10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2023

Commission File Number 001-15877

GERMAN AMERICAN BANCORP, INC.

(Exact name of registrant as specified in its charter)

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

711 Main Street,	Box 810,	Jasper,	Indiana	47546
(Address of Principal Executive Offices)				(Zip Code)

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

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

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

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.	þ	Yes	o	No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.	o	Yes	þ	No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.	þ	Yes	o	No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).	þ	Yes	o	No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer	þ	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	o
		Emerging growth company	o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.  ☑

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. o

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    ☐ Yes þ No

The aggregate market value of the registrant’s common shares held by non-affiliates as of June 30, 2023 was approximately $777,294,304. This calculation does not reflect a determination that persons are (or are not) affiliates for any other purpose.

As of February 20, 2024, there were outstanding 29,584,709 common shares, no par value, of the registrant.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Proxy Statement of German American Bancorp, Inc., for the Annual Meeting of its Shareholders to be held April 29, 2024, to the extent stated herein, are incorporated by reference into Part III (Items 10 through 14).

GERMAN AMERICAN BANCORP, INC.

ANNUAL REPORT ON FORM 10-K

For Fiscal Year Ended December 31, 2023

 Table of Contents

Glossary of Terms and Acronyms		3
PART I
Item 1.	Business	5
Item 1A.	Risk Factors	16
Item 1B.	Unresolved Staff Comments	24
Item 1C.	Cybersecurity	24
Item 2.	Properties	25
Item 3.	Legal Proceedings	25
Item 4.	Mine Safety Disclosures	25
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	26
Item 6.	[Reserved]	27
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	48
Item 8.	Financial Statements and Supplementary Data	50
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	102
Item 9A.	Controls and Procedures	102
Item 9B.	Other Information	102
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	102
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	103
Item 11.	Executive Compensation	103
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	103
Item 13.	Certain Relationships and Related Transactions, and Director Independence	104
Item 14.	Principal Accounting Fees and Services	104
PART IV
Item 15.	Exhibits, Financial Statement Schedules	105
Item 16.	Form 10-K Summary	109
SIGNATURES		110

GLOSSARY OF TERMS AND ACRONYMS

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

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

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

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

AOCI:     Accumulated other comprehensive income (loss)

ASU:     Accounting Standards Update

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

BHC Act:     Bank Holding Company Act of 1956, as amended

BSA:     Bank Secrecy Act (Financial Recordkeeping and Reporting of Currency and Foreign Transactions Act of 1970)

CAA: 2021 Consolidated Appropriations Act enacted on December 27, 2020, which included a $900 billion COVID-19 relief package

CARES Act: Coronavirus Aid, Relief and Economic Security Act

CBLR:     Community bank leverage ratio, which is the subject of rules adopted by federal banking regulators on October 29,2019 (the “CBLR framework”)

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

CET1:     Common Equity Tier 1 Capital

CFPB:     Consumer Financial Protection Bureau

CME Term SOFR: A forward-looking term Secured Overnight Financing Rate, as administered by CME Group Benchmark Administration Limited

CMO:     Collateralized mortgage obligations

COVID-19: Novel coronavirus disease 2019 declared, in March 2020, by the World Health Organization as a global pandemic and by the President of the United States as a national emergency

CRA:     Community Reinvestment Act of 1977

CRE:    Commercial Real Estate

CUB:    Citizens Union Bancorp of Shelbyville, Inc., which was acquired by the company on January 1, 2022

DFI:     Indiana Department of Financial Institutions

DIF:     Deposit Insurance Fund of the FDIC

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

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Economic Growth Act:     Economic Growth, Relief and Consumer Protection Act of 2018

ERISA:     Employee Retirement Income and Security Act of 1974

FASB:     Financial Accounting Standards Board

FDIC:     Federal Deposit Insurance Corporation

FDICIA:     Federal Deposit Insurance Corporation Improvements Act

federal banking

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

FHLB:     Federal Home Loan Bank

FRB:     Board of Governors of the Federal Reserve System

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

GLB Act:     Gramm-Leach-Bliley Financial Modernization Act of 1999

LIBOR:     London Interbank Offered Rate

LIBOR Act: Adjustable Interest Rate (LIBOR) Act enacted on March 15, 2022

MBS:     Mortgage-backed securities

Notes: The Company’s 4.50% Fixed-to-Floating Rate Subordinated Notes due 2029, issued and sold on June 25, 2019, in an aggregate principal amount of $40.0 million

NPV:     Net portfolio value

OCC:     Office of the Comptroller of the Currency

OFAC:     U.S. Treasury Department Office of Foreign Assets Control

PCAOB:     Public Company Accounting Oversight Board (United States)

PCD: Purchased with credit deterioration

PPP: Paycheck Protection Program established under the CARES Act

PTO:            Paid time off

SBA: Small Business Administration

SEC:    Securities and Exchange Commission

SOFR: Secured Overnight Funding Rate

USA Patriot Act: Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001

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Information included in or incorporated by reference in this Annual Report on Form 10-K, our other filings with the Securities and Exchange Commission and our press releases or other public statements, contain or may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Please refer to a discussion of our forward- looking statements and associated risks in Item 1, “Business - Forward-Looking Statements and Associated Risks” and our discussion of risk factors in Item 1A, “Risk Factors” in this Annual Report on Form 10-K.

PART I

Item 1. Business.

General

German American Bancorp, Inc. is a Nasdaq-traded (symbol: GABC) financial holding company based in Jasper, Indiana. German American, through its banking subsidiary German American Bank, operates 75 banking offices in 20 contiguous southern Indiana counties and 14 counties in Kentucky. The Company also owns an investment brokerage subsidiary (German American Investment Services, Inc.) and a full line property and casualty insurance agency (German American Insurance, Inc.).

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

The Company’s lines of business include retail and commercial banking, wealth management services, and insurance operations. Our retail and commercial banking business involves attracting deposits from the general public and using those funds to originate consumer, commercial and agricultural, commercial and agricultural real estate, and residential mortgage loans, primarily in the Company’s local markets. These core banking activities also include the sale of residential mortgage loans in the secondary market. Our wealth management services involve providing trust, investment advisory, brokerage and retirement planning services to customers. In our insurance operations, we offer a full range of personal and corporate property and casualty insurance products, primarily in the Company’s banking subsidiary’s local markets. Financial and other information by segment is included in Note 16 (Segment Information) of the Notes to the Consolidated Financial Statements included in Item 8 of this Report and is incorporated into this Item 1 by reference. Substantially all of the Company’s revenues are derived from customers located in, and substantially all of its assets are located in, the United States.

Subsidiaries

The Company’s principal operating subsidiaries are described in the following table:

Name	Type of Business	Principal Office Location
German American Bank	Commercial Bank	Jasper, IN
German American Insurance, Inc.	Multi-Line Insurance Agency	Jasper, IN
German American Investment Services, Inc.	Retail Brokerage	Jasper, IN

Business Developments

On January 1, 2022, the Company completed the acquisition of Citizens Union Bancorp of Shelbyville, Inc. (“CUB”) through the merger of CUB with and into the Company. Immediately following completion of the CUB holding company merger, CUB’s subsidiary bank, Citizen Union Bank of Shelbyville, Inc., was merged with and into the Company’s subsidiary bank, German American Bank. CUB, headquartered in Shelbyville, Kentucky, operated 15 retail banking offices located in Shelby, Jefferson, Spencer, Bullitt, Oldham, Owen, Gallatin and Hardin counties in Kentucky through Citizens Union Bank of Shelbyville, Inc. As of the closing of the transaction, CUB had total assets of approximately $1.109 billion, total loans of approximately $683.8 million, and total deposits of approximately $930.5 million. The Company issued approximately 2.9 million shares of its common stock, and paid approximately $50.8 million in cash, in exchange for all of the issued and outstanding shares of common stock of CUB. For further information regarding this merger and acquisition transaction, see Note 18 (Business Combinations, Goodwill and Intangible Assets) in the Notes to the Consolidated Financial Statements included in Item 8 of this Report, which Note 18 is incorporated into this Item 1 by reference.

The Company expects to continue to evaluate opportunities to expand its business through opening of new banking, insurance or trust, brokerage and financial planning offices, and through acquisitions of other banks, bank branches, portfolios of loans or other assets, and other financial-service-related businesses and assets in the future.

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Office Locations

The map below illustrates the locations of the Company’s 76 retail and commercial banking, insurance and investment offices.

 

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Competition

The industries in which the Company operates are highly competitive. The Bank competes for commercial and retail banking business within its core banking segment not only with financial institutions that have offices in the same counties but also with financial institutions that compete from other locations in Southern Indiana, Kentucky and elsewhere. Further, the Bank competes for loans and deposits not only with commercial banks but also with savings and loan associations, savings banks, credit unions, production credit associations, federal land banks, finance companies, credit card companies, personal loan companies, investment brokerage firms, insurance agencies, insurance companies, lease finance companies, money market funds, mortgage companies, and other non-depository financial intermediaries. There are numerous alternative providers (including national providers that advertise extensively and provide their services via e-mail, direct mail, telephone and the Internet) for the insurance products and services offered by German American Insurance, Inc., trust and financial planning services offered by the Bank and the brokerage products and financial planning services offered by German American Investment Services, Inc. In addition, financial technology, or “FinTech,” companies continue their rapid growth into key areas of banking. Many of these competitors have substantially greater resources than the Company.

Human Capital

At February 20, 2024, the Company and its subsidiaries employed approximately 840 full-time equivalent employees. There are no collective bargaining agreements, and we consider employee relations to be good.

People come first at German American. It is through our employees, and their ties to the local community, that we are able to proudly support the communities we serve. We are deeply rooted in these communities. Engrained in our culture is a commitment to give back to the individuals, families, and businesses in our communities. We have a long history of community involvement, from both a contributory standpoint and a dedication to hands-on volunteer efforts. We believe that service to our communities, customers and each other is fun, rewarding and powerful.

German American strives to attract, develop, and retain talented individuals in every community we serve. We understand that, in order to deliver the best financial products and services to our clients, we need to invest in our team’s personal and professional success, which includes helping to create a work/life balance and providing further growth opportunities. As a result, our employees have demonstrated a desire and determination to succeed. Our culture encourages them to take initiative, accept challenges, and be collaborative to achieve performance and operating excellence for our customers, shareholders, and communities. German American’s reputation relies on integrity. Our team trusts each other in words and actions, which enables our customers to trust our brand. We value honesty, transparency, and diverse perspectives with high ethical standards in all we do.

For many years, we have annually collected feedback on employee engagement. Most recently, we have partnered with Quantum Workplace to measure employee engagement. The feedback focuses on several key metrics. including employee engagement, team dynamics, customer service, manager effectiveness, trust in leadership, future outlook, diversity and inclusion, individual needs, career growth and development and communication. During 2023, we had 76% employee participation in the survey. Once the feedback is analyzed, our Human Capital team shares the survey results with the managers and employees throughout the Company and works collaboratively to develop and implement action plans to address areas that were identified for improvement based on the feedback received. This ability to target areas for improvement has resulted in an overall engagement score of greater than 73% in 2023, which is a score demonstrating a healthy organization in employee care and compares favorably to the banking industry.

We have long been committed to comprehensive and competitive compensation and benefits programs as we recognize that we operate in an intensely competitive environment for employees. Retention of skilled and highly trained employees is critical to our strategy of being a trusted resource to our communities and customers. To help ensure we remain competitive in our compensation programs, we participate annually in market and banking compensation studies and model compensation with an external vendor for comparison. Furthering our philosophy to attract and retain talented and motivated employees who will continue to advance our purpose and contribute to our overall success, our compensation and benefits programs include: referral incentive programs, quarterly performance incentives, medical (including a digital clinic for joint and muscle care, telemedicine and behavioral health care services), dental and vision plans; a 401(k) deferred compensation plan, with matching contribution, which covers substantially all employees; flexible spending and health savings accounts; competitive paid time off “PTO” programs, including the opportunity to purchase additional PTO; and life insurance and a robust employee assistance program that supports employee well-being through personal and work-life issues. In addition, we offer supplemental benefits such as accident, critical illness and hospital indemnity policies, discounted bank services and an Employee Stock Purchase Plan.

We also invest in our employees’ future by sponsoring and prioritizing continued education throughout the Company’s employee ranks, including support of many bank-related certification programs and any required continuing education to support those certifications. Full-time and part-time employees are eligible for our education assistance program which covers tuition and textbooks for work-related courses taken through a community college or university. Employees are also able to participate in on-the-job learning, classroom learning, mentoring and other internal and external career development programs

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in order to advance or diversify their career paths throughout the organization. These programs focus on enhancing current skills, engaging and empowering our team members in their own career development and building our pipeline of leaders, bankers, commercial lenders and other financial professional roles.

We are committed to employee care and helping our employees improve their quality of life and place. As a result, we remain focused on continuous improvement throughout all departments in order to create positive outcomes and experiences for all. To support our focus on employee care, we have a paid family bonding leave program, a PTO donation program, flexible work guidelines, and career opportunities promoted throughout our footprint.

In order to develop and engage a workforce that aligns with our purpose, we regularly sponsor local community events. We believe that the well-being of our employees and their personal and professional development is furthered by our outreach to the communities we serve. Our employees’ desire for active community involvement enables us to sponsor many local community events and initiatives, including leading financial literacy classes in community schools and volunteering to enhance the arts, education, economic development, and overall community enrichment in our footprint.

Regulation and Supervision

Overview

The Company is subject to regulation and supervision by the Board of Governors of the Federal Reserve System (“FRB”) under the Bank Holding Company Act of 1956, as amended (“BHC Act”), and is required to file with the FRB annual reports and such additional information as the FRB may require. The FRB may also make examinations or inspections of the Company. The Bank is under the supervision of and subject to examination by the Indiana Department of Financial Institutions (“DFI”), and the Federal Deposit Insurance Corporation (“FDIC”). Regulation and examination by banking regulatory agencies are primarily for the benefit of depositors rather than shareholders.

Under FRB policy and the Dodd-Frank Wall Street Reform and Consumer Protection Act, a complex and wide-ranging statute (the “Dodd-Frank Act”), the Company is required to act as a source of financial and managerial strength to the Bank, and to commit resources to support the Bank, even in circumstances where the Company might not do so absent such a requirement. Under current federal law, the FRB may require a bank holding company to make capital injections into a troubled subsidiary bank. It may charge the bank holding company with engaging in unsafe and unsound practices if the bank holding company fails to commit resources to such a subsidiary bank or if it undertakes actions that the FRB believes might jeopardize the bank holding company’s ability to commit resources to such subsidiary bank.

With certain exceptions, the BHC Act prohibits a bank holding company from engaging in (or acquiring direct or indirect control of more than 5 percent of the voting shares of any company engaged in) nonbanking activities. One of the principal exceptions to this prohibition is for activities deemed by the FRB to be “closely related to banking.” Under current regulations, bank holding companies and their subsidiaries are permitted to engage in such banking-related business ventures as consumer finance; equipment leasing; credit life insurance; computer service bureau and software operations; mortgage banking; and securities brokerage.

We are also a “financial holding company” under the BHC Act, which permits us to engage in a broader range of activities that are “financial in nature” and in activities that are determined to be incidental or complementary to activities that are financial in nature. These activities include underwriting and dealing in and making a market in securities (subject to certain limits and compliance procedures required by the so-called Volcker Rule provisions added by the Dodd-Frank Act, described below under “Other Aspects of the Dodd-Frank Act”), insurance underwriting, and merchant banking. Banks may also engage through financial subsidiaries in certain of the activities permitted for financial holding companies, subject to certain conditions. In order to continue as a financial holding company, we must continue to be well-capitalized, well-managed and maintain compliance with the Community Reinvestment Act.

As a financial holding company, we operated GABC Risk Management, Inc., a wholly-owned subsidiary (the “Captive”), as a pooled captive insurance company subsidiary to provide additional insurance coverage for the Company and its subsidiaries related to the operations of the Company for which insurance may not be economically feasible. On April 10, 2023, the Internal Revenue Service issued a proposed regulation impacting taxes on insurance companies under Section 831(b) of the Internal Revenue Code, both prospectively and retroactively, for a period of three years. As a result of the proposed regulation, the Company elected to decommission the Captive as an insurance company in December 2023 and subsequently dissolved the Captive as a corporation in the State of Nevada.

The Bank and the subsidiaries of the Bank may generally engage in activities that are permissible activities for state chartered banks under Indiana banking law, without regard to the limitations that might apply to such activities under the BHC Act if the Company were to engage directly in such activities at the parent company level or through parent company subsidiaries that were not also bank subsidiaries.

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Indiana law and the BHC Act restrict certain types of expansion by the Company and its bank subsidiary. The Company and its subsidiaries may be required to apply for prior approval from (or give prior notice and an opportunity for review to) the FRB, the DFI, the FDIC, and/or other bank regulatory or other regulatory agencies, as a condition to the acquisition or establishment of new offices, or the acquisition (by merger or consolidation, purchase or otherwise) of the stock, business or properties of other banks or other companies.

The earnings of commercial banks and their holding companies are affected not only by general economic conditions but also by the policies of various governmental regulatory authorities. In particular, the FRB regulates money and credit conditions and interest rates in order to influence general economic conditions, primarily through open-market operations in U.S. Government securities, varying the discount rate on bank borrowings, and setting reserve requirements against bank deposits. These policies have a significant influence on overall growth and distribution of bank loans, investments and deposits, and affect interest rates charged on loans and earned on investments or paid for time and savings deposits. FRB monetary policies have had a significant effect on the operating results of commercial banks in the past and this is expected to continue in the future. The general effect, if any, of such policies upon the future business and earnings of the Company cannot accurately be predicted.

Capital Requirements

We are subject to various regulatory capital requirements both at the parent company and at the Bank level administered by the FRB and by the FDIC and DFI, respectively. Failure to meet minimum capital requirements could result in certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could have an adverse material effect on our financial statements. Under capital adequacy guidelines and the regulatory framework for “Prompt Corrective Action” (described below), we must meet specific capital guidelines that involve quantitative measures of our assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting policies. Our capital amounts and classification are also subject to judgments by the regulators regarding qualitative components, risk weightings, and other factors. We have consistently maintained regulatory capital ratios at or above the well-capitalized standards.

Generally, for purposes of satisfying these capital requirements, we must maintain capital sufficient to meet both risk-based asset ratio tests and a leverage ratio test on a consolidated basis. The risk-based ratios are determined by allocating assets and specified off-balance sheet commitments into various weighted categories, with higher weighting assigned to categories perceived as representing greater risk. A risk-based ratio represents the applicable measure of capital divided by total risk-weighted assets. The leverage ratio is a measure of our core capital divided by our total assets adjusted as specified in the guidelines.

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 “Common Equity Tier 1 Capital” to risk-weighted assets of 4.5%, plus a 2.5% “conservation buffer” (bringing the Common Equity Tier 1 Capital to risk-weighted assets ratio to a total of at least 7.0%);

•a minimum ratio of Tier 1 Capital to risk-weighted assets of 6% plus the conservation buffer (which results in a minimum required total Tier 1 Capital to risk-weighted assets ratio of 8.5%);

•a minimum ratio of Total Capital (that is, Tier 1 Capital plus instruments includable in a tier called Tier 2 Capital) to risk-weighted assets of at least 8.0% plus the conservation buffer (which results in a minimum Total Capital to risk-weighted assets ratio of 10.5%); and

•a minimum leverage ratio of 4% (calculated as the ratio of Tier 1 Capital to adjusted average consolidated assets).

“Common Equity Tier 1” (“CET1”) Capital consists of common stock instruments that meet the eligibility criteria in the new rules, retained earnings, accumulated other comprehensive income (“AOCI”) and common equity Tier 1 minority interest.

Tier 1 Capital under the new rules consists of CET1 (subject to certain adjustments) and “additional Tier 1 capital” instruments meeting specified requirements, plus, in the case of smaller holding companies like ours, trust preferred securities in accordance with prior requirements for their inclusion in Tier I Capital.

Under the Basel III Rules, we and our bank subsidiary elected to opt-out of the requirement to include AOCI in our CET1. As a result, most AOCI items will be treated, for regulatory capital purposes, in the same manner in which they were prior to Basel III.

Although banking institutions with a ratio of CET1 to risk-weighted assets above the minimum but below the conservation buffer will technically comply with minimum capital requirements under the new rules, such institutions will face limitations on

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the payment of dividends, common stock repurchases and discretionary cash payments to executive officers based on the amount of the shortfall.

As discussed in Note 1 (Summary of Significant Accounting Policies) of the Notes to the Consolidated Financial Statements included in Item 8 of this Report, the Company adopted the “current expected credit losses” (“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 a result of the Coronavirus Aid, Relief and Economic Security Act (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. Beginning on January 1, 2022, the Company began the required three-year phase-in by reflecting 25% of the previously deferred estimated capital impact of CECL in its regulatory capital. An additional 25% was phased in on each of January 1, 2023 and January 1, 2024, and another 25% will be phased in on January 1, 2025 (at which time the adverse cumulative effects of adopting CECL will have been fully phased into our regulatory capital). Under these rules, the amount of adjustments to regulatory capital that could be deferred until the phase-in period included both the initial impact of our adoption of CECL at January 1, 2020 and 25% of subsequent changes in our allowance for credit losses during each quarter of the two-year period ended December 31, 2021.

Prompt Corrective Action Classifications

The Federal Deposit Insurance Corporation Improvements Act (enacted in 1991) (FDICIA) requires federal banking regulatory authorities to take regulatory enforcement actions known as Prompt Corrective Action with respect to depository institutions that do not meet minimum capital requirements. For these purposes, FDICIA establishes five capital tiers: well-capitalized, adequately-capitalized, under-capitalized, significantly under-capitalized, and critically under-capitalized.

Under FDICIA, a depository institution that is not well-capitalized is generally prohibited from accepting brokered deposits and offering interest rates on deposits higher than the prevailing rate in its market. Since the Bank was well-capitalized throughout 2023, the FDICIA brokered deposit rule did not adversely affect its ability to accept brokered deposits. The Bank had no brokered deposits at December 31, 2023. Further, a depository institution or its holding company that is not well-capitalized will generally not be successful in seeking regulatory approvals that may be necessary in connection with any plan or agreement to expand its business, such as through the acquisition (by merger or consolidation, purchase or otherwise) of the stock, business or properties of other banks or other companies.

Under the Prompt Corrective Action regulations, the applicable agency can treat an institution as if it were in the next lower category if the agency determines (after notice and an opportunity for hearing) that the institution is in an unsafe or unsound condition or is engaging in an unsafe or unsound practice. The degree of regulatory scrutiny of a financial institution will increase, and the permissible activities of the institution will decrease, as it moves downward through the capital categories. Institutions that fall into one of the three “undercapitalized” categories (as such term is used in the FDICIA) may be required to (i) submit a capital restoration plan; (ii) raise additional capital; (iii) restrict their growth, deposit interest rates, and other activities; (iv) improve their management; (v) eliminate management fees and dividends; or (vi) divest themselves of all or a part of their operations. Bank holding companies can be called upon to boost the capital of the financial institutions that they control, and to partially guarantee the institutions’ performance under their capital restoration plans. Critically under-capitalized institutions are subject to appointment of a receiver or conservator within 90 days of becoming so classified.

The minimum ratios defined by the Prompt Corrective Action regulations from time to time are merely guidelines and the bank regulators possess the discretionary authority to require higher capital ratios. Further, the risk-based capital standards of the FRB and the FDIC specify that evaluations by the banking agencies of a bank’s capital adequacy will include an assessment of the exposure to declines in the economic value of a bank’s capital due to changes in interest rates. These banking agencies issued a joint policy statement on interest rate risk describing prudent methods for monitoring such risk that rely principally on internal measures of exposure and active oversight of risk management activities by senior management.

To qualify as a “well-capitalized” institution, a depository institution under the Prompt Corrective Action requirements must have a leverage ratio of no less than 5%, a Tier I Capital ratio of no less than 8%, a CET1 ratio of no less than 6.5%, and a total risk-based capital ratio of no less than 10%, and the bank must not have been under any order or directive from the appropriate regulatory agency to meet and maintain a specific capital level. As of December 31, 2023, the Bank exceeded the requirements contained in the applicable regulations, policies and directives pertaining to capital adequacy to be classified as “well-capitalized”, and is unaware of any material violation or alleged violation of these regulations, policies or directives. For a tabular presentation of our regulatory capital ratios and those of the Bank as of December 31, 2023, see Note 8 (Shareholders’ Equity) of the Notes to the Consolidated Financial Statements included in Item 8 of this Report, which Note 8 is incorporated herein by reference.

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Section 201 of the Economic Growth, Relief and Consumer Protection Act of 2018 (the “Economic Growth Act”) simplified the regulatory capital requirements for eligible community banks and holding companies (which would include the Bank and the Company) that satisfy certain qualifying criteria, including having less than $10 billion in average total consolidated assets and a leverage ratio (referred to as the “community bank leverage ratio”) of greater than 9%, by permitting those entities to opt-in to the community bank leverage ratio framework (the “CBLR framework”). The community bank leverage ratio is the ratio of a banking organization’s Tier 1 Capital to its average total consolidated assets, both as reported on the banking organization’s applicable regulatory filings. If this election is made, the Company and the Bank would satisfy their regulatory capital standards by calculating and reporting the community bank leverage ratio instead of the risk-weighted capital ratios and minimum leverage ratio currently required and would be deemed “well-capitalized” under the FRB’s and FDIC’s Prompt Corrective Action rules so long as they continue to satisfy the qualifying criteria of the CBLR framework. Despite this option, the Company intends to continue with its use of the existing layered ratio structure. Under either framework, the Company and the Bank would be considered well-capitalized under the applicable guidelines.

Future rulemaking and regulatory changes on capital requirements may impact the Company as it continues to grow and evaluate potential mergers and acquisitions.

Restrictions on Bank Dividends or Loans to, or other Transactions with, the Parent Company, and on Parent Company Dividends

German American Bancorp, Inc., which is the publicly-held parent of the Bank (German American Bank), is a corporation that is separate and distinct from the Bank and its other subsidiaries. Most of the parent company’s revenues historically have been comprised of dividends, fees, and interest paid to it by the Bank, and this is expected to continue in the future. There are, however, statutory limits under Indiana law on the amount of dividends that the Bank can pay to its parent company without regulatory approval. The Bank may not, without the approval of the DFI, pay a dividend in an amount greater than its undivided profits. In addition, the prior approval of the DFI is required for the payment of a dividend by an Indiana state-chartered bank if the total of all dividends declared in a calendar year would exceed the total of its net income for the year combined with its retained net income for the two preceding years, unless such a payment qualifies under certain exemptive criteria that exempt certain dividend payments by certain qualified banks from the prior approval requirement. At December 31, 2023, the Bank was eligible for payment of dividends under the exemptive criteria established by DFI policy for this purpose, and could have declared and paid to the holding company approximately $175 million of its undivided profits without approval by the DFI in accordance with such criteria. See Note 8 (Shareholders’ Equity) of the Notes to Consolidated Financial Statements included in Item 8 of this Report for further discussion.

Insured depository institutions such as the Bank are also prohibited under the FDICIA from making capital distributions, including the payment of dividends, if, after making such distribution, the institution would become undercapitalized.

In addition, the FRB and other bank regulatory agencies have issued policy statements or advisories that provide that insured banks and bank holding companies should generally only pay dividends out of current operating earnings.

In addition to these statutory restrictions, if, in the opinion of the applicable regulatory authority, a bank under its jurisdiction is engaged in, or is about to engage in, an unsafe or unsound practice, such authority may require, after notice and hearing, that such bank cease and desist from such practice. Accordingly, if the Bank were to experience financial difficulties, it is possible that the applicable regulatory authority could determine that the Bank would be engaged in an unsafe or unsound practice if the Bank were to pay dividends and could prohibit the Bank from doing so, even if availability existed for dividends under the statutory formula.

Further, the Bank is subject to affiliate transaction restrictions under federal laws, which limit certain transactions generally involving the transfer of funds by a subsidiary bank or its subsidiaries to its parent corporation or any nonbank subsidiary of its parent corporation, whether in the form of loans, extensions of credit, investments, or asset purchases, or otherwise undertaking certain obligations on behalf of such affiliates. Furthermore, covered transactions that are loans and extensions of credit must be secured within specified amounts. In addition, all covered transactions and other affiliate transactions must be conducted on terms and under circumstances that are substantially the same as such transactions with unaffiliated entities.

Other Aspects of the Dodd-Frank Act

The Dodd-Frank Act (in addition to the regulatory changes discussed elsewhere in this “Regulation and Supervision” discussion and below under “Federal Deposit Insurance Premiums and Assessments”) made a variety of changes that affect the business and affairs of the Company and the Bank in other ways. For instance, the Dodd-Frank Act (or agency regulations adopted and implemented (or to be adopted and implemented) under the Dodd-Frank Act) altered the authority and duties of the federal banking and securities regulatory agencies, implemented certain corporate governance requirements for all public companies

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including financial institutions with regard to executive compensation, proxy access by shareholders, and certain whistleblower provisions; restricted certain proprietary trading and hedge fund and private equity activities of banks and their affiliates; eliminated the former statutory prohibition against the payment of interest on business checking accounts; limited interchange fees on debit card transactions by certain large processors; and established the Consumer Financial Protection Bureau (“CFPB”).

The CFPB was granted broad rulemaking, supervisory and enforcement powers under various federal consumer financial protection laws, including the Equal Credit Opportunity Act, Truth in Lending Act, Real Estate Settlement Procedures Act, Fair Credit Reporting Act, Fair Debt Collection Act, the Consumer Financial Privacy provisions of the Gramm-Leach-Bliley Act and certain other statutes. The CFPB has examination and primary enforcement authority with respect to depository institutions with $10 billion or more in assets. Smaller institutions are subject to rules promulgated by the CFPB but continue to be examined and supervised by federal banking regulators for consumer compliance purposes.

The CFPB has authority to prevent unfair, deceptive or abusive practices in connection with the offering of consumer financial products. The Dodd-Frank Act authorized the CFPB to establish certain minimum standards for the origination of residential mortgages including a determination of the borrower’s ability to repay. In addition, Dodd-Frank allows borrowers to raise certain defenses to foreclosure if they receive any loan other than a “qualified mortgage” as defined by the CFPB. Under the CFPB’s rule, a “qualified mortgage” loan must not contain certain specified features, and the borrower’s total monthly debt-to-income ratio may not exceed a specified percentage. Lenders must also verify and document the income and financial resources relied upon to qualify the borrower for the loan and underwrite the loan based on a fully amortizing payment schedule and maximum interest rate during the first five years, taking into account all applicable taxes, insurance and assessments.

The Dodd-Frank Act permits states to adopt consumer protection laws and standards that are more stringent than those adopted at the federal level and, in certain circumstances, permits state attorneys general to enforce compliance with both the state and federal laws and regulations.

The so-called Volcker Rule, which was adopted under the Dodd-Frank Act, prohibits banking entities from, among other things, (1) engaging in short-term proprietary trading for their own accounts, and (2) having certain ownership interests in and relationships with hedge funds or private equity funds (“covered funds”). Community banks like the Bank have been afforded some relief under these final rules from onerous compliance obligations created by the rules; if banks are engaged only in exempted proprietary trading, such as trading in U.S. government, agency, state and municipal obligations, they are exempt entirely from compliance program requirements. Moreover, even if a community bank engages in proprietary trading or covered fund activities under the rule, they need only incorporate references to the Volcker Rule into their existing policies and procedures. The Economic Growth Act also served to raise the threshold of banks subject to the Volcker Rule to only those with more than $10 billion in assets. Although we do not yet meet that threshold, even if we were subject to it, we do not expect that the Volcker Rule would have any material financial implications on us or our investments or activities.

In October 2023, the CFPB proposed a new rule that would require a provider of payment accounts or products, such as a bank, to make data available to consumers upon request regarding the products or services they obtain from the provider. Any such data provider would also have to make the data available to third parties, with the consumer’s express authorization, and through an interface that satisfies formatting, performance and security standards, for the purpose of the third parties providing the consumer with financial products or services requested by the consumer. Data that would be required to be made available under the rule would include transaction information, account balance, account and routing numbers, terms and conditions, upcoming bill information, and certain account verification data. The proposed rule is intended to give consumers control over their financial data, including with whom it is shared, and encourage competition in the provision of consumer financial products or services. For banks that hold at least $850 million but less than $50 billion in total assets (which includes the Bank), compliance would be required approximately two and a half years after adoption of the final rule.

Certain Other Laws and Regulations

The Community Reinvestment Act of 1977 (the “CRA”) requires depository institutions to assist in meeting the credit needs of their market areas consistent with safe and sound banking practice. Under the CRA, each depository institution is required to help meet the credit needs of its market areas by, among other things, providing credit to low- and moderate-income individuals and communities. These factors are also considered in evaluating mergers, acquisitions and applications to open a branch or facility. The applicable federal regulators regularly conduct CRA examinations to assess the performance of financial institutions and assign one of four ratings to the institution’s records of meeting the credit needs of its community. During its last examination, a rating of “satisfactory” was received by the Bank.

In October 2023, the federal banking regulators issued a joint final rule to modernize the CRA regulatory framework. The final rule is intended, among other things, to adapt to changes in the banking industry, including the expanded role of mobile and

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online banking, and to tailor performance standards to account for differences in bank size and business models. The final rule introduces new tests under which the performance of banks with over $2 billion in assets will be assessed. The new rule also includes data collection and reporting requirements, some of which are applicable to banks with less than $10 billion in assets, such as the Bank. Most provisions of the final rule will become effective on January 1, 2026, and the data reporting requirements will become effective on January 1, 2027.

In accordance with the Gramm-Leach-Bliley Financial Modernization Act of 1999 (the “GLB Act”), federal banking regulators adopted rules that limit the ability of banks and other financial institutions to disclose non-public information about consumers to nonaffiliated third parties. These limitations require disclosure of privacy policies to consumers and, in some circumstances, allow consumers to prevent disclosure of certain personal information to a nonaffiliated third party. The privacy provisions of the GLB Act affect how consumer information is transmitted through diversified financial companies and conveyed to outside vendors.

A major focus of governmental policy on financial institutions is combating money laundering and terrorist financing. The Bank Secrecy Act (the “BSA”) requires financial institutions to develop policies, procedures, and practices to prevent and deter money laundering, and mandates that every bank have a written, board-approved program that is reasonably designed to assure and monitor compliance with the BSA. In addition, banks are required to adopt a customer identification program as part of its BSA compliance program, and are required to file Suspicious Activity Reports when they detect certain known or suspected violations of federal law or suspicious transactions related to a money laundering activity or a violation of the BSA. The Bank is also required to (1) identify and verify, subject to certain exceptions, the identity of the beneficial owners of all legal entity customers at the time a new account is opened, and (2) include, in its anti-money laundering program, risk-based procedures for conducting ongoing customer due diligence, which must include procedures that: (a) assist in understanding the nature and purpose of customer relationships for the purpose of developing a customer risk profile, and (b) require ongoing monitoring to identify and report suspicious transactions and, on a risk basis, to maintain and update customer information.

The USA PATRIOT Act of 2001, or the USA Patriot Act, substantially broadened the scope of United States anti-money laundering laws and regulations by imposing significant new compliance and due diligence obligations, creating new crimes and penalties and expanding the extra-territorial jurisdiction of the United States. The U.S. Treasury Department has issued a number of regulations that apply various requirements of the USA Patriot Act to financial institutions such as the Bank. These regulations impose obligations on financial institutions to maintain appropriate policies, procedures and controls to detect, prevent and report money laundering and terrorist financing and to verify the identity of their customers. Failure of a financial institution to maintain and implement adequate programs to combat money laundering and terrorist financing, or to comply with all of the relevant laws or regulations, could have serious legal and reputational consequences for the institution.

The United States has imposed economic sanctions that affect transactions with designated foreign countries, nationals and others. These are typically known as the “OFAC” rules based on their administration by the U.S. Treasury Department Office of Foreign Assets Control (“OFAC”). The OFAC-administered sanctions targeting countries take many different forms. Generally, however, they contain one or more of the following elements: (i) restrictions on trade with or investment in a sanctioned country, including prohibitions against direct or indirect imports from and exports to a sanctioned country and prohibitions on “U.S. persons” engaging in financial transactions relating to making investments in, or providing investment-related advice or assistance to, a sanctioned country; and (ii) a blocking of assets in which the government or specially designated nationals of the sanctioned country have an interest, by prohibiting transfers of property subject to U.S. jurisdiction (including property in the possession or control of U.S. persons). Blocked assets (e.g., property and bank deposits) cannot be paid out, withdrawn, set off or transferred in any manner without a license from OFAC. Failure to comply with these sanctions could have serious legal and reputational consequences.

The Bank is subject to a wide variety of other laws with respect to the operation of its businesses, and regulations adopted under those laws, including but not limited to the Truth in Lending Act, Truth in Savings Act, Equal Credit Opportunity Act, Electronic Funds Transfer Act, Fair Housing Act, Home Mortgage Disclosure Act, Fair Debt Collection Practices Act, Fair Credit Reporting Act, Expedited Funds Availability (Regulation CC), Reserve Requirements (Regulation D), Insider Transactions (Regulation O), Privacy of Consumer Information (Regulation P), Margin Stock Loans (Regulation U), Right To Financial Privacy Act, Flood Disaster Protection Act, Homeowners Protection Act, Servicemembers Civil Relief Act, Real Estate Settlement Procedures Act, TILA-RESPA Integrated Disclosure Rule, Telephone Consumer Protection Act, CAN-SPAM Act, Children’s Online Privacy Protection Act, the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act) and the John Warner National Defense Authorization Act. The laws and regulations to which we are subject are constantly under review by the U.S. Congress, the federal regulatory agencies, and the state authorities.

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Federal Deposit Insurance Premiums and Assessments

The Bank’s deposit accounts are currently insured by the Deposit Insurance Fund (the “DIF”) of the FDIC. The insurance benefit generally covers up to a maximum of $250,000 per separately insured depositor. As an FDIC-insured bank, our bank subsidiary is subject to deposit insurance premiums and assessments to maintain the DIF. The Bank’s deposit insurance premium assessment rate depends on the asset and supervisory categories to which it is assigned. The FDIC has authority to raise or lower assessment rates on insured banks in order to achieve statutorily required reserve ratios in the DIF and to impose special additional assessments.

Under the current system, deposit insurance assessments are based on average total assets minus average tangible equity. The FDIC assigns a banking institution to one of two categories based on asset size. As an institution with under $10 billion in assets, the Bank falls into the “Established Small Institution” category. This category has three sub-categories based on supervisory ratings designed to measure risk (the FDIC’s “CAMELS Composite” ratings). The assessment rate, which ranges from 1.5 to 30.0 basis points (such basis points representing a per annum rate) for Established Small Institutions, is determined based upon each applicable institution’s most recent supervisory and capital evaluations.

In October 2022, the FDIC adopted a final rule that increased the initial base deposit insurance assessment rate schedules uniformly by 2 basis points beginning with the first quarterly assessment period of 2023. The increased assessment was expected to improve the likelihood that the DIF reserve ratio would reach the statutory minimum of 1.35% by the statutory deadline prescribed under the FDIC’s amended restoration plan.

Cybersecurity

The federal banking regulators regularly issue new guidance and standards, and update existing guidance and standards, regarding cybersecurity intended to enhance cyber risk management among financial institutions. Financial institutions are expected to comply with such guidance and standards and to accordingly develop appropriate security controls and risk management processes. If we fail to observe such regulatory guidance or standards, we could be subject to various regulatory sanctions, including financial penalties. In 2023, the SEC issued a final rule that requires disclosure of material cybersecurity incidents, as well as cybersecurity risk management, strategy and governance. Under this rule, banking organizations that are SEC registrants must generally disclose information about a material cybersecurity incident within four business days of determining it is material with periodic updates as to the status of the incident in subsequent filings as necessary.

Under a final rule adopted by federal banking regulators in 2021, banking organizations are required to notify their primary banking regulator within 36 hours of determining that a “computer-security incident” has materially disrupted or degraded, or is reasonably likely to materially disrupt or degrade, the banking organization’s (i) ability to carry out banking operations or deliver banking products and services to a material portion of its customer base, (ii) businesses and operations that would result in material loss, or (iii) operations that would impact the financial stability of the United States.

State regulators have also been increasingly active in implementing privacy and cybersecurity standards and regulations. Recently, several states have adopted regulations requiring certain financial institutions to implement cybersecurity programs and many states, including Indiana, have also recently implemented or modified their data breach notification, information security and data privacy requirements. We expect this trend of state-level activity in those areas to continue and are continually monitoring developments in the states in which our customers are located.

See Item 1A. Risk Factors for a further discussion of risks related to cybersecurity and Item 1C. Cybersecurity for a further discussion of risk management strategies and governance processes related to cybersecurity.

Climate-Related and Other ESG Developments

In recent years, federal, state and international lawmakers and regulators have increased their focus on a company’s risk oversight, disclosures and practices in connection with climate change and other environmental, social and governance (“ESG”) matters. For example, in March 2022, the SEC issued a proposed rule on the enhancement and standardization of climate-related disclosures by public companies. The proposed rule would require public issuers, including us, to significantly expand the scope of climate-related disclosures in their SEC filings. The SEC has also announced plans to propose rules to require enhanced disclosure regarding human capital management and board diversity for public issuers.

Future Legislation and Regulation

The U.S. Congress may enact legislation from time to time that affects the regulation of the financial services industry, and state legislatures may enact legislation from time to time affecting the regulation of financial institutions chartered by or operating in

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those states. Federal and state regulatory agencies also periodically propose and adopt changes to their regulations or change the manner in which existing regulations are applied. The substance or impact of pending or future legislation or regulation, or the application thereof, cannot be predicted, although any change could impact the regulatory structure under which we or our competitors operate and may significantly increase costs, impede the efficiency of internal business processes, require an increase in regulatory capital, require modifications to our business strategy, and limit our ability to pursue business opportunities in an efficient manner. It could also affect our competitors differently than us, including in a manner that would make them more competitive. A change in statutes, regulations or regulatory policies applicable to the Company or any of its subsidiaries could have a material, adverse effect on our business, financial condition and results of operations.

Internet Address; Internet Availability of SEC Reports

The Company’s Internet address is www.germanamerican.com.

The Company makes available, free of charge through the Investor Relations - Financial Information section of its Internet website, the Company’s annual report on Form 10-K, its quarterly reports on Form 10-Q, its current reports on Form 8-K and any amendments to those reports filed or furnished pursuant to Section 13(a) of the Securities Exchange Act of 1934, as amended, as soon as reasonably practicable after those reports are filed with or furnished to the SEC.

Forward-Looking Statements and Associated Risks

The Company from time to time in its oral and written communications makes statements relating to its expectations regarding the future. These types of statements are considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements can include statements about the Company’s net interest income or net interest margin; adequacy of the Company’s capital under regulatory requirements and of its allowance for loan losses, and the quality of the Company’s loans, investment securities and other assets; simulations of changes in interest rates; litigation results; dividend policy; acquisitions or mergers; estimated cost savings, plans and objectives for future operations; and expectations about the Company’s financial and business performance and other business matters as well as economic and market conditions and trends. All statements other than statements of historical fact included in this Report, including statements regarding our financial position, business strategy and the plans and objectives of our management for future operations, are forward-looking statements. When used in this Report, words such as “anticipate”, “believe”, “estimate”, “expect”, “plan”, “intend”, “should”, “would”, “could”, “can”, “may”, “will”, “might” and similar expressions, as they relate to us or our management, identify forward-looking statements.

Such forward-looking statements are based on the beliefs of our management, as well as assumptions made by and information currently available to our management, and are subject to risks, uncertainties, and other factors.

Actual results may differ materially and adversely from the expectations of the Company that are expressed or implied by any forward-looking statement. The discussions in Item 1A, “Risk Factors,” and in Item 7 of this Form 10-K, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” list some of the factors that could cause the Company’s actual results to vary materially from those expressed or implied by any forward-looking statements. Those risks, and other risks, uncertainties, and factors that could cause the Company’s actual results to vary materially from those expressed or implied by any forward-looking statement, include but are not limited to:

•changes in interest rates and the timing and magnitude of any such changes;

•unfavorable economic conditions, including a prolonged period of inflation, and the resulting adverse impact on, among other things, credit quality;

•the soundness of other financial institutions and general investor sentiment regarding the stability of financial institutions;

•changes in our liquidity position;

•the impacts of epidemics, pandemics or other infectious disease outbreaks;

•changes in competitive conditions;

•the introduction, withdrawal, success and timing of asset/liability management strategies or of mergers and acquisitions and other business initiatives and strategies;

•changes in customer borrowing, repayment, investment and deposit practices;

•changes in fiscal, monetary and tax policies;

•changes in financial and capital markets;

•capital management activities, including possible future sales of new securities, or possible repurchases or redemptions by the Company of outstanding debt or equity securities;

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•risks of expansion through acquisitions and mergers, such as unexpected credit quality problems of the acquired loans or other assets, unexpected attrition of the customer base or employee base of the acquired institution or branches, and difficulties in integration of the acquired operations;

•factors driving impairment charges on investments;

•the impact, extent and timing of technological changes;

•potential cyber-attacks, information security breaches and other criminal activities;

•litigation liabilities, including related costs, expenses, settlements and judgments, or the outcome of matters before regulatory agencies, whether pending or commencing in the future;

•actions of the FRB;

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

•changes in accounting principles and interpretations;

•potential increases of federal deposit insurance premium expense, and possible future special assessments of FDIC premiums, either industry wide or specific to the Company’s banking subsidiary;

•actions of the regulatory authorities under the Dodd-Frank Act and the Federal Deposit Insurance Act and other possible legislative and regulatory actions and reforms;

•impacts resulting from possible amendments or revisions to the Dodd-Frank Act and the regulations promulgated thereunder, or to CFPB rules and regulations; and

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

Such statements reflect our views with respect to future events and are subject to these and other risks, uncertainties and assumptions relating to the operations, results of operations, growth strategy and liquidity of the Company. Readers are cautioned not to place undue reliance on these forward-looking statements. It is intended that these forward-looking statements speak only as of the date they are made. We do not undertake any obligation to release publicly any revisions to these forward-looking statements to reflect future events or circumstances or to reflect the occurrence of unanticipated events.

Item 1A. Risk Factors.

The following describes some of the principal risks and uncertainties to which our industry in general, and our securities, assets and businesses specifically, are subject; other risks are briefly identified in our cautionary statement that is included under the heading “Forward-Looking Statements and Associated Risks” in Part I, Item 1, “Business.” Although we seek ways to manage these risks and uncertainties and to develop programs to control those that we can, we ultimately cannot predict the future. Future results may differ materially from past results, and from our expectations and plans.

Risks Related to Our Business and Financial Strategies

Economic weakness in our geographic markets could negatively affect us.

We conduct business from offices that are located in 20 contiguous southern Indiana counties and 14 counties in Kentucky, from which substantially all of our customer base is drawn. Because of the geographic concentration of our operations and customer base, our results depend largely upon economic conditions in this area. A favorable business environment is generally characterized by, among other factors, economic growth, low inflation, low unemployment, high business and investor confidence, strong business earnings, and efficient capital markets. Unfavorable or uncertain economic and market conditions can be caused by a decline in economic growth in the markets where we operate and in the United States as a whole; declines in business activity or investor or business confidence; limitations on the availability of or increases in the cost of credit and capital; increases in inflation or interest rates; high unemployment; commodity price volatility; natural disasters; or a combination of these or other factors.

Current economic conditions are being heavily impacted by elevated levels of inflation and rising interest rates. A prolonged period of inflation may impact our profitability by negatively impacting our fixed costs and expenses. Economic and inflationary pressure on consumers and uncertainty regarding economic improvement could have direct or indirect material adverse impacts on us, on our customers or on the financial institutions with whom we deal as counterparties to financial transactions. Such pressures could negatively impact customers’ ability to obtain new loans or to repay existing loans, diminish the values of any collateral securing such loans and could cause increases in the number of the Company’s customers experiencing financial distress and in the levels of the Company’s delinquencies, non-performing loans and other problem assets, charge-offs and provision for credit losses, all of which could materially adversely affect our financial condition and results of operations. The underwriting and credit monitoring policies and procedures that we have adopted cannot eliminate the risk that we might incur losses on account of factors relating to the economy like those identified above, and those losses could have a material adverse effect on our business, financial condition, results of operations and cash flows.

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If our actual loan losses exceed our estimates, our earnings and financial condition will be impacted.

A significant source of risk for any bank or other enterprise that lends money arises from the possibility that losses will be sustained because borrowers, guarantors and related parties may fail (because of financial difficulties or other reasons) to perform in accordance with the terms of their loan agreements. In our case, we originate many loans that are secured, but some loans are unsecured depending on the nature of the loan. With respect to secured loans, the collateral securing the repayment of these loans includes a wide variety of real and personal property that may be insufficient to cover the obligations owed under such loans, due to adverse changes in collateral values caused by changes in prevailing economic, environmental and other conditions, including declines in the value of real estate and other external events.

Our allowance for credit losses may not be adequate to cover actual losses.

We maintain an allowance for credit losses for the expected credit losses over the contractual life of the loan portfolio as well as unfunded loan commitments. The Company estimates the allowance balance using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Historical loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for changes in underwriting standards, portfolio mix, delinquency levels, changes in environmental conditions, unemployment rates, risk classifications and collateral values. We have also included assumptions about the continued effects of the advancing stress on the economy as a result of inflationary pressures, rising interest rates and financial market volatility, and economic conditions in general, all of which are highly uncertain and for which we have limited recent historical experience to draw upon. If our assumptions and judgments used to determine the allowance for credit losses prove to be incorrect, the allowance may not be adequate. We could sustain actual loan losses that are significantly higher than the amount of our allowance for credit losses.

We could be adversely affected by changes in interest rates.

Our earnings and cash flows are largely dependent upon our net interest income. Net interest income is the difference between interest income earned on interest-earning assets such as loans and securities and interest expense paid on interest-bearing liabilities such as deposits and borrowed funds. Interest rates are highly sensitive to many factors that are beyond our control, including general economic conditions, inflationary trends, demand for loans, securities and deposits, and policies of various governmental and regulatory agencies and, in particular, the monetary policies of the FRB. Changes in monetary policy, including changes in interest rates, could influence not only the interest we receive on loans and securities and the amount of interest we pay on deposits and borrowings, but such changes could also affect (i) our ability to originate loans and obtain deposits, (ii) the fair value of our financial assets and liabilities, and (iii) the average duration of our securities portfolio. If the interest rates paid on deposits and other borrowings increase at a faster rate than the interest rates received on loans and other investments, our net interest income, and therefore earnings, could be adversely affected. Earnings could also be adversely affected if the interest rates received on loans and other investments fall more quickly than the interest rates paid on deposits and other borrowings. We maintain an investment portfolio consisting of various high quality liquid fixed-income securities. The nature of fixed-income securities is such that increases in prevailing market interest rates negatively impact the value of these securities, while decreases in prevailing market interest rates positively impact the value of these securities. Any substantial, unexpected, or prolonged change in market interest rates could have a material adverse effect on our financial condition, results of operations, and cash flows.

The Company’s business, results of operations and financial condition may be adversely affected by epidemics, pandemics or other infectious disease outbreaks.

The Company may face risks related to epidemics, pandemics or other infectious disease outbreaks, which could result in a widespread health crisis that adversely affects general commercial activity, the global economy (including the states and local economies in which we operate) and financial markets. Epidemics, pandemics or other infectious disease outbreaks may result in the Company closing certain offices and may require us to limit how customers conduct business through our branch network. If our employees are required to work remotely, the Company will be exposed to increased cybersecurity risks such as phishing, malware, and other cybersecurity attacks, all of which could expose us to liability and could seriously disrupt our business operations. Furthermore, the Company’s business operations may be disrupted due to vendors and third-party service providers being unable to work or provide services effectively during such a health crisis, including because of illness, quarantines or other government actions.

In addition, epidemics, pandemics or other infectious disease outbreaks could significantly impact households and businesses, or cause limitations on commercial activity, increased unemployment and general economic and financial instability. An economic slow-down, or the reversal of an economic recovery, in the regions in which we conduct our business could result in declines in loan demand and collateral values. Furthermore, negative impacts on our customers caused by such a health crisis could result in increased risk of delinquencies, defaults, foreclosures and losses on our loans. Moreover, governmental and regulatory actions taken in response to epidemics, pandemics or other infectious disease outbreaks may include decreased

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interest rates, which could adversely impact the Company’s interest margins and may lead to decreases in the Company’s net interest income.

The extent to which a widespread health crisis may impact the Company’s business, results of operations and financial condition, as well as its regulatory capital and liquidity ratios, will depend on future developments, which are highly uncertain and are difficult to predict, including, but not limited to, the duration and severity of the crisis, the potential for seasonal or other resurgences, actions taken by governmental authorities and other third parties to contain and treat such epidemics, pandemics or other infectious disease outbreaks, and how quickly and to what extent normal economic and operating conditions can resume. Moreover, the effects of a widespread health crisis may heighten many of the other risks described in this “Risk Factors” section. As a result, the negative effects on the Company’s business, results of operations and financial condition from epidemics, a pandemics or other infectious disease outbreaks could be material.

The banking and financial services business in our markets is highly competitive.

We compete with much larger regional, national, and international competitors, including competitors that have no (or only a limited number of) offices physically located within our markets, many of which compete with us via Internet and other electronic product and service offerings. In addition, banking and other financial services competitors (including newly organized companies) that are not currently represented by physical locations within our geographic markets could establish office facilities within our markets, including through their acquisition of existing competitors. Financial technology, or “FinTech,” companies continue to emerge in key areas of banking. Our competitors may have substantially greater resources and lending limits than we have and may offer services that we do not or cannot provide. Many of our nonfinancial institution competitors have fewer regulatory constraints, broader geographic service areas, and, in some cases, lower cost structures. Increased competition in our market may also result in a decrease in the amounts of our loans and deposits, reduced spreads between loan rates and deposit rates or loan terms that are more favorable to the borrower. Any of these results could have a material adverse effect on our business, financial condition, results of operations or liquidity. See also “Business - Competition” and “Business - Regulation and Supervision” under Item 1 of Part I of this Report.

The manner in which we report our financial condition and results of operations may be affected by accounting changes.

Our financial condition and results of operations that are presented in our consolidated financial statements, accompanying notes to the consolidated financial statements, and selected financial data appearing in this Report, are, to a large degree, dependent upon our accounting policies. The selection of and application of these policies involve estimates, judgments and uncertainties that are subject to change, and the effect of any change in estimates or judgments that might be caused by future developments or resolution of uncertainties could be materially adverse to our reported financial condition and results of operations. In addition, authorities that prescribe accounting principles and standards for public companies from time to time change those principles or standards or adopt formal or informal interpretations of existing principles or standards. Such changes or interpretations (to the extent applicable to us) could result in changes that would be materially adverse to our reported financial condition and results of operations.

We may be adversely affected by changes in tax laws.

Any change in federal or state tax laws or regulations, including any increase in the federal corporate income tax rate from the current level of 21%, could negatively affect our business, financial condition and results of operations.

Liquidity risk could impair our ability to fund operations and jeopardize our financial condition.

Liquidity is essential to our business. An inability to raise funds through deposits, borrowings, the sale of securities or loans and other sources could have a substantial negative effect on our liquidity. Our access to funding sources in amounts adequate to finance our activities or the terms of which are acceptable to us could be impaired by factors that affect us specifically or the financial services industry or economy in general. Although we have historically been able to replace maturing deposits and borrowings as necessary, we might not be able to replace such funds in the future if, among other things, our results of operations or financial condition or the results of operations or financial condition of our lenders or market conditions were to change.

Additionally, negative news about us or the banking industry in general could negatively impact market and/or customer perceptions of the Bank, which could lead to a loss of depositor confidence and an increase in deposit withdrawals, particularly among those with uninsured deposits. Furthermore, as we and other banks experienced in 2023, the failure of other financial institutions may cause deposit outflows as customers (i) spread deposits among several different banks so as to maximize their amount of FDIC insurance, (ii) move deposits to larger banks (who may be considered “too big to fail”), or (iii) remove deposits from the banking system entirely. As of December 31, 2023, approximately 21% of our deposits were uninsured and

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uncollateralized. A failure to maintain adequate liquidity could have a material adverse effect on our business, financial condition and results of operations.

The value of securities in our investment securities portfolio may be negatively affected by market interest rates or disruptions in securities markets, and could affect our liquidity.

As market interest rates have increased, we have experienced significant unrealized losses on our available-for-sale securities portfolio. Unrealized losses related to available-for-sale securities are reflected in accumulated other comprehensive income in our consolidated balance sheets and reduce the level of our book capital and tangible common equity. However, such unrealized losses do not affect our regulatory capital ratios. We actively monitor our available-for-securities portfolio and we do not currently anticipate the need to realize material losses from the sale of securities for liquidity purposes. Furthermore, we believe it is unlikely that we would be required to sell any such securities before recovery of their amortized cost bases, which may be at maturity. Nonetheless, significant unrealized losses could negatively impact market and/or customer perceptions of the Bank, which could lead to a loss of depositor confidence and an increase in deposit withdrawals, particularly among those with uninsured deposits.

In addition, prices and volumes of transactions in the nation’s securities markets can be affected suddenly by economic crises, or by other national or international crises, such as national disasters, acts of war or terrorism, changes in commodities markets, or instability in foreign governments. Disruptions in securities markets may detrimentally affect the value of securities that we hold in our investment portfolio, such as through reduced valuations due to the perception of heightened credit and liquidity risks. There can be no assurance that declines in market value associated with these disruptions will not result in other than temporary impairments of these assets, which would lead to accounting charges that could have a material adverse effect on our net income and capital levels.

The soundness of other financial institutions could adversely affect us.

Our ability to engage in routine funding transactions could be adversely affected by the actions and commercial soundness of other financial institutions. Financial services companies are interrelated as a result of trading, clearing, counterparty, or other relationships. We have exposure to many different industries and counterparties, and we routinely execute transactions with counterparties in the financial services industry, including brokers and dealers, commercial banks, investment banks, mutual and hedge funds, and other institutional clients. As a result, defaults by, or even rumors or questions about, one or more financial services companies, or the financial services industry generally, have led to market-wide liquidity problems and could lead to losses or defaults by us or by other institutions. Many of these transactions expose us to credit risk in the event of default of our counterparty or client. In addition, our credit risk may be exacerbated when the collateral held by us cannot be realized or is liquidated at prices not sufficient to recover the full amount due us.

The bank failures that occurred in 2023 highlighted the potential results of an insured depository institution unexpectedly having to obtain needed liquidity to satisfy deposit withdrawal requests, including how quickly such requests can accelerate once uninsured depositors lose confidence in an institution’s ability to satisfy its obligations to depositors. Uncertainty related to the stability and liquidity of banks has impacted the competitive landscape for deposits in the banking industry and may continue to impact competition for deposits in the future in an unpredictable manner. These possible impacts could adversely affect our future operating results, including net income, and negatively impact capital.

We are dependent on key personnel and the loss of one or more of those key personnel could harm our business.

Competition for qualified employees and personnel in the financial services industry (including banking personnel, trust and investments personnel, and insurance personnel) is intense and there are a limited number of qualified persons with knowledge of and experience in our local markets. Our success depends to a significant degree upon our ability to attract and retain qualified loan origination executives, sales executives for our trust and investment products and services, and sales executives for our insurance products and services. We also depend upon the continued contributions of our management personnel, and in particular upon the abilities of our senior executive management, and the loss of the services of one or more of them could harm our business.

Our controls and procedures may fail or be circumvented.

Management regularly reviews and updates our internal controls, disclosure controls and procedures, and corporate governance policies and procedures. Any system of controls, however well designed and operated, is based in part on certain assumptions and can provide only reasonable, not absolute, assurances that the objectives of the system are met. Any failure or circumvention of our controls and procedures or failure to comply with regulations related to controls and procedures could have a material adverse effect on our business, results of operations, cash flows and financial condition.

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Our methods of reducing risk exposure may not be effective.

The Company maintains a comprehensive risk management program designed to identify, quantify, manage, mitigate, monitor, aggregate, and report risks. However, instruments, systems and strategies used to hedge or otherwise manage exposure to various types of credit, market, liquidity, operational, compliance, financial reporting and strategic risks could be less effective than anticipated. As a result, the Company may not be able to effectively mitigate its risk exposures in particular market environments or against particular types of risk, which could have a material adverse effect on our business, results of operations, cash flows and financial condition. For more information regarding risk management, please see “RISK MANAGEMENT” under Item 7 of this Report (“Management’s Discussion and Analysis of Financial Condition and Results of Operations”).

We are exposed to risk of environmental liabilities with respect to properties to which we take title.

In the course of our business, we may own or foreclose and take title to real estate, and could be subject to environmental liabilities with respect to these properties (including liabilities for property damage, personal injury, investigation and clean-up costs incurred by these parties in connection with environmental contamination), or may be required to investigate or clean up hazardous or toxic substances, or chemical releases at a property.

Climate change and related legislative and regulatory initiatives may materially affect the Company’s business and results of operations.

The global business community has increased its political and social awareness surrounding the state of the global environment and the issue climate change. Further, the U.S. Congress, state legislatures and federal and state regulatory agencies continue to propose numerous initiatives related to climate change. Similar and even more expansive initiatives are expected under the current administration, including potentially increasing supervisory expectations with respect to banks’ risk management practices, accounting for the effects of climate change in stress testing scenarios and systemic risk assessments, revising expectations for credit portfolio concentrations based on climate-related factors and encouraging investment by banks in climate-related initiatives and lending to communities disproportionately impacted by the effects of climate change. The lack of empirical data surrounding the credit and other financial risks posed by climate change make it impossible to predict how specifically climate change may impact our financial condition and results of operations. To the extent our customers experience unpredictable and more frequent weather disasters attributable to climate change, the value of real property securing the loans in our portfolios may be negatively impacted. Additionally, if insurance obtained by our borrowers is insufficient to cover any disaster-related losses sustained to the collateral, or if insurance coverage is otherwise unavailable to our borrowers, the collateral securing our loans may be negatively impacted, which could impact our financial condition and results of operations. Further, the effects of weather disasters attributed to climate change may negatively impact regional and local economic activity, which could lead to an adverse effect on our customers and impact the communities in which we operate. Overall, climate change, its effects and the resulting, unknown impact could have a material adverse effect on our financial condition and results of operations.

Increasing scrutiny and evolving expectations from customers, regulators, investors, and other stakeholders with respect to the Company’s environmental, social and governance practices may impose additional costs on the Company or expose it to new or additional risks.

Companies are facing increasing scrutiny from customers, regulators, investors, and other stakeholders related to their ESG practices and disclosure. Investor advocacy groups, investment funds and influential investors are also increasingly focused on these practices, especially as they relate to the environment, health and safety, diversity, labor conditions and human rights. Increased ESG-related compliance costs for the Company as well as among our suppliers, vendors and various other parties within our supply chain could result in increases to our overall operational costs. Failure to adapt to or comply with regulatory requirements or investor or stakeholder expectations and standards could negatively impact our reputation, ability to do business with certain partners, access to capital, and our stock price. New government regulations could also result in new or more stringent forms of ESG oversight and expanding mandatory and voluntary reporting, diligence, and disclosure.

Risks Related to the Financial Services Industry

We operate in a highly regulated environment and changes in laws and regulations to which we are subject may adversely affect our results of operations.

The banking industry in which we operate is subject to extensive federal and state regulation and supervision, which vests a significant amount of discretion in the various regulatory authorities. Banking regulations are primarily intended to protect the funds of depositors, federal deposit insurance funds and the banking system as a whole, not shareholders. These regulations and supervisory guidance affect our lending practices, capital structure, investment practices, dividend policy and growth, among other things. The U.S. Congress and federal regulatory agencies continually review banking laws, regulations and policies for

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possible changes. Changes to statutes, regulations or regulatory policies or supervisory guidance, including changes in interpretation or implementation of statutes, regulations, policies or supervisory guidance, could affect us in substantial and unpredictable ways. Such changes could subject us to additional costs, limit the types of financial services and products we may offer, limit our ability to return capital to shareholders or conduct certain activities, and/or increase the ability of non-banks to offer competing financial services and products, among other things. Failure to comply with laws, regulations, policies or supervisory guidance could result in enforcement and other legal actions by federal or state authorities, including criminal and civil penalties, the loss of FDIC insurance, the revocation of a banking charter, enforcement actions or sanctions by regulatory agencies, significant fines and civil money penalties and/or reputational damage. In this regard, government authorities, including the bank regulatory agencies, are pursuing aggressive enforcement actions with respect to compliance and other legal matters involving financial activities, which heightens the risks associated with actual and perceived compliance failures. Directives issued to enforce such actions may be confidential and thus, in some instances, we are not permitted to publicly disclose these actions. Any of the foregoing could have a material adverse effect on our business, financial condition and results of operations.

