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 5
GERMAN AMERICAN BANCORP, INC. REPORTS STRONG 3RD QUARTER RESULTS |
German American Bancorp, Inc. today reported 3rd quarter 2007 net income of $2,508,000, or $0.23 per share. Net income during the same quarter last year, which included a $951,000 pre-tax ($628,000 after-tax) gain on the sale of securities, was $2,732,000, or $0.25 per share. Exclusive of the effect of the gain on sale of securities on the 2006 earnings, the 2007 earnings of $2,508,000, or $0.23 per share, represents an increase of $404,000, or $0.04 per share, which equates to increase of approximately 20%, from the prior year’s same quarter results.
In comparison to the same quarter last year, virtually every category of operations showed significant improvement during 2007’s third quarter as net interest income increased by $622,000, or approximately 7%. Exclusive of the effect of the previously-noted gain on sale of securities, non-interest income increased by $488,000 with approximately $272,000 of the non-interest income improvement attributable to the inclusion of the Keach & Grove insurance agency revenue in 2007 results following the acquisition of the agency in the 4th quarter of last year. After adjusting for both of these factors, current year non-interest income increased by approximately $216,000, or 6%.
Additionally, operating expenses showed significant improvement from the prior year as reported total non-interest expense declined by $240,000, or approximately 3%. This decline in non-interest expense is inclusive of the operating expenses of both the Keach & Grove agency and the Bloomington, Indiana banking office which was opened during the 1st quarter of this year. Exclusive of the $590,000 3rd quarter operating expenses of these two new components of Company operations, the improvement in the level of non-interest expense was approximately $830,000, or 9%, largely driven by reduced levels of salaries and benefits, professional fees, and data processing expenses.
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
Partially offsetting these positive earnings factors was a $651,000 increase in the Company’s provision for loan losses. Approximately $300,000 of the increase is attributable to providing reserves for the $29 million, or 14% annualized, increase in average loans during the current quarter (relative to that of the 2nd quarter of the current year). On an end-of-period basis, loans grew by approximately $15 million, or 7% annualized since the end of the second quarter. The vast majority of the remainder of the increased level of provision for loan losses was attributable to a $268,000 charge-off resulting from the loss of a government guaranty on a single agricultural credit due to servicing issues associated with this specific credit relationship.
Commenting on the Company’s 3rd quarter results, Mark Schroeder, President & CEO of German American, stated, “We’re pleased to report yet another quarter of strong fundamental operating results. Our efforts to generate sustainable balance sheet, loan, and revenue growth across all business lines and throughout our market area coupled with an intent focus on controlling our operating expenses has resulted in an ongoing improvement of our overall operating effectiveness. We remain very confident that the successful execution of this strategy will continue to serve us well going forward.”
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 November 20, 2007 to shareholders of record as of November 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.
*****
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
Forward-Looking Statements
German American’s statements in this press release regarding its outlook for its future financial performance 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 5
GERMAN AMERICAN BANCORP, INC.
(unaudited, dollars in thousands except per share data)
Consolidated Balance Sheets
September 30, | |||||||
2007 | 2006 | ||||||
ASSETS | |||||||
Cash and Due from Banks | $ | 20,951 | $ | 27,889 | |||
Short-term Investments | 17,473 | 5,188 | |||||
Investment Securities | 150,054 | 210,520 | |||||
Loans Held-for-Sale | 4,562 | 2,800 | |||||
Loans, Net of Unearned Income | 864,990 | 738,923 | |||||
Allowance for Loan Losses | (8,055 | ) | (9,111 | ) | |||
Net Loans | 856,935 | 729,812 | |||||
Stock in FHLB and Other Restricted Stock | 10,621 | 11,942 | |||||
Premises and Equipment | 23,211 | 23,207 | |||||
Goodwill and Other Intangible Assets | 13,909 | 12,556 | |||||
Other Assets | 37,876 | 36,807 | |||||
TOTAL ASSETS | $ | 1,135,592 | $ | 1,060,721 | |||
LIABILITIES | |||||||
Non-interest-bearing Demand Deposits | $ | 132,624 | $ | 129,536 | |||
