German American Bancorp Inc. reported the financial institution achieved record earnings in 2016.
Its 2016 net income of $35.2 million, or $2.36 per share, was an increase of about 4 percent on a per share basis, the company reported. That is an increase over its previous record annual net income of $30.1 million, or $2.27 per share, reported in 2015.
Fourth-quarter earnings in the current year of $10.1 million, or 66 cents per share, represented an increase of about 14 percent on a per share basis, compared to 2015 fourth-quarter results of $7.7 million or 58 cents per share.
German American’s 2016 reported net income included 10 months of operations at River Valley Bancorp, following completion of a merger on March 1, 2016, and reflected merger-related costs totaling about $4.3 million, or $2.7 million on an after-tax basis, representing about 18 cents per share.
The company attributed its record performance to an increased level of net interest income and net interest margin, driven primarily by a higher level of average loans outstanding and a portfolio mix shift within the company’s securities portfolio to a higher percentage of non-taxable municipal securities.
Year-end loans for 2016 increased by about $425 million, or 27 percent, from the prior year-end level. That was largely due to the acquisition of River Valley, as well as organic loan growth, of about $118 million, or 8 percent.
German American’s Chairman and CEO Mark A. Schroeder said the exceptionally strong 2016 financial performance was driven by a combination of merger-related expansion and organic growth within the company’s existing market footprint.
“The acquisition of River Valley Bancorp in March provided an opportunity to enter the vibrant southeast Indiana area,” he said.
Schroeder said the acquisition of River Valley provides a link along the Interstate 65 corridor between the company’s existing Columbus location and locations in Floyd and Clark counties, leading to becoming a growing component of the greater Louisville, Kentucky market area.
The company announced it was increasing the level of its regular quarterly cash dividend. German American’s board of directors declared a regular quarterly cash dividend of 19 cents per share, which is payable on Feb. 20 to shareholders of record as of Feb. 10.
The quarterly dividend represents an estimated 6 percent increase above the company’s prior quarterly cash dividend level. This is the fifth consecutive year of annual dividend increases.