In addition, we anticipate increased regulatory scrutiny, in the course of routine examinations and otherwise, and new regulations in response to negative developments in the banking industry over the course of 2023, which may increase our cost of doing business and reduce our profitability. Among other things, there may be increased focus by both regulators and investors on deposit composition, the level of uninsured deposits, brokered deposits, unrealized losses in securities portfolios, liquidity, commercial real estate loan composition and concentrations, and capital as well as general oversight and control of the foregoing. We could face increased scrutiny or be viewed as higher risk by regulators and/or the investor community, which could have a material adverse effect on our business, financial condition and results of operations.

See “Business - Regulation and Supervision” of Item 1 above for additional information.

We are required to maintain certain minimum amounts and types of capital and may be subject to more stringent capital requirements in the future. A failure to meet applicable capital requirements could have an adverse effect on us.

We are subject to regulatory requirements specifying minimum amounts and types of capital that we must maintain. From time to time, banking regulators change these capital adequacy guidelines. For example, as a result of the Basel III Rules required by the Dodd-Frank Act, we are now required to satisfy additional, more stringent, capital adequacy standards than we had in the past. See “Business - Regulation and Supervision, Capital Requirements” of Item 1 above for additional information. We currently satisfy the well-capitalized and capital conservation standards set forth in Basel III, and based on our current capital composition and levels, we anticipate that our capital ratios, on a Basel III basis, will continue to exceed the well-capitalized minimum capital requirements and capital conservation buffer standards. However, a failure to meet minimum capital requirements could result in certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could have a negative impact on our ability to lend, grow deposit balances, make acquisitions or make capital distributions in the form of dividends. Higher capital levels could also lower our return on equity.

Our FDIC insurance premiums may increase, and special assessments could be made, which might negatively impact our results of operations.

High levels of insured institution failures, as a result of the recent recession, significantly increased losses to the Deposit Insurance Fund of the FDIC. Further, the Dodd-Frank Act mandated the FDIC to increase the level of its reserves for future losses in its Deposit Insurance Fund. Since the Deposit Insurance Fund is funded by premiums and assessments paid by insured banks, our FDIC insurance premium could increase in future years depending upon the FDIC’s actual loss experience, changes in our Bank’s financial condition or capital strength, and future conditions in the banking industry.

Risks Related to Our Operations

We face significant operational risks due to the high volume and the high dollar value nature of transactions we process.

We operate in many different businesses in diverse markets and rely on the ability of our employees and systems to process transactions. Operational risk is the risk of loss resulting from our operations, including but not limited to, the risk of fraud by employees or persons outside our company, the execution of unauthorized transactions, errors relating to transaction processing and technology, breaches of our internal control systems or failures of those of our suppliers or counterparties, compliance failures, cyber-attacks or unforeseen problems encountered while implementing new computer systems or upgrades to existing systems, business continuation and disaster recovery issues, and other external events. Insurance coverage may not be available for such losses, or where available, such losses may exceed insurance limits. This risk of loss also includes the potential legal actions that could arise as a result of an operational deficiency or as a result of noncompliance with applicable regulatory standards, adverse business decisions or their implementation, and customer attrition due to potential negative publicity. The

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occurrence of any of these events could cause us to suffer financial loss, face regulatory action and suffer damage to our reputation.

Unauthorized disclosure of sensitive or confidential client or customer information, whether through a cyber-attack, other breach of our computer systems or otherwise, could harm our business.

In the normal course of our business, we collect, process and retain sensitive and confidential client and customer information on our behalf and on behalf of other third parties. Despite the security measures we have in place, our facilities and systems may be vulnerable to cyber-attacks, security breaches, acts of vandalism, computer viruses, misplaced or lost data, programming and / or human errors, or other similar events.

Information security risks for financial institutions like us have increased recently in part because of new technologies, the use of the Internet and telecommunications technologies (including mobile devices) to conduct financial and other business transactions and the increased sophistication and activities of organized crime, perpetrators of fraud, hackers, terrorists and others. In addition to cyber-attacks or other security breaches involving the theft of sensitive and confidential information, hackers recently have engaged in attacks against large financial institutions, particularly denial of service attacks, designed to disrupt key business services such as customer-facing web sites. We may not be able to anticipate or implement effective preventive measures against all security breaches of these types. Although we employ detection and response mechanisms designed to contain and mitigate security incidents, early detection may be thwarted by sophisticated attacks and malware designed to avoid detection.

We also face risks related to cyber-attacks and other security breaches in connection with credit card transactions that typically involve the transmission of sensitive information regarding our customers through various third parties. Some of these parties have in the past been the target of security breaches and cyber-attacks, and because the transactions involve third parties and environments that we do not control or secure, future security breaches or cyber-attacks affecting any of these third parties could impact us through no fault of our own, and in some cases we may have exposure and suffer losses for breaches or attacks relating to them. We also rely on numerous other third party service providers to conduct other aspects of our business operations and face similar risks relating to them. We cannot be sure that their information security protocols are sufficient to withstand a cyber-attack or other security breach.

Any cyber-attack or other security breach involving the misappropriation, loss or other unauthorized disclosure of confidential customer information could severely damage our reputation, erode confidence in the security of our systems, products and services, expose us to the risk of litigation and liability, disrupt our operations and have a material adverse effect on our business.

Our information systems may experience an interruption or breach in security.

We rely heavily on communications and information systems to conduct our business. Any failure, interruption, or breach in security or operational integrity of these systems could result in failures or disruptions in our customer relationship management, general ledger, deposit, loan, and other systems. While we have policies and procedures designed to prevent or limit the effect of the failure, interruption, or security breach of our information systems, we cannot completely ensure that any such failures, interruptions, or security breaches will not occur or, if they do occur, that they will be adequately addressed. The occurrence of any failures, interruptions, or security breaches of our information systems could damage our reputation, result in a loss of customer business, subject us to additional regulatory scrutiny, or expose us to civil litigation and possible financial liability, any of which could have a material adverse effect on our financial condition and results of operations.

We are dependent upon third parties for certain information system, data management and processing services and to provide key components of our business infrastructure.

We outsource certain information system and data management and processing functions to third party providers. These third party service providers are sources of operational and informational security risk to us, including risks associated with operational errors, information system interruptions or breaches, and unauthorized disclosures of sensitive or confidential client or customer information. If third party service providers encounter any of these issues, or if we have difficulty communicating with them, we could be exposed to disruption of operations, loss of service or connectivity to customers, reputational damage, and litigation risk that could have a material adverse effect on our results of operations or our business.

Third party vendors provide key components of our business infrastructure such as internet connections, network access and core application processing.

While we have selected these third party vendors carefully, we do not control their actions. Any problems caused by these third parties, including as a result of their not providing us their services for any reason or their performing their services poorly,

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could adversely affect our ability to deliver products and services to our customers and otherwise to conduct our business. Replacing these third party vendors could also entail significant delay and expense.

Risks Relating to Expansion of Our Businesses by Acquisition

Any acquisitions of banks, bank branches, or loans or other financial service assets pose risks to us.

We may acquire other banks, bank branches and other financial-service-related businesses and assets in the future. Acquiring other banks, businesses, or branches involves various risks commonly associated with acquisitions, including, among other things:

•potential exposure to unknown or contingent liabilities of the acquired assets, operations or company;

•exposure to potential asset quality issues of the acquired assets, operations or company;

•environmental liability with acquired real estate collateral or other real estate;

•difficulty and expense of integrating the operations, systems and personnel of the acquired assets, operations or company;

•potential disruption to our ongoing business, including diversion of our management’s time and attention;

•the possible loss of key employees and customers of the acquired operations or company;

•difficulty in estimating the value of the acquired assets, operations or company; and

•potential changes in banking or tax laws or regulations that may affect the acquired assets, operations or company.

We may not be successful in overcoming these risks or any other problems encountered in connection with mergers or acquisitions.

Acquisitions typically involve the payment of a premium over book and market values, and, therefore, some dilution of the Company’s tangible book value per common share or net income per common share (or both) may occur in connection with any future transaction.

We may incur substantial costs to expand by acquisition, and such acquisitions may not result in the levels of profits we seek.

Integration efforts for any future acquisitions may not be successful and following any future acquisition, after giving it effect, we may not achieve financial results comparable to or better than our historical experience.

Risks Related to Our Common Stock

Our common stock price may fluctuate significantly, and this may make it difficult for you to resell our common stock at times or at prices acceptable to you.

Our common stock price constantly changes in response to a variety of factors (some of which are beyond our control), and we expect that our stock price will continue to fluctuate in the future. Factors impacting the price of our common stock include, among others:

•actual or anticipated variations in our quarterly results of operations;

•recommendations or research reports about us or the financial services industry in general published by securities analysts;

•the failure of securities analysts to cover, or continue to cover, us;

•operating and stock price performance of other companies that investors believe are comparable to us;

•news reports relating to trends, concerns and other issues in the financial services industry;

•perceptions in the marketplace regarding us, or our reputation, competitors or other financial institutions;

•actual or anticipated sales of our equity or equity-related securities;

•our past and future dividend practice;

•departure of our management team or other key personnel;

•new technology used, or services offered, by competitors;

•significant acquisitions or business combinations, strategic partnerships, joint ventures or capital commitments by or involving us or our competitors;

•failure to integrate acquisitions or realize anticipated benefits from acquisitions;

•existing or increased regulatory and compliance requirements, changes or proposed changes in laws or regulations, or differing interpretations thereof affecting our business, or enforcement of these laws and regulations; and

•litigation and governmental investigations.

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General market fluctuations, industry factors and general economic and political conditions and events (including elevated inflation, interest rate changes, credit loss trends, or economic slowdowns or recessions) could also cause our stock price to decrease regardless of operating results.

Item 1B. Unresolved Staff Comments. 

None.

Item 1C. Cybersecurity.

Risk Management and Strategy

Our enterprise risk management program is designed to identify, assess, and mitigate risks across various aspects of our company, including financial, operational, regulatory, reputational, and legal. Cybersecurity is a critical component of this program, given the increasing reliance on technology and potential of cyber threats. Our processes and policies related to cybersecurity are focused on: (i) developing organizational understanding to manage cybersecurity risks, (ii) applying safeguards to protect our systems, (iii) detecting the occurrence of a cybersecurity incident, (iv) responding to a cybersecurity incident, and (v) recovering from a cybersecurity incident. Where appropriate, these processes and policies are integrated into our overall enterprise risk management systems and processes. For example, all of our employees with network access are required to complete information security and privacy training on an annual basis. We are continuously working to improve our information technology systems and provide employee awareness training around phishing, malware, and other cyber risks to enhance our levels of protection.

Other aspects of our cyber and information security risk management program include:

•Monitoring external and internal threats and events, managing access, facilitating use of appropriate authentication options, validating controls and programs by internal teams and independent third parties and testing various compromise scenarios that are overseen by our information security team;

•Investing in threat intelligence platforms and participating in financial services industry and government forums which track and report on cyber and other information security threats;

•Identifying those third-party relationships that have the greatest potential to expose the Company to cybersecurity threats and, upon identification, conducting additional due diligence as a part of establishing those relationships;

•Routinely performing vulnerability tests;

•Engaging independent consultants and other third-parties to assist the Company in establishing and improving its policies; and

•Conducting “tabletop” exercises with outside consultants at least annually to test the Company’s processes and policies and using feedback from those exercises to further improve our processes.

The Company also maintains insurance coverage for cybersecurity incidents as part of its overall insurance portfolio.

In the event of a cybersecurity incident, the Company maintains incident response plans to investigate, classify, respond to, and manage cybersecurity incidents that may compromise the availability or integrity of our information systems, network resources, or data. In accordance with the incident response plans, cross-functional management teams assess and assign a threat level to each cybersecurity incident. A cybersecurity incident (or incidents, if aggregated together) assigned a critical threat level is escalated to a committee consisting of the Company’s executive and certain other officers (for such purpose, the “Critical Threat Committee”) for review.

The Company has not experienced any cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected the Company, including its business strategy, results of operations, or financial condition. However, cybersecurity attacks and other threats to the systems, networks, products and services of the Company, its customers and vendors, and other third parties could materially affect the Company in the future. See Item 1A. Risk Factors – Unauthorized disclosure of sensitive or confidential client or customer information, whether through a cyber-attack, other breach of our computer systems or otherwise, could harm our business.

Governance

In exercising oversight over the Company’s information technology risks, including its cyber and information security program, our Board of Directors has established a Technology Committee that is led by the Company’s Chief Digital and Information Officer (“CDIO”) and is comprised of directors with technology industry backgrounds, all of the Company’s executive officers, the Company’s Information Security Officer (“ISO”) and the Company’s Chief Risk Officer. The Technology Committee

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receives materials on a quarterly basis to address the identification and status of information technology cybersecurity risks. Each year, the full Board of Directors also receives a comprehensive update on the Company’s cyber and information security program.

Our CDIO leads the Company’s digital optimization and information technology initiatives. He is also responsible for driving the strategy, execution and integration of all banking and nonbanking technology, information and digital initiatives in alignment with the Company’s corporate business strategy. Our CDIO assumed his current role in January, 2022. Prior to that, he served as the Company’s Senior Vice President of Technology and Operations, where he lead the Company’s core processing and operations functions, and the development of technology-driven products and services. Our CDIO has over 20 years of technology and operations experience in the banking industry.

Our ISO oversees a team of employees dedicated to the prevention, detection, mitigation, and remediation of cybersecurity incidents. He joined the Company in September, 2022 with more than 20 years of technology and information security experience in banking and as a consultant, and holds a Certified Information Security Manager certification.

The Company’s Critical Threat Committee is responsible for evaluating the materiality of a cybersecurity incident based on criteria that has been reviewed with the Board of Directors, and for determining whether there are disclosure obligations under applicable securities laws. In the event that the Critical Threat Committee determines that a critical cybersecurity incident (or incidents, if aggregated together) is deemed to be material, the Critical Threat Committee will brief the Board of Directors and oversee the disclosure process. For all critical cybersecurity incidents that are not deemed to be material, the Critical Threat Committee will notify the Company’s Chairman and Chief Executive Officer to determine whether the Board of Directors will be notified of the critical incident during the next regularly-scheduled cybersecurity update to the Audit Committee, or sooner as circumstances warrant.

Item 2. Properties.

The Company’s executive offices are located in the main office building of the Bank at 711 Main Street, Jasper, Indiana. The main office building, which is owned by the Bank and also serves as the main office of the Company’s other subsidiaries, contains approximately 23,600 square feet of office space. The Bank and the Company’s other subsidiaries also conduct their operations from 50 other locations in Southern Indiana and 27 in Kentucky. Of the 77 total locations, 59 are owned by the Company and 18 are leased from third parties.

Item 3. Legal Proceedings.

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

Item 4. Mine Safety Disclosures.

Not applicable.

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PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Market for Common Stock

German American Bancorp, Inc.’s stock is traded on the Nasdaq Global Select Market under the symbol GABC.

The Common Stock was held of record by approximately 3,058 shareholders at February 20, 2024.

Transfer Agent: Computershare
Priority Processing
150 Royall St., Suite 101
Canton, MA 02021
(800) 884-4225 Shareholder
Information and
Corporate Office: Terri Eckerle
German American Bancorp, Inc.
P.O. Box 810
Jasper, Indiana 47547-0810
(812) 482-1314
(800) 482-1314

Stock Performance Graph

The following graph compares the Company’s five-year cumulative total returns with those of the Russell 2000 Stock Index, Russell Microcap Stock Index, and the Indiana Bank Peer Group. The Indiana Bank Peer Group (which is a custom peer group identified by Company management) includes all Indiana-based commercial bank holding companies (excluding companies owning thrift institutions that are not regulated as bank holding companies) that have been in existence as commercial bank holding companies throughout the five-year period ended December 31, 2023, the stocks of which have been traded on an established securities market (NYSE, NYSE American or Nasdaq) throughout that five-year period. The companies comprising the Indiana Bank Peer Group for purposes of the December 2023 comparison were: 1st Source Corp., First Financial Corp., First Merchants Corp., Lakeland Financial Corp., Old National Bancorp, Horizon Bancorp, First Internet Bancorp, First Savings Financial Corp., and First Capital, Inc. The returns of each company in the Indiana Bank Peer Group have been weighted to reflect the company’s market capitalization. The Russell 2000 Stock Index, which is designed to measure the performance of the small-cap segment of the U.S. equity universe, is a subset of the Russell 3000 Index (which measures the performance of the largest 3,000 U.S. companies) that includes approximately 2,000 of the smallest securities in that index based on a combination of their market cap and current index membership, and is annually reconstituted at the end of each June. The Russell Microcap Stock Index is an index representing the smallest 1,000 securities in the small-cap Russell 2000 Index plus the next 1,000 securities, which is also annually reconstituted at the end of each June. The Company’s stock is currently included in the Russell 2000 Index and Russell Microcap Index.

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Stock Repurchase Program Information

The following table sets forth information regarding the Company’s purchases of its common shares during each of the three months ended December 31, 2023.

Period	Total Number of Shares (or Units) Purchased	Average Price Paid Per Share (or Unit)		Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs (1)	Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs (1)
October 2023	—	$	—	—	1,000,000
November 2023	—	—		—	1,000,000
December 2023	—	—		—	1,000,000
Totals	—	$	—	—

(1) On January 31, 2022, the Company’s Board of Directors approved a plan to repurchase up to 1.0 million shares of the Company’s outstanding common stock. On a share basis, the amount of common stock subject to the repurchase plan represented approximately 3% of the Company’s outstanding shares on the date it was approved. The Company is not obligated to purchase any shares under the plan, and the plan may be discontinued at any time. The actual timing, number and share price of shares purchased under the repurchase plan will be determined by the Company at its discretion and will depend upon such factors as the market price of the stock, general market and economic conditions and applicable legal requirements. The Company has not repurchased any shares under this repurchase plan.

Equity Compensation Plan Information

See Item 12 of Part III of this Report for information regarding securities authorized for issuance under equity compensation plans.

Item 6. [Reserved]

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

INTRODUCTION

German American Bancorp, Inc. is a Nasdaq-traded (symbol: GABC) financial holding company based in Jasper, Indiana. German American, through its banking subsidiary German American Bank, operates 76 banking offices in 20 contiguous southern Indiana counties and 14 counties in Kentucky. The Company also owns an investment brokerage subsidiary (German American Investment Services, Inc.) and a full line property and casualty insurance agency (German American Insurance, Inc.).

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

This Management’s Discussion and Analysis includes an analysis of the major components of the Company’s operations for the years 2021 through 2023 and its financial condition as of December 31, 2022 and 2023. This information should be read in conjunction with the accompanying consolidated financial statements and footnotes contained elsewhere in this Report and with the description of business included in Item 1 of this Report (including the cautionary disclosure regarding “Forward Looking Statements and Associated Risks”). Financial and other information by segment is included in Note 16 (Segment Information) of the Notes to the Consolidated Financial Statements included in Item 8 of this Report and is incorporated into this Item 7 by reference.

The statements of management’s expectations and goals concerning the Company’s future operations and performance that are set forth in the following Management Overview and in other sections of this Item 7 are forward-looking statements, and readers are cautioned that these forward-looking statements are based on assumptions and are subject to risks, uncertainties, and other factors. Actual results may differ materially from the expectations of the Company that is expressed or implied by any forward-looking statement. This Item 7, as well as the discussions in Item 1 (“Business”) entitled “Forward-Looking Statements and Associated Risks” and in Item 1A (“Risk Factors”) (which discussions are incorporated in this Item 7 by reference) list some of the factors that could cause the Company’s actual results to vary materially from those expressed or implied by any such forward-looking statements.

Any statements of management’s expectations and goals concerning the Company’s future operations and performance, and future financial condition, liquidity and capital resources that are set forth in the following Management Overview and in other sections of this Item 7 are forward-looking statements, and readers are cautioned that these forward-looking statements are based on assumptions and are subject to risks, uncertainties, and other factors. Actual results may differ materially from the expectations of the Company that is expressed or implied by any forward-looking statement. This Item 7, as well as the discussions in Item 1 (“Business”) entitled “Forward-Looking Statements and Associated Risks” and in Item 1A (“Risk Factors”) (which discussions are incorporated in this Item 7 by reference) list some of the factors that could cause the Company’s actual results to vary materially from those expressed or implied by any such forward-looking statements.

MANAGEMENT OVERVIEW

Business Developments

On January 1, 2022, the Company completed the acquisition of Citizens Union Bancorp of Shelbyville, Inc. (“CUB”) through the merger of CUB with and into the Company. Immediately following completion of the CUB holding company merger, CUB’s subsidiary bank, Citizen Union Bank of Shelbyville, Inc., was merged with and into the Company’s subsidiary bank, German American Bank. CUB, headquartered in Shelbyville, Kentucky, operated 15 retail banking offices located in Shelby, Jefferson, Spencer, Bullitt, Oldham, Owen, Gallatin and Hardin counties in Kentucky through Citizens Union Bank of Shelbyville, Inc. As of the closing of the transaction, CUB had total assets of approximately $1.109 billion, total loans of approximately $683.8 million, and total deposits of approximately $930.5 million. The Company issued approximately 2.9 million shares of its common stock, and paid approximately $50.8 million in cash, in exchange for all of the issued and outstanding shares of common stock of CUB.

For further information regarding this merger and acquisition transaction, see Note 18 (Business Combinations, Goodwill and Intangible Assets) in the Notes to the Consolidated Financial Statements included in Item 8 of this Report.

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Financial Overview

Net income for the year ended December 31, 2023 totaled $85,888,000, or $2.91 per share, an increase of $4,063,000, or approximately 5% on a per share basis, from the year ended December 31, 2022 net income of $81,825,000, or $2.78 per share. The increase in net income during 2023, compared with 2022, was primarily attributable to increased non-interest income, a decline in non-interest expenses (which was driven by higher expenses in 2022 as a result of the January 1, 2022 acquisition of CUB), and a lower provision for credit losses. The positive impact of those items was partially offset by a decline in net interest income resulting primarily from a reduced level of earning assets, which was somewhat mitigated by an improved net interest margin.

Net income for the year ended December 31, 2022 totaled $81,825,000, or $2.78 per share, a decline of $2,312,000, or approximately 12% on a per share basis, from the year ended December 31, 2021 net income of $84,137,000, or $3.17 per share. The change in net income during 2022, compared with 2021, was largely impacted by acquisition-related expenses for the CUB transaction that closed on January 1, 2022. The 2022 results of operations included acquisition-related expenses of $12,323,000 ($9,372,000 or $0.32 per share, on an after tax basis) and also included Day 1 provision for credit losses under the CECL model of $6,300,000 ($4,725,000 or $1.16 per share, on an after tax basis). The decline in per share net income for the year ended December 31, 2022, as compared to 2021, was also impacted by the Company’s January 1, 2022 issuance of approximately 2.9 million shares of common stock as part of the merger consideration in the CUB transaction.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

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

ALLOWANCE FOR CREDIT LOSSES

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

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

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

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

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

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

The Company uses a number of economic variables in its scenarios to estimate the allowance for credit losses, with the most significant drivers being unemployment rate forecast, gross domestic product and agricultural producer price index as well as qualitative adjustments. Historical loss rates from periods where the average unemployment rate, gross domestic product and agricultural producer pricing index matches the forecast range are considered when calculating the forecast period loss rate. The impact of the changes in the unemployment and gross domestic product forecast range between December 31, 2023, and December 31, 2022, resulted in a decrease in the allowance for credit losses of approximately $400,000.

Based on sensitivity analysis of all portfolios, a 0.050% change (slight improvement or decline on the Company’s scale) in all ten qualitative risk factors would have a $1,900,000 impact on the reserve allocation. The sensitivity and related range of impact is a hypothetical analysis and is not intended to represent management’s judgements or assumptions of qualitative loss factors that were utilized at December 31, 2023 in estimation of the allowance for credit losses on loans recognized on the Consolidated Balance Sheets.

SECURITIES VALUATION

Available-for-sale debt securities in unrealized loss positions are evaluated for impairment related to credit losses at least quarterly. For available-for-sale debt securities in an unrealized loss position, the Company assesses whether we intend to sell, or it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For available-for sale debt securities that do not meet the criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security and the issuer, among other factors. If this assessment indicates that a credit loss exists, the Company compares the present value of cash flows expected to be collected from the security with the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis for the security, a credit loss exists and an allowance for credit losses is recorded, limited to the amount that the fair value of the security is less than its amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income, net of applicable taxes. No allowance for credit losses for available-for-sale debt securities was needed at December 31, 2023. Accrued interest receivable on available-for-sale debt securities is excluded from the estimate of credit losses. As of December 31, 2023, gross unrealized gains on the securities available-for-sale portfolio totaled approximately $1,337,000 and gross unrealized losses totaled approximately $275,765,000. The net amount of these two items, net of applicable taxes, is included in other comprehensive income (loss).

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

INCOME TAX EXPENSE

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

A valuation allowance reduces deferred tax assets to the amount management believes is more likely than not to be realized. In evaluating the realization of deferred tax assets, management considers the likelihood that sufficient taxable income of appropriate character will be generated within carry-back and carry-forward periods, including consideration of available tax

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planning strategies. Tax-related loss contingencies, including assessments arising from tax examinations and tax strategies, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. In considering the likelihood of loss, management considers the nature of the contingency, the progress of any examination or related protest or appeal, the views of legal counsel and other advisors, experience of the Company or other enterprises in similar matters, if any, and management’s intended response to any assessment.

GOODWILL AND OTHER INTANGIBLE ASSETS

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

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

RESULTS OF OPERATIONS

NET INCOME

Net income for the year ended December 31, 2023 totaled $85,888,000, or $2.91 per share, an increase of $4,063,000, or approximately 5% on a per share basis, from the year ended December 31, 2022 net income of $81,825,000, or $2.78 per share. The increase in net income during 2023, compared with 2022, was primarily attributable to increased non-interest income, a decline in non-interest expenses (which was driven by higher expenses in 2022 as a result of the January 1, 2022 acquisition of CUB), and a lower provision for credit losses. The positive impact of those items was partially offset by a decline in net interest income resulting primarily from a reduced level of earning assets, which was somewhat mitigated by an improved net interest margin.

Net income for the year ended December 31, 2022 totaled $81,825,000, or $2.78 per share, a decline of $2,312,000, or approximately 12% on a per share basis, from the year ended December 31, 2021 net income of $84,137,000, or $3.17 per share. The change in net income during 2022, compared with 2021, was largely impacted by acquisition-related expenses for the CUB transaction that closed on January 1, 2022. The 2022 results of operations included acquisition-related expenses of $12,323,000 ($9,372,000 or $0.32 per share, on an after tax basis) and also included Day 1 provision for credit losses under the CECL model of $6,300,000 ($4,725,000 or $1.16 per share, on an after tax basis). The decline in per share net income for the year ended December 31, 2022, as compared to 2021, was also impacted by the Company’s January 1, 2022 issuance of approximately 2.9 million shares of common stock as part of the merger consideration in the CUB transaction.

NET INTEREST INCOME

Net interest income is the Company’s single largest source of earnings, and represents the difference between interest and fees realized on earning assets, less interest paid on deposits and borrowed funds. Several factors contribute to the determination of net interest income and net interest margin, including the volume and mix of earning assets, interest rates, and income taxes. Many factors affecting net interest income are subject to control by management policies and actions. Factors beyond the control of management include the general level of credit and deposit demand, Federal Reserve Board monetary policy, and changes in tax laws.

During the year ended December 31, 2023, net interest income, on a non tax-equivalent basis, totaled $190,433,000, a decline of $10,151,000, or 5%, compared to the year ended December 31, 2022 net interest income of $200,584,000. The decline in net interest income during 2023 compared with 2022 was primarily attributable to a decline in average earning assets, driven by a reduced level of deposits which was somewhat offset by an improved net interest margin resulting from the rise in market interest rates.

During the year ended December 31, 2022, net interest income totaled $200,584,000, representing an increase of $39,754,000, or 25%, from the year ended December 31, 2021 net interest income of $160,830,000. The increase in net interest income

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during 2022 compared with 2021 was primarily attributable to a higher level of earning assets, driven in large part by the CUB acquisition, and an expansion of the Company’s net interest margin. The increase in net interest income was partially offset by a lower level of Paycheck Protection Program (“PPP”) loan fee recognition.

The net interest margin represents tax-equivalent net interest income expressed as a percentage of average earning assets. The net interest margin for the year ended December 31, 2023 was 3.58% compared to 3.45% in 2022 and 3.31% in 2021. The improvement in the Company’s net interest margin during 2023 compared to 2022 of 13 basis points was primarily the result of a shift in the earning assets from the securities portfolio to higher yielding loans, which was somewhat reduced by the increasing cost of deposits as a result of the higher market interest rates.

The improvement in the Company’s net interest margin during 2022 compared to 2021 was largely attributable to improved yields on earning assets driven by increased market rates, which were partially mitigated by an increase in the overall cost of funds of the Company.

The Company’s net interest margin for all periods presented was impacted by the accretion of discounts on acquired loans. In 2022 and 2021, the Company’s net interest margin was also impacted by fees recognized as a part of the PPP. Fees recognized on PPP loans through net interest income totaled $873,000 during 2022 and $12,196,000 during 2021. The fees recognized related to the PPP contributed approximately 1 basis point to the net interest margin in 2022 and 24 basis points to the net interest margin in 2021. Accretion of discounts on acquired loans contributed approximately 5 basis points to the net interest margin in 2023 and 7 basis points during both 2022 and 2021. Accretion of discounts on acquired loans totaled $2,814,000 during 2023, $4,341,000 during 2022, and $3,476,000 during 2021.

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The following table summarizes net interest income (on a tax-equivalent basis) for each of the past three years. For tax-equivalent adjustments, an effective tax rate of 21% was used for all periods presented (1).

Average Balance Sheet

(Tax-equivalent basis, dollars in thousands)

	Twelve Months Ended December 31, 2023						Twelve Months Ended December 31, 2022						Twelve Months Ended December 31, 2021
	Principal Balance		Income / Expense		Yield / Rate		Principal Balance		Income / Expense		Yield / Rate		Principal Balance		Income / Expense		Yield / Rate
ASSETS
Federal Funds Sold and Other Short-term Investments	$	39,452	$	1,677	4.25	%	$	458,230	$	5,765	1.26	%	$	390,362	$	488	0.12	%
Securities:
Taxable	890,841		20,614		2.31	%	1,015,958		20,453		2.01	%	824,204		12,962		1.57	%
Non-taxable	738,769		27,656		3.74	%	844,772		29,810		3.53	%	728,765		22,504		3.09	%
Total Loans and Leases ⁽²⁾	3,835,157		213,195		5.56	%	3,680,708		169,593		4.61	%	3,072,302		139,378		4.54	%
TOTAL INTEREST EARNING ASSETS	5,504,219		263,142		4.78	%	5,999,668		225,621		3.76	%	5,015,633		175,332		3.50	%
Other Assets	578,399						559,949						397,147
Less: Allowance for Credit Losses	(44,744)						(45,587)						(43,073)
TOTAL ASSETS	$	6,037,874					$	6,514,030					$	5,369,707
LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest-bearing Demand Deposits	$	1,826,232	$	28,378	1.55	%	$	2,013,969	$	8,583	0.43	%	$	1,595,579	$	1,789	0.11	%
Savings Deposits and Money Market Accounts	1,229,019		12,106		0.99	%	1,473,772		2,879		0.20	%	1,106,692		885		0.08	%
Time Deposits	588,142		16,432		2.79	%	474,409		2,052		0.43	%	412,935		2,281		0.55	%
FHLB Advances and Other Borrowings	210,837		9,307		4.41	%	159,029		4,828		3.04	%	186,750		4,594		2.46	%
TOTAL INTEREST-BEARING LIABILITIES	3,854,230		66,223		1.72	%	4,121,179		18,342		0.45	%	3,301,956		9,549		0.29	%
Demand Deposit Accounts	1,553,082						1,738,349						1,378,647
Other Liabilities	46,456						44,436						46,170
TOTAL LIABILITIES	5,453,768						5,903,964						4,726,773
Shareholders’ Equity	584,106						610,066						642,934
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	6,037,874					$	6,514,030					$	5,369,707
COST OF FUNDS					1.20	%					0.31	%					0.19	%
NET INTEREST INCOME			$	196,919					$	207,279					$	165,783
NET INTEREST MARGIN					3.58	%					3.45	%					3.31	%

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

(2)Loans held-for-sale and non-accruing loans have been included in average loans. Interest income on loans includes loan fees of $4,316, $6,972, and $15,761 for 2023, 2022 and 2021, respectively.

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The following table sets forth for the periods indicated a summary of the changes in interest income and interest expense resulting from changes in volume and changes in rates:

Net Interest Income – Rate / Volume Analysis

(Tax-Equivalent basis, dollars in thousands) 

	2023 compared to 2022 Increase / (Decrease) Due to ⁽¹⁾						2022 compared to 2021 Increase / (Decrease) Due to ⁽¹⁾
	Volume		Rate		Net		Volume		Rate		Net
Interest Income:
Federal Funds Sold and Other
Short-term Investments	$	(8,748)	$	4,660	$	(4,088)	$	99	$	5,178	$	5,277
Taxable Securities	(2,689)		2,849		160		3,399		4,093		7,492
Non-taxable Securities	(3,894)		1,741		(2,153)		3,852		3,453		7,305
Loans and Leases	7,365		36,237		43,602		28,001		2,214		30,215
Total Interest Income	(7,966)		45,487		37,521		35,351		14,938		50,289
Interest Expense:
Savings and Interest-bearing Demand	(1,590)		30,612		29,022		978		7,810		8,788
Time Deposits	605		13,775		14,380		310		(539)		(229)
FHLB Advances and Other Borrowings	1,871		2,608		4,479		(744)		978		234
Total Interest Expense	886		46,995		47,881		544		8,249		8,793
Net Interest Income	$	(8,852)	$	(1,508)	$	(10,360)	$	34,807	$	6,689	$	41,496

(1) The change in interest due to both rate and volume has been allocated to volume and rate changes in proportion to the relationship of the absolute dollar amounts of the change in each.

See the Company’s Average Balance Sheet above and the discussions under the headings “USES OF FUNDS,” “SOURCES OF FUNDS,” and “RISK MANAGEMENT – Liquidity and Interest Rate Risk Management” for further information on the Company’s net interest income, net interest margin, and interest rate sensitivity position.

PROVISION FOR CREDIT LOSSES

The Company provides for credit losses through regular provisions to the allowance for credit losses. The provision is affected by net charge-offs on loans and changes in specific and general allocations of the allowance. During 2023, the Company recorded a provision for credit losses of $2,550,000 compared with $6,350,000 during 2022 and a negative provision for credit losses of $6,500,000 during 2021.

During 2023, the provision for credit losses represented approximately 7 basis points of average loans. The lower provision recorded during 2023, as compared to 2022, was largely related to the resolution during the fourth quarter of 2023 of a single commercial borrowing relationship with minimal loss recognition for which the Company had established a significant reserve in previous periods. The Company realized net charge-offs of $2,953,000 or 8 basis points of average loans during 2023.

During 2022, the provision for credit losses represented approximately 17 basis points of average loans. The provision for credit losses in 2022 included $6,300,000 for the Day 1 CECL addition to the allocation for credit loss related to the CUB acquisition for the non-purchased with credit deterioration (“PCD”) loans. The Company realized net charge-offs of $2,316,000 or 6 basis points of average loans during 2022.

During 2021, the negative provision for credit losses represented approximately 21 basis points of average loans. The negative provision for credit losses in 2021 was largely due to declines in certain adversely criticized assets and improvement in certain pandemic-related stressed sectors for which the Company had provided significant levels of allowance for credit losses during 2020.

The provision for credit losses made during 2023 was made at a level deemed necessary by management to absorb expected losses in the loan portfolio. A detailed evaluation of the adequacy of the allowance for credit losses is completed quarterly by management, the results of which are used to determine provision for credit losses. Management estimates the allowance balance required using past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions and reasonable and supportable forecasts along with other

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qualitative and quantitative factors. Refer also to the sections entitled “CRITICAL ACCOUNTING POLICIES AND ESTIMATES” and “RISK MANAGEMENT - Lending and Loan Administration” for further discussion of the provision and allowance for credit losses.

NON-INTEREST INCOME

During the year ended December 31, 2023, non-interest income increased $1,128,000 or 2% from the year ended December 31, 2022. During the year ended December 31, 2022, non-interest income declined $329,000, or 1%, from the year ended December 31, 2021.

Non-interest Income (dollars in thousands)	Years Ended December 31,						% Change From Prior Year
	2023		2022		2021		2022		2021
Wealth Management Fees	$	11,711	$	10,076	$	10,321	16	%	(2)	%
Service Charges on Deposit Accounts	11,538		11,457		7,723		1		48
Insurance Revenues	9,596		10,020		9,268		(4)		8
Company Owned Life Insurance	1,731		2,264		1,529		(24)		48
Interchange Fee Income	17,452		15,820		13,116		10		21
Other Operating Income	5,830		5,116		6,991		14		(27)
Subtotal	57,858		54,753		48,948		6		12
Net Gains on Sales of Loans	2,363		3,818		8,267		(38)		(54)
Net Gains on Securities	40		562		2,247		(93)		(75)
TOTAL NON-INTEREST INCOME	$	60,261	$	59,133	$	59,462	2		(1)

 

Wealth management fees increased $1,635,000, or 16%, during 2023 compared with 2022. The increase during 2023 was largely attributable to increased assets under management within the Company’s wealth management group as compared with 2022. Wealth management fees declined $245,000, or 2%, during 2022 compared with 2021.

Service charges on deposit accounts increased $81,000, or 1%, during 2023 compared to 2022. Service charges on deposit accounts increased $3,734,000, or 48%, during 2022 compared to 2021. The increase during 2022 compared with 2021 was the result of the CUB acquisition as well as increased deposit customer activity.

Insurance revenues declined $424,000, or 4%, during 2023 compared with 2022, which was primarily attributable to decreased contingency revenue. Contingency revenue during 2023 totaled $955,000 compared with $1,641,000 during 2022. Contingency revenue is reflective of claims and loss experience with insurance carriers that the Company represents through its property and casualty insurance agency. Insurance revenues increased $752,000, or 8%, during 2022 compared with 2021, which was the result of increased contingency revenue as well as increases across multiple lines of business.

Company owned life insurance decreased $533,000, or 24%, during 2023 compared with 2022. The decline in 2023 was primarily the result of a decrease in the death benefit claims received compared with 2022. Company owned life insurance revenue increased $735,000, or 48%, during 2022 compared with 2021. The increase during 2022 compared with 2021 was largely related to death benefits received from life insurance policies during 2022 and to the CUB acquisition.

Interchange fee income increased $1,632,000, or 10%, during the year ended December 31, 2023 compared with 2022. The increase in the level of fees during 2023 compared with 2022 was due to increased card utilization by customers. Interchange fees increased $2,704,000, or 21%, during 2022 compared with 2021. The increased level of fees during 2022 compared with 2021 was related to the CUB acquisition as well as increased card utilization by customers.

Other operating income increased by $714,000, or 14%, during 2023 compared with 2022. The increase during 2023 was largely attributable to the gain on sale of real estate related to the consolidation of various branch office facilities. Other operating income declined $1,875,000, or 27%, during 2022 compared with 2021. This decline was primarily attributable to the net gain of $1.4 million related to the sale of the two branch office locations during the third quarter of 2021 and to a lower level of interest rate swap transaction fees with loan customers.

Net gains on sales of loans declined $1,455,000, or 38%, during the year ended December 31, 2023 compared with 2022. The decline during 2023 compared with 2022 was related to both a lower volume of loans sold and lower pricing levels. Net gains on sales of loans declined $4,449,000, or 54%, during the year ended December 31, 2022 compared with 2021. The decline in 2022 compared with 2021 was generally attributable to a lower volume of loans sold and lower pricing levels. Loan sales totaled $109.0 million during 2023, $168.1 million during 2022, and $266.0 million during 2021.

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The Company realized $40,000 in gains on sales of securities during 2023 compared with $562,000 during 2022 and $2,247,000 during 2021. The net gains on sales of securities in all periods presented were completed as part of adjustments in allocations within the normal course of business of securities portfolio management.

NON-INTEREST EXPENSE

During the year ended December 31, 2023, non-interest expense totaled $144,497,000, a decrease of $9,694,000, or 6%, compared with the year ended December 31, 2022. During the year ended December 31, 2022, non-interest expense totaled $154,191,000, an increase of $30,184,000, or 24%, compared with the year ended December 31, 2021. The 2022 non-interest expenses included approximately $12,323,000 of non-recurring acquisition-related expenses for the acquisition of CUB.

Non-interest Expense (dollars in thousands)	Years Ended December 31,						% Change From Prior Year
	2023		2022		2021		2022		2021
Salaries and Employee Benefits	$	83,244	$	84,145	$	68,570	(1)	%	23	%
Occupancy, Furniture and Equipment Expense	14,467		14,921		14,831		(3)		1
FDIC Premiums	2,829		1,860		1,419		52		31
Data Processing Fees	11,112		15,406		7,611		(28)		102
Professional Fees	5,575		6,295		5,009		(11)		26
Advertising and Promotion	4,857		4,416		4,197		10		5
Intangible Amortization	2,840		3,711		2,731		(23)		36
Other Operating Expenses	19,573		23,437		19,639		(16)		19
TOTAL NON-INTEREST EXPENSE	$	144,497	$	154,191	$	124,007	(6)		24

 

Salaries and benefits declined $901,000, or 1%, during the year ended December 31, 2023 compared with 2022. The decline in salaries and benefits during 2023 compared with 2022 was largely related to approximately $1,480,000 of acquisition-related salary and benefit costs of a non-recurring nature in 2022 related to the CUB acquisition. Salaries and benefits increased $15,575,000, or 23%, during 2022 compared with 2021. The increase in salaries and benefits during 2022 compared with 2021 was largely attributable to the CUB acquisition, including the aforementioned acquisition-related salary and benefit costs of a non-recurring nature, with the remainder of the increase due primarily to the salaries and benefits costs for the CUB employee base.

FDIC premiums increased $969,000, or 52%, during the year ended December 31, 2023 compared with 2022. The increase during 2023 compared with 2022 was primarily related to an industry-wide 2 basis point increase in the base FDIC premium assessment effective January 1, 2023. FDIC premiums increased $441,000, or 31%, during 2022 compared with 2021. This increase is primarily attributable to an increase in total assessable assets from the acquisition of CUB as well as organic growth.

Data processing fees declined $4,294,000, or 28%, during the year ended December 31, 2023 compared with the year ended December 31, 2022. The decline during 2023 compared with 2022 was largely driven by acquisition-related costs associated with the CUB transaction, which totaled approximately $4,982,000 during 2022. Data processing fees increased $7,795,000, or 102%, during the year ended December 31, 2022 compared with 2021. The increase during 2022 compared with 2021 was largely driven by the aforementioned acquisition-related costs along with the CUB operating costs and costs related to continued data system enhancements.

Professional fees declined $720,000, or 11%, during the year ended December 31, 2023 compared with the year ended December 31, 2022. The decline during 2023 compared with 2022 was primarily due to merger-related professional fees associated with the CUB acquisition that totaled approximately $1,802,000 in 2022, which were partially mitigated by increased legal and other professional fees during 2023. Professional fees increased $1,286,000, or 26%, during 2022 compared with 2021. The increase during 2022 was primarily due to professional fees associated with the CUB acquisition. Merger and acquisition-related professional fees totaled approximately $1,802,000 during 2022 compared with $678,000 during 2021.

Other operating expenses declined $3,864,000, or 16%, during the year ended December 31, 2023 compared to the year ended December 31, 2022. The decline during 2023 compared with 2022 was attributable to acquisition-related costs that totaled approximately $3,862,000 in 2022. The acquisition-related costs were primarily vendor contract termination costs. Other operating expenses increased $3,798,000, or 19%, during the year ended December 31, 2022 compared with 2021. The increase in 2022 compared to 2021 was primarily attributable to the aforementioned acquisition-related costs and operating costs associated with CUB.

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PROVISION FOR INCOME TAXES

The Company records a provision for current income taxes payable, along with a provision for deferred taxes payable in the future. Deferred taxes arise from temporary differences, which are items recorded for financial statement purposes in a different period than for income tax returns. The Company’s effective tax rate was 17.1%, 17.5%, and 18.1%, respectively, in 2023, 2022, and 2021. The effective tax rate in all periods is lower than the blended statutory rate. The lower effective rate in all periods primarily resulted from the Company’s tax-exempt investment income on securities, loans, and company owned life insurance, income tax credits generated by investments in affordable housing projects, and income generated by subsidiaries domiciled in a state with no state or local income tax.

See Note 10 to the Company’s consolidated financial statements included in Item 8 of this Report for additional details relative to the Company’s income tax provision.

CAPITAL RESOURCES

As of December 31, 2023, shareholders’ equity increased by $105.2 million to $663.6 million compared with $558.4 million at year-end 2022. The increase in shareholders’ equity was partially attributable to the increase in retained earnings of $56.5 million due to net income of $85.9 million during 2023, which was partially offset by the payment of $29.4 million in shareholder dividends. The increase in shareholders’ equity was also attributable to an increase in accumulated other comprehensive income (“AOCI”) of $46.4 million related to an increase in value of the Company’s available-for-sale securities portfolio.

Shareholders’ equity represented 10.8% of total assets at December 31, 2023 and 9.1% of total assets at December 31, 2022. Shareholders’ equity included $186.7 million of goodwill and other intangible assets at December 31, 2023 compared to $189.8 million of goodwill and other intangible assets at December 31, 2022.

In January 2022, the Company’s Board of Directors approved a plan to repurchase up to 1.0 million shares of the Company’s outstanding common stock. On a share basis, the amount of common stock subject to the new repurchase plan represented approximately 3% of the Company’s outstanding shares on the date it was approved. The Company is not obligated to purchase any shares under the plan, and the plan may be discontinued at any time. The actual timing, number and share price of shares purchased under the repurchase plan will be determined by the Company at its discretion and will depend upon such factors as the market price of the stock, general market and economic conditions and applicable legal requirements. The Company has not repurchased any shares of common stock under the repurchase plan.

In August 2022, the Inflation Reduction Act of 2022 (the “IRA”) was enacted. Among other things, the IRA imposes a new 1% excise tax on the fair 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.

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

The current risk-based capital rules, as adopted by federal banking regulators, are based upon guidelines developed by the Basel Committee on Banking Supervision and reflect various requirements of the Dodd-Frank Act (the “Basel III Rules”). The Basel III Rules require banking organizations to, among other things, maintain a minimum ratio of Total Capital to risk-weighted assets, a minimum ratio of Tier 1 Capital to risk-weighted assets, a minimum ratio of “Common Equity Tier 1 Capital” to risk-weighted assets, and a minimum leverage ratio (calculated as the ratio of Tier 1 Capital to adjusted average consolidated assets). In addition, under the Basel III Rules, in order to avoid limitations on capital distributions, including dividend payments, the Company is required to maintain a 2.5% capital conservation buffer above the adequately capitalized regulatory capital ratios. At December 31, 2023, the capital levels for the Company and its subsidiary bank remained well in excess of the minimum amounts needed for capital adequacy purposes and the Bank’s capital levels met the necessary requirements to be considered well-capitalized.

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

	12/31/2023 Ratio		12/31/2022 Ratio		Minimum for Capital Adequacy Purposes ⁽¹⁾		Well-Capitalized Guidelines
Total Capital (to Risk Weighted Assets)
Consolidated	16.50	%	15.45	%	8.00	%	N/A
Bank	14.76		14.07		8.00		10.00	%
Tier 1 (Core) Capital (to Risk Weighted Assets)
Consolidated	14.97	%	13.97	%	6.00	%	N/A
Bank	14.04		13.42		6.00		8.00	%
Common Tier 1 (CET 1) Capital Ratio (to Risk Weighted Assets)
Consolidated	14.26	%	13.26	%	4.50	%	N/A
Bank	14.04		13.42		4.50		6.50	%
Tier 1 Capital (to Average Assets)
Consolidated	11.75	%	10.50	%	4.00	%	N/A
Bank	11.03		10.09		4.00		5.00	%

(1) Excludes capital conservation buffer.

As discussed in Note 1 (Summary of Significant Accounting Policies) of the Notes to the Consolidated Financial Statements included in Item 8 of this Report, 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 Coronavirus Aid, Relief, and Economic Security Act (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. An additional 25% was phased in on each of January 1, 2023 and January 1, 2024, and another 25% will be phased in on January 1, 2025 (at which time the cumulative effects of adopting CECL will have been fully phased into our regulatory capital). Under the five-year transition option, the amount of adjustments to regulatory capital that could be deferred until the phase-in period began included both the initial impact of our adoption of CECL at January 1, 2020 and 25% of subsequent changes in our allowance for credit losses during each quarter of the two-year period ended December 31, 2021.

USES OF FUNDS

LOANS

December 31, 2023 total loans increased $189.3 million, or 5%, compared with December 31, 2022. The increase in total loans at December 31, 2023 compared with year-end 2022 was broad-based across most segments of the portfolio. Commercial real estate loans increased $155.0 million, or 8%, agricultural loans grew $6.4 million, or 2%, and retail loans increased $42.9 million, or 6%. Partially offsetting these increases was a modest decline in commercial and industrial loans of $15.0 million, or 2%, as line of credit utilization remains muted.

December 31, 2022 total loans increased $780.7 million, or 26%, compared with December 31, 2021. The increase in total loans at December 31, 2022 compared with year-end 2021 was largely due to the acquisition of CUB and organic loan growth from throughout the Company’s existing market areas, partially offset by a decrease in PPP loans.

The Bank has certain lending policies and procedures in place that are designed to maximize loan income within an acceptable level of risk. Management reviews and approves these policies and procedures on a regular basis. A reporting system supplements the review process by providing management with frequent reports related to loan production, loan quality, concentration of credit, loan delinquencies and non-performing and potential problem loans. Diversification in the loan portfolio is a means of managing risk associated with fluctuations in economic conditions. As reflected in the table below, over the past several years (including 2023), the composition of the loan portfolio has remained relatively stable and diversified.

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The portfolio is most heavily concentrated in commercial real estate loans at 53% of the portfolio in 2023, followed by commercial and industrial loans at 17% of the portfolio, and agricultural loans at 11% of the portfolio.

Loan Portfolio	December 31,
(dollars in thousands)	2023			2022			2021			2020			2019
Commercial and Industrial Loans and Leases	$	661,529		$	676,502		$	548,350		$	694,437		$	589,758
Commercial Real Estate Loans	2,121,835			1,966,884			1,530,677			1,467,397			1,495,862
Agricultural Loans	423,803			417,413			358,150			376,186			384,526
Home Equity and Consumer Loans	407,889			377,164			307,184			297,702			306,972
Residential Mortgage Loans	362,844			350,682			263,565			256,276			304,855
Total Loans	3,977,900			3,788,645			3,007,926			3,091,998			3,081,973
Less: Unearned Income	(6,818)			(3,711)			(3,662)			(3,926)			(4,882)
Subtotal	3,971,082			3,784,934			3,004,264			3,088,072			3,077,091
Less: Allowance for Credit Losses	(43,765)			(44,168)			(37,017)			(46,859)			(16,278)
Loans, Net	$	3,927,317		$	3,740,766		$	2,967,247		$	3,041,213		$	3,060,813
Net PPP Loans (Included in Commercial and Industrial Loans above)	—			—			19,450			181,984			—
Ratio of Loans to Total Loans
Commercial and Industrial Loans and Leases	17		%	18		%	18		%	23		%	19		%
Commercial Real Estate Loans	53		%	52		%	51		%	47		%	49		%
Agricultural Loans	11		%	11		%	12		%	12		%	12		%
Home Equity and Consumer Loans	10		%	10		%	10		%	10		%	10		%
Residential Mortgage Loans	9		%	9		%	9		%	8		%	10		%
Total Loans	100		%	100		%	100		%	100		%	100		%

The Company’s policy is generally to extend credit to consumer and commercial borrowers in its primary geographic market area in southern Indiana and central and western Kentucky. Commercial extensions of credit outside this market area are generally concentrated in real estate loans within a reasonable proximity of the Company’s primary market and are granted on a selective basis.

PPP loans, which were originated in 2020 and early 2021, were made to fund payroll and operational costs of eligible businesses, organizations and self-employed persons during the COVID-19 pandemic. Loans covered by the PPP, which was administered by the Small Business Administration (“SBA”) under the provisions of the CARES Act, were eligible for loan forgiveness if program guidelines were met. The Company actively participated in assisting its customers with PPP funding during the program. PPP loans are reflected in Commercial and Industrial Loans and Leases in the table above.

While commercial real estate (“CRE”) is the largest component of the Company’s loan portfolio, it is well-diversified over numerous property types. Specifically, the commercial real estate loan portfolio, as a percentage of the CRE portfolio and total loans at December 31, 2023, included the following property types: multi-family dwellings (21% of CRE portfolio and 11% of total loans); single family investment properties (12% of CRE portfolio and 7% of total loans); retail space (14% of CRE portfolio and 7% of total loans); office real estate (8% of CRE portfolio and 4% of total loans); lodging (6% of CRE portfolio and 3% of total loans); healthcare facilities (7% of CRE portfolio and 4% of total loans); and land development and construction (6% of CRE portfolio and 3% of total loans). The Company’s commercial real estate loan portfolio is further diversified by occupancy type, with approximately 77% of the CRE portfolio being non-owner occupied at December 31, 2023 (which is 41% of the Company’s overall loan portfolio), and 23% of the CRE portfolio being owner occupied (which is 12% of the Company’s total loan portfolio).

The commercial real estate loan portfolio, as a percentage of the CRE portfolio and total loans at December 31, 2022, included the following property types: multi-family dwellings (20% of CRE portfolio and 11% of total loans); single family investment properties (14% of CRE portfolio and 7% of total loans); retail space (13% of CRE portfolio and 7% of total loans); office real estate (7% of CRE portfolio and 4% of total loans); lodging (6% of CRE portfolio and 3% of total loans); healthcare facilities (6% of CRE portfolio and 3% of total loans); and land development and construction (5% of CRE portfolio and 3% of total loans). The Company’s commercial real estate loan portfolio is further diversified by occupancy type, with approximately 78% of the CRE portfolio being non-owner occupied at December 31, 2022 (which is 40% of the Company’s overall loan portfolio), and 22% of the CRE portfolio being owner occupied (which is 12% of the Company’s total loan portfolio).

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

The following table indicates the amounts of loans (excluding residential mortgages on 1-4 family residences and consumer loans) outstanding as of December 31, 2023, which, based on remaining scheduled repayments of principal, are due in the periods indicated (dollars in thousands). 

	Within One Year		One to Five Years		After Five Years		Total
Commercial and Agricultural	$	845,677	$	1,601,441	$	771,576	$	3,218,694

	Interest Sensitivity
	Fixed Rate		Variable Rate
Loans Maturing After One Year	$	824,511	$	1,548,506

INVESTMENTS

The investment portfolio is a principal source for funding the Company’s loan growth and other liquidity needs of its subsidiaries. The Company’s securities portfolio primarily consists of money market securities, collateralized and uncollateralized federal agency securities, municipal obligations of state and political subdivisions, and mortgage-backed securities and collateralized mortgage obligations (MBS/CMO - Residential) issued by U.S. government agencies. Money market securities include federal funds sold, interest-bearing balances with banks, and other short-term investments. The composition of the year-end balances in the investment portfolio is presented in Note 2 (Securities) of the Notes to the Consolidated Financial Statements included in Item 8 of this Report and in the table below:

Investment Portfolio, at Amortized Cost	December 31,
(dollars in thousands)	2023		%		2022		%		2021		%
Federal Funds Sold and Other Short-term Investments	$	36,525	2	%	$	41,905	2	%	$	349,717	16	%
U.S. Treasury	—		—		64,097		3		—		—
Obligations of State and Political Subdivisions	889,940		47		939,193		44		896,048		40
MBS/CMO	761,025		40		846,519		40		797,693		36
US Gov’t Sponsored Entities & Agencies	220,295		11		245,017		11		175,457		8
Equity Securities	353		n/m ⁽¹⁾		353		n/m ⁽¹⁾		353		n/m ⁽¹⁾
Total Securities Portfolio	$	1,908,138	100	%	$	2,137,084	100	%	$	2,219,268	100	%

(1)n/m = not meaningful

The amortized cost of investment securities, including federal funds sold and short-term investments, decreased $229.0 million, or 11%, at year-end 2023 compared to year-end 2022 and decreased $82.2 million, or 4%, at year-end 2022 compared to year-end 2021. The decline in the available for sale portfolio during 2023 compared with 2022 was primarily the result of the Company’s utilization of cash flows of approximately $171 million from the securities portfolio to fund loan growth and overall modest deposit declines. The decline in 2023 was broad-based across all areas of the investment portfolio. Mortgage related securities declined $85.5 million, or 10%, obligations of state and political subdivisions declined $49.3 million, or 5%, and US treasuries declined $64 million, or 100%, as compared to 2022. The decline from year-end 2022 compared with year-end 2021 was primarily attributable to the decrease in federal funds sold which is partially offset by the increase in amortized cost of obligations of state and political subdivisions, agency issued mortgage related securities and collateralized and uncollateralized federal agency securities.

The investment portfolio continues to be relatively balanced with agency issued mortgage related securities and collateralized and uncollateralized federal agency securities totaling $981.3 million, or 51% of the total securities portfolio at December 31, 2023. The Company’s level of obligations of state and political subdivisions increased to $889.9 million, or 47% of the portfolio at December 31, 2023.

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Investment Securities, at Carrying Value
(dollars in thousands)
	December 31,
Securities Available-for-Sale	2023		2022		2021
U.S. Treasury	$	—	$	64,119	$	—
Obligations of State and Political Subdivisions	768,875		777,852		925,706
MBS/CMO	645,040		714,681		791,950
US Gov’t Sponsored Entities & Agencies	182,917		205,017		171,961
Total Securities	$	1,596,832	$	1,761,669	$	1,889,617

As discussed above, the Company utilized cash flows from the available for sale portfolio to fund loan growth and an overall modest decline in deposits. This cash flow utilization drove the decline in carrying value in the available for sale portfolio from 2023 to 2022, which was slightly offset by the fair value adjustments in the portfolio due to the change in interest rates. The decline in the available for sale portfolio during 2022 compared with 2021 was largely attributable to fair value adjustments in the portfolio caused by the rise in market interest rates. The Company’s $1.597 billion available-for-sale investment portfolio provides an additional funding source for the liquidity needs of the Company’s subsidiaries and for asset/liability management requirements. 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.

The amortized cost of available-for-sale debt securities at December 31, 2023 is shown in the following table by contractual maturity. MBS/CMO - Residential securities are based on estimated average lives. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations.

Maturities and Average Yields of Securities at December 31, 2023

(dollars in thousands)

	Within One Year				After One But Within Five Years				After Five But Within Ten Years				After Ten Years
	Amount		Yield		Amount		Yield		Amount		Yield		Amount		Yield
U.S. Treasury	$	—	—	%	$	—	—	%	$	—	—	%	$	—	—	%
Obligations of State and Political Subdivisions	1,768		3.72	%	17,548		4.28	%	65,213		3.26	%	805,411		3.01	%
MBS/CMO	—		—	%	35,091		2.72	%	31,116		2.22	%	694,818		1.77	%
US Gov’t Sponsored Entities & Agencies	333		2.48	%	8,675		1.14	%	12,094		2.94	%	199,193		1.82	%
Total Securities	$	2,101	3.52	%	$	61,314	2.94	%	$	108,423	2.93	%	$	1,699,422	2.36	%

A tax-equivalent adjustment using a tax rate of 21 percent was used in the above table.

CONTRACTUAL OBLIGATIONS

In addition to the other uses of funds discussed previously, the Company has certain contractual obligations to make cash payments. These contractual obligations primarily consist of borrowings from the Federal Home Loan Bank (“FHLB”), junior subordinated debentures, deposits, repurchase agreements, and lease commitments for certain office facilities. A summary of these payment obligations is set forth below.

Contractual and Other Obligations	Payments Due In
(dollars in thousands)	One Year or Less		Over One Year		Total
Deposits without Stated Maturities	$	4,485,921	$	—	$	4,485,921
Time Deposits	707,978		59,064		767,042
Federal Home Loan Bank Advances	25,000		25,000		50,000
Other Borrowings (Subordinated Notes and Debentures)	—		81,220		81,220
Federal Funds Purchased	25,000		—		25,000
Securities Sold under Repurchase Agreements	40,968		—		40,968
Lease Obligations	1,775		8,133		9,908
Total Contractual and Other Obligations	$	5,286,642	$	173,417	$	5,460,059

In the normal course of business, the Company makes commitments to extend credit and commitments to sell loans, which are not reflected in its consolidated financial statements. For further information about such commitments, see Note 14 (Commitments and Off-balance Sheet Items) in Notes to the Consolidated Financial Statements included in Item 8 of this Report.

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SOURCES OF FUNDS

The Company’s primary source of funding is its base of core customer deposits. Core deposits consist of demand deposits, savings, interest-bearing checking, money market accounts, and certificates of deposit of less than $100,000. Other deposit sources include certificates of deposit of $100,000 or more. The deposit base remains diverse with stable and manageable exposure to uninsured and uncollateralized deposits of approximately 21% of total deposits.

Other funding sources include overnight borrowings from other financial institutions and securities sold under agreement to repurchase. The membership of the Company’s affiliate bank in the Federal Home Loan Bank System provides a significant additional source for both long and short-term collateralized borrowings. In addition, the Company, as a separate and distinct corporation from its bank and other subsidiaries, also has the ability to borrow funds from other financial institutions and to raise debt or equity capital from the capital markets and other sources. The following pages contain a discussion of changes in funding sources.

The table below illustrates changes between years in the average balances of all funding sources:

Funding Sources - Average Balances (dollars in thousands)	December 31,						% Change From Prior Year
	2023		2022		2021		2023		2022
Demand Deposits
Non-interest-bearing	$	1,553,082	$	1,738,349	$	1,378,647	(11)	%	26	%
Interest-bearing	1,826,232		2,013,969		1,595,579		(9)		26
Savings Deposits	572,623		640,653		460,945		(11)		39
Money Market Accounts	656,396		833,119		645,747		(21)		29
Other Time Deposits	257,736		262,764		226,419		(2)		16
Total Core Deposits	4,866,069		5,488,854		4,307,337		(11)		27
Certificates of Deposits of $100,000 or more	330,406		211,645		186,516		56		13
FHLB Advances and Other Borrowings	210,837		159,029		186,750		33		(15)
Total Funding Sources	$	5,407,312	$	5,859,528	$	4,680,603	(8)		25

 

Maturities of certificates of deposit of $100,000 or more are summarized as follows:

(dollars in thousands) 

	3 Months Or Less		3 - 6 Months		6 - 12 Months		Over 12 Months		Total
December 31, 2023	$	119,055	$	117,165	$	222,396	$	19,349	$	477,965

CORE DEPOSITS

The Company’s overall level of average core deposits declined approximately $622.8 million, or 11%, during 2023 compared with 2022. The Company’s overall level of period-end core deposits declined approximately $381.8 million, or 7%, during 2023 compared with 2022. Competitive deposit pricing in the marketplace as well as customers actively looking for yield opportunities within and outside the banking industry are contributing factors to the decline in total deposits over the course of the past year. A meaningful level of the outflow of deposits experienced during the past year was captured within the Company’s wealth management group.

The Company’s ability to attract core deposits continues to be influenced by competition and the interest rate environment, as well as the availability of alternative investment products. The Company has continued to see customer movement from both interest bearing and non-interest bearing transactional accounts to time deposits due primarily to a higher interest rate environment. Core deposits continue to represent a significant funding source for the Company’s operations and represented 90% of average total funding sources during 2023 compared with 94% during 2022 and 92% during 2021.

