German American Bancorp reports record third-quarter earnings of $38.6 million

Jasper — German American Bancorp, the Jasper-based parent of German American Bank, reported net income of $38.6 million, or $1.03 per share, for the third quarter of 2026. The company says that is its highest quarterly profit on record.

The three months ended Sept. 30 topped the second quarter’s $38.2 million, or $1.02 per share, which was also a company record. Profit rose $3.6 million from $35.1 million, or 94 cents per share, in the third quarter of 2025.

The board declared a quarterly cash dividend of 31 cents per share. It is payable Nov. 20 to shareholders of record as of Nov. 10.

Net interest income is the gap between what the bank earns on loans and investments and what it pays on deposits and borrowing. It rose $2.3 million, or about 3%, from the second quarter to $83.5 million. The bank’s net interest margin rose to 4.42%, up from 4.30% in the second quarter and 4.06% a year earlier. The company said the gain came mostly from higher yields on loans and investments.

Total loans grew $57.0 million during the quarter to about $6.0 billion. Commercial real estate loans led the growth, up $47.7 million. Home equity lending also grew. Agricultural loans fell $8.4 million and commercial and industrial loans fell $3.9 million. The company said borrowers were using less of their operating lines of credit.

Total deposits fell $59.3 million to $6.94 billion. Non-interest-bearing accounts held steady at about 28% of deposits. In the release, Chairman and CEO D. Neil Dauby said the bank’s ability to attract reasonably priced deposits amid stiffer competition will be key going forward.

Operating expenses rose $2.7 million, or about 5%, to $53.1 million. The company named four causes: higher health insurance costs, a modest increase in full-time employees, seasonal repair and maintenance, and the timing of donations and sponsorships. The advertising and promotion line, which includes those donations, rose $490,000, or 40%.

Problem loans declined. Non-performing assets were $24.0 million, or 0.29% of total assets, down from $26.8 million at June 30. Net charge-offs, meaning loans written off as losses, were $581,000.

Rising long-term interest rates at the end of the quarter lowered the paper value of the bank’s bond holdings. The release says the 10-year Treasury yield reached a 24-year high. Tangible book value per share fell from $21.48 to $20.01. Unrealized losses recorded in shareholders’ equity grew from $165.2 million to $250.8 million. Those losses do not reduce net income.

For the first nine months of 2026, the company earned $110.0 million, or $2.93 per share. That compares with $77.0 million, or $2.10 per share, a year earlier. The 2025 figure included costs tied to the purchase of Ohio-based Heartland BancCorp, which closed Feb. 1, 2025.

“We are extremely pleased to deliver another record quarterly earnings performance for the third quarter 2026 and continue to drive our quarterly earnings per share above a dollar. We believe we are well positioned for continued profitability with a strong net interest margin, solid loan and income production as well as controlled expenses,” D. Neil Dauby, Chairman and CEO of German American, stated. “We are encouraged by the strength of our pipeline, driven by our strong diversified footprint, as we move into the last quarter of 2026. We believe we are in the right markets with the right people. Our ability to grow reasonably priced deposits to fund such anticipated growth, in the face of heightened deposit competition, will be key as we move forward into the future.”

Dauby also stated, “We just completed a new strategic plan for 2027 and beyond, and we are excited for the future as we continue on our path as a high performing bank with a commitment to: creating an exceptional employee experience; providing a wide range of products and services that our customers value; supporting the communities we serve; and delivering superior returns to our shareholders. We are ready to adapt and evolve to an ever-changing environment that includes artificial intelligence, digital money/payments, enhanced fraud prevention, and cybersecurity just to name a few.”

German American operates 92 banking offices in Indiana, Kentucky and Ohio. It does business as Heartland Bank in Columbus and Greater Cincinnati. Total assets were $8.41 billion at Sept. 30.