GERMAN AMERICAN BANCORP, INC.
NEWS RELEASE
For additional information, contact:
Mark A Schroeder, President/CEO of German American Bancorp, Inc.
Bradley M. Rust, Senior Vice President/CFO of German American Bancorp, Inc.
(812) 482-1314
Page 1 of 3
August 1, 2006 | GERMAN AMERICAN BANCORP, INC. REPORTS INCREASED SECOND QUARTER AND RECORD YEAR-TO-DATE EARNINGS |
German American Bancorp, Inc., Jasper, Indiana, (NASDAQ: GABC) today reported increased second quarter earnings and record year-to-date 2006 earnings in terms of both net income and earnings per share. The Company’s second quarter 2006 net income was $2,488,000, or $0.23 per share, compared to $2,408,000, or $0.22 per share during the second quarter of last year. On a year-to-date basis, 2006 earnings were $5,051,000, or $0.46 per share, which represents the highest level of six months earnings recorded in the Company’s history. 2006 earnings increased by approximately 5% from 2005 reported net income and earnings per share which were $4,819,000 and $0.44 per share, respectively.
Contributing to the Company’s solid second quarter earnings were a $923,000 increase in the level of net interest income and additional non-interest income of $171,000, as well as a significant reduction totaling $637,000 in the provision for loan loss related to improvements in the quality of the Company’s loan portfolio. An offsetting factor to these positive earnings contributors of $1,731,000 was a $1,406,000 increase of non-interest related operating expenses.
On a year-to-date basis, the Company’s strong 2006 financial results were reflective of a similar comparison with net interest income increasing by $1,800,000, an improvement of non-interest income of $224,000, and a reduced level of provision for loan losses of $829,000. Partially offsetting these $2,853,000 of year-to-date earnings enhancements, non-interest related operating expenses were $2,171,000 higher in 2006 relative to that recorded during the first six months of 2005.
The Company’s 2006 second quarter and year-to-date financial results are reflective of the operating results of the recent acquisitions of PCB Holding Company and Stone City Bancshares, Inc.
GERMAN AMERICAN BANCORP, INC.
NEWS RELEASE
For additional information, contact:
Mark A Schroeder, President/CEO of German American Bancorp, Inc.
Bradley M. Rust, Senior Vice President/CFO of German American Bancorp, Inc.
(812) 482-1314
Page 2 of 3
“The strong second quarter financial performance marked the sixth consecutive quarter of solid improvement in reported net income and earnings per share relative to the same quarterly period of the prior fiscal year”, stated Mark A. Schroeder, President & Chief Executive Officer. “This impressive trend in improved operating performance is directly attributable to our ability to successfully position the Company to benefit from the recent return to a more normal interest rate and economic environment. We’re extremely pleased with our record level of year-to-date financial performance and are optimistic that our first half results will provide the impetus for strong financial performance throughout the balance of 2006.”
Schroeder continued, “In addition to the strength of our operating results, we are also very well positioned in terms of second quarter balance sheet growth driven by annualized linked-quarter total loan growth of 13%, including annualized commercial loan growth of 19%. Furthermore, our loan pipeline indicates a continuation of strong loan growth potential during the upcoming quarter. This combination of strong financial performance and promising prospects for continued loan growth bodes well in terms of our future performance levels.”
The Company also announced its Board of Directors has declared a regular quarterly cash dividend of $0.14 per share which will be payable on August 20, 2006 to shareholders of record as of August 10, 2006.
German American Bancorp, Inc. is a $1 billion financial services holding company based in Jasper, Indiana. The Company’s Common Stock is traded on NASDAQ’s National Market System under the symbol GABC. Including Stone City Bank, which was acquired January 1, 2006, the Company now operates six affiliated community banks with 29 retail banking offices in the nine contiguous Southwestern Indiana counties of Daviess, Dubois, Gibson, Knox, Lawrence, Martin, Perry, Pike, and Spencer. The Company also operates German American Financial Advisors & Trust Company, a trust, brokerage and financial planning subsidiary operating from the banking offices of the bank subsidiaries and German American Insurance, Inc., a full-line property and casualty insurance subsidiary with five independent insurance offices throughout its market area. The Company’s lines of business include retail and commercial banking, mortgage banking, comprehensive wealth management, full service brokerage and trust administration, title insurance, and a full range of personal and corporate insurance products.
