German American Bancorp Inc. reported record quarterly earnings of $12.6 million, or 55 cents per share, for the third quarter of 2018.
This was an increase of about $3 million, or 31 percent on a per share basis, relative to German American’s third-quarter 2017 net income of $9.7 million, or 42 cents per share.
On a year-to-date basis, reported earnings for the first nine months of 2018 were $35.6 million, or $1.55 per share, which represents an increase of about $6.5 million, or 22 percent on a per share basis, from the first nine months of 2017 that had a net income of $29.1 million or $1.27 per share.
The 2018 earnings were inclusive of $1.5 million in acquisition-related expenses, or which $396,000 (about $317,000 or 1 cent per share on an after-tax basis) were recorded in the third quarter, with the remaining $1.1 million (about $867,000 or 4 cents per share on an after-tax basis) incurred in the first half of 2018.
These acquisition expenses were related to the five-branch MainSource Bank acquisition in the Columbus and Greensburg markets that closed May 18 and the merger with First Security Inc. of Owensboro, Kentucky, that closed Oct. 15.
The third-quarter record financial performance was largely attributable to increased net interest income, bank officials said. The increased net interest income was driven by the company’s double-digit increases, on an annualized basis, in the level of average loans outstanding.
Average loans outstanding during the third quarter of 2018 were $2.319 billion, an increase of $260.2 million or 13 percent compared to the third quarter of 2017.
The third quarter, second quarter and year-to-date reported net income and earnings per share also were positively impacted by the federal income tax reform legislation, which reduced the company’s corporate federal income tax statutory rate of 35 percent to 21 percent effective Jan. 1.
The company announced its board of directors declared a regular quarterly cash dividend of 15 cents per share, payable Nov. 20 to shareholders of record as of Nov. 10.
German American Bancorp is a bank holding company based in Jasper. Following the merger in Columbus and Greensburg and the planned merger of First Security, German American, through its banking subsidiary German American Bank, will operate 66 banking offices in 20 contiguous southern Indiana counties and five counties in Kentucky. That includes four banking centers in Columbus and one in Seymour.