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 1of 5
January 31, 2007 GERMAN AMERICAN BANCORP, INC. REPORTS RECORD ANNUAL EARNINGS
German American Bancorp, Inc., Jasper, Indiana, (NASDAQ: GABC) reported today that its 2006 earnings achieved a record level with reported net income of $10,221,000, or $0.93 per share. The record 2006 performance, which comes on the heels of record performance in 2005, represents an increase of approximately 5% over the prior year’s net income of $9,721,000, or $0.89 per share.
The Company’s net income for the fourth quarter was $2,438,000, or $0.22 per share, compared to $2,431,000, or $0.22 per share, during the fourth quarter of last year. The Company’s solid fourth quarter financial performance marked the eighth consecutive quarter of earnings improvement relative to the same quarterly period of the prior fiscal year.
A number of favorable factors resulted in the Company’s record level of earnings reported for 2006, including a nearly $4,000,000 increase, representing a 12% improvement, in the level of net interest income driven by both an increased level of earning assets and slightly higher net interest margin. Additionally, the Company’s non-interest income increased by approximately $1,200,000, or approximately 8%, in 2006 as compared to 2005. Other items impacting the comparison of the two years include an approximately $1,000,000 reduced level of provision for loan loss. Offsetting items to these positive earnings contributors were increases of approximately $5,000,000 in the Company’s operating expenses in 2006, largely attributable to expenses associated with the inclusion of recently acquired banking and insurance units in 2006 operations.
The Company’s 2006 fourth quarter and year-to-date financial results are reflective of the operating results of the acquisitions of PCB Holding Company as of October 1, 2005, Stone City Bancshares, Inc. as of January 1, 2006, and Keach & Grove Insurance as of October 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 5
The Company also continued the trend of solid balance sheet growth during 2006 as evidenced by the $144 million of loan growth generated during the year. This loan growth, which was in excess of 20%, was generated from a variety of sources, including $54 million of organic growth, $48 million from the acquisition of Stone City Bancshares, Inc., in January 2006, and $42 million from the purchase of the Southern Indiana-based agricultural loan portfolio of a regional banking company in December 2006.
Mark A. Schroeder, President & Chief Executive Officer of German American Bancorp, Inc. commenting on the Company’s 2006 record financial performance, stated. “We’re extremely pleased to deliver the second consecutive year of record earnings and the eighth consecutive quarter of improved earnings performance to our shareholders. The 2006 net income of $10,221,000 is the first time in our Company’s history that we surpassed the $10 million milestone and is a testament to the dedication of our staff and the loyalty of our customers. The significant loan growth we experienced in 2006 along with the planned expansion of our banking footprint as of February 1st into the Bloomington, Indiana market provides a baseline upon which to build continued strong financial performance. ”
Schroeder continued, “Clearly, our business model, which is based on customer responsiveness and local decision-making, coupled with 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 is being embraced by the agricultural, commercial and retail businesses along with consumers located throughout our market area. German American is uniquely positioned to provide comprehensive financial services across our entire market footprint and our success in growing our business during the past several years is evidence of our customers’ recognition and acceptance of the value our business model delivers.”
The Company also announced that its Board of Directors declared a regular quarterly cash dividend of $0.14 per share which will be payable on February 20, 2007 to shareholders of record as of February 10, 2007.
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 5
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. Inclusive of the soon to be opened Bloomington, Indiana banking office, the Company’s banking subsidiary, German American Bancorp, operates through six community banking affiliates with 30 banking offices in the ten contiguous Southern Indiana counties of Daviess, Dubois, Gibson, Knox, Lawrence, Martin, Monroe, 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 six 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.
Forward-Looking Statements
German American’s statements in this press release regarding financial performance, including new business opportunities, future growth opportunities, 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.
