UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark one)
|X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the fiscal year ended: December 31, 1999
OR
| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from____________to_____________
Commission File Number 0-11244
GERMAN AMERICAN BANCORP
-----------------------
(Exact name of registrant as specified in its charter)
INDIANA 35-1547518
- ------------------------------------ ------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
711 Main Street, Box 810, Jasper, Indiana 47546
- ----------------------------------------- --------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (812) 482-1314
Securities registered pursuant to Section 12 (b) of the Act:
Title of each class Name of each exchange on which registered
NONE Not Applicable
- --------------------- ------------------------------------
Securities registered pursuant to Section 12 (g) of the Act:
Common Shares, No Par Value
- ---------------------------
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES X NO
------
The aggregate market value of the voting stock held by nonaffiliates of the
Registrant (assuming solely for purposes of this calculation that all directors
and executive officers of the Registrant are affiliates) valued at the last
trade price reported by NASDAQ as of March 10, 2000 was approximately
$146,723,000.
As of March 10, 2000, there were outstanding 9,029,109 common shares, no
par value, of the registrant.
DOCUMENTS INCORPORATED BY REFERENCE
(1) Portions of the Annual Report to Shareholders of German American
Bancorp for 1999, to the extent stated herein, are incorporated by reference
into Parts I and II.
(2) Portions of the Proxy Statement of German American Bancorp for the
Annual Meeting of its Shareholders to be held April 27, 2000, to the extent
stated herein, are incorporated by reference into Part III.
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K (section 229.405 of this chapter) is not contained herein,
and will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. | |
PART I
Item 1. Business.
General
German American Bancorp (referred to herein as the "Company", the
"Corporation", or the "Registrant") is a multi-bank holding company organized in
Indiana in 1982. The Company operates five affiliate community banks with 25
banking offices and two insurance subsidiaries with 5 insurance offices in the
eight contiguous Southwestern Indiana counties of Daviess, Dubois, Gibson, Knox,
Martin, Perry, Pike and Spencer. The banks' wide range of personal and corporate
financial services include making commercial and consumer loans; marketing,
originating, and servicing mortgage loans; providing trust, investment advisory
and brokerage services; accepting deposits and providing safe deposit
facilities. The Company's insurance activities include offering a full range of
title, property, casualty, life and credit insurance products. The Company's
subsidiaries are described in the following table:
Names of Principal Subsidiaries Type of Business Location Parent Company
- ------------------------------------------------- ---------------------------- ------------------- ---------------------------------
German American Bank Commercial Bank Jasper, IN German American Bancorp
First American Bank Savings Bank Vincennes, IN German American Bancorp
First State Bank, Southwest Indiana Commercial Bank Tell City, IN German American Bancorp
German American Holdings Corporation 2nd Tier Holding Company Jasper, IN German American Bancorp
GAB Mortgage Corp. Inactive Jasper, IN German American Bancorp
German American Reinsurance Co., Ltd. Credit Life Insurance Jasper, IN German American Bancorp
Peoples National Bank Commercial Bank Washington, IN German American Holdings Corp.
Citizens State Bank Commercial Bank Petersburg, IN German American Holdings Corp.
The Doty Agency, Inc. Insurance Agency Petersburg, IN Citizens State Bank
First Title Insurance Company Title Insurance Agency Vincennes, IN Citizens State Bank
- ------------------------------------------------------------------------------------------------------------------------------------
The Company over the five-year period ended December 31, 1999 has
experienced both internal growth and growth by acquiring other banks, thrifts
and insurance agencies. For a description of acquisitions see note 18 to the
Company's consolidated financial statements included in the Company's annual
report to shareholders for 1999 and filed as Exhibit 13.4 to this report. Most
of these acquisitions have been accounted for under the pooling-of-interests
method of accounting, with the result that the financial statements for all
periods prior to such acquisitions were retroactively restated.
In January 1999, the Company completed a merger with 1ST BANCORP of
Vincennes, Indiana. 1ST BANCORP's subsidiaries included First American Bank
(formerly known as First Federal Bank); First Financial Insurance Agency, Inc.;
and First Title Insurance Company. 1ST BANCORP's thrift operations through First
American Bank included mortgage banking activities. First Financial Insurance
Agency, Inc. operated an office in Gibson County, Indiana, which now operates as
a part of The Doty Agency.