The Company’s overall level of average core deposits increased approximately $1.2 billion, or 27%, during 2022 compared with 2021, largely as a result of the CUB acquisition. During 2022, average demand deposits (non-interest bearing and interest bearing) increased $778.1 million, average savings deposits increased $179.7 million, average money market demand deposits increased $187.4 million and average time deposits under $100,000 increased $36.3 million.

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Demand, savings, and money market deposits have provided a growing source of funding for the Company in each of the periods reported. Average demand, savings, and money market deposits declined 12% during 2023 following 28% growth during 2022. Average demand, savings, and money market deposits totaled $4.608 billion or 95% of core deposits (85% of total funding sources) in 2023 compared with $5.226 billion or 95% of core deposits (89% of total funding sources) in 2022 and $4.080 billion or 95% of core deposits (87% of total funding sources) in 2021.

Other time deposits consist of certificates of deposits in denominations of less than $100,000. These average deposits declined by 2% during 2023 following an increase of 16% during 2022. Other time deposits comprised 5% of core deposits in all periods presented.

OTHER FUNDING SOURCES

Certificates of deposits in denominations of $100,000 or more are an additional source of other funding for the Company’s bank subsidiary and are used as both long-term and short-term funding sources. On an average basis, large denomination certificates increased $118.8 million, or 56%, during 2023. This follows an increase of $25.1 million, or 13% during 2022. Large certificate deposits comprised approximately 6% of average total funding sources in 2023 compared with 4% in 2022 and 4% in 2021. On an end of period basis, certificates of deposits in denominations of $100,000 or more increased $284.7 million, or 147%, during 2023 compared to an increase of $47.8 million, or 33%, during 2022. As previously discussed, customers seeking higher yield opportunities were a contributing factor to growth in this category of the Company’s funding sources.

The Company had no brokered deposits as of December 31, 2023 and 2022. The Company participates in a reciprocal deposit program. Reciprocal Deposits totaled $77.9 million at December 31, 2023 and $42.6 million at December 31, 2022.

FHLB advances and other borrowings represent an important source of other funding for the Company. Average borrowed funds increased $51.8 million, or 33%, during 2023 compared to a decline of $27.8 million, or 15%, during 2022. Borrowings comprised approximately 4% of average total funding sources during 2023 compared with 3% in 2022 and 4% in 2021.

The bank subsidiary of the Company also utilizes short-term funding sources from time to time. These sources consist of overnight federal funds purchased from other financial institutions, secured repurchase agreements that generally mature within one day of the transaction date, and secured overnight variable rate borrowings from the FHLB. These borrowings represent an important source of short-term liquidity for the Company’s bank subsidiary.

The Company’s bank subsidiary is authorized by its Board to borrow up to $500 million at the FHLB, but availability at December 31, 2023 was limited to approximately $226 million based on the then pledged collateral and outstanding borrowings. In addition, the Company had a borrowing capacity of approximately $200 million at the Federal Reserve Bank as of December 31, 2023, based on the then pledged collateral. The capacity for borrowings from the FHLB and the Federal Reserve Bank could be increased, in each case, by the Company pledging additional available collateral. The Company’s Asset/Liability Committee closely monitors the availability of these sources as part of its overall oversight and management of the bank subsidiary’s liquidity.

Long-term debt at the Company’s bank subsidiary is in the form of FHLB advances, which are secured by the pledge of certain investment securities, residential and housing-related mortgage loans, and certain other commercial real estate loans. See Note 7 (FHLB Advances and Other Borrowings) of the Notes to the Consolidated Financial Statements included in Item 8 of this Report for further information regarding borrowed funds.

PARENT COMPANY FUNDING SOURCES

The parent company is a corporation separate and distinct from its bank and other subsidiaries. For information regarding the financial condition, result of operations, and cash flows of the Company, presented on a parent-company-only basis, see Note 17 (Parent Company Financial Statements) of the Notes to the Consolidated Financial Statements included in Item 8 of this Report.

The Company uses funds at the parent company level to pay dividends to its shareholders, to acquire or make other investments in other businesses or their securities or assets, to repurchase its stock from time to time, and for other general corporate purposes. The parent company does not have access to the deposits and certain other sources of funds that are available to its bank subsidiary to support its operations. Instead, the parent company has historically derived most of its revenues from dividends paid to the parent company by its bank subsidiary. The Company’s banking subsidiary is subject to statutory restrictions on its ability to pay dividends to the parent company. See Note 8 (Shareholders’ Equity) of the Notes to the Consolidated Financial Statements included in Item 8 of this Report, which is incorporated herein by reference. The parent

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company has, from time-to-time, supplemented the dividends received from its subsidiaries with borrowings. For details related to borrowings, see Note 7 (FHLB Advances and Other Borrowings) of the Notes to the Consolidated Financial Statements included in Item 8 of this Report.

At year-end 2023, the Company had available to it a $15 million revolving line of credit facility that will mature on September 25, 2024. Borrowings are available for general working capital purposes. Interest is payable quarterly at a floating rate based upon term SOFR rate plus a margin payable in respect of any principal amounts advanced under the revolving line of credit. There was no outstanding balance as of December 31, 2023.

RISK MANAGEMENT

The Company is exposed to various types of business risk on an on-going basis. These risks include credit risk, liquidity risk and interest rate risk. Various procedures are employed at the Company’s subsidiary bank to monitor and mitigate risk in the loan and investment portfolios, as well as risks associated with changes in interest rates. Following is a discussion of the Company’s philosophies and procedures to address these risks.

LENDING AND LOAN ADMINISTRATION

Primary responsibility and accountability for day-to-day lending activities rests with the Company’s subsidiary bank. Loan personnel at the subsidiary bank have the authority to extend credit under guidelines approved by the Bank’s board of directors. The executive loan committee serves as a vehicle for communication and for the pooling of knowledge, judgment and experience of its members. The committee provides valuable input to lending personnel, acts as an approval body, and monitors the overall quality of the Bank’s loan portfolio. The Corporate Credit Risk Management Committee comprised of members of the Company’s and its subsidiary Bank’s executive officers and board of directors, strives to ensure a consistent application of the Company’s lending policies. The Company also maintains a comprehensive risk-grading and loan review program, which includes quarterly reviews of problem loans, delinquencies and charge-offs. The purpose of this program is to evaluate loan administration, credit quality, loan documentation and the adequacy of the allowance for credit losses.

The Company maintains an allowance for credit losses to cover management’s estimate of all expected credit losses over the expected contractual life of the loan portfolio. Management estimates the required level of allowance for credit losses using past loan loss experience, information about specific borrower situations and estimated collateral values, along with reasonable and supportable forecasts, judgmentally adjusted for economic, external and internal quantitative and qualitative factors and portfolio trends. Economic factors include evaluating changes in international, national, regional and local economic and business conditions that affect the collectability of the loan portfolio. Internal factors include evaluating changes in lending policies and procedures; changes in the nature and volume of the loan portfolio; and changes in experience, ability and depth of lending management and staff. Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in management’s judgment, should be charged-off. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed.

The allowance for credit losses is comprised of: (a) specific reserves on individual credits; and (b) general reserves for certain loan categories and industries, and overall historical loss experience; based on performance trends in the loan portfolios, current economic conditions, and other factors that influence the level of estimated credit losses. The need for specific reserves are considered for credits when: (a) the customer’s cash flow or net worth appears insufficient to repay the loan; (b) the loan has been criticized in a regulatory examination; (c) the loan is on non-accrual; or, (d) other reasons where the ultimate collectability of the loan is in question, or the loan characteristics require special monitoring.

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Allowance for Credit Losses (dollars in thousands)	Years Ended December 31,
	2023			2022			2021			2020			2019
Balance of Allowance for Expected Credit Losses at Beginning of Period	$	44,168		$	37,017		$	46,859		$	16,278		$	15,823
Impact of adopting ASC 326	—			—			—			8,767			—
Impact of adopting ASC 326 - PCD loans	—			—			—			6,886			—
Loans Charged-off:
Commercial and Industrial Loans and Leases	1,792			1,149			2,777			2,119			3,810
Commercial Real Estate Loans	56			79			10			36			320
Agricultural Loans	27			—			—			—			—
Home Equity and Consumer Loans	1,858			1,598			1,003			942			1,155
Residential Mortgage Loans	58			24			45			39			117
Total Loans Charged-off	3,791			2,850			3,835			3,136			5,402
Recoveries of Previously Charged-off Loans:
Commercial and Industrial Loans and Leases	154			26			61			23			56
Commercial Real Estate Loans	76			24			40			129			29
Agricultural Loans	—			—			—			—			—
Home Equity and Consumer Loans	605			479			359			358			440
Residential Mortgage Loans	3			5			33			4			7
Total Recoveries	838			534			493			514			532
Net Loans Recovered (Charged-off)	(2,953)			(2,316)			(3,342)			(2,622)			(4,870)
Acquisition of Citizens Union Bank of Shelbyville, KY - PCD Loans	—			3,117			—			—			—
Additions to Allowance Charged to Expense	2,550			6,350			(6,500)			17,550			5,325
Balance at End of Period	$	43,765		$	44,168		$	37,017		$	46,859		$	16,278
Net Charge-offs (Recoveries) to Average Loans Outstanding	0.08		%	0.06		%	0.11		%	0.08		%	0.17		%
Provision for Credit Losses to Average Loans Outstanding	0.07		%	0.17		%	(0.21)		%	0.55		%	0.18		%
Allowance for Credit Losses to Total Loans at Year-end	1.10		%	1.17		%	1.23		%	1.52		%	0.53		%

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

	Years Ended December 31,
	2023		2022		2021		2020		2019
Commercial and Industrial Loans and Leases	$	8,267	$	13,958	$	9,754	$	6,645	$	4,799
Commercial Real Estate Loans	25,923		21,598		19,245		29,878		4,692
Agricultural Loans	3,837		4,188		4,505		6,756		5,315
Home Equity and Consumer Loans	2,976		2,196		1,808		1,636		634
Residential Mortgage Loans	2,762		2,228		1,705		1,944		333
Unallocated	—		—		—		—		505
Total Allowance for Credit Losses	$	43,765	$	44,168	$	37,017	$	46,859	$	16,278

The Company’s allowance for credit losses totaled $43.8 million at December 31, 2023 compared to $44.2 million at December 31, 2022. The allowance for credit losses represented 1.10% of period-end loans at December 31, 2023 compared with 1.17% of period-end loans at December 31, 2022.

The Company adopted ASU No. 2016-13, Financial instruments - Credit Losses (Topic 326) on January 1, 2020. The Company added $9.4 million to the allowance for credit losses in conjunction with the closing of the CUB acquisition on January 1, 2022 related to the CUB loan portfolio. Of the increase in allowance for credit losses for the CUB portfolio, $6.3 million was recorded through the provision for credit losses on “Day 1” under the CECL model for non-PCD loans. The Company also acquired $29.9 million in PCD loans (at time of acquisition) for which the company recorded a credit adjustment of $3.1 million which was included in the allowance for credit losses.

The Company realized net charge-offs of $2,953,000, or 0.08% of average loans outstanding, during 2023 compared with $2,316,000, or 0.06% of average loans outstanding, during 2022 and $3,342,000, or 0.11% of average loans outstanding, during 2021.

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Please see “RESULTS OF OPERATIONS - Provision for Credit Losses” and “CRITICAL ACCOUNTING POLICIES AND ESTIMATES - Allowance for Credit Losses” for additional information regarding the allowance.

NON-PERFORMING ASSETS

Non-performing assets consist of: (a) non-accrual loans; (b) loans which have been renegotiated to provide for a reduction or deferral of interest or principal because of deterioration in the financial condition of the borrower; (c) loans past due 90 days or more as to principal or interest; and, (d) other real estate owned. Loans are 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. Uncollected accrued interest is reversed against income at the time a loan is placed on non-accrual. Loans are typically charged-off at 180 days past due, or earlier if deemed uncollectible. Exceptions to the non-accrual and charge-off policies are made when the loan is well secured and in the process of collection. The following table presents an analysis of the Company’s non-performing assets.

Non-performing Assets	December 31,
(dollars in thousands)	2023			2022			2021			2020			2019
Non-accrual Loans	$	9,136		$	12,888		$	14,602		$	21,507		$	13,802
Past Due Loans (90 days or more and accruing)	55			1,427			156			—			190
Total Non-performing Loans	9,191			14,315			14,758			21,507			13,992
Other Real Estate	—			—			—			325			425
Total Non-performing Assets	$	9,191		$	14,315		$	14,758		$	21,832		$	14,417
Restructured Loans	$	—		$	—		$	104		$	111		$	116
Non-performing Loans to Total Loans	0.23		%	0.38		%	0.49		%	0.70		%	0.45		%
Allowance for Credit Losses to Non-performing Loans	476.17		%	308.54		%	250.83		%	217.88		%	116.34		%

The following tables present an analysis of the Company’s non-accrual loans and loans past due 90 days or more and still accruing.

Non-Accrual Loans	December 31,
(dollars in thousands)	2023		2022		2021		2020		2019
Commercial and Industrial Loans and Leases	$	3,707	$	7,936	$	10,530	$	8,133	$	4,940
Commercial Real Estate Loans	1,889		1,950		2,243		10,188		3,433
Agricultural Loans	879		1,062		1,136		1,915		2,739
Home Equity Loans	1,033		310		24		271		79
Consumer Loans	253		400		82		170		115
Residential Mortgage Loans	1,375		1,230		587		830		2,496
Total	$	9,136	$	12,888	$	14,602	$	21,507	$	13,802

Loans Past Due 90 Days or More & Still Accruing	December 31,
(dollars in thousands)	2023		2022		2021		2020		2019
Commercial and Industrial Loans and Leases	$	—	$	1,427	$	—	$	—	$	190
Commercial Real Estate Loans	55		—		156		—		—
Agricultural Loans	—		—		—		—		—
Home Equity Loans	—		—		—		—		—
Consumer Loans	—		—		—		—		—
Residential Mortgage Loans	—		—		—		—		—
Total	$	55	$	1,427	$	156	$	—	$	190

Non-performing assets totaled $9.2 million, or 0.15% of total assets, at December 31, 2023 compared to $14.3 million, or 0.23% of total assets, at December 31, 2022 and compared to $14.8 million, or 0.26% of total assets, at December 31, 2021.  Non-performing loans totaled $9.2 million, or 0.23% of total loans, at December 31, 2023 compared with $14.3 million, or 0.38% of total loans, at December 31, 2022 and compared with $14.8 million, or 0.49% of total loans, at December 31, 2021.

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The decline in the level of non-performing commercial and industrial loans and leases during 2023 was primarily attributable to the resolution of a single commercial borrowing relationship with minimal loss recognition for which the Company had established a significant reserve in previous periods. The decline in the level of non-performing commercial and industrial loans and leases during 2022 was primarily attributable to certain credits that were either charged-off or paid off, which were in non-accrual status.

For additional detail on individually analyzed loans, see Note 4 (Loans) of the Notes to the Consolidated Financial Statements included in Item 8 of this Report.

Interest income recognized on non-performing loans for 2023 was $231,000. The gross interest income that would have been recognized in 2023 on non-performing loans if the loans had been current in accordance with their original terms was $1,313,000. Loans are typically placed on non-accrual status when scheduled principal or interest payments are past due for 90 days or more, unless the loan is well secured and in the process of collection.

LIQUIDITY AND INTEREST RATE RISK MANAGEMENT

Liquidity is a measure of the ability of the Company’s subsidiary bank to fund new loan demand, existing loan commitments and deposit withdrawals. The purpose of liquidity management is to match sources of funds with anticipated customer borrowings and withdrawals and other obligations to ensure a dependable funding base, without unduly penalizing earnings. Failure to properly manage liquidity requirements can result in the need to satisfy customer withdrawals and other obligations on less than desirable terms. The liquidity of the parent company is dependent upon the receipt of dividends from its bank subsidiary, which are subject to certain regulatory limitations explained in Note 8 (Shareholders’ Equity) of the Notes to the Consolidated Financial Statements included in Item 8 of this Report. The subsidiary bank’s source of funding is predominately core deposits, time deposits in excess of $100,000 and brokered certificates of deposit, maturities of securities, repayments of loan principal and interest, federal funds purchased, securities sold under agreements to repurchase and borrowings from the Federal Home Loan Bank and Federal Reserve Bank.

Interest rate risk is the exposure of the Company’s financial condition to adverse changes in market interest rates. In an effort to estimate the impact of sustained interest rate movements to the Company’s earnings, the Company monitors interest rate risk through computer-assisted simulation modeling of its net interest income. The Company’s simulation modeling monitors the potential impact to net interest income under various interest rate scenarios. The Company’s objective is to actively manage its asset/liability position within a one-year interval and to limit the risk in any of the interest rate scenarios to a reasonable level of tax-equivalent net interest income within that interval. The Company’s Asset/Liability Committee monitors compliance within established guidelines of the Funds Management Policy. See Item 7A. Quantitative and Qualitative Disclosures About Market Risk section for further discussion regarding interest rate risk.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

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

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

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

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

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

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

Interest Rate Sensitivity as of December 31, 2023 - Net Interest Income

	Net Interest Income
Changes in Rates	Amount		% Change
+2%	$	201,181	(0.34)	%
+1%	202,136		0.14
Base	201,862		—
-1%	199,444		(1.20)
-2%	196,374		(2.72)

The above table is a measurement of the Company’s net interest income at risk, assuming a static balance sheet as of December 31, 2023 and instantaneous parallel changes in interest rates. The Company also monitors interest rate risk under other scenarios including a more gradual movement in market interest rates. This type of scenario can at times produce different modeling results in measuring interest rate risk sensitivity.

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

Interest Rate Sensitivity as of December 31, 2023 - Net Portfolio Value

	Net Portfolio Value				Net Portfolio Value as a % of Present Value of Assets
Changes in Rates	Amount		% Change		NPV Ratio		Change
+2%	$	575,830	(17.25)	%	10.72	%	(140) b.p.
+1%	637,347		(8.41)		11.48		(64) b.p.
Base	695,888		—		12.12		—
-1%	743,599		6.86		12.54		42 b.p.
-2%	770,311		10.69		12.60		48 b.p.

The above discussion, and the portions of MANAGEMENT’S DISCUSSION AND ANALYSIS in Item 7 of this Report that are referenced in the above discussion contain statements relating to future results of the Company that are considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to, among other things, simulation of the impact on net interest income from changes in interest rates. Actual results may differ materially from those expressed or implied therein as a result of certain risks and uncertainties, including those risks and uncertainties expressed above, those that are described in MANAGEMENT’S DISCUSSION AND ANALYSIS in Item 7 of this Report, and those that are described in Item 1 of this Report, “Business,” under the caption “Forward-Looking Statements and Associated Risks,” which discussions are incorporated herein by reference.

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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, 2023 and 2022, the related consolidated statements of income, comprehensive income (loss), changes in shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2023, 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, 2023, 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, 2023 and 2022, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2023 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, 2023, 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.

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       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 Matters

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

As discussed in Notes 1 and 4, the allowance for credit losses (the “ACL”) is an accounting estimate of expected credit losses over the estimated life of financial assets carried at amortized cost and off-balance-sheet credit exposures in accordance with Accounting Standards Update (the “ASU”) 2016-13, Financial Instruments —Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The standard requires the Company’s loan portfolio, measured at amortized cost, to be presented at the net amount expected to be collected. Estimates of expected credit losses for loans are based on historical experience, current conditions and reasonable and supportable forecasts over the estimated life of the loans. In order to estimate the expected credit losses, the Company utilizes a loss estimation model. The Company utilizes the static pool methodology for determining the allowance for credit losses. The static pool methodology tracks loan pool by segment over a period of time to calculate a loss rate. Loss rates are then qualitatively adjusted for current conditions and reasonable and supportable forecast. Commercial and agricultural loans graded special mention and substandard are also adjusted based on a migration analysis technique.

Auditing the Allowance for Credit Losses for Loans was identified by us as a critical audit matter because of the extent of auditor judgment applied and significant audit effort to evaluate the significant subjective and complex judgments made by management. The principal considerations resulting in our determination included the following:

•Significant auditor judgment and effort were used in evaluating the qualitative factors used in the calculation.

•Significant audit effort to test the completeness and accuracy of data used in the migration analysis calculation, including accuracy of loan risk rating, and its application to the commercial and agricultural loan segments.

The primary procedures performed to address this critical audit matter included:

•Testing the effectiveness of controls over the Company’s preparation and review of the allowance for credit loss calculation, including relevance and reliability of data used as the basis for adjustments related to the qualitative factors, management’s judgments and significant assumptions in the development and reasonableness of qualitative factors, and mathematical accuracy and appropriateness of the application of qualitative factors;

51

       Report of Independent Registered Public Accounting Firm

•Substantively testing management’s process for developing the qualitative factors and assessing relevance and reliability of data used to develop factors, including evaluating their judgments and significant assumptions for reasonableness, and mathematical accuracy and appropriateness of the application of qualitative factors;

•Testing the effectiveness of controls over the Company’s loan risk rating;

•Substantively testing the accuracy of both the loan risk ratings as well as testing the accuracy of the transition matrix.

Crowe LLP

We have served as the Company’s auditor since 1977.

Louisville, Kentucky

February 27, 2024

52

Consolidated Balance Sheets

Dollars in thousands, except share and per share data

	December 31,
	2023		2022
ASSETS
Cash and Due from Banks	$	78,805	$	75,476
Federal Funds Sold and Other Short-term Investments	36,525		41,905
Cash and Cash Equivalents	115,330		117,381
Interest-bearing Time Deposits with Banks	500		500
Securities Available-for-Sale, at Fair Value (Amortized Cost $1,871,260 for December 31, 2023; Amortized Cost $2,094,826 for December 31, 2022; No Allowance for Credit Losses)	1,596,832		1,761,669
Other Investments	353		353
Loans Held-for-Sale, at Fair Value	5,226		8,600
Loans	3,977,900		3,788,645
Less:   Unearned Income	(6,818)		(3,711)
Allowance for Credit Losses	(43,765)		(44,168)
Loans, Net	3,927,317		3,740,766
Stock in FHLB of Indianapolis and Other Restricted Stock, at Cost	14,687		15,037
Premises, Furniture and Equipment, Net	106,776		112,237
Other Real Estate	—		—
Goodwill	180,357		180,357
Intangible Assets	6,307		9,426
Company Owned Life Insurance	85,840		83,998
Accrued Interest Receivable and Other Assets	112,673		125,667
TOTAL ASSETS	$	6,152,198	$	6,155,991
LIABILITIES
Non-interest-bearing Demand Deposits	$	1,493,160	$	1,691,804
Interest-bearing Demand, Savings, and Money Market Accounts	2,992,761		3,229,778
Time Deposits	767,042		428,469
Total Deposits	5,252,963		5,350,051
FHLB Advances and Other Borrowings	193,937		203,806
Accrued Interest Payable and Other Liabilities	41,740		43,741
TOTAL LIABILITIES	5,488,640		5,597,598
Commitments and Contingencies (See Note 14)
SHAREHOLDERS’ EQUITY
Common Stock, no par value, $1 stated value; 45,000,000 shares authorized	29,585		29,493
Additional Paid-in Capital	389,411		387,171
Retained Earnings	461,622		405,167
Accumulated Other Comprehensive Income (Loss)	(217,060)		(263,438)
TOTAL SHAREHOLDERS’ EQUITY	663,558		558,393
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	6,152,198	$	6,155,991
End of period shares issued and outstanding	29,584,709		29,493,193

 

See accompanying notes to the consolidated financial statements.

53

Consolidated Statements of Income

Dollars in thousands, except per share data

	Years Ended December 31,
	2023		2022		2021
INTEREST INCOME
Interest and Fees on Loans	$	212,517	$	169,158	$	139,151
Interest on Federal Funds Sold and Other Short-term Investments	1,677		5,765		488
Interest and Dividends on Securities:
Taxable	20,614		20,453		12,962
Non-taxable	21,848		23,550		17,778
TOTAL INTEREST INCOME	256,656		218,926		170,379
INTEREST EXPENSE
Interest on Deposits	56,916		13,514		4,955
Interest on FHLB Advances and Other Borrowings	9,307		4,828		4,594
TOTAL INTEREST EXPENSE	66,223		18,342		9,549
NET INTEREST INCOME	190,433		200,584		160,830
Provision for Credit Losses	2,550		6,350		(6,500)
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES	187,883		194,234		167,330
NON-INTEREST INCOME
Wealth Management Fees	11,711		10,076		10,321
Service Charges on Deposit Accounts	11,538		11,457		7,723
Insurance Revenues	9,596		10,020		9,268
Company Owned Life Insurance	1,731		2,264		1,529
Interchange Fee Income	17,452		15,820		13,116
Other Operating Income	5,830		5,116		6,991
Net Gains on Sales of Loans	2,363		3,818		8,267
Net Gains on Securities	40		562		2,247
TOTAL NON-INTEREST INCOME	60,261		59,133		59,462
NON-INTEREST EXPENSE
Salaries and Employee Benefits	83,244		84,145		68,570
Occupancy Expense	10,887		11,223		11,081
Furniture and Equipment Expense	3,580		3,698		3,750
FDIC Premiums	2,829		1,860		1,419
Data Processing Fees	11,112		15,406		7,611
Professional Fees	5,575		6,295		5,009
Advertising and Promotion	4,857		4,416		4,197
Intangible Amortization	2,840		3,711		2,731
Other Operating Expenses	19,573		23,437		19,639
TOTAL NON-INTEREST EXPENSE	144,497		154,191		124,007
Income before Income Taxes	103,647		99,176		102,785
Income Tax Expense	17,759		17,351		18,648
NET INCOME	$	85,888	$	81,825	$	84,137
Basic Earnings per Share	$	2.91	$	2.78	$	3.17
Diluted Earnings per Share	$	2.91	$	2.78	$	3.17

See accompanying notes to the consolidated financial statements.

54

Consolidated Statements of Comprehensive Income (Loss)

Dollars in thousands

	Years Ended December 31,
	2023		2022		2021
NET INCOME	$	85,888	$	81,825	$	84,137
Other Comprehensive Income (Loss):
Unrealized Gains (Losses) on Securities:
Unrealized Holding Gain (Loss) Arising During the Period	58,769		(353,013)		(23,011)
Reclassification Adjustment for Gains Included in Net Income	(40)		(563)		(2,247)
Tax Effect	(12,351)		74,600		5,367
Net of Tax	46,378		(278,976)		(19,891)
Postretirement Benefit Obligation:
Net (Loss) Arising During the Period	—		—		—
Reclassification Adjustment for Amortization of Prior Service Cost and Net	—		54		—
Tax Effect	—		—		—
Net of Tax	—		54		—
Total Other Comprehensive Income (Loss)	46,378		(278,922)		(19,891)
COMPREHENSIVE INCOME (LOSS)	$	132,266	$	(197,097)	$	64,246

See accompanying notes to the consolidated financial statements.

55

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, 2020	26,502,157	$	26,502	$	274,385	$	288,447	$	35,375	$	624,709
Net Income						84,137				84,137
Other Comprehensive Income (Loss)								(19,891)		(19,891)
Cash Dividends ($0.84 per share)						(22,220)				(22,220)
Issuance of Common Stock for:
Restricted Share Grants	51,351	52		1,672						1,724
Balances, December 31, 2021	26,553,508	26,554		276,057		350,364		15,484		668,459
Net Income						81,825				81,825
Other Comprehensive Income (Loss)								(278,922)		(278,922)
Cash Dividends ($0.92 per share)						(27,022)				(27,022)
Issuance of Common Stock for:
Acquisition of Citizens Union Bancorp	2,870,975	2,871		108,852						111,723
Restricted Share Grants	68,710	68		2,262						2,330
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

See accompanying notes to the consolidated financial statements. 

56

Consolidated Statements of Cash Flows

Dollars in thousands

	Years Ended December 31,
CASH FLOWS FROM OPERATING ACTIVITIES	2023		2022		2021
Net Income	$	85,888	$	81,825	$	84,137
Adjustments to Reconcile Net Income to Net Cash from Operating Activities:
Net Amortization on Securities	5,566		6,452		6,638
Depreciation and Amortization	9,560		10,116		8,770
Loans Originated for Sale	(106,781)		(162,959)		(261,529)
Proceeds from Sales of Loans Held-for-Sale	112,525		171,591		276,417
Provision for Credit Losses	2,550		6,350		(6,500)
Gain on Sale of Loans, net	(2,363)		(3,818)		(8,267)
Gain on Securities, net	(40)		(562)		(2,247)
Loss (Gain) on Sales of Other Real Estate and Repossessed Assets	(83)		(18)		(101)
Loss (Gain) on Disposition and Donation of Premises and Equipment	(547)		(37)		1,640
Loss (Gain) on Disposition of Land	(83)		—		—
Post Retirement Medical Benefit	—		54		—
Increase in Cash Surrender Value of Company Owned Life Insurance	(1,842)		(1,820)		(1,369)
Equity Based Compensation	2,332		2,330		1,724
Change in Assets and Liabilities:
Interest Receivable and Other Assets	3,725		(1,094)		2,716
Interest Payable and Other Liabilities	(3,173)		1,626		(1,185)
Net Cash from Operating Activities	107,234		110,036		100,844
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from Maturity of Other Short-term Investments	—		495		496
Proceeds from Maturities of Securities Available-for-Sale	287,084		143,418		208,156
Proceeds from Sales of Securities Available-for-Sale	114,259		145,237		111,124
Purchase of Securities Available-for-Sale	(183,302)		(417,940)		(1,020,695)
Proceeds from Redemption of Federal Home Loan Bank Stock	350		8,089		120
Purchase of Loans	(1,502)		(933)		—
Proceeds from Sales of Loans Held for Investment	—		3,916		—
Loans Made to Customers, net of Payments Received	(187,624)		(107,236)		59,557
Proceeds from Sales of Other Real Estate	108		88		1,423
Property and Equipment Expenditures	(5,745)		(7,852)		(4,686)
Proceeds from Sale of Land and Building	3,627		—		1,963
Proceeds from Life Insurance	—		773		549
Sale of Bank Branches	—		—		1,694
Acquisition of Citizens Union Bancorp of Shelbyville, Inc.	—		207,764		—
Net Cash from Investing Activities	27,255		(24,181)		(640,299)
CASH FLOWS FROM FINANCING ACTIVITIES
Change in Deposits	(96,782)		(324,771)		655,485
Change in Short-term Borrowings	(35,193)		29,817		15,423
Advances in Long-term Debt	25,000		—		—
Repayments of Long-term Debt	(132)		(41,690)		(58,091)
Issuance (Retirement) of Common Stock	—		—		—
Dividends Paid	(29,433)		(27,022)		(22,220)
Net Cash from Financing Activities	(136,540)		(363,666)		590,597
Net Change in Cash and Cash Equivalents	(2,051)		(277,811)		51,142
Cash and Cash Equivalents at Beginning of Year	117,381		395,192		344,050
Cash and Cash Equivalents at End of Year	$	115,330	$	117,381	$	395,192
Cash Paid During the Year for
Interest	$	60,663	$	17,442	$	10,020
Income Taxes	15,375		11,649		14,434
Supplemental Non Cash Disclosures
Loans Transferred to Other Real Estate	$	—	$	30	$	—
Reclass of Land & Buildings to Other Assets	691		—		—
Interest Rate Swap Fair Value Activity	(2,282)		4,988		(4,287)
See Note 18 (Business Combinations, Goodwill and Intangible Assets) regarding non-cash transactions included in the acquisition.

See accompanying notes to the consolidated financial statements.

57

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

The operations of German American Bancorp, Inc. (the “Company”) are primarily comprised of three business segments: core banking, trust and investment advisory 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, 2023, and 2022, 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.

Mortgage loans held for sale are generally sold on a servicing released 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 $20,580 at December 31, 2023 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.

Allowance for Credit Losses - Loans

The allowance for credit losses is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged off against the allowance when management believes the

58

Notes to the Consolidated Financial Statements

Dollars in thousands, except per share data

NOTE 1 – Summary of Significant Accounting Policies (continued)

uncollectibility of a loan balance is confirmed. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off.

The Company utilizes the static pool methodology in determining expected future credit losses. Static pool analysis includes segmenting and tracking loans over a period of time based on similar risk characteristics such as loan structure, collateral type, industry of borrower and concentrations, contractual terms and credit risk indicators. Static pool calculates a loss rate on a closed pool of loans that existed on a specified start date based upon the remaining life of each segment. The Company’s expected loss estimate is anchored in historical credit loss experience, with an emphasis on all available portfolio data. The Company’s historical look-back period includes January 2014 through the current period, on a monthly basis.

The Company estimates the allowance balance using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Historical loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for changes in underwriting standards, portfolio mix, delinquency level, changes in environmental conditions, unemployment rates, risk classifications and collateral values. The Company separately assigns allocations for substandard and special mention commercial and agricultural credits as well as other categories of loans based on migration analysis techniques. The migration analysis factors are calculated using a transition matrix to determine the likelihood of a customer’s asset quality rating migrating from its current rating to any other rating.

The allowance for credit losses is measured on a collective (pooled) basis when similar risk characteristics exist. The Company has identified the following portfolio segments and identified the risk characteristics of each portfolio listed below:

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

59

Notes to the Consolidated Financial Statements

Dollars in thousands, except per share data

NOTE 1 – Summary of Significant Accounting Policies (continued)

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.

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 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.

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

60

Notes to the Consolidated Financial Statements

Dollars in thousands, except per share data

NOTE 1 – Summary of Significant Accounting Policies (continued)

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 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 6 to 10 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.

Restrictions on Cash

At December 31, 2023 and 2022, the Company was not 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.

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

61

Notes to the Consolidated Financial Statements

Dollars in thousands, except per share data

NOTE 1 – Summary of Significant Accounting Policies (continued)

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 15. 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 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting”. These amendments provide temporary optional guidance to ease the potential burden in accounting for reference rate reform. The ASU provides optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. It is intended to help stakeholders during the global market-wide reference rate transition period. In January 2021, the FASB issued ASU 2021-01 which clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. The guidance is effective for all entities as of March 12, 2020 through December 31, 2024. The Company has discontinued originating LIBOR based loans and has a plan in place to transition LIBOR indexed loans primarily to term SOFR or other indices.

On March 31, 2022, the FASB issued ASU 2022-02, “Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures” which eliminates the troubled debt restructuring recognition and measurement guidance and instead requires an entity to evaluate whether the modification represents a new loan or a continuation of an existing loan. The amendments also enhance existing disclosures and include new disclosure requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. To improve consistency for vintage disclosures, the ASU requires that public business entities disclose current-period gross write-offs by year of origination for financing receivables and net investments in leases within the scope of Subtopic 326-20. For entities that have adopted ASU 2016-13, the amendments are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. For entities that have not adopted ASU 2016-13, the effective dates for the amendments are the same as the effective dates in ASU 2016-13. Early adoption is permitted if ASU 2016-13 has been adopted, including adoption in an interim period. If an entity elects to adopt the amendments in an interim period, the guidance should be applied as of the beginning of the fiscal year that includes the interim period. The Company adopted the new guidance prospectively with no material impact to the consolidated financial statements.

The SEC released Staff Accounting Bulletin No. 121 (“SAB 121”), which provides interpretive guidance regarding the accounting for obligations to safeguard crypto-assets an entity holds for its customers, either directly through an agent or another third party acting on its behalf. SAB 121 requires an entity to recognize a liability on its balance sheet to reflect the obligation to safeguard the crypto-assets of others, along with a corresponding safeguarding asset, both of which are measured

62

Notes to the Consolidated Financial Statements

Dollars in thousands, except per share data

NOTE 1 – Summary of Significant Accounting Policies (continued)

at fair value. The Company has completed an evaluation and concluded that it does not have a safeguarding obligation under SAB 121 and therefore the disclosures do not apply.

Newly Issued But Not Yet Effective Accounting Standards

On March 29, 2023, the FASB issued ASU 2023-02, “Investments - Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method” to expand use of the proportional amortization method of accounting to equity investments in tax credit programs beyond those in low-income-housing tax credit (LIHTC) programs. The amendments in this update permit reporting entities to account for certain tax equity investments, regardless of the tax credit program from which the income tax credits are received, using the proportional amortization method if certain conditions are met. This guidance provides clarifications to address interpretive issues and prescribes specific information that reporting entities must disclose about tax credit investments each period.

This ASU is effective for reporting periods beginning after December 15, 2023, for public business entities. For all other entities, the ASU is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted, including early adoption in any interim period as of the beginning of the fiscal year that includes that interim period. Entities have the option of applying the forthcoming revisions using either a modified retrospective or retrospective adoption approach. The Company is currently evaluating the impact of adopting this new guidance, however, adoption of the standard is not expected to have a material impact on the Company’s financial statements or disclosures.

NOTE 2 – 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
2023
U.S. Treasury	$	—	$	—	$	—	$	—
Obligations of State and Political Subdivisions	889,940		1,309		(122,374)		768,875
MBS/CMO	761,025		28		(116,013)		645,040
US Gov’t Sponsored Entities & Agencies	220,295		—		(37,378)		182,917
Total	$	1,871,260	$	1,337	$	(275,765)	$	1,596,832
2022
U.S. Treasury	$	64,097	$	22	$	—	$	64,119
Obligations of State and Political Subdivisions	939,193		673		(162,014)		777,852
MBS/CMO	846,519		—		(131,838)		714,681
US Gov’t Sponsored Entities & Agencies	245,017		—		(40,000)		205,017
Total	$	2,094,826	$	695	$	(333,852)	$	1,761,669

All mortgage-backed securities in the above table (identified above and throughout this Note 2 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.

63

Notes to the Consolidated Financial Statements

Dollars in thousands, except per share data

NOTE 2 – Securities (continued)

The amortized cost and fair value of securities at December 31, 2023 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	$	1,768	$	1,766
Due after one year through five years	17,548		17,589
Due after five years through ten years	65,213		62,296
Due after ten years	805,411		687,224
MBS/CMO	761,025		645,040
US Gov’t Sponsored Entities & Agencies	220,295		182,917
Total	$	1,871,260	$	1,596,832

	2023		2022		2021
Proceeds from the Sales of Securities are summarized below:	Available- for-Sale		Available- for-Sale		Available- for-Sale
Proceeds from Sales	$	114,259	$	145,237	$	111,124
Gross Gains on Sales	346		750		2,399
Gross Losses on Sales	306		188		152
Income Taxes on Net Gains	8		118		472

The carrying value of securities pledged to secure repurchase agreements, public and trust deposits, and for other purposes as required by law was $366,576 and $354,123 as of December 31, 2023 and 2022, respectively.

Below is a summary of securities with unrealized losses as December 31, 2023 and 2022, 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, 2023
Obligations of State and Political Subdivisions	$	13,469	$	(175)	$	668,223	$	(122,199)	$	681,692	$	(122,374)
MBS/CMO	135		(1)		643,172		(116,012)		643,307		(116,013)
US Gov’t Sponsored Entities & Agencies	—		—		182,917		(37,378)		182,917		(37,378)
Total	$	13,604	$	(176)	$	1,494,312	$	(275,589)	$	1,507,916	$	(275,765)

	Less than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
December 31, 2022
Obligations of State and Political Subdivisions	$	579,267	$	(117,423)	$	122,992	$	(44,591)	$	702,259	$	(162,014)
MBS/CMO	240,344		(20,920)		474,327		(110,918)		714,671		(131,838)
US Gov’t Sponsored Entities & Agencies	198,702		(38,818)		6,314		(1,182)		205,016		(40,000)
Total	$	1,018,313	$	(177,161)	$	603,633	$	(156,691)	$	1,621,946	$	(333,852)

Available-for-sale debt securities in unrealized loss positions are evaluated for impairment related to credit losses at least quarterly. For available-for-sale debt securities in an unrealized loss position, the Company assesses whether we intend to sell, or it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is reduced to fair value through

64

Notes to the Consolidated Financial Statements

Dollars in thousands, except per share data

NOTE 2 – Securities (continued)

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. The decrease in unrealized losses from December 31, 2022 to December 31, 2023 was primarily the result of fair value adjustments caused by the change in market interest rates. No allowance for credit losses for available-for-sale debt securities was needed at December 31, 2023 or 2022.

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 $9,620 at December 31, 2023 and $10,637 at December 31, 2022. 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, 2023 and 2022. 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 2023 or 2022.

NOTE 3 - Derivatives

The Company executes interest rate swaps with commercial banking customers to facilitate their respective risk management strategies. The notional amounts of these interest rate swaps and the offsetting counterparty derivative instruments were $139,751 at December 31, 2023 and $134,684 at December 31, 2022. 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, 2023				December 31, 2022
	Notional Amount		Fair Value		Notional Amount		Fair Value
Included in Other Assets:
Interest Rate Swaps	$	139,751	$	7,458	$	134,684	$	9,899
Included in Other Liabilities:
Interest Rate Swaps	$	139,751	$	7,467	$	134,684	$	9,749

65

Notes to the Consolidated Financial Statements

Dollars in thousands, except per share data

NOTE 3 – Derivatives (continued)

The following table presents the effect of derivative instruments on the Consolidated Statements of Income for the years ended December 31, 2023, 2022 and 2021 is as follows: 

	2023		2022		2021
Interest Rate Swaps:
Included in Other Income	$	344	$	403	$	1,131

NOTE 4 - Loans

Loans were comprised of the following classifications at December 31: 

	2023		2022
Commercial:
Commercial and Industrial Loans	$	589,541	$	620,106
Commercial Real Estate Loans	2,121,835		1,966,884
Agricultural Loans	423,803		417,413
Leases	71,988		56,396
Retail:
Home Equity Loans	299,685		279,748
Consumer Loans	87,853		79,904
Credit Cards	20,351		17,512
Residential Mortgage Loans	362,844		350,682
Subtotal	3,977,900		3,788,645
Less: Unearned Income	(6,818)		(3,711)
Allowance for Credit Losses	(43,765)		(44,168)
Loans, net	$	3,927,317	$	3,740,766

The table above includes $13,237 and $21,149 of purchase credit deteriorated loans as of December 31, 2023 and 2022, respectively.

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, 2023, 2022 and 2021:

December 31, 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

66

Notes to the Consolidated Financial Statements

Dollars in thousands, except per share data

NOTE 4 – Loans (continued)

December 31, 2022	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	$	9,554	$	19,245	$	4,505	$	200	$	507	$	1,061	$	240	$	1,705	$	37,017
Acquisition of Citizens Union Bank of Shelbyville, KY - PCD Loans	376		1,945		689		—		2		—		—		105		3,117
Provision (Benefit) for Credit Losses	4,942		463		(1,006)		9		991		351		163		437		6,350
Loans Charged-off	(1,149)		(79)		—		—		(1,364)		(69)		(165)		(24)		(2,850)
Recoveries Collected	26		24		—		—		459		1		19		5		534
Total Ending Allowance Balance	$	13,749	$	21,598	$	4,188	$	209	$	595	$	1,344	$	257	$	2,228	$	44,168

December 31, 2021	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	$	6,445	$	29,878	$	6,756	$	200	$	490	$	996	$	150	$	1,944	$	46,859
Provision (Benefit) for Credit Losses	5,825		(10,663)		(2,251)		—		385		44		387		(227)		(6,500)
Loans Charged-off	(2,777)		(10)		—		—		(675)		(15)		(313)		(45)		(3,835)
Recoveries Collected	61		40		—		—		307		36		16		33		493
Total Ending Allowance Balance	$	9,554	$	19,245	$	4,505	$	200	$	507	$	1,061	$	240	$	1,705	$	37,017

The Company utilizes the Static Pool methodology in determining expected future credit losses. Static pool analysis means segmenting and tracking loans over a period of time based on similar risk characteristics such as loan structure, collateral type, industry of borrower and concentrations, contractual terms and credit risk indicators. Static pool calculates a loss rate on a closed pool of loans that existed on a specified start date based upon the remaining life of each segment.

The Company’s expected loss estimate is anchored in historical credit loss experience, with an emphasis on all available portfolio data. The Company’s historical look-back period includes January 2014 through the current period, on a monthly basis.

Qualitative reserves reflect management’s overall estimate of the extent to which current expected credit losses on collectively evaluated loans will differ from historical loss experience. The analysis takes into consideration industry and collateral concentrations, acquired loan portfolio characteristics and other credit-related analytics as deemed appropriate. Management attempts to quantify qualitative reserves by anchoring to specific data points when possible.

The Company estimates the allowance balance using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Historical loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for changes in underwriting standards, portfolio mix, delinquency level, changes in environmental conditions, unemployment rates, risk classifications and collateral values. The allowance for credit losses is measured on a collective (pooled) basis when similar risk characteristics exist. Based on the potential increased losses related to the advancing stress on the economy as a result of inflationary pressures, rising interest rates and financial market volatility, the Company has considered this loss experience may align with loss experience from the recessionary period from 2008-2011 and qualitative adjustments have been made accordingly.

Loans that do not share risk characteristics are evaluated on an individual basis. Loans evaluated individually are 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.

67

Notes to the Consolidated Financial Statements

Dollars in thousands, except per share data

NOTE 4 – Loans (continued)

For the year ended December 31, 2023, the decline in allowance for credit losses was largely related to the resolution, during the fourth quarter of 2023, of a single commercial borrowing relationship with minimal loss recognition for which the Company had established a significant reserve in previous periods which was slightly offset by additional reserve for loan portfolio growth. Key indicators utilized in forecasting for the allowance calculations include unemployment rates and gross domestic product as well as commodity prices for the agricultural segment of the portfolio. There has been some improvement in these factors over previous periods; however, rising interest rates and the expanded inflationary impact on consumer discretionary spending were considered in the qualitative factors to determine the allowance for credit losses.

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.

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, 2023 and 2022:

December 31, 2023	Non-Accrual With No Allowance for Credit Loss ⁽¹⁾		Non-Accrual		Loans Past Due Over 89 Days Still Accruing
Commercial and Industrial Loans	$	1,864	$	3,707	$	—
Commercial Real Estate Loans	942		1,889		55
Agricultural Loans	665		879		—
Leases	—		—		—
Home Equity Loans	1,033		1,033		—
Consumer Loans	111		111		—
Credit Cards	142		142		—
Residential Mortgage Loans	1,125		1,375		—
Total	$	5,882	$	9,136	$	55

(1) Includes non-accrual loans with no allowance for credit loss and are also included in Non-Accrual loans totaling $9,136.

December 31, 2022	Non-Accrual With No Allowance for Credit Loss ⁽¹⁾		Non-Accrual		Loans Past Due Over 89 Days Still Accruing
Commercial and Industrial Loans	$	1,142	$	7,936	$	1,427
Commercial Real Estate Loans	49		1,950		—
Agricultural Loans	994		1,062		—
Leases	—		—		—
Home Equity Loans	262		310		—
Consumer Loans	240		254		—
Credit Cards	146		146		—
Residential Mortgage Loans	676		1,230		—
Total	$	3,509	$	12,888	$	1,427

(1) Includes non-accrual loans with no allowance for credit loss and are also included in Non-Accrual loans totaling $12,888.

Interest income on non-accrual loans recognized during the years ended December 31, 2023 and 2022 totaled $106 and $32. 

68

Notes to the Consolidated Financial Statements

Dollars in thousands, except per share data

NOTE 4 – Loans (continued)

The following tables present the amortized cost basis of collateral-dependent loans by class of loans as of December 31, 2023 and 2022:

December 31, 2023	Real Estate		Equipment		Accounts Receivable		Other		Total
Commercial and Industrial Loans	$	3,668	$	49	$	—	$	1,888	$	5,605
Commercial Real Estate Loans	8,553		—		—		—		8,553
Agricultural Loans	3,338		1,055		—		—		4,393
Leases	—		—		—		—		—
Home Equity Loans	420		—		—		—		420
Consumer Loans	9		—		—		—		9
Credit Cards	—		—		—		—		—
Residential Mortgage Loans	753		—		—		—		753
Total	$	16,741	$	1,104	$	—	$	1,888	$	19,733

December 31, 2022	Real Estate		Equipment		Accounts Receivable		Other		Total
Commercial and Industrial Loans	$	2,078	$	1,219	$	272	$	5,851	$	9,420
Commercial Real Estate Loans	12,192		36		—		—		12,228
Agricultural Loans	4,944		318		—		—		5,262
Leases	—		—		—		—		—
Home Equity Loans	467		—		—		—		467
Consumer Loans	8		2		—		12		22
Credit Cards	—		—		—		—		—
Residential Mortgage Loans	1,060		—		—		—		1,060
Total	$	20,749	$	1,575	$	272	$	5,863	$	28,459

The following tables present the aging of the amortized cost basis in past due loans by class of loans as of December 31, 2023 and 2022:

December 31, 2023	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	$	832	$	257	$	3,299	$	4,388	$	585,153	$	589,541
Commercial Real Estate Loans	1,215		484		938		2,637		2,119,198		2,121,835
Agricultural Loans	5		248		497		750		423,053		423,803
Leases	—		—		—		—		71,988		71,988
Home Equity Loans	1,016		571		1,033		2,620		297,065		299,685
Consumer Loans	658		84		110		852		87,001		87,853
Credit Cards	165		87		142		394		19,957		20,351
Residential Mortgage Loans	7,362		1,647		1,215		10,224		352,620		362,844
Total	$	11,253	$	3,378	$	7,234	$	21,865	$	3,956,035	$	3,977,900

69

Notes to the Consolidated Financial Statements

Dollars in thousands, except per share data

NOTE 4 – Loans (continued)

December 31, 2022	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	$	268	$	681	$	8,285	$	9,234	$	610,872	$	620,106
Commercial Real Estate Loans	1,617		14		616		2,247		1,964,637		1,966,884
Agricultural Loans	343		—		123		466		416,947		417,413
Leases	—		—		—		—		56,396		56,396
Home Equity Loans	1,770		140		310		2,220		277,528		279,748
Consumer Loans	219		64		252		535		79,369		79,904
Credit Cards	86		24		146		256		17,256		17,512
Residential Mortgage Loans	6,330		2,783		1,051		10,164		340,518		350,682
Total	$	10,633	$	3,706	$	10,783	$	25,122	$	3,763,523	$	3,788,645

Loan Modifications Made to Borrowers Experiencing Financial Difficulty

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

The Company’s loan modifications for borrowers experiencing financial difficulties will typically include one or a combination of the following: a reduction of the stated interest rate of the loan; an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk; or a permanent reduction of the recorded investment in the loan. No modifications in 2023 resulted in the permanent reduction of the recorded investment in the loan.

At December 31, 2023, 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, 2023 and were modified in the twelve months prior to that default to borrowers experiencing financial difficulty. The Company considers a loan to be in payment default once it is 30 days contractually past due under the modified terms.

Credit Quality Indicators:

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

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

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

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

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

70

Notes to the Consolidated Financial Statements

Dollars in thousands, except per share data

NOTE 4 – Loans (continued)

The following table presents the risk category of loans and current period gross charge-offs as of December 31, 2023 by loan class and vintage year:

	Term Loans Amortized Cost Basis by Origination Year
As of December 31, 2023	2023		2022		2021		2020		2019		Prior		Revolving Loans Amortized Cost Basis		Total
Commercial and Industrial:
Risk Rating
Pass	$	112,626	$	134,590	$	80,738	$	28,492	$	32,585	$	45,764	$	134,936	$	569,731
Special Mention	47		453		128		829		—		1,948		3,048		6,453
Substandard	—		294		5,689		780		1,696		1,471		3,427		13,357
Doubtful	—		—		—		—		—		—		—		—
Total Commercial and Industrial Loans	$	112,673	$	135,337	$	86,555	$	30,101	$	34,281	$	49,183	$	141,411	$	589,541
Current Period Gross Charge-Offs	$	—	$	911	$	32	$	493	$	7	$	88	$	261	$	1,792
Commercial Real Estate:
Risk Rating
Pass	$	300,569	$	416,874	$	470,917	$	225,668	$	147,431	$	458,821	$	41,102	$	2,061,382
Special Mention	13,906		2,401		11,155		1,651		259		19,532		638		49,542
Substandard	—		617		5,510		1,142		729		2,737		176		10,911
Doubtful	—		—		—		—		—		—		—		—
Total Commercial Real Estate Loans	$	314,475	$	419,892	$	487,582	$	228,461	$	148,419	$	481,090	$	41,916	$	2,121,835
Current Period Gross Charge-Offs	$	—	$	—	$	56	$	—	$	—	$	—	$	—	$	56
Agricultural:
Risk Rating
Pass	$	44,948	$	56,291	$	39,852	$	42,279	$	23,217	$	100,391	$	89,455	$	396,433
Special Mention	1,495		164		903		5,047		2,338		9,894		2,259		22,100
Substandard	—		—		199		188		200		4,683		—		5,270
Doubtful	—		—		—		—		—		—		—		—
Total Agricultural Loans	$	46,443	$	56,455	$	40,954	$	47,514	$	25,755	$	114,968	$	91,714	$	423,803
Current Period Gross Charge-Offs	$	—	$	—	$	—	$	2	$	—	$	—	$	25	$	27
Leases:
Risk Rating
Pass	$	36,848	$	12,281	$	10,634	$	6,086	$	4,788	$	1,351	$	—	$	71,988
Special Mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Total Leases	$	36,848	$	12,281	$	10,634	$	6,086	$	4,788	$	1,351	$	—	$	71,988
Current Period Gross Charge-Offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

71

Notes to the Consolidated Financial Statements

Dollars in thousands, except per share data

NOTE 4 – Loans (continued)

As of December 31, 2022, the risk category of loans by class of loans is as follows:

	Term Loans Amortized Cost Basis by Origination Year
As of December 31, 2022	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
Commercial and Industrial:
Risk Rating
Pass	$	156,318	$	117,648	$	39,949	$	46,505	$	18,423	$	51,482	$	154,203	$	584,528
Special Mention	56		148		577		78		551		2,346		1,672		5,428
Substandard	1,714		5,629		849		1,304		1,028		2,237		17,389		30,150
Doubtful	—		—		—		—		—		—		—		—
Total Commercial and Industrial Loans	$	158,088	$	123,425	$	41,375	$	47,887	$	20,002	$	56,065	$	173,264	$	620,106
Commercial Real Estate:
Risk Rating
Pass	$	398,631	$	490,747	$	261,462	$	162,701	$	129,151	$	427,433	$	35,163	$	1,905,288
Special Mention	3,982		1,568		4,612		135		13,689		25,371		—		49,357
Substandard	—		4,628		489		1,415		979		4,728		—		12,239
Doubtful	—		—		—		—		—		—		—		—
Total Commercial Real Estate Loans	$	402,613	$	496,943	$	266,563	$	164,251	$	143,819	$	457,532	$	35,163	$	1,966,884
Agricultural:
Risk Rating
Pass	$	62,673	$	47,682	$	47,355	$	25,431	$	21,728	$	92,344	$	83,862	$	381,075
Special Mention	634		842		6,066		4,149		2,355		11,440		4,310		29,796
Substandard	—		210		628		429		85		5,190		—		6,542
Doubtful	—		—		—		—		—		—		—		—
Total Agricultural Loans	$	63,307	$	48,734	$	54,049	$	30,009	$	24,168	$	108,974	$	88,172	$	417,413
Leases:
Risk Rating
Pass	$	20,057	$	14,461	$	9,648	$	8,901	$	1,851	$	1,478	$	—	$	56,396
Special Mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Total Leases	$	20,057	$	14,461	$	9,648	$	8,901	$	1,851	$	1,478	$	—	$	56,396

72

Notes to the Consolidated Financial Statements

Dollars in thousands, except per share data

NOTE 4 – 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 period ended December 31, 2023.

	Term Loans Amortized Cost Basis by Origination Year
As of December 31, 2023	2023		2022		2021		2020		2019		Prior		Revolving Loans Amortized Cost Basis		Total
Consumer:
Payment performance
Performing	$	49,208	$	21,459	$	9,708	$	2,756	$	917	$	1,911	$	1,783	$	87,742
Nonperforming	74		21		12		—		—		1		3		111
Total Consumer Loans	$	49,282	$	21,480	$	9,720	$	2,756	$	917	$	1,912	$	1,786	$	87,853
Current Period Gross Charge-Offs	$	1,162	$	42	$	23	$	71	$	3	$	1	$	7	$	1,309
Home Equity:
Payment performance
Performing	$	—	$	170	$	236	$	90	$	165	$	1,207	$	296,784	$	298,652
Nonperforming	—		247		252		60		—		102		372		1,033
Total Home Equity Loans	$	—	$	417	$	488	$	150	$	165	$	1,309	$	297,156	$	299,685
Current Period Gross Charge-Offs	$	—	$	—	$	—	$	55	$	—	$	24	$	15	$	94
Residential Mortgage:
Payment performance
Performing	$	56,306	$	65,301	$	85,753	$	41,352	$	17,831	$	94,926	$	—	$	361,469
Nonperforming	11		60		417		287		109		491		—		1,375
Total Residential Mortgage Loans	$	56,317	$	65,361	$	86,170	$	41,639	$	17,940	$	95,417	$	—	$	362,844
Current Period Gross Charge-Offs	$	—	$	—	$	22	$	36	$	—	$	—	$	—	$	58

73

Notes to the Consolidated Financial Statements

Dollars in thousands, except per share data

NOTE 4 – 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, 2022.

	Term Loans Amortized Cost Basis by Origination Year
As of December 31, 2022	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
Consumer:
Payment performance
Performing	$	42,685	$	22,708	$	5,610	$	2,394	$	1,543	$	1,553	$	3,157	$	79,650
Nonperforming	3		19		212		8		2		10		—		254
Total Consumer Loans	$	42,688	$	22,727	$	5,822	$	2,402	$	1,545	$	1,563	$	3,157	$	79,904
Home Equity:
Payment performance
Performing	$	63	$	—	$	—	$	—	$	—	$	591	$	278,784	$	279,438
Nonperforming	—		20		—		—		19		1		270		310
Total Home Equity Loans	$	63	$	20	$	—	$	—	$	19	$	592	$	279,054	$	279,748
Residential Mortgage:
Payment performance
Performing	$	69,982	$	97,176	$	46,851	$	20,080	$	16,664	$	98,699	$	—	$	349,452
Nonperforming	—		161		253		—		78		738		—		1,230
Total Residential Mortgage Loans	$	69,982	$	97,337	$	47,104	$	20,080	$	16,742	$	99,437	$	—	$	350,682

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, 2023		December 31, 2022
Performing	$	20,209	$	17,366
Nonperforming	142		146
Total	$	20,351	$	17,512

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, 2023
Purchases	$	—	$	1,502	$	—	$	—	$	—	$	—	$	—	$	—	$	1,502
Sales	—		—		—		—		—		—		—		—		—
December 31, 2022
Purchases	$	522	$	411	$	—	$	—	$	—	$	—	$	—	$	—	$	933
Sales	—		3,819		97		—		—		—		—		—		3,916

74

Notes to the Consolidated Financial Statements

Dollars in thousands, except per share data

NOTE 4 – 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 2023. A summary of the activity of these loans follows:

Balance January 1, 2023		Additions		Changes in Persons or Interests Included		Deductions				Balance December 31, 2023
						Collected		Charged-off
$	51,086	$	13,854	$	(7,087)	$	(18,031)	$	—	$	39,822

NOTE 5 – Premises, Furniture, and Equipment 

Premises, furniture, and equipment was comprised of the following classifications at December 31:

	2023		2022
Land	$	27,100	$	27,401
Buildings and Improvements	106,646		109,682
Furniture and Equipment	45,749		46,665
Total Premises, Furniture and Equipment	179,495		183,748
Less:  Accumulated Depreciation	(72,719)		(71,511)
Total	$	106,776	$	112,237

Depreciation expense was $6,570, $6,648 and $5,802 for 2023, 2022 and 2021, respectively.

NOTE 6 - Deposits

At year end 2023, stated maturities of time deposits were as follows:

2024	$	707,978
2025	32,366
2026	16,952
2027	6,155
2028	3,591
Thereafter	—
Total	$	767,042

Time deposits and brokered certificates of deposit exceeding the FDIC insurance limit of $250 at December 31, 2023 and 2022 were $277,568 and $71,081, respectively.

Time deposits originated from outside the geographic area, generally through brokers, totaled $3,801 and $3,277 at December 31, 2023 and 2022, respectively.

Deposits from principal officers, directors, and their affiliates at year-end 2023 and 2022 were $67,637 and $62,435, respectively.

75

Notes to the Consolidated Financial Statements

Dollars in thousands, except per share data

NOTE 7 – 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,
	2023				2022
	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	$	50,000	$	—	$	25,000	$	—
Junior Subordinated Debentures assumed from American Community Bancorp, Inc.	8,248		(1,723)		8,248		(1,873)
Junior Subordinated Debentures assumed from River Valley Bancorp, Inc.	7,217		(977)		7,217		(1,082)
Junior Subordinated Debentures assumed from Citizens First Corporation	5,155		(853)		5,155		(919)
Junior Subordinated Debentures assumed from Citizens Union Bancorp of Shelbyville, Inc.	20,600		(1,885)		20,600		(2,020)
Subordinated Debentures	40,000		(455)		40,000		(538)
Finance Lease Obligation	2,642		—		2,857		—
Long-term Borrowings	133,862		(5,893)		109,077		(6,432)
Overnight Variable Rate Advances from Federal Home Loan Bank collateralized by qualifying mortgages, investment securities, and mortgage-backed securities	—		—		25,000		—
Federal Funds Purchased	25,000		—		11,200		—
Repurchase Agreements	40,968		—		64,961		—
Short-term Borrowings	65,968		—		101,161		—
Total Borrowings	$	199,830	$	(5,893)	$	210,238	$	(6,432)

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. 

	2023			2022
Average Daily Balance During the Year	$	51,474		$	52,932
Average Interest Rate During the Year	1.16		%	0.20		%
Maximum Month-end Balance During the Year	$	60,055		$	72,084
Weighted Average Interest Rate at Year-end	1.44		%	0.57		%

At December 31, 2023, interest rates on long-term FHLB Advances ranged from 1.54% to 3.57% with a weighted average rate of 2.56%. At December 31, 2022 the Company held one long-term FHLB advance with an interest rate of 1.54%. At December 31, 2023 and 2022, the Company had no advances containing options whereby the FHLB may convert a fixed rate advance to an adjustable rate advance.

At December 31, 2023 and 2022, the Company had outstanding $39,545 and $39,462, respectively, in aggregate principal amount, of its 4.50% Fixed-to-Floating Rate Subordinated Notes due 2029 (the “Notes”). The Notes bear interest at a fixed annual rate of 4.50% until but excluding June 30, 2024, payable semi-annually in arrears. The indenture for the Notes contemplates that, from and including June 30, 2024 to but excluding the maturity date of June 30, 2029, or early redemption date, the interest rate will reset quarterly to an interest 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. The Secured Overnight Financing Rate, or SOFR, is the preferred alternate rate to LIBOR, as identified by the Alternative Reference Rates Committee, a U.S.-based group convened by the Federal Reserve Board and the Federal Reserve Bank of New York. The Federal Reserve subsequently

76

Notes to the Consolidated Financial Statements

Dollars in thousands, except per share data

NOTE 7 - FHLB Advances and Other Borrowings (continued)

adopted final regulations that, among other things, established LIBOR benchmark replacements based on SOFR under certain circumstances. See Replacement of LIBOR Benchmark below for additional information.

The Notes are not subject to any sinking fund and are not convertible into or exchangeable for any other securities or assets of the Company or any of its subsidiaries. The Notes are not subject to redemption at the option of the holder. The Notes are unsecured, subordinated obligations of the Company only and are not obligations of, and are not guaranteed by, any subsidiary of the Company. The Notes rank junior in right to payment to the Company’s current and future senior indebtedness. The Notes are intended to qualify as Tier 2 capital for regulatory capital purposes for the Company.

At December 31, 2023, 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 25, 2024. Interest on the line of credit is based upon one-month Term SOFR plus 2.10%.

