GERMAN AMERICAN BANCORP, INC.
NEWS RELEASE
For additional information, contact:
Mark A Schroeder, Chief Executive Officer of German American Bancorp, Inc.
Bradley M Rust, Executive Vice President/CFO of German American Bancorp, Inc.
(812) 482-1314
| February 1, 2011 | GERMAN AMERICAN BANCORP, INC., |
| | REPORTS RECORD 2010 PERFORMANCE |
Summary
German American Bancorp, Inc. (NASDAQ: GABC) reported today that it had achieved 2010 net income at an all-time record level of $13.4 million, or $1.21 per share, a 10% increase over the Company’s 2009 net income of $12.2 million, or $1.10 per share. The Company’s return on average equity for 2010 was 11.18%, representing the 6th consecutive year the Company has achieved a double-digit return.
The record 2010 performance was driven by an improvement in the level of the Company’s core operating results, derived from increased revenues in both net interest income and non-interest income. The Company’s 2010 net interest income increased by $4.2 million while its non-interest income reflected a $1.1 million improvement from the levels reported in the prior year. The higher level of net interest income was the result of both an 8% increase in the level of the Company’s average earning assets, and a widening of the Company’s tax-equivalent net interest margin to 3.98% (up from 3.95% in 2009). The increased non-interest income was largely attributable to an approximately $400 thousand increase in the gain from the sale of secondary market residential mortgage loans, and a $500 thousand increase in gains on the sale of other real estate.
Commenting on the Company’s achievement of yet another record performance, Mark A. Schroeder, Chairman & CEO of German American, stated, “We are truly gratified that, in this our Company’s 100th anniversary year, we have been able to achieve this all-time record level of performance. In fact, the past three years have been the best three-year period in our history. This feat is truly remarkable in the face of the economic challenges our nation has faced during this period. The accomplishment of this achievement is due to the fiscal responsibility of our customers, the economic viability of the Southern Indiana communities we serve, and the commitment of our staff of dedicated financial professionals. We are extremely grateful to each of these important constituents for their contribution to our success.”
GERMAN AMERICAN BANCORP, INC.
NEWS RELEASE
For additional information, contact:
Mark A Schroeder, Chief Executive Officer of German American Bancorp, Inc.
Bradley M Rust, Executive Vice President/CFO of German American Bancorp, Inc.
(812) 482-1314
Schroeder continued, “We are pleased with our prospects for continued success not only within our legacy markets, but also in our newest market presence in the Evansville, Indiana market area. Effective January 1, 2011, we finalized our previously reported acquisition of the Bank of Evansville, and now have 5 banking offices located throughout the Evansville market. We are excited about the opportunities our entry into this new market area will afford us not only within banking but also relative to the expansion of our insurance and investment lines of business.”
The Company also announced that its Board of Directors declared its regular quarterly cash dividend of $0.14 per share which will be payable on February 20, 2011 to shareholders of record as of February 10, 2011.
Balance Sheet Highlights
The following balance sheet highlights as of December 31, 2010, do not include the impact of the acquisition of American Community Bancorp, Inc., and its consolidated subsidiaries, including Bank of Evansville, which were acquired on January 1, 2011.
Total assets for the Company increased by approximately $132.9 million or 11% as of December 31, 2010 compared with year-end 2009. The increase was largely attributable to an increase in the Company’s core deposit base due to both internal organic growth and the May 2010 acquisition of two branch office locations in the Evansville (Indiana) banking market.
Year-end 2010 loans outstanding increased approximately $39.2 million or 4% compared with year-end 2009. The overall increase in the loan portfolio was largely driven by the May 2010 branch acquisition, pursuant to which the Company acquired approximately $44 million in loans.
| End of Period Loan Balances | | | | | | | | | | | | |
| | | 12/31/10 | | | 12/31/09 | | | $ Change | | | % Change | |
| | | | | | | | | | | | | |
| Commercial & Industrial Loans | | $ | 217,988 | | | $ | 188,962 | | | $ | 29,026 | | | | 15 | % |
| Commercial Real Estate Loans | | | 340,074 | | | | 334,255 | | | | 5,819 | | | | 2 | % |
| Agricultural Loans | | | 165,102 | | | | 156,845 | | | | 8,257 | | | | 5 | % |
| Consumer Loans | | | 118,244 | | | | 114,736 | | | | 3,508 | | | | 3 | % |
| Residential Mortgage Loans | | | 77,310 | | | | 84,677 | | | | (7,367 | ) | | | -9 | % |
| | | $ | 918,718 | | | $ | 879,475 | | | $ | 39,243 | | | | 4 | % |
GERMAN AMERICAN BANCORP, INC.
NEWS RELEASE
For additional information, contact:
Mark A Schroeder, Chief Executive Officer of German American Bancorp, Inc.
Bradley M Rust, Executive Vice President/CFO of German American Bancorp, Inc.
