Exhibit 99
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JASPER, INDIANA | JANUARY 30, 2003 | GERMAN AMERICAN BANCORP ANNOUNCES INTENT TO EXTEND A SELF TENDER OFFER, REPORTS FOURTH QUARTER AND 2002 EARNINGS INCREASE, AND DECLARES QUARTERLY CASH DIVIDEND |
German American Bancorp (NASDAQ: GABC) announced today that it intends to commence a self-tender offer on or about February 6, 2003 for up to 1,000,000 shares of its Common Stock, or approximately 9% of its outstanding shares. The tender offer will allow shareholders to tender their shares to the Company at a price of $20.00 per share. On Wednesday, January 29, 2003, the last transaction in the Company’s Common Stock as reported by NASDAQ was completed at $15.55 per share. The offer, which is expected to expire on or about March 14, 2003, unless extended, will be subject to other conditions that will be described in the Offer to Purchase that will be mailed to shareholders effective with the commencement date of the offering.
Mark A. Schroeder, the Company’s President & CEO, commenting on the pending tender offer stated, “Our Company’s capital level has grown, over the course of the past several years, to the point at which it is significantly in excess of the “well capitalized” level prescribed by banking regulators and in excess of the level required to support our current and future operations. As interest rates have declined to 50 year lows, the incremental current earnings on this excess capital is quite low and we believe it has had a detrimental effect on the level of the Company’s return on equity and earnings per share. After a thorough evaluation of a variety of alternatives, management and the Board have determined that a repurchase of our own shares at this time would be in the best interests of our shareholders. Through participating in our tender offer, both large and small shareholders will have an opportunity to enhance their liquidity or diversify their holdings at a premium to the market. Additionally, for the remaining GABC shareholders, we believe this action will result in enhanced earnings per share and return on equity going forward. We are extremely pleased that the strength of our capital position allows us to make this offer to our shareholders.”
The Company also announced that its year 2002 earnings were $9,442,000, or $.82 per share. Earnings for 2002 increased by approximately 2.7% from the $9,193,000, or $.79 per share, reported for 2001. Fourth quarter earnings in 2002 were $2,229,000, or $.19 per share, an increase of approximately 22.1% from the $1,825,000, or $.15 per share, in the fourth quarter of 2001.
The Company’s 2002 earnings increases were generated by the Company’s core banking segment. German American’s mortgage banking operations were adversely affected during the fourth quarter of 2001 and throughout 2002 due to the impact of historic low levels of interest rates on the valuation of mortgage servicing rights and net interest income. The mortgage banking segment experienced net losses of $963,000 and $324,000 for the twelve and three months ended December 31, 2002, compared to net income of $28,000 and a net loss of $302,000 for the comparable periods of 2001. Excluding the mortgage banking segment, the Company would have posted earnings growth of 13.5% and 20.0% for the twelve and three months ended December 31, 2002 compared with the same periods of 2001.
The Company’s Board of Directors also declared a regular quarterly cash dividend of $0.14 per share, payable on or before February 20, 2003 to shareholders of record as of February 10, 2003. The maintenance of the per share dividend following the issuance of the Company’s five percent annual stock dividend in December 2002 results in an effective five percent increase in the cash dividends paid to shareholders. This latest dividend action represents the eighth consecutive year of effective cash dividend increases in connection with the annual stock dividend declaration in December of each year.
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German American Bancorp, a $1 billion financial services company, operates 5 affiliated community banks with 26 retail banking offices in the eight contiguous Southwestern Indiana counties of Daviess, Dubois, Gibson, Knox, Martin, Perry, Pike, and Spencer and a business lending center in Evansville, Indiana. The Company also operates German American Financial Advisors & Trust Company as well as 4 independent insurance agencies located throughout its market area. The Company’s lines of business include retail and commercial banking, mortgage banking, comprehensive financial planning, full service brokerage and trust administration, title insurance, and a full range of personal and corporate property and casualty insurance products. German American Bancorp is based in Jasper, Indiana and its common stock is traded on NASDAQ’s National Market System under the symbol GABC.
This press release contains “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995, including the statements concerning management’s expectations that the planned self tender offer will commence and end on certain dates, that shareholders will have the opportunity to sell their shares to the Company under the offer at a premium to current market prices, and that the Company’s purchase of shares pursuant to the planned self tender offer may result in enhanced earnings per share and return on equity. With respect to these statements, readers are cautioned that the Company’s obligation to purchase shares under the self tender offer will be subject to compliance with applicable law and to a number of other conditions and, if those conditions are not satisfied, the Company could determine not to commence the offer or could withdraw the offer once it is commenced without purchasing any shares; that the Company is not obligated to purchase all shares tendered by each shareholder if more than the maximum amount sought is tendered to it under the offer; and that the Company’s expectations regarding enhanced earnings per share and return on equity as a result of the offer assume that the Company purchases the maximum number of shares that it is seeking to purchase at the offer price, and that the Company’s earnings and financial condition are not materially different from its recent earnings and current financial condition, except to the extent that earnings and financial condition are affected by the purchase of the shares pursuant to the offer. Readers are further cautioned that a variety of factors could cause the Company’s actual results to differ from those described herein, including general and local economic conditions, interest rate changes, risks associated with acquisitions, credit risks, regulatory risks and competition. For a more complete description of factors that could cause future results to differ from those described in forward-looking statements, see the discussions captioned “Forward-Looking Statements” in Item 1 of the Company’s annual report on Form 10-K for the year ended December 31, 2001 and in the Company’s quarterly reports on Form 10-Q filed during 2002.