Also in January 1999, the Company completed a merger with The Doty Agency,
Inc. of Petersburg, Indiana. Doty is a general multi-line, full-service
insurance agency and that now has offices in Gibson, Knox, Pike and Dubois
counties in Indiana.
In May 1999, the Company acquired Smith and Bell, a general multi-line,
full-service insurance agency in Vincennes, Indiana. Smith and Bell now operates
offices in Knox County, Indiana as part of The Doty Agency.
Additional information regarding the Company and its subsidiaries is
included in the Company's Annual Report to Shareholders for 1999, selected
portions of which are filed as Exhibit 13 to this Annual Report on Form 10-K
(the "Shareholders' Report") and are incorporated herein by reference.
Recent Development - Holland Bancorp Merger
On March 24, 2000 the Company announced that it had agreed in principle to
acquire Holland Bancorp, Inc. ("Holland"), through the merger of Holland with
and into the Company, and the simultaneous merger of Holland's sole bank
subsidiary, The Holland National Bank, into the Company's subsidiary, The German
American Bank. The Holland National Bank operates four banking offices in Dubois
County, Indiana.
Under the terms of the proposed merger, the shareholders of Holland would
receive 3.5 shares of common stock of the Company for each of their Holland
shares, or an aggregate of approximately 947,777 shares of common stock of the
Company.
At December 31, 1999, Holland had total assets of and total shareholders'
equity of $64 million and $6 million, respectively. Holland reported net income
of $532 thousand for the year ended December 31, 1999.
The proposed merger is subject to the completion of due diligence and
execution of a definitive agreement, approval by shareholders of Holland,
Holland's receipt of a fairness opinion, approval of the appropriate bank
regulatory agencies and other conditions. It is contemplated that the mergers
will be consummated during the third quarter of 2000, and that they will be
accounted for under the pooling of interests method of accounting.
Competition
The banking business is highly competitive. The Company's subsidiary banks
compete not only with financial institutions that have offices in the same
counties but also compete for deposits, loans and many other types of financial
services products with financial institutions that are located throughout
Southwest Indiana and adjoining areas. In addition to other commercial banks,
the Company's subsidiary banks compete with savings and loan associations,
savings banks, credit unions, production credit associations, federal land
banks, finance companies, credit card companies, personal loan companies,
brokerage firms, insurance companies, lease finance companies, money market
funds, mortgage companies and other non-depository financial intermediaries.
Many of these banks and other organizations have substantially greater resources
than the Corporation.
Recent changes in federal and state law have resulted in and are expected
to continue to result in increased competition. The reductions in legal barriers
to the acquisition of banks by securities firms, insurance companies and other
financial service companies resulting from implementation of the
Gramm-Leach-Bliley Act of 1999 and other recent and proposed changes are
expected to continue to further stimulate competition in the markets in which
the Banks operate, although it is not possible to predict the extent or timing
of such increased competition.
Employees
At February 29, 2000 the Company and its subsidiaries employed
approximately 385 full-time equivalent employees. There are no collective
bargaining agreements, and employee relations are considered to be good.
Regulation and Supervision
The Company is subject to the Bank Holding Company Act of 1956, as amended
("BHC Act"), and is required to file with the Board of Governors of the Federal
Reserve System ("FRB") annual reports and such additional information as the FRB
may require. The FRB may also make examinations or inspections of the Company.
Under FRB policy, the Company is expected to act as a source of financial
strength to its bank subsidiaries and to commit resources to support them even
in circumstances where the Company might not do so absent such an FRB policy.
The Company's subsidiary banks are under the supervision of and subject to
examination by one or more of the Indiana Department of Financial Institutions
("DFI"), the Office of Comptroller of Currency ("OCC"), the Federal Deposit
Insurance Corporation ("FDIC") and the Office of Thrift Supervision ("OTS").
Regulation and examination by banking regulatory agencies are primarily for the
benefit of depositors rather than shareholders.