(812) 482-1314
Non-performing assets totaled $13.3 million at December 31, 2010 compared to $11.2 million of non-performing assets at December 31, 2009. Non-performing assets represented 0.97% of total assets at December 31, 2010 compared to 0.90% at year-end 2009. Non-performing loans totaled $11.2 million at December 31, 2010 compared to $8.8 million of non-performing loans at December 31, 2009. Non-performing loans represented 1.22% of total outstanding loans at year-end 2010 compared with 1.00% of total loans outstanding at year-end 2009. The most significant cause of the increase in non-performing assets and loans was related to two commercial real estate credits that were placed on non-accrual status prior to the fourth quarter of 2010 that totaled approximately $4.5 million.
The Company’s allowance for loan losses totaled $13.3 million at December 31, 2010 representing an increase of $2.3 million or 21% from year-end 2009. The allowance for loan losses represented 1.45% of period-end loans at December 31, 2010 compared with 1.25% at December 31, 2009. The allowance for loan losses represented 119% of period-end non-performing loans at December 31, 2010.
Year-end 2010 deposits increased $117.6 million or 12% compared with year-end 2009 total deposits. The increase was primarily attributable to an increase in core deposits from within the Company’s market areas, and further augmented by approximately $51 million of deposits acquired in early May 2010 as a part of the branch acquisition transaction, of which a majority were core deposits.
| End of Period Deposit Balances | | | | | | | | | | | | |
| | | 12/31/10 | | | 12/31/09 | | | $ Change | | | % Change | |
| | | | | | | | | | | | | |
| Non-interest-bearing Demand Deposits | | $ | 184,204 | | | $ | 155,268 | | | $ | 28,936 | | | | 19 | % |
| Interest-bearing Demand, Savings, & Money Market Accounts | | | 541,532 | | | | 484,699 | | | | 56,833 | | | | 12 | % |
| Time Deposits < $100,000 | | | 272,964 | | | | 256,401 | | | | 16,563 | | | | 6 | % |
| Time Deposits of $100,000 or more & Brokered Deposits | | | 88,586 | | | | 73,275 | | | | 15,311 | | | | 21 | % |
| | | $ | 1,087,286 | | | $ | 969,643 | | | $ | 117,643 | | | | 12 | % |
GERMAN AMERICAN BANCORP, INC.
NEWS RELEASE
For additional information, contact:
Mark A Schroeder, Chief Executive Officer of German American Bancorp, Inc.
Bradley M Rust, Executive Vice President/CFO of German American Bancorp, Inc.
(812) 482-1314
Results of Operations Highlights
Year ended December 31, 2010 compared to Year ended December 31, 2009
Net income for the year ended December 31, 2010 totaled $13,405,000, an increase of $1,187,000 or 10% from the year ended December 31, 2009 net income of $12,218,000.
| Summary Average Balance Sheet | | | | | | | | | | | | | | | | | | |
| (Tax-equivalent basis / $ in thousands) | | | | | | | | | | | | | | | | | | |
| | | YTD December 31, 2010 | | | YTD December 31, 2009 | |
| | | Principal | | | Income/ | | | Yield/ | | | Principal | | | Income/ | | | Yield/ | |
| | | Balance | | | Expense | | | Rate | | | Balance | | | Expense | | | Rate | |
| Assets | | | | | | | | | | | | | | | | | | |
| Federal Funds Sold and Other Short-term Investments | | $ | 41,020 | | | $ | 76 | | | | 0.19 | % | | $ | 41,085 | | | $ | 106 | | | | 0.26 | % |
| Securities | | | 294,754 | | | | 11,387 | | | | 3.86 | % | | | 215,994 | | | | 10,274 | | | | 4.76 | % |
| Loans and Leases | | | 906,127 | | | | 53,540 | | | | 5.91 | % | | | 891,322 | | | | 54,166 | | | | 6.08 | % |
| Total Interest Earning Assets | | $ | 1,241,901 | | | $ | 65,003 | | | | 5.23 | % | | $ | 1,148,401 | | | $ | 64,546 | | | | 5.62 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Liabilities | | | | | | | | | | | | | | | | | | | | | | | | |
| Demand Deposit Accounts | | $ | 173,091 | | | | | | | | | | | $ | 149,673 | | | | | | | | | |
| Interest-bearing Demand, Savings, and Money Market Accounts | | $ | 518,965 | | | $ | 1,688 | | | | 0.33 | % | | $ | 473,214 | | | $ | 3,241 | | | | 0.68 | % |
| Time Deposits | | | 354,239 | | | | 8,873 | | | | 2.50 | % | | | 341,041 | | | | 10,254 | | | | 3.01 | % |
| FHLB Advances and Other Borrowings | | | 150,737 | | | | 4,961 | | | | 3.29 | % | | | 143,332 | | | | 5,728 | | | | 4.00 | % |
| Total Interest-Bearing Liabilities | | $ | 1,023,941 | | | $ | 15,522 | | | | 1.52 | % | | $ | 957,587 | | | $ | 19,223 | | | | 2.01 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Cost of Funds | | | | | | | | | | | 1.25 | % | | | | | | | | | | | 1.67 | % |
| Net Interest Income | | | | | | $ | 49,481 | | | | | | | | | | | $ | 45,323 | | | | | |
| Net Interest Margin | | | | | | | | | | | 3.98 | % | | | | | | | | | | | 3.95 | % |
During the year ended December 31, 2010, net interest income totaled $48,671,000 representing an increase of $4,158,000 or 9% from the year ended December 31, 2009 net interest income of $44,513,000. The tax equivalent net interest margin for the year ended December 31, 2010 was 3.98% compared to 3.95% in 2009. The increased net interest income was largely the result of a higher level of earning assets largely driven by growth in the Company’s core deposit base.