At December 31, 2023, scheduled principal payments on long-term borrowings, excluding the capitalized lease obligation and acquired subordinated debentures (which are discussed below) are as follows:

2024	$	25,000
2025	—
2026	—
2027	—
2028	25,000
Thereafter	39,545
Total	$	89,545

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. $34,829 of the junior subordinated debentures were treated as Tier 1 capital for regulatory capital purposes as of December 31, 2023. $34,378 of the junior subordinated debentures were treated as Tier 1 capital for regulatory capital purposes as of December 31, 2022. 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, 2023		Variable Rate (1)	Rate as of December 31, 2023		Rate as of December 31, 2022 (2)		Maturity Date
ACB Trust I	5/6/2005	$	5,155	$	4,105	3-Month SOFR + 2.15%	7.81	%	6.90	%	May 2035
ACB Trust II	7/15/2005	3,093		2,420		3-Month SOFR + 1.85%	7.49	%	6.54	%	July 2035
RIVR Statutory Trust I	3/26/2003	7,217		6,240		3-Month SOFR + 3.15%	8.77	%	7.87	%	March 2033
Citizens First Statutory Trust I	10/16/2006	5,155		4,302		3-Month SOFR +1.65%	7.31	%	5.39	%	January 2037
CUB Capital Trust I	10/21/2004	10,310		9,642		3-Month SOFR +2.00%	7.64	%	6.69	%	November 2034
CUB Capital Trust II	8/17/2005	10,310		9,073		3-Month SOFR +1.50%	7.16	%	5.58	%	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.

(2)    Prior to CME Term SOFR becoming effective, the variable rate was based upon LIBOR rates and tenors. See Replacement of LIBOR Benchmark below for additional information.

77

Notes to the Consolidated Financial Statements

Dollars in thousands, except per share data

NOTE 7 - FHLB Advances and Other Borrowings (continued)

Replacement of LIBOR Benchmark:

On March 15, 2022, the Adjustable Interest Rate (LIBOR) Act (the “LIBOR Act”) was signed into law in response to the U.K. Financial Conduct Authority, the authority regulating LIBOR, announcing that, among other things, the 1-month, 3-month, 6-month and 12-month U.S. dollar LIBOR settings would cease to exist after June 30, 2023. The LIBOR Act establishes a uniform national approach for replacing LIBOR in legacy contracts that do not provide for the use of a clearly defined replacement benchmark rate. As directed by the LIBOR Act, on December 16, 2022, the Federal Reserve issued a final rule setting forth regulations to implement the LIBOR Act, including establishing benchmark replacements based on SOFR for contracts governed by U.S. law that reference certain tenors of U.S. dollar LIBOR (the overnight and one-, three-, six-, and 12-month tenors) and that do not have terms that provide for the use of a clearly defined and practicable replacement benchmark rate (“fallback provisions”) following the first London banking day after June 30, 2023.

As the junior subordinated debentures discussed above do not have LIBOR fallback provisions, after June 30, 2023, the interest paid on those debentures has been and will be based upon the CME Term SOFR, as the replacement benchmark, including a static spread adjustment for the appropriate tenor, as provided by the LIBOR Act and related Federal Reserve regulations. The relevant spread adjustment for a three-month tenor is 0.26161%.

NOTE 8 - 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

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, 2023, 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 2023 and 2022, 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.

78

Notes to the Consolidated Financial Statements

Dollars in thousands, except per share data

NOTE 8 – Shareholders’ Equity (continued)

At December 31, 2023, 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	$	810,391	16.50	%	$	392,870	8.00	%	N/A		N/A
Bank	723,998		14.76		392,402		8.00		$	490,503	10.00	%
Tier 1 (Core) Capital (to Risk Weighted Assets)
Consolidated	$	735,089	14.97	%	$	294,652	6.00	%	N/A		N/A
Bank	688,696		14.04		294,302		6.00		$	392,402	8.00	%
Common Tier 1 (CET 1) Capital Ratio (to Risk Weighted Assets)
Consolidated	$	700,260	14.26	%	$	220,989	4.50	%	N/A		N/A
Bank	688,696		14.04		220,726		4.50		$	318,827	6.50	%
Tier 1 (Core) Capital (to Average Assets)
Consolidated	$	735,089	11.75	%	$	250,162	4.00	%	N/A		N/A
Bank	688,696		11.03		249,642		4.00		$	312,053	5.00	%

(1) Excludes 2.5% capital conservation buffer.

At December 31, 2022, 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	$	747,542	15.45	%	$	387,024	8.00	%	N/A		N/A
Bank	680,695		14.07		386,959		8.00		$	483,698	10.00	%
Tier 1 (Core) Capital (to Risk Weighted Assets)
Consolidated	$	676,068	13.97	%	$	290,268	6.00	%	N/A		N/A
Bank	649,221		13.42		290,219		6.00		$	386,959	8.00	%
Common Tier 1 (CET 1) Capital Ratio (to Risk Weighted Assets)
Consolidated	$	641,690	13.26	%	$	217,701	4.50	%	N/A		N/A
Bank	649,221		13.42		217,664		4.50		$	314,404	6.50	%
Tier 1 (Core) Capital (to Average Assets)
Consolidated	$	676,068	10.50	%	$	257,622	4.00	%	N/A		N/A
Bank	649,221		10.09		257,341		4.00		$	321,677	5.00	%

(1) Excludes 2.5% capital conservation buffer.

The Company and the Bank at year end 2023 and 2022 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

79

Notes to the Consolidated Financial Statements

Dollars in thousands, except per share data

NOTE 8 – Shareholders’ Equity (continued)

dividends payable by the affiliate to the holding company, or by the holding company to its shareholders. At December 31, 2023 the Bank had approximately $175,000 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 and January 1, 2024 and another 25% will be phased in on January 1, 2025 (at which time the cumulative effects of adopting CECL will have been fully phased into our regulatory capital). Under the five-year transition option, the amount of adjustments to regulatory capital that could be deferred until the phase-in period began included both the initial impact of our adoption of CECL at January 1, 2020 and 25% of subsequent changes in our allowance for credit losses during each quarter of the two-year period ended December 31, 2021.

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 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 date of grant (twenty years in the case of nonqualified stock options). The exercise price of stock options granted pursuant to the plans must be no less than the market value of the Common Stock on the date of the grant.

The plans authorize an optionee to pay the exercise price of options in cash or in common shares of the Company or in some combination of cash and common shares. An optionee may tender already-owned common shares to the Company in exercise of an option. Certain of these plans authorize an optionee to surrender the value of an unexercised option in payment of an equivalent amount of the exercise price of the option. The Company typically issues authorized but unissued common shares upon the exercise of options.

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 2023, 2022 and 2021, 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, 2023, 2022 and 2021.

Restricted Stock

During the periods presented, awards of long-term incentives were granted in the form of restricted stock. In 2019 and prior, awards that were granted to management and selected other employees under the Company’s management incentive plan were granted in tandem with cash credit entitlements in the form of 60% restricted stock grants and 40% cash credit entitlements. In 2020, awards granted under the management incentive plan were granted in tandem with cash credit entitlements in the form of 66.67% restricted stock grants and 33.33% cash credit entitlements. In 2019 and prior, the restricted stock grants and tandem cash credit entitlements, generally, vested in three annual installments of 33.3% each. In 2020, 100% of 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. Beginning in 2021, for named executive officers, awards are granted in the form of 100% restricted stock grants which will vest in one-third installments on the first, second and third anniversaries of the award date.

80

Notes to the Consolidated Financial Statements

Dollars in thousands, except per share data

NOTE 8 – Shareholders’ Equity (continued)

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 December 31 of the year after grant or does not satisfy certain meeting attendance requirements, at which time they generally vest 100 percent. 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 2023, 2022, and 2021:

	2023		2022		2021
Restricted Stock Expense	$	2,345	$	2,308	$	1,692
Cash Entitlement Expense	750		646		732
Tax Effect	(803)		(766)		(629)
Net of Tax	$	2,292	$	2,188	$	1,795

Unrecognized expense associated with the restricted stock grants and cash entitlements totaled $3,519, $2,781, and $2,497 as of December 31, 2023, 2022, and 2021, respectively.

The following table presents information on restricted stock grants outstanding for the period shown:

	Year Ended December 31, 2023
	Restricted Shares	Weighted Average Market Price at Grant
Outstanding at Beginning of Period	74,873	$	41.05
Granted	96,931	33.72
Issued and Vested	(49,757)	40.55
Forfeited	(5,415)	37.20
Outstanding at End of Period	116,632	35.34

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 replaced the Company’s 2009 Employee Stock Purchase Plan, which expired by its own terms on August 16, 2019. The 2019 ESPP provides for a series of 3-month offering periods, commencing on the first day and ending on the last trading day of each calendar quarter, for the purchase of the Company’s common stock by participating employees. The purchase price of the shares has been set at 95% of the fair 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 2023, the Company recorded $29 of expense, $22 net of tax, for the employee stock purchase plan. In 2022, the Company recorded $53 of expense, $39 net of tax, for the employee stock purchase plan. In 2021, the Company recorded $45 of expense, $34 net of tax, for the employee stock purchase plan. There was no unrecognized compensation expense as of December 31, 2023, 2022 and 2021 for the Employee Stock Purchase Plans.

Stock Repurchase Plan

On January 31, 2022, the Company’s Board of Directors approved a new 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 new 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

81

Notes to the Consolidated Financial Statements

Dollars in thousands, except per share data

NOTE 8 – Shareholders’ Equity (continued)

factors as the market price of the stock, general market and economic conditions and applicable legal requirements. The Company has not repurchased an shares under this repurchase plan.

In August 2022, the Inflation Reduction Act of 2022 (the “IRA”) was enacted. Among other things, the IRA imposes a new 1% excise tax on the fair 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 9 - 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 $2,356, $2,152, and $2,050 for 2023, 2022, and 2021, 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 $7,227, $7,619, and $5,520 for 2023, 2022, and 2021, 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 $2,651 and $3,212 at December 31, 2023 and 2022, respectively. Deferred compensation expense was $261, $1,143, and $302 for 2023, 2022, and 2021, respectively. In conjunction with the plans, the Company purchased life insurance on certain directors and officers.

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:	2023		2022
Obligation at the Beginning of Year	$	1,530	$	1,592
Unrecognized Loss (Gain)	187		(71)
Components of Net Periodic Postretirement Benefit Cost
Service Cost	101		105
Interest Cost	71		35
Net Expected Benefit Payments	(142)		(131)
Amendments	—		—
Obligation at End of Year	$	1,747	$	1,530

Components of Postretirement Benefit Expense:	2023		2022		2021
Service Cost	$	101	$	105	$	119
Interest Cost	71		35		28
Amortization of Prior Service Costs	(3)		(2)		(2)
Amortization of Unrecognized Net (Gain) Loss	32		43		55
Net Postretirement Benefit Expense	201		181		200
Net Gain (Loss) During Period Recognized in Other Comprehensive Income (Loss)	158		(112)		(121)
Total Recognized in Net Postretirement Benefit Expense and Other Comprehensive Income	$	359	$	69	$	79

82

Notes to the Consolidated Financial Statements

Dollars in thousands, except per share data

NOTE 9 – Employee Benefit Plans (continued)

Assumptions Used to Determine Net Periodic Cost and Benefit Obligations:	2023		2022		2021
Discount Rate	4.64	%	4.83	%	2.31	%

Assumed Health Care Cost Trend Rates at Year-end:	2023		2022
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	2030		2028

Contributions

The Company expects to contribute $169 to its postretirement medical and life insurance plan in 2024.

Estimated Future Benefits

The following postretirement benefit payments, which reflect expected future service, are expected to be paid:

2024	$	169
2025	129
2026	167
2027	177
2028	184
2029-2033	931

Multi-Employer Pension Plan

Through the acquisition of River Valley Bancorp, the Company acquired a participation in a multi-employer defined benefit pension plan. Effective December 31, 2015, the plan was frozen. Pension expense was approximately $141 and $53 during 2023 and 2022, respectively. Specific plan asset and accumulated benefit information for the Company’s portion of the fund is not available. Under the Employee Retirement Income and Security Act of 1974 (“ERISA”), a contributor to a multi-employer pension plan may be liable in the event of complete or partial withdrawal for the benefit payments guaranteed under ERISA. The Company is in process of withdrawing from this multi-employer pension plan with finalization expected to occur in the second quarter of 2024. As a result, the Company has accrued a withdrawal liability in the amount of $101 as of December 31, 2023.

The Company participates in the Pentegra Defined Benefit Plan for Financial Institutions (the “Pentegra DB Plan”), a tax-qualified defined-benefit pension plan. The Pentegra DB Plan operates as a multi-employer plan for accounting purposes and as a multiple-employer plan under ERISA and the Internal Revenue Code. There are no collective bargaining agreements in place that require contributions to the Pentegra DB Plan.

The Pentegra DB Plan is a single plan under Internal Revenue Code Section 413(c) and, as a result, all of the assets stand behind all of the liabilities. Accordingly, under the Pentegra DB Plan, contributions made by a participating employer may be used to provide benefits to participants of other participating employers.

Total contributions made to the Pentegra DB Plan, as reported on Form 5500, equal $142,405 and $248,563 for the plan years ended June 30, 2022 and 2021, respectively. The Company’s contributions to the Pentegra DB Plan for the fiscal year ending December 31, 2023 were not more than 5% of total contributions to the Pentegra DB Plan for the year ending June 30, 2022.

83

Notes to the Consolidated Financial Statements

Dollars in thousands, except per share data

NOTE 10 - Income Taxes

The provision for income taxes consists of the following:

	2023		2022		2021
Current Federal	$	13,067	$	13,049	$	13,437
Current State	1,934		1,763		2,547
Deferred Federal	2,602		1,868		2,056
Deferred State	156		671		608
Total	$	17,759	$	17,351	$	18,648

Effective tax rates differ from the federal statutory rate of 21% for 2023, 2022 and 2021 applied to income before income taxes due to the following:

	2023		2022		2021
Statutory Rate Times Pre-tax Income	$	21,766	$	20,827	$	21,585
Add (Subtract) the Tax Effect of:
Income from Tax-exempt Loans and Investments	(4,951)		(5,223)		(3,872)
Non-deductible Merger Costs	—		177		—
State Income Tax, Net of Federal Tax Effect	1,651		1,923		2,492
General Business Tax Credits	(1,128)		(1,038)		(1,013)
Amortization of Tax Credit Investments	1,101		1,040		1,001
Company Owned Life Insurance	(363)		(476)		(321)
Other Differences	(317)		121		(1,224)
Total Income Taxes	$	17,759	$	17,351	$	18,648

84

Notes to the Consolidated Financial Statements

Dollars in thousands, except per share data

NOTE 10 – Income Taxes (continued)

The net deferred tax asset/(liability) at December 31 consists of the following:

	2023		2022
Deferred Tax Assets:
Allowance for Credit Losses	$	10,888	$	10,478
Lease Liability (Operating Leases)	1,313		1,585
Unrealized Loss on Securities	57,882		70,234
Deferred Compensation and Employee Benefits	1,026		1,162
Other-than-temporary Impairment	245		246
Accrued Expenses	1,224		1,325
Business Combination Fair Value Adjustments	—		205
Pension and Postretirement Plans	182		182
Other Real Estate Owned	41		70
Non-Accrual Loan Interest Income	449		629
General Business Tax Credits	—		198
Net Operating Loss Carryforward	650		828
Other	879		1,190
Total Deferred Tax Assets	74,779		88,332
Deferred Tax Liabilities:
Depreciation	(3,416)		(2,859)
Leasing Activities, Net	(12,926)		(10,983)
FHLB Stock Dividends	(455)		(488)
Prepaid Expenses	(154)		(684)
Intangibles	(2,376)		(3,181)
Deferred Loan Fees	(954)		(1,127)
Mortgage Servicing Rights	(51)		(58)
Right of Use Asset (Operating Leases)	(1,274)		(1,548)
Business Combination Fair Value Adjustments	(478)		—
Other	(1,325)		(924)
Total Deferred Tax Liabilities	(23,409)		(21,852)
Valuation Allowance	—		—
Net Deferred Tax Asset/(Liability)	$	51,370	$	66,480

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, 2023, 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, 2023 was approximately $1,070.

As of December 31, 2023, the Company had Kentucky net operating loss carryforwards of $16,462, which expire in years ranging from 2029 through 2040. These net operating loss carryforwards are expected to be fully utilized before their expiration dates.

85

Notes to the Consolidated Financial Statements

Dollars in thousands, except per share data

NOTE 10 – Income Taxes (continued)

 Unrecognized Tax Benefits

The Company had no unrecognized tax benefits as of December 31, 2023, 2022, and 2021, and did not recognize any increase in unrecognized benefits during 2023 relative to any tax positions taken in 2023. Should the accrual of any interest or penalties 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, 2023, 2022, and 2021. The Company and its corporate subsidiaries file a consolidated U.S. Federal income tax return, which is subject to examination for all years after 2019. The Company and its corporate subsidiaries file combined/unitary returns in various states, which are subject to examination for all years after 2019.

NOTE 11 - 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, 2023, 2022 and 2021. 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.

	Year Ended
	December 31,
Non-interest Income	2023		2022		2021
In-Scope of Topic 606:
Wealth Management Fees	$	11,711	$	10,076	$	10,321
Service Charges on Deposit Accounts	11,538		11,457		7,723
Insurance Revenues	9,596		10,020		9,268
Interchange Fee Income	17,452		15,820		13,116
Other Operating Income:
ATM Fees	1,185		1,235		992
Wire Transfer Fees	696		737		703
Other (1)	1,251		1,251		1,182
Non-interest Income (in-scope of Topic 606)	53,429		50,596		43,305
Non-interest Income (out-of-scope of Topic 606)	6,832		8,537		16,157
Total Non-interest Income	$	60,261	$	59,133	$	59,462

(1) “Other” income includes safe deposit box rentals and other non-interest related fees totaling $1.2 million, $1.2 million, and $1.2 million for the years ended December 31, 2023, 2022, and 2021, 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).

86

Notes to the Consolidated Financial Statements

Dollars in thousands, except per share data

NOTE 11 – Revenue Recognition (continued)

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

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

NOTE 12 - Per Share Data

The computation of Basic Earnings per Share and Diluted Earnings per Share are provided below:

	2023		2022		2021
Basic Earnings per Share:
Net Income	$	85,888	$	81,825	$	84,137
Weighted Average Shares Outstanding	29,557,567		29,464,591		26,537,311
Basic Earnings per Share	$	2.91	$	2.78	$	3.17
Diluted Earnings per Share:
Net Income	$	85,888	$	81,825	$	84,137
Weighted Average Shares Outstanding	29,557,567		29,464,591		26,537,311
Potentially Dilutive Shares, Net	—		—		—
Diluted Weighted Average Shares Outstanding	29,557,567		29,464,591		26,537,311
Diluted Earnings per Share	$	2.91	$	2.78	$	3.17

There were no anti-dilutive shares at December 31, 2023, 2022, and 2021. There were no stock options outstanding at December 31, 2023, 2022 and 2021. Restricted stock units are participating shares and included in outstanding shares for purposes of the calculation of earnings per share.

NOTE 13 - 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, 2023		December 31, 2022
Finance Lease Cost:
Amortization of Right-of-Use Assets	$	210	$	210
Interest on Lease Liabilities	304		326
Operating Lease Cost	1,424		1,508
Short-term Lease Cost	—		—
Total Lease Cost	$	1,938	$	2,044

87

Notes to the Consolidated Financial Statements

Dollars in thousands, except per share data

NOTE 13 – Leases (continued)

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

	December 31, 2023		December 31, 2022
Weighted Average Remaining Lease Term:
Finance Leases	8 years		9 years
Operating Leases	7 years		7 years
Weighted Average Discount Rate:
Finance Leases	11.37	%	11.41	%
Operating Leases	3.07	%	2.98	%

Supplemental balance sheet information related to leases were as follows:

	December 31, 2023		December 31, 2022
Finance Leases
Premises, Furniture and Equipment, Net	$	1,648	$	1,858
Other Borrowings	$	2,642	$	2,857
Operating Leases
Operating Lease Right-of-Use Assets	$	5,180	$	6,297
Operating Lease Liabilities	$	5,337	$	6,447

Supplemental cash flow information related to leases were as follows:

	December 31, 2023		December 31, 2022
Cash Paid for Amounts in the Measurement of Lease Liabilities:
Operating Cash Flows from Finance Leases	$	304	$	326
Operating Cash Flows from Operating Leases	1,395		1,449
Financing Cash Flows from Finance Leases	211		186

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

	December 31, 2023
	Finance Leases		Operating Leases
Year 1	$	519	$	1,256
Year 2	519		1,047
Year 3	519		845
Year 4	486		662
Year 5	438		620
Thereafter	1,509		1,488
Total Lease Payments	3,990		5,918
Less Imputed Interest	(1,348)		(581)
Total	$	2,642	$	5,337

NOTE 14 - 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.

88

Notes to the Consolidated Financial Statements

Dollars in thousands, except per share data

NOTE 14 – Commitments and Off-balance Sheet Items (continued)

Commitments and contingent liabilities are summarized as follows, at December 31:

	2023				2022
	Fixed Rate		Variable Rate		Fixed Rate		Variable Rate
Commitments to Fund Loans:
Consumer Lines	$	13,978	$	689,295	$	15,238	$	576,784
Commercial Operating Lines	120,352		546,016		161,058		611,357
Residential Mortgages	11,855		3,521		15,129		5,327
Total Commitments to Fund Loans	$	146,185	$	1,238,832	$	191,425	$	1,193,468
Commitments to Sell Loans:
Mandatory	$	—	$	—	$	—	$	—
Non-mandatory	$	5,992	$	—	$	8,731	$	—
Standby Letters of Credit	$	3,340	$	16,161	$	3,047	$	17,117

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 27 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.

NOTE 15 - 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, 2023, the Company held $75 in Level 3 securities which consist of non-rated Obligations of State and Political Subdivisions and $984 in Level 3 securities which consist of non-rated MBS/CMO. Absent the credit rating, significant

89

Notes to the Consolidated Financial Statements

Dollars in thousands, except per share data

NOTE 15 – Fair Value (continued)

assumptions must be made such that the credit risk input becomes an unobservable input and thus these investment securities are reported by the Company in a Level 3 classification. 

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

Individually Analyzed 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.

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

Assets and Liabilities Measured on a Recurring Basis

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

	Fair Value Measurements at December 31, 2023 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	$	—	$	—	$	—	$	—
Obligations of State and Political Subdivisions	—		768,800		75		768,875
MBS/CMO	—		644,056		984		645,040
US Gov’t Sponsored Entities & Agencies	—		182,917		—		182,917
Total Securities	$	—	$	1,595,773	$	1,059	$	1,596,832
Loans Held-for-Sale	$	—	$	5,226	$	—	$	5,226
Derivative Assets	$	—	$	7,458	$	—	$	7,458
Derivative Liabilities	$	—	$	7,467	$	—	$	7,467

90

Notes to the Consolidated Financial Statements

Dollars in thousands, except per share data

NOTE 15 – Fair Value (continued)

	Fair Value Measurements at December 31, 2022 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	$	64,119	$	—	$	—	$	64,119
Obligations of State and Political Subdivisions	—		777,769		83		$	777,852
MBS/CMO	—		713,775		906		$	714,681
US Gov’t Sponsored Entities & Agencies	—		205,017		—		205,017
Total Securities	$	64,119	$	1,696,561	$	989	$	1,761,669
Loans Held-for-Sale	$	—	$	8,600	$	—	$	8,600
Derivative Assets	$	—	$	9,899	$	—	$	9,899
Derivative Liabilities	$	—	$	9,749	$	—	$	9,749

As of December 31, 2023 and 2022, the aggregate fair value, contractual balance (including accrued interest), and gain or loss on Loans Held-for-Sale were as follows:

	2023		2022
Aggregate Fair Value	$	5,226	$	8,600
Contractual Balance	5,125		8,474
Gain (Loss)	101		126

The total amount of gains and losses from changes in fair value included in earnings for the years ended December 31, 2023, 2022 and 2021 for loans held for sale were $(25), $(163), and $(237), respectively.

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 years ended December 31, 2023 and 2022:

	Obligations of State and Political Subdivisions				MBS/CMO
	2023		2022		2023		2022
Balance of Recurring Level 3 Assets at January 1	$	83	$	—	$	906	$	—
Total Gains (Losses) Included in Other Comprehensive Income	(8)		(17)		78		(76)
Maturities / Calls	—		—		—		—
Acquired through Bank Acquisition	—		100		—		982
Balance of Recurring Level 3 Assets at December 31	$	75	$	83	$	984	$	906

Of the total gain/loss included in earnings for the years ended December 31, 2023 and 2022, $70 and $(93) was attributable to other changes in fair value, respectively.

91

Notes to the Consolidated Financial Statements

Dollars in thousands, except per share data

NOTE 15 – Fair Value (continued)

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, 2023 Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Assets:
Individually Analyzed Loans
Commercial and Industrial Loans	$	—	$	—	$	2,506	$	2,506
Commercial Real Estate Loans	—		—		3,447		3,447
Agricultural Loans	—		—		2,395		2,395
Consumer Loans	—		—		9		9
Home Equity Loans	—		—		326		326
Residential Mortgage Loans	—		—		450		450

	Fair Value Measurements at December 31, 2022 Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Assets:
Individually Analyzed Loans
Commercial and Industrial Loans	$	—	$	—	$	1,858	$	1,858
Commercial Real Estate Loans	—		—		10,040		10,040
Agricultural Loans	—		—		2,970		2,970
Consumer Loans	—		—		8		8
Home Equity Loans	—		—		368		368
Residential Mortgage Loans	—		—		718		718

There was no Other Real Estate carried at fair value less costs to sell at December 31, 2023 and 2022. No charge to earnings was included in the years ended December 31, 2023 and 2022.

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, 2023 and 2022:

December 31, 2023	Fair Value		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
Individually Analyzed Loans - Commercial and Industrial Loans	$	2,506	Sales comparison approach	Adjustment for physical condition of comparable properties sold	23% - 100% (33%)
Individually Analyzed Loans - Commercial Real Estate Loans	$	3,447	Sales comparison approach	Adjustment for physical condition of comparable properties sold	20% - 68% (42%)
Individually Analyzed Loans - Agricultural Loans	$	2,395	Sales comparison approach	Adjustment for physical condition of comparable properties sold	31% - 100% (51%)
Individually Analyzed Loans - Consumer Loans	$	9	Sales comparison approach	Adjustment for physical condition of comparable properties sold	20% - 20% (20%)
Individually Analyzed Loans - Home Equity Loans	$	326	Sales comparison approach	Adjustment for physical condition of comparable properties sold	20% - 20% (20%)
Individually Analyzed Loans - Residential Mortgage Loans	$	450	Sales comparison approach	Adjustment for physical condition of comparable properties sold	20% -20% (20%)

92

Notes to the Consolidated Financial Statements

Dollars in thousands, except per share data

NOTE 15 – Fair Value (continued)

December 31, 2022	Fair Value		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
Individually Analyzed Loans - Commercial and Industrial Loans	$	1,858	Sales comparison approach	Adjustment for physical condition of comparable properties sold	0% - 100% (40%)
Individually Analyzed Loans - Commercial Real Estate Loans	$	10,040	Sales comparison approach	Adjustment for physical condition of comparable properties sold	30% - 100% (37%)
Individually Analyzed Loans - Agricultural Loans	$	2,970	Sales comparison approach	Adjustment for physical condition of comparable properties sold	30% - 100% (48%)
Individually Analyzed Loans - Consumer Loans	$	8	Sales comparison approach	Adjustment for physical condition of comparable properties sold	27% - 100% (20%)
Individually Analyzed Loans - Home Equity Loans	$	368	Sales comparison approach	Adjustment for physical condition of comparable properties sold	20% - 51% (20%)
Individually Analyzed Loans - Residential Mortgage Loans	$	718	Sales comparison approach	Adjustment for physical condition of comparable properties sold	20% - 100% (21%)

 

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, 2023 and 2022. 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, 2023 Using
	Carrying Value		Level 1		Level 2		Level 3		Total
Financial Assets:
Cash and Short-term Investments	$	115,330	$	78,805	$	36,525	$	—	$	115,330
Interest Bearing Time Deposits with Banks	500		—		500		—		500
Loans, Net	3,918,184		—		—		3,801,738		3,801,738
Accrued Interest Receivable	30,595		—		10,014		20,581		30,595
Financial Liabilities:
Demand, Savings, and Money Market Deposits	(4,485,921)		(4,485,921)		—		—		(4,485,921)
Time Deposits	(767,042)		—		(759,217)		—		(759,217)
Short-term Borrowings	(65,968)		(25,000)		(40,968)		—		(65,968)
Long-term Debt	(127,969)		—		(52,522)		(74,562)		(127,084)
Accrued Interest Payable	(7,073)		—		(6,701)		(372)		(7,073)

			Fair Value Measurements at December 31, 2022 Using
	Carrying Value		Level 1		Level 2		Level 3		Total
Financial Assets:
Cash and Short-term Investments	$	117,381	$	75,476	$	41,905	$	—	$	117,381
Interest Bearing Time Deposits with Banks	500		—		500		—		500
Loans, Net	3,724,804		—		—		3,688,903		3,688,903
Accrued Interest Receivable	27,741		38		10,863		16,840		27,741
Financial Liabilities:
Demand, Savings, and Money Market Deposits	(4,921,582)		(4,921,582)		—		—		(4,921,582)
Time Deposits	(428,469)		—		(426,184)		—		(426,184)
Short-term Borrowings	(101,161)		(36,200)		(64,961)		—		(101,161)
Long-term Debt	(102,645)		—		(26,830)		(72,272)		(99,102)
Accrued Interest Payable	(1,513)		—		(1,205)		(308)		(1,513)

NOTE 16 - Segment Information

The Company’s operations include three primary segments: core banking, wealth management services, and insurance operations. 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. The core banking segment also involves the sale of residential mortgage loans in the secondary

93

Notes to the Consolidated Financial Statements

Dollars in thousands, except per share data

NOTE 16 – Segment Information (continued)

market. The wealth management segment involves providing trust, investment advisory, brokerage and retirement planning services to customers. The insurance segment offers a full range of personal and corporate property and casualty insurance products, primarily in the Company’s banking subsidiary’s local markets.

The core banking segment is comprised by the Company’s banking subsidiary, German American Bank, which operated through 76 banking offices at December 31, 2023. Net interest income from loans and investments funded by deposits and borrowings is the primary revenue for the core-banking segment. The wealth management segment’s revenues are comprised primarily of fees generated by the 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 primarily consists of German American Insurance, Inc., which provides a full line of personal and corporate insurance products. Commissions derived from the sale of insurance products are the primary source of revenue for the insurance segment.

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 three segments are the same as those of the Company. The evaluation process for segments does not include holding company income and expense. Holding company amounts are the primary differences between segment amounts and consolidated totals, and are reflected in the column labeled “Other” below, along with amounts to eliminate transactions between segments.

	Core Banking		Wealth Management Services		Insurance		Other		Consolidated Totals
Year Ended December 31, 2023
Net Interest Income	$	195,215	$	120	$	56	$	(4,958)	$	190,433
Net Gains on Sales of Loans	2,363		—		—		—		2,363
Net Gains on Securities	40		—		—		—		40
Wealth Management Fees	5		11,706		—		—		11,711
Insurance Revenues	1		24		9,572		(1)		9,596
Noncash Items:
Provision for Credit Losses	2,550		—		—		—		2,550
Depreciation and Amortization	9,025		31		48		456		9,560
Income Tax Expense (Benefit)	18,698		695		556		(2,190)		17,759
Segment Profit (Loss)	85,037		2,974		1,682		(3,805)		85,888
Segment Assets at December 31, 2023	6,137,687		9,508		3,509		1,494		6,152,198

	Core Banking		Wealth Management Services		Insurance		Other		Consolidated Totals
Year Ended December 31, 2022
Net Interest Income	$	204,259	$	46	$	27	$	(3,748)	$	200,584
Net Gains on Sales of Loans	3,818		—		—		—		3,818
Net Gains on Securities	589		—		—		(27)		562
Wealth Management Fees	4		10,072		—		—		10,076
Insurance Revenues	31		12		9,977		—		10,020
Noncash Items:
Provision for Credit Losses	6,350		—		—		—		6,350
Depreciation and Amortization	9,571		41		48		456		10,116
Income Tax Expense (Benefit)	17,873		691		720		(1,933)		17,351
Segment Profit (Loss)	82,965		2,157		2,281		(5,578)		81,825
Segment Assets at December 31, 2022	6,152,346		8,846		14,706		(19,907)		6,155,991

94

Notes to the Consolidated Financial Statements

Dollars in thousands, except per share data

NOTE 16 – Segment Information (continued)

	Core Banking		Wealth Management Services		Insurance		Other		Consolidated Totals
Year Ended December 31, 2021
Net Interest Income	$	163,395	$	42	$	11	$	(2,618)	$	160,830
Net Gains on Sales of Loans	8,267		—		—		—		8,267
Net Gains on Securities	2,247		—		—		—		2,247
Wealth Management Fees	4		10,317		—		—		10,321
Insurance Revenues	14		7		9,247		—		9,268
Noncash Items:
Provision for Credit Losses	(6,500)		—		—		—		(6,500)
Depreciation and Amortization	8,346		46		57		321		8,770
Income Tax Expense (Benefit)	18,774		826		652		(1,604)		18,648
Segment Profit (Loss)	82,066		2,543		2,034		(2,506)		84,137
Segment Assets at December 31, 2021	5,595,721		6,115		12,245		(5,542)		5,608,539

NOTE 17 - Parent Company Financial Statements

The condensed financial statements of German American Bancorp, Inc. are presented below:

CONDENSED BALANCE SHEETS

	December 31,
	2023		2022
ASSETS
Cash	$	66,835	$	46,541
Securities Available-for-Sale	4,112		—
Other Investments	353		353
Investment in Subsidiary Bank	652,452		566,494
Investment in Non-banking Subsidiaries	1,975		6,747
Other Assets	15,097		19,165
Total Assets	$	740,824	$	639,300
LIABILITIES
Borrowings	$	75,327	$	74,788
Other Liabilities	1,939		6,119
Total Liabilities	77,266		80,907
SHAREHOLDERS’ EQUITY
Common Stock	29,585		29,493
Additional Paid-in Capital	389,411		387,171
Retained Earnings	461,622		405,167
Accumulated Other Comprehensive Income (Loss)	(217,060)		(263,438)
Total Shareholders’ Equity	663,558		558,393
Total Liabilities and Shareholders’ Equity	$	740,824	$	639,300

95

Notes to the Consolidated Financial Statements

Dollars in thousands, except per share data

NOTE 17 – Parent Company Financial Statements (continued)

CONDENSED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS)

	Years Ended December 31,
	2023		2022		2021
INCOME
Dividends from Subsidiaries
Bank	$	50,000	$	35,000	$	65,000
Non-bank	—		—		1,470
Interest Income	277		104		109
Other Income (Loss)	(28)		31		11
Total Income	50,249		35,135		66,590
EXPENSES
Salaries and Employee Benefits	535		535		537
Professional Fees	777		1,989		1,256
Occupancy and Equipment Expense	8		8		10
Interest Expense	5,360		3,963		2,763
Other Expenses	1,183		1,162		1,200
Total Expenses	7,863		7,657		5,766
INCOME BEFORE INCOME TAXES AND EQUITY IN UNDISTRIBUTED INCOME OF SUBSIDIARIES	42,386		27,478		60,824
Income Tax Benefit	2,215		1,947		1,607
INCOME BEFORE EQUITY IN UNDISTRIBUTED INCOME OF SUBSIDIARIES	44,601		29,425		62,431
Equity in Undistributed Income of Subsidiaries	41,287		52,400		21,706
NET INCOME	85,888		81,825		84,137
Other Comprehensive Income (Loss):
Changes in Unrealized Gain (Loss) on Securities, Available-for-Sale	46,378		(278,976)		(19,891)
Changes in Unrecognized Loss in Postretirement Benefit Obligation, Net	—		54		—
TOTAL COMPREHENSIVE INCOME (LOSS)	$	132,266	$	(197,097)	$	64,246

96

Notes to the Consolidated Financial Statements

Dollars in thousands, except per share data

NOTE 17 – Parent Company Financial Statements (continued)

CONDENSED STATEMENTS OF CASH FLOWS

	Years Ended December 31,
	2023		2022		2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income	$	85,888	$	81,825	$	84,137
Adjustments to Reconcile Net Income to Net Cash from Operations
Change in Other Assets	3,929		3,861		(3,939)
Change in Other Liabilities	(3,113)		1,200		863
Equity Based Compensation	2,332		2,330		1,723
Equity in Excess Undistributed Income of Subsidiaries	(41,287)		(52,400)		(21,706)
Net Cash from Operating Activities	47,749		36,816		61,078
CASH FLOWS FROM INVESTING ACTIVITIES
Cash Used for Business Acquisitions	—		(49,644)		—
Net Equity in Dissolution of Subsidiary	1,978		—		—
Net Cash from Investing Activities	1,978		(49,644)		—
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends Paid	(29,433)		(27,022)		(22,220)
Net Cash from Financing Activities	(29,433)		(27,022)		(22,220)
Net Change in Cash and Cash Equivalents	20,294		(39,850)		38,858
Cash and Cash Equivalents at Beginning of Year	46,541		86,391		47,533
Cash and Cash Equivalents at End of Year	$	66,835	$	46,541	$	86,391

NOTE 18 - Business Combinations, Goodwill and Intangible Assets

Business Combinations

On January 1, 2022, the Company acquired Citizens Union Bancorp of Shelbyville, Inc. (“CUB”) through the merger of CUB with and into the Company. This was immediately followed by the merger of Citizens Union Bank of Shelbyville, Inc., a wholly-owned subsidiary of CUB, into the Company’s subsidiary bank, German American Bank. CUB, headquartered in Shelbyville, Kentucky, operated 15 retail banking offices located in Shelby, Jefferson, Spencer, Bullitt, Oldham, Owen, Gallatin and Hardin counties in Kentucky through Citizens Union Bank of Shelbyville, Inc.

As of the closing of the transaction, CUB had total assets of $1,108,546, total loans of $683,807, and total deposits of $930,533. 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 CUB 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 $12,323 of direct acquisition costs and recorded $58,596 of goodwill and $7,572 of intangible assets. The goodwill of $58,596 arising from the acquisition consisted largely of synergies and the cost savings resulting from the combining of the operations of the companies. This goodwill will be evaluated annually for impairment and is non-deductible for tax purposes. The intangible assets are related to core deposits and are being amortized over 8 years. The following table summarizes the fair value of the total consideration transferred as a part of the CUB acquisition as well as the fair value of identifiable assets acquired and liabilities assumed as of the effective date of the transaction.

97

Notes to the Consolidated Financial Statements

Dollars in thousands, except per share data

NOTE 18 – Business Combinations, Goodwill and Intangible Assets (continued)

Consideration
Cash for Options and Fractional Shares	$	942
Cash Consideration	49,863
Equity Instruments	111,914
Fair Value of Total Consideration Transferred	$	162,719
Recognized Amounts of Identifiable Assets Acquired and Liabilities Assumed:
Cash	$	20,244
Federal Funds Sold and Other Short-term Investments	238,325
Interest-bearing Time Deposits with Banks	250
Securities	102,233
Loans	678,142
Stock in FHLB of Indianapolis and Other Restricted Stock, at Cost	10,078
Premises, Furniture & Equipment	19,805
Other Real Estate	40
Intangible Assets	7,572
Company Owned Life Insurance	12,881
Accrued Interest Receivable and Other Assets	18,309
Deposits - Non-interest Bearing	(237,472)
Deposits - Interest Bearing	(696,750)
FHLB Advances and Other Borrowings	(60,837)
Accrued Interest Payable and Other Liabilities	(8,697)
Total Identifiable Net Assets	$	104,123
Goodwill	$	58,596

Under the terms of the merger agreement, each CUB common shareholder of record at the effective time of the merger became entitled to receive a cash payment of $13.44 and a 0.7739 share of common stock of the Company for each of their former shares of CUB common stock. As a result, in connection with the closing of the merger on January 1, 2022, the Company issued 2,870,975 shares of its common stock to the former shareholders of CUB and paid cash consideration in the aggregate amount of $50.8 million.

This acquisition is consistent with the Company’s strategy to build a regional presence in central and western Kentucky. 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 $29,868 on the date of acquisition. The gross contractual amounts receivable relating to the purchased financial assets with credit deterioration was $34,453. The Company estimates, on the date of acquisition, that $3,117 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, 2021 after giving effect to certain adjustments. The unaudited pro forma information for the year ended December 30, 2022 and 2021 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.

98

Notes to the Consolidated Financial Statements

Dollars in thousands, except per share data

NOTE 18 – Business Combinations, Goodwill and Intangible Assets (continued)

	Unaudited Pro Forma Year Ended 12/31/2022		Unaudited Pro Forma Year Ended 12/31/2021
Net Interest Income	$	200,584	$	195,691
Non-interest Income	59,133		64,951
Total Revenue	259,717		260,642
Provision for Credit Losses	50		(8,707)
Non-interest Expense	141,868		142,978
Income Before Income Taxes	117,799		126,371
Income Tax Expense	21,858		24,260
Net Income	$	95,941	$	102,111
Earnings Per Share and Diluted Earnings Per Share	$	3.26	$	3.47

For the year ended December 31, 2022, the above pro forma financial information excludes non-recurring merger costs that totaled $12,323 on a pre-tax basis and Day 1 provision for credit losses under the CECL model of $6,300 on a pre-tax basis.

Goodwill

The changes in the carrying amount of goodwill for the periods ended December 31, 2023, 2022, and 2021, were classified as follows:

	2023		2022		2021
Beginning of Year	$	180,357	$	121,761	$	121,956
Acquired Goodwill	—		58,596		(195)
Impairment	—		—		—
End of Year	$	180,357	$	180,357	$	121,761

Of the $180,357 carrying amount of goodwill, $179,025 is allocated to the core banking segment, and $1,332 is allocated to the insurance segment for both periods ended December 31, 2023 and 2022. Of the $121,761 carrying amount of goodwill, $120,429 is allocated to the core banking segment, and $1,332 is allocated to the insurance segment for the period ended December 31, 2021. The decrease of $195 in 2021 is attributable to the sale of two branches located in Lexington, Kentucky.

Impairment exists when a reporting unit’s carrying value of goodwill exceeds its fair value. At December 31, 2023, 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.

Acquired Intangible Assets

Acquired intangible assets were as follows as of year end:

	2023
	Gross Amount		Accumulated Amortization
Core Banking
Core Deposit Intangible	$	33,247	$	(27,811)
Branch Acquisition Intangible	257		(257)
Insurance
Customer List	5,408		(5,408)
Total	$	38,912	$	(33,476)

99

Notes to the Consolidated Financial Statements

Dollars in thousands, except per share data

NOTE 18 – Business Combinations, Goodwill and Intangible Assets (continued)

	2022
	Gross Amount		Accumulated Amortization
Core Banking
Core Deposit Intangible	$	33,247	$	(25,001)
Branch Acquisition Intangible	257		(257)
Insurance
Customer List	5,408		(5,378)
Total	$	38,912	$	(30,636)

Amortization Expense was $2,840, $3,711 and $2,731, for 2023, 2022 and 2021, respectively.

Estimated amortization expense for each of the next five years is as follows:

2024	$	2,032
2025	1,394
2026	916
2027	593
2028	361

NOTE 19 - Other Comprehensive Income (Loss)

The tables below summarize the changes in accumulated other comprehensive income (loss) by component for the years ended December 31, 2023 and 2022, net of tax:

December 31, 2023	Unrealized Gains and Losses on Available-for-Sale Securities		Postretirement Benefit Items		Total
Beginning Balance	$	(262,924)	$	(514)	$	(263,438)
Other Comprehensive Income (Loss) Before Reclassification	46,410		—		46,410
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)	(32)		—		(32)
Net Current Period Other
Comprehensive Income (Loss)	46,378		—		46,378
Ending Balance	$	(216,546)	$	(514)	$	(217,060)

December 31, 2022	Unrealized Gains and Losses on Available-for-Sale Securities		Postretirement Benefit Items		Total
Beginning Balance	$	16,052	$	(568)	$	15,484
Other Comprehensive Income (Loss) Before Reclassification	(278,532)		—		(278,532)
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)	(444)		54		(390)
Net Current Period Other
Comprehensive Income (Loss)	(278,976)		54		(278,922)
Ending Balance	$	(262,924)	$	(514)	$	(263,438)

100

Notes to the Consolidated Financial Statements

Dollars in thousands, except per share data

NOTE 19 – 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, 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 (Loss) 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

The table below summarizes the classifications out of accumulated other comprehensive income (loss) by component for the year ended December 31, 2022:

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	$	562	Net Gain (Loss) on Securities
	(118)		Income Tax Expense
	444		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	$	444

The table below summarizes the classifications out of accumulated other comprehensive income (loss) by component for the year ended December 31, 2021:

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	$	2,247	Net Gain (Loss) on Securities
	(472)		Income Tax Expense
	1,775		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	$	1,775

101

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

Not Applicable.

Item 9A. Controls and Procedures.

Disclosure Controls and Procedures

As of December 31, 2023, the Company carried out an evaluation, under the supervision and with the participation of its principal executive officer and principal financial officer, of the effectiveness of the design and operation of its disclosure controls and procedures. Based on this evaluation, the Company’s principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures are effective in timely alerting them to material information required to be included in the Company’s periodic reports filed with the Securities and Exchange Commission. There are inherent limitations to the effectiveness of systems of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective systems of disclosure controls and procedures can provide only reasonable assurances of achieving their control objectives.

Changes in Internal Control Over Financial Reporting in Most Recent Fiscal Quarter

There was no change in the Company’s internal control over financial reporting that occurred during the Company’s fourth fiscal quarter of 2023 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Management’s Report on Internal Control Over Financial Reporting

The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. The Company’s internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. 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 (iii) 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. Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2023. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in the 2013 Internal Control-Integrated Framework. Based on our assessment and those criteria, management concluded that the Company maintained effective internal control over financial reporting as of December 31, 2023.

The Company’s independent registered public accounting firm has issued their report on the Company’s internal control over financial reporting. That report is included in Item 8. Financial Statements and Supplementary Data of this Report under the heading, Report of Independent Registered Public Accounting Firm.

Item 9B. Other Information.

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

None.

(b)    Insider trading arrangements.

During the three months ended December 31, 2023, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Not applicable.

102

PART III

Item 10. Directors, Executive Officers, and Corporate Governance.

Information responsive to this Item 10 will be included under the captions “Election of Directors,” “Our Executive Officers,” “Section 16(a): Beneficial Ownership Reporting Compliance,” “Corporate Governance – Code of Business Conduct,” “Corporate Governance – Committees and Attendance,” “Corporate Governance – Director Nominations Process,” “Report of the Audit Committee,” and “Executive Compensation and Related Information – Insider Trading Policy and Anti-Hedging Provision” in the Company’s Proxy Statement for the Annual Meeting of Shareholders to be held in April 2024 which will be filed within 120 days of the end of the fiscal year covered by this Report (the “2024 Proxy Statement”), which sections are incorporated herein by reference.

Item 11. Executive Compensation.

Information relating to compensation of the Company’s executive officers and directors (including the required disclosures under the subheadings “Compensation Committee Interlocks and Insider Participation” and “Compensation Committee Report”) will be included under the caption “Executive and Director Compensation” in the 2024 Proxy Statement, which section is incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Information relating to security ownership of certain beneficial owners and the directors and executive officers of the Company will be included under the captions “Ownership of Our Common Shares by Our Directors and Executive Officers” and “Principal Owners of Common Shares” of the 2024 Proxy Statement, which sections are incorporated herein by reference.

Equity Compensation Plan Information

The Company maintains two equity incentive plans under which it has authorized the issuance of its Common Shares to employees and non-employee directors as compensation: its 2019 Long-Term Equity Incentive Plan (the “2019 LTI Plan”) and its 2019 Employee Stock Purchase Plan (the “2019 ESPP”). Each of these plans was approved by the requisite vote of the Company’s common shareholders in the year of adoption by the Board of Directors. The Company is not a party to any individual compensation arrangement involving the authorization for issuance of its equity securities to any single person, other than option agreements and restricted stock award agreements that have been granted under the terms of one of the three plans identified above. The following table sets forth information regarding these plans as of December 31, 2023:

Plan Category	Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants or Rights		Weighted Average Exercise Price of Outstanding Options, Warrants and Rights			Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Securities Reflected in First Column)
Equity compensation plans approved by security holders	—	(a)	$	—	(a)	1,470,546	(b)
Equity compensation plans not approved by security holders	—		—			—
Total	—		$	—		1,470,546

(a)On December 31, 2023, participants under the 2019 ESPP exercised options to purchase 5,142 Common Shares at the purchase price of $32.33 per share. The Company settled the option exercises in January 2024 with shares purchased on the open market.

(b)Represents 750,000 shares at December 31, 2023 that the Company may in the future issue to employees under the 2019 ESPP (although the Company typically purchases the shares needed for sale to participating employees on the open market rather than issuing new issue shares to such employees) and 720,546 shares that were available for grant or issuance at December 31, 2023 under the 2019 LTI Plan.

For additional information regarding the Company’s equity incentive plans and employee stock purchase plan, see Note 8 (Shareholders’ Equity) of the Notes to the Consolidated Financial Statements included in Item 8 of this Report.

103

Item 13. Certain Relationships and Related Transactions, and Director Independence.

Information responsive to this Item 13 will be included under the captions “Election of Directors” and “Transactions with Related Persons” of the 2024 Proxy Statement, which sections are incorporated herein by reference.

Item 14. Principal Accounting Fees and Services.

Information responsive to this Item 14 will be included in the 2024 Proxy Statement under the caption “Principal Accountant Fees and Services”, which section is incorporated herein by reference.

104

PART IV

Item 15. Exhibits, Financial Statement Schedules.

(a)(1) Financial Statements

The following items are included in Item 8 of this Report:

German American Bancorp, Inc. and Subsidiaries:	Page #
Report of Independent Registered Public Accounting Firm PCAOB ID 173	50
Consolidated Balance Sheets at December 31, 2023 and 2022	53
Consolidated Statements of Income, years ended December 31, 2023, 2022 and 2021	54
Consolidated Statements of Comprehensive Income (Loss), years ended December 31, 2023, 2022 and 2021	55
Consolidated Statements of Changes in Shareholders’ Equity, years ended December 31, 2023, 2022 and 2021	56
Consolidated Statements of Cash Flows, years ended December 31, 2023, 2022 and 2021	57
Notes to the Consolidated Financial Statements	58

(a)(2) Financial Statement Schedules

None.

105

(a)(3) Exhibits

The following exhibits are included with this report or incorporated herein by reference:

Exhibit No.	Description
3.1	Amended and Restated Articles of Incorporation of German American Bancorp, Inc. are incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K filed May 26, 2020 (SEC File No. 001-15877).
3.2	Amended and Restated Bylaws of German American Bancorp, Inc. are incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K filed December 20, 2023 (SEC File No. 001-15877).
4.1	Terms of Common Shares and Preferred Shares of the Registrant (included in Amended and Restated Articles of Incorporation) are incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K filed May 26, 2020 (SEC File No. 001-15877).
4.2	Specimen stock certificate for Common Shares of the Registrant is incorporated by reference from Exhibit 99.1 to the Registrant’s Current Report on Form 8-K filed October 21, 2010 (SEC File No. 001-15877).
4.3	Indenture, dated as of June 25, 2019, by and between German American Bancorp, Inc. and U.S. Bank National Association, as trustee, is incorporated by reference to Exhibit 4.1 of the Registrant’s Current Report on Form 8-K filed June 25, 2019 (SEC File No. 001-15877).
4.4	Form of 4.50% Fixed-to-Floating Subordinated Note due 2029 of German American Bancorp, Inc. is incorporated by reference to Exhibit 4.2 of the Registrant’s Current Report on Form 8-K filed June 25, 2019 (SEC File No. 001-15877).
4.5	Description of the securities of German American Bancorp, Inc. registered pursuant to Section 12 of the Exchange Act is incorporated by reference to Exhibit 4.6 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2019, filed March 2, 2020 (SEC File No. 001-15877).
10.1*	Adoption Agreement for the German American Bancorp, Inc. Nonqualified Savings Plan, effective January 1, 2009 is incorporated by reference to Exhibit 10.3 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2019, filed March 2, 2020 (SEC File No. 001-15877).
10.2*	Basic Plan Document for the German American Bancorp, Inc. Nonqualified Savings Plan, effective January 1, 2009 is incorporated by reference to Exhibit 10.4 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2019, filed March 2, 2020 (SEC File No. 001-15877).
10.3*	First Amendment to the German American Bancorp, Inc. Nonqualified Savings Plan, effective January 1, 2020 is incorporated by reference to Exhibit 10.5 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2019, filed March 2, 2020 (SEC File No. 001-15877).
10.4*+	Second Amendment to the German American Bancorp, Inc. Nonqualified Savings Plan, effective January 1, 2024.
10.5*	Description of Director Compensation Arrangements for the 12 month period ending on June 30, 2022 is incorporated by reference to Exhibit 10.8 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2021, filed March 1, 2022 (SEC File No. 001-15877).
10.6*	Description of Director Compensation Arrangements for the 12 month period ending on June 30, 2023 is incorporated by reference to Exhibit 10.8 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2022, filed March 1, 2023 (SEC File No. 001-15877).
10.7*	Description of Director Compensation Arrangements for the 12 month period ending on June 30, 2024 is incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023, filed August 8, 2023 (SEC File No. 001-15877).
10.8*	Description of Executive Management Incentive Plan for 2021 (awards payable in 2022) is incorporated by reference from the description contained in Item 5.02 of the Registrant’s Current Report on Form 8-K filed March 12, 2021 (SEC File No. 001-15877).
10.9*	Description of Executive Management Incentive Plan for 2022 (awards payable in 2023) is incorporated by reference from the description contained in Item 5.02 of the Registrant’s Current Report on Form 8-K filed March 11, 2022 (SEC File No. 001-15877).
10.10*	Description of Executive Management Incentive Plan for 2023 (awards payable in 2024) is incorporated by reference from the description contained in Item 5.02 of the Registrant’s Current Report on Form 8-K filed March 3, 2023 (SEC File No. 001-15877).
10.11*	Executive Supplemental Retirement Income Agreement dated October 1, 1996, between First Federal Bank, F.S.B. and Bradley M. Rust, as amended by a First Amendment between Bradley M. Rust and the Registrant dated December 30, 2008, is incorporated by reference to Exhibit 10.18 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2009, filed March 10, 2010 (SEC File No. 001-15877).
10.12*	Supplemental Executive Retirement Agreement between German American Bancorp and Keith A. Leinenbach, dated August 31, 2017, is incorporated by reference from Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed September 5, 2017 (SEC File No. 001-15877).

106

Exhibit No.	Description
10.13*	Form of LTI Restricted Stock Award Agreement that evidences the terms of restricted stock awards granted to executive officers under the 2019 Long-Term Equity Incentive Plan in conjunction with the Management Long-Term Incentive Plan from time to time in effect is incorporated by reference to Exhibit 10.17 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2019, filed March 2, 2020 (SEC File No. 001-15877).
10.14*	Form of Restricted Stock Award Agreement that evidences the terms of awards of restricted stock grants granted under the 2019 Long-Term Equity Incentive Plan to Directors as part of their annual compensation arrangement is incorporated by reference to Exhibit 10.18 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2019, filed March 2, 2020 (SEC File No. 001-15877).
10.15*	German American Bancorp, Inc. Amended and Restated 2019 Employee Stock Purchase Plan is incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed May 26, 2020 (SEC File No. 000-15877).
10.16*	German American Bancorp, Inc. 2019 Long-Term Equity Incentive Plan is incorporated by reference to Exhibit 10.2 of the Registrant’s Current Report on Form 8-K filed May 21, 2019 (SEC File No. 000-15877).
21+	Subsidiaries of the Registrant
23+	Consent of Crowe LLP
31.1+	Sarbanes-Oxley Act of 2002, Section 302 Certification of Principal Executive Officer.
31.2+	Sarbanes-Oxley Act of 2002, Section 302 Certification of Principal Financial Officer.
32.1++	Sarbanes-Oxley Act of 2002, Section 906 Certification of Principal Executive Officer.
32.2++	Sarbanes-Oxley Act of 2002, Section 906 Certification of Principal Financial Officer.
97+	German American Bancorp, Inc. Incentive Compensation Recovery Policy
101.INS+	Inline XBRL Instance Document (The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.)
101.SCH+	Inline XBRL Taxonomy Extension Schema Document.
101.CAL+	Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF+	Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB+	Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE+	Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

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

+ Exhibits that are filed with this Report (other than through incorporation by reference to other disclosures or exhibits) are indicated by a plus sign.

++ Exhibits that are furnished with this Report are indicated by a double plus sign.

Note: No long-term debt instrument issued by the Registrant exceeds 10% of consolidated total assets or is registered. In accordance with paragraph 4 (iii) of Item 601(b) of Regulation S-K, to the extent not otherwise filed herewith or incorporated by reference hereby, the Registrant will furnish the Securities and Exchange Commission copies of long-term debt instruments and related agreements upon request.

In reviewing any agreements included as exhibits to this Report, please remember that they are included to provide you with information regarding their terms and are not intended to provide any other factual or disclosure information about us or the other parties to the agreements. The agreements may contain representations and warranties by the parties to the agreements, including us. These representations and warranties have been made solely for the benefit of the other parties to the applicable agreement and:

•should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate;

•may have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement;

•may apply standards of materiality in a way that is different from what may be viewed as material to you or other investors; and

107

•were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments.

Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time.

108

Item 16. Form 10-K Summary.

Not applicable.

109

Pursuant to the requirements of Section 13 of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

		GERMAN AMERICAN BANCORP, INC.
		(Registrant)
Date:	February 27, 2024	By: /s/D. Neil Dauby
		D. Neil Dauby, Chairman and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Date:	February 27, 2024	/s/D. Neil Dauby
		D. Neil Dauby, Chairman and Chief Executive Officer (principal executive officer)
Date:	February 27, 2024	/s/Zachary W. Bawel
		Zachary W. Bawel, Director
Date:	February 27, 2024	/s/Angela Curry
		Angela Curry, Director
Date:	February 27, 2024	/s/Sue J. Ellspermann
		Sue J. Ellspermann, Director
Date:	February 27, 2024	/s/Marc D. Fine
		Marc D. Fine, Director
Date:	February 27, 2024	/s/Jason M. Kelly
		Jason M. Kelly, Director
Date:	February 27, 2024	/s/Diane B. Medley
		Diane B. Medley, Director
Date:	February 27, 2024	/s/M. Darren Root
		M. Darren Root, Director
Date:	February 27, 2024	/s/Christina M. Ryan
		Christina M. Ryan, Director
Date:	February 27, 2024	/s/Thomas W. Seger
		Thomas W. Seger, Director
Date:	February 27, 2024	/s/Jack W. Sheidler
		Jack W. Sheidler, Director
Date:	February 27, 2024	/s/Tyson J. Wagler
		Tyson J. Wagler, Director
Date:	February 27, 2024	/s/Bradley M. Rust
		Bradley M. Rust, President and Chief Financial Officer (principal financial officer)
Date:	February 27, 2024	/s/Vicki L. Schuler
		Vicki L. Schuler, Senior Vice President, Controller (principal accounting officer)

110

EX-10.4

SECOND AMENDMENT

TO THE

GERMAN AMERICAN BANCORP, INC. NONQUALIFIED SAVINGS PLAN

    THIS GERMAN AMERICAN BANCORP, INC. NONQUALIFIED SAVINGS PLAN (“Plan”), which Plan most recently was amended and restated effective January 1, 2009, by GERMAN AMERICAN BANCORP, INC. (“Employer”), further amends and modifies the Plan effective January 1, 2024 pursuant to the right to amend reserved in Section 9.01 of The CORPORATEplan for Retirement EXECUTIVE Basic Plan Document that forms part of the Plan.

A.

    The “Distribution” table under Section 1.07(a)(1) of the Adoption Agreement is hereby replaced in its entirety with the following:

	(A)Specified Age		(B) Separation from Service		(C) Disability		(D) Change in Control		(E) Death
Deferral Contribution	þ þ	Lump Sum Installments	þ þ	Lump Sum Installments	þ þ	Lump Sum Installments	þ þ	Lump Sum Installments	þ þ	Lump Sum Installments
Matching Contribution	þ þ	Lump Sum Installments	þ þ	Lump Sum Installments	þ þ	Lump Sum Installments	þ þ	Lump Sum Installments	þ þ	Lump Sum Installments
Employer Contribution	þ þ	Lump Sum Installments	þ þ	Lump Sum Installments	þ þ	Lump Sum Installments	þ þ	Lump Sum Installments	þ þ	Lump Sum Installments

B.

    Any Participant who has a distribution election that does not conform with the above new Distribution Election table and who has not yet received a distribution shall be required to make a new distribution election under the Plan. The new election shall supersede any prior distribution election.

C.

    The following sentence is removed from Section 8.01(b) of the Plan in its entirety:

“With respect to any initial distribution election, a Participant shall in no event be permitted to make more than one distribution election change.”

D.

Attachment B to the Adoption Agreement is removed in its entirety.

    Any Participant who had previously elected the 15th day of the calendar year following the distribution triggering event as the distribution timing and who has not yet received a distribution will automatically have their election changed to the 15th day of the month following the applicable distribution triggering event. This change will supersede any prior elections.

E.

    Except as specifically amended above, the Plan shall remain unchanged and, as amended above, shall continue in full force and effect.

IN WITNESS WHEREOF, the Employer has caused this Second Amendment to the German American Bancorp, Inc. Nonqualified Savings Plan to be executed by its duly authorized officer this 19th day of December, 2023.

GERMAN AMERICAN BANCORP, INC.

By:/s/ D. Neil Dauby

     D. Neil Dauby                                          

                        Chairman and Chief Executive Officer                             

2

EX-21

Exhibit 21

SUBSIDIARIES OF THE REGISTRANT

(AS OF FEBRUARY 27, 2024)

Name of Subsidiary	State/Jurisdiction of Incorporation/Organization	Other Names under which Subsidiary Does Business
German American Bank	Indiana
GAB Investment Company, Inc.	Nevada
GAB Investment Center, Inc.	Nevada
GAB Investments, LLC	Nevada
GAB Capital Funding Corp.	Nevada
GAB Funding Corp.	Maryland
GABC Leasing, Inc.	Indiana
GABC Holdings, Inc.	Indiana
GABC Development Corporation	Indiana
German American Investment Services, Inc.	Indiana
German American Insurance, Inc.	Indiana
ACB Capital Trust I	Delaware
ACB Capital Trust II	Delaware
RIVR Statutory Trust I	Connecticut
Citizens First Statutory Trust I	Delaware
CUB Title Company, LLC	Kentucky
CUB St. Denis, LLC	Kentucky
SM 2013, LLC	Kentucky
EQP 2011, LLC	Kentucky
CUB Investments, Inc.	Kentucky	BUC Investments, Inc.
CUB Capital Trust I	Delaware
CUB Capital Trust II	Delaware

EX-23

Exhibit 23

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the Registration Statements No. 333-232405 on Form S-8 and No. 333-157277 on Form S-3 of German American Bancorp, Inc. of our report dated February 27, 2024 relating to the consolidated financial statements and effectiveness of internal control over financial reporting, appearing in this Annual Report on Form 10-K of German American Bancorp, Inc. for the year ended December 31, 2023.

/s/ Crowe LLP

Crowe LLP

Louisville, Kentucky

February 27, 2024

EX-31.1

 Exhibit 31.1

Sarbanes-Oxley Act of 2002, Section 302 Certification of Principal Executive Officer

I, D. Neil Dauby, Chairman and Chief Executive Officer of German American Bancorp, Inc., certify that:

1.I have reviewed this Annual Report on Form 10-K of German American Bancorp, Inc. (the “registrant”):

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

February 27, 2024

Date

/s/ D. Neil Dauby

D. Neil Dauby

Chairman and Chief Executive Officer

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

Sarbanes-Oxley Act of 2002, Section 302 Certification of Principal Financial Officer

I, Bradley M. Rust, President and Chief Financial Officer of German American Bancorp, Inc. certify that:

1.I have reviewed this Annual Report on Form 10-K of German American Bancorp, Inc., (the “registrant”):

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

February 27, 2024

Date

/s/ Bradley M. Rust

Bradley M. Rust

President and Chief Financial Officer

(Principal Financial Officer)

EX-32.1

Exhibit 32.1

Sarbanes-Oxley Act of 2002, Section 906 Certification for Principal Executive Officer

I, D. Neil Dauby, Chairman and Chief Executive Officer of German American Bancorp, Inc. certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350), that:

(1)the Annual Report on Form 10-K for the year ended December 31, 2023, (the “Periodic Report”) which this statement accompanies fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and

(2)information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of German American Bancorp, Inc.

