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2024-06-19 00:19 German American Banking Insurance | Investments German American Bancorp , Inc. ( GABC ) Reports Continued Strong Performance During Third Quarter | German American Bancorp Press Release MENU ΑΡΚ German American Bancorp , Inc. ( GABC ) Reports Continued Strong Performance During Third Quarter Company Release - 10/25/2021 5:30 PM ET JASPER , Ind . , Oct. 25 , 2021 ( GLOBE NEWSWIRE ) -- German American Bancorp , Inc. ( Nasdaq : GABC ) reported today continued strong operating performance with earnings of $ 21.5 million , or $ 0.81 per share , for third quarter 2021. This level of solid quarterly earnings represented an increase of $ 6.9 million , or $ 0.26 per share , approximately 47 % on a per share basis , from 2020 third quarter earnings of $ 14.6 million , or $ 0.55 per share . On a year - to - date basis , the current earnings of $ 64.9 million , or $ 2.44 per share , increased by $ 23.5 million , or approximately 56 % on a per share basis , as compared to third quarter 2020 year - to - date earnings of $ 41.3 million , or $ 1.56 per share . The third quarter 2021 earnings growth , as compared to third quarter 2020 , 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 solid core non - interest income revenue increases and controlled non - interest expenses . As of September 30 , 2021 , the Company's total assets were $ 5.476 billion , representing an increase of $ 127.2 million , or 10 % on an annualized basis , compared to June 30 , 2021 , and an increase of $ 622.9 million , or 13 % , compared to September 30 , 2020. Exclusive of PPP loans and certain sold loans , the increase in total assets reflects an increase in total loans of approximately 5 % , on an annualized basis , when comparing September 30 , 2021 to June 30 , 2021 , and an increase of approximately 2 % when compared to September 30 , 2020. Additionally , the Company's historically strong loan portfolio demonstrated continued quality improvement , allowing for a $ 2.0 million reversal of the provision for credit losses in the third quarter of 2021 . Net interest income during the third quarter of 2021 increased by $ 2.9 million , or 8 % , from the third quarter of 2020 , and $ 7.0 million , or 6 % , in 2021 relative to 2020 on year - to - date basis . The increase in net interest income in the third quarter of 2021 compared to the third quarter of 2020 was primarily attributable to the increase in average earning assets . The increase in net interest income for year - to - date 2021 was primarily attributable to an increase in average earning assets , a higher level of fees recognized related to PPP loans and a lower cost of funds . Year - over - year non - interest income improvements totaled approximately $ 2.3 million , or 17 % , on a quarterly basis , and $ 4.7 million , or 12 % , on a year - to - date basis . A comparison of third quarter 2021 non - interest income to the third quarter of 2020 was driven by a $ 1.7 million increase in other operating income primarily related to the gain from the sale of two branch office locations during the current quarter . Additionally , the Company generated a $ 733,000 , or 37 % , increase in trust and investment product fees and a $ 544,000 , or 19 % , increase in interchange fee income during the third quarter of 2021 as compared to the same quarter in 2020. Both of these areas of fee income were positively impacted by the ongoing improvement economic conditions , with the increase in trust and investment fees largely attributable to increased assets under management within the Company's wealth management group and the increase in interchange fees related to increased card utilization by customers . These non - interest income improvements were partially offset by reduced levels of net gains on sales of residential loans into the secondary market and of net gains on sales of securities . The Company's level f non - interest expenses reflected modest increases in 2021 on both a quarterly and year - to - date basis relative to 2020. The primary drivers of the increase were related to several areas of non - recurring professional and legal related expenses in connection with the previously noted branch office sale , the recently announced pending acquisition of Citizens Union Bancorp of Shelbyville , Inc. , and certain other legal matters . Mark A. Schroeder , German American's Chairman & CEO , stated , " We were again very pleased with our ability to build upon the momentum of our strong first half of 2021 earnings with very solid performance in the third quarter . We are also excited about the future growth potential in connection with the recent announcement of our pending acquisition of Citizens Union Bancorp of Shelbyville , Kentucky . Citizens Union primarily operates within the Louisville , Kentucky Metropolitan Statistical Area ( " MSA " ) , which will provide us with a strong platform from which we can build upon our existing strong presence on the Indiana side of the Louisville MSA and on our successful Louisville - based Commercial Loan Production and Wealth Management Office . I believe this acquisition represents one of the most important strategic opportunities we've had during my tenure as CEO to take our Company to the next level in terms of both future balance sheet and earnings growth . " 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 November 20 , 2021 to shareholders of record as