The provision for loan loss totaled $5,225,000 during the year ended December 31, 2010 representing an increase of $1,475,000 or 39% from the year ended December 31, 2009. During 2010, the provision for loan loss represented approximately 58 basis points of average loans while net charge-offs represented approximately 32 basis points of average loans.
GERMAN AMERICAN BANCORP, INC.
NEWS RELEASE
For additional information, contact:
Mark A Schroeder, Chief Executive Officer of German American Bancorp, Inc.
Bradley M Rust, Executive Vice President/CFO of German American Bancorp, Inc.
(812) 482-1314
During the year ended December 31, 2010, non-interest income increased approximately 7% from the year ended December 31, 2009.
| Non-interest Income | | YTD | | | YTD | | | | | | | |
| | | 12/31/10 | | | 12/31/09 | | | $ Change | | | % Change | |
| | | | | | | | | | | | | |
| Trust and Investment Product Fees | | $ | 1,582 | | | $ | 1,617 | | | $ | (35 | ) | | | -2 | % |
| Service Charges on Deposit Accounts | | | 4,065 | | | | 4,395 | | | | (330 | ) | | | -8 | % |
| Insurance Revenues | | | 5,347 | | | | 5,296 | | | | 51 | | | | 1 | % |
| Company Owned Life Insurance | | | 806 | | | | 1,104 | | | | (298 | ) | | | -27 | % |
| Other Operating Income | | | 2,983 | | | | 2,110 | | | | 873 | | | | 41 | % |
| Subtotal | | | 14,783 | | | | 14,522 | | | | 261 | | | | 2 | % |
Net Gains on Sales of Loans and Related Assets | | | 2,160 | | | | 1,760 | | | | 400 | | | | 23 | % |
| Net Gain (Loss) on Securities | | | — | | | | (423 | ) | | | 423 | | | | -100 | % |
| Total Non-interest Income | | $ | 16,943 | | | $ | 15,859 | | | $ | 1,084 | | | | 7 | % |
Deposit service charges and fees declined approximately 8% during 2010 compared with 2009 due to decreased customer utilization of the Company’s overdraft protection program and to a lesser degree changes implemented in the program during the third quarter of 2010 related to Regulation E. Company owned life insurance income declined 27% during 2010 compared with 2009 as a result of death benefits received from life insurance policies during 2009.
Other operating income increased $873,000 or 41% during the year ended December 31, 2010 compared with the year ended December 31, 2009. This increase was due primarily to a net gain on the sale of other real estate during 2010 compared with a net loss during 2009, representing an approximately $511,000 difference year over year, and an approximately $274,000 increase in net interchange revenues during 2010 compared with 2009.
The net gain on sales of loans increased $400,000 or 23% in the year ended December 31, 2010 compared with the year ended December 31, 2009 due to strong residential mortgage loan sales and improved pricing on those loans sold and those loans held for sale. Loans sales totaled $119.3 million during 2010 and $143.6 million during 2009.
The net loss on securities during 2009 was related to the recognition of other-than-temporary impairment charges on the Company’s portfolio of non-controlling investments in other banking organizations.
GERMAN AMERICAN BANCORP, INC.
NEWS RELEASE
For additional information, contact:
Mark A Schroeder, Chief Executive Officer of German American Bancorp, Inc.
Bradley M Rust, Executive Vice President/CFO of German American Bancorp, Inc.
(812) 482-1314
During the year ended December 31, 2010, non-interest expense increased approximately 2% compared with the year ended December 31, 2009.
| Non-interest Expense | | YTD | | | YTD | | | | | | | |
| | | 12/31/10 | | | 12/31/09 | | | $ Change | | | % Change | |
| | | | | | | | | | | | | |
| Salaries and Employee Benefits | | $ | 22,070 | | | $ | 21,961 | | | $ | 109 | | | | — | % |
| Occupancy, Furniture and Equipment Expense | | | 6,083 | | | | 6,035 | | | | 48 | | | | 1 | % |
| FDIC Premiums | | | 1,455 | | | | 1,863 | | | | (408 | ) | | | -22 | % |
| Data Processing Fees | | | 1,411 | | | | 1,368 | | | | 43 | | | | 3 | % |
| Professional Fees | | | 2,285 | | | | 1,740 | | | | 545 | | | | 31 | % |
| Advertising and Promotion | | | 1,255 | | | | 993 | | | | 262 | | | | 26 | % |
| Intangible Amortization | | | 898 | | | | 909 | | | | (11 | ) | | | -1 | % |
| Other Operating Expenses | | | 5,904 | | | | 5,522 | | | | 382 | | | | 7 | % |
| Total Non-interest Expense | | $ | 41,361 | | | $ | 40,391 | | | $ | 970 | | | | 2 | % |
The Company’s FDIC deposit insurance assessments decreased $408,000, or 22%, during 2010 compared with 2009. This decrease was due to an industry-wide special assessment in the second quarter of 2009 of approximately $550,000 which represented 5 basis points of the Company’s subsidiary bank’s total assets less Tier 1 Capital.
