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
October 31, 2006 | GERMAN AMERICAN BANCORP, INC. REPORTS INCREASED THIRD QUARTER AND YEAR-TO-DATE EARNINGS AND ANNOUNCES MARKET EXPANSION PLANS |
German American Bancorp, Inc., Jasper, Indiana, (NASDAQ: GABC) reported today that its third quarter and year-to-date net income increased by approximately 10% and 7%, respectively, over the prior year's net income for the same periods.
The Company's net income for the third quarter was $2,732,000, or $0.25 per share, compared to $2,471,000, or $0.23 per share, during the third quarter of last year. On a year-to-date basis, 2006 earnings were $7,783,000, or $0.71 per share, which compares favorably to the reported nine months' net income and earnings per share for 2005 which were $7,290,000 and $0.67 per share, respectively.
Current year earnings were positively affected by increases within the Company's net interest income and non-interest income as well as a reduced level of provision for loan losses. The improvement in the level of net-interest income was attributable to annualized loan growth of approximately 18% in both the third quarter and year-to-date. The increase in non-interest income was primarily credited to the gain derived from the sale of the Company's portfolio of agency-issued preferred stock during the third quarter while the reduction in provision was due to improvements in the quality of the Company's loan portfolio. An offsetting factor to these positive earnings contributors was an increased level of non-interest related operating expenses primarily attributable to the inclusion of recently acquired banking units and costs associated with the Company's conversion of its core processing system during the third quarter of 2006.
The Company's 2006 third quarter and year-to-date financial results are reflective of the operating results of the recent acquisitions of PCB Holding Company as of October 1, 2005 and Stone City Bancshares, Inc. as of January 1, 2006.
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 Company also announced the planned expansion of its banking footprint into the Bloomington, Indiana market and the recent acquisition of Keach & Grove Insurance of Bedford, Indiana. The acquisition of Keach & Grove Insurance, which is expected to increase the Company's annual insurance commission revenues by approximately $1,100,000, was completed as of October 1, 2006. The Company plans to expand its banking and investment services into the Bloomington, Indiana market (in Monroe County, just north of its operations in Bedford, in Lawrence County, Indiana) by opening an office in Bloomington during the first quarter of 2007.
Mark A. Schroeder, President & Chief Executive Officer of German American Bancorp, Inc. stated. "We're pleased to report yet another quarter of solid earnings and strong loan growth. The depth of our financial professionals, who intimately know their local markets, and our wide array of offerings of state-of-the-art banking, investment, and insurance products and services are paying dividends in terms of new business opportunities. Area agricultural, commercial and retail businesses along with consumers located throughout our market area are, in increasing numbers, turning to German American for all their financial needs."
Schroeder continued, "We're very excited about the potential growth opportunities we believe our planned expansion into the Bloomington market and our recent Bedford-based insurance agency acquisition will provide for both customers and shareholders. German American is uniquely positioned to provide comprehensive financial services across our entire market footprint and our recent success is evidence of our customers' recognition and acceptance of the value our business model delivers."
The Company's Board of Directors declared a regular quarterly cash dividend of $0.14 per share which will be payable on November 20, 2006 to shareholders of record as of November 10, 2006.
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
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. The Company engages in retail, commercial and mortgage banking businesses through six community banking affiliates and 29 banking offices in the nine contiguous Southern Indiana counties of Daviess, Dubois, Gibson, Knox, Lawrence, Martin, Perry, Pike, and Spencer. The Company provides comprehensive wealth management, full service brokerage and trust administration at its banking offices through its subsidiary, German American Financial Advisors & Trust Company. The Company also offers a full line of property and casualty insurance and personal insurance through six independent insurance offices located throughout the Company's market area by its subsidiary, German American Insurance, Inc., and title insurance through its First Title Insurance Company subsidiary.
Cautionary Statement Regarding Forward-Looking Information