Interest-bearing Demand, Savings, and Money Market Accounts | 328,847 | 299,216 | |||||
Time Deposits | 446,138 | 395,565 | |||||
Total Deposits | 907,609 | 824,317 | |||||
Borrowings | 119,189 | 132,464 | |||||
Other Liabilities | 14,102 | 12,931 | |||||
TOTAL LIABILITIES | 1,040,900 | 969,712 | |||||
SHAREHOLDERS' EQUITY | |||||||
Common Stock and Surplus | 79,379 | 79,174 | |||||
Retained Earnings | 15,450 | 12,553 | |||||
Accumulated Other Comprehensive Loss | (137 | ) | (718 | ) | |||
TOTAL SHAREHOLDERS' EQUITY | 94,692 | 91,009 | |||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 1,135,592 | $ | 1,060,721 | |||
END OF PERIOD SHARES OUTSTANDING | 11,029,484 | 11,009,187 | |||||
BOOK VALUE PER SHARE | $ | 8.59 | $ | 8.27 |
Consolidated Statements of Income
Three Months Ended | Nine Months Ended | ||||||||||||
September 30, | September 30, | ||||||||||||
2007 | 2006 | 2007 | 2006 | ||||||||||
INTEREST INCOME | |||||||||||||
Interest and Fees on Loans | $ | 16,585 | $ | 13,799 | $ | 47,498 | $ | 38,994 | |||||
Interest on Short-term Investments | 145 | 105 | 349 | 367 | |||||||||
Interest and Dividends on Investment Securities | 1,908 | 2,470 | 6,078 | 7,138 | |||||||||
TOTAL INTEREST INCOME | 18,638 | 16,374 | 53,925 | 46,499 | |||||||||
INTEREST EXPENSE | |||||||||||||
Interest on Deposits | 7,326 | 5,586 | 20,581 | 15,136 | |||||||||
Interest on Borrowings | 1,581 | 1,679 | 4,744 | 4,480 | |||||||||
TOTAL INTEREST EXPENSE | 8,907 | 7,265 | 25,325 | 19,616 | |||||||||
NET INTEREST INCOME | 9,731 | 9,109 | 28,600 | 26,883 | |||||||||
Provision for Loan Losses | 941 | 290 | 3,244 | 634 | |||||||||
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES | 8,790 | 8,819 | 25,356 | 26,249 | |||||||||
NON-INTEREST INCOME | |||||||||||||
Net Gain on Sales of Loans and Related Assets | 226 | 83 | 602 | 750 | |||||||||
Net Gain on Securities | - | 951 | - | 951 | |||||||||
Other Non-interest Income | 3,729 | 3,384 | 11,443 | 10,361 | |||||||||
TOTAL NON-INTEREST INCOME | 3,955 | 4,418 | 12,045 | 12,062 | |||||||||
NON-INTEREST EXPENSE | |||||||||||||
Salaries and Benefits | 5,395 | 5,403 | 16,452 | 15,954 | |||||||||
Other Non-interest Expenses | 3,676 | 3,908 | 11,476 | 11,396 | |||||||||
TOTAL NON-INTEREST EXPENSE | 9,071 | 9,311 | 27,928 | 27,350 | |||||||||
Income before Income Taxes | 3,674 | 3,926 | 9,473 | 10,961 | |||||||||
Income Tax Expense | 1,166 | 1,194 | 2,843 | 3,178 | |||||||||
NET INCOME | $ | 2,508 | $ | 2,732 | $ | 6,630 | $ | 7,783 | |||||
EARNINGS PER SHARE & DILUTED EARNINGS PER SHARE | $ | 0.23 | $ | 0.25 | $ | 0.60 | $ | 0.71 | |||||
WEIGHTED AVERAGE SHARES OUTSTANDING | 11,008,562 | 10,994,686 | 11,008,562 | 10,993,944 | |||||||||
DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING | 11,025,877 | 11,008,102 | 11,026,989 | 11,002,108 |
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 | Nine Months Ended | ||||||||||||
September 30, | September 30, | ||||||||||||
2007 | 2006 | 2007 | 2006 | ||||||||||
EARNINGS PERFORMANCE RATIOS | |||||||||||||
Annualized Return on Average Assets | 0.89 | % | 1.06 | % | 0.80 | % | 1.02 | % | |||||
Annualized Return on Average Equity | 11.16 | % | 12.19 | % | 9.64 | % | 11.78 | % | |||||
Net Interest Margin | 3.78 | % | 3.95 | % | 3.81 | % | 3.99 | % | |||||
Efficiency Ratio (1) | 65.64 | % | 67.47 | % | 67.94 | % | 68.74 | % | |||||
Net Overhead Expense to Average Earning Assets (2) | 1.97 | % | 2.06 | % | 2.08 | % | 2.19 | % | |||||
ASSET QUALITY RATIOS | |||||||||||||
Annualized Net Charge-offs to Average Loans | 0.31 | % | 0.11 | % | 0.37 | % | 0.24 | % | |||||
Allowance for Loan Losses to Period End Loans | 0.93 | % | 1.23 | % | |||||||||
Non-performing Assets to Period End Assets | 0.53 | % | 1.20 | % | |||||||||
Non-performing Loans to Period End Loans | 0.54 | % | 1.58 | % | |||||||||
SELECTED BALANCE SHEET & OTHER FINANCIAL DATA | |||||||||||||
Average Assets | $ | 1,124,035 | $ | 1,034,691 | $ | 1,109,139 | $ | 1,017,580 | |||||
Average Earning Assets | $ | 1,038,211 | $ | 948,209 | $ | 1,019,275 | $ | 929,498 | |||||
Average Total Loans | $ | 863,405 | $ | 722,394 | $ | 832,600 | $ | 703,070 | |||||
Average Demand Deposits | $ | 131,011 | $ | 124,545 | $ | 133,096 | $ | 128,924 | |||||
Average Interest Bearing Liabilities | $ | 889,430 | $ | 807,967 | $ | 870,907 | $ | 787,420 | |||||
Average Equity | $ | 89,874 | $ | 89,612 | $ | 91,668 | $ | 88,059 | |||||
Period End Non-performing Assets (3) | $ | 6,037 | $ | 12,727 | |||||||||
Period End Non-performing Loans (4) | $ | 4,644 | $ | 11,645 | |||||||||
Tax Equivalent Net Interest Income | $ | 9,863 | $ | 9,383 | $ | 29,061 | $ | 27,728 | |||||
Net Charge-offs during Period | $ | 662 | $ | 197 | $ | 2,318 | $ | 1,272 |
(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. |