Professional fees increased $545,000 or 31% during the year ended December 31, 2010 compared with 2009 primarily as a result of professional fees associated with the acquisition of American Community Bancorp, Inc. effective January 1, 2011 and the acquisition of two branch offices during the second quarter of 2010.
Advertising and promotion increased 26% in the year ended December 31, 2010 compared with 2009 largely as a result of the Company’s common identity initiative and the acquisition of two branch offices in a new market for the Company during the second quarter of 2010.
Other operating expenses increased approximately 7% during the year ended December 31, 2010 compared with the year ended December 31, 2009. The increase was largely attributable to costs related to the Company’s common identity initiative that was undertaken during 2010.
GERMAN AMERICAN BANCORP, INC.
NEWS RELEASE
For additional information, contact:
Mark A Schroeder, Chief Executive Officer of German American Bancorp, Inc.
Bradley M Rust, Executive Vice President/CFO of German American Bancorp, Inc.
(812) 482-1314
Quarter ended December 31, 2010 compared to quarter ended September 30, 2010
Net income for the quarter ended December 31, 2010 totaled $3,152,000, a decline of $442,000 or 12% from third quarter 2010 net income of $3,594,000.
| Summary Average Balance Sheet | | | | | | | | | | | | | | | | | | |
| (Tax-equivalent basis / $ in thousands) | | | | | | | | | | | | | | | | | | |
| | | Quarter Ended December 31, 2010 | | | Quarter Ended September 30, 2010 | |
| | | Principal | | | Income/ | | | Yield/ | | | Principal | | | Income/ | | | Yield/ | |
| | | Balance | | | Expense | | | Rate | | | Balance | | | Expense | | | Rate | |
| Assets | | | | | | | | | | | | | | | | | | |
| Federal Funds Sold and Other Short-term Investments | | $ | 61,349 | | | $ | 28 | | | | 0.18 | % | | $ | 25,241 | | | $ | 12 | | | | 0.19 | % |
| Securities | | | 323,674 | | | | 2,857 | | | | 3.53 | % | | | 314,705 | | | | 2,804 | | | | 3.56 | % |
| Loans and Leases | | | 922,672 | | | | 13,632 | | | | 5.87 | % | | | 921,687 | | | | 13,737 | | | | 5.92 | % |
| Total Interest Earning Assets | | $ | 1,307,695 | | | $ | 16,517 | | | | 5.02 | % | | $ | 1,261,633 | | | $ | 16,553 | | | | 5.22 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Liabilities | | | | | | | | | | | | | | | | | | | | | | | | |
| Demand Deposit Accounts | | $ | 194,254 | | | | | | | | | | | $ | 180,147 | | | | | | | | | |
| Interest-bearing Demand, Savings, and Money Market Accounts | | $ | 562,673 | | | $ | 399 | | | | 0.28 | % | | $ | 523,265 | | | $ | 402 | | | | 0.30 | % |
| Time Deposits | | | 361,160 | | | | 2,222 | | | | 2.44 | % | | | 359,466 | | | | 2,240 | | | | 2.47 | % |
| FHLB Advances and Other Borrowings | | | 142,791 | | | | 1,063 | | | | 2.95 | % | | | 154,011 | | | | 1,236 | | | | 3.18 | % |
| Total Interest-Bearing Liabilities | | $ | 1,066,624 | | | $ | 3,684 | | | | 1.37 | % | | $ | 1,036,742 | | | $ | 3,878 | | | | 1.48 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Cost of Funds | | | | | | | | | | | 1.12 | % | | | | | | | | | | | 1.22 | % |
| Net Interest Income | | | | | | $ | 12,833 | | | | | | | | | | | $ | 12,675 | | | | | |
| Net Interest Margin | | | | | | | | | | | 3.90 | % | | | | | | | | | | | 4.00 | % |
During the quarter ended December 31, 2010, net interest income totaled $12,630,000 representing an increase of $153,000 or 1% from the third quarter of 2010. The tax equivalent net interest margin for the fourth quarter of 2010 was 3.90% compared to 4.00% in the third quarter of 2010. The increased net interest income was largely the result of a higher level of earning assets driven by growth in the Company’s core deposit base. The decline in the net interest margin was largely attributable to an increase in the Company’s federal funds sold position driven by core deposit growth and a decline in loan yields related to the continued low interest rate environment.
