GAB announces record earnings in 2016

German American Bancorp, Inc. reported record earnings for 2016 marking the seventh consecutive year the company has attained this level of performance.

According to the bank, 2016’s numbers continues a trend of exceptional performance by German American, as the company has consistently delivered double-digit returns on shareholders’ equity over the course of the past twelve fiscal years.

The company’s 2016 net income of $35.2 million, or $2.36 per share, was an increase of approximately 4%, on a per share basis, over its previous record annual net income of $30.1 million, or $2.27 per share, reported in 2015. Fourth quarter earnings in the current year of $10.1 million, or $0.66 per share, represented an increase of approximately 14%, on a per share basis, relative to 2015 fourth quarter results of $7.7 million, or $0.58 per share.

The reported earnings included ten month’s operations of River Valley Bancorp, following completion of the merger transaction on March 1, 2016, and reflected merger-related costs totaling approximately $4.3 million, or $2.7 million on an after-tax basis, representing approximately $0.18 per share.

The 2016 record performance was largely attributable to an increased level of net interest income and net interest margin, driven primarily by a higher level of average loans outstanding and a portfolio mix shift within the company’s securities portfolio to a higher percentage of non-taxable municipal securities.

2016 year-end loans outstanding increased by approximately $425 million, or 27%, from the prior year-end level. The year-over-year increase in loans outstanding was largely due to the acquisition of River Valley, as well as organic growth, exclusive of the impact of the River Valley acquisition, of approximately $118 million, or 8%.

“Our exceptionally strong 2016 financial performance was driven by a combination of both merger-related expansion and organic growth within our existing market footprint. The acquisition of River Valley Bancorp in March provided an opportunity to enter the vibrant Southeast Indiana area,” Mark A. Schroeder, German American’s Chairman & CEO, stated. “With a well connected team of financial professionals and an established branch network along the I-65 corridor between our existing Columbus, Indiana presence and the Indiana counties of Clark and Floyd, which are a rapidly growing component of the greater Louisville, Kentucky market area, the inclusion of River Valley positions us very well for future growth within this market area. We have already seen significant community banking opportunities within these markets, and we fully expect these new markets for German American will provide significant growth potential going forward.”

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3 Comments

  1. They are a publicly traded company, so they do share their gains in the form of paying dividends to shareholders.

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