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 4 of 5
GERMAN AMERICAN BANCORP, INC. | |||||||||
(unaudited, dollars in thousands except per share data) |
Consolidated Balance Sheets | |||||||
December 31, | |||||||
2006 | 2005 | ||||||
ASSETS | |||||||
Cash and Due from Banks | $ | 23,960 | $ | 27,644 | |||
Short-term Investments | 5,735 | 5,287 | |||||
Investment Securities | 185,557 | 189,834 | |||||
Loans Held-for-Sale | 1,601 | 1,901 | |||||
Loans, Net of Unearned Income | 796,259 | 651,956 | |||||
Allowance for Loan Losses | (7,129 | ) | (9,265 | ) | |||
Net Loans | 789,130 | 642,691 | |||||
Stock in FHLB and Other Restricted Stock | 10,621 | 14,095 | |||||
Premises and Equipment | 23,245 | 20,233 | |||||
Goodwill and Other Intangible Assets | 14,629 | 6,201 | |||||
Other Assets | 38,996 | 38,581 | |||||
TOTAL ASSETS | $ | 1,093,474 | $ | 946,467 | |||
LIABILITIES | |||||||
Non-interest-bearing Demand Deposits | $ | 137,671 | $ | 130,383 | |||
Interest-bearing Demand, Savings, and | |||||||
Money Market Accounts | 329,690 | 307,007 | |||||
Time Deposits | 400,257 | 309,431 | |||||
Total Deposits | 867,618 | 746,821 | |||||
Borrowings | 119,889 | 105,394 | |||||
Other Liabilities | 13,526 | 11,997 | |||||
TOTAL LIABILITIES | 1,001,033 | 864,212 | |||||
SHAREHOLDERS' EQUITY | |||||||
Common Stock and Surplus | 79,224 | 74,427 | |||||
Retained Earnings | 13,450 | 9,391 | |||||
Accumulated Other Comprehensive Loss | (233 | ) | (1,563 | ) | |||
TOTAL SHAREHOLDERS' EQUITY | 92,441 | 82,255 | |||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 1,093,474 | $ | 946,467 | |||
END OF PERIOD SHARES OUTSTANDING | 11,008,562 | 10,643,514 | |||||
BOOK VALUE PER SHARE | $ | 8.40 | $ | 7.73 |
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||
2006 | 2005 | 2006 | 2005 | ||||||||||
INTEREST INCOME | |||||||||||||
Interest and Fees on Loans | $ | 14,496 | $ | 11,249 | $ | 53,490 | $ | 41,751 | |||||
Interest on Short-term Investments | 178 | 122 | 545 | 316 | |||||||||
Interest and Dividends on Investment Securities | 2,421 | 2,074 | 9,559 | 8,130 | |||||||||
TOTAL INTEREST INCOME | 17,095 | 13,445 | 63,594 | 50,197 | |||||||||
INTEREST EXPENSE | |||||||||||||
Interest on Deposits | 6,193 | 3,991 | 21,329 | 13,389 | |||||||||
Interest on Borrowings | 1,589 | 1,196 | 6,069 | 4,595 | |||||||||
TOTAL INTEREST EXPENSE | 7,782 | 5,187 | 27,398 | 17,984 | |||||||||
Net Interest Income | 9,313 | 8,258 | 36,196 | 32,213 | |||||||||
Provision for Loan Losses | 291 | 178 | 925 | 1,903 | |||||||||
Net Interest Income after | |||||||||||||
Provision for Loan Losses | 9,022 | 8,080 | 35,271 | 30,310 | |||||||||
NON-INTEREST INCOME | |||||||||||||
Net Gain on Sales of Loans and Related Assets | 100 | 301 | 850 | 1,000 | |||||||||
Net Gain on Securities | - | - | 951 | - | |||||||||
Other Non-interest Income | 3,530 | 3,207 | 13,589 | 13,194 | |||||||||