The provision for loan loss totaled $1,350,000 during the quarter ended December 31, 2010 compared with $1,375,000 during the quarter ended September 30, 2010 representing an decline of approximately 2%.
GERMAN AMERICAN BANCORP, INC.
NEWS RELEASE
For additional information, contact:
Mark A Schroeder, Chief Executive Officer of German American Bancorp, Inc.
Bradley M Rust, Executive Vice President/CFO of German American Bancorp, Inc.
(812) 482-1314
During the quarter ended December 31, 2010, non-interest income decreased 7% compared to the third quarter of 2010.
| Non-interest Income | | Qtr Ended | | | Qtr Ended | | | | | | | |
| | | 12/31/10 | | | 09/30/10 | | | $ Change | | | % Change | |
| | | | | | | | | | | | | |
| Trust and Investment Product Fees | | $ | 448 | | | $ | 348 | | | $ | 100 | | | | 29 | % |
| Service Charges on Deposit Accounts | | | 991 | | | | 1,053 | | | | (62 | ) | | | -6 | % |
| Insurance Revenues | | | 1,255 | | | | 1,323 | | | | (68 | ) | | | -5 | % |
| Company Owned Life Insurance | | | 221 | | | | 197 | | | | 24 | | | | 12 | % |
| Other Operating Income | | | 684 | | | | 710 | | | | (26 | ) | | | -4 | % |
| Subtotal | | | 3,599 | | | | 3,631 | | | | (32 | ) | | | -1 | % |
Net Gains on Sales of Loans and Related Assets | | | 541 | | | | 802 | | | | (261 | ) | | | -33 | % |
| Net Gain (Loss) on Securities | | | — | | | | — | | | | — | | | | — | % |
| Total Non-interest Income | | $ | 4,140 | | | $ | 4,433 | | | $ | (293 | ) | | | -7 | % |
Trust and investment product fees increased 29% during the quarter ended December 31, 2010, compared with the third quarter 2010 due primarily to improved retail brokerage revenues.
The net gain of sales of loans decreased 33% in the quarter ended December 31, 2010 compared with the third quarter of 2010. The decline was largely attributable to a lower pipeline of residential mortgage loans to be originated and sold and a lower level of loans held for sale as of year end 2010 compared with September 30, 2010. Loans sales totaled $43.9 million during the fourth quarter of 2010 compared to $39.6 million during the third quarter of 2010.
During the quarter ended December 31, 2010, non-interest expense increased approximately 3% compared with the third quarter of 2010.
GERMAN AMERICAN BANCORP, INC.
NEWS RELEASE
For additional information, contact:
Mark A Schroeder, Chief Executive Officer of German American Bancorp, Inc.
Bradley M Rust, Executive Vice President/CFO of German American Bancorp, Inc.
(812) 482-1314
| Non-interest Expense | | Qtr Ended | | | Qtr Ended | | | | | | | |
| | | 12/31/10 | | | 09/30/10 | | | $ Change | | | % Change | |
| | | | | | | | | | | | | |
| Salaries and Employee Benefits | | $ | 5,763 | | | $ | 5,470 | | | $ | 293 | | | | 5 | % |
| Occupancy, Furniture and Equipment Expense | | | 1,572 | | | | 1,537 | | | | 35 | | | | 2 | % |
| FDIC Premiums | | | 412 | | | | 355 | | | | 57 | | | | 16 | % |
| Data Processing Fees | | | 357 | | | | 330 | | | | 27 | | | | 8 | % |
| Professional Fees | | | 542 | | | | 698 | | | | (156 | ) | | | -22 | % |
| Advertising and Promotion | | | 363 | | | | 350 | | | | 13 | | | | 4 | % |
| Intangible Amortization | | | 171 | | | | 262 | | | | (91 | ) | | | -35 | % |
| Other Operating Expenses | | | 1,572 | | | | 1,439 | | | | 133 | | | | 9 | % |
| Total Non-interest Expense | | $ | 10,752 | | | $ | 10,441 | | | $ | 311 | | | | 3 | % |
Salaries and benefits expense increased approximately 5% during the fourth quarter of 2010 compared with the third quarter of 2010. The increase was largely attributable to year-end adjustments for incentive plans and employee benefits paid in conjunction with the Company’s 100th year anniversary.
Professional fees decreased $156,000 or 22% during the quarter ended December 31, 2010 compared with the third quarter of 2010 primarily as a result of a modestly lower level of professional fees associated with the acquisition of American Community Bancorp, Inc. and a general decline in other professional fees.
Intangible amortization decreased $91,000 or 35% during the fourth quarter of 2010 compared with the third quarter of 2010 as a result of the full amortization as of September 30, 2010 of customer list intangible for two insurance agencies purchased in 2003.