GERMAN AMERICAN BANCORP, INC.
NEWS RELEASE
For additional information, contact:
Mark A Schroeder, President/CEO of German American Bancorp, Inc.
Bradley M. Rust, Senior Vice President/CFO of German American Bancorp, Inc.
(812) 482-1314
Page 3 of 3
Forward-Looking Statements
German American’s statements in this press release regarding financial performance, including loan growth potential and asset quality, may be deemed to include “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Readers are cautioned that, by their nature, forward-looking statements are based on assumptions and are subject to risks, uncertainties, and other factors. Actual results and experience could differ materially from the anticipated results or other expectations expressed or implied by these forward-looking statements as a result of a number of factors, including but not limited to, those discussed in the press release. Factors which could cause actual results and experience to differ from these expectations include changes in interest rates; changes in competitive conditions; the introduction, withdrawal, success and timing of asset/liability management strategies or of mergers and acquisitions and other business initiatives and strategies; changes in customer borrowing, repayment, investment and deposit practices; changes in fiscal, monetary and tax policies; changes in financial and capital markets; changes in general economic conditions, either nationally or regionally, resulting in, among other things, credit quality deterioration; capital management activities; actions of the Federal Reserve Board; changes in accounting principles and interpretations; and legislative and regulatory actions and reforms. These forward-looking statements speak only as of the date of this press release and German American undertakes no obligation to update any such forward-looking statement to reflect events or circumstances that occur after the date hereof.
GERMAN AMERICAN BANCORP, INC.
(unaudited, dollars in thousands except per share data)
Consolidated Statements of Income | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
June 30, | |||||||||||||
2006 | 2005 | ||||||||||||
ASSETS | |||||||||||||
Cash and Due from Banks | $ | 26,149 | $ | 17,996 | |||||||||
Short-term Investments | 5,424 | 7,685 | |||||||||||
Investment Securities | 206,218 | 191,131 | |||||||||||
Loans Held-for-Sale | 2,261 | 3,038 | |||||||||||
Loans, Net of Unearned Income | 705,787 | 625,443 | |||||||||||
Allowance for Loan Losses | (9,019 | ) | (9,501 | ) | |||||||||
Net Loans | 696,768 | 615,942 | |||||||||||
Stock in FHLB and Other Restricted Stock | 14,483 | 13,829 | |||||||||||
Premises and Equipment | 23,124 | 19,440 | |||||||||||
Goodwill and Other Intangible Assets | 12,710 | 3,962 | |||||||||||
Other Assets | 37,403 | 36,204 | |||||||||||
TOTAL ASSETS | $ | 1,024,540 | $ | 909,227 | |||||||||
LIABILITIES | |||||||||||||
Non-interest-bearing Demand Deposits | $ | 126,011 | $ | 120,656 | |||||||||
Interest-bearing Demand, Savings, and | |||||||||||||
Money Market Accounts | 320,605 | 281,123 | |||||||||||
Time Deposits | 358,157 | 307,819 | |||||||||||
Total Deposits | 804,773 | 709,598 | |||||||||||
Borrowings | 119,717 | 104,211 | |||||||||||
Other Liabilities | 11,322 | 11,729 | |||||||||||
TOTAL LIABILITIES | 935,812 | 825,538 | |||||||||||
SHAREHOLDERS' EQUITY | |||||||||||||
Common Stock and Surplus | 79,202 | 76,490 | |||||||||||
Retained Earnings | 11,362 | 7,556 | |||||||||||
Accumulated Other Comprehensive Loss | (1,836 | ) | (357 | ) | |||||||||
TOTAL SHAREHOLDERS' EQUITY | |||||||||||||
88,728 | 83,689 | ||||||||||||
TOTAL LIABILITIES AND | |||||||||||||
SHAREHOLDERS' EQUITY | $ | 1,024,540 | $ | 909,227 | |||||||||
END OF PERIOD SHARES OUTSTANDING | 11,008,821 | 10,824,223 | |||||||||||
BOOK VALUE PER SHARE | $ | 8.06 | $ | 7.73 |
GERMAN AMERICAN BANCORP, INC.
