JASPER — German American Bancorp, Inc. reported strong annual earnings of $81.8 million, or $2.78 per share, for the year end Dec. 31, 2022, representing the second highest level of annual earnings in the company’s history. This level of reported annual earnings resulted in a 13.4% return on average shareholders’ equity, marking the 18th consecutive fiscal year in which the company has delivered a double-digit return on shareholders’ equity.
German American also announced the declaration of a 9% increase in its quarterly cash dividend, marking the 11th consecutive year of increased cash dividends.
The company’s 2022 reported annual earnings represented a decrease of $2.3 million, or approximately 12% on a per share basis, from the prior year 2021 record annual earnings of $84.1 million, or $3.17 per share. The 2021 earnings were positively impacted by non-recurring Paycheck Protection Program fees of $12.2 million, reserve release of $6.5 million, and record level mortgage revenues.
As a result of the Jan. 1, 2022 acquisition of Citizens Union Bancorp of Shelbyville, Inc. (CUB), 2022 earnings included $18.6 million of one-time merger and acquisition costs and “Day 1” provision under the current expected credit loss (“CECL”) model for an after-tax impact of $14.1 million, or $0.48 per share.
Fourth quarter 2022 net income of $24.4 million, or $0.83 per share, represented an increase of $5.1 million, or approximately 14% on a per share basis, from fourth quarter 2021 net income of $19.3 million, or $0.73 per share, aided in part by the CUB acquisition. In addition to the net income impact of the CUB acquisition, the per share amount for fourth quarter 2022 also reflects the issuance of approximately 2.9 million shares of the company’s common stock as part of the merger consideration.
On a quarter over quarter basis, earnings and earnings per share were virtually identical at approximately $24.5 million and $0.83 per share as core operations began to normalize. Fourth quarter 2022 performance was highlighted by strong organic loan growth, continued net interest margin expansion and strong credit metrics. Total loans increased $102 million, or approximately 11% on an annualized basis, and were broad based across all loan categories and all markets.
The company also announced a 9% increase in the level of its regular quarterly cash dividend, as its board of directors declared a regular quarterly cash dividend of $0.25 per share, which will be payable on Feb. 20, 2023 to shareholders of record as of Feb. 10, 2023.
D. Neil Dauby, German American’s president and CEO stated, “We are extremely pleased with our operating results in 2022, continuing our decades long trend of exceptional financial performance. Thanks to the dedicated efforts of our team members, we effectively executed on the integration of our CUB acquisition over the last three quarters of 2022, positioning our company for continued future success. While we anticipate some potential inflationary and recessionary challenges in 2023, we remain excited and committed to the vitality and future growth of our Indiana and Kentucky communities.”
German American operates 77 banking offices across two contiguous states, including locations in Columbus.