About German American
German American Bancorp, Inc., is a NASDAQ-traded (symbol: GABC) financial services holding company based in Jasper, Indiana. German American, through its banking subsidiary German American Bancorp, operates 33 retail banking offices in 12 contiguous southern Indiana counties. The Company also owns a trust, brokerage, and financial planning subsidiary (German American Financial Advisors & Trust Company) and a full line property and casualty insurance agency (German American Insurance, Inc.).
GERMAN AMERICAN BANCORP, INC.
NEWS RELEASE
For additional information, contact:
Mark A Schroeder, Chief Executive Officer of German American Bancorp, Inc.
Bradley M Rust, Executive Vice President/CFO of German American Bancorp, Inc.
(812) 482-1314
Cautionary Note Regarding Forward-Looking Statements
The Company's statements in this press release regarding German American’s prospects for continued success, both in its legacy markets and in its new market presence in Evansville, Indiana arising from its May 2010 branch purchase transaction and its January 2011 acquisition of Bank of Evansville (and its opportunities to expand its insurance and investment lines of business in that new market area) 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 that could cause the Company's actual future experiences in its Evansville market to be less successful than expected by management include risks incident to any acquisition transaction, such as the risks that Bank of Evansville's operations may not be integrated successfully into German American's operations or such integration may be more difficult, time-consuming or costly than expected, including possible disruption of employee or customer relationships that could result in decreased revenues if such disruption results in loss of customers; management's previously-announced expected cost savings from the Bank of Evansville transaction may not be fully realized or realized within the expected timeframe; management's previously-announced expectations that net interest income of the Company might improve as a result of the Bank of Evansville transaction might be not realized or delayed, in part or in whole, due to possible market factors that could dictate that German American delay or alter projected deposit pricing strategies in the Evansville market; and the final valuations of the acquired assets and assumed liabilities for accounting purposes under the acquisition method of accounting as applied to the January 2011 acquisition may differ materially from the preliminary valuations assumed by management’s models, and such valuation differences may result in material changes (including possible material adverse changes) in German American’s actual future results of operations compared to those projected by it under its models. Other factors that could cause actual experiences to differ from the expectations stated or implied in this press release include 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, including the intended strategies of expanding the Company's insurance and investment lines of business in the Evansville market; changes in customer borrowing, repayment, investment and deposit practices; changes in fiscal, monetary and tax policies; changes in financial and capital markets; continued deterioration in general economic conditions, either nationally or locally, resulting in, among other things, credit quality deterioration and dampened loan demand; actions of the Federal Reserve Board; changes in accounting principles and interpretations; and actions of federal regulatory agencies under the Federal Deposit Insurance Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, and other 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 Balance Sheets
| | | December 31, | | | September 30, | | | December 31, | |
| | | 2010 | | | 2010 | | | 2009 | |
| | | | | | | | | | |
| ASSETS | | | | | | | | | |
| Cash and Due from Banks | | $ | 15,021 | | | $ | 19,203 | | | $ | 16,052 | |
| Short-term Investments | | | 4,250 | | | | 26,112 | | | | 12,002 | |
| Investment Securities | | | 348,351 | | | | 302,673 | | | | 253,714 | |
| | | | | | | | | | | | | |
| Loans Held-for-Sale | | | 11,850 | | | | 13,627 | | | | 5,706 | |
| | | | | | | | | | | | | |