German American's statements in this press release regarding future growth opportunities as a result of the planned Bloomington branch opening and increased insurance commission revenues, and regarding improvements in its loan 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; the ability to retain the acquired insurance agency's clientele; 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
(unaudited, dollars in thousands except per share data)
Consolidated Balance Sheets
| September 30, | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 2006 | 2005 | |||||||||
| ASSETS | ||||||||||
| Cash and Due from Banks | $ | 27,889 | $ | 22,761 | ||||||
| Short-term Investments | 5,188 | 8,982 | ||||||||
| Investment Securities | 210,520 | 189,464 | ||||||||
| Loans Held-for-Sale | 2,800 | 2,779 | ||||||||
| Loans, Net of Unearned Income | 738,923 | 625,618 | ||||||||
| Allowance for Loan Losses | (9,111 | ) | (9,370 | ) | ||||||
| Net Loans | 729,812 | 616,248 | ||||||||
| Stock in FHLB and Other Restricted Stock | 11,942 | 13,829 | ||||||||
| Premises and Equipment | 23,207 | 19,867 | ||||||||
| Goodwill and Other Intangible Assets | 12,556 | 3,856 | ||||||||
| Other Assets | 36,807 | 40,089 | ||||||||
| TOTAL ASSETS | $ | 1,060,721 | $ | 917,875 | ||||||
| LIABILITIES | ||||||||||
| Non-interest-bearing Demand Deposits | $ | 129,536 | $ | 119,772 | ||||||
| Interest-bearing Demand, Savings, and | ||||||||||
| Money Market Accounts | 301,257 | 283,490 | ||||||||
| Time Deposits | 393,524 | 308,386 | ||||||||
| Total Deposits | 824,317 | 711,648 | ||||||||
| Borrowings | 132,464 | 111,283 | ||||||||
| Other Liabilities | 12,931 | 10,532 | ||||||||
| TOTAL LIABILITIES | 969,712 | 833,463 | ||||||||
| SHAREHOLDERS' EQUITY | ||||||||||
| Common Stock and Surplus | 79,174 | 76,438 | ||||||||
| Retained Earnings | 12,553 | 8,512 | ||||||||
| Accumulated Other Comprehensive Loss | (718 | ) | (538 | ) | ||||||
| TOTAL SHAREHOLDERS' EQUITY | 91,009 | 84,412 | ||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 1,060,721 | $ | 917,875 | ||||||
| END OF PERIOD SHARES OUTSTANDING | 11,009,187 | 10,827,205 | ||||||||
| BOOK VALUE PER SHARE | $ | 8.27 | $ | 7.80 | ||||||
GERMAN AMERICAN BANCORP
(unaudited, dollars in thousands except per share data)
Consolidated Statements of Income
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2006 | 2005 | 2006 | 2005 | |||||||||||
| INTEREST INCOME | ||||||||||||||
| Interest and Fees on Loans | $ | 13,799 | $ | 10,514 | $ | 38,994 | $ | 30,502 | ||||||
| Interest on Short-term Investments | 105 | 55 | 367 | 194 | ||||||||||
| Interest and Dividends on Investment Securities | 2,470 | 2,007 | 7,138 | 6,056 | ||||||||||
| TOTAL INTEREST INCOME | 16,374 | 12,576 | 46,499 | 36,752 | ||||||||||
| INTEREST EXPENSE | ||||||||||||||
| Interest on Deposits | 5,586 | 3,427 | 15,136 | 9,398 | ||||||||||
| Interest on Borrowings | 1,679 | 1,168 | 4,480 | 3,399 | ||||||||||
| TOTAL INTEREST EXPENSE | 7,265 | 4,595 | 19,616 | 12,797 | ||||||||||
| Net Interest Income | 9,109 | 7,981 | 26,883 | 23,955 | ||||||||||
| Provision for Loan Losses | 290 | 552 | 634 | 1,725 | ||||||||||
| Net Interest Income after | ||||||||||||||
| Provision for Loan Losses | 8,819 | 7,429 | 26,249 | 22,230 | ||||||||||
| NON-INTEREST INCOME | ||||||||||||||
| Net Gain on Sales of Loans and Related Assets | 83 | 234 | 750 | 699 | ||||||||||
| Net Gain/(Loss) on Securities | 951 | — | 951 | — | ||||||||||
| Other Non-interest Income | 3,304 | 3,254 | 10,059 | 9,987 | ||||||||||
| TOTAL NON-INTEREST INCOME | 4,338 | 3,488 | 11,760 | 10,686 | ||||||||||
| NON-INTEREST EXPENSE | ||||||||||||||
| Salaries and Benefits | 5,403 | 4,465 | 15,954 | 13,592 | ||||||||||
| Other Non-interest Expenses | 3,828 | 3,060 | 11,094 | 9,579 | ||||||||||
| TOTAL NON-INTEREST EXPENSE | 9,231 | 7,525 | 27,048 | 23,171 | ||||||||||
| Income before Income Taxes | 3,926 | 3,392 | 10,961 | 9,745 | ||||||||||
| Income Tax Expense | 1,194 | 921 | 3,178 | 2,455 | ||||||||||
| NET INCOME | $ | 2,732 | $ | 2,471 | $ | 7,783 | $ | 7,290 | ||||||
| EARNINGS PER SHARE & DILUTED EARNINGS PER SHARE | $ | 0.25 | $ | 0.23 | $ | 0.71 | $ | 0.67 | ||||||
| WEIGHTED AVERAGE SHARES OUTSTANDING | 10,994,686 | 10,826,729 | 10,993,994 | 10,851,022 | ||||||||||
| DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING | 11,008,102 | 10,832,686 | 11,002,679 | 10,857,891 | ||||||||||
| EARNINGS PERFORMANCE RATIOS | ||||||||||||||
| Annualized Return on Average Assets | 1.06 | % | 1.08 | % | 1.02 | % | 1.06 | % | ||||||
| Annualized Return on Average Equity | 12.19 | % | 11.87 | % | 11.78 | % | 11.66 | % | ||||||
| Net Interest Margin | 3.95 | % | 3.92 | % | 3.99 | % | 3.93 | % | ||||||
| Efficiency Ratio(1) | 67.29 | % | 63.96 | % | 68.50 | % | 65.12 | % | ||||||
| Net Overhead Expense to Average Earning Assets(2) | 2.06 | % | 1.92 | % | 2.19 | % | 1.96 | % | ||||||
| ASSET QUALITY RATIOS | ||||||||||||||
| Annualized Net Charge-offs to Average Loans | 0.11 | % | 0.43 | % | 0.24 | % | 0.25 | % | ||||||
| Allowance for Loan Losses to Period End Loans | 1.23 | % | 1.50 | % | ||||||||||
| Non-performing Assets to Period End Assets | 1.20 | % | 1.76 | % | ||||||||||
| Non-performing Loans to Period End Loans | 1.58 | % | 2.52 | % | ||||||||||
| (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. |