GERMAN AMERICAN BANCORP (unaudited,dollars in thousands except per share data) Consolidated Balance Sheets December 31, 2002 2001 ----------- ----------- ASSETS Cash and Due from Banks .................................. $ 27,627 $ 36,893 Short-term Investments ................................... 8,118 62,534 Investment Securities .................................... 257,143 203,746 Loans Held for Sale ...................................... 13,138 5,538 Loans, Net of Unearned Income ............................ 610,741 657,166 Allowance for Loan Losses ................................ (8,301) (8,388) ----------- ----------- Net Loans ............................................. 602,440 648,778 Premises and Equipment ................................... 21,966 20,016 Other Assets ............................................. 26,573 37,606 ----------- ----------- TOTAL ASSETS ............................................. $ 957,005 $ 1,015,111 =========== =========== LIABILITIES Non-interest-bearing Demand Deposits ..................... $ 95,655 $ 106,613 Interest-bearing Demand, Savings, and Money Market Accounts ................................ 243,202 241,925 Time Deposits ‹ $100,000 ................................. 311,489 327,510 Time Deposits $100,000 or more and Brokered Deposits .................................... 56,848 50,826 ----------- ----------- Total Deposits ........................................ 707,194 726,874 Borrowings ............................................... 132,319 174,385 Other Liabilities ........................................ 12,973 11,643 ----------- ----------- TOTAL LIABILITIES ....................................... 852,486 912,902 ----------- ----------- SHAREHOLDERS' EQUITY Common Stock and Surplus ................................. 90,297 83,277 Retained Earnings ........................................ 12,298 18,133 Accumulated Other Comprehensive Income (Loss) ............ 1,924 799 ----------- ----------- TOTAL SHAREHOLDERS' EQUITY .................................... 104,519 102,209 ----------- ----------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY ........................................ $ 957,005 $ 1,015,111 =========== =========== BOOK VALUE PER SHARE .......................................... $ 9.12 $ 8.82(1) END OF PERIOD SHARES OUTSTANDING .............................. $11,460,731 11,038,675(2) (1) Restated for December 2002 stock dividend. (2) End of period shares outstanding were not restated for the effect of stock dividends.
GERMAN AMERICAN BANCORP (unaudited,dollars in thousands except per share data) Consolidated Statements of Income Three Months Ended Twelve Months Ended December 31, December 31, 2002 2001 2002 2001 --------------------------- ---------------------------- INTEREST INCOME Interest and Fees on Loans................................$ 11,544 $ 13,433 $ 48,471 $ 58,445 Interest on Short-term Investments ....................... 147 457 754 2,093 Interest on Investment Securities......................... 2,691 2,439 11,269 10,531 ----------- ----------- ----------- ----------- TOTAL INTEREST INCOME ..................................... 14,382 16,329 60,494 71,069 ----------- ----------- ----------- ----------- INTEREST EXPENSE Interest on Deposits...................................... 4,335 5,765 18,676 27,465 Interest on Borrowings ................................... 2,474 2,616 9,882 11,452 ----------- ----------- ----------- ----------- TOTAL INTEREST EXPENSE .................................... 6,809 8,381 28,558 38,917 ----------- ----------- ----------- ----------- Net Interest Income....................................... 7,573 7,948 31,936 32,152 Provision for Loan Losses ................................ 323 165 1,115 660 Net Interest Income after Provision for Loan Losses .............................. 7,250 7,783 30,821 31,492 ----------- ----------- ----------- ----------- NON-INTEREST INCOME Other Operating Income ................................... 1,997 1,955 7,867 8,262 Net Gain on Sales of Loans,Related Assets, & Provision for Loss on Loans Held for Sale ....................... 663 383 1,625 1,509 Net Gain / (Loss) on Sales of Securities ................. 17 --- 17 1 ----------- ----------- ----------- ----------- TOTAL NON-INTEREST INCOME ................................. 2,677 2,338 9,509 9,772 ----------- ----------- ----------- ----------- NON-INTEREST EXPENSE Salaries and Benefits..................................... 4,318 4,510 17,443 16,669 Other Operating Expenses ................................. 2,992 3,532 11,458 12,639 ----------- ----------- ----------- ----------- TOTAL NON-INTEREST EXPENSE ................................ 7,310 8,042 28,901 29,308 ----------- ----------- ----------- ----------- Income before Income Taxes ............................... 2,617 2,079 11,429 11,956 Income Tax Expense ....................................... 388 254 1,987 2,763 ----------- ----------- ----------- ----------- NET INCOME ..................................................$ 2,229 $ 1,825 $ 9,442 $ 9,193 =========== =========== =========== =========== EARNINGS PER SHARE AND DILUTED EARNINGS PER SHARE ...........................$ 0.19 $ 0.15(1) $ 0.82 $ 0.79(1) =========== =========== =========== =========== WEIGHTED AVERAGE SHARES OUTSTANDING Basic .................................................... 11,451,300 11,581,239(1) 11,486,776 11,572,927(1) Diluted .................................................. 11,482,686 11,614,609(1) 11,517,825 11,585,218(1) (1) Restated for December 2002 stock dividend.