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2024-06-19 00:20 German American Banking Insurance | Investments German American Bancorp , Inc. ( GABC ) Posts Strong Second Quarter Performance | German American Bancorp Press Release MENU 9 German American Bancorp , Inc. ( GABC ) Posts Strong Second Quarter Performance Company Release - 7/26/2021 5:00 PM ET JASPER , Ind . , July 26 , 2021 ( GLOBE NEWSWIRE ) -- German American Bancorp , Inc. ( Nasdaq : GABC ) reported another quarter of strong operating performance , resulting in quarterly earnings of $ 23.8 million , or $ 0.90 per share , during the second quarter of 2021. This level of quarterly earnings represented an increase of $ 4.3 million , or approximately 22 % on a per share basis , from 2021 first quarter earnings of $ 19.6 million , or $ 0.74 per share . On a year - over - year basis , the current quarterly earnings , as compared to second quarter 2020 earnings of $ 14.3 million , or $ 0.54 per share , increased by $ 9.6 million , or approximately 67 % on a per share basis . The second quarter 2021 earnings growth was driven by a number of factors including strong balance sheet growth , within both the core loan portfolio and deposit base , improved net interest income , and a reduced provision for credit losses , coupled with a solid increase in core non - interest income and disciplined control over non - interest expenses . As of June 30 , 2021 , the Company's total assets were $ 5.349 billion , representing an increase of $ 128.7 million , or 10 % on an annualized basis , compared to March 31 , 2021 , and an increase of $ 497.5 million , or 10 % , compared to June 30 , 2020. This increase in total assets , on a linked - quarter basis , was partially attributable to total loans , exclusive of PPP loans , increasing by 5 % , on an annualized basis , from March 31 , 2021 to June 30 , 2021. This organic growth of the core loan portfolio represents the first quarter of loan growth , exclusive of the impact f PPP loans , since the onset of the COVID - 19 pandemic . Additionally , the Company's historically strong loan portfolio demonstrated further quality improvement , allowing for a $ 5.0 million reversal of the provision for credit losses in the second quarter of 2021 . Net interest income during the second quarter of 2021 increased $ 948,000 from the first quarter of 2021 and $ 1.4 million compared to the same period of 2020. The increase in net interest income in the second quarter of 2021 compared to the first quarter of 2021 was primarily attributable to the increase in average earning assets . The increase in net interest income in the second quarter of 2021 compared to with the second quarter of 2020 was largely attributable to an increase in average earning assets and a higher level of fees recognized related to PPP loans . While certain seasonality factors impacted the level of non - interest income in the second quarter compared to the first quarter of 2021 , an additional factor contributing to the second quarter of 2021 net income improvement was a year - over - year increase in non - interest income . Year - over - year combined net revenue improvements of approximately $ 1.5 million , or 12 % , were primarily driven by a $ 753,000 , or 40 % , increase in trust and investment product fees , and a $ 1.0 million , or 41 % , increase in interchange fee income . Both of these areas of fee income were positively impacted by the ongoing improvement in economic conditions , with the increase in trust and investment fees being largely attributable to increased assets under management within the Company's wealth management group , and the increase in interchange fees being related to increased card utilization by customers . The Company's non - interest expenses declined by $ 2.2 million in the second quarter of 2021 , as compared to the first quarter of 2021. The vast majority of this positive differential was attributable to a higher level of expense in the first quarter related to the Company's previously disclosed operating optimization plan . Mark A. Schroeder , German American's Chairman & CEO , stated , " We were very pleased with our ability to build upon the momentum of our solid first quarter earnings with exceptionally strong performance in the second quarter . We were particularly encouraged by the level of core , organic loan growth , exclusive of the impact of PPP loan activity , and the improvement we've seen in general economic conditions throughout our footprint during the current quarter . While new developments related t the pandemic continue to cause uncertainty for both our business and retail customers , we are hopeful that improvements in commercial and social activities will remain steady and look forward with optimism to