German American Bancorp reports record third quarter earnings of $35.1 million

German American Bancorp, Inc. achieved record quarterly earnings of $35.1 million, or $0.94 per share, in the third quarter of 2025 — the highest level of reported quarterly earnings and earnings per share in the company’s history.

The Jasper, Indiana-based bank holding company’s third quarter performance represents a 12% increase from second quarter 2025 earnings of $31.4 million, or $0.84 per share. Compared to the same period last year, earnings jumped $14.0 million, representing approximately 32% growth on a per-share basis from third quarter 2024 earnings of $21.0 million, or $0.71 per share.

On an adjusted basis, the company reported net income of $34.4 million, or $0.92 per share, compared to $32.1 million, or $0.86 per share, in the previous quarter.

“We are extremely pleased to deliver a record earnings performance in the third quarter of 2025 as we positioned the Company with various strategic transactions throughout 2024 and early 2025,” said D. Neil Dauby, German American’s Chairman and CEO.

The company’s strong financial metrics include a return on average assets (ROAA) of 1.68%, return on average equity (ROAE) of 13.0%, return on average tangible equity (ROATCE) of 21.0%, and a net interest margin (NIM) of 4.06%.

The record operating performance stems from continued net interest margin expansion, strong gains in net interest income and operating leverage, solid deposit growth with a high level of non-interest-bearing demand deposits, solid loan growth, healthy credit metrics, and controlled expenses.

German American’s overall loan portfolio at September 30, 2025, remains stable and diversified, increasing by approximately 3% on an annualized linked-quarter basis. The increase results from solid loan originations across the company’s entire footprint, partially offset by higher commercial real estate payoffs.

The company’s loan portfolio reflects healthy credit metrics, with non-performing assets at 0.28% of period-end assets and non-performing loans totaling 0.41% of period-end loans. Net charge-offs remained minimal at five basis points of average loans on an annualized basis for the third quarter.

Third quarter total deposits increased 3.4% on an annualized linked-quarter basis, led by a 9% increase in non-interest-bearing demand deposit accounts. Non-interest-bearing accounts continue to be strong, representing more than 28% of total deposits at September 30, 2025.

The total cost of deposits declined 6 basis points from 1.73% at June 30, 2025, to 1.67% at September 30, 2025. The 25-basis-point Federal Funds rate cut that occurred late in the third quarter had minimal impact on the quarter’s overall financial performance.

Non-interest income increased $1.7 million, or 10%, in the third quarter compared to the second quarter of 2025. The increase was driven by a 3% increase in wealth management and a 6% increase in deposit fees, both resulting from increased new business. A non-recurring gain on the redemption of subordinated debt previously issued by Heartland BancCorp also contributed to the favorable increase.

The company’s third-quarter 2025 efficiency ratio fell below 50%, to 49.26%, as it continues to build scale and profitability.

German American completed its acquisition of Heartland BancCorp on February 1, 2025, through a merger that significantly expanded the company’s footprint. Heartland, headquartered in Whitehall, Ohio, operated 20 retail banking offices located in Columbus, Ohio, and Greater Cincinnati.

As of the closing, Heartland had total assets of approximately $1.94 billion, total loans of approximately $1.58 billion, and total deposits of approximately $1.73 billion. German American issued approximately 7.74 million shares of its common stock and paid approximately $23.1 million in cash in exchange for all outstanding Heartland shares.

“Our Heartland Bank acquisition that closed in the first quarter of 2025 continues to integrate extremely well, adding to the overall momentum of our Company,” Dauby stated. “We are excited about the long-term growth potential in connection with a normalizing yield curve and our strong diversified organic growth footprint.”

Total assets for the company totaled $8.401 billion at September 30, 2025, representing an increase of $121.1 million compared with June 30, 2025, and an increase of $2.140 billion compared with September 30, 2024. The year-over-year increase in total assets was largely attributable to the Heartland acquisition, with continued organic loan growth also contributing.

Total loans increased $39.3 million, or 3% on an annualized basis, compared with June 30, 2025, and increased $1.718 billion compared with September 30, 2024. The quarterly increase was broad-based across most segments of the portfolio and throughout the company’s footprint, though partially mitigated by higher levels of commercial real estate loan payoffs.

Agricultural loans increased $11.4 million, or 10% on an annualized basis, and commercial real estate loans increased $6.5 million, or 1% on an annualized basis. Commercial and industrial loans declined $2.3 million, or 1% on an annualized basis, while retail loans grew by $23.7 million, or 7% on an annualized basis, due largely to strong home equity loan originations.

The loan portfolio composition remains relatively stable and diversified. The portfolio is most heavily weighted in commercial real estate loans at 54%, followed by commercial and industrial loans at 14%, residential mortgage loans at 14%, agricultural loans at 8%, and home equity loans at 8%.

The company’s allowance for credit losses totaled $76.1 million at September 30, 2025, representing 1.32% of period-end loans. The company added $32.7 million to the allowance for credit losses in conjunction with the Heartland acquisition closing.

Capital levels for both the company and the bank remained well in excess of minimum amounts needed for capital adequacy purposes, and the bank’s capital levels meet requirements to be considered well-capitalized.

Dauby emphasized the company’s commitment to future growth, stating, “We continue to add top talent to our relationship-focused team of professionals and, with their dedicated efforts, we are confident that our strong community presence, healthy financial condition, and disciplined approach to growth will continue to drive future profitability and long-term shareholder value.”

The company’s board of directors declared a regular quarterly cash dividend of $0.29 per share, payable on November 20, 2025, to shareholders of record as of November 10, 2025.

“We remain excited and committed to the vitality and future growth of our Indiana, Kentucky, and Ohio communities,” Dauby said.