Staff Reports
German American Bancorp Inc. recently reported first quarter earnings of $9.1 million, or 31 cents per share.
The current quarterly earnings include the results of Citizens Union Bancorp of Shelbyville Inc., which as previously reported was acquired by German American on Jan. 1.
The first quarter of 2022 included one-time merger
and acquisition costs of approximately $11.7 million and Day 1 provision under the current expected credit loss model for CUB of $6.3 million (total impact of $13.6 million, or 46 cents per share, on an after-tax basis).
As a result, quarterly earnings declined by approximately $10.5 million, or 58% on a per share basis, from 2021 first quarter earnings of $19.6 million, or 74 cents per share.
Total assets overall increased during the past year by $1.5 billion, or approximately 28%, from March 31, 2021.
The 2022 first quarter financial position and performance relative to the same quarter last year was positively impacted by the inclusion of the CUB acquisition and ongoing organic loan and deposit growth, which were partially mitigated by the reduction of loans made under the Paycheck Protection Program.
End of period deposits over the first quarter of 2022 grew $1.1 billion mostly as a result of the CUB acquisition; however, excluding the acquisition, German American continued to generate solid deposit growth into 2022 with an increase of $191 million, or 16% annualized, in organic deposits.
First quarter 2022 net interest income increased $8 million, or approximately 21%, compared to the same period of 2021 driven by the company’s higher level of average earning assets.
Operating income increased $1.2 million or 8% quarter over prior year same quarter. Deposit service charge fees and interchange income improved 40%, resulting from the higher utilization by existing customers as well as the expanded customer base from the acquisition.
Other positive drivers include an increase of 12% in wealth management fees and a 13% increase in insurance services revenue. Net gains on sales of loans declined 35% as volume declined due to the overall slowing of the home mortgage refinance sector.
Operating expenses increased $16.9 million, or 54%, compared to the first quarter of 2021, of which nearly $12 million was related to the acquisition-related expenses in connection with CUB. The majority of the remaining increase was primarily attributable to the operating costs associated with CUB during the first quarter of 2022.
The 2022 first quarter results also included a $6.7 million increase to the company’s provision for credit losses as compared to the first quarter of 2021. During the quarter ending March 31 of this year, the company recorded a provision for credit losses of $5.2 million compared with a negative provision for credit losses of $1.5 million during the first quarter of 2021.
German American also announced its board of directors declared a regular quarterly cash dividend of 23 cents per share, which will be payable May 20 to shareholders of record as of May 10.
The financial holding company is based in Jasper. German American, through its banking subsidiary German American Bank, operates 77 banking offices in 19 contiguous southern Indiana counties and 14 counties in Kentucky. That includes a branch in Seymour at 1725 E. Tipton St.