TOTAL NON-INTEREST INCOME | 3,630 | 3,508 | 15,390 | 14,194 | |||||||||
NON-INTEREST EXPENSE | |||||||||||||
Salaries and Benefits | 5,537 | 4,919 | 21,491 | 18,511 | |||||||||
Other Non-interest Expenses | 3,871 | 3,358 | 14,965 | 12,937 | |||||||||
TOTAL NON-INTEREST EXPENSE | 9,408 | 8,277 | 36,456 | 31,448 | |||||||||
Income before Income Taxes | 3,244 | 3,311 | 14,205 | 13,056 | |||||||||
Income Tax Expense | 806 | 880 | 3,984 | 3,335 | |||||||||
NET INCOME | $ | 2,438 | $ | 2,431 | $ | 10,221 | $ | 9,721 | |||||
EARNINGS PER SHARE & DILUTED EARNINGS PER SHARE | $ | 0.22 | $ | 0.22 | $ | 0.93 | $ | 0.89 | |||||
WEIGHTED AVERAGE SHARES OUTSTANDING | 10,997,099 | 11,009,579 | 10,994,739 | 10,890,987 | |||||||||
DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING | 11,003,640 | 11,013,394 | 11,005,667 | 10,896,822 |
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 5 of 5
GERMAN AMERICAN BANCORP, INC. | ||||||||
(unaudited, dollars in thousands except per share data) |
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||
2006 | 2005 | 2006 | 2005 | ||||||||||
EARNINGS PERFORMANCE RATIOS | |||||||||||||
Annualized Return on Average Assets | 0.91 | % | 1.03 | % | 0.99 | % | 1.05 | % | |||||
Annualized Return on Average Equity | 10.88 | % | 11.06 | % | 11.56 | % | 11.51 | % | |||||
Net Interest Margin | 3.89 | % | 3.92 | % | 3.96 | % | 3.92 | % | |||||
Efficiency Ratio (1) | 71.52 | % | 68.67 | % | 69.25 | % | 66.02 | % | |||||
Net Overhead Expense to Average Earning Assets (2) | 2.36 | % | 2.20 | % | 2.24 | % | 2.02 | % | |||||
ASSET QUALITY RATIOS | |||||||||||||
Annualized Net Charge-offs to Average Loans | 1.21 | % | 0.32 | % | 0.50 | % | 0.26 | % | |||||
Allowance for Loan Losses to Period End Loans | 0.90 | % | 1.42 | % | |||||||||
Non-performing Assets to Period End Assets | 0.96 | % | 1.71 | % | |||||||||
Non-performing Loans to Period End Loans | 1.21 | % | 2.41 | % | |||||||||
SELECTED BALANCE SHEET & OTHER FINANCIAL DATA | |||||||||||||
Average Assets | $ | 1,066,214 | $ | 943,430 | $ | 1,029,838 | $ | 925,851 | |||||
Average Earning Assets | $ | 977,310 | $ | 869,038 | $ | 941,549 | $ | 853,323 | |||||
Average Total Loans | $ | 751,432 | $ | 652,030 | $ | 715,260 | $ | 634,526 | |||||
Average Demand Deposits | $ | 132,237 | $ | 122,540 | $ | 129,759 | $ | 121,662 | |||||
Average Interest Bearing Liabilities | $ | 830,346 | $ | 720,508 | $ | 798,240 | $ | 707,490 | |||||
Average Equity | $ | 89,616 | $ | 87,898 | $ | 88,451 | $ | 84,479 | |||||
Period End Non-performing Loans (3) | $ | 9,652 | $ | 15,707 | |||||||||
Tax Equivalent Net Interest Income | $ | 9,524 | $ | 8,546 | $ | 37,252 | $ | 33,443 | |||||
Net Charge-offs during Period | $ | 2,273 | $ | 522 | $ | 3,545 | $ | 1,678 |
(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. | ||||||||||||||||
(3) Non-performing loans are defined as Non-accrual Loans, Loans Past Due 90 days or more, and Restructured Loans. |