Announces 7.4% Dividend Increase as German American Bancorp Reports Strong Q4 and 2024 Earnings
German American Bancorp, Inc. (Nasdaq: GABC) announces solid earnings for the fourth quarter of 2024, posting $23.2 million, or $0.78 per share. This represents a 10% increase on a per-share basis compared to the third quarter of 2024, where the company earned $21.0 million, or $0.71 per share.
For the full year ending December 31, 2024, the company announces impressive annual earnings of $83.8 million, or $2.83 per share. This results in a return on average shareholders’ equity of 12.2%, marking the 20th consecutive year in which the company has achieved double-digit returns on equity.
In addition, German American Bancorp announces a 7.4% increase in its quarterly cash dividend, marking the 13th consecutive year of dividend hikes. This increase highlights the company’s strong operational performance and solid capital position.
The company announces a strong financial performance for the fourth quarter of 2024, driven by continued growth in net interest margin, loans, and deposits. German American Bancorp also announces its robust credit profile, increasing non-interest income, and well-managed non-interest expenses, all contributing to strong operating performance despite challenging market conditions.
Net interest income for the fourth quarter of 2024 increases by $2.4 million, or 5%, compared to the linked third quarter of 2024. The net interest margin for the quarter stands at 3.54%, marking a 7-basis-point expansion from the previous quarter’s margin of 3.47%. This growth is largely attributed to lower deposit costs, driven by a decline in the federal funds rate, and a stable yield on earning assets.
The company announces that total deposits increased by $57.8 million, or 4% on an annualized linked quarter basis, compared to the third quarter of 2024. The growth was primarily due to the seasonal influx of public fund deposits, while non-interest-bearing accounts remained stable at over 26% of total deposits.
German American Bancorp also announces that total loans increased by $63.9 million, or 6% on an annualized linked quarter basis, during the fourth quarter of 2024. Loan growth was broad-based across most categories, except for residential mortgages. The company’s diverse loan portfolio and strong credit metrics were also highlighted, with non-performing assets representing just 0.18% of total assets and non-performing loans making up 0.27% of total loans.
Non-interest income also sees a positive trend, with a 2% increase over the third quarter of 2024. Wealth management fees were a key driver, rising by 3% due to higher assets under management and strong capital markets. Non-interest expenses declined by $287,000, or 1%, compared to the prior quarter, reflecting disciplined cost control measures.
For the full year of 2024, German American Bancorp announces annual earnings of $83.8 million, or $2.83 per share, which was a slight decrease of $2.1 million, or about 3%, from the prior year’s earnings of $85.9 million, or $2.91 per share. Despite this slight decline, the company’s return on average shareholders’ equity remained robust at 12.2%, marking the 20th consecutive year of double-digit returns on equity.
The company also announces that its operating performance in 2024 was enhanced by significant corporate actions. These included the sale of its insurance division, a partial restructuring of its securities portfolio, and the announcement of its proposed acquisition of Heartland BancCorp, based in Columbus, Ohio. These transactions, along with strong performance in the latter half of 2024, are expected to drive momentum for future growth in earnings and balance sheet expansion into 2025.
German American Bancorp’s accomplishments in 2024 did not go unnoticed. The company announces several prestigious recognitions, including being named to Piper Sandler’s Sm-All Stars, Raymond James Community Bankers Cup, S&P Global’s Top Performing Community Bank list, Bank Director Top Banks list, Forbes America’s Best Bank list, and Newsweek’s Best Regional Bank list. CEO D. Neil Dauby commented, “These accolades reflect the consistent profitability, growth, and operational efficiency of our team, who are committed to serving our customers and communities.”
In line with its strong performance, German American Bancorp announces a 7.4% increase in its quarterly cash dividend, raising it to $0.29 per share. This dividend will be payable on February 20, 2025, to shareholders of record as of February 10, 2025. This marks the 13th consecutive year of dividend increases, further demonstrating the company’s financial strength and commitment to delivering value to shareholders.
Dauby expressed optimism about the company’s growth prospects, especially with the expected benefits of a normalizing yield curve, a strong organic growth footprint, and the pending merger with Heartland BancCorp, which has received all necessary shareholder and regulatory approvals. “This acquisition is a strategically compelling and financially attractive opportunity that should drive long-term shareholder value,” Dauby stated.
At year-end 2024, the company announces its total assets amounted to $6.296 billion, an increase of $35.0 million compared to the previous quarter and $143.7 million compared to the previous year. The increase in total assets was primarily driven by loan growth, partially offset by a decline in the securities portfolio due to changes in market conditions.
The loan portfolio remained diversified, with commercial real estate loans making up 54% of the portfolio, followed by commercial and industrial loans at 16%, and agricultural loans at 10%. The company’s exposure to office real estate was limited, with office loans representing only 5% of the total portfolio.
As of December 31, 2024, German American Bancorp announces its strong capital levels, with total capital representing 17.15% of risk-weighted assets and Tier 1 capital at 15.72%. These capital ratios exceed regulatory requirements, ensuring the company remains well-capitalized.
In conclusion, German American Bancorp announces its continued strength, resilience, and solid financial results in Q4 and for 2024. With a strong balance sheet, healthy capital position, and strategic initiatives in place, the company is well-positioned for growth in 2025 and beyond. The merger with Heartland BancCorp further enhances the company’s future growth trajectory, and its commitment to providing value to shareholders remains a central focus.