continued economic growth in the coming months . " 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 August 20 , 2021 to shareholders of record as of August 10 , 2021 . COVID - 19 Pandemic Loan Information The Company continued 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 " ) , lending funds primarily to its existing loan and / or deposit customers . The PPP loans carry an interest rate of 1.00 % and included a processing fee that varied depending on the balance of the loan at origination and is recognized over the life of the loan . The vast majority of the Company's PPP loans made during 2020 had two- year maturities , while PPP loans made during 2021 have five - year maturities . Under the first round of the PPP , which concluded in 2020 , the Company originated loans totaling approximately $ 351.3 million in principal amount , with approximately $ 12.0 million of related net processing fees on 3,070 PPP loan relationships . As of June 30 , 2021 , $ 330.8 million of those first round PPP loans had been forgiven by the Company pursuant to the terms of the program , with $ 11.7 million in net processing fees having been recognized by the Company . The Company also participated in the second round of the program , which began in January 2021 and gave applicants until May 31 , 2021 to apply for a PPP loan and the SBA until June 30 , 2021 to process applications . The Company originated loans totaling approximately $ 157.0 million in principal amount , with approximately $ 9.0 million of related net processing fees , on 2,601 PPP loan relationships , under the second round of this program . As of June 30 , 2021 , $ 20.8 million of second round PPP loans had been forgiven by the Company , with $ 2.0 million in net processing fees having been recognized by the Company . As a result of the forgiveness of the first and second round PPP loans , $ 156.7 million of total PPP loans remain outstanding as of June 30 , 2021 , with approximately $ 7.3 million of net fees remaining deferred on that date . 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 June 30 , 2021 , with all 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 6/30/2021 As of 3/31/2021 5 266 12,267 0.1 % 0.9 % 0.8 % 2.4 % 1 7 n / m ( 2 ) n / m ( ¹ ) 1 14 n / m ( 1 ) 0.1 % 8 S 12,554 0.4 % 1.4 % The Company tracks lending exposure by industry classification to 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 June 30 , 2021 , the Company had the following exposure to these potentially sensitive COVID - 19 identified loan segments : Industry Segment ( dollars in thousands ) Number of Loans Outstanding Balance % of Total Loans ( excludes PPP Loans ) % of Industry Segment Under Deferral Lodging / Hotels Retail Shopping / Strip Centers Restaurants 44 $ 130,630 62 172 96,831 52,286 4.5 % 7.9 % 3.3 % - % 1.8 % 4.1 % During the second quarter of 2021 , the Company re - assessed its exposure to the student housing industry segment , which was formerly included as a COVID - 19 pandemic - related stressed sector . With the return of universities in its market areas to in - person classes for the 2021/2022 school year and occupancy levels for the upcoming school year that are similar to historical levels , the Company removed the student housing segment from the COVID - 19 pandemic - related stressed sectors . Balance Sheet Highlights Total assets for the Company totaled $ 5.349 billion at June 30 , 2021 , representing an increase of $ 128.7 million , or 10 % on an annualized basis , compared with March 31 , 2021 and an increase of $ 497.5 million , or 10 % , compared with June 30 , 2020. The increase in total assets during the second quarter of 2021 compared with March 31 , 2021 and June 30 , 2020 has been largely driven by significant growth of deposits . Securities available for sale increased $ 199.5 million as of June 30 , 2021 compared with March 31 , 2021 and increased $ 623.1 million compared with June 30 , 2020. The increase in the securities portfolio in both the second quarter of 2021 and over the past year was the result of increased levels of deposits and cash flows from the forgiveness of PPP loans . June 30 , 2021 total loans declined $ 46.5 million , or 6 % on an annualized basis , compared with March 31 , 2021 and declined $ 196.4 million , or 6 % , compared with June 30 , 2020. The decline in total loans at June 30 , 2021 compared with March 31 , 2021 and June 30 , 2020 was due to a decrease in PPP loans . PPP loans , net of deferred fees , totaled $ 149.4 million at June 30 , 2021 compared with $ 234.2 million at March 31 , 2021 and $ 338.7 million at June 30 , 2020 . https://ir.germanamerican.com/news-events/press-releases/news-details/2021/German-American-Bancorp-Inc.-GABC-Posts-Strong-Second-Quarter-Performance/default.aspx 1/6