With certain exceptions, the BHC Act prohibits a bank holding company from
engaging in, or acquiring direct or indirect control of more than 5 percent of
the voting shares of any company engaged in nonbanking activities. One of the
principal exceptions to this prohibition is for activities deemed by the FRB to
be "closely related to banking." Under current regulations, bank holding
companies and their subsidiaries are permitted to engage in such banking-related
business ventures as sales and consumer finance; equipment leasing; credit life
insurance; computer service bureau and software operations; mortgage banking;
and securities brokerage. As a result of recent amendments to the BHC Act, many
of these acquisitions may be effected by bank holding companies that satisfy
certain statutory criteria concerning management, capitalization, and regulatory
compliance if written notice is given to the FRB within 10 business days after
the transaction. In other cases, prior written notice to the FRB will be
required.
In evaluating a written notice of such an acquisition, the FRB will
consider various factors, including among others the financial and managerial
resources of the notifying bank holding company and the relative public benefits
and adverse effects which may be expected to result from the performance of the
activity by an affiliate of such company. The FRB may apply different standards
to activities proposed to be commenced de novo and activities commenced by
acquisition, in whole or in part, of a going concern.
Effective March 11, 2000 the Gramm-Leach-Bliley Act of 1999, which was
signed into law on November 12, 1999, permits a bank holding company to qualify
as a "financial holding company" and, as a result, be permitted to engage in a
broader range of activities that are "financial in nature" and in activities
that are determined to be incidental or complementary to activities that are
financial in nature. The Gramm-Leach-Bliley Act amends the BHC Act to include a
list of activities that are financial in nature, and the list includes
activities such as underwriting, dealing in and making a market in securities;
insurance underwriting and agency activities; and merchant banking. The Federal
Reserve Board is authorized to determine other activities that are financial in
nature or incidental or complementary to such activities. The Gramm-Leach-Bliley
Act also authorizes banks to engage through financial subsidiaries in certain of
the activities permitted for financial holding companies.
Indiana law, the National Bank Act, the Home Owners Loan Act, and the BHC
Act restrict certain types of expansion by the Company and its bank
subsidiaries. Under the Home Owners Loan Act, First American Bank may branch,
subject to certain conditions, anywhere within the United States. Under the BHC
Act, the Company may establish non-banking offices without geographical
limitation. Under the BHC Act, the Company must receive the prior written
approval of the FRB or its delegate before it may acquire ownership or control
of more than 5 percent of the voting shares of another bank, and under Indiana
law it may not acquire 25 percent or more of the voting shares of another bank
without the prior approval of the Indiana Department of Financial Institutions
("DFI").
In 1994, the Congress enacted the Riegle-Neal Interstate Banking and
Branching Efficiency Act of 1994 (the "Riegle-Neal Act"), which substantially
changed the geographic constraints applicable to the banking industry. Effective
September 29, 1995, the Riegle-Neal Act allowed bank holding companies to
acquire banks located in any state in the United States without regard to
geographic restrictions or reciprocity requirements imposed by state law.
Effective June 1, 1997 (or earlier if expressly authorized by applicable state
law), the Riegle-Neal Act allowed banks to establish interstate branch networks
through acquisitions of other banks, subject to certain conditions.. The
establishment of de novo interstate branches or the acquisition of individual
branches of a bank in another state (rather than the acquisition of an
out-of-state bank in its entirety) is allowed by the Riegle-Neal Act only if
specifically authorized by state law. The legislation allowed individual states
to "opt-out" of certain provisions of the Riegle-Neal Act by enacting
appropriate legislation prior to June 1, 1997.
In 1996, Indiana authorized out-of-state banks to establish branch offices
in Indiana. The Indiana Financial Institutions Act now permits, in appropriate
circumstances,
(A) with the approval of the DFI:
o the acquisition of all or substantially all of the assets of an
Indiana-chartered bank by an FDIC-insured bank, savings bank or savings
association located in another state,
o the acquisition by an Indiana-chartered bank of all or substantially
all of the assets of an FDIC-insured bank, savings bank or savings
association located in another state,
o the consolidation of one or more Indiana-chartered banks and
FDIC-insured banks, savings banks or savings associations located in
other states having laws permitting such consolidation, with the
resulting organization chartered by Indiana, and
o the organization of a branch in Indiana by FDIC-insured banks located
in other states, the District of Columbia or U.S. territories or
protectorates having laws permitting an Indiana-chartered bank to
establish a branch in such jurisdiction, and
(B) upon written notice to the DFI:
o the acquisition by an Indiana-chartered bank of one or more branches
(not comprising all or substantially all of the assets) of an
FDIC-insured bank, savings bank or savings association located in
another state, the District of Columbia, or a U.S. territory or
protectorate,
o the establishment by Indiana-chartered banks of branches located in
other states, the District of Columbia, or U.S. territories or
protectorates, and
o the consolidation of one or more Indiana-chartered banks and
FDIC-insured banks, savings banks or savings associations located in
other states, with the resulting organization chartered by one of such
other states, and
(C) the sale by an Indiana-chartered bank of one or more of its branches
(not comprising all or substantially all of its assets) to an FDIC-insured
bank, savings bank or savings association located in a state in which an
Indiana-chartered bank could purchase one or more branches of the
purchasing entity.
