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2024-06-19 00:22 German American Banking Insurance | Investments German American Bancorp , Inc. ( GABC ) Reports First Quarter 2021 Earnings | German American Bancorp Press Release MENU K German American Bancorp , Inc. ( GABC ) Reports First Quarter 2021 Earnings Company Release - 4/26/2021 5:15 PM ET JASPER , Ind . , April 26 , 2021 ( GLOBE NEWSWIRE ) -- German American Bancorp , Inc. ( NASDAQ : GABC ) reported first quarter 2021 earnings of $ 19.6 million , or $ 0.74 per share . This level of strong quarterly earnings represented an increase of $ 7.1 million , or approximately 57 % on a per share basis , from 2020 first quarter earnings of $ 12.5 million , or $ 0.47 per share . The first quarter 2021 earnings growth was driven by a number of factors including improved net interest income , lower provision for credit losses and increased non - interest revenue which was partially offset by a modestly higher level of non - interest expense . Net interest income increased $ 2.7 million in the first quarter of 2021 compared to the same period of 2020. This increase was attributable to a $ 766 million , or 19 % , increase in average total interest earning assets in the first quarter 2021 relative to that in the first quarter of 2020 partially offset by a reduction in the level of the Company's net interest margin to 3.41 % in 2021 from 3.74 % in 2020 . The elevated level of average earning assets was driven by a $ 747 million , or 21 % , increase in average deposits from customers throughout the Company's footprint . On an end - of - period basis , total deposits increased by $ 900 million , or 26 % , as of March 31 , 2021 compared to period - end total deposits at March 31 , 2020 . During the first quarter of 2021 , the provision for credit losses declined by $ 6.7 million compared to the same period of 2020. In 2020 , the Company had increased its allowance for credit losses due to the developments related to the COVID - 19 pandemic . The decline in the level of provision for credit losses in the first quarter of 2021 was largely impacted by a lower level of outstanding loans , exclusive of Paycheck Protection Program ( " PPP " ) loans , and a decline in certain adversely criticized assets during the quarter . An additional factor contributing to the first quarter of 2021 net - income improvement was a $ 956 thousand increase in non - interest income . The combined net revenue improvements of approximately $ 10.3 million were slightly offset by a $ 931 thousand increase in non - interest operating expenses , which was inclusive of non - recurring expenses totaling $ 2.0 million related to the Company's previously announced operating optimization plan . Mark A. Schroeder , German American's Chairman & CEO , stated , " After an extremely challenging 2020 due to a myriad of issues associated with the pandemic , we are very pleased to have been able to start off 2021 with extremely solid and strong first quarter performance . While the environment of historically low interest rates and net interest margins are likely to continue to be a challenge in 2021 and the coming years , we are hopeful that the worst of the economic impact of the pandemic is behind us . " Schroeder continued , " Our ability to increase the level of net interest income due to our materially larger balance sheet will hopefully allow us to mitigate the impact of the low interest rate environment . Additionally , while we've not seen growth during the pandemic within our loan portfolio , exclusive of PPP loans , we are encouraged by the level of interest we're seeing from customers in terms of potential future loan demand . We are also hopeful that our customers ' utilization of their existing lines of credit will again begin to increase in the coming months as they experience the need for additional operating funds in response to an elevated level of economic growth and expansion as the impact of the pandemic wanes . We look forward to the balance of 2021 and our ability to build upon our first quarter results with a cautious optimism . " The Company also announced its Board of Directors has declared a regular quarterly cash dividend of $ 0.21 per share , which will be payable on May 20 , 2021 to shareholders of record as of May 10 , 2021 . COVID - 19 Pandemic Loan Information The Company continues its participation in the Paycheck Protection Program ( " PPP " ) for loans provided through the Small Business Administration ( " SBA " ) , as established under the Coronavirus Aid , Relief and Economic Security Act ( the " CARES Act " ) . Having previously participated in the first round of the program during 2020 , the Company is also participating in the second round of the PPP that commenced in January 2021. Under the second round of the program , the Company can make new PPP loans to borrowers that did not receive PPP funds in 2020 in addition to " second draw " loans targeted at businesses that have exhausted their initial PPP proceeds . Under the PPP , the Company has lent and is lending funds primarily to its existing loan and / or deposit customers , based on a pre - determined SBA - developed formula , intended to incentivize small business owners to retain their employees . These loans carry a customer interest rate of 1.00 % plus a processing fee that varies depending on the balance of the loan at origination . The vast majority of the Company's first round PPP loans have two - year maturities . The second round PPP loans have five - year maturities . The Company originated loans totaling approximately $ 351.3 million in principal amount , on 3,070 PPP loan relationships , under the first round of this program . The net processing fees related to the PPP , totaled approximately $ 12.0 million , and are being recognized over the life of the loans . As a result of the forgiveness of the first round PPP loans which began in the fourth quarter of 2020 for the Company , remaining PPP loans outstanding totaled $ 97.3 million with approximately $ 1.2 million of net fees remaining deferred as of March 31 , 2021 . The Company is also participating in the second round of the program which gives applicants until May 31 , 2021 to apply for a first or second draw PPP loan and gives the SBA until June 30 , 2021 to process loan applications . Through March 31 , 2021 , the Company has originated loans totaling approximately $ 145.4 million in principal amount , on 2,034 PPP loan relationships , under the second round of this program . Through March 31 , 2021 net processing fees related to the second round of PPP , totaled approximately $ 7.4 million , and are being recognized over the life of the loans . The Company is continuing to actively originate PPP loans . In response to requests from borrowers who have experienced pandemic - related business or personal cash flow interruptions , and in accordance with regulatory guidance , the Company has made short - term loan modifications involving both partial and full payment deferrals . The table below shows the payment modifications that were still in effect as of March 31 , 2021 , with the majority of these credit relationships making full interest payments . Type of Loans ( dollars in thousands ) Commercial & Industrial Loans Commercial Real Estate Loans Agricultural Loans Consumer Loans Residential Mortgage Loans Total ( 1 ) n / m not meaningful % of Loan Category ( Excludes PPP Loans ) Number of Loans Outstanding Balance As of 3/31/2021 As of 12/31/2020 4 S 4,413 15 36,137 0.9 % 0.8 % 2.4 % 3.0 % - - % 40 n / m ( 2 ) n / m ( 1 ) 2 173 0.1 % 0.1 % 23 $ 40,763 1.4 % 1.7 % The Company tracks lending exposure by industry classification t determine potential risk associated with industry concentrations , if any , that could lead to additional credit loss exposure . As a result of the COVID - 19 pandemic , the Company initially identified loan segments that could represent a potentially higher level of credit risk , as many of these customers may have incurred a significant negative impact to their businesses as a result of governmental stay - at - home orders and travel restrictions . At March 31 , 2021 , the Company had the following exposure to these potentially sensitive COVID - 19 identified loan segments : Industry Segment ( dollars in thousands ) Lodging / Hotels Student Housing Retail Shopping / Strip Centers Restaurants Balance Sheet Highlights Number of Loans Outstanding Balance % of Total Loans ( excludes PPP Loans ) % of Industry Segment Under Deferral 44 $ 130,599 4.5 % 22.8 % 104 86,430 3.0 % 66 87,928 3.0 % 169 44.862 1.6 % 12.8 % Total assets for the Company totaled $ 5.220 billion at March 31 , 2021 , representing an increase of $ 242.3 million , or 19 % on an annualized basis , compared with December 31 , 2020 and an increase of $ 896.0 million , or 21 % , compared with March 31 , 2020. The increase in total assets during the first quarter of 2021 compared with December 31 , 2020 and March 31 , 2020 has been primarily driven by significant growth of deposits . Federal funds sold and other short - term investments increased $ 2.7 million as of March 31 , 2021 compared with December 31 , 2020 and increased $ 248.6 million compared with March 31 , 2020. The increase as of March 31 , 2021 compared with the end of the first quarter of 2020 was largely driven by deposit growth over the past year . Securities available for sale increased $ 168.0 million as of March 31 , 2021 compared with year - end 2020 and increased $ 510.1 million compared with March 31 , 2020. The increase in the securities portfolio in both the first quarter of 2021 and over the past year was the result of increased levels of deposits . March 31 , 2021 total loans increased $ 29.0 million , or 4 % on an annualized basis , compared with December 31 , 2020 and increased $ 102.6 million , or 3 % , compared with March 31 , 2020. The increase total loans at March 31 , 2021 compared with year - end 2020 and March 31 , 2020 was due to an increase in PPP loans . PPP loans totaled $ 242.7 million ( $ 234.2 million net of deferred fees ) at March 31 , 2021 compared with $ 186.0 million in PPP loans ( $ 182.0 million net of deferred fees ) at December 31 , 2020 . https://ir.germanamerican.com/news-events/press-releases/news-details/2021/German-American-Bancorp-Inc.-GABC-Reports-First-Quarter-2021-Earnings/default.aspx 1/6