This certificate is being furnished solely for purposes of Section 906 and is not being filed as part of the Periodic Report.

February 27, 2024

Date

/s/ D. Neil Dauby

D. Neil Dauby

Chairman and Chief Executive Officer

(Principal Executive Officer)

EX-32.2

Exhibit 32.2

Sarbanes-Oxley Act of 2002, Section 906 Certification of Principal Financial Officer

I, Bradley M. Rust, President and Chief Financial Officer of German American Bancorp, Inc. certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350), that:

(1) the Annual Report on Form 10-K for the year ended December 31, 2023, (the “Periodic Report”) which this statement accompanies fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and

(2) information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of German American Bancorp, Inc.

This certificate is being furnished solely for purposes of Section 906 and is not being filed as part of the Periodic Report.

February 27, 2024

Date

/s/ Bradley M. Rust

Bradley M. Rust

President and Chief Financial Officer

(Principal Financial Officer)

EX-97

GERMAN AMERICAN BANCORP, INC.

INCENTIVE COMPENSATION RECOVERY POLICY

Introduction

The Board of Directors of German American Bancorp, Inc. (the “Board”) believes that it is in the best interests of German American Bancorp, Inc. (the “Corporation”) and its shareholders to create and maintain a culture that emphasizes integrity and accountability and that reinforces the Corporation’s pay-for-performance compensation philosophy. The Board has therefore adopted this policy which provides for the recovery of certain executive compensation in the event of an accounting restatement resulting from material noncompliance with financial reporting requirements under the federal securities laws (this “Policy”). This Policy is designed to comply with Section 10D of the Securities Exchange Act of 1934 (the “Exchange Act”).

Administration

This Policy shall be administered by the Board or, if so designated by the Board, the Compensation/Human Resources Committee of the Board (the “Compensation Committee”), in which case references herein to the Board shall be deemed references to the Compensation Committee. Any determinations made by the Board shall be final and binding on all affected individuals.

Covered Executives

This Policy applies to the Corporation’s current and former executive officers, as determined by the Board in accordance with Section 10D of the Exchange Act and the listing standards of the national securities exchange on which the Corporation’s securities are listed (the “Exchange”), and such other officers and employees who may from time to time be deemed subject to the Policy by the Board (“Covered Executives”).

Recovery; Accounting Restatement    

In the event the Corporation is required to prepare an accounting restatement of its financial statements due to the Corporation’s material noncompliance with any financial reporting requirement under the securities laws, the Board will require reimbursement or forfeiture of any excess Incentive Compensation received by any Covered Executive during the three completed fiscal years immediately preceding the date on which the Corporation is required to prepare an accounting restatement.

Incentive Compensation

For purposes of this Policy, “Incentive Compensation” means any compensation that is granted, earned or vested based wholly or in part upon the attainment of any Financial Reporting Measure, and includes:

(1)annual incentive awards under the Corporation’s Management Incentive Plans in effect from time to time;

(2)vested or unvested equity-based awards under the Corporation’s 2019 Long-Term Equity Incentive Plan, as amended from time to time, or any successor plan; and

(3)any other incentive based compensation in respect of any Corporation plan or agreement;

that, in each case, are or is granted, earned or vested based wholly or in part upon the attainment of any Financial Reporting Measure. For the avoidance of doubt, equity- or cash-based awards that are granted, earned and vest exclusively on the basis of continued employment, without any financial performance condition, and bonus awards that are discretionary or based on subjective goals or goals unrelated to Financial Reporting Measures, do not constitute Incentive Compensation.

For purposes of this Policy, “Financial Reporting Measures” means measures (including GAAP and non-GAAP financial measures) that are determined and presented in accordance with the accounting principles used in preparing the Corporation’s financial statements, and any measures derived wholly or in part from such measures, as well as the Corporation’s stock price and total shareholder return.

Excess Incentive Compensation: Amount Subject to Recovery

The amount to be recovered will be the excess of the Incentive Compensation received by the Covered Executive based on the erroneous data over the Incentive Compensation that would have been paid to the Covered Executive had it been based on the restated results, as determined by the Board.

If the Board cannot determine the amount of excess Incentive Compensation received by the Covered Executive directly from the information in the accounting restatement, then it will make its determination based on a reasonable estimate of the effect of the accounting restatement.

Method of Recovery

The Board will determine, in its sole discretion, the method or methods for recovering excess Incentive Compensation hereunder, which may include, without limitation:

(a)requiring reimbursement of cash Incentive Compensation previously paid;

(b)seeking recovery of any gain realized on the vesting, exercise, settlement, sale, transfer, or other disposition of any equity-based awards;

(c)offsetting the recovered amount from any compensation otherwise owed by the Corporation to the Covered Executive;

(d)cancelling outstanding vested or unvested equity awards; and/or

(e)taking any other remedial and recovery action permitted by law, as determined by the Board.

- 2 -

The methods for recovering Incentive Compensation hereunder need not be the same for, or applied in the same manner to, each Covered Executive, provided that any such method shall provide for reasonably prompt recovery and otherwise comply with any requirements of the Exchange.

No Indemnification

The Corporation shall not indemnify any Covered Executives against the loss of any incorrectly awarded Incentive Compensation.

Interpretation

The Board is authorized to interpret and construe this Policy and to make all determinations necessary, appropriate, or advisable for the administration of this Policy. It is intended that this Policy be interpreted in a manner that is consistent with the requirements of Section 10D of the Exchange Act and any applicable rules or standards adopted by the Securities and Exchange Commission (the “SEC”) or the Exchange.

Effective Date

This Policy shall be effective as of the date it is adopted by the Board (the “Effective Date”) and shall apply to Incentive Compensation that is approved, awarded or granted to Covered Executives on or after October 2, 2023.

Amendment; Termination

This Policy may be amended from time to time or terminated by the Board, in each case, at its discretion; provided, however, no amendment or termination of this Policy shall be effective if such amendment or termination would cause the Corporation to violate any federal securities laws or any rules or regulations of the SEC or the Exchange.

Other Recovery Rights

The Board intends that this Policy will be applied to the fullest extent of the law. The Board may require that any employment agreement, equity award agreement, or similar agreement entered into on or after the Effective Date shall, as a condition to the grant of any benefit thereunder, require a Covered Executive to agree to abide by the terms of this Policy. Any right of recovery under this Policy is in addition to, and not in lieu of, any other remedies or rights of recovery or recoupment that may be available to the Corporation pursuant to the terms of any other policy of the Corporation or any provision in any compensatory plan or arrangement, employment agreement, equity award agreement, or similar plan, arrangement or agreement and any other legal rights and remedies available to the Corporation, or any actions that may be imposed by law enforcement agencies, regulators, administrative bodies, or other authorities.

- 3 -

Impracticability

The Board shall recover any excess Incentive Compensation in accordance with this Policy unless such recovery would be impracticable, as determined by the Board in accordance with Rule 10D-1 of the Exchange Act and the listing standards of the Exchange.

Successors

This Policy shall be binding and enforceable against all Covered Executives and their beneficiaries, heirs, executors, administrators or other legal representatives.

Adopted: October 30, 2023

- 4 -

XML

Cover - USD ($)

12 Months Ended

Dec. 31, 2023

Feb. 20, 2024

Jun. 30, 2023

Cover [Abstract]

Document Type

10-K

Document Period End Date

Dec. 31, 2023

Current Fiscal Year End Date

--12-31

Entity File Number

001-15877

Entity Registrant Name

GERMAN AMERICAN BANCORP, INC.

Entity Incorporation, State or Country Code

IN

Entity Tax Identification Number

35-1547518

Entity Address, Address Line One

711 Main Street,

Entity Address, Address Line Two

Box 810,

Entity Address, City or Town

Jasper,

Entity Address, State or Province

IN

Entity Address, Postal Zip Code

47546

City Area Code

812

Local Phone Number

482-1314

Title of 12(b) Security

Common Shares, no par value

Trading Symbol

GABC

Security Exchange Name

NASDAQ

Entity Well-known Seasoned Issuer

Yes

Entity Voluntary Filers

No

Entity Current Reporting Status

Yes

Entity Interactive Data Current

Yes

Entity Filer Category

Large Accelerated Filer

Entity Small Business

false

Entity Emerging Growth Company

false

ICFR Auditor Attestation Flag

true

Document Financial Statement Error Correction [Flag]

false

Entity Shell Company

false

Entity Public Float

$ 777,294,304

Entity Common Stock, Shares Outstanding

29,584,709

Documents Incorporated by Reference

Portions of the Proxy Statement of German American Bancorp, Inc., for the Annual Meeting of its Shareholders to be held April 29, 2024, to the extent stated herein, are incorporated by reference into Part III (Items 10 through 14).

Document Annual Report

true

Document Transition Report

false

Entity Central Index Key

0000714395

Document Fiscal Year Focus

2023

Document Fiscal Period Focus

FY

Amendment Flag

false

XML

Audit Information	12 Months Ended
	Dec. 31, 2023
Audit Information [Abstract]
Auditor Name	Crowe LLP
Auditor Location	Louisville, Kentucky
Auditor Firm ID	173

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
ASSETS
Cash and Due from Banks	$ 78,805	$ 75,476
Federal Funds Sold and Other Short-term Investments	36,525	41,905
Cash and Cash Equivalents	115,330	117,381
Interest-bearing Time Deposits with Banks	500	500
Securities Available-for-Sale, at Fair Value (Amortized Cost $1,871,260 for December 31, 2023; Amortized Cost $2,094,826 for December 31, 2022; No Allowance for Credit Losses)	1,596,832	1,761,669
Other Investments	353	353
Loans Held-for-Sale, at Fair Value	5,226	8,600
Loans	3,977,900	3,788,645
Less:   Unearned Income	(6,818)	(3,711)
Allowance for Credit Losses	(43,765)	(44,168)
Loans, Net	3,927,317	3,740,766
Stock in FHLB of Indianapolis and Other Restricted Stock, at Cost	14,687	15,037
Premises, Furniture and Equipment, Net	106,776	112,237
Other Real Estate	0	0
Goodwill	180,357	180,357
Intangible Assets	6,307	9,426
Company Owned Life Insurance	85,840	83,998
Accrued Interest Receivable and Other Assets	112,673	125,667
TOTAL ASSETS	6,152,198	6,155,991
LIABILITIES
Non-interest-bearing Demand Deposits	1,493,160	1,691,804
Interest-bearing Demand, Savings, and Money Market Accounts	2,992,761	3,229,778
Time Deposits	767,042	428,469
Total Deposits	5,252,963	5,350,051
FHLB Advances and Other Borrowings	193,937	203,806
Accrued Interest Payable and Other Liabilities	41,740	43,741
TOTAL LIABILITIES	5,488,640	5,597,598
Commitments and Contingencies (See Note 14)
SHAREHOLDERS’ EQUITY
Common Stock, no par value, $1 stated value; 45,000,000 shares authorized	29,585	29,493
Additional Paid-in Capital	389,411	387,171
Retained Earnings	461,622	405,167
Accumulated Other Comprehensive Income (Loss)	(217,060)	(263,438)
TOTAL SHAREHOLDERS’ EQUITY	663,558	558,393
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$ 6,152,198	$ 6,155,991
End of period shares issued (in shares)	29,584,709	29,493,193
End of period shares outstanding (in shares)	29,584,709	29,493,193

XML

Consolidated Balance Sheets (Parenthetical) - USD ($)	Dec. 31, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Amortized cost	$ 1,871,260,000	$ 2,094,826,000
Allowance for credit losses for available-for-sale securities	$ 0	$ 0
Common Stock, stated value (in dollars per share)	$ 1	$ 1
Common Stock, shares authorized (in shares)	45,000,000	45,000,000

XML

Consolidated Statements of Income - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
INTEREST INCOME
Interest and Fees on Loans	$ 212,517	$ 169,158	$ 139,151
Interest on Federal Funds Sold and Other Short-term Investments	1,677	5,765	488
Interest and Dividends on Securities:
Taxable	20,614	20,453	12,962
Non-taxable	21,848	23,550	17,778
TOTAL INTEREST INCOME	256,656	218,926	170,379
INTEREST EXPENSE
Interest on Deposits	56,916	13,514	4,955
Interest on FHLB Advances and Other Borrowings	9,307	4,828	4,594
TOTAL INTEREST EXPENSE	66,223	18,342	9,549
NET INTEREST INCOME	190,433	200,584	160,830
Provision for Credit Losses	2,550	6,350	(6,500)
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES	187,883	194,234	167,330
NON-INTEREST INCOME
Company Owned Life Insurance	1,731	2,264	1,529
Other Operating Income	5,830	5,116	6,991
Net Gains on Sales of Loans	2,363	3,818	8,267
Net Gains on Securities	40	562	2,247
TOTAL NON-INTEREST INCOME	60,261	59,133	59,462
NON-INTEREST EXPENSE
Salaries and Employee Benefits	83,244	84,145	68,570
Occupancy Expense	10,887	11,223	11,081
Furniture and Equipment Expense	3,580	3,698	3,750
FDIC Premiums	2,829	1,860	1,419
Data Processing Fees	11,112	15,406	7,611
Professional Fees	5,575	6,295	5,009
Advertising and Promotion	4,857	4,416	4,197
Intangible Amortization	2,840	3,711	2,731
Other Operating Expenses	19,573	23,437	19,639
TOTAL NON-INTEREST EXPENSE	144,497	154,191	124,007
Income before Income Taxes	103,647	99,176	102,785
Income Tax Expense	17,759	17,351	18,648
NET INCOME	$ 85,888	$ 81,825	$ 84,137
Basic Earnings per Share (in dollars per share)	$ 2.91	$ 2.78	$ 3.17
Diluted Earnings per Share (in dollars per share)	$ 2.91	$ 2.78	$ 3.17
Wealth Management Fees
NON-INTEREST INCOME
Non-interest Income	$ 11,711	$ 10,076	$ 10,321
Service Charges on Deposit Accounts
NON-INTEREST INCOME
Non-interest Income	11,538	11,457	7,723
Insurance Revenues
NON-INTEREST INCOME
Non-interest Income	9,596	10,020	9,268
Interchange Fee Income
NON-INTEREST INCOME
Non-interest Income	$ 17,452	$ 15,820	$ 13,116

XML

Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Statement of Comprehensive Income [Abstract]
Net Income	$ 85,888	$ 81,825	$ 84,137
Unrealized Gains (Losses) on Securities:
Unrealized Holding Gain (Loss) Arising During the Period	58,769	(353,013)	(23,011)
Reclassification Adjustment for Gains Included in Net Income	(40)	(563)	(2,247)
Tax Effect	(12,351)	74,600	5,367
Net of Tax	46,378	(278,976)	(19,891)
Postretirement Benefit Obligation:
Net (Loss) Arising During the Period	0	0	0
Reclassification Adjustment for Amortization of Prior Service Cost and Net	0	54	0
Tax Effect	0	0	0
Net of Tax	0	54	0
Total Other Comprehensive Income (Loss)	46,378	(278,922)	(19,891)
COMPREHENSIVE INCOME (LOSS)	$ 132,266	$ (197,097)	$ 64,246

XML

Consolidated Statements of Changes in Shareholders' Equity - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Income (Loss)
Beginning balance (in shares) at Dec. 31, 2020		26,502,157
Beginning balance at Dec. 31, 2020	$ 624,709	$ 26,502	$ 274,385	$ 288,447	$ 35,375
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income	84,137			84,137
Other Comprehensive Income (Loss)	(19,891)				(19,891)
Cash Dividends	(22,220)			(22,220)
Issuance of Common Stock for:
Restricted Share Grants (in shares)		51,351
Restricted Share Grants	1,724	$ 52	1,672
Ending balance (in shares) at Dec. 31, 2021		26,553,508
Ending balance at Dec. 31, 2021	668,459	$ 26,554	276,057	350,364	15,484
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income	81,825			81,825
Other Comprehensive Income (Loss)	(278,922)				(278,922)
Cash Dividends	(27,022)			(27,022)
Issuance of Common Stock for:
Acquisition of Citizens Union Bancorp (in shares)		2,870,975
Acquisition of Citizens Union Bancorp	111,723	$ 2,871	108,852
Restricted Share Grants (in shares)		68,710
Restricted Share Grants	$ 2,330	$ 68	2,262
Ending balance (in shares) at Dec. 31, 2022	29,493,193	29,493,193
Ending balance at Dec. 31, 2022	$ 558,393	$ 29,493	387,171	405,167	(263,438)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income	85,888			85,888
Other Comprehensive Income (Loss)	46,378				46,378
Cash Dividends	(29,433)			(29,433)
Issuance of Common Stock for:
Restricted Share Grants (in shares)		91,516
Restricted Share Grants	$ 2,332	$ 92	2,240
Ending balance (in shares) at Dec. 31, 2023	29,584,709	29,584,709
Ending balance at Dec. 31, 2023	$ 663,558	$ 29,585	$ 389,411	$ 461,622	$ (217,060)

XML

Consolidated Statements of Changes in Shareholders' Equity (Parenthetical) - $ / shares	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Statement of Stockholders' Equity [Abstract]
Cash dividends (in dollars per share)	$ 1.00	$ 0.92	$ 0.84

XML

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income	$ 85,888	$ 81,825	$ 84,137
Adjustments to Reconcile Net Income to Net Cash from Operating Activities:
Net Amortization on Securities	5,566	6,452	6,638
Depreciation and Amortization	9,560	10,116	8,770
Loans Originated for Sale	(106,781)	(162,959)	(261,529)
Proceeds from Sales of Loans Held-for-Sale	112,525	171,591	276,417
Provision for Credit Losses	2,550	6,350	(6,500)
Gain on Sale of Loans, net	(2,363)	(3,818)	(8,267)
Gain on Securities, net	(40)	(562)	(2,247)
Loss (Gain) on Sales of Other Real Estate and Repossessed Assets	(83)	(18)	(101)
Loss (Gain) on Disposition and Donation of Premises and Equipment	(547)	(37)	1,640
Loss (Gain) on Disposition of Land	(83)	0	0
Post Retirement Medical Benefit	0	54	0
Increase in Cash Surrender Value of Company Owned Life Insurance	(1,842)	(1,820)	(1,369)
Equity Based Compensation	2,332	2,330	1,724
Change in Assets and Liabilities:
Interest Receivable and Other Assets	3,725	(1,094)	2,716
Interest Payable and Other Liabilities	(3,173)	1,626	(1,185)
Net Cash from Operating Activities	107,234	110,036	100,844
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from Maturity of Other Short-term Investments	0	495	496
Proceeds from Maturities of Securities Available-for-Sale	287,084	143,418	208,156
Proceeds from Sales of Securities Available-for-Sale	114,259	145,237	111,124
Purchase of Securities Available-for-Sale	(183,302)	(417,940)	(1,020,695)
Proceeds from Redemption of Federal Home Loan Bank Stock	350	8,089	120
Purchase of Loans	(1,502)	(933)	0
Proceeds from Sales of Loans Held for Investment	0	3,916	0
Loans Made to Customers, net of Payments Received	(187,624)	(107,236)	59,557
Proceeds from Sales of Other Real Estate	108	88	1,423
Property and Equipment Expenditures	(5,745)	(7,852)	(4,686)
Proceeds from Sale of Land and Building	3,627	0	1,963
Proceeds from Life Insurance	0	773	549
Sale of Bank Branches	0	0	1,694
Acquisition of Citizens Union Bancorp of Shelbyville, Inc.	0	207,764	0
Net Cash from Investing Activities	27,255	(24,181)	(640,299)
CASH FLOWS FROM FINANCING ACTIVITIES
Change in Deposits	(96,782)	(324,771)	655,485
Change in Short-term Borrowings	(35,193)	29,817	15,423
Advances in Long-term Debt	25,000	0	0
Repayments of Long-term Debt	(132)	(41,690)	(58,091)
Issuance (Retirement) of Common Stock	0	0	0
Dividends Paid	(29,433)	(27,022)	(22,220)
Net Cash from Financing Activities	(136,540)	(363,666)	590,597
Net Change in Cash and Cash Equivalents	(2,051)	(277,811)	51,142
Cash and Cash Equivalents at Beginning of Year	117,381	395,192	344,050
Cash and Cash Equivalents at End of Year	115,330	117,381	395,192
Cash Paid During the Year for
Interest	60,663	17,442	10,020
Income Taxes	15,375	11,649	14,434
Supplemental Non Cash Disclosures
Loans Transferred to Other Real Estate	0	30	0
Reclass of Land & Buildings to Other Assets	691	0	0
Interest Rate Swap Fair Value Activity	$ (2,282)	$ 4,988	$ (4,287)

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Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2023

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Description of Business and Basis of Presentation

The operations of German American Bancorp, Inc. (the “Company”) are primarily comprised of three business segments: core banking, trust and investment advisory 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, 2023, and 2022, 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.

Mortgage loans held for sale are generally sold on a servicing released 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 $20,580 at December 31, 2023 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.

Allowance for Credit Losses - Loans

The allowance for credit losses is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged off against the allowance when management believes the

uncollectibility of a loan balance is confirmed. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off.

The Company utilizes the static pool methodology in determining expected future credit losses. Static pool analysis includes segmenting and tracking loans over a period of time based on similar risk characteristics such as loan structure, collateral type, industry of borrower and concentrations, contractual terms and credit risk indicators. Static pool calculates a loss rate on a closed pool of loans that existed on a specified start date based upon the remaining life of each segment. The Company’s expected loss estimate is anchored in historical credit loss experience, with an emphasis on all available portfolio data. The Company’s historical look-back period includes January 2014 through the current period, on a monthly basis.

The Company estimates the allowance balance using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Historical loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for changes in underwriting standards, portfolio mix, delinquency level, changes in environmental conditions, unemployment rates, risk classifications and collateral values. The Company separately assigns allocations for substandard and special mention commercial and agricultural credits as well as other categories of loans based on migration analysis techniques. The migration analysis factors are calculated using a transition matrix to determine the likelihood of a customer’s asset quality rating migrating from its current rating to any other rating.

The allowance for credit losses is measured on a collective (pooled) basis when similar risk characteristics exist. The Company has identified the following portfolio segments and identified the risk characteristics of each portfolio listed below:

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

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.

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 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.

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 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 6 to 10 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.

Restrictions on Cash

At December 31, 2023 and 2022, the Company was not 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.

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 15. 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 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting”. These amendments provide temporary optional guidance to ease the potential burden in accounting for reference rate reform. The ASU provides optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. It is intended to help stakeholders during the global market-wide reference rate transition period. In January 2021, the FASB issued ASU 2021-01 which clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. The guidance is effective for all entities as of March 12, 2020 through December 31, 2024. The Company has discontinued originating LIBOR based loans and has a plan in place to transition LIBOR indexed loans primarily to term SOFR or other indices.

On March 31, 2022, the FASB issued ASU 2022-02, “Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures” which eliminates the troubled debt restructuring recognition and measurement guidance and instead requires an entity to evaluate whether the modification represents a new loan or a continuation of an existing loan. The amendments also enhance existing disclosures and include new disclosure requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. To improve consistency for vintage disclosures, the ASU requires that public business entities disclose current-period gross write-offs by year of origination for financing receivables and net investments in leases within the scope of Subtopic 326-20. For entities that have adopted ASU 2016-13, the amendments are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. For entities that have not adopted ASU 2016-13, the effective dates for the amendments are the same as the effective dates in ASU 2016-13. Early adoption is permitted if ASU 2016-13 has been adopted, including adoption in an interim period. If an entity elects to adopt the amendments in an interim period, the guidance should be applied as of the beginning of the fiscal year that includes the interim period. The Company adopted the new guidance prospectively with no material impact to the consolidated financial statements.

The SEC released Staff Accounting Bulletin No. 121 (“SAB 121”), which provides interpretive guidance regarding the accounting for obligations to safeguard crypto-assets an entity holds for its customers, either directly through an agent or another third party acting on its behalf. SAB 121 requires an entity to recognize a liability on its balance sheet to reflect the obligation to safeguard the crypto-assets of others, along with a corresponding safeguarding asset, both of which are measured

at fair value. The Company has completed an evaluation and concluded that it does not have a safeguarding obligation under SAB 121 and therefore the disclosures do not apply.

Newly Issued But Not Yet Effective Accounting Standards

On March 29, 2023, the FASB issued ASU 2023-02, “Investments - Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method” to expand use of the proportional amortization method of accounting to equity investments in tax credit programs beyond those in low-income-housing tax credit (LIHTC) programs. The amendments in this update permit reporting entities to account for certain tax equity investments, regardless of the tax credit program from which the income tax credits are received, using the proportional amortization method if certain conditions are met. This guidance provides clarifications to address interpretive issues and prescribes specific information that reporting entities must disclose about tax credit investments each period.

This ASU is effective for reporting periods beginning after December 15, 2023, for public business entities. For all other entities, the ASU is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted, including early adoption in any interim period as of the beginning of the fiscal year that includes that interim period. Entities have the option of applying the forthcoming revisions using either a modified retrospective or retrospective adoption approach. The Company is currently evaluating the impact of adopting this new guidance, however, adoption of the standard is not expected to have a material impact on the Company’s financial statements or disclosures.

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Securities

12 Months Ended

Dec. 31, 2023

Investments, Debt and Equity Securities [Abstract]

Securities

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
2023
U.S. Treasury	$	—	$	—	$	—	$	—
Obligations of State and Political Subdivisions	889,940		1,309		(122,374)		768,875
MBS/CMO	761,025		28		(116,013)		645,040
US Gov’t Sponsored Entities & Agencies	220,295		—		(37,378)		182,917
Total	$	1,871,260	$	1,337	$	(275,765)	$	1,596,832
2022
U.S. Treasury	$	64,097	$	22	$	—	$	64,119
Obligations of State and Political Subdivisions	939,193		673		(162,014)		777,852
MBS/CMO	846,519		—		(131,838)		714,681
US Gov’t Sponsored Entities & Agencies	245,017		—		(40,000)		205,017
Total	$	2,094,826	$	695	$	(333,852)	$	1,761,669

All mortgage-backed securities in the above table (identified above and throughout this Note 2 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, 2023 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	$	1,768	$	1,766
Due after one year through five years	17,548		17,589
Due after five years through ten years	65,213		62,296
Due after ten years	805,411		687,224
MBS/CMO	761,025		645,040
US Gov’t Sponsored Entities & Agencies	220,295		182,917
Total	$	1,871,260	$	1,596,832

	2023		2022		2021
Proceeds from the Sales of Securities are summarized below:	Available- for-Sale		Available- for-Sale		Available- for-Sale
Proceeds from Sales	$	114,259	$	145,237	$	111,124
Gross Gains on Sales	346		750		2,399
Gross Losses on Sales	306		188		152
Income Taxes on Net Gains	8		118		472

The carrying value of securities pledged to secure repurchase agreements, public and trust deposits, and for other purposes as required by law was $366,576 and $354,123 as of December 31, 2023 and 2022, respectively.

Below is a summary of securities with unrealized losses as December 31, 2023 and 2022, 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, 2023
Obligations of State and Political Subdivisions	$	13,469	$	(175)	$	668,223	$	(122,199)	$	681,692	$	(122,374)
MBS/CMO	135		(1)		643,172		(116,012)		643,307		(116,013)
US Gov’t Sponsored Entities & Agencies	—		—		182,917		(37,378)		182,917		(37,378)
Total	$	13,604	$	(176)	$	1,494,312	$	(275,589)	$	1,507,916	$	(275,765)

	Less than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
December 31, 2022
Obligations of State and Political Subdivisions	$	579,267	$	(117,423)	$	122,992	$	(44,591)	$	702,259	$	(162,014)
MBS/CMO	240,344		(20,920)		474,327		(110,918)		714,671		(131,838)
US Gov’t Sponsored Entities & Agencies	198,702		(38,818)		6,314		(1,182)		205,016		(40,000)
Total	$	1,018,313	$	(177,161)	$	603,633	$	(156,691)	$	1,621,946	$	(333,852)

Available-for-sale debt securities in unrealized loss positions are evaluated for impairment related to credit losses at least quarterly. For available-for-sale debt securities in an unrealized loss position, the Company assesses whether we intend to sell, or it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is reduced to fair value through

income. For available-for sale debt securities that do not meet the criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security and the issuer, among other factors. If this assessment indicates that a credit loss exists, we compare the present value of cash flows expected to be collected from the security with the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis for the security, a credit loss exists and an allowance for credit losses 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. The decrease in unrealized losses from December 31, 2022 to December 31, 2023 was primarily the result of fair value adjustments caused by the change in market interest rates. No allowance for credit losses for available-for-sale debt securities was needed at December 31, 2023 or 2022.

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 $9,620 at December 31, 2023 and $10,637 at December 31, 2022. 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, 2023 and 2022. 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 2023 or 2022.

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Derivatives

12 Months Ended

Dec. 31, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives

Derivatives

The Company executes interest rate swaps with commercial banking customers to facilitate their respective risk management strategies. The notional amounts of these interest rate swaps and the offsetting counterparty derivative instruments were $139,751 at December 31, 2023 and $134,684 at December 31, 2022. 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, 2023				December 31, 2022
	Notional Amount		Fair Value		Notional Amount		Fair Value
Included in Other Assets:
Interest Rate Swaps	$	139,751	$	7,458	$	134,684	$	9,899
Included in Other Liabilities:
Interest Rate Swaps	$	139,751	$	7,467	$	134,684	$	9,749

The following table presents the effect of derivative instruments on the Consolidated Statements of Income for the years ended December 31, 2023, 2022 and 2021 is as follows: 

	2023		2022		2021
Interest Rate Swaps:
Included in Other Income	$	344	$	403	$	1,131

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Loans

12 Months Ended

Dec. 31, 2023

Receivables [Abstract]

Loans

Loans

Loans were comprised of the following classifications at December 31: 

	2023		2022
Commercial:
Commercial and Industrial Loans	$	589,541	$	620,106
Commercial Real Estate Loans	2,121,835		1,966,884
Agricultural Loans	423,803		417,413
Leases	71,988		56,396
Retail:
Home Equity Loans	299,685		279,748
Consumer Loans	87,853		79,904
Credit Cards	20,351		17,512
Residential Mortgage Loans	362,844		350,682
Subtotal	3,977,900		3,788,645
Less: Unearned Income	(6,818)		(3,711)
Allowance for Credit Losses	(43,765)		(44,168)
Loans, net	$	3,927,317	$	3,740,766

The table above includes $13,237 and $21,149 of purchase credit deteriorated loans as of December 31, 2023 and 2022, respectively.

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, 2023, 2022 and 2021:

December 31, 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

December 31, 2022	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	$	9,554	$	19,245	$	4,505	$	200	$	507	$	1,061	$	240	$	1,705	$	37,017
Acquisition of Citizens Union Bank of Shelbyville, KY - PCD Loans	376		1,945		689		—		2		—		—		105		3,117
Provision (Benefit) for Credit Losses	4,942		463		(1,006)		9		991		351		163		437		6,350
Loans Charged-off	(1,149)		(79)		—		—		(1,364)		(69)		(165)		(24)		(2,850)
Recoveries Collected	26		24		—		—		459		1		19		5		534
Total Ending Allowance Balance	$	13,749	$	21,598	$	4,188	$	209	$	595	$	1,344	$	257	$	2,228	$	44,168

December 31, 2021	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	$	6,445	$	29,878	$	6,756	$	200	$	490	$	996	$	150	$	1,944	$	46,859
Provision (Benefit) for Credit Losses	5,825		(10,663)		(2,251)		—		385		44		387		(227)		(6,500)
Loans Charged-off	(2,777)		(10)		—		—		(675)		(15)		(313)		(45)		(3,835)
Recoveries Collected	61		40		—		—		307		36		16		33		493
Total Ending Allowance Balance	$	9,554	$	19,245	$	4,505	$	200	$	507	$	1,061	$	240	$	1,705	$	37,017

The Company utilizes the Static Pool methodology in determining expected future credit losses. Static pool analysis means segmenting and tracking loans over a period of time based on similar risk characteristics such as loan structure, collateral type, industry of borrower and concentrations, contractual terms and credit risk indicators. Static pool calculates a loss rate on a closed pool of loans that existed on a specified start date based upon the remaining life of each segment.

The Company’s expected loss estimate is anchored in historical credit loss experience, with an emphasis on all available portfolio data. The Company’s historical look-back period includes January 2014 through the current period, on a monthly basis.

Qualitative reserves reflect management’s overall estimate of the extent to which current expected credit losses on collectively evaluated loans will differ from historical loss experience. The analysis takes into consideration industry and collateral concentrations, acquired loan portfolio characteristics and other credit-related analytics as deemed appropriate. Management attempts to quantify qualitative reserves by anchoring to specific data points when possible.

The Company estimates the allowance balance using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Historical loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for changes in underwriting standards, portfolio mix, delinquency level, changes in environmental conditions, unemployment rates, risk classifications and collateral values. The allowance for credit losses is measured on a collective (pooled) basis when similar risk characteristics exist. Based on the potential increased losses related to the advancing stress on the economy as a result of inflationary pressures, rising interest rates and financial market volatility, the Company has considered this loss experience may align with loss experience from the recessionary period from 2008-2011 and qualitative adjustments have been made accordingly.

Loans that do not share risk characteristics are evaluated on an individual basis. Loans evaluated individually are 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.

For the year ended December 31, 2023, the decline in allowance for credit losses was largely related to the resolution, during the fourth quarter of 2023, of a single commercial borrowing relationship with minimal loss recognition for which the Company had established a significant reserve in previous periods which was slightly offset by additional reserve for loan portfolio growth. Key indicators utilized in forecasting for the allowance calculations include unemployment rates and gross domestic product as well as commodity prices for the agricultural segment of the portfolio. There has been some improvement in these factors over previous periods; however, rising interest rates and the expanded inflationary impact on consumer discretionary spending were considered in the qualitative factors to determine the allowance for credit losses.

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.

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, 2023 and 2022:

December 31, 2023	Non-Accrual With No Allowance for Credit Loss ⁽¹⁾		Non-Accrual		Loans Past Due Over 89 Days Still Accruing
Commercial and Industrial Loans	$	1,864	$	3,707	$	—
Commercial Real Estate Loans	942		1,889		55
Agricultural Loans	665		879		—
Leases	—		—		—
Home Equity Loans	1,033		1,033		—
Consumer Loans	111		111		—
Credit Cards	142		142		—
Residential Mortgage Loans	1,125		1,375		—
Total	$	5,882	$	9,136	$	55

(1) Includes non-accrual loans with no allowance for credit loss and are also included in Non-Accrual loans totaling $9,136.

December 31, 2022	Non-Accrual With No Allowance for Credit Loss ⁽¹⁾		Non-Accrual		Loans Past Due Over 89 Days Still Accruing
Commercial and Industrial Loans	$	1,142	$	7,936	$	1,427
Commercial Real Estate Loans	49		1,950		—
Agricultural Loans	994		1,062		—
Leases	—		—		—
Home Equity Loans	262		310		—
Consumer Loans	240		254		—
Credit Cards	146		146		—
Residential Mortgage Loans	676		1,230		—
Total	$	3,509	$	12,888	$	1,427

(1) Includes non-accrual loans with no allowance for credit loss and are also included in Non-Accrual loans totaling $12,888.

Interest income on non-accrual loans recognized during the years ended December 31, 2023 and 2022 totaled $106 and $32. 

The following tables present the amortized cost basis of collateral-dependent loans by class of loans as of December 31, 2023 and 2022:

December 31, 2023	Real Estate		Equipment		Accounts Receivable		Other		Total
Commercial and Industrial Loans	$	3,668	$	49	$	—	$	1,888	$	5,605
Commercial Real Estate Loans	8,553		—		—		—		8,553
Agricultural Loans	3,338		1,055		—		—		4,393
Leases	—		—		—		—		—
Home Equity Loans	420		—		—		—		420
Consumer Loans	9		—		—		—		9
Credit Cards	—		—		—		—		—
Residential Mortgage Loans	753		—		—		—		753
Total	$	16,741	$	1,104	$	—	$	1,888	$	19,733

December 31, 2022	Real Estate		Equipment		Accounts Receivable		Other		Total
Commercial and Industrial Loans	$	2,078	$	1,219	$	272	$	5,851	$	9,420
Commercial Real Estate Loans	12,192		36		—		—		12,228
Agricultural Loans	4,944		318		—		—		5,262
Leases	—		—		—		—		—
Home Equity Loans	467		—		—		—		467
Consumer Loans	8		2		—		12		22
Credit Cards	—		—		—		—		—
Residential Mortgage Loans	1,060		—		—		—		1,060
Total	$	20,749	$	1,575	$	272	$	5,863	$	28,459

The following tables present the aging of the amortized cost basis in past due loans by class of loans as of December 31, 2023 and 2022:

December 31, 2023	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	$	832	$	257	$	3,299	$	4,388	$	585,153	$	589,541
Commercial Real Estate Loans	1,215		484		938		2,637		2,119,198		2,121,835
Agricultural Loans	5		248		497		750		423,053		423,803
Leases	—		—		—		—		71,988		71,988
Home Equity Loans	1,016		571		1,033		2,620		297,065		299,685
Consumer Loans	658		84		110		852		87,001		87,853
Credit Cards	165		87		142		394		19,957		20,351
Residential Mortgage Loans	7,362		1,647		1,215		10,224		352,620		362,844
Total	$	11,253	$	3,378	$	7,234	$	21,865	$	3,956,035	$	3,977,900

December 31, 2022	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	$	268	$	681	$	8,285	$	9,234	$	610,872	$	620,106
Commercial Real Estate Loans	1,617		14		616		2,247		1,964,637		1,966,884
Agricultural Loans	343		—		123		466		416,947		417,413
Leases	—		—		—		—		56,396		56,396
Home Equity Loans	1,770		140		310		2,220		277,528		279,748
Consumer Loans	219		64		252		535		79,369		79,904
Credit Cards	86		24		146		256		17,256		17,512
Residential Mortgage Loans	6,330		2,783		1,051		10,164		340,518		350,682
Total	$	10,633	$	3,706	$	10,783	$	25,122	$	3,763,523	$	3,788,645

Loan Modifications Made to Borrowers Experiencing Financial Difficulty

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

The Company’s loan modifications for borrowers experiencing financial difficulties will typically include one or a combination of the following: a reduction of the stated interest rate of the loan; an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk; or a permanent reduction of the recorded investment in the loan. No modifications in 2023 resulted in the permanent reduction of the recorded investment in the loan.

At December 31, 2023, 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, 2023 and were modified in the twelve months prior to that default to borrowers experiencing financial difficulty. The Company considers a loan to be in payment default once it is 30 days contractually past due under the modified terms.

Credit Quality Indicators:

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

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

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

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

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

The following table presents the risk category of loans and current period gross charge-offs as of December 31, 2023 by loan class and vintage year:

	Term Loans Amortized Cost Basis by Origination Year
As of December 31, 2023	2023		2022		2021		2020		2019		Prior		Revolving Loans Amortized Cost Basis		Total
Commercial and Industrial:
Risk Rating
Pass	$	112,626	$	134,590	$	80,738	$	28,492	$	32,585	$	45,764	$	134,936	$	569,731
Special Mention	47		453		128		829		—		1,948		3,048		6,453
Substandard	—		294		5,689		780		1,696		1,471		3,427		13,357
Doubtful	—		—		—		—		—		—		—		—
Total Commercial and Industrial Loans	$	112,673	$	135,337	$	86,555	$	30,101	$	34,281	$	49,183	$	141,411	$	589,541
Current Period Gross Charge-Offs	$	—	$	911	$	32	$	493	$	7	$	88	$	261	$	1,792
Commercial Real Estate:
Risk Rating
Pass	$	300,569	$	416,874	$	470,917	$	225,668	$	147,431	$	458,821	$	41,102	$	2,061,382
Special Mention	13,906		2,401		11,155		1,651		259		19,532		638		49,542
Substandard	—		617		5,510		1,142		729		2,737		176		10,911
Doubtful	—		—		—		—		—		—		—		—
Total Commercial Real Estate Loans	$	314,475	$	419,892	$	487,582	$	228,461	$	148,419	$	481,090	$	41,916	$	2,121,835
Current Period Gross Charge-Offs	$	—	$	—	$	56	$	—	$	—	$	—	$	—	$	56
Agricultural:
Risk Rating
Pass	$	44,948	$	56,291	$	39,852	$	42,279	$	23,217	$	100,391	$	89,455	$	396,433
Special Mention	1,495		164		903		5,047		2,338		9,894		2,259		22,100
Substandard	—		—		199		188		200		4,683		—		5,270
Doubtful	—		—		—		—		—		—		—		—
Total Agricultural Loans	$	46,443	$	56,455	$	40,954	$	47,514	$	25,755	$	114,968	$	91,714	$	423,803
Current Period Gross Charge-Offs	$	—	$	—	$	—	$	2	$	—	$	—	$	25	$	27
Leases:
Risk Rating
Pass	$	36,848	$	12,281	$	10,634	$	6,086	$	4,788	$	1,351	$	—	$	71,988
Special Mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Total Leases	$	36,848	$	12,281	$	10,634	$	6,086	$	4,788	$	1,351	$	—	$	71,988
Current Period Gross Charge-Offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

As of December 31, 2022, the risk category of loans by class of loans is as follows:

	Term Loans Amortized Cost Basis by Origination Year
As of December 31, 2022	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
Commercial and Industrial:
Risk Rating
Pass	$	156,318	$	117,648	$	39,949	$	46,505	$	18,423	$	51,482	$	154,203	$	584,528
Special Mention	56		148		577		78		551		2,346		1,672		5,428
Substandard	1,714		5,629		849		1,304		1,028		2,237		17,389		30,150
Doubtful	—		—		—		—		—		—		—		—
Total Commercial and Industrial Loans	$	158,088	$	123,425	$	41,375	$	47,887	$	20,002	$	56,065	$	173,264	$	620,106
Commercial Real Estate:
Risk Rating
Pass	$	398,631	$	490,747	$	261,462	$	162,701	$	129,151	$	427,433	$	35,163	$	1,905,288
Special Mention	3,982		1,568		4,612		135		13,689		25,371		—		49,357
Substandard	—		4,628		489		1,415		979		4,728		—		12,239
Doubtful	—		—		—		—		—		—		—		—
Total Commercial Real Estate Loans	$	402,613	$	496,943	$	266,563	$	164,251	$	143,819	$	457,532	$	35,163	$	1,966,884
Agricultural:
Risk Rating
Pass	$	62,673	$	47,682	$	47,355	$	25,431	$	21,728	$	92,344	$	83,862	$	381,075
Special Mention	634		842		6,066		4,149		2,355		11,440		4,310		29,796
Substandard	—		210		628		429		85		5,190		—		6,542
Doubtful	—		—		—		—		—		—		—		—
Total Agricultural Loans	$	63,307	$	48,734	$	54,049	$	30,009	$	24,168	$	108,974	$	88,172	$	417,413
Leases:
Risk Rating
Pass	$	20,057	$	14,461	$	9,648	$	8,901	$	1,851	$	1,478	$	—	$	56,396
Special Mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Total Leases	$	20,057	$	14,461	$	9,648	$	8,901	$	1,851	$	1,478	$	—	$	56,396

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 period ended December 31, 2023.

	Term Loans Amortized Cost Basis by Origination Year
As of December 31, 2023	2023		2022		2021		2020		2019		Prior		Revolving Loans Amortized Cost Basis		Total
Consumer:
Payment performance
Performing	$	49,208	$	21,459	$	9,708	$	2,756	$	917	$	1,911	$	1,783	$	87,742
Nonperforming	74		21		12		—		—		1		3		111
Total Consumer Loans	$	49,282	$	21,480	$	9,720	$	2,756	$	917	$	1,912	$	1,786	$	87,853
Current Period Gross Charge-Offs	$	1,162	$	42	$	23	$	71	$	3	$	1	$	7	$	1,309
Home Equity:
Payment performance
Performing	$	—	$	170	$	236	$	90	$	165	$	1,207	$	296,784	$	298,652
Nonperforming	—		247		252		60		—		102		372		1,033
Total Home Equity Loans	$	—	$	417	$	488	$	150	$	165	$	1,309	$	297,156	$	299,685
Current Period Gross Charge-Offs	$	—	$	—	$	—	$	55	$	—	$	24	$	15	$	94
Residential Mortgage:
Payment performance
Performing	$	56,306	$	65,301	$	85,753	$	41,352	$	17,831	$	94,926	$	—	$	361,469
Nonperforming	11		60		417		287		109		491		—		1,375
Total Residential Mortgage Loans	$	56,317	$	65,361	$	86,170	$	41,639	$	17,940	$	95,417	$	—	$	362,844
Current Period Gross Charge-Offs	$	—	$	—	$	22	$	36	$	—	$	—	$	—	$	58

The following table presents the amortized cost in residential, home equity and consumer loans based on payment activity for the period ended December 31, 2022.

	Term Loans Amortized Cost Basis by Origination Year
As of December 31, 2022	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
Consumer:
Payment performance
Performing	$	42,685	$	22,708	$	5,610	$	2,394	$	1,543	$	1,553	$	3,157	$	79,650
Nonperforming	3		19		212		8		2		10		—		254
Total Consumer Loans	$	42,688	$	22,727	$	5,822	$	2,402	$	1,545	$	1,563	$	3,157	$	79,904
Home Equity:
Payment performance
Performing	$	63	$	—	$	—	$	—	$	—	$	591	$	278,784	$	279,438
Nonperforming	—		20		—		—		19		1		270		310
Total Home Equity Loans	$	63	$	20	$	—	$	—	$	19	$	592	$	279,054	$	279,748
Residential Mortgage:
Payment performance
Performing	$	69,982	$	97,176	$	46,851	$	20,080	$	16,664	$	98,699	$	—	$	349,452
Nonperforming	—		161		253		—		78		738		—		1,230
Total Residential Mortgage Loans	$	69,982	$	97,337	$	47,104	$	20,080	$	16,742	$	99,437	$	—	$	350,682

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, 2023		December 31, 2022
Performing	$	20,209	$	17,366
Nonperforming	142		146
Total	$	20,351	$	17,512

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, 2023
Purchases	$	—	$	1,502	$	—	$	—	$	—	$	—	$	—	$	—	$	1,502
Sales	—		—		—		—		—		—		—		—		—
December 31, 2022
Purchases	$	522	$	411	$	—	$	—	$	—	$	—	$	—	$	—	$	933
Sales	—		3,819		97		—		—		—		—		—		3,916

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 2023. A summary of the activity of these loans follows:

Balance January 1, 2023		Additions		Changes in Persons or Interests Included		Deductions				Balance December 31, 2023
						Collected		Charged-off
$	51,086	$	13,854	$	(7,087)	$	(18,031)	$	—	$	39,822

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Premises, Furniture, and Equipment

12 Months Ended

Dec. 31, 2023

Property, Plant and Equipment [Abstract]

Premises, Furniture, and Equipment

Premises, Furniture, and Equipment 

Premises, furniture, and equipment was comprised of the following classifications at December 31:

	2023		2022
Land	$	27,100	$	27,401
Buildings and Improvements	106,646		109,682
Furniture and Equipment	45,749		46,665
Total Premises, Furniture and Equipment	179,495		183,748
Less:  Accumulated Depreciation	(72,719)		(71,511)
Total	$	106,776	$	112,237

Depreciation expense was $6,570, $6,648 and $5,802 for 2023, 2022 and 2021, respectively.

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Deposits

12 Months Ended

Dec. 31, 2023

Deposits Liabilities, Balance Sheet, Reported Amounts [Abstract]

Deposits

Deposits

At year end 2023, stated maturities of time deposits were as follows:

2024	$	707,978
2025	32,366
2026	16,952
2027	6,155
2028	3,591
Thereafter	—
Total	$	767,042

Time deposits and brokered certificates of deposit exceeding the FDIC insurance limit of $250 at December 31, 2023 and 2022 were $277,568 and $71,081, respectively.

Time deposits originated from outside the geographic area, generally through brokers, totaled $3,801 and $3,277 at December 31, 2023 and 2022, respectively.

Deposits from principal officers, directors, and their affiliates at year-end 2023 and 2022 were $67,637 and $62,435, respectively.

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FHLB Advances and Other Borrowings

12 Months Ended

Dec. 31, 2023

Advance from Federal Home Loan Bank [Abstract]

FHLB Advances and Other Borrowings

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,
	2023				2022
	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	$	50,000	$	—	$	25,000	$	—
Junior Subordinated Debentures assumed from American Community Bancorp, Inc.	8,248		(1,723)		8,248		(1,873)
Junior Subordinated Debentures assumed from River Valley Bancorp, Inc.	7,217		(977)		7,217		(1,082)
Junior Subordinated Debentures assumed from Citizens First Corporation	5,155		(853)		5,155		(919)
Junior Subordinated Debentures assumed from Citizens Union Bancorp of Shelbyville, Inc.	20,600		(1,885)		20,600		(2,020)
Subordinated Debentures	40,000		(455)		40,000		(538)
Finance Lease Obligation	2,642		—		2,857		—
Long-term Borrowings	133,862		(5,893)		109,077		(6,432)
Overnight Variable Rate Advances from Federal Home Loan Bank collateralized by qualifying mortgages, investment securities, and mortgage-backed securities	—		—		25,000		—
Federal Funds Purchased	25,000		—		11,200		—
Repurchase Agreements	40,968		—		64,961		—
Short-term Borrowings	65,968		—		101,161		—
Total Borrowings	$	199,830	$	(5,893)	$	210,238	$	(6,432)

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. 

	2023			2022
Average Daily Balance During the Year	$	51,474		$	52,932
Average Interest Rate During the Year	1.16		%	0.20		%
Maximum Month-end Balance During the Year	$	60,055		$	72,084
Weighted Average Interest Rate at Year-end	1.44		%	0.57		%

At December 31, 2023, interest rates on long-term FHLB Advances ranged from 1.54% to 3.57% with a weighted average rate of 2.56%. At December 31, 2022 the Company held one long-term FHLB advance with an interest rate of 1.54%. At December 31, 2023 and 2022, the Company had no advances containing options whereby the FHLB may convert a fixed rate advance to an adjustable rate advance.

At December 31, 2023 and 2022, the Company had outstanding $39,545 and $39,462, respectively, in aggregate principal amount, of its 4.50% Fixed-to-Floating Rate Subordinated Notes due 2029 (the “Notes”). The Notes bear interest at a fixed annual rate of 4.50% until but excluding June 30, 2024, payable semi-annually in arrears. The indenture for the Notes contemplates that, from and including June 30, 2024 to but excluding the maturity date of June 30, 2029, or early redemption date, the interest rate will reset quarterly to an interest 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. The Secured Overnight Financing Rate, or SOFR, is the preferred alternate rate to LIBOR, as identified by the Alternative Reference Rates Committee, a U.S.-based group convened by the Federal Reserve Board and the Federal Reserve Bank of New York. The Federal Reserve subsequently

adopted final regulations that, among other things, established LIBOR benchmark replacements based on SOFR under certain circumstances. See Replacement of LIBOR Benchmark below for additional information.

The Notes are not subject to any sinking fund and are not convertible into or exchangeable for any other securities or assets of the Company or any of its subsidiaries. The Notes are not subject to redemption at the option of the holder. The Notes are unsecured, subordinated obligations of the Company only and are not obligations of, and are not guaranteed by, any subsidiary of the Company. The Notes rank junior in right to payment to the Company’s current and future senior indebtedness. The Notes are intended to qualify as Tier 2 capital for regulatory capital purposes for the Company.

At December 31, 2023, 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 25, 2024. Interest on the line of credit is based upon one-month Term SOFR plus 2.10%.

At December 31, 2023, scheduled principal payments on long-term borrowings, excluding the capitalized lease obligation and acquired subordinated debentures (which are discussed below) are as follows:

2024	$	25,000
2025	—
2026	—
2027	—
2028	25,000
Thereafter	39,545
Total	$	89,545

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. $34,829 of the junior subordinated debentures were treated as Tier 1 capital for regulatory capital purposes as of December 31, 2023. $34,378 of the junior subordinated debentures were treated as Tier 1 capital for regulatory capital purposes as of December 31, 2022. 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, 2023		Variable Rate (1)	Rate as of December 31, 2023		Rate as of December 31, 2022 (2)		Maturity Date
ACB Trust I	5/6/2005	$	5,155	$	4,105	3-Month SOFR + 2.15%	7.81	%	6.90	%	May 2035
ACB Trust II	7/15/2005	3,093		2,420		3-Month SOFR + 1.85%	7.49	%	6.54	%	July 2035
RIVR Statutory Trust I	3/26/2003	7,217		6,240		3-Month SOFR + 3.15%	8.77	%	7.87	%	March 2033
Citizens First Statutory Trust I	10/16/2006	5,155		4,302		3-Month SOFR +1.65%	7.31	%	5.39	%	January 2037
CUB Capital Trust I	10/21/2004	10,310		9,642		3-Month SOFR +2.00%	7.64	%	6.69	%	November 2034
CUB Capital Trust II	8/17/2005	10,310		9,073		3-Month SOFR +1.50%	7.16	%	5.58	%	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.

(2)    Prior to CME Term SOFR becoming effective, the variable rate was based upon LIBOR rates and tenors. See Replacement of LIBOR Benchmark below for additional information.

Replacement of LIBOR Benchmark:

On March 15, 2022, the Adjustable Interest Rate (LIBOR) Act (the “LIBOR Act”) was signed into law in response to the U.K. Financial Conduct Authority, the authority regulating LIBOR, announcing that, among other things, the 1-month, 3-month, 6-month and 12-month U.S. dollar LIBOR settings would cease to exist after June 30, 2023. The LIBOR Act establishes a uniform national approach for replacing LIBOR in legacy contracts that do not provide for the use of a clearly defined replacement benchmark rate. As directed by the LIBOR Act, on December 16, 2022, the Federal Reserve issued a final rule setting forth regulations to implement the LIBOR Act, including establishing benchmark replacements based on SOFR for contracts governed by U.S. law that reference certain tenors of U.S. dollar LIBOR (the overnight and one-, three-, six-, and 12-month tenors) and that do not have terms that provide for the use of a clearly defined and practicable replacement benchmark rate (“fallback provisions”) following the first London banking day after June 30, 2023.

As the junior subordinated debentures discussed above do not have LIBOR fallback provisions, after June 30, 2023, the interest paid on those debentures has been and will be based upon the CME Term SOFR, as the replacement benchmark, including a static spread adjustment for the appropriate tenor, as provided by the LIBOR Act and related Federal Reserve regulations. The relevant spread adjustment for a three-month tenor is 0.26161%.

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Shareholders' Equity

12 Months Ended

Dec. 31, 2023

Stockholders' Equity Note [Abstract]

Shareholders' Equity

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

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, 2023, 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 2023 and 2022, 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, 2023, 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	$	810,391	16.50	%	$	392,870	8.00	%	N/A		N/A
Bank	723,998		14.76		392,402		8.00		$	490,503	10.00	%
Tier 1 (Core) Capital (to Risk Weighted Assets)
Consolidated	$	735,089	14.97	%	$	294,652	6.00	%	N/A		N/A
Bank	688,696		14.04		294,302		6.00		$	392,402	8.00	%
Common Tier 1 (CET 1) Capital Ratio (to Risk Weighted Assets)
Consolidated	$	700,260	14.26	%	$	220,989	4.50	%	N/A		N/A
Bank	688,696		14.04		220,726		4.50		$	318,827	6.50	%
Tier 1 (Core) Capital (to Average Assets)
Consolidated	$	735,089	11.75	%	$	250,162	4.00	%	N/A		N/A
Bank	688,696		11.03		249,642		4.00		$	312,053	5.00	%

(1) Excludes 2.5% capital conservation buffer.

At December 31, 2022, 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	$	747,542	15.45	%	$	387,024	8.00	%	N/A		N/A
Bank	680,695		14.07		386,959		8.00		$	483,698	10.00	%
Tier 1 (Core) Capital (to Risk Weighted Assets)
Consolidated	$	676,068	13.97	%	$	290,268	6.00	%	N/A		N/A
Bank	649,221		13.42		290,219		6.00		$	386,959	8.00	%
Common Tier 1 (CET 1) Capital Ratio (to Risk Weighted Assets)
Consolidated	$	641,690	13.26	%	$	217,701	4.50	%	N/A		N/A
Bank	649,221		13.42		217,664		4.50		$	314,404	6.50	%
Tier 1 (Core) Capital (to Average Assets)
Consolidated	$	676,068	10.50	%	$	257,622	4.00	%	N/A		N/A
Bank	649,221		10.09		257,341		4.00		$	321,677	5.00	%

(1) Excludes 2.5% capital conservation buffer.

The Company and the Bank at year end 2023 and 2022 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, 2023 the Bank had approximately $175,000 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 and January 1, 2024 and another 25% will be phased in on January 1, 2025 (at which time the cumulative effects of adopting CECL will have been fully phased into our regulatory capital). Under the five-year transition option, the amount of adjustments to regulatory capital that could be deferred until the phase-in period began included both the initial impact of our adoption of CECL at January 1, 2020 and 25% of subsequent changes in our allowance for credit losses during each quarter of the two-year period ended December 31, 2021.

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 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 date of grant (twenty years in the case of nonqualified stock options). The exercise price of stock options granted pursuant to the plans must be no less than the market value of the Common Stock on the date of the grant.

The plans authorize an optionee to pay the exercise price of options in cash or in common shares of the Company or in some combination of cash and common shares. An optionee may tender already-owned common shares to the Company in exercise of an option. Certain of these plans authorize an optionee to surrender the value of an unexercised option in payment of an equivalent amount of the exercise price of the option. The Company typically issues authorized but unissued common shares upon the exercise of options.

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 2023, 2022 and 2021, 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, 2023, 2022 and 2021.

Restricted Stock

During the periods presented, awards of long-term incentives were granted in the form of restricted stock. In 2019 and prior, awards that were granted to management and selected other employees under the Company’s management incentive plan were granted in tandem with cash credit entitlements in the form of 60% restricted stock grants and 40% cash credit entitlements. In 2020, awards granted under the management incentive plan were granted in tandem with cash credit entitlements in the form of 66.67% restricted stock grants and 33.33% cash credit entitlements. In 2019 and prior, the restricted stock grants and tandem cash credit entitlements, generally, vested in three annual installments of 33.3% each. In 2020, 100% of 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. Beginning in 2021, for named executive officers, awards are granted in the form of 100% restricted stock grants which will vest in one-third installments on the first, second and third anniversaries of the award date.

Awards that are granted to directors as additional retainers for their services do not include any cash credit entitlement. These director restricted stock grants are subject to forfeiture in the event that the recipient of the grant does not continue in service as a director of the Company through December 31 of the year after grant or does not satisfy certain meeting attendance requirements, at which time they generally vest 100 percent. 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 2023, 2022, and 2021:

	2023		2022		2021
Restricted Stock Expense	$	2,345	$	2,308	$	1,692
Cash Entitlement Expense	750		646		732
Tax Effect	(803)		(766)		(629)
Net of Tax	$	2,292	$	2,188	$	1,795

Unrecognized expense associated with the restricted stock grants and cash entitlements totaled $3,519, $2,781, and $2,497 as of December 31, 2023, 2022, and 2021, respectively.

The following table presents information on restricted stock grants outstanding for the period shown:

	Year Ended December 31, 2023
	Restricted Shares	Weighted Average Market Price at Grant
Outstanding at Beginning of Period	74,873	$	41.05
Granted	96,931	33.72
Issued and Vested	(49,757)	40.55
Forfeited	(5,415)	37.20
Outstanding at End of Period	116,632	35.34

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 replaced the Company’s 2009 Employee Stock Purchase Plan, which expired by its own terms on August 16, 2019. The 2019 ESPP provides for a series of 3-month offering periods, commencing on the first day and ending on the last trading day of each calendar quarter, for the purchase of the Company’s common stock by participating employees. The purchase price of the shares has been set at 95% of the fair 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 2023, the Company recorded $29 of expense, $22 net of tax, for the employee stock purchase plan. In 2022, the Company recorded $53 of expense, $39 net of tax, for the employee stock purchase plan. In 2021, the Company recorded $45 of expense, $34 net of tax, for the employee stock purchase plan. There was no unrecognized compensation expense as of December 31, 2023, 2022 and 2021 for the Employee Stock Purchase Plans.

Stock Repurchase Plan

On January 31, 2022, the Company’s Board of Directors approved a new 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 new 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 not repurchased an shares under this repurchase plan.

In August 2022, the Inflation Reduction Act of 2022 (the “IRA”) was enacted. Among other things, the IRA imposes a new 1% excise tax on the fair 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.

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Employee Benefit Plans

12 Months Ended

Dec. 31, 2023

Retirement Benefits [Abstract]

Employee Benefit Plans

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 $2,356, $2,152, and $2,050 for 2023, 2022, and 2021, 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 $7,227, $7,619, and $5,520 for 2023, 2022, and 2021, 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 $2,651 and $3,212 at December 31, 2023 and 2022, respectively. Deferred compensation expense was $261, $1,143, and $302 for 2023, 2022, and 2021, respectively. In conjunction with the plans, the Company purchased life insurance on certain directors and officers.

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:	2023		2022
Obligation at the Beginning of Year	$	1,530	$	1,592
Unrecognized Loss (Gain)	187		(71)
Components of Net Periodic Postretirement Benefit Cost
Service Cost	101		105
Interest Cost	71		35
Net Expected Benefit Payments	(142)		(131)
Amendments	—		—
Obligation at End of Year	$	1,747	$	1,530

Components of Postretirement Benefit Expense:	2023		2022		2021
Service Cost	$	101	$	105	$	119
Interest Cost	71		35		28
Amortization of Prior Service Costs	(3)		(2)		(2)
Amortization of Unrecognized Net (Gain) Loss	32		43		55
Net Postretirement Benefit Expense	201		181		200
Net Gain (Loss) During Period Recognized in Other Comprehensive Income (Loss)	158		(112)		(121)
Total Recognized in Net Postretirement Benefit Expense and Other Comprehensive Income	$	359	$	69	$	79

Assumptions Used to Determine Net Periodic Cost and Benefit Obligations:	2023		2022		2021
Discount Rate	4.64	%	4.83	%	2.31	%

Assumed Health Care Cost Trend Rates at Year-end:	2023		2022
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	2030		2028

Contributions

The Company expects to contribute $169 to its postretirement medical and life insurance plan in 2024.

Estimated Future Benefits

The following postretirement benefit payments, which reflect expected future service, are expected to be paid:

2024	$	169
2025	129
2026	167
2027	177
2028	184
2029-2033	931

Multi-Employer Pension Plan

Through the acquisition of River Valley Bancorp, the Company acquired a participation in a multi-employer defined benefit pension plan. Effective December 31, 2015, the plan was frozen. Pension expense was approximately $141 and $53 during 2023 and 2022, respectively. Specific plan asset and accumulated benefit information for the Company’s portion of the fund is not available. Under the Employee Retirement Income and Security Act of 1974 (“ERISA”), a contributor to a multi-employer pension plan may be liable in the event of complete or partial withdrawal for the benefit payments guaranteed under ERISA. The Company is in process of withdrawing from this multi-employer pension plan with finalization expected to occur in the second quarter of 2024. As a result, the Company has accrued a withdrawal liability in the amount of $101 as of December 31, 2023.

The Company participates in the Pentegra Defined Benefit Plan for Financial Institutions (the “Pentegra DB Plan”), a tax-qualified defined-benefit pension plan. The Pentegra DB Plan operates as a multi-employer plan for accounting purposes and as a multiple-employer plan under ERISA and the Internal Revenue Code. There are no collective bargaining agreements in place that require contributions to the Pentegra DB Plan.

The Pentegra DB Plan is a single plan under Internal Revenue Code Section 413(c) and, as a result, all of the assets stand behind all of the liabilities. Accordingly, under the Pentegra DB Plan, contributions made by a participating employer may be used to provide benefits to participants of other participating employers.

Total contributions made to the Pentegra DB Plan, as reported on Form 5500, equal $142,405 and $248,563 for the plan years ended June 30, 2022 and 2021, respectively. The Company’s contributions to the Pentegra DB Plan for the fiscal year ending December 31, 2023 were not more than 5% of total contributions to the Pentegra DB Plan for the year ending June 30, 2022.