| Loans, Net of Unearned Income | | | 917,236 | | | | 913,623 | | | | 877,822 | |
| Allowance for Loan Losses | | | (13,317 | ) | | | (11,700 | ) | | | (11,016 | ) |
| Net Loans | | | 903,919 | | | | 901,923 | | | | 866,806 | |
| | | | | | | | | | | | | |
| Stock in FHLB and Other Restricted Stock | | | 9,207 | | | | 10,621 | | | | 10,621 | |
| Premises and Equipment | | | 25,974 | | | | 26,784 | | | | 22,153 | |
| Goodwill and Other Intangible Assets | | | 12,459 | | | | 12,630 | | | | 12,273 | |
| Other Assets | | | 44,857 | | | | 42,411 | | | | 43,638 | |
| TOTAL ASSETS | | $ | 1,375,888 | | | $ | 1,355,984 | | | $ | 1,242,965 | |
| | | | | | | | | | | | | |
| LIABILITIES | | | | | | | | | | | | |
| Non-interest-bearing Demand Deposits | | $ | 184,204 | | | $ | 187,363 | | | $ | 155,268 | |
| Interest-bearing Demand, Savings, and Money Market Accounts | | | 541,532 | | | | 532,877 | | | | 484,699 | |
| Time Deposits | | | 361,550 | | | | 362,608 | | | | 329,676 | |
| Total Deposits | | | 1,087,286 | | | | 1,082,848 | | | | 969,643 | |
| | | | | | | | | | | | | |
| Borrowings | | | 153,717 | | | | 137,173 | | | | 148,121 | |
| Other Liabilities | | | 13,351 | | | | 13,090 | | | | 11,652 | |
| TOTAL LIABILITIES | | | 1,254,354 | | | | 1,233,111 | | | | 1,129,416 | |
| | | | | | | | | | | | | |
| SHAREHOLDERS' EQUITY | | | | | | | | | | | | |
| Common Stock and Surplus | | | 80,402 | | | | 80,194 | | | | 79,893 | |
| Retained Earnings | | | 36,232 | | | | 34,635 | | | | 29,041 | |
| Accumulated Other Comprehensive Income | | | 4,900 | | | | 8,044 | | | | 4,615 | |
| TOTAL SHAREHOLDERS' EQUITY | | | 121,534 | | | | 122,873 | | | | 113,549 | |
| | | | | | | | | | | | | |
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | | $ | 1,375,888 | | | $ | 1,355,984 | | | $ | 1,242,965 | |
| | | | | | | | | | | | | |
| END OF PERIOD SHARES OUTSTANDING | | | 11,105,583 | | | | 11,104,918 | | | | 11,077,382 | |
| | | | | | | | | | | | | |
| BOOK VALUE PER SHARE | | $ | 10.94 | | | $ | 11.06 | | | $ | 10.25 | |
(unaudited, dollars in thousands except per share data)
Consolidated Statements of Income
| | | Three Months Ended | | | Year Ended | |
| | | December 31, | | | September 30, | | | December 31, | | | December 31, | | | December 31, | |
| | | 2010 | | | 2010 | | | 2009 | | | 2010 | | | 2009 | |
| | | | | | | | | | | | | | | | |
| INTEREST INCOME | | | | | | | | | | | | | | | |
| Interest and Fees on Loans | | $ | 13,565 | | | $ | 13,668 | | | $ | 13,332 | | | $ | 53,266 | | | $ | 53,905 | |
| Interest on Short-term Investments | | | 28 | | | | 12 | | | | 42 | | | | 76 | | | | 106 | |
| Interest and Dividends on Investment Securities | | | 2,721 | | | | 2,675 | | | | 2,423 | | | | 10,851 | | | | 9,725 | |
| TOTAL INTEREST INCOME | | | 16,314 | | | | 16,355 | | | | 15,797 | | | | 64,193 | | | | 63,736 | |
| | | | | | | | | | | | | | | | | | | | | |
| INTEREST EXPENSE | | | | | | | | | | | | | | | | | | | | |
| Interest on Deposits | | | 2,621 | | | | 2,642 | | | | 3,026 | | | | 10,561 | | | | 13,495 | |
| Interest on Borrowings | | | 1,063 | | | | 1,236 | | | | 1,497 | | | | 4,961 | | | | 5,728 | |
| TOTAL INTEREST EXPENSE | | | 3,684 | | | | 3,878 | | | | 4,523 | | | | 15,522 | | | | 19,223 | |
| | | | | | | | | | | | | | | | | | | | | |
| NET INTEREST INCOME | | | 12,630 | | | | 12,477 | | | | 11,274 | | | | 48,671 | | | | 44,513 | |
| Provision for Loan Losses | | | 1,350 | | | | 1,375 | | | | 750 | | | | 5,225 | | | | 3,750 | |
| NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES | | | 11,280 | | | | 11,102 | | | | 10,524 | | | | 43,446 | | | | 40,763 | |
| | | | | | | | | | | | | | | | | | | | | |
| NON-INTEREST INCOME | | | | | | | | | | | | | | | | | | | | |
| Net Gain on Sales of Loans | | | 541 | | | | 802 | | | | 323 | | | | 2,160 | | | | 1,760 | |
| Net Gain (Loss) on Securities | | | - | | | | - | | | | (389 | ) | | | - | | | | (423 | ) |
| Other Non-interest Income | | | 3,599 | | | | 3,631 | | | | 3,803 | | | | 14,783 | | | | 14,522 | |
| TOTAL NON-INTEREST INCOME | | | 4,140 | | | | 4,433 | | | | 3,737 | | | | 16,943 | | | | 15,859 | |
| | | | | | | | | | | | | | | | | | | | | |
| NON-INTEREST EXPENSE | | | | | | | | | | | | | | | | | | | | |
| Salaries and Benefits | | | 5,763 | | | | 5,470 | | | | 5,405 | | | | 22,070 | | | | 21,961 | |
