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. (Nasdaq: GABC) reported record earnings for the third quarter 2025. Third quarter earnings of $35.1 million, or $0.94 per share, resulted in the highest level of reported quarterly earnings and earnings per share in the company’s history.
This level of quarterly earnings represents an increase of $3.7 million, or approximately 12% on a per share basis, from 2025 second quarter earnings of $31.4 million, or $0.84 per share. It represents an increase of $14.0 million, or approximately 32% on a per share basis, from 2024 third quarter earnings of $21.0 million or $0.71 per share. Strong quarterly financial metrics of 1.68% return on average assets, 13.0% return on average equity, 21.0% return on average tangible equity and a 4.06% net interest margin continue to reinforce our position of strength.
The record operating performance was driven by continued net interest margin expansion, strong gains in net interest income and operating leverage, solid deposit growth with continued high level of non-interest bearing demand deposits, solid loan growth, healthy credit metrics and controlled expenses.
The overall loan portfolio at Sept. 30, 2025 remains stable and diversified, increasing by approximately 3% on an annualized linked quarter basis. The increase was driven by solid loan originations across the company’s entire footprint that were partially mitigated by higher commercial real estate payoffs. The cmpany’s loan portfolio reflects healthy credit metrics, as non-performing assets were 0.28% of period end assets and non-performing loans totaled 0.41% of period end loans. Net charge-offs remained minimal at 5 basis points of average loans on an annualized basis for the third quarter of 2025.
Third quarter total deposits increased 3.4% on an annualized linked quarter basis led by a 9% increase in non-interest bearing demand deposit accounts. Overall, non-interest bearing accounts continue to be strong, representing over 28% of total deposits at Sept. 30, 2025. Total cost of deposits declined 6 basis points from 1.73% at June 30, 2025 to 1.67% at September 30, 2025. The 25 basis point Federal Funds rate cut that took place late in the third quarter had minimal impact on the quarter’s overall financial performance.
Non-interest income trended favorably in the third quarter of 2025 over linked second quarter 2025. Non-interest income increased $1.7 million or 10% driven by a 3% increase in wealth management and 6% increase in deposit fees both resulting from increased new business. A non-recurring gain on the redemption of subordinated debt previously issued by Heartland BancCorp (“Heartland”) also contributed to the favorable increase.
The company’s third quarter 2025 efficiency ratio fell below 50% to 49.26%.
The company also announced that its Board of Directors declared a regular quarterly cash dividend of $0.29 per share, which will be payable on Nov. 20, 2025 to shareholders of record as of Nov. 10, 2025.
“We are extremely pleased to deliver a record earnings performance in the third quarter of 2025 as we positioned the company with various strategic transactions throughout 2024 and early 2025. Our Heartland Bank acquisition that closed in the first quarter of 2025 continues to integrate extremely well, adding to the overall momentum of our Company. We are excited about the long-term growth potential in connection with a normalizing yield curve and our strong diversified organic growth footprint,” stated D. Neil Dauby, German American’s chairman and CEO.
Dauby also stated, “We continue to add top talent to our relationship-focused team of professionals and, with their dedicated efforts, we are confident that our strong community presence, healthy financial condition and disciplined approach to growth will continue to drive future profitability and long-term shareholder value. We remain excited and committed to the vitality and future growth of our Indiana, Kentucky and Ohio communities.”
