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 6
May 3, 2007 GERMAN AMERICAN BANCORP, INC. REPORTS 1st QUARTER OPERATING RESULTS
German American Bancorp, Inc., Jasper, Indiana, (NASDAQ: GABC) reported today 1st quarter 2007 earnings of $1,479,000, or $0.13 per share.
“Our reported results for the 1st quarter of 2007 certainly require looking behind the numbers to determine the strength of our operating results”, noted Mark Schroeder, President & CEO of German American Bancorp, Inc. “Our reported earnings include the impact of several events which while having an adverse effect on the 1st quarter results, positions the Company very well in terms of future performance potential.”
Schroeder continued, “We strongly believe that, driven by what is now a clean loan portfolio, strong loan and balance sheet growth, continued revenue growth, and market expansion opportunities from our new banking office in the economically vibrant Bloomington, Indiana market, German American is poised to continue its recent trend of strong financial performance in the coming quarters.”
The comparison of the Company’s 1st quarter 2007 results, with that of the prior year’s same period earnings of $2,563,000 or $0.23 per share, were significantly affected by the costs associated with the previously reported resolution of a non-performing hotel facilities credit. Late in the 1st quarter, the Company gained control of the facilities which were subsequently sold on April 20, 2007. These credit-related costs included increased provision for loan losses of $1.3 million in direct charges related to the valuation of the properties, an additional $160,000 in indirect provision charges due to the impact on the Company’s historical loss ratios and resulting reserve levels, and collection costs of $110,000. In total, the after-tax cost during the 1st quarter associated with the resolution of this matter was $948,000.
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 6
The 1st quarter 2007 results also included the start-up costs associated with the opening of the Company’s new Bloomington, Indiana banking office on February 1, 2007. These start-up expenses totaled approximately $200,000 during the 1st quarter. Further, the Company’s contingency commission income within its insurance operations recorded in the 1st quarter of the current year was $30,000, compared to the $271,000 recorded in the 1st quarter of last year. Total insurance revenues increased $83,000 from 2006 to 2007, despite the aforementioned decrease in contingency commission income.
Positively impacting the 1st quarter results was a $499,000 increase in net interest income as compared to the Company’s level of net interest income in the same period last year. This net interest income increase was driven by a 15% increase in the average loans outstanding during the 3 month period ending on March 31, 2007, compared with the same period of the prior year.
The Company’s 2007 1st quarter results are also reflective of the operating results of the acquisition of Keach & Grove Insurance based in Bedford, Indiana as of October 1, 2006.
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 May 20, 2007 to shareholders of record as of May 10, 2007.
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German American Bancorp, Inc. is a financial services holding company based in Jasper, Indiana. The Company’s Common Stock is traded on NASDAQ’s Global Select Market System under the symbol GABC. The principal subsidiary of German American Bancorp, Inc., is its banking subsidiary, German American Bancorp which operates through six community banking affiliates with 30 retail banking offices in the ten contiguous Southern Indiana counties of Daviess, Dubois, Gibson, Knox, Lawrence, Martin, Monroe, Perry, Pike, and Spencer. German American Bancorp owns a trust, brokerage and financial planning subsidiary which operates from its banking offices and a full line property and casualty insurance agency with six insurance agency offices throughout its market area.
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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 6
Forward-Looking Statements
German American’s statements in this press release regarding its outlook for its future financial performance (including potential loan, balance sheet and revenue growth, its loan portfolio quality, and market expansion opportunities associated with its new Bloomington, Indiana, office) are “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 locally, 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 6
GERMAN AMERICAN BANCORP, INC. | |||||||||
(unaudited, dollars in thousands except per share data) |
Consolidated Balance Sheets | |||||||
March 31, | |||||||
2007 | 2006 | ||||||
ASSETS | |||||||
Cash and Due from Banks | $ | 21,175 | $ | 29,067 | |||
Short-term Investments | 3,394 | 26,662 | |||||