| Other Non-interest Expenses | | | 4,989 | | | | 4,971 | | | | 4,753 | | | | 19,291 | | | | 18,430 | |
| TOTAL NON-INTEREST EXPENSE | | | 10,752 | | | | 10,441 | | | | 10,158 | | | | 41,361 | | | | 40,391 | |
| | | | | | | | | | | | | | | | | | | | | |
| Income before Income Taxes | | | 4,668 | | | | 5,094 | | | | 4,103 | | | | 19,028 | | | | 16,231 | |
| Income Tax Expense | | | 1,516 | | | | 1,500 | | | | 782 | | | | 5,623 | | | | 4,013 | |
| | | | | | | | | | | | | | | | | | | | | |
| NET INCOME | | $ | 3,152 | | | $ | 3,594 | | | $ | 3,321 | | | $ | 13,405 | | | $ | 12,218 | |
| | | | | | | | | | | | | | | | | | | | | |
| EARNINGS PER SHARE & DILUTED EARNINGS PER SHARE | | $ | 0.28 | | | $ | 0.32 | | | $ | 0.30 | | | $ | 1.21 | | | $ | 1.10 | |
| | | | | | | | | | | | | | | | | | | | | |
| WEIGHTED AVERAGE SHARES OUTSTANDING | | | 11,105,323 | | | | 11,104,918 | | | | 11,077,382 | | | | 11,098,836 | | | | 11,065,917 | |
| DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING | | | 11,114,793 | | | | 11,110,861 | | | | 11,085,472 | | | | 11,104,887 | | | | 11,068,988 | |
(unaudited, dollars in thousands except per share data)
| | | Three Months Ended | | | Year Ended | |
| | | December 31, | | | September 30, | | | December 31, | | | December 31, | | | December 31, | |
| | | 2010 | | | 2010 | | | 2009 | | | 2010 | | | 2009 | |
| EARNINGS PERFORMANCE RATIOS | | | | | | | | | | | | | | | |
| Annualized Return on Average Assets | | | 0.90 | % | | | 1.06 | % | | | 1.04 | % | | | 1.01 | % | | | 0.99 | % |
| Annualized Return on Average Equity | | | 10.14 | % | | | 11.79 | % | | | 11.69 | % | | | 11.18 | % | | | 11.12 | % |
| Net Interest Margin | | | 3.90 | % | | | 4.00 | % | | | 3.82 | % | | | 3.98 | % | | | 3.95 | % |
Efficiency Ratio (1) | | | 63.35 | % | | | 61.03 | % | | | 66.71 | % | | | 62.27 | % | | | 66.02 | % |
Net Overhead Expense to Average Earning Assets (2) | | | 2.02 | % | | | 1.90 | % | | | 2.15 | % | | | 1.97 | % | | | 2.14 | % |
| | | | | | | | | | | | | | | | | | | | | |
| ASSET QUALITY RATIOS | | | | | | | | | | | | | | | | | | | | |
| Annualized Net Charge-offs to Average Loans | | | -0.12 | % | | | 0.21 | % | | | 0.23 | % | | | 0.32 | % | | | 0.25 | % |
| Allowance for Loan Losses to Period End Loans | | | 1.45 | % | | | 1.28 | % | | | 1.25 | % | | | | | | | | |
| Non-performing Assets to Period End Assets | | | 0.97 | % | | | 1.04 | % | | | 0.90 | % | | | | | | | | |
| Non-performing Loans to Period End Loans | | | 1.22 | % | | | 1.28 | % | | | 1.00 | % | | | | | | | | |
| Loans 30-89 Days Past Due to Period End Loans | | | 0.65 | % | | | 0.62 | % | | | 0.64 | % | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| SELECTED BALANCE SHEET & OTHER FINANCIAL DATA | | | | | | | | | | | | | | | | | | | | |
| Average Assets | | $ | 1,399,100 | | | $ | 1,353,459 | | | $ | 1,279,199 | | | $ | 1,330,540 | | | $ | 1,230,596 | |
| Average Earning Assets | | $ | 1,307,695 | | | $ | 1,261,633 | | | $ | 1,195,609 | | | $ | 1,241,901 | | | $ | 1,148,401 | |
| Average Total Loans | | $ | 922,672 | | | $ | 921,687 | | | $ | 890,740 | | | $ | 906,127 | | | $ | 891,322 | |
| Average Demand Deposits | | $ | 194,254 | | | $ | 180,147 | | | $ | 156,644 | | | $ | 173,091 | | | $ | 149,673 | |
| Average Interest Bearing Liabilities | | $ | 1,066,624 | | | $ | 1,036,742 | | | $ | 996,020 | | | $ | 1,023,941 | | | $ | 957,587 | |
| Average Equity | | $ | 124,329 | | | $ | 121,980 | | | $ | 113,640 | | | $ | 119,867 | | | $ | 109,887 | |
| | | | | | | | | | | | | | | | | | | | | |
Period End Non-performing Assets (3) | | $ | 13,325 | | | $ | 14,109 | | | $ | 11,156 | | | | | | | | | |
Period End Non-performing Loans (4) | | $ | 11,230 | | | $ | 11,712 | | | $ | 8,793 | | | | | | | | | |
Period End Loans 30-89 Days Past Due (5) | | $ | 5,986 | | | $ | 5,707 | | | $ | 5,625 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| Tax Equivalent Net Interest Income | | $ | 12,833 | | | $ | 12,675 | | | $ | 11,490 | | | $ | 49,481 | | | $ | 45,323 | |
| Net Charge-offs during Period | | $ | (267 | ) | | $ | 488 | | | $ | 522 | | | $ | 2,924 | | | $ | 2,256 | |
| (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. |
| (5) | Loans 30-89 days past due and still accruing. |