On November 12, 1999, President Clinton signed into law the
Gramm-Leach-Bliley Act. Among other things, the Gramm-Leach-Bliley Act repealed
the restrictions on banks affiliating with securities firms contained in
sections 20 and 32 of the Glass-Steagall Act. This act also created a new
"financial holding company" under the BHC Act, which will permit holding
companies to engage in a statutorily provided list of financial activities,
including insurance and securities underwriting and agency activities, merchant
banking, and insurance company portfolio investment activities, and authorizes
such other financial activities as may be determined by rule or order of the
FRB. In addition, the Gramm-Leach-Bliley Act imposes significant new financial
privacy obligations and reporting requirements on all financial institutions,
including banks. Among other things, it will require financial institutions (a)
to establish privacy policies and disclose them to customers both at the
commencement of a customer relationship and on an annual basis and (b) to permit
customers to opt out of a financial institution's disclosure of financial
information to nonaffiliated third parties. The Gramm-Leach-Bliley Act requires
the federal financial regulators to promulgate regulations implementing these
provisions within six months of enactment, and the statute's privacy
requirements will take effect one year after enactment.
The earnings of commercial banks and their holding companies are affected
not only by general economic conditions but also by the policies of various
governmental regulatory authorities. In particular, the FRB regulates money and
credit conditions and interest rates in order to influence general economic
conditions, primarily through open-market operations in U.S. Government
securities, varying the discount rate on bank borrowings, and setting reserve
requirements against bank deposits. These policies have a significant influence
on overall growth and distribution of bank loans, investments and deposits, and
affect interest rates charged on loans and earned on investments or paid for
time and savings deposits. FRB monetary policies have had a significant effect
on the operating results of commercial banks in the past and this is expected to
continue in the future. The general effect, if any, of such policies upon the
future business and earnings of the Company cannot accurately be predicted.
The Company and its bank subsidiaries are required by law to maintain
minimum levels of capital. These required capital levels are expressed in terms
of capital ratios, known as the leverage ratio and the capital to risk-based
assets ratios. The Company significantly exceeds the minimum required capital
levels for each measure of capital adequacy. See "Management's Discussion and
Analysis -- Capital Resources," included in the Shareholders' Report.
Also, federal regulations define five categories of financial institutions
for purposes of implementing prompt corrective action and supervisory
enforcement requirements of the Federal Deposit Insurance Corporation
Improvements Act of 1991. The category to which the most highly capitalized
institutions are assigned is termed "Well-Capitalized." Institutions falling
into this category must have a total risk-based capital ratio (the ratio of
total capital to risk-weighted assets) of at least 10%, a Tier 1 risk-based
capital ratio (the ratio of Tier 1, or "core", capital to risk-weighted assets)
of at least 6%, a leverage ratio (the ratio of Tier 1 capital to total assets)
of at least 5%, and must not be subject to any written agreement, order or
directive from its regulator relative to meeting and maintaining a specific
capital level. On December 31, 1999, the Company had a total risk-based capital
ratio of 14.78%, a Tier 1 risk-based capital ratio of 13.53% (based on Tier 1
capital of $89,272,000 and total risk-weighted assets of $659,631,000), and a
leverage ratio of 9.07%. The Company meets all of the requirements of the "Well
Capitalized" category and, accordingly, the Company does not expect these
regulations to significantly impact operations.
The Company is a corporation separate and distinct from its bank and other
subsidiaries. Most of the Company' revenues will be received by it in the form
of dividends or interest paid by its bank subsidiaries. These subsidiaries are
subject to statutory restrictions on its ability to pay dividends. The FRB has
issued a policy statement on the payment of cash dividends by bank holding
companies to the effect that a bank holding company should not pay cash
dividends exceeding its net income or which could only be funded in ways that
would weaken the bank holding company's financial health, such as by borrowing.
