JASPER, Ind., April 29, 2024 (GLOBE NEWSWIRE) -- German American Bancorp, Inc. (NASDAQ:GABC) reported first quarter 2024 earnings of $19.0 million, or $0.64 per share, compared to earnings of $21.5 million, or $0.73 per share, for fourth quarter 2023, and earnings of $20.8 million, or $0.71 per share, for first quarter 2023. First quarter 2024 operating performance was highlighted by strong linked quarter commercial real estate and retail organic loan growth, linked quarter non-public fund deposit growth, strong credit metrics, controlled operating expenses, and a solid level of diversified non-interest income. However, from an earnings perspective, these increases were more than offset by lower net interest income as a result of modest net interest margin compression driven by higher deposit costs. The net interest margin declined from 3.43% to 3.35%, or 8 basis points, during the first quarter of 2024 on a linked quarter basis as the funding cost increase of 12 basis points outpaced the earning asset yield increase of 4 basis points. The rise in the cost of funds in the first quarter of 2024 was driven by the continued competitive deposit pricing in the marketplace, and the ongoing re-mixing of the Company's deposit composition as customers continued to move into time deposit accounts seeking higher yields. First quarter 2024 deposits declined approximately $33.6 million, or 3%, on an annualized linked quarter basis compared to year-end 2023 driven by a delayed seasonal outflow of public fund deposits into first quarter 2024. Non-public funds however continued to grow positively on a linked quarter basis. The overall core deposit base remains diverse with stable and manageable exposure to uninsured and uncollateralized deposits of approximately 21% and non-interest bearing demand accounts remaining stable at 28% of total deposits During the first quarter of 2024 loans remained stable and diversified with commercial real estate and retail organic loan growth helping to offset the larger seasonal reductions in utilization of agricultural lines of credit and ongoing reduced utilization in commercial and industrial lines. Credit quality remained strong as non-performing assets were 0.16% of period end assets and non-performing loans totaled 0.25% of period end loans. Non-interest income for the first quarter 2024 was driven by an increase in wealth management fees attributable to the ongoing growth and gathering of assets under management. Insurance revenues also contributed in a meaningful way driven by seasonal contingency income as well as improved commercial lines revenue. Linked quarter interchange fee income was lower as fourth quarter 2023 usage was seasonally up from the holidays and first quarter 2024 usage was seasonally down due to tax refunds. The Company also announced that its Board of Directors declared a regular quarterly cash dividend of $0.27 per share, which will be payable on May 20, 2024 to shareholders of record as of May 10, 2024. As previously reported, this dividend rate represents an 8% increase over the rate in effect during 2023. D. Neil Dauby, German American's Chairman & CEO stated, "Our Company delivered solid first quarter results to kick off the 2024 year while maintaining strong capital levels and a solid liquidity position. During the quarter, we continued to add key talent to our team in both customer facing and operational areas. We continued to invest in new digital platforms/systems to improve customer experience, drive customer acquisition/retention and drive future revenues. Our talented team of "relationship driven, value added" professionals, innovative technology and continuous improvement mindset will position us well for continued growth across our footprint." Balance Sheet Highlights Total assets for the Company totaled $6.112 billion at March 31, 2024, representing a decline of $40.3 million compared with December 31, 2023 and an increase of $115.0 million compared with March 31, 2023. The modest decline in total assets at March 31, 2024 compared with year-end 2023 was largely related to a decline in the securities portfolio while the increase in total assets at March 31, 2024 compared to March 31, 2023 was largely attributable to an increase in total loans, partially offset by a decline in the securities portfolio. Securities available for sale declined $57.6 million as of March 31, 2024 compared with December 31, 2023 and declined $131.0 million compared with March 31, 2023. The decline at March 31, 2024 in the available for sale securities portfolio compared with year-end 2023 and the end of the first quarter of 2023 was primarily the result of the Company's utilization of cash flows from the securities portfolio to fund loan growth and other balance sheet funding needs. Current projections indicate approximately $190.0 million in principal and interest cash flows from the portfolio over the next twelve months with rates unchanged. Total loans remained relatively stable at March 31, 2024 compared with year-end 2023, increasing by $1.0 million, while total loans increased $206.1 million, or 6%, compared with March 31, 2023. The modest increase during the first quarter of 2024 compared with year-end 2023 was largely attributable to increased commercial real estate loans and retail loans, partially offset by lower seasonal line utilization for agricultural loans and lower line utilization for commercial and industrial loans. Commercial real estate loans increased $27.0 million, or 5% on an annualized basis, while retail loans grew $12.5 million, or 6% on an annualized basis. Partially offsetting these increases was a decline in agricultural loans of $23.1 million, or 22% on an annualized basis, and a decline in commercial and industrial loans of $15.4 million, or 9% on an annualized basis, as line of credit utilization declined in both of these segments. The composition of the loan portfolio has remained relatively stable and diversified over the past several years, including 2024. The portfolio is most heavily concentrated in commercial real estate loans at 54% of the portfolio, followed by commercial and industrial loans at 16% of the portfolio, and agricultural loans at 10% of the portfolio. The Company's commercial lending is extended to various industries, including multi-family housing and lodging, agribusiness and manufacturing, as well as health care, wholesale, and retail services. The Company's commercial real estate portfolio has limited exposure to office real estate, with office exposure totaling approximately 4% of the total loan portfolio. End of Period