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Income Taxes

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

The provision for income taxes consists of the following:

	2023		2022		2021
Current Federal	$	13,067	$	13,049	$	13,437
Current State	1,934		1,763		2,547
Deferred Federal	2,602		1,868		2,056
Deferred State	156		671		608
Total	$	17,759	$	17,351	$	18,648

Effective tax rates differ from the federal statutory rate of 21% for 2023, 2022 and 2021 applied to income before income taxes due to the following:

	2023		2022		2021
Statutory Rate Times Pre-tax Income	$	21,766	$	20,827	$	21,585
Add (Subtract) the Tax Effect of:
Income from Tax-exempt Loans and Investments	(4,951)		(5,223)		(3,872)
Non-deductible Merger Costs	—		177		—
State Income Tax, Net of Federal Tax Effect	1,651		1,923		2,492
General Business Tax Credits	(1,128)		(1,038)		(1,013)
Amortization of Tax Credit Investments	1,101		1,040		1,001
Company Owned Life Insurance	(363)		(476)		(321)
Other Differences	(317)		121		(1,224)
Total Income Taxes	$	17,759	$	17,351	$	18,648

The net deferred tax asset/(liability) at December 31 consists of the following:

	2023		2022
Deferred Tax Assets:
Allowance for Credit Losses	$	10,888	$	10,478
Lease Liability (Operating Leases)	1,313		1,585
Unrealized Loss on Securities	57,882		70,234
Deferred Compensation and Employee Benefits	1,026		1,162
Other-than-temporary Impairment	245		246
Accrued Expenses	1,224		1,325
Business Combination Fair Value Adjustments	—		205
Pension and Postretirement Plans	182		182
Other Real Estate Owned	41		70
Non-Accrual Loan Interest Income	449		629
General Business Tax Credits	—		198
Net Operating Loss Carryforward	650		828
Other	879		1,190
Total Deferred Tax Assets	74,779		88,332
Deferred Tax Liabilities:
Depreciation	(3,416)		(2,859)
Leasing Activities, Net	(12,926)		(10,983)
FHLB Stock Dividends	(455)		(488)
Prepaid Expenses	(154)		(684)
Intangibles	(2,376)		(3,181)
Deferred Loan Fees	(954)		(1,127)
Mortgage Servicing Rights	(51)		(58)
Right of Use Asset (Operating Leases)	(1,274)		(1,548)
Business Combination Fair Value Adjustments	(478)		—
Other	(1,325)		(924)
Total Deferred Tax Liabilities	(23,409)		(21,852)
Valuation Allowance	—		—
Net Deferred Tax Asset/(Liability)	$	51,370	$	66,480

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, 2023, 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, 2023 was approximately $1,070.

As of December 31, 2023, the Company had Kentucky net operating loss carryforwards of $16,462, which expire in years ranging from 2029 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, 2023, 2022, and 2021, and did not recognize any increase in unrecognized benefits during 2023 relative to any tax positions taken in 2023. Should the accrual of any interest or penalties 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, 2023, 2022, and 2021. The Company and its corporate subsidiaries file a consolidated U.S. Federal income tax return, which is subject to examination for all years after 2019. The Company and its corporate subsidiaries file combined/unitary returns in various states, which are subject to examination for all years after 2019.

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Revenue Recognition

12 Months Ended

Dec. 31, 2023

Revenue from Contract with Customer [Abstract]

Revenue Recognition

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, 2023, 2022 and 2021. 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.

	Year Ended
	December 31,
Non-interest Income	2023		2022		2021
In-Scope of Topic 606:
Wealth Management Fees	$	11,711	$	10,076	$	10,321
Service Charges on Deposit Accounts	11,538		11,457		7,723
Insurance Revenues	9,596		10,020		9,268
Interchange Fee Income	17,452		15,820		13,116
Other Operating Income:
ATM Fees	1,185		1,235		992
Wire Transfer Fees	696		737		703
Other (1)	1,251		1,251		1,182
Non-interest Income (in-scope of Topic 606)	53,429		50,596		43,305
Non-interest Income (out-of-scope of Topic 606)	6,832		8,537		16,157
Total Non-interest Income	$	60,261	$	59,133	$	59,462

(1) “Other” income includes safe deposit box rentals and other non-interest related fees totaling $1.2 million, $1.2 million, and $1.2 million for the years ended December 31, 2023, 2022, and 2021, 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 earns insurance revenue from commissions derived from the sale of personal and corporate property and casualty insurance products. These commissions are primarily earned over time as the Company provides 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.

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Per Share Data

12 Months Ended

Dec. 31, 2023

Earnings Per Share [Abstract]

Per Share Data

Per Share Data

The computation of Basic Earnings per Share and Diluted Earnings per Share are provided below:

	2023		2022		2021
Basic Earnings per Share:
Net Income	$	85,888	$	81,825	$	84,137
Weighted Average Shares Outstanding	29,557,567		29,464,591		26,537,311
Basic Earnings per Share	$	2.91	$	2.78	$	3.17
Diluted Earnings per Share:
Net Income	$	85,888	$	81,825	$	84,137
Weighted Average Shares Outstanding	29,557,567		29,464,591		26,537,311
Potentially Dilutive Shares, Net	—		—		—
Diluted Weighted Average Shares Outstanding	29,557,567		29,464,591		26,537,311
Diluted Earnings per Share	$	2.91	$	2.78	$	3.17

There were no anti-dilutive shares at December 31, 2023, 2022, and 2021. There were no stock options outstanding at December 31, 2023, 2022 and 2021. Restricted stock units are participating shares and included in outstanding shares for purposes of the calculation of earnings per share.

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Leases

12 Months Ended

Dec. 31, 2023

Leases [Abstract]

Leases

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, 2023		December 31, 2022
Finance Lease Cost:
Amortization of Right-of-Use Assets	$	210	$	210
Interest on Lease Liabilities	304		326
Operating Lease Cost	1,424		1,508
Short-term Lease Cost	—		—
Total Lease Cost	$	1,938	$	2,044

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

	December 31, 2023		December 31, 2022
Weighted Average Remaining Lease Term:
Finance Leases	8 years		9 years
Operating Leases	7 years		7 years
Weighted Average Discount Rate:
Finance Leases	11.37	%	11.41	%
Operating Leases	3.07	%	2.98	%

Supplemental balance sheet information related to leases were as follows:

	December 31, 2023		December 31, 2022
Finance Leases
Premises, Furniture and Equipment, Net	$	1,648	$	1,858
Other Borrowings	$	2,642	$	2,857
Operating Leases
Operating Lease Right-of-Use Assets	$	5,180	$	6,297
Operating Lease Liabilities	$	5,337	$	6,447

Supplemental cash flow information related to leases were as follows:

	December 31, 2023		December 31, 2022
Cash Paid for Amounts in the Measurement of Lease Liabilities:
Operating Cash Flows from Finance Leases	$	304	$	326
Operating Cash Flows from Operating Leases	1,395		1,449
Financing Cash Flows from Finance Leases	211		186

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

	December 31, 2023
	Finance Leases		Operating Leases
Year 1	$	519	$	1,256
Year 2	519		1,047
Year 3	519		845
Year 4	486		662
Year 5	438		620
Thereafter	1,509		1,488
Total Lease Payments	3,990		5,918
Less Imputed Interest	(1,348)		(581)
Total	$	2,642	$	5,337

Leases

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, 2023		December 31, 2022
Finance Lease Cost:
Amortization of Right-of-Use Assets	$	210	$	210
Interest on Lease Liabilities	304		326
Operating Lease Cost	1,424		1,508
Short-term Lease Cost	—		—
Total Lease Cost	$	1,938	$	2,044

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

	December 31, 2023		December 31, 2022
Weighted Average Remaining Lease Term:
Finance Leases	8 years		9 years
Operating Leases	7 years		7 years
Weighted Average Discount Rate:
Finance Leases	11.37	%	11.41	%
Operating Leases	3.07	%	2.98	%

Supplemental balance sheet information related to leases were as follows:

	December 31, 2023		December 31, 2022
Finance Leases
Premises, Furniture and Equipment, Net	$	1,648	$	1,858
Other Borrowings	$	2,642	$	2,857
Operating Leases
Operating Lease Right-of-Use Assets	$	5,180	$	6,297
Operating Lease Liabilities	$	5,337	$	6,447

Supplemental cash flow information related to leases were as follows:

	December 31, 2023		December 31, 2022
Cash Paid for Amounts in the Measurement of Lease Liabilities:
Operating Cash Flows from Finance Leases	$	304	$	326
Operating Cash Flows from Operating Leases	1,395		1,449
Financing Cash Flows from Finance Leases	211		186

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

	December 31, 2023
	Finance Leases		Operating Leases
Year 1	$	519	$	1,256
Year 2	519		1,047
Year 3	519		845
Year 4	486		662
Year 5	438		620
Thereafter	1,509		1,488
Total Lease Payments	3,990		5,918
Less Imputed Interest	(1,348)		(581)
Total	$	2,642	$	5,337

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Commitments and Off-balance Sheet Items

12 Months Ended

Dec. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Off-balance Sheet Items

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.

Commitments and contingent liabilities are summarized as follows, at December 31:

	2023				2022
	Fixed Rate		Variable Rate		Fixed Rate		Variable Rate
Commitments to Fund Loans:
Consumer Lines	$	13,978	$	689,295	$	15,238	$	576,784
Commercial Operating Lines	120,352		546,016		161,058		611,357
Residential Mortgages	11,855		3,521		15,129		5,327
Total Commitments to Fund Loans	$	146,185	$	1,238,832	$	191,425	$	1,193,468
Commitments to Sell Loans:
Mandatory	$	—	$	—	$	—	$	—
Non-mandatory	$	5,992	$	—	$	8,731	$	—
Standby Letters of Credit	$	3,340	$	16,161	$	3,047	$	17,117

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 27 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.

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Fair Value

12 Months Ended

Dec. 31, 2023

Fair Value Disclosures [Abstract]

Fair Value

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, 2023, the Company held $75 in Level 3 securities which consist of non-rated Obligations of State and Political Subdivisions and $984 in Level 3 securities which consist of non-rated MBS/CMO. Absent the credit rating, significant

assumptions must be made such that the credit risk input becomes an unobservable input and thus these investment securities are reported by the Company in a Level 3 classification. 

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

Individually Analyzed 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.

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

Assets and Liabilities Measured on a Recurring Basis

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

	Fair Value Measurements at December 31, 2023 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	$	—	$	—	$	—	$	—
Obligations of State and Political Subdivisions	—		768,800		75		768,875
MBS/CMO	—		644,056		984		645,040
US Gov’t Sponsored Entities & Agencies	—		182,917		—		182,917
Total Securities	$	—	$	1,595,773	$	1,059	$	1,596,832
Loans Held-for-Sale	$	—	$	5,226	$	—	$	5,226
Derivative Assets	$	—	$	7,458	$	—	$	7,458
Derivative Liabilities	$	—	$	7,467	$	—	$	7,467

	Fair Value Measurements at December 31, 2022 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	$	64,119	$	—	$	—	$	64,119
Obligations of State and Political Subdivisions	—		777,769		83		$	777,852
MBS/CMO	—		713,775		906		$	714,681
US Gov’t Sponsored Entities & Agencies	—		205,017		—		205,017
Total Securities	$	64,119	$	1,696,561	$	989	$	1,761,669
Loans Held-for-Sale	$	—	$	8,600	$	—	$	8,600
Derivative Assets	$	—	$	9,899	$	—	$	9,899
Derivative Liabilities	$	—	$	9,749	$	—	$	9,749

As of December 31, 2023 and 2022, the aggregate fair value, contractual balance (including accrued interest), and gain or loss on Loans Held-for-Sale were as follows:

	2023		2022
Aggregate Fair Value	$	5,226	$	8,600
Contractual Balance	5,125		8,474
Gain (Loss)	101		126

The total amount of gains and losses from changes in fair value included in earnings for the years ended December 31, 2023, 2022 and 2021 for loans held for sale were $(25), $(163), and $(237), respectively.

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 years ended December 31, 2023 and 2022:

	Obligations of State and Political Subdivisions				MBS/CMO
	2023		2022		2023		2022
Balance of Recurring Level 3 Assets at January 1	$	83	$	—	$	906	$	—
Total Gains (Losses) Included in Other Comprehensive Income	(8)		(17)		78		(76)
Maturities / Calls	—		—		—		—
Acquired through Bank Acquisition	—		100		—		982
Balance of Recurring Level 3 Assets at December 31	$	75	$	83	$	984	$	906

Of the total gain/loss included in earnings for the years ended December 31, 2023 and 2022, $70 and $(93) was attributable to other changes in fair value, respectively.

Assets and Liabilities Measured on a Non-Recurring Basis

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

	Fair Value Measurements at December 31, 2023 Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Assets:
Individually Analyzed Loans
Commercial and Industrial Loans	$	—	$	—	$	2,506	$	2,506
Commercial Real Estate Loans	—		—		3,447		3,447
Agricultural Loans	—		—		2,395		2,395
Consumer Loans	—		—		9		9
Home Equity Loans	—		—		326		326
Residential Mortgage Loans	—		—		450		450

	Fair Value Measurements at December 31, 2022 Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Assets:
Individually Analyzed Loans
Commercial and Industrial Loans	$	—	$	—	$	1,858	$	1,858
Commercial Real Estate Loans	—		—		10,040		10,040
Agricultural Loans	—		—		2,970		2,970
Consumer Loans	—		—		8		8
Home Equity Loans	—		—		368		368
Residential Mortgage Loans	—		—		718		718

There was no Other Real Estate carried at fair value less costs to sell at December 31, 2023 and 2022. No charge to earnings was included in the years ended December 31, 2023 and 2022.

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, 2023 and 2022:

December 31, 2023	Fair Value		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
Individually Analyzed Loans - Commercial and Industrial Loans	$	2,506	Sales comparison approach	Adjustment for physical condition of comparable properties sold	23% - 100% (33%)
Individually Analyzed Loans - Commercial Real Estate Loans	$	3,447	Sales comparison approach	Adjustment for physical condition of comparable properties sold	20% - 68% (42%)
Individually Analyzed Loans - Agricultural Loans	$	2,395	Sales comparison approach	Adjustment for physical condition of comparable properties sold	31% - 100% (51%)
Individually Analyzed Loans - Consumer Loans	$	9	Sales comparison approach	Adjustment for physical condition of comparable properties sold	20% - 20% (20%)
Individually Analyzed Loans - Home Equity Loans	$	326	Sales comparison approach	Adjustment for physical condition of comparable properties sold	20% - 20% (20%)
Individually Analyzed Loans - Residential Mortgage Loans	$	450	Sales comparison approach	Adjustment for physical condition of comparable properties sold	20% -20% (20%)

December 31, 2022	Fair Value		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
Individually Analyzed Loans - Commercial and Industrial Loans	$	1,858	Sales comparison approach	Adjustment for physical condition of comparable properties sold	0% - 100% (40%)
Individually Analyzed Loans - Commercial Real Estate Loans	$	10,040	Sales comparison approach	Adjustment for physical condition of comparable properties sold	30% - 100% (37%)
Individually Analyzed Loans - Agricultural Loans	$	2,970	Sales comparison approach	Adjustment for physical condition of comparable properties sold	30% - 100% (48%)
Individually Analyzed Loans - Consumer Loans	$	8	Sales comparison approach	Adjustment for physical condition of comparable properties sold	27% - 100% (20%)
Individually Analyzed Loans - Home Equity Loans	$	368	Sales comparison approach	Adjustment for physical condition of comparable properties sold	20% - 51% (20%)
Individually Analyzed Loans - Residential Mortgage Loans	$	718	Sales comparison approach	Adjustment for physical condition of comparable properties sold	20% - 100% (21%)

 

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, 2023 and 2022. 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, 2023 Using
	Carrying Value		Level 1		Level 2		Level 3		Total
Financial Assets:
Cash and Short-term Investments	$	115,330	$	78,805	$	36,525	$	—	$	115,330
Interest Bearing Time Deposits with Banks	500		—		500		—		500
Loans, Net	3,918,184		—		—		3,801,738		3,801,738
Accrued Interest Receivable	30,595		—		10,014		20,581		30,595
Financial Liabilities:
Demand, Savings, and Money Market Deposits	(4,485,921)		(4,485,921)		—		—		(4,485,921)
Time Deposits	(767,042)		—		(759,217)		—		(759,217)
Short-term Borrowings	(65,968)		(25,000)		(40,968)		—		(65,968)
Long-term Debt	(127,969)		—		(52,522)		(74,562)		(127,084)
Accrued Interest Payable	(7,073)		—		(6,701)		(372)		(7,073)

			Fair Value Measurements at December 31, 2022 Using
	Carrying Value		Level 1		Level 2		Level 3		Total
Financial Assets:
Cash and Short-term Investments	$	117,381	$	75,476	$	41,905	$	—	$	117,381
Interest Bearing Time Deposits with Banks	500		—		500		—		500
Loans, Net	3,724,804		—		—		3,688,903		3,688,903
Accrued Interest Receivable	27,741		38		10,863		16,840		27,741
Financial Liabilities:
Demand, Savings, and Money Market Deposits	(4,921,582)		(4,921,582)		—		—		(4,921,582)
Time Deposits	(428,469)		—		(426,184)		—		(426,184)
Short-term Borrowings	(101,161)		(36,200)		(64,961)		—		(101,161)
Long-term Debt	(102,645)		—		(26,830)		(72,272)		(99,102)
Accrued Interest Payable	(1,513)		—		(1,205)		(308)		(1,513)

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Segment Information

12 Months Ended

Dec. 31, 2023

Segment Reporting [Abstract]

Segment Information

Segment Information

The Company’s operations include three primary segments: core banking, wealth management services, and insurance operations. 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. The core banking segment also involves the sale of residential mortgage loans in the secondary

market. The wealth management segment involves providing trust, investment advisory, brokerage and retirement planning services to customers. The insurance segment offers a full range of personal and corporate property and casualty insurance products, primarily in the Company’s banking subsidiary’s local markets.

The core banking segment is comprised by the Company’s banking subsidiary, German American Bank, which operated through 76 banking offices at December 31, 2023. Net interest income from loans and investments funded by deposits and borrowings is the primary revenue for the core-banking segment. The wealth management segment’s revenues are comprised primarily of fees generated by the 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 primarily consists of German American Insurance, Inc., which provides a full line of personal and corporate insurance products. Commissions derived from the sale of insurance products are the primary source of revenue for the insurance segment.

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 three segments are the same as those of the Company. The evaluation process for segments does not include holding company income and expense. Holding company amounts are the primary differences between segment amounts and consolidated totals, and are reflected in the column labeled “Other” below, along with amounts to eliminate transactions between segments.

	Core Banking		Wealth Management Services		Insurance		Other		Consolidated Totals
Year Ended December 31, 2023
Net Interest Income	$	195,215	$	120	$	56	$	(4,958)	$	190,433
Net Gains on Sales of Loans	2,363		—		—		—		2,363
Net Gains on Securities	40		—		—		—		40
Wealth Management Fees	5		11,706		—		—		11,711
Insurance Revenues	1		24		9,572		(1)		9,596
Noncash Items:
Provision for Credit Losses	2,550		—		—		—		2,550
Depreciation and Amortization	9,025		31		48		456		9,560
Income Tax Expense (Benefit)	18,698		695		556		(2,190)		17,759
Segment Profit (Loss)	85,037		2,974		1,682		(3,805)		85,888
Segment Assets at December 31, 2023	6,137,687		9,508		3,509		1,494		6,152,198

	Core Banking		Wealth Management Services		Insurance		Other		Consolidated Totals
Year Ended December 31, 2022
Net Interest Income	$	204,259	$	46	$	27	$	(3,748)	$	200,584
Net Gains on Sales of Loans	3,818		—		—		—		3,818
Net Gains on Securities	589		—		—		(27)		562
Wealth Management Fees	4		10,072		—		—		10,076
Insurance Revenues	31		12		9,977		—		10,020
Noncash Items:
Provision for Credit Losses	6,350		—		—		—		6,350
Depreciation and Amortization	9,571		41		48		456		10,116
Income Tax Expense (Benefit)	17,873		691		720		(1,933)		17,351
Segment Profit (Loss)	82,965		2,157		2,281		(5,578)		81,825
Segment Assets at December 31, 2022	6,152,346		8,846		14,706		(19,907)		6,155,991

	Core Banking		Wealth Management Services		Insurance		Other		Consolidated Totals
Year Ended December 31, 2021
Net Interest Income	$	163,395	$	42	$	11	$	(2,618)	$	160,830
Net Gains on Sales of Loans	8,267		—		—		—		8,267
Net Gains on Securities	2,247		—		—		—		2,247
Wealth Management Fees	4		10,317		—		—		10,321
Insurance Revenues	14		7		9,247		—		9,268
Noncash Items:
Provision for Credit Losses	(6,500)		—		—		—		(6,500)
Depreciation and Amortization	8,346		46		57		321		8,770
Income Tax Expense (Benefit)	18,774		826		652		(1,604)		18,648
Segment Profit (Loss)	82,066		2,543		2,034		(2,506)		84,137
Segment Assets at December 31, 2021	5,595,721		6,115		12,245		(5,542)		5,608,539

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Parent Company Financial Statements

12 Months Ended

Dec. 31, 2023

Condensed Financial Information Disclosure [Abstract]

Parent Company Financial Statements

The condensed financial statements of German American Bancorp, Inc. are presented below:

CONDENSED BALANCE SHEETS

	December 31,
	2023		2022
ASSETS
Cash	$	66,835	$	46,541
Securities Available-for-Sale	4,112		—
Other Investments	353		353
Investment in Subsidiary Bank	652,452		566,494
Investment in Non-banking Subsidiaries	1,975		6,747
Other Assets	15,097		19,165
Total Assets	$	740,824	$	639,300
LIABILITIES
Borrowings	$	75,327	$	74,788
Other Liabilities	1,939		6,119
Total Liabilities	77,266		80,907
SHAREHOLDERS’ EQUITY
Common Stock	29,585		29,493
Additional Paid-in Capital	389,411		387,171
Retained Earnings	461,622		405,167
Accumulated Other Comprehensive Income (Loss)	(217,060)		(263,438)
Total Shareholders’ Equity	663,558		558,393
Total Liabilities and Shareholders’ Equity	$	740,824	$	639,300

CONDENSED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS)

	Years Ended December 31,
	2023		2022		2021
INCOME
Dividends from Subsidiaries
Bank	$	50,000	$	35,000	$	65,000
Non-bank	—		—		1,470
Interest Income	277		104		109
Other Income (Loss)	(28)		31		11
Total Income	50,249		35,135		66,590
EXPENSES
Salaries and Employee Benefits	535		535		537
Professional Fees	777		1,989		1,256
Occupancy and Equipment Expense	8		8		10
Interest Expense	5,360		3,963		2,763
Other Expenses	1,183		1,162		1,200
Total Expenses	7,863		7,657		5,766
INCOME BEFORE INCOME TAXES AND EQUITY IN UNDISTRIBUTED INCOME OF SUBSIDIARIES	42,386		27,478		60,824
Income Tax Benefit	2,215		1,947		1,607
INCOME BEFORE EQUITY IN UNDISTRIBUTED INCOME OF SUBSIDIARIES	44,601		29,425		62,431
Equity in Undistributed Income of Subsidiaries	41,287		52,400		21,706
NET INCOME	85,888		81,825		84,137
Other Comprehensive Income (Loss):
Changes in Unrealized Gain (Loss) on Securities, Available-for-Sale	46,378		(278,976)		(19,891)
Changes in Unrecognized Loss in Postretirement Benefit Obligation, Net	—		54		—
TOTAL COMPREHENSIVE INCOME (LOSS)	$	132,266	$	(197,097)	$	64,246

CONDENSED STATEMENTS OF CASH FLOWS

	Years Ended December 31,
	2023		2022		2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income	$	85,888	$	81,825	$	84,137
Adjustments to Reconcile Net Income to Net Cash from Operations
Change in Other Assets	3,929		3,861		(3,939)
Change in Other Liabilities	(3,113)		1,200		863
Equity Based Compensation	2,332		2,330		1,723
Equity in Excess Undistributed Income of Subsidiaries	(41,287)		(52,400)		(21,706)
Net Cash from Operating Activities	47,749		36,816		61,078
CASH FLOWS FROM INVESTING ACTIVITIES
Cash Used for Business Acquisitions	—		(49,644)		—
Net Equity in Dissolution of Subsidiary	1,978		—		—
Net Cash from Investing Activities	1,978		(49,644)		—
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends Paid	(29,433)		(27,022)		(22,220)
Net Cash from Financing Activities	(29,433)		(27,022)		(22,220)
Net Change in Cash and Cash Equivalents	20,294		(39,850)		38,858
Cash and Cash Equivalents at Beginning of Year	46,541		86,391		47,533
Cash and Cash Equivalents at End of Year	$	66,835	$	46,541	$	86,391

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Business Combinations, Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2023

Business Combinations, Goodwill and Intangible Assets [Abstract]

Business Combinations, Goodwill and Intangible Assets

Business Combinations, Goodwill and Intangible Assets

Business Combinations

On January 1, 2022, the Company acquired Citizens Union Bancorp of Shelbyville, Inc. (“CUB”) through the merger of CUB with and into the Company. This was immediately followed by the merger of Citizens Union Bank of Shelbyville, Inc., a wholly-owned subsidiary of CUB, into the Company’s subsidiary bank, German American Bank. CUB, headquartered in Shelbyville, Kentucky, operated 15 retail banking offices located in Shelby, Jefferson, Spencer, Bullitt, Oldham, Owen, Gallatin and Hardin counties in Kentucky through Citizens Union Bank of Shelbyville, Inc.

As of the closing of the transaction, CUB had total assets of $1,108,546, total loans of $683,807, and total deposits of $930,533. 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 CUB 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 $12,323 of direct acquisition costs and recorded $58,596 of goodwill and $7,572 of intangible assets. The goodwill of $58,596 arising from the acquisition consisted largely of synergies and the cost savings resulting from the combining of the operations of the companies. This goodwill will be evaluated annually for impairment and is non-deductible for tax purposes. The intangible assets are related to core deposits and are being amortized over 8 years. The following table summarizes the fair value of the total consideration transferred as a part of the CUB 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 Options and Fractional Shares	$	942
Cash Consideration	49,863
Equity Instruments	111,914
Fair Value of Total Consideration Transferred	$	162,719
Recognized Amounts of Identifiable Assets Acquired and Liabilities Assumed:
Cash	$	20,244
Federal Funds Sold and Other Short-term Investments	238,325
Interest-bearing Time Deposits with Banks	250
Securities	102,233
Loans	678,142
Stock in FHLB of Indianapolis and Other Restricted Stock, at Cost	10,078
Premises, Furniture & Equipment	19,805
Other Real Estate	40
Intangible Assets	7,572
Company Owned Life Insurance	12,881
Accrued Interest Receivable and Other Assets	18,309
Deposits - Non-interest Bearing	(237,472)
Deposits - Interest Bearing	(696,750)
FHLB Advances and Other Borrowings	(60,837)
Accrued Interest Payable and Other Liabilities	(8,697)
Total Identifiable Net Assets	$	104,123
Goodwill	$	58,596

Under the terms of the merger agreement, each CUB common shareholder of record at the effective time of the merger became entitled to receive a cash payment of $13.44 and a 0.7739 share of common stock of the Company for each of their former shares of CUB common stock. As a result, in connection with the closing of the merger on January 1, 2022, the Company issued 2,870,975 shares of its common stock to the former shareholders of CUB and paid cash consideration in the aggregate amount of $50.8 million.

This acquisition is consistent with the Company’s strategy to build a regional presence in central and western Kentucky. 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 $29,868 on the date of acquisition. The gross contractual amounts receivable relating to the purchased financial assets with credit deterioration was $34,453. The Company estimates, on the date of acquisition, that $3,117 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, 2021 after giving effect to certain adjustments. The unaudited pro forma information for the year ended December 30, 2022 and 2021 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 12/31/2022		Unaudited Pro Forma Year Ended 12/31/2021
Net Interest Income	$	200,584	$	195,691
Non-interest Income	59,133		64,951
Total Revenue	259,717		260,642
Provision for Credit Losses	50		(8,707)
Non-interest Expense	141,868		142,978
Income Before Income Taxes	117,799		126,371
Income Tax Expense	21,858		24,260
Net Income	$	95,941	$	102,111
Earnings Per Share and Diluted Earnings Per Share	$	3.26	$	3.47

For the year ended December 31, 2022, the above pro forma financial information excludes non-recurring merger costs that totaled $12,323 on a pre-tax basis and Day 1 provision for credit losses under the CECL model of $6,300 on a pre-tax basis.

Goodwill

The changes in the carrying amount of goodwill for the periods ended December 31, 2023, 2022, and 2021, were classified as follows:

	2023		2022		2021
Beginning of Year	$	180,357	$	121,761	$	121,956
Acquired Goodwill	—		58,596		(195)
Impairment	—		—		—
End of Year	$	180,357	$	180,357	$	121,761

Of the $180,357 carrying amount of goodwill, $179,025 is allocated to the core banking segment, and $1,332 is allocated to the insurance segment for both periods ended December 31, 2023 and 2022. Of the $121,761 carrying amount of goodwill, $120,429 is allocated to the core banking segment, and $1,332 is allocated to the insurance segment for the period ended December 31, 2021. The decrease of $195 in 2021 is attributable to the sale of two branches located in Lexington, Kentucky.

Impairment exists when a reporting unit’s carrying value of goodwill exceeds its fair value. At December 31, 2023, 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.

Acquired Intangible Assets

Acquired intangible assets were as follows as of year end:

	2023
	Gross Amount		Accumulated Amortization
Core Banking
Core Deposit Intangible	$	33,247	$	(27,811)
Branch Acquisition Intangible	257		(257)
Insurance
Customer List	5,408		(5,408)
Total	$	38,912	$	(33,476)

	2022
	Gross Amount		Accumulated Amortization
Core Banking
Core Deposit Intangible	$	33,247	$	(25,001)
Branch Acquisition Intangible	257		(257)
Insurance
Customer List	5,408		(5,378)
Total	$	38,912	$	(30,636)

Amortization Expense was $2,840, $3,711 and $2,731, for 2023, 2022 and 2021, respectively.

Estimated amortization expense for each of the next five years is as follows:

2024	$	2,032
2025	1,394
2026	916
2027	593
2028	361

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Other Comprehensive Income (Loss)

12 Months Ended

Dec. 31, 2023

Equity [Abstract]

Other Comprehensive Income (Loss)

Other Comprehensive Income (Loss)

The tables below summarize the changes in accumulated other comprehensive income (loss) by component for the years ended December 31, 2023 and 2022, net of tax:

December 31, 2023	Unrealized Gains and Losses on Available-for-Sale Securities		Postretirement Benefit Items		Total
Beginning Balance	$	(262,924)	$	(514)	$	(263,438)
Other Comprehensive Income (Loss) Before Reclassification	46,410		—		46,410
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)	(32)		—		(32)
Net Current Period Other
Comprehensive Income (Loss)	46,378		—		46,378
Ending Balance	$	(216,546)	$	(514)	$	(217,060)

December 31, 2022	Unrealized Gains and Losses on Available-for-Sale Securities		Postretirement Benefit Items		Total
Beginning Balance	$	16,052	$	(568)	$	15,484
Other Comprehensive Income (Loss) Before Reclassification	(278,532)		—		(278,532)
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)	(444)		54		(390)
Net Current Period Other
Comprehensive Income (Loss)	(278,976)		54		(278,922)
Ending Balance	$	(262,924)	$	(514)	$	(263,438)

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 (Loss) 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

The table below summarizes the classifications out of accumulated other comprehensive income (loss) by component for the year ended December 31, 2022:

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	$	562	Net Gain (Loss) on Securities
	(118)		Income Tax Expense
	444		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	$	444

The table below summarizes the classifications out of accumulated other comprehensive income (loss) by component for the year ended December 31, 2021:

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	$	2,247	Net Gain (Loss) on Securities
	(472)		Income Tax Expense
	1,775		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	$	1,775

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Pay vs Performance Disclosure - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Pay vs Performance Disclosure
Net Income	$ 85,888	$ 81,825	$ 84,137

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Insider Trading Arrangements	3 Months Ended
	Dec. 31, 2023
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

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Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2023

Accounting Policies [Abstract]

Description of Business and Basis of Presentation

Description of Business and Basis of Presentation

The operations of German American Bancorp, Inc. (the “Company”) are primarily comprised of three business segments: core banking, trust and investment advisory 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

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, 2023, and 2022, 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

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.

Mortgage loans held for sale are generally sold on a servicing released 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

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 $20,580 at December 31, 2023 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.

Purchased Credit Deteriorated (PCD) Loans

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.

Allowance for Credit Losses - Loans and Credit Quality Indicators

Allowance for Credit Losses - Loans

The allowance for credit losses is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged off against the allowance when management believes the

uncollectibility of a loan balance is confirmed. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off.

The Company utilizes the static pool methodology in determining expected future credit losses. Static pool analysis includes segmenting and tracking loans over a period of time based on similar risk characteristics such as loan structure, collateral type, industry of borrower and concentrations, contractual terms and credit risk indicators. Static pool calculates a loss rate on a closed pool of loans that existed on a specified start date based upon the remaining life of each segment. The Company’s expected loss estimate is anchored in historical credit loss experience, with an emphasis on all available portfolio data. The Company’s historical look-back period includes January 2014 through the current period, on a monthly basis.

The Company estimates the allowance balance using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Historical loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for changes in underwriting standards, portfolio mix, delinquency level, changes in environmental conditions, unemployment rates, risk classifications and collateral values. The Company separately assigns allocations for substandard and special mention commercial and agricultural credits as well as other categories of loans based on migration analysis techniques. The migration analysis factors are calculated using a transition matrix to determine the likelihood of a customer’s asset quality rating migrating from its current rating to any other rating.

The allowance for credit losses is measured on a collective (pooled) basis when similar risk characteristics exist. The Company has identified the following portfolio segments and identified the risk characteristics of each portfolio listed below:

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

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.

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.

Key indicators utilized in forecasting for the allowance calculations include unemployment rates and gross domestic product as well as commodity prices for the agricultural segment of the portfolio. There has been some improvement in these factors over previous periods; however, rising interest rates and the expanded inflationary impact on consumer discretionary spending were considered in the qualitative factors to determine the allowance for credit losses.

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.

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.

Allowance for Credit Losses - Available-For-Sale Securities and Off-Balance Sheet Credit Exposures

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 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.

Federal Home Loan Bank (FHLB) Stock

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

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

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 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 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 6 to 10 years.

Company Owned Life Insurance

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

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

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.

Restrictions on Cash

Restrictions on Cash

At December 31, 2023 and 2022, the Company was not required to have balance on deposits with the Federal Reserve, or as cash on hand.

Long-term Assets

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

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)

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 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.

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

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

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

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 Value of Financial Instruments

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 15. 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

Recently Adopted Accounting Guidance

In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting”. These amendments provide temporary optional guidance to ease the potential burden in accounting for reference rate reform. The ASU provides optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. It is intended to help stakeholders during the global market-wide reference rate transition period. In January 2021, the FASB issued ASU 2021-01 which clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. The guidance is effective for all entities as of March 12, 2020 through December 31, 2024. The Company has discontinued originating LIBOR based loans and has a plan in place to transition LIBOR indexed loans primarily to term SOFR or other indices.

On March 31, 2022, the FASB issued ASU 2022-02, “Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures” which eliminates the troubled debt restructuring recognition and measurement guidance and instead requires an entity to evaluate whether the modification represents a new loan or a continuation of an existing loan. The amendments also enhance existing disclosures and include new disclosure requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. To improve consistency for vintage disclosures, the ASU requires that public business entities disclose current-period gross write-offs by year of origination for financing receivables and net investments in leases within the scope of Subtopic 326-20. For entities that have adopted ASU 2016-13, the amendments are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. For entities that have not adopted ASU 2016-13, the effective dates for the amendments are the same as the effective dates in ASU 2016-13. Early adoption is permitted if ASU 2016-13 has been adopted, including adoption in an interim period. If an entity elects to adopt the amendments in an interim period, the guidance should be applied as of the beginning of the fiscal year that includes the interim period. The Company adopted the new guidance prospectively with no material impact to the consolidated financial statements.

The SEC released Staff Accounting Bulletin No. 121 (“SAB 121”), which provides interpretive guidance regarding the accounting for obligations to safeguard crypto-assets an entity holds for its customers, either directly through an agent or another third party acting on its behalf. SAB 121 requires an entity to recognize a liability on its balance sheet to reflect the obligation to safeguard the crypto-assets of others, along with a corresponding safeguarding asset, both of which are measured

at fair value. The Company has completed an evaluation and concluded that it does not have a safeguarding obligation under SAB 121 and therefore the disclosures do not apply.

Newly Issued But Not Yet Effective Accounting Standards

On March 29, 2023, the FASB issued ASU 2023-02, “Investments - Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method” to expand use of the proportional amortization method of accounting to equity investments in tax credit programs beyond those in low-income-housing tax credit (LIHTC) programs. The amendments in this update permit reporting entities to account for certain tax equity investments, regardless of the tax credit program from which the income tax credits are received, using the proportional amortization method if certain conditions are met. This guidance provides clarifications to address interpretive issues and prescribes specific information that reporting entities must disclose about tax credit investments each period.

This ASU is effective for reporting periods beginning after December 15, 2023, for public business entities. For all other entities, the ASU is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted, including early adoption in any interim period as of the beginning of the fiscal year that includes that interim period. Entities have the option of applying the forthcoming revisions using either a modified retrospective or retrospective adoption approach. The Company is currently evaluating the impact of adopting this new guidance, however, adoption of the standard is not expected to have a material impact on the Company’s financial statements or disclosures.

Revenue Recognition

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 earns insurance revenue from commissions derived from the sale of personal and corporate property and casualty insurance products. These commissions are primarily earned over time as the Company provides 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.

Leases

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.

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, 2023, the Company held $75 in Level 3 securities which consist of non-rated Obligations of State and Political Subdivisions and $984 in Level 3 securities which consist of non-rated MBS/CMO. Absent the credit rating, significant

assumptions must be made such that the credit risk input becomes an unobservable input and thus these investment securities are reported by the Company in a Level 3 classification. 

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

Individually Analyzed 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.

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.

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Securities (Tables)

12 Months Ended

Dec. 31, 2023

Investments, Debt and Equity Securities [Abstract]

Schedule of Securities Available-for-Sale

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
2023
U.S. Treasury	$	—	$	—	$	—	$	—
Obligations of State and Political Subdivisions	889,940		1,309		(122,374)		768,875
MBS/CMO	761,025		28		(116,013)		645,040
US Gov’t Sponsored Entities & Agencies	220,295		—		(37,378)		182,917
Total	$	1,871,260	$	1,337	$	(275,765)	$	1,596,832
2022
U.S. Treasury	$	64,097	$	22	$	—	$	64,119
Obligations of State and Political Subdivisions	939,193		673		(162,014)		777,852
MBS/CMO	846,519		—		(131,838)		714,681
US Gov’t Sponsored Entities & Agencies	245,017		—		(40,000)		205,017
Total	$	2,094,826	$	695	$	(333,852)	$	1,761,669

Schedule of Securities by Contractual Maturity

The amortized cost and fair value of securities at December 31, 2023 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	$	1,768	$	1,766
Due after one year through five years	17,548		17,589
Due after five years through ten years	65,213		62,296
Due after ten years	805,411		687,224
MBS/CMO	761,025		645,040
US Gov’t Sponsored Entities & Agencies	220,295		182,917
Total	$	1,871,260	$	1,596,832

Schedule of Proceeds from the Sales of Securities

	2023		2022		2021
Proceeds from the Sales of Securities are summarized below:	Available- for-Sale		Available- for-Sale		Available- for-Sale
Proceeds from Sales	$	114,259	$	145,237	$	111,124
Gross Gains on Sales	346		750		2,399
Gross Losses on Sales	306		188		152
Income Taxes on Net Gains	8		118		472

Schedule of Securities with Unrealized Losses

Below is a summary of securities with unrealized losses as December 31, 2023 and 2022, 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, 2023
Obligations of State and Political Subdivisions	$	13,469	$	(175)	$	668,223	$	(122,199)	$	681,692	$	(122,374)
MBS/CMO	135		(1)		643,172		(116,012)		643,307		(116,013)
US Gov’t Sponsored Entities & Agencies	—		—		182,917		(37,378)		182,917		(37,378)
Total	$	13,604	$	(176)	$	1,494,312	$	(275,589)	$	1,507,916	$	(275,765)

	Less than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
December 31, 2022
Obligations of State and Political Subdivisions	$	579,267	$	(117,423)	$	122,992	$	(44,591)	$	702,259	$	(162,014)
MBS/CMO	240,344		(20,920)		474,327		(110,918)		714,671		(131,838)
US Gov’t Sponsored Entities & Agencies	198,702		(38,818)		6,314		(1,182)		205,016		(40,000)
Total	$	1,018,313	$	(177,161)	$	603,633	$	(156,691)	$	1,621,946	$	(333,852)

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Derivatives (Tables)

12 Months Ended

Dec. 31, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Fair Value Hedges Included in the Consolidated Balance Sheets

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

	December 31, 2023				December 31, 2022
	Notional Amount		Fair Value		Notional Amount		Fair Value
Included in Other Assets:
Interest Rate Swaps	$	139,751	$	7,458	$	134,684	$	9,899
Included in Other Liabilities:
Interest Rate Swaps	$	139,751	$	7,467	$	134,684	$	9,749

Schedule of Effect of Derivatives Instruments on the Consolidated Statements of Income

The following table presents the effect of derivative instruments on the Consolidated Statements of Income for the years ended December 31, 2023, 2022 and 2021 is as follows: 

	2023		2022		2021
Interest Rate Swaps:
Included in Other Income	$	344	$	403	$	1,131

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Loans (Tables)

12 Months Ended

Dec. 31, 2023

Receivables [Abstract]

Schedule of Loans Classifications

Loans were comprised of the following classifications at December 31: 

	2023		2022
Commercial:
Commercial and Industrial Loans	$	589,541	$	620,106
Commercial Real Estate Loans	2,121,835		1,966,884
Agricultural Loans	423,803		417,413
Leases	71,988		56,396
Retail:
Home Equity Loans	299,685		279,748
Consumer Loans	87,853		79,904
Credit Cards	20,351		17,512
Residential Mortgage Loans	362,844		350,682
Subtotal	3,977,900		3,788,645
Less: Unearned Income	(6,818)		(3,711)
Allowance for Credit Losses	(43,765)		(44,168)
Loans, net	$	3,927,317	$	3,740,766

Schedule of 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, 2023, 2022 and 2021:

December 31, 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

December 31, 2022	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	$	9,554	$	19,245	$	4,505	$	200	$	507	$	1,061	$	240	$	1,705	$	37,017
Acquisition of Citizens Union Bank of Shelbyville, KY - PCD Loans	376		1,945		689		—		2		—		—		105		3,117
Provision (Benefit) for Credit Losses	4,942		463		(1,006)		9		991		351		163		437		6,350
Loans Charged-off	(1,149)		(79)		—		—		(1,364)		(69)		(165)		(24)		(2,850)
Recoveries Collected	26		24		—		—		459		1		19		5		534
Total Ending Allowance Balance	$	13,749	$	21,598	$	4,188	$	209	$	595	$	1,344	$	257	$	2,228	$	44,168

December 31, 2021	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	$	6,445	$	29,878	$	6,756	$	200	$	490	$	996	$	150	$	1,944	$	46,859
Provision (Benefit) for Credit Losses	5,825		(10,663)		(2,251)		—		385		44		387		(227)		(6,500)
Loans Charged-off	(2,777)		(10)		—		—		(675)		(15)		(313)		(45)		(3,835)
Recoveries Collected	61		40		—		—		307		36		16		33		493
Total Ending Allowance Balance	$	9,554	$	19,245	$	4,505	$	200	$	507	$	1,061	$	240	$	1,705	$	37,017

Schedule of Non-accrual and Loans Past Due Over 89 Days Still Accruing

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, 2023 and 2022:

December 31, 2023	Non-Accrual With No Allowance for Credit Loss ⁽¹⁾		Non-Accrual		Loans Past Due Over 89 Days Still Accruing
Commercial and Industrial Loans	$	1,864	$	3,707	$	—
Commercial Real Estate Loans	942		1,889		55
Agricultural Loans	665		879		—
Leases	—		—		—
Home Equity Loans	1,033		1,033		—
Consumer Loans	111		111		—
Credit Cards	142		142		—
Residential Mortgage Loans	1,125		1,375		—
Total	$	5,882	$	9,136	$	55

(1) Includes non-accrual loans with no allowance for credit loss and are also included in Non-Accrual loans totaling $9,136.

December 31, 2022	Non-Accrual With No Allowance for Credit Loss ⁽¹⁾		Non-Accrual		Loans Past Due Over 89 Days Still Accruing
Commercial and Industrial Loans	$	1,142	$	7,936	$	1,427
Commercial Real Estate Loans	49		1,950		—
Agricultural Loans	994		1,062		—
Leases	—		—		—
Home Equity Loans	262		310		—
Consumer Loans	240		254		—
Credit Cards	146		146		—
Residential Mortgage Loans	676		1,230		—
Total	$	3,509	$	12,888	$	1,427

(1) Includes non-accrual loans with no allowance for credit loss and are also included in Non-Accrual loans totaling $12,888

Schedule of Collateral-dependent Loans

The following tables present the amortized cost basis of collateral-dependent loans by class of loans as of December 31, 2023 and 2022:

December 31, 2023	Real Estate		Equipment		Accounts Receivable		Other		Total
Commercial and Industrial Loans	$	3,668	$	49	$	—	$	1,888	$	5,605
Commercial Real Estate Loans	8,553		—		—		—		8,553
Agricultural Loans	3,338		1,055		—		—		4,393
Leases	—		—		—		—		—
Home Equity Loans	420		—		—		—		420
Consumer Loans	9		—		—		—		9
Credit Cards	—		—		—		—		—
Residential Mortgage Loans	753		—		—		—		753
Total	$	16,741	$	1,104	$	—	$	1,888	$	19,733

December 31, 2022	Real Estate		Equipment		Accounts Receivable		Other		Total
Commercial and Industrial Loans	$	2,078	$	1,219	$	272	$	5,851	$	9,420
Commercial Real Estate Loans	12,192		36		—		—		12,228
Agricultural Loans	4,944		318		—		—		5,262
Leases	—		—		—		—		—
Home Equity Loans	467		—		—		—		467
Consumer Loans	8		2		—		12		22
Credit Cards	—		—		—		—		—
Residential Mortgage Loans	1,060		—		—		—		1,060
Total	$	20,749	$	1,575	$	272	$	5,863	$	28,459

Schedule of Aging of Past Due Loans

The following tables present the aging of the amortized cost basis in past due loans by class of loans as of December 31, 2023 and 2022:

December 31, 2023	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	$	832	$	257	$	3,299	$	4,388	$	585,153	$	589,541
Commercial Real Estate Loans	1,215		484		938		2,637		2,119,198		2,121,835
Agricultural Loans	5		248		497		750		423,053		423,803
Leases	—		—		—		—		71,988		71,988
Home Equity Loans	1,016		571		1,033		2,620		297,065		299,685
Consumer Loans	658		84		110		852		87,001		87,853
Credit Cards	165		87		142		394		19,957		20,351
Residential Mortgage Loans	7,362		1,647		1,215		10,224		352,620		362,844
Total	$	11,253	$	3,378	$	7,234	$	21,865	$	3,956,035	$	3,977,900

December 31, 2022	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	$	268	$	681	$	8,285	$	9,234	$	610,872	$	620,106
Commercial Real Estate Loans	1,617		14		616		2,247		1,964,637		1,966,884
Agricultural Loans	343		—		123		466		416,947		417,413
Leases	—		—		—		—		56,396		56,396
Home Equity Loans	1,770		140		310		2,220		277,528		279,748
Consumer Loans	219		64		252		535		79,369		79,904
Credit Cards	86		24		146		256		17,256		17,512
Residential Mortgage Loans	6,330		2,783		1,051		10,164		340,518		350,682
Total	$	10,633	$	3,706	$	10,783	$	25,122	$	3,763,523	$	3,788,645

Schedule of Risk Category of Loans

The following table presents the risk category of loans and current period gross charge-offs as of December 31, 2023 by loan class and vintage year:

	Term Loans Amortized Cost Basis by Origination Year
As of December 31, 2023	2023		2022		2021		2020		2019		Prior		Revolving Loans Amortized Cost Basis		Total
Commercial and Industrial:
Risk Rating
Pass	$	112,626	$	134,590	$	80,738	$	28,492	$	32,585	$	45,764	$	134,936	$	569,731
Special Mention	47		453		128		829		—		1,948		3,048		6,453
Substandard	—		294		5,689		780		1,696		1,471		3,427		13,357
Doubtful	—		—		—		—		—		—		—		—
Total Commercial and Industrial Loans	$	112,673	$	135,337	$	86,555	$	30,101	$	34,281	$	49,183	$	141,411	$	589,541
Current Period Gross Charge-Offs	$	—	$	911	$	32	$	493	$	7	$	88	$	261	$	1,792
Commercial Real Estate:
Risk Rating
Pass	$	300,569	$	416,874	$	470,917	$	225,668	$	147,431	$	458,821	$	41,102	$	2,061,382
Special Mention	13,906		2,401		11,155		1,651		259		19,532		638		49,542
Substandard	—		617		5,510		1,142		729		2,737		176		10,911
Doubtful	—		—		—		—		—		—		—		—
Total Commercial Real Estate Loans	$	314,475	$	419,892	$	487,582	$	228,461	$	148,419	$	481,090	$	41,916	$	2,121,835
Current Period Gross Charge-Offs	$	—	$	—	$	56	$	—	$	—	$	—	$	—	$	56
Agricultural:
Risk Rating
Pass	$	44,948	$	56,291	$	39,852	$	42,279	$	23,217	$	100,391	$	89,455	$	396,433
Special Mention	1,495		164		903		5,047		2,338		9,894		2,259		22,100
Substandard	—		—		199		188		200		4,683		—		5,270
Doubtful	—		—		—		—		—		—		—		—
Total Agricultural Loans	$	46,443	$	56,455	$	40,954	$	47,514	$	25,755	$	114,968	$	91,714	$	423,803
Current Period Gross Charge-Offs	$	—	$	—	$	—	$	2	$	—	$	—	$	25	$	27
Leases:
Risk Rating
Pass	$	36,848	$	12,281	$	10,634	$	6,086	$	4,788	$	1,351	$	—	$	71,988
Special Mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Total Leases	$	36,848	$	12,281	$	10,634	$	6,086	$	4,788	$	1,351	$	—	$	71,988
Current Period Gross Charge-Offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

As of December 31, 2022, the risk category of loans by class of loans is as follows:

	Term Loans Amortized Cost Basis by Origination Year
As of December 31, 2022	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
Commercial and Industrial:
Risk Rating
Pass	$	156,318	$	117,648	$	39,949	$	46,505	$	18,423	$	51,482	$	154,203	$	584,528
Special Mention	56		148		577		78		551		2,346		1,672		5,428
Substandard	1,714		5,629		849		1,304		1,028		2,237		17,389		30,150
Doubtful	—		—		—		—		—		—		—		—
Total Commercial and Industrial Loans	$	158,088	$	123,425	$	41,375	$	47,887	$	20,002	$	56,065	$	173,264	$	620,106
Commercial Real Estate:
Risk Rating
Pass	$	398,631	$	490,747	$	261,462	$	162,701	$	129,151	$	427,433	$	35,163	$	1,905,288
Special Mention	3,982		1,568		4,612		135		13,689		25,371		—		49,357
Substandard	—		4,628		489		1,415		979		4,728		—		12,239
Doubtful	—		—		—		—		—		—		—		—
Total Commercial Real Estate Loans	$	402,613	$	496,943	$	266,563	$	164,251	$	143,819	$	457,532	$	35,163	$	1,966,884
Agricultural:
Risk Rating
Pass	$	62,673	$	47,682	$	47,355	$	25,431	$	21,728	$	92,344	$	83,862	$	381,075
Special Mention	634		842		6,066		4,149		2,355		11,440		4,310		29,796
Substandard	—		210		628		429		85		5,190		—		6,542
Doubtful	—		—		—		—		—		—		—		—
Total Agricultural Loans	$	63,307	$	48,734	$	54,049	$	30,009	$	24,168	$	108,974	$	88,172	$	417,413
Leases:
Risk Rating
Pass	$	20,057	$	14,461	$	9,648	$	8,901	$	1,851	$	1,478	$	—	$	56,396
Special Mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Total Leases	$	20,057	$	14,461	$	9,648	$	8,901	$	1,851	$	1,478	$	—	$	56,396

Schedule of Residential, Home Equity and Consumer Loans Based on 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 period ended December 31, 2023.

	Term Loans Amortized Cost Basis by Origination Year
As of December 31, 2023	2023		2022		2021		2020		2019		Prior		Revolving Loans Amortized Cost Basis		Total
Consumer:
Payment performance
Performing	$	49,208	$	21,459	$	9,708	$	2,756	$	917	$	1,911	$	1,783	$	87,742
Nonperforming	74		21		12		—		—		1		3		111
Total Consumer Loans	$	49,282	$	21,480	$	9,720	$	2,756	$	917	$	1,912	$	1,786	$	87,853
Current Period Gross Charge-Offs	$	1,162	$	42	$	23	$	71	$	3	$	1	$	7	$	1,309
Home Equity:
Payment performance
Performing	$	—	$	170	$	236	$	90	$	165	$	1,207	$	296,784	$	298,652
Nonperforming	—		247		252		60		—		102		372		1,033
Total Home Equity Loans	$	—	$	417	$	488	$	150	$	165	$	1,309	$	297,156	$	299,685
Current Period Gross Charge-Offs	$	—	$	—	$	—	$	55	$	—	$	24	$	15	$	94
Residential Mortgage:
Payment performance
Performing	$	56,306	$	65,301	$	85,753	$	41,352	$	17,831	$	94,926	$	—	$	361,469
Nonperforming	11		60		417		287		109		491		—		1,375
Total Residential Mortgage Loans	$	56,317	$	65,361	$	86,170	$	41,639	$	17,940	$	95,417	$	—	$	362,844
Current Period Gross Charge-Offs	$	—	$	—	$	22	$	36	$	—	$	—	$	—	$	58

The following table presents the amortized cost in residential, home equity and consumer loans based on payment activity for the period ended December 31, 2022.

	Term Loans Amortized Cost Basis by Origination Year
As of December 31, 2022	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
Consumer:
Payment performance
Performing	$	42,685	$	22,708	$	5,610	$	2,394	$	1,543	$	1,553	$	3,157	$	79,650
Nonperforming	3		19		212		8		2		10		—		254
Total Consumer Loans	$	42,688	$	22,727	$	5,822	$	2,402	$	1,545	$	1,563	$	3,157	$	79,904
Home Equity:
Payment performance
Performing	$	63	$	—	$	—	$	—	$	—	$	591	$	278,784	$	279,438
Nonperforming	—		20		—		—		19		1		270		310
Total Home Equity Loans	$	63	$	20	$	—	$	—	$	19	$	592	$	279,054	$	279,748
Residential Mortgage:
Payment performance
Performing	$	69,982	$	97,176	$	46,851	$	20,080	$	16,664	$	98,699	$	—	$	349,452
Nonperforming	—		161		253		—		78		738		—		1,230
Total Residential Mortgage Loans	$	69,982	$	97,337	$	47,104	$	20,080	$	16,742	$	99,437	$	—	$	350,682

Schedule of Retail Loans Based on Payment Activity

The following table presents the recorded investment in retail loans based on payment activity:

Credit Cards	December 31, 2023		December 31, 2022
Performing	$	20,209	$	17,366
Nonperforming	142		146
Total	$	20,351	$	17,512

Schedule of Loans Purchased and/or Sold During the Year

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, 2023
Purchases	$	—	$	1,502	$	—	$	—	$	—	$	—	$	—	$	—	$	1,502
Sales	—		—		—		—		—		—		—		—		—
December 31, 2022
Purchases	$	522	$	411	$	—	$	—	$	—	$	—	$	—	$	—	$	933
Sales	—		3,819		97		—		—		—		—		—		3,916

Schedule of Loans to Directors, Executive Officers and Principal Shareholders

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 2023. A summary of the activity of these loans follows:

Balance January 1, 2023		Additions		Changes in Persons or Interests Included		Deductions				Balance December 31, 2023
						Collected		Charged-off
$	51,086	$	13,854	$	(7,087)	$	(18,031)	$	—	$	39,822

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Premises, Furniture, and Equipment (Tables)

12 Months Ended

Dec. 31, 2023

Property, Plant and Equipment [Abstract]

Schedule of Premises, Furniture and Equipment

Premises, furniture, and equipment was comprised of the following classifications at December 31:

	2023		2022
Land	$	27,100	$	27,401
Buildings and Improvements	106,646		109,682
Furniture and Equipment	45,749		46,665
Total Premises, Furniture and Equipment	179,495		183,748
Less:  Accumulated Depreciation	(72,719)		(71,511)
Total	$	106,776	$	112,237

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Deposits (Tables)

12 Months Ended

Dec. 31, 2023

Deposits Liabilities, Balance Sheet, Reported Amounts [Abstract]

Schedule of Stated Maturities of Time Deposits

At year end 2023, stated maturities of time deposits were as follows:

2024	$	707,978
2025	32,366
2026	16,952
2027	6,155
2028	3,591
Thereafter	—
Total	$	767,042

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FHLB Advances and Other Borrowings (Tables)

12 Months Ended

Dec. 31, 2023

Advance from Federal Home Loan Bank [Abstract]

Schedule of Borrowings, Debt and Repurchase Agreements

Information regarding each of these types of borrowings or other indebtedness is as follows:

	December 31,
	2023				2022
	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	$	50,000	$	—	$	25,000	$	—
Junior Subordinated Debentures assumed from American Community Bancorp, Inc.	8,248		(1,723)		8,248		(1,873)
Junior Subordinated Debentures assumed from River Valley Bancorp, Inc.	7,217		(977)		7,217		(1,082)
Junior Subordinated Debentures assumed from Citizens First Corporation	5,155		(853)		5,155		(919)
Junior Subordinated Debentures assumed from Citizens Union Bancorp of Shelbyville, Inc.	20,600		(1,885)		20,600		(2,020)
Subordinated Debentures	40,000		(455)		40,000		(538)
Finance Lease Obligation	2,642		—		2,857		—
Long-term Borrowings	133,862		(5,893)		109,077		(6,432)
Overnight Variable Rate Advances from Federal Home Loan Bank collateralized by qualifying mortgages, investment securities, and mortgage-backed securities	—		—		25,000		—
Federal Funds Purchased	25,000		—		11,200		—
Repurchase Agreements	40,968		—		64,961		—
Short-term Borrowings	65,968		—		101,161		—
Total Borrowings	$	199,830	$	(5,893)	$	210,238	$	(6,432)

Schedule of Repurchase Agreements

	2023			2022
Average Daily Balance During the Year	$	51,474		$	52,932
Average Interest Rate During the Year	1.16		%	0.20		%
Maximum Month-end Balance During the Year	$	60,055		$	72,084
Weighted Average Interest Rate at Year-end	1.44		%	0.57		%

Schedule of Principal Payments on Long-Term Borrowings

At December 31, 2023, scheduled principal payments on long-term borrowings, excluding the capitalized lease obligation and acquired subordinated debentures (which are discussed below) are as follows:

2024	$	25,000
2025	—
2026	—
2027	—
2028	25,000
Thereafter	39,545
Total	$	89,545

Schedule of Issuance of Subordinated Debentures

The following table summarizes the terms of each issuance:

	Date of Issuance	Issuance Amount		Carrying Amount at December 31, 2023		Variable Rate (1)	Rate as of December 31, 2023		Rate as of December 31, 2022 (2)		Maturity Date
ACB Trust I	5/6/2005	$	5,155	$	4,105	3-Month SOFR + 2.15%	7.81	%	6.90	%	May 2035
ACB Trust II	7/15/2005	3,093		2,420		3-Month SOFR + 1.85%	7.49	%	6.54	%	July 2035
RIVR Statutory Trust I	3/26/2003	7,217		6,240		3-Month SOFR + 3.15%	8.77	%	7.87	%	March 2033
Citizens First Statutory Trust I	10/16/2006	5,155		4,302		3-Month SOFR +1.65%	7.31	%	5.39	%	January 2037
CUB Capital Trust I	10/21/2004	10,310		9,642		3-Month SOFR +2.00%	7.64	%	6.69	%	November 2034
CUB Capital Trust II	8/17/2005	10,310		9,073		3-Month SOFR +1.50%	7.16	%	5.58	%	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.

(2)    Prior to CME Term SOFR becoming effective, the variable rate was based upon LIBOR rates and tenors. See Replacement of LIBOR Benchmark below for additional information.

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Shareholders' Equity (Tables)

12 Months Ended

Dec. 31, 2023

Stockholders' Equity Note [Abstract]

Schedule of Consolidated and Bank Actual Capital and Minimum Required Levels

At December 31, 2023, 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	$	810,391	16.50	%	$	392,870	8.00	%	N/A		N/A
Bank	723,998		14.76		392,402		8.00		$	490,503	10.00	%
Tier 1 (Core) Capital (to Risk Weighted Assets)
Consolidated	$	735,089	14.97	%	$	294,652	6.00	%	N/A		N/A
Bank	688,696		14.04		294,302		6.00		$	392,402	8.00	%
Common Tier 1 (CET 1) Capital Ratio (to Risk Weighted Assets)
Consolidated	$	700,260	14.26	%	$	220,989	4.50	%	N/A		N/A
Bank	688,696		14.04		220,726		4.50		$	318,827	6.50	%
Tier 1 (Core) Capital (to Average Assets)
Consolidated	$	735,089	11.75	%	$	250,162	4.00	%	N/A		N/A
Bank	688,696		11.03		249,642		4.00		$	312,053	5.00	%

(1) Excludes 2.5% capital conservation buffer.

At December 31, 2022, 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	$	747,542	15.45	%	$	387,024	8.00	%	N/A		N/A
Bank	680,695		14.07		386,959		8.00		$	483,698	10.00	%
Tier 1 (Core) Capital (to Risk Weighted Assets)
Consolidated	$	676,068	13.97	%	$	290,268	6.00	%	N/A		N/A
Bank	649,221		13.42		290,219		6.00		$	386,959	8.00	%
Common Tier 1 (CET 1) Capital Ratio (to Risk Weighted Assets)
Consolidated	$	641,690	13.26	%	$	217,701	4.50	%	N/A		N/A
Bank	649,221		13.42		217,664		4.50		$	314,404	6.50	%
Tier 1 (Core) Capital (to Average Assets)
Consolidated	$	676,068	10.50	%	$	257,622	4.00	%	N/A		N/A
Bank	649,221		10.09		257,341		4.00		$	321,677	5.00	%

(1) Excludes 2.5% capital conservation buffer.