Additionally, the FRB possesses enforcement powers over bank holding companies
and their non-bank subsidiaries to prevent or remedy actions that represent
unsafe or unsound practices or violations of applicable statutes and
regulations. Among these powers is the ability in appropriate cases to proscribe
the payment of dividends by banks and bank holding companies. The FDIC, OCC, OTS
and DFI possess similar enforcement powers over the respective bank subsidiaries
of the Company for which they have supervision. The "prompt corrective action"
provisions of federal banking law impose further restrictions on the payment of
dividends by insured banks which fail to meet specified capital levels and, in
some cases, their parent bank holding companies.
Statistical Disclosures
The following statistical data should be read in conjunction with
Management's Discussion and Analysis (Item 7), Selected Financial Data (Item 6),
and the Financial Statements and Supplementary Data (Item 8) included elsewhere
herein through incorporation by reference to the indicated pages of the
Shareholders' Report.
Securities (dollars in thousands)
The following tables set forth the carrying amount of Securities at the dates
indicated:
December 31,
1999 1998 1997
---- ---- ----
Securities Held-to-Maturity:
U.S. Treasury and other
U.S. Government Agencies
and Corporations................................. $ --- $ 19,258 $ 49,345
State and Political Subdivisions...................... 29,288 27,591 24,983
Asset- / Mortgage-backed Securities................... 903 1,497 2,998
----------- ----------- ----------
Subtotal of SecuritiesHeld-to-Maturity........... 30,191 48,346 77,326
----------- ----------- ----------
Securities Available-for-Sale:
U.S. Treasury and other U.S.
Government Agencies and Corporations............. $ 92,326 $ 68,386 $ 67,990
State and Political Subdivisions...................... 26,487 30,455 21,670
Asset- / Mortgage-backed Securities................... 58,967 52,686 22,377
Equity Securities.................................... 10,368 --- ---
----------- ----------- ----------
Subtotal of Securities Available-for-Sale........ 188,148 151,527 112,037
----------- ----------- ----------
Total Securities............................. $ 218,339 $ 199,873 $189,363
=========== =========== ========
Statistical Disclosures (continued)
The following table sets forth for the periods indicated a summary of the
changes in interest income and interest expense resulting from changes in volume
and changes in rates (dollars in thousands):
.........
......... 1999 compared to 1998 1998 compared to 1997
--------------------- ---------------------
Increase / (Decrease) Due to (1) Increase / (Decrease) Due to (1)
----------------------------------------------------------------------------
Volume Rate Net Volume Rate Net
---------------------------------------------------------------------------
Interest Income:
Federal Funds Sold and.................
Other Short-term Investments....... $(691) $(185) $(876) $(103) $36 $ (67)
Taxable Securities..................... 1,115 198 1,313 (915) (115) (1,030)
Nontaxable Securities (2).............. 504 (149) 355 625 (2) 623
Loans and Leases (3)................... 4,708 (2,891) 1,817 3,817 (784) 3,033
------------------------------------------------------------------------------
Total Interest Income..................... 5,636 (3,027) 2,609 3,424 (865) 2,559
----------------------------------------------------------------------------
Interest Expense:
Savings and Interest-bearing Demand.... 385 (232) 153 282 (161) 121
Time Deposits.......................... 571 (1,314) (743) 584 (59) 525
FHLB Advances and Other Borrowings..... 1,781 (37) 1,744 218 7 225
------------------------------------------------------------------------------
Total Interest Expense.................... 2,737 (1,583) 1,154 1,084 (213) 871
------------------------------------------------------------------------------
Net Interest Income....................... $2,899 $(1,444) $1,455 $2,340 $(652) $1,688
==============================================================================
<FN>
(1) The change in interest due to both rate and volume has been allocated to
volume and rate changes in proportion to the relationship of the absolute dollar
amounts of the change in each.
(2) Change in interest income include the effect of tax equivalent adjustments
using a tax rate of 34 percent for all years presented.
(3) Interest income on loans includes loan fees of $877, $1,230, and $1,029 for 1999, 1998, and 1997, respectively.
