Pictured is the branch of the German American Bank on 25th Street in Columbus, Ind., a former MainSource Bank branch that completed its conversion last week. Mike Wolanin | The Republic
JASPER, Ind. — German American Bancorp Inc. reported earnings of $85.9 million, or $2.91 per share, for the year ending Dec. 31, representing the second highest level of earnings per share in the company’s history.
This level of reported annual earnings resulted in a 14.7% return on average shareholders’ equity, marking the 19th consecutive fiscal year in which the company has delivered a double-digit return. The company also announced the declaration of an 8% increase in its quarterly cash dividend, marking the 12th consecutive year of increased cash dividends.
The company’s 2023 reported net income represented an increase of $4.1 million, or about 5% on a per share basis, over 2022 net income of $81.8 million , or $2.78 per share, which was impacted by the one-time merger costs related to the Jan. 1, 2022 acquisition of Citizens Union Bancorp of Shelbyville.
On a quarter over quarter basis, fourth quarter 2023 net income of $21.5 million and earnings per share of $0.73 were consistent with third quarter 2023 net income of $21.5 million, or $0.73 per share. Net interest margin declined from 3.57% to 3.43%, or 14 basis points, quarter over quarter. This compression was driven by a lower level of accretion of discounts on acquired loans that negatively impacted the net interest margin by 7 basis points and an overall increase in the cost of funds.
The margin compression was partially offset by exceptional credit metrics, with no provision for credit losses being taken in the fourth quarter, largely due to a fully-reserved non-performing commercial relationship being paid off.
The fourth quarter 2023 operating performance was highlighted by strong organic loan and deposit growth with total loans increasing $84 million, or about 9% on an annualized basis. Deposits increased $117 million, or 2% on a linked quarter basis, with non-interest bearing accounts remaining at a solid 28.4% of total deposits.
The company announced an 8% increase in the level of its regular quarterly cash dividend, as its board of directors declared a regular quarterly cash dividend of $0.27 per share, which will be payable on Feb. 20 to shareholders of record as of Feb. 10.