of November 10 , 2021 . Balance Sheet Highlights On September 24 , 2021 , the Company completed the sale of its two branches located in Lexington , Kentucky , to the Home Savings and Loan Company of Kenton , Ohio ( " HSLC " ) . As part of the sale , HSLC assumed approximately $ 17.6 million in total deposits and purchased approximately $ 18.0 million in total loans . Total assets for the Company totaled $ 5.476 billion at September 30 , 2021 , representing an increase of $ 127.2 million , or 10 % on an annualized basis , compared with June 30 , 2021 and an increase of $ 622.9 million , or 13 % , compared with September 30 , 2020. The increase in total assets during the third quarter of 2021 compared with June 30 , 2021 and September 30 , 2020 has been largely driven by significant growth of deposits . Securities available for sale increased $ 110.9 million as of September 30 , 2021 compared with June 30 , 2021 and increased $ 659.3 million compared with September 30 , 2020. The increase in the securities portfolio in both the third quarter of 2021 and over the past year was the result of increased levels of deposits and cash flows from the forgiveness of loans made under the Paycheck Protection Program ( " PPP " ) . September 30 , 2021 total loans declined $ 61.5 million , or 8 % on an annualized basis , compared with June 30 , 2021 and declined $ 212.2 million , or 7 % , compared with September 30 , 2020. The decline in total loans at September 30 , 2021 compared with June 30 , 2021 and September 30 , 2020 was primarily due to a decrease in PPP loans and , to a lesser degree , the sale of commercial and agricultural loans as a part of the branch sale completed during the third quarter of 2021. PPP loans , net of deferred fees , totaled $ 68.0 million ( $ 71.2 million principal balance and $ 3.2 million of remaining net deferred fees ) at September 30 , 2021 compared with $ 149.4 million at June 30 , 2021 and $ 341.8 million at September 30 , 2020. As of June 30 , 2021 the balances of loans sold as a part of the branch sale totaled $ 15.8 million . Excluding PPP loans and the loans sold as a part of the branch sale , total loans increased $ 35.6 million , or 5 % on an annualized basis , at September 30 , 2021 compared with June 30 , 2021 . Commercial real estate loans increased approximately $ 24.9 million , or 7 % on an annualized basis , during the third quarter of 2021 compared with June 30 , 2021 , commercial and industrial loans increased $ 2.2 million , or 2 % on an annualized basis , and agricultural loans increased $ 5.0 million , or 6 % on an annualized basis ( excluding PPP loans and the branch loans that were sold ) . During the third quarter of 2021 compared with June 30 , 2021 , retail loans increased $ 3.4 million , or 2 % on an annualized basis . End of Period Loan Balances ( dollars in thousands ) Commercial & Industrial Loans Commercial Real Estate Loans Agricultural Loans Consumer Loans Residential Mortgage Loans Net PPP Loans ( included in Commercial & Industrial Loans above ) 9/30/2021 6/30/2021 9/30/2020 $ 566,769 1,528,493 $ 647,918 1,517,172 $ 839,022 1,453,280 349,321 344,450 376,215 299,000 290,890 294,276 269,406 $ 3,012,989 $ 274,093 3,074,523 $ 262,439 3,225,232 $ 68,047 $ 149,372 S 342,719 In response to requests from borrowers who had experienced pandemic - related business or personal cash flow interruptions , and in accordance with regulatory guidance , the Company began making short - term loan modifications involving both partial and full payment deferrals in April 2020. As of September 30 , 2021 , the Company has just one commercial real estate loan , in the principal amount of $ 3.5 million , with a payment modification that is still in effect , with such credit relationship making full interest payments . The Company's allowance for credit losses totaled $ 37.8 million at September 30 , 2021 compared to $ 40.0 million at June 30 , 2021 and $ 46.8 million at September 30 , 2020. The allowance for credit losses represented 1.26 % of period - end loans ( 1.29 % excluding PPP loans ) at September 30 , 2021 compared with 1.30 % of period - end loans ( 1.37 % excluding PPP loans ) at June 30 , 2021 and 1.45 % of period - end loans ( 1.62 % excluding PPP loans ) at September 30 , 2020 . The Company adopted ASU No. 2016-13 , Financial Instruments - Credit Losses ( Topic 326 ) ( " CECL " ) on January 1 , 2020. Under the CECL model , certain acquired loans continue to carry a fair value discount as well as an allowance for credit losses . As of September 30 , 2021 , the Company held net discounts on acquired loans of $ 5.5 million . The allowance for credit losses declined during the quarter ended September 30 , 2021 as a result of the Company recording a negative $ 2.0 million provision for credit losses while recording modest net charge - offs . During 2020 , the allowance for credit losses increased through elevated provision for credit losses primarily due to the developments during 2020 related to the COVID - 19 pandemic and the resulting impact on the economic assumptions used in the CECL model . 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 September 30 , 2021 , the Company had the following exposure to these potentially sensitive COVID - 19 identified loan segments : https://ir.germanamerican.com/news-events/press-releases/news-details/2021/German-American-Bancorp-Inc.-GABC-Reports-Continued-Strong-Performance-During-Third-Quarter/default.aspx 1/6