Schedule of Restricted Stock and Cash Entitlements Expense

The following table presents expense recorded for restricted stock and cash entitlements as well as the related tax effect for the years ended 2023, 2022, and 2021:

	2023		2022		2021
Restricted Stock Expense	$	2,345	$	2,308	$	1,692
Cash Entitlement Expense	750		646		732
Tax Effect	(803)		(766)		(629)
Net of Tax	$	2,292	$	2,188	$	1,795

Schedule of Restricted Stock Grants Outstanding

The following table presents information on restricted stock grants outstanding for the period shown:

	Year Ended December 31, 2023
	Restricted Shares	Weighted Average Market Price at Grant
Outstanding at Beginning of Period	74,873	$	41.05
Granted	96,931	33.72
Issued and Vested	(49,757)	40.55
Forfeited	(5,415)	37.20
Outstanding at End of Period	116,632	35.34

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Employee Benefit Plans (Tables)

12 Months Ended

Dec. 31, 2023

Retirement Benefits [Abstract]

Schedule of Changes in Accumulated Postretirement Benefits Obligations

Changes in Accumulated Postretirement Benefit Obligations:	2023		2022
Obligation at the Beginning of Year	$	1,530	$	1,592
Unrecognized Loss (Gain)	187		(71)
Components of Net Periodic Postretirement Benefit Cost
Service Cost	101		105
Interest Cost	71		35
Net Expected Benefit Payments	(142)		(131)
Amendments	—		—
Obligation at End of Year	$	1,747	$	1,530

Schedule of Components of Postretirement Benefit Expense

Components of Postretirement Benefit Expense:	2023		2022		2021
Service Cost	$	101	$	105	$	119
Interest Cost	71		35		28
Amortization of Prior Service Costs	(3)		(2)		(2)
Amortization of Unrecognized Net (Gain) Loss	32		43		55
Net Postretirement Benefit Expense	201		181		200
Net Gain (Loss) During Period Recognized in Other Comprehensive Income (Loss)	158		(112)		(121)
Total Recognized in Net Postretirement Benefit Expense and Other Comprehensive Income	$	359	$	69	$	79

Schedule of Assumptions Used to Determine Net Periodic Cost and Benefit Obligations

Assumptions Used to Determine Net Periodic Cost and Benefit Obligations:	2023		2022		2021
Discount Rate	4.64	%	4.83	%	2.31	%

Schedule of Assumption of Health Care Cost Trend Rates at Year-end

Assumed Health Care Cost Trend Rates at Year-end:	2023		2022
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	2030		2028

Schedule of Estimated Future Benefits

The following postretirement benefit payments, which reflect expected future service, are expected to be paid:

2024	$	169
2025	129
2026	167
2027	177
2028	184
2029-2033	931

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Schedule of Provision for Income Taxes

	2023		2022		2021
Current Federal	$	13,067	$	13,049	$	13,437
Current State	1,934		1,763		2,547
Deferred Federal	2,602		1,868		2,056
Deferred State	156		671		608
Total	$	17,759	$	17,351	$	18,648

Schedule of Effective Income Tax Rate Reconciliation

Effective tax rates differ from the federal statutory rate of 21% for 2023, 2022 and 2021 applied to income before income taxes due to the following:

	2023		2022		2021
Statutory Rate Times Pre-tax Income	$	21,766	$	20,827	$	21,585
Add (Subtract) the Tax Effect of:
Income from Tax-exempt Loans and Investments	(4,951)		(5,223)		(3,872)
Non-deductible Merger Costs	—		177		—
State Income Tax, Net of Federal Tax Effect	1,651		1,923		2,492
General Business Tax Credits	(1,128)		(1,038)		(1,013)
Amortization of Tax Credit Investments	1,101		1,040		1,001
Company Owned Life Insurance	(363)		(476)		(321)
Other Differences	(317)		121		(1,224)
Total Income Taxes	$	17,759	$	17,351	$	18,648

Schedule of Net Deferred Tax Liability

The net deferred tax asset/(liability) at December 31 consists of the following:

	2023		2022
Deferred Tax Assets:
Allowance for Credit Losses	$	10,888	$	10,478
Lease Liability (Operating Leases)	1,313		1,585
Unrealized Loss on Securities	57,882		70,234
Deferred Compensation and Employee Benefits	1,026		1,162
Other-than-temporary Impairment	245		246
Accrued Expenses	1,224		1,325
Business Combination Fair Value Adjustments	—		205
Pension and Postretirement Plans	182		182
Other Real Estate Owned	41		70
Non-Accrual Loan Interest Income	449		629
General Business Tax Credits	—		198
Net Operating Loss Carryforward	650		828
Other	879		1,190
Total Deferred Tax Assets	74,779		88,332
Deferred Tax Liabilities:
Depreciation	(3,416)		(2,859)
Leasing Activities, Net	(12,926)		(10,983)
FHLB Stock Dividends	(455)		(488)
Prepaid Expenses	(154)		(684)
Intangibles	(2,376)		(3,181)
Deferred Loan Fees	(954)		(1,127)
Mortgage Servicing Rights	(51)		(58)
Right of Use Asset (Operating Leases)	(1,274)		(1,548)
Business Combination Fair Value Adjustments	(478)		—
Other	(1,325)		(924)
Total Deferred Tax Liabilities	(23,409)		(21,852)
Valuation Allowance	—		—
Net Deferred Tax Asset/(Liability)	$	51,370	$	66,480

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Revenue Recognition (Tables)

12 Months Ended

Dec. 31, 2023

Revenue from Contract with Customer [Abstract]

Schedule of Non-interest Income, Segregated by Revenue Stream

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, 2023, 2022 and 2021. 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.

	Year Ended
	December 31,
Non-interest Income	2023		2022		2021
In-Scope of Topic 606:
Wealth Management Fees	$	11,711	$	10,076	$	10,321
Service Charges on Deposit Accounts	11,538		11,457		7,723
Insurance Revenues	9,596		10,020		9,268
Interchange Fee Income	17,452		15,820		13,116
Other Operating Income:
ATM Fees	1,185		1,235		992
Wire Transfer Fees	696		737		703
Other (1)	1,251		1,251		1,182
Non-interest Income (in-scope of Topic 606)	53,429		50,596		43,305
Non-interest Income (out-of-scope of Topic 606)	6,832		8,537		16,157
Total Non-interest Income	$	60,261	$	59,133	$	59,462

(1) “Other” income includes safe deposit box rentals and other non-interest related fees totaling $1.2 million, $1.2 million, and $1.2 million for the years ended December 31, 2023, 2022, and 2021, respectively, all of which are within scope of ASC 606.

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Per Share Data (Tables)

12 Months Ended

Dec. 31, 2023

Earnings Per Share [Abstract]

Schedule of Computations of Basic Earnings Per Share and Diluted Earnings Per Share

The computation of Basic Earnings per Share and Diluted Earnings per Share are provided below:

	2023		2022		2021
Basic Earnings per Share:
Net Income	$	85,888	$	81,825	$	84,137
Weighted Average Shares Outstanding	29,557,567		29,464,591		26,537,311
Basic Earnings per Share	$	2.91	$	2.78	$	3.17
Diluted Earnings per Share:
Net Income	$	85,888	$	81,825	$	84,137
Weighted Average Shares Outstanding	29,557,567		29,464,591		26,537,311
Potentially Dilutive Shares, Net	—		—		—
Diluted Weighted Average Shares Outstanding	29,557,567		29,464,591		26,537,311
Diluted Earnings per Share	$	2.91	$	2.78	$	3.17

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Leases (Tables)

12 Months Ended

Dec. 31, 2023

Leases [Abstract]

Schedule of Components of Lease Expense, Weighted Average Remaining Lease Term, Discount Rates and Supplemental Cash Flow Information

The components of lease expense were as follows:

	December 31, 2023		December 31, 2022
Finance Lease Cost:
Amortization of Right-of-Use Assets	$	210	$	210
Interest on Lease Liabilities	304		326
Operating Lease Cost	1,424		1,508
Short-term Lease Cost	—		—
Total Lease Cost	$	1,938	$	2,044

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

	December 31, 2023		December 31, 2022
Weighted Average Remaining Lease Term:
Finance Leases	8 years		9 years
Operating Leases	7 years		7 years
Weighted Average Discount Rate:
Finance Leases	11.37	%	11.41	%
Operating Leases	3.07	%	2.98	%

Supplemental cash flow information related to leases were as follows:

	December 31, 2023		December 31, 2022
Cash Paid for Amounts in the Measurement of Lease Liabilities:
Operating Cash Flows from Finance Leases	$	304	$	326
Operating Cash Flows from Operating Leases	1,395		1,449
Financing Cash Flows from Finance Leases	211		186

Schedule of Supplemental Balance Sheet Information

Supplemental balance sheet information related to leases were as follows:

	December 31, 2023		December 31, 2022
Finance Leases
Premises, Furniture and Equipment, Net	$	1,648	$	1,858
Other Borrowings	$	2,642	$	2,857
Operating Leases
Operating Lease Right-of-Use Assets	$	5,180	$	6,297
Operating Lease Liabilities	$	5,337	$	6,447

Schedule of Maturity of Finance Lease Liabilities

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

	December 31, 2023
	Finance Leases		Operating Leases
Year 1	$	519	$	1,256
Year 2	519		1,047
Year 3	519		845
Year 4	486		662
Year 5	438		620
Thereafter	1,509		1,488
Total Lease Payments	3,990		5,918
Less Imputed Interest	(1,348)		(581)
Total	$	2,642	$	5,337

Schedule of Maturity of Operating Lease Liabilities

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

	December 31, 2023
	Finance Leases		Operating Leases
Year 1	$	519	$	1,256
Year 2	519		1,047
Year 3	519		845
Year 4	486		662
Year 5	438		620
Thereafter	1,509		1,488
Total Lease Payments	3,990		5,918
Less Imputed Interest	(1,348)		(581)
Total	$	2,642	$	5,337

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Commitments and Off-balance Sheet Items (Tables)

12 Months Ended

Dec. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

Schedule of Commitments and Contingent Liabilities

Commitments and contingent liabilities are summarized as follows, at December 31:

	2023				2022
	Fixed Rate		Variable Rate		Fixed Rate		Variable Rate
Commitments to Fund Loans:
Consumer Lines	$	13,978	$	689,295	$	15,238	$	576,784
Commercial Operating Lines	120,352		546,016		161,058		611,357
Residential Mortgages	11,855		3,521		15,129		5,327
Total Commitments to Fund Loans	$	146,185	$	1,238,832	$	191,425	$	1,193,468
Commitments to Sell Loans:
Mandatory	$	—	$	—	$	—	$	—
Non-mandatory	$	5,992	$	—	$	8,731	$	—
Standby Letters of Credit	$	3,340	$	16,161	$	3,047	$	17,117

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Fair Value (Tables)

12 Months Ended

Dec. 31, 2023

Fair Value Disclosures [Abstract]

Schedule of Assets and Liabilities Measured at Fair Value on 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, 2023 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	$	—	$	—	$	—	$	—
Obligations of State and Political Subdivisions	—		768,800		75		768,875
MBS/CMO	—		644,056		984		645,040
US Gov’t Sponsored Entities & Agencies	—		182,917		—		182,917
Total Securities	$	—	$	1,595,773	$	1,059	$	1,596,832
Loans Held-for-Sale	$	—	$	5,226	$	—	$	5,226
Derivative Assets	$	—	$	7,458	$	—	$	7,458
Derivative Liabilities	$	—	$	7,467	$	—	$	7,467

	Fair Value Measurements at December 31, 2022 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	$	64,119	$	—	$	—	$	64,119
Obligations of State and Political Subdivisions	—		777,769		83		$	777,852
MBS/CMO	—		713,775		906		$	714,681
US Gov’t Sponsored Entities & Agencies	—		205,017		—		205,017
Total Securities	$	64,119	$	1,696,561	$	989	$	1,761,669
Loans Held-for-Sale	$	—	$	8,600	$	—	$	8,600
Derivative Assets	$	—	$	9,899	$	—	$	9,899
Derivative Liabilities	$	—	$	9,749	$	—	$	9,749

Schedule of Aggregate Fair Value, Contractual Balance and Gains or Loss of Loans Held-for-Sale

As of December 31, 2023 and 2022, the aggregate fair value, contractual balance (including accrued interest), and gain or loss on Loans Held-for-Sale were as follows:

	2023		2022
Aggregate Fair Value	$	5,226	$	8,600
Contractual Balance	5,125		8,474
Gain (Loss)	101		126

Schedule of Reconciliation of all Assets Measured at Fair Value on Recurring Basis, Using Significant Unobservable Inputs (Level 3)

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 years ended December 31, 2023 and 2022:

	Obligations of State and Political Subdivisions				MBS/CMO
	2023		2022		2023		2022
Balance of Recurring Level 3 Assets at January 1	$	83	$	—	$	906	$	—
Total Gains (Losses) Included in Other Comprehensive Income	(8)		(17)		78		(76)
Maturities / Calls	—		—		—		—
Acquired through Bank Acquisition	—		100		—		982
Balance of Recurring Level 3 Assets at December 31	$	75	$	83	$	984	$	906

Schedule of Assets and Liabilities Measured at Fair Value on Non-Recurring Basis

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

	Fair Value Measurements at December 31, 2023 Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Assets:
Individually Analyzed Loans
Commercial and Industrial Loans	$	—	$	—	$	2,506	$	2,506
Commercial Real Estate Loans	—		—		3,447		3,447
Agricultural Loans	—		—		2,395		2,395
Consumer Loans	—		—		9		9
Home Equity Loans	—		—		326		326
Residential Mortgage Loans	—		—		450		450

	Fair Value Measurements at December 31, 2022 Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Assets:
Individually Analyzed Loans
Commercial and Industrial Loans	$	—	$	—	$	1,858	$	1,858
Commercial Real Estate Loans	—		—		10,040		10,040
Agricultural Loans	—		—		2,970		2,970
Consumer Loans	—		—		8		8
Home Equity Loans	—		—		368		368
Residential Mortgage Loans	—		—		718		718

Schedule of Fair Value Assets and Liabilities Measured on Nonrecurring Basis Validation Techniques

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, 2023 and 2022:

December 31, 2023	Fair Value		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
Individually Analyzed Loans - Commercial and Industrial Loans	$	2,506	Sales comparison approach	Adjustment for physical condition of comparable properties sold	23% - 100% (33%)
Individually Analyzed Loans - Commercial Real Estate Loans	$	3,447	Sales comparison approach	Adjustment for physical condition of comparable properties sold	20% - 68% (42%)
Individually Analyzed Loans - Agricultural Loans	$	2,395	Sales comparison approach	Adjustment for physical condition of comparable properties sold	31% - 100% (51%)
Individually Analyzed Loans - Consumer Loans	$	9	Sales comparison approach	Adjustment for physical condition of comparable properties sold	20% - 20% (20%)
Individually Analyzed Loans - Home Equity Loans	$	326	Sales comparison approach	Adjustment for physical condition of comparable properties sold	20% - 20% (20%)
Individually Analyzed Loans - Residential Mortgage Loans	$	450	Sales comparison approach	Adjustment for physical condition of comparable properties sold	20% -20% (20%)

December 31, 2022	Fair Value		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
Individually Analyzed Loans - Commercial and Industrial Loans	$	1,858	Sales comparison approach	Adjustment for physical condition of comparable properties sold	0% - 100% (40%)
Individually Analyzed Loans - Commercial Real Estate Loans	$	10,040	Sales comparison approach	Adjustment for physical condition of comparable properties sold	30% - 100% (37%)
Individually Analyzed Loans - Agricultural Loans	$	2,970	Sales comparison approach	Adjustment for physical condition of comparable properties sold	30% - 100% (48%)
Individually Analyzed Loans - Consumer Loans	$	8	Sales comparison approach	Adjustment for physical condition of comparable properties sold	27% - 100% (20%)
Individually Analyzed Loans - Home Equity Loans	$	368	Sales comparison approach	Adjustment for physical condition of comparable properties sold	20% - 51% (20%)
Individually Analyzed Loans - Residential Mortgage Loans	$	718	Sales comparison approach	Adjustment for physical condition of comparable properties sold	20% - 100% (21%)

Schedule of Carrying Amounts and Estimated Fair Values of Company's Financial Instruments

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, 2023 and 2022. 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, 2023 Using
	Carrying Value		Level 1		Level 2		Level 3		Total
Financial Assets:
Cash and Short-term Investments	$	115,330	$	78,805	$	36,525	$	—	$	115,330
Interest Bearing Time Deposits with Banks	500		—		500		—		500
Loans, Net	3,918,184		—		—		3,801,738		3,801,738
Accrued Interest Receivable	30,595		—		10,014		20,581		30,595
Financial Liabilities:
Demand, Savings, and Money Market Deposits	(4,485,921)		(4,485,921)		—		—		(4,485,921)
Time Deposits	(767,042)		—		(759,217)		—		(759,217)
Short-term Borrowings	(65,968)		(25,000)		(40,968)		—		(65,968)
Long-term Debt	(127,969)		—		(52,522)		(74,562)		(127,084)
Accrued Interest Payable	(7,073)		—		(6,701)		(372)		(7,073)

			Fair Value Measurements at December 31, 2022 Using
	Carrying Value		Level 1		Level 2		Level 3		Total
Financial Assets:
Cash and Short-term Investments	$	117,381	$	75,476	$	41,905	$	—	$	117,381
Interest Bearing Time Deposits with Banks	500		—		500		—		500
Loans, Net	3,724,804		—		—		3,688,903		3,688,903
Accrued Interest Receivable	27,741		38		10,863		16,840		27,741
Financial Liabilities:
Demand, Savings, and Money Market Deposits	(4,921,582)		(4,921,582)		—		—		(4,921,582)
Time Deposits	(428,469)		—		(426,184)		—		(426,184)
Short-term Borrowings	(101,161)		(36,200)		(64,961)		—		(101,161)
Long-term Debt	(102,645)		—		(26,830)		(72,272)		(99,102)
Accrued Interest Payable	(1,513)		—		(1,205)		(308)		(1,513)

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Segment Information (Tables)

12 Months Ended

Dec. 31, 2023

Segment Reporting [Abstract]

Schedule of Segment Financial Information

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 three segments are the same as those of the Company. The evaluation process for segments does not include holding company income and expense. Holding company amounts are the primary differences between segment amounts and consolidated totals, and are reflected in the column labeled “Other” below, along with amounts to eliminate transactions between segments.

	Core Banking		Wealth Management Services		Insurance		Other		Consolidated Totals
Year Ended December 31, 2023
Net Interest Income	$	195,215	$	120	$	56	$	(4,958)	$	190,433
Net Gains on Sales of Loans	2,363		—		—		—		2,363
Net Gains on Securities	40		—		—		—		40
Wealth Management Fees	5		11,706		—		—		11,711
Insurance Revenues	1		24		9,572		(1)		9,596
Noncash Items:
Provision for Credit Losses	2,550		—		—		—		2,550
Depreciation and Amortization	9,025		31		48		456		9,560
Income Tax Expense (Benefit)	18,698		695		556		(2,190)		17,759
Segment Profit (Loss)	85,037		2,974		1,682		(3,805)		85,888
Segment Assets at December 31, 2023	6,137,687		9,508		3,509		1,494		6,152,198

	Core Banking		Wealth Management Services		Insurance		Other		Consolidated Totals
Year Ended December 31, 2022
Net Interest Income	$	204,259	$	46	$	27	$	(3,748)	$	200,584
Net Gains on Sales of Loans	3,818		—		—		—		3,818
Net Gains on Securities	589		—		—		(27)		562
Wealth Management Fees	4		10,072		—		—		10,076
Insurance Revenues	31		12		9,977		—		10,020
Noncash Items:
Provision for Credit Losses	6,350		—		—		—		6,350
Depreciation and Amortization	9,571		41		48		456		10,116
Income Tax Expense (Benefit)	17,873		691		720		(1,933)		17,351
Segment Profit (Loss)	82,965		2,157		2,281		(5,578)		81,825
Segment Assets at December 31, 2022	6,152,346		8,846		14,706		(19,907)		6,155,991

	Core Banking		Wealth Management Services		Insurance		Other		Consolidated Totals
Year Ended December 31, 2021
Net Interest Income	$	163,395	$	42	$	11	$	(2,618)	$	160,830
Net Gains on Sales of Loans	8,267		—		—		—		8,267
Net Gains on Securities	2,247		—		—		—		2,247
Wealth Management Fees	4		10,317		—		—		10,321
Insurance Revenues	14		7		9,247		—		9,268
Noncash Items:
Provision for Credit Losses	(6,500)		—		—		—		(6,500)
Depreciation and Amortization	8,346		46		57		321		8,770
Income Tax Expense (Benefit)	18,774		826		652		(1,604)		18,648
Segment Profit (Loss)	82,066		2,543		2,034		(2,506)		84,137
Segment Assets at December 31, 2021	5,595,721		6,115		12,245		(5,542)		5,608,539

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Parent Company Financial Statements (Tables)

12 Months Ended

Dec. 31, 2023

Condensed Financial Information Disclosure [Abstract]

Schedule of Condensed Balance Sheets

CONDENSED BALANCE SHEETS

	December 31,
	2023		2022
ASSETS
Cash	$	66,835	$	46,541
Securities Available-for-Sale	4,112		—
Other Investments	353		353
Investment in Subsidiary Bank	652,452		566,494
Investment in Non-banking Subsidiaries	1,975		6,747
Other Assets	15,097		19,165
Total Assets	$	740,824	$	639,300
LIABILITIES
Borrowings	$	75,327	$	74,788
Other Liabilities	1,939		6,119
Total Liabilities	77,266		80,907
SHAREHOLDERS’ EQUITY
Common Stock	29,585		29,493
Additional Paid-in Capital	389,411		387,171
Retained Earnings	461,622		405,167
Accumulated Other Comprehensive Income (Loss)	(217,060)		(263,438)
Total Shareholders’ Equity	663,558		558,393
Total Liabilities and Shareholders’ Equity	$	740,824	$	639,300

Schedule of Condensed Statements of Income and Comprehensive Income (Loss)

CONDENSED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS)

	Years Ended December 31,
	2023		2022		2021
INCOME
Dividends from Subsidiaries
Bank	$	50,000	$	35,000	$	65,000
Non-bank	—		—		1,470
Interest Income	277		104		109
Other Income (Loss)	(28)		31		11
Total Income	50,249		35,135		66,590
EXPENSES
Salaries and Employee Benefits	535		535		537
Professional Fees	777		1,989		1,256
Occupancy and Equipment Expense	8		8		10
Interest Expense	5,360		3,963		2,763
Other Expenses	1,183		1,162		1,200
Total Expenses	7,863		7,657		5,766
INCOME BEFORE INCOME TAXES AND EQUITY IN UNDISTRIBUTED INCOME OF SUBSIDIARIES	42,386		27,478		60,824
Income Tax Benefit	2,215		1,947		1,607
INCOME BEFORE EQUITY IN UNDISTRIBUTED INCOME OF SUBSIDIARIES	44,601		29,425		62,431
Equity in Undistributed Income of Subsidiaries	41,287		52,400		21,706
NET INCOME	85,888		81,825		84,137
Other Comprehensive Income (Loss):
Changes in Unrealized Gain (Loss) on Securities, Available-for-Sale	46,378		(278,976)		(19,891)
Changes in Unrecognized Loss in Postretirement Benefit Obligation, Net	—		54		—
TOTAL COMPREHENSIVE INCOME (LOSS)	$	132,266	$	(197,097)	$	64,246

Schedule of Condensed Statements of Cash Flows

CONDENSED STATEMENTS OF CASH FLOWS

	Years Ended December 31,
	2023		2022		2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income	$	85,888	$	81,825	$	84,137
Adjustments to Reconcile Net Income to Net Cash from Operations
Change in Other Assets	3,929		3,861		(3,939)
Change in Other Liabilities	(3,113)		1,200		863
Equity Based Compensation	2,332		2,330		1,723
Equity in Excess Undistributed Income of Subsidiaries	(41,287)		(52,400)		(21,706)
Net Cash from Operating Activities	47,749		36,816		61,078
CASH FLOWS FROM INVESTING ACTIVITIES
Cash Used for Business Acquisitions	—		(49,644)		—
Net Equity in Dissolution of Subsidiary	1,978		—		—
Net Cash from Investing Activities	1,978		(49,644)		—
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends Paid	(29,433)		(27,022)		(22,220)
Net Cash from Financing Activities	(29,433)		(27,022)		(22,220)
Net Change in Cash and Cash Equivalents	20,294		(39,850)		38,858
Cash and Cash Equivalents at Beginning of Year	46,541		86,391		47,533
Cash and Cash Equivalents at End of Year	$	66,835	$	46,541	$	86,391

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Business Combinations, Goodwill and Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2023

Business Combinations, Goodwill and Intangible Assets [Abstract]

Schedule of Total Consideration Transferred and Fair Value of Identifiable Assets Acquired and Liabilities Assumed

The following table summarizes the fair value of the total consideration transferred as a part of the CUB 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 Options and Fractional Shares	$	942
Cash Consideration	49,863
Equity Instruments	111,914
Fair Value of Total Consideration Transferred	$	162,719
Recognized Amounts of Identifiable Assets Acquired and Liabilities Assumed:
Cash	$	20,244
Federal Funds Sold and Other Short-term Investments	238,325
Interest-bearing Time Deposits with Banks	250
Securities	102,233
Loans	678,142
Stock in FHLB of Indianapolis and Other Restricted Stock, at Cost	10,078
Premises, Furniture & Equipment	19,805
Other Real Estate	40
Intangible Assets	7,572
Company Owned Life Insurance	12,881
Accrued Interest Receivable and Other Assets	18,309
Deposits - Non-interest Bearing	(237,472)
Deposits - Interest Bearing	(696,750)
FHLB Advances and Other Borrowings	(60,837)
Accrued Interest Payable and Other Liabilities	(8,697)
Total Identifiable Net Assets	$	104,123
Goodwill	$	58,596

Schedule of Unaudited Pro Forma Financial Information

The following table presents unaudited pro forma information as if the acquisition had occurred on January 1, 2021 after giving effect to certain adjustments. The unaudited pro forma information for the year ended December 30, 2022 and 2021 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 12/31/2022		Unaudited Pro Forma Year Ended 12/31/2021
Net Interest Income	$	200,584	$	195,691
Non-interest Income	59,133		64,951
Total Revenue	259,717		260,642
Provision for Credit Losses	50		(8,707)
Non-interest Expense	141,868		142,978
Income Before Income Taxes	117,799		126,371
Income Tax Expense	21,858		24,260
Net Income	$	95,941	$	102,111
Earnings Per Share and Diluted Earnings Per Share	$	3.26	$	3.47

Schedule of Changes in Carrying Amount of Goodwill

The changes in the carrying amount of goodwill for the periods ended December 31, 2023, 2022, and 2021, were classified as follows:

	2023		2022		2021
Beginning of Year	$	180,357	$	121,761	$	121,956
Acquired Goodwill	—		58,596		(195)
Impairment	—		—		—
End of Year	$	180,357	$	180,357	$	121,761

Schedule of Acquired Intangible Assets

Acquired Intangible Assets

Acquired intangible assets were as follows as of year end:

	2023
	Gross Amount		Accumulated Amortization
Core Banking
Core Deposit Intangible	$	33,247	$	(27,811)
Branch Acquisition Intangible	257		(257)
Insurance
Customer List	5,408		(5,408)
Total	$	38,912	$	(33,476)

	2022
	Gross Amount		Accumulated Amortization
Core Banking
Core Deposit Intangible	$	33,247	$	(25,001)
Branch Acquisition Intangible	257		(257)
Insurance
Customer List	5,408		(5,378)
Total	$	38,912	$	(30,636)

Schedule of Estimated Amortization Expense of Intangibles

Estimated amortization expense for each of the next five years is as follows:

2024	$	2,032
2025	1,394
2026	916
2027	593
2028	361

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Other Comprehensive Income (Loss) (Tables)

12 Months Ended

Dec. 31, 2023

Equity [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss)

The tables below summarize the changes in accumulated other comprehensive income (loss) by component for the years ended December 31, 2023 and 2022, net of tax:

December 31, 2023	Unrealized Gains and Losses on Available-for-Sale Securities		Postretirement Benefit Items		Total
Beginning Balance	$	(262,924)	$	(514)	$	(263,438)
Other Comprehensive Income (Loss) Before Reclassification	46,410		—		46,410
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)	(32)		—		(32)
Net Current Period Other
Comprehensive Income (Loss)	46,378		—		46,378
Ending Balance	$	(216,546)	$	(514)	$	(217,060)

December 31, 2022	Unrealized Gains and Losses on Available-for-Sale Securities		Postretirement Benefit Items		Total
Beginning Balance	$	16,052	$	(568)	$	15,484
Other Comprehensive Income (Loss) Before Reclassification	(278,532)		—		(278,532)
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)	(444)		54		(390)
Net Current Period Other
Comprehensive Income (Loss)	(278,976)		54		(278,922)
Ending Balance	$	(262,924)	$	(514)	$	(263,438)

Schedule of Classifications Out of Accumulated Other Comprehensive Income (Loss) by Component

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 (Loss) 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

The table below summarizes the classifications out of accumulated other comprehensive income (loss) by component for the year ended December 31, 2022:

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	$	562	Net Gain (Loss) on Securities
	(118)		Income Tax Expense
	444		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	$	444

The table below summarizes the classifications out of accumulated other comprehensive income (loss) by component for the year ended December 31, 2021:

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	$	2,247	Net Gain (Loss) on Securities
	(472)		Income Tax Expense
	1,775		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	$	1,775

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Summary of Significant Accounting Policies (Narrative) (Details)	12 Months Ended
	Dec. 31, 2023 USD ($) segment	Dec. 31, 2022 USD ($)
Property, Plant and Equipment [Line Items]
Number of segments | segment	3
Accrued interest receivable on loans	$ 20,580,000
Required cash on deposit at Federal Reserve	$ 0	$ 0
Minimum
Property, Plant and Equipment [Line Items]
Finite-lived intangible asset, useful life (in years)	6 years
Maximum
Property, Plant and Equipment [Line Items]
Finite-lived intangible asset, useful life (in years)	10 years
Buildings and related components | Minimum
Property, Plant and Equipment [Line Items]
Premises, furniture, and equipment, useful life (in years)	10 years
Buildings and related components | Maximum
Property, Plant and Equipment [Line Items]
Premises, furniture, and equipment, useful life (in years)	40 years
Furniture, fixtures and equipment | Minimum
Property, Plant and Equipment [Line Items]
Premises, furniture, and equipment, useful life (in years)	3 years
Furniture, fixtures and equipment | Maximum
Property, Plant and Equipment [Line Items]
Premises, furniture, and equipment, useful life (in years)	10 years

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Securities (Schedule of Securities Available-for-Sale) (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	$ 1,871,260	$ 2,094,826
Gross Unrealized Gains	1,337	695
Gross Unrealized Losses	(275,765)	(333,852)
Fair Value	1,596,832	1,761,669
U.S. Treasury
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	0	64,097
Gross Unrealized Gains	0	22
Gross Unrealized Losses	0	0
Fair Value	0	64,119
Obligations of State and Political Subdivisions
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	889,940	939,193
Gross Unrealized Gains	1,309	673
Gross Unrealized Losses	(122,374)	(162,014)
Fair Value	768,875	777,852
MBS/CMO
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	761,025	846,519
Gross Unrealized Gains	28	0
Gross Unrealized Losses	(116,013)	(131,838)
Fair Value	645,040	714,681
US Gov’t Sponsored Entities & Agencies
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	220,295	245,017
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(37,378)	(40,000)
Fair Value	$ 182,917	$ 205,017

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Securities (Schedule of Securities by Contractual Maturity) (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Securities Available-for-Sale: Amortized cost
Due in one year or less	$ 1,768
Due after one year through five years	17,548
Due after five years through ten years	65,213
Due after ten years	805,411
Total	1,871,260	$ 2,094,826
Securities Available-for-Sale: Fair Value
Due in one year or less	1,766
Due after one year through five years	17,589
Due after five years through ten years	62,296
Due after ten years	687,224
Total	1,596,832	1,761,669
MBS/CMO
Securities Available-for-Sale: Amortized cost
Securities without single maturity	761,025
Total	761,025	846,519
Securities Available-for-Sale: Fair Value
Securities without single maturity	645,040
Total	645,040	714,681
US Gov’t Sponsored Entities & Agencies
Securities Available-for-Sale: Amortized cost
Securities without single maturity	220,295
Total	220,295	245,017
Securities Available-for-Sale: Fair Value
Securities without single maturity	182,917
Total	$ 182,917	$ 205,017

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Securities (Schedule of Proceeds from the Sales of Securities) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Investments, Debt and Equity Securities [Abstract]
Proceeds from Sales	$ 114,259	$ 145,237	$ 111,124
Gross Gains on Sales	346	750	2,399
Gross Losses on Sales	306	188	152
Income Taxes on Net Gains	$ 8	$ 118	$ 472

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Securities (Narrative) (Details)	Dec. 31, 2023 USD ($) investment	Dec. 31, 2022 USD ($) investment	Dec. 31, 2009 USD ($)
Debt Securities, Available-for-sale [Line Items]
Carrying amount of securities pledged	$ 366,576,000	$ 354,123,000
Allowance for credit losses for available-for-sale securities	0	0
Accrued interest receivable on available-for-sale securities	$ 9,620,000	$ 10,637,000
Debt Securities, Available-for-Sale, Accrued Interest, after Allowance for Credit Loss, Statement of Financial Position [Extensible Enumeration]	Accrued Interest Payable and Other Liabilities	Accrued Interest Payable and Other Liabilities
Original investment of equity security	$ 353,000	$ 353,000
Other than temporary impairment recognized through earnings	$ 0	$ 0
Equity Securities
Debt Securities, Available-for-sale [Line Items]
Number of equity securities held in non-controlling investment banking | investment	1	1
Original investment of equity security			$ 1,350,000
Other than temporary impairment recognized through earnings			$ 997,000

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Securities (Schedule of Securities with Unrealized Losses) (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Debt Securities, Available-for-sale [Line Items]
Less than 12 Months Fair Value	$ 13,604	$ 1,018,313
Less than 12 Months Unrealized Loss	(176)	(177,161)
12 Months or More Fair Value	1,494,312	603,633
12 Months or More Unrealized Loss	(275,589)	(156,691)
Total Fair Value	1,507,916	1,621,946
Total Unrealized Loss	(275,765)	(333,852)
Obligations of State and Political Subdivisions
Debt Securities, Available-for-sale [Line Items]
Less than 12 Months Fair Value	13,469	579,267
Less than 12 Months Unrealized Loss	(175)	(117,423)
12 Months or More Fair Value	668,223	122,992
12 Months or More Unrealized Loss	(122,199)	(44,591)
Total Fair Value	681,692	702,259
Total Unrealized Loss	(122,374)	(162,014)
MBS/CMO
Debt Securities, Available-for-sale [Line Items]
Less than 12 Months Fair Value	135	240,344
Less than 12 Months Unrealized Loss	(1)	(20,920)
12 Months or More Fair Value	643,172	474,327
12 Months or More Unrealized Loss	(116,012)	(110,918)
Total Fair Value	643,307	714,671
Total Unrealized Loss	(116,013)	(131,838)
US Gov’t Sponsored Entities & Agencies
Debt Securities, Available-for-sale [Line Items]
Less than 12 Months Fair Value	0	198,702
Less than 12 Months Unrealized Loss	0	(38,818)
12 Months or More Fair Value	182,917	6,314
12 Months or More Unrealized Loss	(37,378)	(1,182)
Total Fair Value	182,917	205,016
Total Unrealized Loss	$ (37,378)	$ (40,000)

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Derivatives (Narrative) (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Interest Rate Swaps
Derivative [Line Items]
Notional amount of derivatives	$ 139,751	$ 134,684

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Derivatives (Derivative Instruments and Hedging Activities) (Details) - Interest Rate Swaps - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Other Assets
Included in Other Assets:
Interest rate swaps, notional Amount	$ 139,751	$ 134,684
Interest rate swaps, fair value	7,458	9,899
Other Liabilities
Included in Other Liabilities:
Interest rate swaps, notional Amount	139,751	134,684
Interest rate swaps, fair value	$ 7,467	$ 9,749

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Derivatives (Derivative Instruments Consolidated Statement) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Interest Rate Swaps
Derivative [Line Items]
Included in Other Income	$ 344	$ 403	$ 1,131

XML

Loans (Classifications of Loans) (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	$ 3,977,900	$ 3,788,645
Less:   Unearned Income	(6,818)	(3,711)
Allowance for Credit Losses	(43,765)	(44,168)	$ (37,017)	$ (46,859)
Loans, Net	3,927,317	3,740,766
Commercial and Industrial Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	589,541	620,106
Allowance for Credit Losses	(7,921)	(13,749)	(9,554)	(6,445)
Commercial Real Estate Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	2,121,835	1,966,884
Allowance for Credit Losses	(25,923)	(21,598)	(19,245)	(29,878)
Agricultural Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	423,803	417,413
Allowance for Credit Losses	(3,837)	(4,188)	(4,505)	(6,756)
Leases
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	71,988	56,396
Allowance for Credit Losses	(346)	(209)	(200)	(200)
Home Equity Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	299,685	279,748
Allowance for Credit Losses	(1,834)	(1,344)	(1,061)	(996)
Consumer Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	87,853	79,904
Allowance for Credit Losses	(759)	(595)	(507)	(490)
Credit Cards
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	20,351	17,512
Allowance for Credit Losses	(383)	(257)	(240)	(150)
Residential Mortgage Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	362,844	350,682
Allowance for Credit Losses	(2,762)	(2,228)	$ (1,705)	$ (1,944)
Commercial | Commercial and Industrial Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	589,541	620,106
Commercial | Commercial Real Estate Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	2,121,835	1,966,884
Commercial | Agricultural Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	423,803	417,413
Commercial | Leases
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	71,988	56,396
Retail
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	3,977,900	3,788,645
Retail | Home Equity Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	299,685	279,748
Retail | Consumer Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	87,853	79,904
Retail | Credit Cards
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	20,351	17,512
Retail | Residential Mortgage Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	$ 362,844	$ 350,682

XML

Loans (Narrative) (Details)	12 Months Ended
	Dec. 31, 2023 USD ($) loan	Dec. 31, 2022 USD ($)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, Net	$ 3,927,317,000	$ 3,740,766,000
Interest income recognized on non-accrual loans	$ 106,000	32,000
Number of loans modified as debt restructurings (in loans) | loan	0
Number of loans that subsequently default after modification (in loans) | loan	0
Threshold amount to individually classify loans by credit risk	$ 250,000
Loans acquired with deteriorated credit quality
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, Net	$ 13,237,000	$ 21,149,000

XML

Loans (Allowance for Credit Losses for Loans) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Allowance for Credit Losses [Roll Forward]
Beginning Balance	$ 44,168	$ 37,017	$ 46,859
Acquisition of Citizens Union Bank of Shelbyville, KY - PCD Loans		3,117
Provision (Benefit) for Credit Losses	2,550	6,350	(6,500)
Loans Charged-off	(3,791)	(2,850)	(3,835)
Recoveries Collected	838	534	493
Total Ending Allowance Balance	43,765	44,168	37,017
Commercial and Industrial Loans
Allowance for Credit Losses [Roll Forward]
Beginning Balance	13,749	9,554	6,445
Acquisition of Citizens Union Bank of Shelbyville, KY - PCD Loans		376
Provision (Benefit) for Credit Losses	(4,190)	4,942	5,825
Loans Charged-off	(1,792)	(1,149)	(2,777)
Recoveries Collected	154	26	61
Total Ending Allowance Balance	7,921	13,749	9,554
Commercial Real Estate Loans
Allowance for Credit Losses [Roll Forward]
Beginning Balance	21,598	19,245	29,878
Acquisition of Citizens Union Bank of Shelbyville, KY - PCD Loans		1,945
Provision (Benefit) for Credit Losses	4,305	463	(10,663)
Loans Charged-off	(56)	(79)	(10)
Recoveries Collected	76	24	40
Total Ending Allowance Balance	25,923	21,598	19,245
Agricultural Loans
Allowance for Credit Losses [Roll Forward]
Beginning Balance	4,188	4,505	6,756
Acquisition of Citizens Union Bank of Shelbyville, KY - PCD Loans		689
Provision (Benefit) for Credit Losses	(324)	(1,006)	(2,251)
Loans Charged-off	(27)	0	0
Recoveries Collected	0	0	0
Total Ending Allowance Balance	3,837	4,188	4,505
Leases
Allowance for Credit Losses [Roll Forward]
Beginning Balance	209	200	200
Acquisition of Citizens Union Bank of Shelbyville, KY - PCD Loans		0
Provision (Benefit) for Credit Losses	137	9	0
Loans Charged-off	0	0	0
Recoveries Collected	0	0	0
Total Ending Allowance Balance	346	209	200
Consumer Loans
Allowance for Credit Losses [Roll Forward]
Beginning Balance	595	507	490
Acquisition of Citizens Union Bank of Shelbyville, KY - PCD Loans		2
Provision (Benefit) for Credit Losses	919	991	385
Loans Charged-off	(1,309)	(1,364)	(675)
Recoveries Collected	554	459	307
Total Ending Allowance Balance	759	595	507
Home Equity Loans
Allowance for Credit Losses [Roll Forward]
Beginning Balance	1,344	1,061	996
Acquisition of Citizens Union Bank of Shelbyville, KY - PCD Loans		0
Provision (Benefit) for Credit Losses	551	351	44
Loans Charged-off	(94)	(69)	(15)
Recoveries Collected	33	1	36
Total Ending Allowance Balance	1,834	1,344	1,061
Credit Cards
Allowance for Credit Losses [Roll Forward]
Beginning Balance	257	240	150
Acquisition of Citizens Union Bank of Shelbyville, KY - PCD Loans		0
Provision (Benefit) for Credit Losses	563	163	387
Loans Charged-off	(455)	(165)	(313)
Recoveries Collected	18	19	16
Total Ending Allowance Balance	383	257	240
Residential Mortgage Loans
Allowance for Credit Losses [Roll Forward]
Beginning Balance	2,228	1,705	1,944
Acquisition of Citizens Union Bank of Shelbyville, KY - PCD Loans		105
Provision (Benefit) for Credit Losses	589	437	(227)
Loans Charged-off	(58)	(24)	(45)
Recoveries Collected	3	5	33
Total Ending Allowance Balance	$ 2,762	$ 2,228	$ 1,705

XML

Loans (Non-accrual and Loans Past Due over 89 Days Still Accruing) (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Financing Receivable, Past Due [Line Items]
Non-Accrual With No Allowance For Credit Losses	$ 5,882	$ 3,509
Non-Accrual	9,136	12,888
Loans Past Due Over 89 Days Still Accruing	55	1,427
Commercial and Industrial Loans
Financing Receivable, Past Due [Line Items]
Non-Accrual With No Allowance For Credit Losses	1,864	1,142
Non-Accrual	3,707	7,936
Loans Past Due Over 89 Days Still Accruing	0	1,427
Commercial Real Estate Loans
Financing Receivable, Past Due [Line Items]
Non-Accrual With No Allowance For Credit Losses	942	49
Non-Accrual	1,889	1,950
Loans Past Due Over 89 Days Still Accruing	55	0
Agricultural Loans
Financing Receivable, Past Due [Line Items]
Non-Accrual With No Allowance For Credit Losses	665	994
Non-Accrual	879	1,062
Loans Past Due Over 89 Days Still Accruing	0	0
Leases
Financing Receivable, Past Due [Line Items]
Non-Accrual With No Allowance For Credit Losses	0	0
Non-Accrual	0	0
Loans Past Due Over 89 Days Still Accruing	0	0
Home Equity Loans
Financing Receivable, Past Due [Line Items]
Non-Accrual With No Allowance For Credit Losses	1,033	262
Non-Accrual	1,033	310
Loans Past Due Over 89 Days Still Accruing	0	0
Consumer Loans
Financing Receivable, Past Due [Line Items]
Non-Accrual With No Allowance For Credit Losses	111	240
Non-Accrual	111	254
Loans Past Due Over 89 Days Still Accruing	0	0
Credit Cards
Financing Receivable, Past Due [Line Items]
Non-Accrual With No Allowance For Credit Losses	142	146
Non-Accrual	142	146
Loans Past Due Over 89 Days Still Accruing	0	0
Residential Mortgage Loans
Financing Receivable, Past Due [Line Items]
Non-Accrual With No Allowance For Credit Losses	1,125	676
Non-Accrual	1,375	1,230
Loans Past Due Over 89 Days Still Accruing	$ 0	$ 0

XML

Loans (Collateral-dependent Loans by Class) (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	$ 3,977,900	$ 3,788,645
Total
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	19,733	28,459
Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	16,741	20,749
Equipment
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	1,104	1,575
Accounts Receivable
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	0	272
Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	1,888	5,863
Commercial and Industrial Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	589,541	620,106
Commercial and Industrial Loans | Total
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	5,605	9,420
Commercial and Industrial Loans | Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	3,668	2,078
Commercial and Industrial Loans | Equipment
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	49	1,219
Commercial and Industrial Loans | Accounts Receivable
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	0	272
Commercial and Industrial Loans | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	1,888	5,851
Commercial Real Estate Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	2,121,835	1,966,884
Commercial Real Estate Loans | Total
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	8,553	12,228
Commercial Real Estate Loans | Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	8,553	12,192
Commercial Real Estate Loans | Equipment
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	0	36
Commercial Real Estate Loans | Accounts Receivable
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	0	0
Commercial Real Estate Loans | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	0	0
Agricultural Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	423,803	417,413
Agricultural Loans | Total
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	4,393	5,262
Agricultural Loans | Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	3,338	4,944
Agricultural Loans | Equipment
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	1,055	318
Agricultural Loans | Accounts Receivable
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	0	0
Agricultural Loans | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	0	0
Leases
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	71,988	56,396
Leases | Total
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	0	0
Leases | Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	0	0
Leases | Equipment
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	0	0
Leases | Accounts Receivable
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	0	0
Leases | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	0	0
Home Equity Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	299,685	279,748
Home Equity Loans | Total
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	420	467
Home Equity Loans | Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	420	467
Home Equity Loans | Equipment
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	0	0
Home Equity Loans | Accounts Receivable
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	0	0
Home Equity Loans | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	0	0
Consumer Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	87,853	79,904
Consumer Loans | Total
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	9	22
Consumer Loans | Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	9	8
Consumer Loans | Equipment
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	0	2
Consumer Loans | Accounts Receivable
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	0	0
Consumer Loans | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	0	12
Credit Cards
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	20,351	17,512
Credit Cards | Total
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	0	0
Credit Cards | Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	0	0
Credit Cards | Equipment
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	0	0
Credit Cards | Accounts Receivable
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	0	0
Credit Cards | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	0	0
Residential Mortgage Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	362,844	350,682
Residential Mortgage Loans | Total
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	753	1,060
Residential Mortgage Loans | Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	753	1,060
Residential Mortgage Loans | Equipment
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	0	0
Residential Mortgage Loans | Accounts Receivable
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	0	0
Residential Mortgage Loans | Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans	$ 0	$ 0

XML

Loans (Aging of Past Due Loans) (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Financing Receivable, Past Due [Line Items]
Loans	$ 3,977,900	$ 3,788,645
Total Past Due
Financing Receivable, Past Due [Line Items]
Loans	21,865	25,122
30-59 Days Past Due
Financing Receivable, Past Due [Line Items]
Loans	11,253	10,633
60-89 Days Past Due
Financing Receivable, Past Due [Line Items]
Loans	3,378	3,706
Greater Than 89 Days Past Due
Financing Receivable, Past Due [Line Items]
Loans	7,234	10,783
Loans Not Past Due
Financing Receivable, Past Due [Line Items]
Loans	3,956,035	3,763,523
Commercial and Industrial Loans
Financing Receivable, Past Due [Line Items]
Loans	589,541	620,106
Commercial and Industrial Loans | Total Past Due
Financing Receivable, Past Due [Line Items]
Loans	4,388	9,234
Commercial and Industrial Loans | 30-59 Days Past Due
Financing Receivable, Past Due [Line Items]
Loans	832	268
Commercial and Industrial Loans | 60-89 Days Past Due
Financing Receivable, Past Due [Line Items]
Loans	257	681
Commercial and Industrial Loans | Greater Than 89 Days Past Due
Financing Receivable, Past Due [Line Items]
Loans	3,299	8,285
Commercial and Industrial Loans | Loans Not Past Due
Financing Receivable, Past Due [Line Items]
Loans	585,153	610,872
Commercial Real Estate Loans
Financing Receivable, Past Due [Line Items]
Loans	2,121,835	1,966,884
Commercial Real Estate Loans | Total Past Due
Financing Receivable, Past Due [Line Items]
Loans	2,637	2,247
Commercial Real Estate Loans | 30-59 Days Past Due
Financing Receivable, Past Due [Line Items]
Loans	1,215	1,617
Commercial Real Estate Loans | 60-89 Days Past Due
Financing Receivable, Past Due [Line Items]
Loans	484	14
Commercial Real Estate Loans | Greater Than 89 Days Past Due
Financing Receivable, Past Due [Line Items]
Loans	938	616
Commercial Real Estate Loans | Loans Not Past Due
Financing Receivable, Past Due [Line Items]
Loans	2,119,198	1,964,637
Agricultural Loans
Financing Receivable, Past Due [Line Items]
Loans	423,803	417,413
Agricultural Loans | Total Past Due
Financing Receivable, Past Due [Line Items]
Loans	750	466
Agricultural Loans | 30-59 Days Past Due
Financing Receivable, Past Due [Line Items]
Loans	5	343
Agricultural Loans | 60-89 Days Past Due
Financing Receivable, Past Due [Line Items]
Loans	248	0
Agricultural Loans | Greater Than 89 Days Past Due
Financing Receivable, Past Due [Line Items]
Loans	497	123
Agricultural Loans | Loans Not Past Due
Financing Receivable, Past Due [Line Items]
Loans	423,053	416,947
Leases
Financing Receivable, Past Due [Line Items]
Loans	71,988	56,396
Leases | Total Past Due
Financing Receivable, Past Due [Line Items]
Loans	0	0
Leases | 30-59 Days Past Due
Financing Receivable, Past Due [Line Items]
Loans	0	0
Leases | 60-89 Days Past Due
Financing Receivable, Past Due [Line Items]
Loans	0	0
Leases | Greater Than 89 Days Past Due
Financing Receivable, Past Due [Line Items]
Loans	0	0
Leases | Loans Not Past Due
Financing Receivable, Past Due [Line Items]
Loans	71,988	56,396
Home Equity Loans
Financing Receivable, Past Due [Line Items]
Loans	299,685	279,748
Home Equity Loans | Total Past Due
Financing Receivable, Past Due [Line Items]
Loans	2,620	2,220
Home Equity Loans | 30-59 Days Past Due
Financing Receivable, Past Due [Line Items]
Loans	1,016	1,770
Home Equity Loans | 60-89 Days Past Due
Financing Receivable, Past Due [Line Items]
Loans	571	140
Home Equity Loans | Greater Than 89 Days Past Due
Financing Receivable, Past Due [Line Items]
Loans	1,033	310
Home Equity Loans | Loans Not Past Due
Financing Receivable, Past Due [Line Items]
Loans	297,065	277,528
Consumer Loans
Financing Receivable, Past Due [Line Items]
Loans	87,853	79,904
Consumer Loans | Total Past Due
Financing Receivable, Past Due [Line Items]
Loans	852	535
Consumer Loans | 30-59 Days Past Due
Financing Receivable, Past Due [Line Items]
Loans	658	219
Consumer Loans | 60-89 Days Past Due
Financing Receivable, Past Due [Line Items]
Loans	84	64
Consumer Loans | Greater Than 89 Days Past Due
Financing Receivable, Past Due [Line Items]
Loans	110	252
Consumer Loans | Loans Not Past Due
Financing Receivable, Past Due [Line Items]
Loans	87,001	79,369
Credit Cards
Financing Receivable, Past Due [Line Items]
Loans	20,351	17,512
Credit Cards | Total Past Due
Financing Receivable, Past Due [Line Items]
Loans	394	256
Credit Cards | 30-59 Days Past Due
Financing Receivable, Past Due [Line Items]
Loans	165	86
Credit Cards | 60-89 Days Past Due
Financing Receivable, Past Due [Line Items]
Loans	87	24
Credit Cards | Greater Than 89 Days Past Due
Financing Receivable, Past Due [Line Items]
Loans	142	146
Credit Cards | Loans Not Past Due
Financing Receivable, Past Due [Line Items]
Loans	19,957	17,256
Residential Mortgage Loans
Financing Receivable, Past Due [Line Items]
Loans	362,844	350,682
Residential Mortgage Loans | Total Past Due
Financing Receivable, Past Due [Line Items]
Loans	10,224	10,164
Residential Mortgage Loans | 30-59 Days Past Due
Financing Receivable, Past Due [Line Items]
Loans	7,362	6,330
Residential Mortgage Loans | 60-89 Days Past Due
Financing Receivable, Past Due [Line Items]
Loans	1,647	2,783
Residential Mortgage Loans | Greater Than 89 Days Past Due
Financing Receivable, Past Due [Line Items]
Loans	1,215	1,051
Residential Mortgage Loans | Loans Not Past Due
Financing Receivable, Past Due [Line Items]
Loans	$ 352,620	$ 340,518

XML

Loans (Risk Category of Loans) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Financing Receivable, Credit Quality Indicator [Line Items]
Loans	$ 3,977,900	$ 3,788,645
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss, Writeoff, by Origination Year [Abstract]
Total	3,791	2,850	$ 3,835
Commercial and Industrial Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Current fiscal year	112,673	158,088
One year before current fiscal year	135,337	123,425
Two year before current fiscal year	86,555	41,375
Three year before current fiscal year	30,101	47,887
Four year before current fiscal year	34,281	20,002
Prior	49,183	56,065
Revolving Loans Amortized Cost Basis	141,411	173,264
Loans	589,541	620,106
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss, Writeoff, by Origination Year [Abstract]
2023	0
2022	911
2021	32
2020	493
2019	7
Prior	88
Revolving Loans Amortized Cost Basis	261
Total	1,792	1,149	2,777
Commercial Real Estate Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Current fiscal year	314,475	402,613
One year before current fiscal year	419,892	496,943
Two year before current fiscal year	487,582	266,563
Three year before current fiscal year	228,461	164,251
Four year before current fiscal year	148,419	143,819
Prior	481,090	457,532
Revolving Loans Amortized Cost Basis	41,916	35,163
Loans	2,121,835	1,966,884
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss, Writeoff, by Origination Year [Abstract]
2023	0
2022	0
2021	56
2020	0
2019	0
Prior	0
Revolving Loans Amortized Cost Basis	0
Total	56	79	10
Agricultural Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Current fiscal year	46,443	63,307
One year before current fiscal year	56,455	48,734
Two year before current fiscal year	40,954	54,049
Three year before current fiscal year	47,514	30,009
Four year before current fiscal year	25,755	24,168
Prior	114,968	108,974
Revolving Loans Amortized Cost Basis	91,714	88,172
Loans	423,803	417,413
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss, Writeoff, by Origination Year [Abstract]
2023	0
2022	0
2021	0
2020	2
2019	0
Prior	0
Revolving Loans Amortized Cost Basis	25
Total	27	0	0
Leases
Financing Receivable, Credit Quality Indicator [Line Items]
Current fiscal year	36,848	20,057
One year before current fiscal year	12,281	14,461
Two year before current fiscal year	10,634	9,648
Three year before current fiscal year	6,086	8,901
Four year before current fiscal year	4,788	1,851
Prior	1,351	1,478
Revolving Loans Amortized Cost Basis	0	0
Loans	71,988	56,396
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss, Writeoff, by Origination Year [Abstract]
2023	0
2022	0
2021	0
2020	0
2019	0
Prior	0
Revolving Loans Amortized Cost Basis	0
Total	0	0	$ 0
Pass | Commercial and Industrial Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Current fiscal year	112,626	156,318
One year before current fiscal year	134,590	117,648
Two year before current fiscal year	80,738	39,949
Three year before current fiscal year	28,492	46,505
Four year before current fiscal year	32,585	18,423
Prior	45,764	51,482
Revolving Loans Amortized Cost Basis	134,936	154,203
Loans	569,731	584,528
Pass | Commercial Real Estate Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Current fiscal year	300,569	398,631
One year before current fiscal year	416,874	490,747
Two year before current fiscal year	470,917	261,462
Three year before current fiscal year	225,668	162,701
Four year before current fiscal year	147,431	129,151
Prior	458,821	427,433
Revolving Loans Amortized Cost Basis	41,102	35,163
Loans	2,061,382	1,905,288
Pass | Agricultural Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Current fiscal year	44,948	62,673
One year before current fiscal year	56,291	47,682
Two year before current fiscal year	39,852	47,355
Three year before current fiscal year	42,279	25,431
Four year before current fiscal year	23,217	21,728
Prior	100,391	92,344
Revolving Loans Amortized Cost Basis	89,455	83,862
Loans	396,433	381,075
Pass | Leases
Financing Receivable, Credit Quality Indicator [Line Items]
Current fiscal year	36,848	20,057
One year before current fiscal year	12,281	14,461
Two year before current fiscal year	10,634	9,648
Three year before current fiscal year	6,086	8,901
Four year before current fiscal year	4,788	1,851
Prior	1,351	1,478
Revolving Loans Amortized Cost Basis	0	0
Loans	71,988	56,396
Special Mention | Commercial and Industrial Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Current fiscal year	47	56
One year before current fiscal year	453	148
Two year before current fiscal year	128	577
Three year before current fiscal year	829	78
Four year before current fiscal year	0	551
Prior	1,948	2,346
Revolving Loans Amortized Cost Basis	3,048	1,672
Loans	6,453	5,428
Special Mention | Commercial Real Estate Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Current fiscal year	13,906	3,982
One year before current fiscal year	2,401	1,568
Two year before current fiscal year	11,155	4,612
Three year before current fiscal year	1,651	135
Four year before current fiscal year	259	13,689
Prior	19,532	25,371
Revolving Loans Amortized Cost Basis	638	0
Loans	49,542	49,357
Special Mention | Agricultural Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Current fiscal year	1,495	634
One year before current fiscal year	164	842
Two year before current fiscal year	903	6,066
Three year before current fiscal year	5,047	4,149
Four year before current fiscal year	2,338	2,355
Prior	9,894	11,440
Revolving Loans Amortized Cost Basis	2,259	4,310
Loans	22,100	29,796
Special Mention | Leases
Financing Receivable, Credit Quality Indicator [Line Items]
Current fiscal year	0	0
One year before current fiscal year	0	0
Two year before current fiscal year	0	0
Three year before current fiscal year	0	0
Four year before current fiscal year	0	0
Prior	0	0
Revolving Loans Amortized Cost Basis	0	0
Loans	0	0
Substandard | Commercial and Industrial Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Current fiscal year	0	1,714
One year before current fiscal year	294	5,629
Two year before current fiscal year	5,689	849
Three year before current fiscal year	780	1,304
Four year before current fiscal year	1,696	1,028
Prior	1,471	2,237
Revolving Loans Amortized Cost Basis	3,427	17,389
Loans	13,357	30,150
Substandard | Commercial Real Estate Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Current fiscal year	0	0
One year before current fiscal year	617	4,628
Two year before current fiscal year	5,510	489
Three year before current fiscal year	1,142	1,415
Four year before current fiscal year	729	979
Prior	2,737	4,728
Revolving Loans Amortized Cost Basis	176	0
Loans	10,911	12,239
Substandard | Agricultural Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Current fiscal year	0	0
One year before current fiscal year	0	210
Two year before current fiscal year	199	628
Three year before current fiscal year	188	429
Four year before current fiscal year	200	85
Prior	4,683	5,190
Revolving Loans Amortized Cost Basis	0	0
Loans	5,270	6,542
Substandard | Leases
Financing Receivable, Credit Quality Indicator [Line Items]
Current fiscal year	0	0
One year before current fiscal year	0	0
Two year before current fiscal year	0	0
Three year before current fiscal year	0	0
Four year before current fiscal year	0	0
Prior	0	0
Revolving Loans Amortized Cost Basis	0	0
Loans	0	0
Doubtful | Commercial and Industrial Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Current fiscal year	0	0
One year before current fiscal year	0	0
Two year before current fiscal year	0	0
Three year before current fiscal year	0	0
Four year before current fiscal year	0	0
Prior	0	0
Revolving Loans Amortized Cost Basis	0	0
Loans	0	0
Doubtful | Commercial Real Estate Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Current fiscal year	0	0
One year before current fiscal year	0	0
Two year before current fiscal year	0	0
Three year before current fiscal year	0	0
Four year before current fiscal year	0	0
Prior	0	0
Revolving Loans Amortized Cost Basis	0	0
Loans	0	0
Doubtful | Agricultural Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Current fiscal year	0	0
One year before current fiscal year	0	0
Two year before current fiscal year	0	0
Three year before current fiscal year	0	0
Four year before current fiscal year	0	0
Prior	0	0
Revolving Loans Amortized Cost Basis	0	0
Loans	0	0
Doubtful | Leases
Financing Receivable, Credit Quality Indicator [Line Items]
Current fiscal year	0	0
One year before current fiscal year	0	0
Two year before current fiscal year	0	0
Three year before current fiscal year	0	0
Four year before current fiscal year	0	0
Prior	0	0
Revolving Loans Amortized Cost Basis	0	0
Loans	$ 0	$ 0

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Loans (Residential, Home Equity and Consumer Loans Based on Payment Activity) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Financing Receivable, Credit Quality Indicator [Line Items]
Loans	$ 3,977,900	$ 3,788,645
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss, Writeoff, by Origination Year [Abstract]
Total	3,791	2,850	$ 3,835
Consumer Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Current fiscal year	49,282	42,688
One year before current fiscal year	21,480	22,727
Two year before current fiscal year	9,720	5,822
Three year before current fiscal year	2,756	2,402
Four year before current fiscal year	917	1,545
Prior	1,912	1,563
Revolving Loans Amortized Cost Basis	1,786	3,157
Loans	87,853	79,904
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss, Writeoff, by Origination Year [Abstract]
2023	1,162
2022	42
2021	23
2020	71
2019	3
Prior	1
Revolving Loans Amortized Cost Basis	7
Total	1,309	1,364	675
Consumer Loans | Performing
Financing Receivable, Credit Quality Indicator [Line Items]
Current fiscal year	49,208	42,685
One year before current fiscal year	21,459	22,708
Two year before current fiscal year	9,708	5,610
Three year before current fiscal year	2,756	2,394
Four year before current fiscal year	917	1,543
Prior	1,911	1,553
Revolving Loans Amortized Cost Basis	1,783	3,157
Loans	87,742	79,650
Consumer Loans | Nonperforming
Financing Receivable, Credit Quality Indicator [Line Items]
Current fiscal year	74	3
One year before current fiscal year	21	19
Two year before current fiscal year	12	212
Three year before current fiscal year	0	8
Four year before current fiscal year	0	2
Prior	1	10
Revolving Loans Amortized Cost Basis	3	0
Loans	111	254
Home Equity Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Current fiscal year	0	63
One year before current fiscal year	417	20
Two year before current fiscal year	488	0
Three year before current fiscal year	150	0
Four year before current fiscal year	165	19
Prior	1,309	592
Revolving Loans Amortized Cost Basis	297,156	279,054
Loans	299,685	279,748
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss, Writeoff, by Origination Year [Abstract]
2023	0
2022	0
2021	0
2020	55
2019	0
Prior	24
Revolving Loans Amortized Cost Basis	15
Total	94	69	15
Home Equity Loans | Performing
Financing Receivable, Credit Quality Indicator [Line Items]
Current fiscal year	0	63
One year before current fiscal year	170	0
Two year before current fiscal year	236	0
Three year before current fiscal year	90	0
Four year before current fiscal year	165	0
Prior	1,207	591
Revolving Loans Amortized Cost Basis	296,784	278,784
Loans	298,652	279,438
Home Equity Loans | Nonperforming
Financing Receivable, Credit Quality Indicator [Line Items]
Current fiscal year	0	0
One year before current fiscal year	247	20
Two year before current fiscal year	252	0
Three year before current fiscal year	60	0
Four year before current fiscal year	0	19
Prior	102	1
Revolving Loans Amortized Cost Basis	372	270
Loans	1,033	310
Residential Mortgage Loans
Financing Receivable, Credit Quality Indicator [Line Items]
Current fiscal year	56,317	69,982
One year before current fiscal year	65,361	97,337
Two year before current fiscal year	86,170	47,104
Three year before current fiscal year	41,639	20,080
Four year before current fiscal year	17,940	16,742
Prior	95,417	99,437
Revolving Loans Amortized Cost Basis	0	0
Loans	362,844	350,682
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss, Writeoff, by Origination Year [Abstract]
2023	0
2022	0
2021	22
2020	36
2019	0
Prior	0
Revolving Loans Amortized Cost Basis	0
Total	58	24	$ 45
Residential Mortgage Loans | Performing
Financing Receivable, Credit Quality Indicator [Line Items]
Current fiscal year	56,306	69,982
One year before current fiscal year	65,301	97,176
Two year before current fiscal year	85,753	46,851
Three year before current fiscal year	41,352	20,080
Four year before current fiscal year	17,831	16,664
Prior	94,926	98,699
Revolving Loans Amortized Cost Basis	0	0
Loans	361,469	349,452
Residential Mortgage Loans | Nonperforming
Financing Receivable, Credit Quality Indicator [Line Items]
Current fiscal year	11	0
One year before current fiscal year	60	161
Two year before current fiscal year	417	253
Three year before current fiscal year	287	0
Four year before current fiscal year	109	78
Prior	491	738
Revolving Loans Amortized Cost Basis	0	0
Loans	$ 1,375	$ 1,230