(unaudited, dollars in thousands except per share data)
Consolidated Statements of Income | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||
INTEREST INCOME | ||||||||||||||
Interest and Fees on Loans | $ | 12,813 | $ | 10,074 | $ | 25,195 | $ | 19,988 | ||||||
Interest on Short-term Investments | 136 | 52 | 262 | 139 | ||||||||||
Interest and Dividends on Investment Securities | 2,428 | 2,046 | 4,668 | 4,049 | ||||||||||
TOTAL INTEREST INCOME | 15,377 | 12,172 | 30,125 | 24,176 | ||||||||||
INTEREST EXPENSE | ||||||||||||||
Interest on Deposits | 5,068 | 3,082 | 9,550 | 5,971 | ||||||||||
Interest on Borrowings | 1,411 | 1,115 | 2,801 | 2,231 | ||||||||||
TOTAL INTEREST EXPENSE | 6,479 | 4,197 | 12,351 | 8,202 | ||||||||||
Net Interest Income | 8,898 | 7,975 | 17,774 | 15,974 | ||||||||||
Provision for Loan Losses | 54 | 691 | 344 | 1,173 | ||||||||||
Net Interest Income after | ||||||||||||||
Provision for Loan Losses | 8,844 | 7,284 | 17,430 | 14,801 | ||||||||||
NON-INTEREST INCOME | ||||||||||||||
Net Gain on Sales of Loans and Related Assets | 454 | 229 | 667 | 465 | ||||||||||
Net Gain/(Loss) on Securities | — | — | — | — | ||||||||||
Other Non-interest Income | 3,274 | 3,328 | 6,755 | 6,733 | ||||||||||
TOTAL NON-INTEREST INCOME | 3,728 | 3,557 | 7,422 | 7,198 | ||||||||||
NON-INTEREST EXPENSE | ||||||||||||||
Salaries and Benefits | 5,367 | 4,531 | 10,551 | 9,127 | ||||||||||
Other Non-interest Expenses | 3,747 | 3,177 | 7,266 | 6,519 | ||||||||||
TOTAL NON-INTEREST EXPENSE | 9,114 | 7,708 | 17,817 | 15,646 | ||||||||||
Income before Income Taxes | 3,458 | 3,133 | 7,035 | 6,353 | ||||||||||
Income Tax Expense | 970 | 725 | 1,984 | 1,534 | ||||||||||
NET INCOME | $ | 2,488 | $ | 2,408 | $ | 5,051 | $ | 4,819 | ||||||
EARNINGS PER SHARE & DILUTED EARNINGS PER SHARE | $ | 0.23 | $ | 0.22 | $ | 0.46 | $ | 0.44 | ||||||
WEIGHTED AVERAGE SHARES OUTSTANDING | 10,993,898 | 10,832,135 | 10,993,567 | 10,863,370 | ||||||||||
DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING | 11,000,333 | 10,836,778 | 11,002,189 | 10,873,771 | ||||||||||
EARNINGS PERFORMANCE RATIOS | ||||||||||||||
Annualized Return on Average Assets | 0.98 | % | 1.05 | % | 1.00 | % | 1.05 | % | ||||||
Annualized Return on Average Equity | 11.36 | % | 11.74 | % | 11.53 | % | 11.56 | % | ||||||
Net Interest Margin | 3.99 | % | 3.93 | % | 4.01 | % | 3.93 | % | ||||||
Efficiency Ratio (1) | 70.57 | % | 65.02 | % | 69.15 | % | 65.69 | % | ||||||
Net Overhead Expense to Average Earning Assets (2) | 2.33 | % | 1.96 | % | 2.26 | % | 1.99 | % | ||||||
ASSET QUALITY RATIOS | ||||||||||||||
Annualized Net Charge-offs to Average Loans | 0.44 | % | 0.10 | % | 0.31 | % | 0.15 | % | ||||||
Allowance for Loan Losses to Period End Loans | 1.28 | % | 1.52 | % | ||||||||||
Non-performing Assets to Period End Assets | 1.24 | % | 1.69 | % | ||||||||||
Non-performing Loans to Period End Loans | 1.66 | % | 2.42 | % | ||||||||||
(1) | Efficiency Ratio is defined as Non-interest Expense divided by the sum of Net Interest Income, on a tax equivalent basis, and Non-interest Income. |
(2) | Net Overhead Expense is defined as Total Non-interest Income less Total Non-interest Expense. |