Investment Securities | 173,192 | 202,580 | |||||
Loans Held-for-Sale | 2,009 | 2,186 | |||||
Loans, Net of Unearned Income | 810,789 | 683,330 | |||||
Allowance for Loan Losses | (7,620 | ) | (9,721 | ) | |||
Net Loans | 803,169 | 673,609 | |||||
Stock in FHLB and Other Restricted Stock | 10,621 | 14,483 | |||||
Premises and Equipment | 23,873 | 22,422 | |||||
Goodwill and Other Intangible Assets | 14,356 | 13,014 | |||||
Other Assets | 39,248 | 41,093 | |||||
TOTAL ASSETS | $ | 1,091,037 | $ | 1,025,116 | |||
LIABILITIES | |||||||
Non-interest-bearing Demand Deposits | $ | 138,709 | $ | 137,603 | |||
Interest-bearing Demand, Savings, and | |||||||
Money Market Accounts | 315,820 | 314,523 | |||||
Time Deposits | 426,800 | 355,448 | |||||
Total Deposits | 881,329 | 807,574 | |||||
Borrowings | 103,395 | 117,468 | |||||
Other Liabilities | 13,707 | 12,207 | |||||
TOTAL LIABILITIES | 998,431 | 937,249 | |||||
SHAREHOLDERS' EQUITY | |||||||
Common Stock and Surplus | 79,300 | 79,065 | |||||
Retained Earnings | 13,387 | 10,415 | |||||
Accumulated Other Comprehensive Loss | (81 | ) | (1,613 | ) | |||
TOTAL SHAREHOLDERS' EQUITY | 92,606 | 87,867 | |||||
TOTAL LIABILITIES AND | |||||||
SHAREHOLDERS' EQUITY | $ | 1,091,037 | $ | 1,025,116 | |||
END OF PERIOD SHARES OUTSTANDING | 11,029,612 | 11,006,904 | |||||
BOOK VALUE PER SHARE | $ | 8.40 | $ | 7.98 |
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 6
GERMAN AMERICAN BANCORP, INC. | |||||||||
(unaudited, dollars in thousands except per share data) |
Consolidated Statements of Income | |||||||
Three Months Ended | |||||||
March 31, | |||||||
2007 | 2006 | ||||||
INTEREST INCOME | |||||||
Interest and Fees on Loans | $ | 15,067 | $ | 12,382 | |||
Interest on Short-term Investments | 120 | 126 | |||||
Interest and Dividends on Investment Securities | 2,142 | 2,240 | |||||
TOTAL INTEREST INCOME | 17,329 | 14,748 | |||||
INTEREST EXPENSE | |||||||
Interest on Deposits | 6,430 | 4,482 | |||||
Interest on Borrowings | 1,524 | 1,390 | |||||
TOTAL INTEREST EXPENSE | 7,954 | 5,872 | |||||
NET INTEREST INCOME | 9,375 | 8,876 | |||||
Provision for Loan Losses | 1,928 | 290 | |||||
NET INTEREST INCOME AFTER | |||||||
PROVISION FOR LOAN LOSSES | 7,447 | 8,586 | |||||
NON-INTEREST INCOME | |||||||
Net Gain on Sales of Loans and Related Assets | 178 | 213 | |||||
Net Gain / (Loss) on Securities | - | - | |||||
Other Non-interest Income | 3,732 | 3,583 | |||||
TOTAL NON-INTEREST INCOME | 3,910 | 3,796 | |||||
NON-INTEREST EXPENSE | |||||||
Salaries and Benefits | 5,503 | 5,184 | |||||
Other Non-interest Expenses | 3,931 | 3,621 | |||||
TOTAL NON-INTEREST EXPENSE | 9,434 | 8,805 | |||||
Income before Income Taxes | 1,923 | 3,577 | |||||
Income Tax Expense | 444 | 1,014 | |||||
NET INCOME | $ | 1,479 | $ | 2,563 | |||
EARNINGS PER SHARE & DILUTED EARNINGS PER SHARE | $ | 0.13 | $ | 0.23 | |||
WEIGHTED AVERAGE SHARES OUTSTANDING | 11,008,562 | 10,993,232 | |||||
DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING | 11,016,930 | 10,996,058 |
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 6 of 6
GERMAN AMERICAN BANCORP, INC. | |||||||
(unaudited, dollars in thousands except per share data) | |||||||
Three Months Ended | |||||||
March 31 | |||||||
2007 | 2006 | ||||||
EARNINGS PERFORMANCE RATIOS | |||||||
Annualized Return on Average Assets | 0.54 | % | 1.02 | % | |||
Annualized Return on Average Equity | 6.37 | % | 11.69 | % | |||
Net Interest Margin | 3.86 | % | 4.03 | % | |||
Efficiency Ratio (1) | 70.08 | % | 67.96 | % | |||
Net Overhead Expense to Average Earning Assets (2) | 2.21 | % | 2.18 | % | |||
ASSET QUALITY RATIOS | |||||||
Annualized Net Charge-offs to Average Loans | 0.72 | % | 0.18 | % | |||
Allowance for Loan Losses to Period End Loans | 0.94 | % | 1.42 | % | |||
Non-performing Assets to Period End Assets | 0.83 | % | 1.56 | % | |||
Non-performing Loans to Period End Loans | 0.75 | % | 2.17 | % | |||
SELECTED BALANCE SHEET & OTHER FINANCIAL DATA | |||||||
Average Assets | $ | 1,090,037 | $ | 1,004,556 | |||
Average Earning Assets | $ | 998,195 | $ | 916,982 | |||
Average Total Loans | $ | 799,238 | $ | 692,844 | |||
Average Demand Deposits | $ | 133,499 | $ | 132,713 | |||
Average Interest Bearing Liabilities | $ | 850,386 | $ | 770,549 | |||
Average Equity | $ | 92,808 | $ | 87,685 | |||
Period End Non-performing Assets (3) | $ | 9,102 | $ | 15,942 | |||
Period End Non-performing Loans (4) | $ | 6,114 | $ | 14,816 | |||
Tax Equivalent Net Interest Income | $ | 9,552 | $ | 9,160 | |||
Net Charge-offs during Period | $ | 1,437 | $ | 318 | |||
(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 Expense less Total Non-interest Income. |
(3) | Non-performing assets are defined as Non-accrual Loans, Loans Past Due 90 days or more, Restructured Loans, and Other Real Estate Owned. |
(4) | Non-performing loans are defined as Non-accrual Loans, Loans Past Due 90 days or more, and Restructured Loans. |