Staff Reports
German American Bancorp Inc. reported first quarter 2021 earnings of $19.6 million, or $0.74 per share. This represented an increase of $7.1 million, or about 57% on a per share basis, from 2020 first quarter earnings of $12.5 million, or $0.47 per share.
The 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, the company said.
Net interest income increased $2.7 million in the first quarter compared to the same period of 2020. The increase was attributed to a $766 million, or 19% increase, in average total interest earning assets in the first quarter of 2021. This was relative to that 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, 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 in 2020. Last year, the company increased its allowance for credit losses due to the COVID-19 pandemic. The decline in the level of provision for credit losses in the first quarter was largely impacted by a lower level of outstanding loans, exclusive of Paycheck Protection loans, and a decline in certain adversely criticized assets during the quarter.
An additional factor contributing to the first quarter net-income improvement was a $956,000 increase in non-interest income.
“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,” said Mark A. Schroeder, German American’s chairman and CEO. “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 the worst of the economic impact of the pandemic is behind us.”
The company announced its board of directors has declared a regular quarterly cash dividend of $0.21 per share, which will be payable on May 20 to shareholders of record as of May 10.
German American Bancorp is a financial holding company based in Jasper. German American, through its banking subsidiary German American Bank, operates 73 banking offices in 20 continguous southern Indiana counties, including locations in Columbus, and eight counties in Kentucky.