Loan Balances 3/31/2024   12/31/2023   3/31/2023 (dollars in thousands)                       Commercial & Industrial Loans $         646,162     $         661,529     $         667,306   Commercial Real Estate Loans           2,148,808               2,121,835               2,000,237   Agricultural Loans           400,733               423,803               378,587   Consumer Loans           421,980               407,889               376,398   Residential Mortgage Loans           361,236               362,844               350,338     $         3,978,919     $         3,977,900     $         3,772,866   The Company's allowance for credit losses totaled $43.8 million at both March 31, 2024 and December 31, 2023 and totaled $44.3 million at March 31, 2023. The allowance for credit losses represented 1.10% of period-end loans at both March 31, 2024 and December 31, 2023 and represented 1.18% of period-end loans at March 31, 2023. Non-performing assets totaled $10.0 million at March 31, 2024, $9.2 million at December 31, 2023 and $14.6 million at March 31, 2023. Non-performing assets represented 0.16% of total assets at March 31, 2024, 0.15% at December 31, 2023 and 0.24% at March 31, 2023. Non-performing loans represented 0.25% of total loans at March 31, 2024, 0.23% at December 31, 2023 and 0.39% at March 31, 2023. Non-performing Assets           (dollars in thousands)             3/31/2024   12/31/2023   3/31/2023 Non-Accrual Loans $         9,898     $         9,136     $         13,495   Past Due Loans (90 days or more)           85               55               1,098   Total Non-Performing Loans           9,983               9,191               14,593   Other Real Estate           —               —               —   Total Non-Performing Assets $         9,983     $         9,191     $         14,593   March 31, 2024 total deposits declined $33.6 million, or 3% on an annualized basis, compared to year-end 2023 and increased $64.5 million, or 1%, compared with March 31, 2023. The decline at March 31, 2024 compared to year-end 2023 was largely attributable to seasonal outflows of public entity funds. The Company has continued to see customer movement from both interest bearing and non-interest bearing transactional accounts to time deposits due primarily to a higher interest rate environment. Non-interest bearing deposits have remained relatively stable as a percent of total deposits with both March 31, 2024 and December 31, 2023 non-interest deposits totaling 28% of total deposits compared with 31% at March 31, 2023. End of Period Deposit Balances 3/31/2024   12/31/2023   3/31/2023 (dollars in thousands)                       Non-interest-bearing Demand Deposits $         1,463,933     $         1,493,160     $         1,601,206   IB Demand, Savings, and MMDA Accounts           2,918,459               2,992,761               3,039,393   Time Deposits < $100,000           328,804               289,077               245,104   Time Deposits > $100,000           508,151               477,965               269,192     $         5,219,347     $         5,252,963     $         5,154,895   At March 31, 2024, the capital levels for the Company and its subsidiary bank, German American Bank (the "Bank"), remained well in excess of the minimum amounts needed for capital adequacy purposes and the Bank's capital levels met the necessary requirements to be considered well-capitalized.   3/31/2024Ratio   12/31/2023Ratio   3/31/2023Ratio Total Capital (to Risk Weighted Assets)           Consolidated         16.57   %          16.50   %           15.89   % Bank         14.53   %           14.76   %           14.37   % Tier 1 (Core) Capital (to Risk Weighted Assets)           Consolidated         14.97   %           14.97   %           14.32   % Bank         13.73   %           14.04   %           13.63   % Common Tier 1 (CET 1) Capital Ratio (to Risk Weighted Assets)           Consolidated         14.27   %           14.26   %           13.60   % Bank         13.73   %           14.04   %           13.63   % Tier 1 Capital (to Average Assets)           Consolidated         12.01   %           11.75   %           11.08   % Bank         11.02   %           11.03   %           10.55   % Results of Operations Highlights – Quarter ended March 31, 2024 Net income for the quarter ended March 31, 2024 totaled $19,022,000, or $0.64 per share, a decline of 12% on a per share basis, compared with the fourth quarter 2023 net income of $21,507,000, or $0.73 per share, and a decline of 10% on a per share basis compared with the first quarter 2023 net income of $20,807,000, or $0.71 per share. Summary Average Balance Sheet (Tax-equivalent basis / dollars in thousands)   Quarter Ended   Quarter Ended   Quarter Ended   March 31, 2024   December 31, 2023   March 31, 2023                                       Principal Balance   Income/ Expense   Yield/ Rate   Principal Balance   Income/ Expense   Yield/ Rate   Principal Balance   Income/ Expense   Yield/ Rate Assets                                   Federal Funds Sold and Other                                   Short-term Investments $         22,903     $         299             5.25   %   $         36,927     $         473             5.09   %   $         46,729     $         345             2.99   % Securities           1,595,700               11,537             2.89   %             1,527,306               11,903             3.12   %             1,729,189               12,595             2.91   % Loans and Leases           3,972,232               58,067             5.88   %             3,921,967               56,257             5.69   %             3,773,789               49,245             5.29   % Total Interest Earning Assets $         5,590,835     $         69,903             5.02   %   $         5,486,200     $         68,633             4.98   %   $         5,549,707     $         62,185             4.53   %                                     Liabilities                                   Demand Deposit Accounts $         1,426,239             $         1,507,780             $         1,636,133           IB Demand, Savings, and                                   MMDA Accounts $         2,969,755     $         12,823             1.74   %   $         3,010,984     $         12,433             1.64   %   $         3,119,979     $         7,414             0.96   % Time Deposits           806,976               8,166             4.07   %             709,534               6,577             3.68   %             451,644               1,557             1.40   % FHLB Advances and Other Borrowings