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Loans (Retail Loans Based on Payment Activity) (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Financing Receivable, Credit Quality Indicator [Line Items]
Loans	$ 3,977,900	$ 3,788,645
Credit Cards
Financing Receivable, Credit Quality Indicator [Line Items]
Loans	20,351	17,512
Credit Cards | Performing
Financing Receivable, Credit Quality Indicator [Line Items]
Loans	20,209	17,366
Credit Cards | Nonperforming
Financing Receivable, Credit Quality Indicator [Line Items]
Loans	$ 142	$ 146

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Loans (Loans Purchased and/or Sold During the Year) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Accounts, Notes, Loans and Financing Receivable [Line Items]
Purchases	$ 1,502	$ 933
Sales	0	3,916
Commercial and Industrial Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Purchases	0	522
Sales	0	0
Commercial Real Estate Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Purchases	1,502	411
Sales	0	3,819
Agricultural Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Purchases	0	0
Sales	0	97
Leases
Accounts, Notes, Loans and Financing Receivable [Line Items]
Purchases	0	0
Sales	0	0
Consumer Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Purchases	0	0
Sales	0	0
Home Equity Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Purchases	0	0
Sales	0	0
Credit Cards
Accounts, Notes, Loans and Financing Receivable [Line Items]
Purchases	0	0
Sales	0	0
Residential Mortgage Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Purchases	0	0
Sales	$ 0	$ 0

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Loans (Activity of Loans to Directors, Executive Officers and Principal Shareholders) (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2023 USD ($)
Loans and Leases Receivable, Related Parties [Roll Forward]
Balance January 1, 2023	$ 51,086
Additions	13,854
Changes in Persons or Interests Included	(7,087)
Deductions, Collected	(18,031)
Deductions, Charged-off	0
Balance December 31, 2023	$ 39,822

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Premises, Furniture, and Equipment (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Property, Plant and Equipment [Line Items]
Total Premises, Furniture and Equipment	$ 179,495	$ 183,748
Less:  Accumulated Depreciation	(72,719)	(71,511)
Total	106,776	112,237
Depreciation expense	6,570	6,648	$ 5,802
Land
Property, Plant and Equipment [Line Items]
Total Premises, Furniture and Equipment	27,100	27,401
Buildings and Improvements
Property, Plant and Equipment [Line Items]
Total Premises, Furniture and Equipment	106,646	109,682
Furniture and Equipment
Property, Plant and Equipment [Line Items]
Total Premises, Furniture and Equipment	$ 45,749	$ 46,665

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Deposits (Maturities of Time Deposits) (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Deposits Liabilities, Balance Sheet, Reported Amounts [Abstract]
2024	$ 707,978
2025	32,366
2026	16,952
2027	6,155
2028	3,591
Thereafter	0
Total	$ 767,042	$ 428,469

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Deposits (Narrative) (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Deposits Liabilities, Balance Sheet, Reported Amounts [Abstract]
Time deposits of $250 or more and Brokered CDs	$ 277,568	$ 71,081
Time deposits originated from outside the geographic area	3,801	3,277
Deposits from principal officers, directors and their affiliates	$ 67,637	$ 62,435

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FHLB Advances and Other Borrowings (Schedule of Borrowings, Debt and Repurchase Agreements) (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Business Acquisition [Line Items]
Total Borrowings	$ 199,830	$ 210,238
Unamortized Discount and Debt Issuance Costs	(5,893)	(6,432)
Overnight Variable Rate Advances
Business Acquisition [Line Items]
Overnight Variable Rate Advances from Federal Home Loan Bank collateralized by qualifying mortgages, investment securities, and mortgage-backed securities	0	25,000
Unamortized Discount and Debt Issuance Costs	0	0
Federal Funds Purchased
Business Acquisition [Line Items]
Federal Funds Purchased	25,000	11,200
Unamortized Discount and Debt Issuance Costs	0	0
Repurchase Agreements
Business Acquisition [Line Items]
Repurchase Agreements	40,968	64,961
Unamortized Discount and Debt Issuance Costs	0	0
Short-term Borrowings
Business Acquisition [Line Items]
Short-term Borrowings	65,968	101,161
Unamortized Discount and Debt Issuance Costs	0	0
American Community Bancorp
Business Acquisition [Line Items]
Junior Subordinated Debentures	8,248	8,248
Unamortized Discount and Debt Issuance Costs	(1,723)	(1,873)
River Valley
Business Acquisition [Line Items]
Junior Subordinated Debentures	7,217	7,217
Unamortized Discount and Debt Issuance Costs	(977)	(1,082)
Citizens First Corporation
Business Acquisition [Line Items]
Junior Subordinated Debentures	5,155	5,155
Unamortized Discount and Debt Issuance Costs	(853)	(919)
Citizens Union Bancorp
Business Acquisition [Line Items]
Junior Subordinated Debentures	20,600	20,600
Unamortized Discount and Debt Issuance Costs	(1,885)	(2,020)
Long Term Advances
Business Acquisition [Line Items]
Long-term Advances from Federal Home Loan Bank collateralized by qualifying mortgages, investment securities, and mortgage-backed securities	50,000	25,000
Unamortized Discount and Debt Issuance Costs	0	0
Subordinated Debentures
Business Acquisition [Line Items]
Subordinated Debentures	40,000	40,000
Unamortized Discount and Debt Issuance Costs	(455)	(538)
Finance Lease Obligation
Business Acquisition [Line Items]
Finance Lease Obligation	2,642	2,857
Unamortized Discount and Debt Issuance Costs	0	0
Long-term Borrowings
Business Acquisition [Line Items]
Long-term Borrowings	133,862	109,077
Unamortized Discount and Debt Issuance Costs	$ (5,893)	$ (6,432)

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FHLB Advances and Other Borrowings (Schedule of Repurchase Agreements) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Advance from Federal Home Loan Bank [Abstract]
Average Daily Balance During the Year	$ 51,474	$ 52,932
Average Interest Rate During the Year	1.16%	0.20%
Maximum Month-end Balance During the Year	$ 60,055	$ 72,084
Weighted Average Interest Rate at Year-end	1.44%	0.57%

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FHLB Advances and Other Borrowings (Narrative) (Details)	6 Months Ended	12 Months Ended
	Dec. 31, 2023 USD ($)	Dec. 31, 2023 USD ($)	Dec. 31, 2022 USD ($) advance
Debt Instrument [Line Items]
Number of long-term FHLB advances (in advances) | advance			1
FHLB advances, convertible from fixed to adjustable rate	$ 0	$ 0	$ 0
Line of credit, maximum borrowing capacity	15,000,000	15,000,000
Line of credit, outstanding balance	0	0
Junior subordinated debt for Tier 1 capital purposes	$ 34,829,000	$ 34,829,000	$ 34,378,000
SOFR
Debt Instrument [Line Items]
Variable rate (as percent)	0.26161%	2.10%
4.50% Fixed-to-Floating Rate Subordinated Notes due 2029 | SOFR
Debt Instrument [Line Items]
Variable rate (as percent)			0.26161%
Relevant spread adjustment (as percent)		2.68%
4.50% Fixed-to-Floating Rate Subordinated Notes due 2029 | Subordinated Debentures
Debt Instrument [Line Items]
Debt sold and issued	$ 39,545,000	$ 39,545,000	$ 39,462,000
Debt interest rate (as percent)	4.50%	4.50%
Junior Subordinated Debentures | Subordinated Debentures
Debt Instrument [Line Items]
Relevant spread adjustment (as percent)		0.26161%
Minimum
Debt Instrument [Line Items]
Interest rate on FHLB advances (as percent)	1.54%	1.54%	1.54%
Maximum
Debt Instrument [Line Items]
Interest rate on FHLB advances (as percent)	3.57%	3.57%
Weighted Average
Debt Instrument [Line Items]
Interest rate on FHLB advances (as percent)	2.56%	2.56%

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FHLB Advances and Other Borrowings (Scheduled Principal Payments on Long-Term Borrowings) (Details) $ in Thousands	Dec. 31, 2023 USD ($)
Advance from Federal Home Loan Bank [Abstract]
2024	$ 25,000
2025	0
2026	0
2027	0
2028	25,000
Thereafter	39,545
Long-term Borrowings	$ 89,545

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FHLB Advances and Other Borrowings (Schedule of Issuance of Subordinated Debentures) (Details) - USD ($)							6 Months Ended	12 Months Ended
	Oct. 16, 2006	Aug. 17, 2005	Jul. 15, 2005	May 06, 2005	Oct. 21, 2004	Mar. 26, 2003	Dec. 31, 2023	Dec. 31, 2023	Dec. 31, 2022
SOFR
Debt Instrument [Line Items]
Variable rate (as percent)							0.26161%	2.10%
ACB Trust I
Debt Instrument [Line Items]
Issuance Amount				$ 5,155,000
Carrying Amount at December 31, 2023							$ 4,105,000	$ 4,105,000
Rate as of December 31								7.81%	6.90%
ACB Trust I | SOFR
Debt Instrument [Line Items]
Variable rate (as percent)				2.15%
ACB Trust II
Debt Instrument [Line Items]
Issuance Amount			$ 3,093,000
Carrying Amount at December 31, 2023							2,420,000	$ 2,420,000
Rate as of December 31								7.49%	6.54%
ACB Trust II | SOFR
Debt Instrument [Line Items]
Variable rate (as percent)			1.85%
RIVR Statutory Trust I
Debt Instrument [Line Items]
Issuance Amount						$ 7,217,000
Carrying Amount at December 31, 2023							6,240,000	$ 6,240,000
Rate as of December 31								8.77%	7.87%
RIVR Statutory Trust I | SOFR
Debt Instrument [Line Items]
Variable rate (as percent)						3.15%
Citizens First Statutory Trust I
Debt Instrument [Line Items]
Issuance Amount	$ 5,155,000
Carrying Amount at December 31, 2023							4,302,000	$ 4,302,000
Rate as of December 31								7.31%	5.39%
Citizens First Statutory Trust I | SOFR
Debt Instrument [Line Items]
Variable rate (as percent)	1.65%
CUB Capital Trust I
Debt Instrument [Line Items]
Issuance Amount					$ 10,310,000
Carrying Amount at December 31, 2023							9,642,000	$ 9,642,000
Rate as of December 31								7.64%	6.69%
CUB Capital Trust I | SOFR
Debt Instrument [Line Items]
Variable rate (as percent)					2.00%
CUB Capital Trust II
Debt Instrument [Line Items]
Issuance Amount		$ 10,310,000
Carrying Amount at December 31, 2023							$ 9,073,000	$ 9,073,000
Rate as of December 31								7.16%	5.58%
CUB Capital Trust II | SOFR
Debt Instrument [Line Items]
Variable rate (as percent)		1.50%

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Shareholders' Equity (Narrative) (Details)			12 Months Ended					24 Months Ended
	Jan. 31, 2022 shares	Oct. 01, 2019 shares	Dec. 31, 2023 USD ($) plan shares	Dec. 31, 2022 USD ($) shares	Dec. 31, 2021 USD ($) shares	Dec. 31, 2020	Dec. 31, 2019 installment	Dec. 31, 2022 USD ($)
Minimum capital conservation buffer			0.025
Number of equity incentive plans | plan			1
Stock compensation expense			$ 750,000	$ 646,000	$ 732,000
Stock compensation expense not recorded			0	0	0			$ 0
Unrecognized expense related to restricted stock and cash entitlements			3,519,000	2,781,000	2,497,000			$ 2,781,000
Stock compensation expense, net of tax			$ 2,292,000	$ 2,188,000	$ 1,795,000
Common Stock | 2021 Share Repurchase Program
Common stock, authorized shares repurchase (in shares) | shares	1,000,000
Common Stock | 2022 Share Repurchase Program
Common stock, percentage of Company's outstanding shares authorized for repurchase	3.00%
Stock Options
Stock option expiration period (in years)			10 years
Number of options granted (in shares) | shares			0	0	0
Stock compensation expense			$ 0	$ 0	$ 0
Nonqualified Stock Options
Stock option expiration period (in years)			20 years
Restricted Stock
Restricted stock and restricted stock units grant during period percentage						66.67%	60.00%
Cash credit entitlement percentage						33.33%	40.00%
Number of installments | installment							3
Percentage vested			100.00%
Restricted Stock | Year One
Percentage vested						100.00%
Restricted Stock | Year Two
Percentage vested						50.00%
Restricted Stock | Director
Percentage vested								100.00%
Restricted Stock | Executive Officer | Year One
Percentage vested			33.33%
Restricted Stock | Executive Officer | Year Two
Percentage vested			33.33%
Restricted Stock | Executive Officer | Year Three
Percentage vested			33.33%
Employee Stock Purchase Plan
Stock compensation expense			$ 29,000	53,000	45,000
Unrecognized expense related to restricted stock and cash entitlements			0	0	0			$ 0
Stock compensation expense, net of tax			$ 22,000	$ 39,000	$ 34,000
2009 LTIP Plan | Restricted Stock | Year One
Percentage vested							33.30%
2009 LTIP Plan | Restricted Stock | Year Two
Percentage vested							33.30%
2009 LTIP Plan | Restricted Stock | Year Three
Percentage vested						50.00%	33.30%
2019 LTIP Plan
Share-based compensation arrangement, number of shares authorized (in shares) | shares			1,000,000
2019 ESPP
Share-based compensation, number of shares available for future grants (in shares) | shares		750,000
Offering period (in months)		3 months
Percentage of purchase price at offering date		95.00%
Bank
Minimum capital conservation buffer			0.025
Retained earnings available for payment of dividends to parent company without prior regulatory approval			$ 175,000,000

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Shareholders' Equity (Schedule of Consolidated and Affiliate Bank Actual Capital and Minimum Required Levels) (Details) $ in Thousands	Dec. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)
Tier 1 (Core) Capital (to Average Assets)
Minimum capital conservation buffer	0.025
Bank
Total Capital (to Risk Weighted Assets)
Actual Amount of Total Capital (to Risk Weighted Assets)	$ 723,998	$ 680,695
Actual Ratio of Total Capital (to Risk Weighted Assets)	0.1476	0.1407
Minimum Required For Capital Adequacy Purposes: Amount, Total Capital	$ 392,402	$ 386,959
Minimum Required For Capital Adequacy Purposes: Ratio, Total Capital (to Risk Weighted Assets)	0.0800	0.0800
Minimum Required To Be Well-Capitalized Under Prompt Corrective Action Regulations: Amount, Total Capital (to Risk Weighted Assets)	$ 490,503	$ 483,698
Minimum Required To Be Well-Capitalized Under Prompt Corrective Action Regulations: Ratio, Total Capital (to Risk Weighted Assets)	0.1000	0.1000
Tier 1 (Core) Capital (to Risk Weighted Assets)
Actual Amount of Tier 1 Capital (to Risk Weighted Assets)	$ 688,696	$ 649,221
Actual Ratio of Tier 1 Capital (to Risk Weighted Assets)	0.1404	0.1342
Minimum Required For Capital Adequacy Purposes: Amount, Tier 1 Capital (to Risk Weighted Assets)	$ 294,302	$ 290,219
Minimum Required For Capital Adequacy Purposes: Ratio, Tier 1 Capital (to Risk Weighted Assets)	0.0600	0.0600
Minimum Required To Be Well-Capitalized Under Prompt Corrective Action Regulations: Amount, Tier 1 Capital (to Risk Weighted Assets)	$ 392,402	$ 386,959
Minimum Required To Be Well-Capitalized Under Prompt Corrective Action Regulations: Ratio, Tier 1 Capital (to Risk Weighted Assets)	0.0800	0.0800
Common Tier 1 (CET 1) Capital Ratio (to Risk Weighted Assets)
Actual Amount of Common Tier 1 Capital (to Risk Weighted Assets)	$ 688,696	$ 649,221
Actual Ratio of Common Tier 1 Capital (to Risk Weighted Assets)	14.04%	13.42%
Minimum Required For Capital Adequacy Purposes: Amount, Common Tier 1 Capital (to Risk Weighted Assets)	$ 220,726	$ 217,664
Minimum Required For Capital Adequacy Purposes: Ratio, Common Tier 1 Capital (to Risk Weighted Assets)	4.50%	4.50%
Minimum Required To Be Well-Capitalized Under Prompt Corrective Action Regulations: Amount, Common Tier 1 Capital (to Risk Weighted Assets)	$ 318,827	$ 314,404
Minimum Required To Be Well-Capitalized Under Prompt Corrective Action Regulations: Ratio, Common Tier 1 Capital (to Risk Weighted Assets)	6.50%	6.50%
Tier 1 (Core) Capital (to Average Assets)
Actual Amount of Tier 1 Capital (to Average Assets)	$ 688,696	$ 649,221
Actual Ratio of Tier 1 Capital (to Average Assets)	0.1103	0.1009
Minimum Required For Capital Adequacy Purposes: Amount, Tier 1 Capital (to Average Assets)	$ 249,642	$ 257,341
Minimum Required For Capital Adequacy Purposes: Ratio, Tier 1 Capital (to Average Assets)	0.0400	0.0400
Minimum Required To Be Well-Capitalized Under Prompt Corrective Action Regulations: Amount, Tier 1 Capital (to Average Assets)	$ 312,053	$ 321,677
Minimum Required To Be Well-Capitalized Under Prompt Corrective Action Regulations: Ratio, Tier 1 Capital (to Average Assets)	0.0500	0.0500
Minimum capital conservation buffer	0.025
Consolidated
Total Capital (to Risk Weighted Assets)
Actual Amount of Total Capital (to Risk Weighted Assets)	$ 810,391	$ 747,542
Actual Ratio of Total Capital (to Risk Weighted Assets)	0.1650	0.1545
Minimum Required For Capital Adequacy Purposes: Amount, Total Capital	$ 392,870	$ 387,024
Minimum Required For Capital Adequacy Purposes: Ratio, Total Capital (to Risk Weighted Assets)	0.0800	0.0800
Tier 1 (Core) Capital (to Risk Weighted Assets)
Actual Amount of Tier 1 Capital (to Risk Weighted Assets)	$ 735,089	$ 676,068
Actual Ratio of Tier 1 Capital (to Risk Weighted Assets)	0.1497	0.1397
Minimum Required For Capital Adequacy Purposes: Amount, Tier 1 Capital (to Risk Weighted Assets)	$ 294,652	$ 290,268
Minimum Required For Capital Adequacy Purposes: Ratio, Tier 1 Capital (to Risk Weighted Assets)	0.0600	0.0600
Common Tier 1 (CET 1) Capital Ratio (to Risk Weighted Assets)
Actual Amount of Common Tier 1 Capital (to Risk Weighted Assets)	$ 700,260	$ 641,690
Actual Ratio of Common Tier 1 Capital (to Risk Weighted Assets)	14.26%	13.26%
Minimum Required For Capital Adequacy Purposes: Amount, Common Tier 1 Capital (to Risk Weighted Assets)	$ 220,989	$ 217,701
Minimum Required For Capital Adequacy Purposes: Ratio, Common Tier 1 Capital (to Risk Weighted Assets)	4.50%	4.50%
Tier 1 (Core) Capital (to Average Assets)
Actual Amount of Tier 1 Capital (to Average Assets)	$ 735,089	$ 676,068
Actual Ratio of Tier 1 Capital (to Average Assets)	0.1175	0.1050
Minimum Required For Capital Adequacy Purposes: Amount, Tier 1 Capital (to Average Assets)	$ 250,162	$ 257,622
Minimum Required For Capital Adequacy Purposes: Ratio, Tier 1 Capital (to Average Assets)	0.0400	0.0400
Minimum capital conservation buffer	0.025

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Shareholders' Equity (Schedule of Restricted Stock And Cash Entitlements Expense) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Stockholders' Equity Note [Abstract]
Restricted Stock Expense	$ 2,345	$ 2,308	$ 1,692
Cash Entitlement Expense	750	646	732
Tax Effect	(803)	(766)	(629)
Net of Tax	$ 2,292	$ 2,188	$ 1,795

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Shareholders' Equity (Schedule of Restricted Stock Grants Outstanding) (Details) - Restricted Stock	12 Months Ended
	Dec. 31, 2023 $ / shares shares
Restricted Shares
Number of Shares Outstanding at Beginning of Period (in shares) | shares	74,873
Number of Shares Granted (in shares) | shares	96,931
Number of Shares Issued and Vested (in shares) | shares	(49,757)
Number of Shares Forfeited (in shares) | shares	(5,415)
Number of Shares Outstanding at End of Period (in shares) | shares	116,632
Weighted Average Market Price at Grant
Weighted Average Market Price at Grant Outstanding at Beginning of Period (in dollars per share) | $ / shares	$ 41.05
Weighted Average Market Price at Grant Granted (in dollars per share) | $ / shares	33.72
Weighted Average Market Price at Grant Issued and Vested (in dollars per share) | $ / shares	40.55
Weighted Average Market Price at Grant Forfeited (in dollars per share) | $ / shares	37.20
Weighted Average Market Price at Grant Outstanding at End of Period (in dollars per share) | $ / shares	$ 35.34

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Employee Benefit Plans (Narrative) (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2023 USD ($) $ / Family	Dec. 31, 2022 USD ($)	Jun. 30, 2022 USD ($)	Dec. 31, 2021 USD ($)	Jun. 30, 2021 USD ($)
Defined Benefit Plan Disclosure [Line Items]
401(k) deferred compensation and profit sharing plan, company contributions	$ 2,356	$ 2,152		$ 2,050
Annual losses per covered family (in dollars per family) | $ / Family	175
Charges to earnings for self-insurance reserve	$ 7,227	7,619		5,520
Postretirement Medical and Life Benefit Plan
Defined Benefit Plan Disclosure [Line Items]
Estimated future employer contributions in 2024	169
Multi-Employer Pension Plan
Defined Benefit Plan Disclosure [Line Items]
Pension withdrawal liability	$ 101
Multi-Employer Pension Plan | Pentegra DB Plan
Defined Benefit Plan Disclosure [Line Items]
Multiemployer plan, total contributions			$ 142,405		$ 248,563
Multiemployer plan, maximum percentage of employer's contributions	5.00%
Multi-Employer Pension Plan | River Valley
Defined Benefit Plan Disclosure [Line Items]
Pension expense	$ 141	53
Certain directors and officers
Defined Benefit Plan Disclosure [Line Items]
Accrued benefits payable	2,651	3,212
Deferred compensation expense	$ 261	$ 1,143		$ 302

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Employee Benefit Plans (Changes in Accumulated Postretirement Benefits Obligations) (Details) - Postretirement Medical and Life Benefit Plan - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward]
Obligation at the Beginning of Year	$ 1,530	$ 1,592
Unrecognized Loss (Gain)	187	(71)
Components of Net Periodic Postretirement Benefit Cost
Service Cost	101	105	$ 119
Interest Cost	71	35	28
Net Expected Benefit Payments	(142)	(131)
Amendments	0	0
Obligation at End of Year	$ 1,747	$ 1,530	$ 1,592

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Employee Benefit Plans (Components of Postretirement Benefit Expense) (Details) - Postretirement Medical and Life Benefit Plan - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Defined Benefit Plan Disclosure [Line Items]
Service Cost	$ 101	$ 105	$ 119
Interest Cost	71	35	28
Amortization of Prior Service Costs	(3)	(2)	(2)
Amortization of Unrecognized Net (Gain) Loss	32	43	55
Net Postretirement Benefit Expense	201	181	200
Net Gain (Loss) During Period Recognized in Other Comprehensive Income (Loss)	158	(112)	(121)
Total Recognized in Net Postretirement Benefit Expense and Other Comprehensive Income	$ 359	$ 69	$ 79

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Employee Benefit Plans (Assumptions used to Determine Net Periodic Cost and Benefit Obligations) (Details)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Postretirement Medical and Life Benefit Plan
Defined Benefit Plan Disclosure [Line Items]
Discount Rate	4.64%	4.83%	2.31%

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Employee Benefit Plans (Assumption of Health Care Cost Trend Rates) (Details)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Retirement Benefits [Abstract]
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	2030	2028

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Employee Benefit Plans (Schedule of Expected Benefit Payments) (Details) - Postretirement Medical and Life Benefit Plan $ in Thousands	Dec. 31, 2023 USD ($)
Defined Benefit Plan Disclosure [Line Items]
2024	$ 169
2025	129
2026	167
2027	177
2028	184
2029-2033	$ 931

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Income Taxes (Provision for Income Taxes) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Income Tax Disclosure [Abstract]
Current Federal	$ 13,067	$ 13,049	$ 13,437
Current State	1,934	1,763	2,547
Deferred Federal	2,602	1,868	2,056
Deferred State	156	671	608
Total Income Taxes	$ 17,759	$ 17,351	$ 18,648

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Income Taxes (Effective Income Tax Rate Reconciliation) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Income Tax Disclosure [Abstract]
Statutory Rate applied to the pre-tax income	21.00%	21.00%	21.00%
Statutory Rate Times Pre-tax Income	$ 21,766	$ 20,827	$ 21,585
Add (Subtract) the Tax Effect of:
Income from Tax-exempt Loans and Investments	(4,951)	(5,223)	(3,872)
Non-deductible Merger Costs	0	177	0
State Income Tax, Net of Federal Tax Effect	1,651	1,923	2,492
General Business Tax Credits	(1,128)	(1,038)	(1,013)
Amortization of Tax Credit Investments	1,101	1,040	1,001
Company Owned Life Insurance	(363)	(476)	(321)
Other Differences	(317)	121	(1,224)
Total Income Taxes	$ 17,759	$ 17,351	$ 18,648

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Income Taxes (Net Deferred Tax Liability) (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Deferred Tax Assets:
Allowance for Credit Losses	$ 10,888	$ 10,478
Lease Liability (Operating Leases)	1,313	1,585
Unrealized Loss on Securities	57,882	70,234
Deferred Compensation and Employee Benefits	1,026	1,162
Other-than-temporary Impairment	245	246
Accrued Expenses	1,224	1,325
Business Combination Fair Value Adjustments	0	205
Pension and Postretirement Plans	182	182
Other Real Estate Owned	41	70
Non-Accrual Loan Interest Income	449	629
General Business Tax Credits	0	198
Net Operating Loss Carryforward	650	828
Other	879	1,190
Total Deferred Tax Assets	74,779	88,332
Deferred Tax Liabilities:
Depreciation	(3,416)	(2,859)
Leasing Activities, Net	(12,926)	(10,983)
FHLB Stock Dividends	(455)	(488)
Prepaid Expenses	(154)	(684)
Intangibles	(2,376)	(3,181)
Deferred Loan Fees	(954)	(1,127)
Mortgage Servicing Rights	(51)	(58)
Right of Use Asset (Operating Leases)	(1,274)	(1,548)
Business Combination Fair Value Adjustments	(478)	0
Other	(1,325)	(924)
Total Deferred Tax Liabilities	(23,409)	(21,852)
Valuation Allowance	0	0
Net Deferred Tax Asset/(Liability)	$ 51,370	$ 66,480

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Income Taxes (Narrative) (Details)	12 Months Ended
	Dec. 31, 2023 USD ($) bankingCompany	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)
Income Tax Disclosure [Abstract]
Number of banking businesses acquired | bankingCompany	3
Amount of retained earnings for which no provision for federal income taxes has been made	$ 5,095,000
Provision for income taxes	0
Unrecorded deferred income tax liability on retained earnings for which provision for federal income taxes have been made	1,070,000
Net operating loss carryforwards which expire from 2029 through 2040	16,462,000
Unrecognized tax benefits	0	$ 0	$ 0
Increase in unrecognized tax benefits relative to tax positions taken	0	0	0
Accrual of unrecognized tax benefit, income tax penalties and interest accrued	$ 0	$ 0	$ 0

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Revenue Recognition (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Disaggregation of Revenue [Line Items]
Non-interest Income (out-of-scope of Topic 606)	$ 6,832	$ 8,537	$ 16,157
Total Non-interest Income	60,261	59,133	59,462
Wealth Management Fees
Disaggregation of Revenue [Line Items]
Non-interest Income (in-scope of Topic 606)	11,711	10,076	10,321
Service Charges on Deposit Accounts
Disaggregation of Revenue [Line Items]
Non-interest Income (in-scope of Topic 606)	11,538	11,457	7,723
Insurance Revenues
Disaggregation of Revenue [Line Items]
Non-interest Income (in-scope of Topic 606)	9,596	10,020	9,268
Interchange Fee Income
Disaggregation of Revenue [Line Items]
Non-interest Income (in-scope of Topic 606)	17,452	15,820	13,116
In-Scope of Topic 606:
Disaggregation of Revenue [Line Items]
Non-interest Income (in-scope of Topic 606)	53,429	50,596	43,305
In-Scope of Topic 606: | Wealth Management Fees
Disaggregation of Revenue [Line Items]
Non-interest Income (in-scope of Topic 606)	11,711	10,076	10,321
In-Scope of Topic 606: | ATM Fees
Disaggregation of Revenue [Line Items]
Non-interest Income (in-scope of Topic 606)	1,185	1,235	992
In-Scope of Topic 606: | Wire Transfer Fees
Disaggregation of Revenue [Line Items]
Non-interest Income (in-scope of Topic 606)	696	737	703
In-Scope of Topic 606: | Other
Disaggregation of Revenue [Line Items]
Non-interest Income (in-scope of Topic 606)	1,251	1,251	1,182
In-Scope of Topic 606: | Safe deposit box rentals and other non-interest related fees
Disaggregation of Revenue [Line Items]
Non-interest Income (in-scope of Topic 606)	1,200	1,200	1,200
In-Scope of Topic 606: | Transferred at Point in Time | Service Charges on Deposit Accounts
Disaggregation of Revenue [Line Items]
Non-interest Income (in-scope of Topic 606)	11,538	11,457	7,723
In-Scope of Topic 606: | Transferred at Point in Time | Interchange Fee Income
Disaggregation of Revenue [Line Items]
Non-interest Income (in-scope of Topic 606)	17,452	15,820	13,116
In-Scope of Topic 606: | Transferred over Time | Insurance Revenues
Disaggregation of Revenue [Line Items]
Non-interest Income (in-scope of Topic 606)	$ 9,596	$ 10,020	$ 9,268

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Per Share Data (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Basic Earnings per Share:
Net Income	$ 85,888	$ 81,825	$ 84,137
Weighted Average Shares Outstanding (in shares)	29,557,567	29,464,591	26,537,311
Basic Earnings per Share (in dollars per share)	$ 2.91	$ 2.78	$ 3.17
Diluted Earnings per Share:
Net Income	$ 85,888	$ 81,825	$ 84,137
Weighted Average Shares Outstanding (in shares)	29,557,567	29,464,591	26,537,311
Potentially Dilutive Shares, Net (in shares)	0	0	0
Diluted Weighted Average Shares Outstanding (in shares)	29,557,567	29,464,591	26,537,311
Diluted Earnings per Share (in dollars per share)	$ 2.91	$ 2.78	$ 3.17
Antidilutive securities excluded from computation of earnings per share (in shares)	0	0	0
Stock options outstanding (in shares)	0	0	0

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Leases (Components of Lease Expense) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Finance Lease Cost:
Amortization of Right-of-Use Assets	$ 210	$ 210
Interest on Lease Liabilities	304	326
Operating Lease Cost	1,424	1,508
Short-term Lease Cost	0	0
Total Lease Cost	$ 1,938	$ 2,044

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Leases (Weighted Average Lease Term and Discount Rates) (Details)	Dec. 31, 2023	Dec. 31, 2022
Weighted Average Remaining Lease Term:
Finance Leases	8 years	9 years
Operating Leases	7 years	7 years
Weighted Average Discount Rate:
Finance Leases	11.37%	11.41%
Operating Leases	3.07%	2.98%

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Leases (Supplemental Balance Sheet Information) (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Leases [Abstract]
Premises, Furniture and Equipment, Net	$ 1,648	$ 1,858
Other Borrowings	2,642	2,857
Operating Lease Right-of-Use Assets	5,180	6,297
Operating Lease Liabilities	$ 5,337	$ 6,447
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	Premises, Furniture and Equipment, Net	Premises, Furniture and Equipment, Net
Finance Lease, Liability, Statement of Financial Position [Extensible List]	Other Borrowings	Other Borrowings
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	Accrued Interest Receivable and Other Assets	Accrued Interest Receivable and Other Assets
Operating Lease, Liability, Statement of Financial Position [Extensible List]	Accrued Interest Payable and Other Liabilities	Accrued Interest Payable and Other Liabilities

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Leases (Supplemental Cash Flow Information) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Cash Paid for Amounts in the Measurement of Lease Liabilities:
Operating Cash Flows from Finance Leases	$ 304	$ 326
Operating Cash Flows from Operating Leases	1,395	1,449
Financing Cash Flows from Finance Leases	$ 211	$ 186

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Leases (Maturity of Finance and Operating Lease Liabilities) (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Finance Leases
Year 1	$ 519
Year 2	519
Year 3	519
Year 4	486
Year 5	438
Thereafter	1,509
Total Lease Payments	3,990
Less Imputed Interest	(1,348)
Total	2,642	$ 2,857
Operating Leases
Year 1	1,256
Year 2	1,047
Year 3	845
Year 4	662
Year 5	620
Thereafter	1,488
Total Lease Payments	5,918
Less Imputed Interest	(581)
Total	$ 5,337	$ 6,447

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Commitments and Off-balance Sheet Items (Commitments and Contingencies) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Commitment to Sell Loans, Mandatory
Commitments and Contingent Liabilities [Line Items]
Fixed Rate	$ 0	$ 0
Variable Rate	0	0
Commitment to Sell Loans, Non-Mandatory
Commitments and Contingent Liabilities [Line Items]
Fixed Rate	5,992	8,731
Variable Rate	0	0
Standby Letters of Credit
Commitments and Contingent Liabilities [Line Items]
Fixed Rate	3,340	3,047
Variable Rate	16,161	17,117
Commitment to Fund Loans
Commitments and Contingent Liabilities [Line Items]
Fixed Rate	146,185	191,425
Variable Rate	1,238,832	1,193,468
Consumer Lines | Commitment to Fund Loans
Commitments and Contingent Liabilities [Line Items]
Fixed Rate	13,978	15,238
Variable Rate	689,295	576,784
Commercial Operating Lines | Commitment to Fund Loans
Commitments and Contingent Liabilities [Line Items]
Fixed Rate	120,352	161,058
Variable Rate	546,016	611,357
Residential Mortgages | Commitment to Fund Loans
Commitments and Contingent Liabilities [Line Items]
Fixed Rate	11,855	15,129
Variable Rate	$ 3,521	$ 5,327

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Commitments and Off-balance Sheet Items (Narrative) (Details)	12 Months Ended
	Dec. 31, 2023
Minimum
Commitments and Contingent Liabilities [Line Items]
Fixed rates on commitments to fund loans (as percent)	2.00%
Maturity of commitments to fund loans (in years)	1 year
Maximum
Commitments and Contingent Liabilities [Line Items]
Fixed rates on commitments to fund loans (as percent)	24.00%
Maturity of commitments to fund loans (in years)	27 years

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Fair Value (Narrative) (Details) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Other real estate carried at fair value less cost to sell	$ 0	$ 0
Other real estate, adjustments to carrying value less costs to sell charged to earnings	0	0
Loans Held-for-Sale
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Gain (losses) from changes in fair value included in earnings	(25,000)	(163,000)	$ (237,000)
Obligations of State and Political Subdivisions
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total gains (losses) included in earnings attributable to changes in fair value	70,000	(93,000)
Fair Value, Measurements, Recurring
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Securities	1,596,832,000	1,761,669,000
Fair Value, Measurements, Recurring | Obligations of State and Political Subdivisions
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Securities	768,875,000	777,852,000
Fair Value, Measurements, Recurring | MBS/CMO
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Securities	645,040,000	714,681,000
Fair Value, Measurements, Recurring | Significant Unobservable  Inputs (Level 3)
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Securities	1,059,000	989,000
Fair Value, Measurements, Recurring | Significant Unobservable  Inputs (Level 3) | Obligations of State and Political Subdivisions
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Securities	75,000	83,000
Fair Value, Measurements, Recurring | Significant Unobservable  Inputs (Level 3) | MBS/CMO
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Securities	$ 984,000	$ 906,000

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Fair Value (Assets and Liabilities Measured at Fair Value on Recurring Basis) (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Assets:
Loans Held-for-Sale	$ 5,226	$ 8,600
Fair Value, Measurements, Recurring
Assets:
Securities	1,596,832	1,761,669
Loans Held-for-Sale	5,226	8,600
Derivative Assets	7,458	9,899
Derivative Liabilities	7,467	9,749
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value, Measurements, Recurring
Assets:
Securities	0	64,119
Loans Held-for-Sale	0	0
Derivative Assets	0	0
Derivative Liabilities	0	0
Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Recurring
Assets:
Securities	1,595,773	1,696,561
Loans Held-for-Sale	5,226	8,600
Derivative Assets	7,458	9,899
Derivative Liabilities	7,467	9,749
Significant Unobservable  Inputs (Level 3) | Fair Value, Measurements, Recurring
Assets:
Securities	1,059	989
Loans Held-for-Sale	0	0
Derivative Assets	0	0
Derivative Liabilities	0	0
U.S. Treasury | Fair Value, Measurements, Recurring
Assets:
Securities	0	64,119
U.S. Treasury | Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value, Measurements, Recurring
Assets:
Securities	0	64,119
U.S. Treasury | Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Recurring
Assets:
Securities	0	0
U.S. Treasury | Significant Unobservable  Inputs (Level 3) | Fair Value, Measurements, Recurring
Assets:
Securities	0	0
Obligations of State and Political Subdivisions | Fair Value, Measurements, Recurring
Assets:
Securities	768,875	777,852
Obligations of State and Political Subdivisions | Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value, Measurements, Recurring
Assets:
Securities	0	0
Obligations of State and Political Subdivisions | Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Recurring
Assets:
Securities	768,800	777,769
Obligations of State and Political Subdivisions | Significant Unobservable  Inputs (Level 3) | Fair Value, Measurements, Recurring
Assets:
Securities	75	83
MBS/CMO | Fair Value, Measurements, Recurring
Assets:
Securities	645,040	714,681
MBS/CMO | Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value, Measurements, Recurring
Assets:
Securities	0	0
MBS/CMO | Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Recurring
Assets:
Securities	644,056	713,775
MBS/CMO | Significant Unobservable  Inputs (Level 3) | Fair Value, Measurements, Recurring
Assets:
Securities	984	906
US Gov’t Sponsored Entities & Agencies | Fair Value, Measurements, Recurring
Assets:
Securities	182,917	205,017
US Gov’t Sponsored Entities & Agencies | Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value, Measurements, Recurring
Assets:
Securities	0	0
US Gov’t Sponsored Entities & Agencies | Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Recurring
Assets:
Securities	182,917	205,017
US Gov’t Sponsored Entities & Agencies | Significant Unobservable  Inputs (Level 3) | Fair Value, Measurements, Recurring
Assets:
Securities	$ 0	$ 0

XML

Fair Value Fair Value (Aggregate Fair Value, Contractual Balance and Gain and Loss of Loans Held-for-Sale) (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Fair Value Disclosures [Abstract]
Aggregate Fair Value	$ 5,226	$ 8,600
Contractual Balance	5,125	8,474
Gain (Loss)	$ 101	$ 126

XML

Fair Value (Reconciliation of all Assets Measured at Fair Value on a Recurring Basis, Using Significant Unobservable Inputs (Level 3)) (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Obligations of State and Political Subdivisions
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance of Recurring Level 3 Assets at January 1	$ 83	$ 0
Total Gains (Losses) Included in Other Comprehensive Income	(8)	(17)
Maturities / Calls	0	0
Acquired through Bank Acquisition	0	100
Balance of Recurring Level 3 Assets at December 31	75	83
MBS/CMO
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance of Recurring Level 3 Assets at January 1	906	0
Total Gains (Losses) Included in Other Comprehensive Income	78	(76)
Maturities / Calls	0	0
Acquired through Bank Acquisition	0	982
Balance of Recurring Level 3 Assets at December 31	$ 984	$ 906

XML

Fair Value (Assets and Liabilities Measured at Fair Value on Non-Recurring Basis) (Details) - Individually Analyzed Loans - Fair Value, Measurements, Nonrecurring - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Commercial and Industrial Loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	$ 2,506	$ 1,858
Commercial Real Estate Loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	3,447	10,040
Agricultural Loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	2,395	2,970
Consumer Loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	9	8
Home Equity Loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	326	368
Residential Mortgage Loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	450	718
Quoted Prices in Active Markets for Identical Assets (Level 1) | Commercial and Industrial Loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Commercial Real Estate Loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Agricultural Loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Consumer Loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Home Equity Loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Residential Mortgage Loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	0	0
Significant Other Observable Inputs (Level 2) | Commercial and Industrial Loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	0	0
Significant Other Observable Inputs (Level 2) | Commercial Real Estate Loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	0	0
Significant Other Observable Inputs (Level 2) | Agricultural Loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	0	0
Significant Other Observable Inputs (Level 2) | Consumer Loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	0	0
Significant Other Observable Inputs (Level 2) | Home Equity Loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	0	0
Significant Other Observable Inputs (Level 2) | Residential Mortgage Loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	0	0
Significant Unobservable  Inputs (Level 3) | Commercial and Industrial Loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	2,506	1,858
Significant Unobservable  Inputs (Level 3) | Commercial Real Estate Loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	3,447	10,040
Significant Unobservable  Inputs (Level 3) | Agricultural Loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	2,395	2,970
Significant Unobservable  Inputs (Level 3) | Consumer Loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	9	8
Significant Unobservable  Inputs (Level 3) | Home Equity Loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	326	368
Significant Unobservable  Inputs (Level 3) | Residential Mortgage Loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	$ 450	$ 718

XML

Fair Value (Fair Value Assets and Liabilities Measured on Nonrecurring Basis Validation Techniques) (Details) - Significant Unobservable  Inputs (Level 3) - Fair Value, Measurements, Nonrecurring - Individually Analyzed Loans $ in Thousands	Dec. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)
Commercial and Industrial Loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	$ 2,506	$ 1,858
Commercial and Industrial Loans | Minimum | Sales comparison approach
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Measurement input	0.23	0
Commercial and Industrial Loans | Maximum | Sales comparison approach
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Measurement input	1	1
Commercial and Industrial Loans | Weighted Average | Sales comparison approach
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Measurement input	0.33	0.40
Commercial Real Estate Loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	$ 3,447	$ 10,040
Commercial Real Estate Loans | Minimum | Sales comparison approach
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Measurement input	0.20	0.30
Commercial Real Estate Loans | Maximum | Sales comparison approach
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Measurement input	0.68	1
Commercial Real Estate Loans | Weighted Average | Sales comparison approach
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Measurement input	0.42	0.37
Agricultural Loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	$ 2,395	$ 2,970
Agricultural Loans | Minimum | Sales comparison approach
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Measurement input	0.31	0.30
Agricultural Loans | Maximum | Sales comparison approach
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Measurement input	1	1
Agricultural Loans | Weighted Average | Sales comparison approach
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Measurement input	0.51	0.48
Consumer Loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	$ 9	$ 8
Consumer Loans | Sales comparison approach
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Measurement input	0.20
Consumer Loans | Minimum | Sales comparison approach
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Measurement input	0.20	0.27
Consumer Loans | Maximum | Sales comparison approach
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Measurement input		1
Consumer Loans | Weighted Average | Sales comparison approach
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Measurement input	0.20	0.20
Home Equity Loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	$ 326	$ 368
Home Equity Loans | Minimum | Sales comparison approach
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Measurement input	0.20	0.20
Home Equity Loans | Maximum | Sales comparison approach
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Measurement input	0.20	0.51
Home Equity Loans | Weighted Average | Sales comparison approach
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Measurement input	0.20	0.20
Residential Mortgage Loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value	$ 450	$ 718
Residential Mortgage Loans | Minimum | Sales comparison approach
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Measurement input	0.20	0.20
Residential Mortgage Loans | Maximum | Sales comparison approach
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Measurement input	0.20	1
Residential Mortgage Loans | Weighted Average | Sales comparison approach
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Measurement input	0.20	0.21

XML

Fair Value (Carrying Amounts and Estimated Fair Values of Company's Financial Instruments) (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Financial Assets:
Interest Bearing Time Deposits with Banks	$ 500	$ 500
Financial Liabilities:
Demand, Savings, and Money Market Deposits	(5,252,963)	(5,350,051)
Time Deposits	(767,042)	(428,469)
Long-term Debt	(89,545)
Carrying Value
Financial Assets:
Cash and Short-term Investments	115,330	117,381
Interest Bearing Time Deposits with Banks	500	500
Loans, Net	3,918,184	3,724,804
Accrued Interest Receivable	30,595	27,741
Financial Liabilities:
Demand, Savings, and Money Market Deposits	(4,485,921)	(4,921,582)
Time Deposits	(767,042)	(428,469)
Short-term Borrowings	(65,968)	(101,161)
Long-term Debt	(127,969)	(102,645)
Accrued Interest Payable	(7,073)	(1,513)
Fair Value
Financial Assets:
Cash and Short-term Investments	115,330	117,381
Interest Bearing Time Deposits with Banks	500	500
Loans, Net	3,801,738	3,688,903
Accrued Interest Receivable	30,595	27,741
Financial Liabilities:
Demand, Savings, and Money Market Deposits	(4,485,921)	(4,921,582)
Time Deposits	(759,217)	(426,184)
Short-term Borrowings	(65,968)	(101,161)
Long-term Debt	(127,084)	(99,102)
Accrued Interest Payable	(7,073)	(1,513)
Fair Value | Level 1
Financial Assets:
Cash and Short-term Investments	78,805	75,476
Interest Bearing Time Deposits with Banks	0	0
Loans, Net	0	0
Accrued Interest Receivable	0	38
Financial Liabilities:
Demand, Savings, and Money Market Deposits	(4,485,921)	(4,921,582)
Time Deposits	0	0
Short-term Borrowings	(25,000)	(36,200)
Long-term Debt	0	0
Accrued Interest Payable	0	0
Fair Value | Level 2
Financial Assets:
Cash and Short-term Investments	36,525	41,905
Interest Bearing Time Deposits with Banks	500	500
Loans, Net	0	0
Accrued Interest Receivable	10,014	10,863
Financial Liabilities:
Demand, Savings, and Money Market Deposits	0	0
Time Deposits	(759,217)	(426,184)
Short-term Borrowings	(40,968)	(64,961)
Long-term Debt	(52,522)	(26,830)
Accrued Interest Payable	(6,701)	(1,205)
Fair Value | Level 3
Financial Assets:
Cash and Short-term Investments	0	0
Interest Bearing Time Deposits with Banks	0	0
Loans, Net	3,801,738	3,688,903
Accrued Interest Receivable	20,581	16,840
Financial Liabilities:
Demand, Savings, and Money Market Deposits	0	0
Time Deposits	0	0
Short-term Borrowings	0	0
Long-term Debt	(74,562)	(72,272)
Accrued Interest Payable	$ (372)	$ (308)

XML

Segment Information (Narrative) (Details)	12 Months Ended
	Dec. 31, 2023 segment bankingOffice
Segment Reporting [Abstract]
Number of primary segments | segment	3
Number of banking offices | bankingOffice	76

XML

Segment Information (Segment Financial Information) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Segment Reporting Information [Line Items]
Net Interest Income	$ 190,433	$ 200,584	$ 160,830
Net Gains on Sales of Loans	2,363	3,818	8,267
Net Gains on Securities	40	562	2,247
Wealth Management Fees	11,711	10,076	10,321
Insurance Revenues	9,596	10,020	9,268
Noncash Items:
Provision for Credit Losses	2,550	6,350	(6,500)
Depreciation and Amortization	9,560	10,116	8,770
Income Tax Expense (Benefit)	17,759	17,351	18,648
Segment Profit (Loss)	85,888	81,825	84,137
Total Assets	6,152,198	6,155,991	5,608,539
Operating segments | Core Banking
Segment Reporting Information [Line Items]
Net Interest Income	195,215	204,259	163,395
Net Gains on Sales of Loans	2,363	3,818	8,267
Net Gains on Securities	40	589	2,247
Wealth Management Fees	5	4	4
Insurance Revenues	1	31	14
Noncash Items:
Provision for Credit Losses	2,550	6,350	(6,500)
Depreciation and Amortization	9,025	9,571	8,346
Income Tax Expense (Benefit)	18,698	17,873	18,774
Segment Profit (Loss)	85,037	82,965	82,066
Total Assets	6,137,687	6,152,346	5,595,721
Operating segments | Wealth Management Services
Segment Reporting Information [Line Items]
Net Interest Income	120	46	42
Net Gains on Sales of Loans	0	0	0
Net Gains on Securities	0	0	0
Wealth Management Fees	11,706	10,072	10,317
Insurance Revenues	24	12	7
Noncash Items:
Provision for Credit Losses	0	0	0
Depreciation and Amortization	31	41	46
Income Tax Expense (Benefit)	695	691	826
Segment Profit (Loss)	2,974	2,157	2,543
Total Assets	9,508	8,846	6,115
Operating segments | Insurance
Segment Reporting Information [Line Items]
Net Interest Income	56	27	11
Net Gains on Sales of Loans	0	0	0
Net Gains on Securities	0	0	0
Wealth Management Fees	0	0	0
Insurance Revenues	9,572	9,977	9,247
Noncash Items:
Provision for Credit Losses	0	0	0
Depreciation and Amortization	48	48	57
Income Tax Expense (Benefit)	556	720	652
Segment Profit (Loss)	1,682	2,281	2,034
Total Assets	3,509	14,706	12,245
Other
Segment Reporting Information [Line Items]
Net Interest Income	(4,958)	(3,748)	(2,618)
Net Gains on Sales of Loans	0	0	0
Net Gains on Securities	0	(27)	0
Wealth Management Fees	0	0	0
Insurance Revenues	(1)	0	0
Noncash Items:
Provision for Credit Losses	0	0	0
Depreciation and Amortization	456	456	321
Income Tax Expense (Benefit)	(2,190)	(1,933)	(1,604)
Segment Profit (Loss)	(3,805)	(5,578)	(2,506)
Total Assets	$ 1,494	$ (19,907)	$ (5,542)

XML

Parent Company Financial Statements (Condensed Balance Sheets) (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
ASSETS
Securities Available-for-Sale	$ 1,596,832	$ 1,761,669
Other Investments	353	353
Total Assets	6,152,198	6,155,991	$ 5,608,539
LIABILITIES
Borrowings	199,830	210,238
TOTAL LIABILITIES	5,488,640	5,597,598
SHAREHOLDERS’ EQUITY
Common Stock	29,585	29,493
Additional Paid-in Capital	389,411	387,171
Retained Earnings	461,622	405,167
Accumulated Other Comprehensive Income (Loss)	(217,060)	(263,438)
TOTAL SHAREHOLDERS’ EQUITY	663,558	558,393	$ 668,459	$ 624,709
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	6,152,198	6,155,991
Parent Company
ASSETS
Cash	66,835	46,541
Securities Available-for-Sale	4,112	0
Other Investments	353	353
Investment in Subsidiary Bank	652,452	566,494
Investment in Non-banking Subsidiaries	1,975	6,747
Other Assets	15,097	19,165
Total Assets	740,824	639,300
LIABILITIES
Borrowings	75,327	74,788
Other Liabilities	1,939	6,119
TOTAL LIABILITIES	77,266	80,907
SHAREHOLDERS’ EQUITY
Common Stock	29,585	29,493
Additional Paid-in Capital	389,411	387,171
Retained Earnings	461,622	405,167
Accumulated Other Comprehensive Income (Loss)	(217,060)	(263,438)
TOTAL SHAREHOLDERS’ EQUITY	663,558	558,393
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$ 740,824	$ 639,300

XML

Parent Company Financial Statements (Condensed Statements of Income and Comprehensive Income (Loss)) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
EXPENSES
Salaries and Employee Benefits	$ 83,244	$ 84,145	$ 68,570
Professional Fees	5,575	6,295	5,009
Interest Expense	66,223	18,342	9,549
INCOME BEFORE INCOME TAXES AND EQUITY IN UNDISTRIBUTED INCOME OF SUBSIDIARIES	103,647	99,176	102,785
Income Tax Benefit	(17,759)	(17,351)	(18,648)
NET INCOME	85,888	81,825	84,137
Other Comprehensive Income (Loss):
Changes in Unrecognized Loss in Postretirement Benefit Obligation, Net	0	54	0
Parent Company
INCOME
Interest Income	277	104	109
Other Income (Loss)	(28)	31	11
Total Income	50,249	35,135	66,590
EXPENSES
Salaries and Employee Benefits	535	535	537
Professional Fees	777	1,989	1,256
Occupancy and Equipment Expense	8	8	10
Interest Expense	5,360	3,963	2,763
Other Expenses	1,183	1,162	1,200
Total Expenses	7,863	7,657	5,766
INCOME BEFORE INCOME TAXES AND EQUITY IN UNDISTRIBUTED INCOME OF SUBSIDIARIES	42,386	27,478	60,824
Income Tax Benefit	2,215	1,947	1,607
INCOME BEFORE EQUITY IN UNDISTRIBUTED INCOME OF SUBSIDIARIES	44,601	29,425	62,431
Equity in Undistributed Income of Subsidiaries	41,287	52,400	21,706
NET INCOME	85,888	81,825	84,137
Other Comprehensive Income (Loss):
Changes in Unrealized Gain (Loss) on Securities, Available-for-Sale	46,378	(278,976)	(19,891)
Changes in Unrecognized Loss in Postretirement Benefit Obligation, Net	0	54	0
TOTAL COMPREHENSIVE INCOME (LOSS)	132,266	(197,097)	64,246
Parent Company | Bank
INCOME
Dividends from Subsidiaries	50,000	35,000	65,000
Parent Company | Non-bank
INCOME
Dividends from Subsidiaries	$ 0	$ 0	$ 1,470

XML

Parent Company Financial Statements (Condensed Statements of Cash Flows) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income	$ 85,888	$ 81,825	$ 84,137
Adjustments to Reconcile Net Income to Net Cash from Operations
Change in Other Assets	3,725	(1,094)	2,716
Change in Other Liabilities	(3,173)	1,626	(1,185)
Equity Based Compensation	2,332	2,330	1,724
Net Cash from Operating Activities	107,234	110,036	100,844
CASH FLOWS FROM INVESTING ACTIVITIES
Net Equity in Dissolution of Subsidiary	0	0	1,694
Net Cash from Investing Activities	27,255	(24,181)	(640,299)
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends Paid	(29,433)	(27,022)	(22,220)
Net Cash from Financing Activities	(136,540)	(363,666)	590,597
Net Change in Cash and Cash Equivalents	(2,051)	(277,811)	51,142
Cash and Cash Equivalents at Beginning of Year	117,381	395,192	344,050
Cash and Cash Equivalents at End of Year	115,330	117,381	395,192
Parent Company
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income	85,888	81,825	84,137
Adjustments to Reconcile Net Income to Net Cash from Operations
Change in Other Assets	3,929	3,861	(3,939)
Change in Other Liabilities	(3,113)	1,200	863
Equity Based Compensation	2,332	2,330	1,723
Equity in Excess Undistributed Income of Subsidiaries	(41,287)	(52,400)	(21,706)
Net Cash from Operating Activities	47,749	36,816	61,078
CASH FLOWS FROM INVESTING ACTIVITIES
Cash Used for Business Acquisitions	0	(49,644)	0
Net Equity in Dissolution of Subsidiary	1,978	0	0
Net Cash from Investing Activities	1,978	(49,644)	0
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends Paid	(29,433)	(27,022)	(22,220)
Net Cash from Financing Activities	(29,433)	(27,022)	(22,220)
Net Change in Cash and Cash Equivalents	20,294	(39,850)	38,858
Cash and Cash Equivalents at Beginning of Year	46,541	86,391	47,533
Cash and Cash Equivalents at End of Year	$ 66,835	$ 46,541	$ 86,391

XML

Business Combinations, Goodwill and Intangible Assets (Narrative) (Details)		12 Months Ended
	Jan. 01, 2022 USD ($) bankingOffice $ / shares shares	Dec. 31, 2023 USD ($) bankingOffice	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($) bankingOffice	Dec. 31, 2020 USD ($)
Business Acquisition [Line Items]
Number of banking offices | bankingOffice		76
Total Assets		$ 6,152,198,000	$ 6,155,991,000	$ 5,608,539,000
Loans		3,977,900,000	3,788,645,000
Goodwill		180,357,000	180,357,000	121,761,000	$ 121,956,000
Allowance for credit losses		43,765,000	44,168,000	37,017,000	$ 46,859,000
Decrease in goodwill attributable to sale of branches				195,000
Goodwill impairment		0	0	0
Amortization of expense intangible assets		2,840,000	3,711,000	$ 2,731,000
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Brank Branches
Business Acquisition [Line Items]
Number of branches sold (in banking offices) | bankingOffice				2
Core Banking
Business Acquisition [Line Items]
Goodwill		179,025,000	179,025,000	$ 120,429,000
Insurance
Business Acquisition [Line Items]
Goodwill		1,332,000	$ 1,332,000	$ 1,332,000
Citizens Union Bancorp of Shelbyville, Inc. ("CUB")
Business Acquisition [Line Items]
Direct acquisition costs	$ 12,323,000
Goodwill	58,596,000
Intangible Assets	7,572,000
Cash paid	50,800,000
Merger related costs		12,323,000
Citizens Union Bancorp of Shelbyville, Inc. ("CUB") | Adjustment
Business Acquisition [Line Items]
Allowance for credit losses		$ 6,300,000
Citizens Union Bancorp of Shelbyville, Inc. ("CUB") | Loans acquired with deteriorated credit quality
Business Acquisition [Line Items]
Business Combination, Acquired Receivable, Fair Value	29,868,000
Business Combination, Acquired Receivables, Gross Contractual Amount	34,453,000
Estimated contractual cash flows of purchased financial asset with credit deterioration	$ 3,117,000
Citizens Union Bancorp of Shelbyville, Inc. ("CUB") | Common Stock
Business Acquisition [Line Items]
Cash payment for each share exchanged (in dollars per share) | $ / shares	$ 13.44
Fixed exchange ratio (in shares) | shares	0.7739
Shares of common stock issued for acquisition (in shares) | shares	2,870,975
Citizens Union Bancorp of Shelbyville, Inc. ("CUB") | Core Deposit Intangible
Business Acquisition [Line Items]
Intangible Assets	$ 7,572,000
Weighted average useful live of intangibles	8 years
Citizens Union Bancorp of Shelbyville, Inc. ("CUB")
Business Acquisition [Line Items]
Number of banking offices | bankingOffice	15
Citizens Union Bancorp of Shelbyville, Inc. ("CUB") | Citizens Union Bancorp of Shelbyville, Inc. ("CUB")
Business Acquisition [Line Items]
Total Assets	$ 1,108,546,000
Loans	683,807,000
Deposits	$ 930,533,000

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Business Combinations, Goodwill and Intangible Assets (Total Consideration Transferred and Fair Value of Assets Acquired and Liabilities Assumed) (Details) - USD ($) $ in Thousands	Jan. 01, 2022	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Recognized Amounts of Identifiable Assets Acquired and Liabilities Assumed:
Goodwill		$ 180,357	$ 180,357	$ 121,761	$ 121,956
Citizens Union Bancorp of Shelbyville, Inc. ("CUB")
Consideration
Cash for Options and Fractional Shares	$ 942
Cash Consideration	49,863
Equity Instruments	111,914
Fair Value of Total Consideration Transferred	162,719
Recognized Amounts of Identifiable Assets Acquired and Liabilities Assumed:
Cash	20,244
Federal Funds Sold and Other Short-term Investments	238,325
Interest-bearing Time Deposits with Banks	250
Securities	102,233
Loans	678,142
Stock in FHLB of Indianapolis and Other Restricted Stock, at Cost	10,078
Premises, Furniture & Equipment	19,805
Other Real Estate	40
Intangible Assets	7,572
Company Owned Life Insurance	12,881
Accrued Interest Receivable and Other Assets	18,309
Deposits - Non-interest Bearing	(237,472)
Deposits - Interest Bearing	(696,750)
FHLB Advances and Other Borrowings	(60,837)
Accrued Interest Payable and Other Liabilities	(8,697)
Total Identifiable Net Assets	104,123
Goodwill	$ 58,596

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Business Combinations, Goodwill and Intangible Assets (Unaudited Pro Forma Financial Information) (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Business Combinations, Goodwill and Intangible Assets [Abstract]
Net Interest Income	$ 200,584	$ 195,691
Non-interest Income	59,133	64,951
Total Revenue	259,717	260,642
Provision for Credit Losses	50	(8,707)
Non-interest Expense	141,868	142,978
Income Before Income Taxes	117,799	126,371
Income Tax Expense	21,858	24,260
Net Income	$ 95,941	$ 102,111
Earnings Per Share, Basic (in dollars per share)	$ 3.26	$ 3.47
Earnings Per Share, Diluted (in dollars per share)	$ 3.26	$ 3.47

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Business Combinations, Goodwill and Intangible Assets (Changes in Carrying Amount of Goodwill) (Details) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Goodwill [Roll Forward]
Beginning of Year	$ 180,357,000	$ 121,761,000	$ 121,956,000
Acquired Goodwill	0	58,596,000	(195,000)
Impairment	0	0	0
End of Year	$ 180,357,000	$ 180,357,000	$ 121,761,000

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Business Combinations, Goodwill and Intangible Assets (Acquired Intangible Assets) (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Business Acquisition [Line Items]
Gross Amount	$ 38,912	$ 38,912
Accumulated Amortization	(33,476)	(30,636)
Core Deposit Intangible | Core Banking
Business Acquisition [Line Items]
Gross Amount	33,247	33,247
Accumulated Amortization	(27,811)	(25,001)
Branch Acquisition Intangible | Core Banking
Business Acquisition [Line Items]
Gross Amount	257	257
Accumulated Amortization	(257)	(257)
Customer List | Insurance
Business Acquisition [Line Items]
Gross Amount	5,408	5,408
Accumulated Amortization	$ (5,408)	$ (5,378)

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Business Combinations, Goodwill and Intangible Assets (Estimated Amortization Expense of Intangibles) (Details) $ in Thousands	Dec. 31, 2023 USD ($)
Estimated amortization expense for each of the next five years is as follows:
2024	$ 2,032
2025	1,394
2026	916
2027	593
2028	$ 361

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Other Comprehensive Income (Loss) (Other Comprehensive Income Components) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning balance	$ 558,393	$ 668,459	$ 624,709
Other Comprehensive Income (Loss) Before Reclassification	46,410	(278,532)
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)	(32)	(390)
Total Other Comprehensive Income (Loss)	46,378	(278,922)	(19,891)
Ending balance	663,558	558,393	668,459
Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning balance	(263,438)	15,484	35,375
Total Other Comprehensive Income (Loss)	46,378	(278,922)	(19,891)
Ending balance	(217,060)	(263,438)	15,484
Unrealized Gains and Losses on Available-for-Sale Securities
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning balance	(262,924)	16,052
Other Comprehensive Income (Loss) Before Reclassification	46,410	(278,532)
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)	(32)	(444)
Total Other Comprehensive Income (Loss)	46,378	(278,976)
Ending balance	(216,546)	(262,924)	16,052
Postretirement Benefit Items
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning balance	(514)	(568)
Other Comprehensive Income (Loss) Before Reclassification	0	0
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)	0	54
Total Other Comprehensive Income (Loss)	0	54
Ending balance	$ (514)	$ (514)	$ (568)

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Other Comprehensive Income (Loss) (Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Net Gain (Loss) on Securities	$ 40	$ 562	$ 2,247
Income Tax Expense	(17,759)	(17,351)	(18,648)
Net Income	85,888	81,825	84,137
Salaries and Employee Benefits	(83,244)	(84,145)	(68,570)
Total Reclassifications for the Period	32	390
Unrealized Gains and Losses on Available-for-Sale Securities
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Total Reclassifications for the Period	32	444
Reclassification out of Accumulated Other Comprehensive Income
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Total Reclassifications for the Period	32	444	1,775
Reclassification out of Accumulated Other Comprehensive Income | Unrealized Gains and Losses on Available-for-Sale Securities
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Net Gain (Loss) on Securities	40	562	2,247
Income Tax Expense	(8)	(118)	(472)
Net Income	32	444	1,775
Reclassification out of Accumulated Other Comprehensive Income | Amortization of Post Retirement Plan Items Actuarial Gains (Losses) | Postretirement Medical and Life Benefit Plan
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Income Tax Expense	0	0	0
Net Income	0	0	0
Salaries and Employee Benefits	$ 0	$ 0	$ 0