</FN>
The following is a schedule of loans by major category for each reported period
(dollars in thousands):
December 31,
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
Real Estate Loans Secured by 1-4
Family Residential Properties............. $356,001 $295,788 $252,828 $244,414 $278,931
Loans to Finance Agricultural Production,
Poultry and Other Loans to Farmers........ 64,054 62,736 60,421 64,415 69,000
Commercial and Industrial Loans.............. 161,711 136,249 121,444 123,101 113,215
Loans to Individuals for Household, Family
and Other Personal Expenditures........... 112,870 104,024 92,126 77,990 76,675
------- ------- ------ ------ ------
Total Loans............................... $694,636 $598,797 $526,819 $509,920 $537,821
======== ======== ======== ======== ========
Statistical Disclosures (continued)
The following table indicates the amounts of loans (excluding residential
mortgages on 1-4 family residences and consumer loans) outstanding as of
December 31, 1999 which, based on remaining scheduled repayments of principal,
are due in the periods indicated (dollars in thousands).
Maturing
---------------------------------------------------------
Within After One After
One But Within Five
Year Five Years Years Total
---- ---------- ----- -----
Commercial, Agricultural and Poultry............. $64,023 $49,824 $111,918 $225,765
Interest Sensitivity
Fixed Variable
Rate Rate
Loans maturing after one year.... $100,956 $60,786
The Provision for Loan Losses provides a reserve (the Allowance for Loan
Losses) to which loan losses are charged as those losses become identifiable.
Management determines the appropriate level of the Allowance for Loan Losses on
a quarterly basis through an independent review by the Bank's credit review
section done by employees who have no direct lending responsibilities. Through
this review, all commercial loans with outstanding balances in excess of $25,000
are analyzed with particular attention paid to those loans which are considered
by management to have an above-average level of risk. This analysis is evaluated
by Senior Management and serves as the basis for determining the adequacy of the
Allowance for Loan Losses. Through this review process a specific portion of the
reserve is allocated to impaired loans and to those loans which are considered
to represent significant exposure to risk, and estimated potential losses are
provided based on historic loan loss experience for consumer loans, residential
mortgage loans, and commercial loans not specifically reviewed. In addition, a
balance of the reserve is unallocated to provide an allowance for risk, such as
concentrations of credit to specific industry groups, which are difficult to
quantify in an absolute dollar amount.
Nonperforming loans comprise: (a) loans accounted for on a nonaccrual basis
("nonaccrual loans"); (b) loans contractually past due 90 days or more as to
interest or principal payments (but not included in the loans in (a) above)
("past due loans"); and (c) loans not included above which are "troubled debt
restructuring" as defined in Statement of Financial Standards No. 15 "FASB 15",
"Accounting by Debtors and Creditors for Troubled Debt Restructuring"
("restructured loans"). The following table presents information concerning the
aggregate amount of nonperforming assets (dollars in thousands):
December 31,
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
Nonaccrual Loans................................. $7,237 $5,411 $3,568 $3,065 $2,478
Past Due Loans................................... 1,564 1,522 3,358 1,622 3,282
Restructured Loans............................... --- --- --- --- 122
--- --- --- --- ---
Total Nonperforming Loans.................... 8,801 6,933 6,926 4,687 5,882
Other Real Estate................................ 2,434 1,156 785 706 968
----- ----- --- --- ---
Total Nonperforming Assets................... $11,235 $8,089 $7,711 $5,393 $6,850
======= ====== ====== ====== ======
Interest income recognized on nonperforming loans for 1999 was $428,000.
The gross interest income that would have been recognized in 1999 on
nonperforming loans if the loans had been current in accordance with their
original terms is $815,000. Loans are placed on nonaccrual status when scheduled
principal or interest payments are past due for 90 days or more, unless the loan
is well secured and in the process of collection.
Accounting standards require recognition of loan impairment if a loan's
full principal or interest payments are not expected to be received. Loans
considered to be impaired are reduced to the present value of expected future
cash flows or to the fair value of collateral, by allocating a portion of the
allowance for loan losses to such loans. The total dollar amount of impaired
loans at December 31, 1999 was $2,230,000 and are included in the table above.
For additional detail on impaired loans, see Note 3 of the consolidated
financial statements included in the Shareholders' Report (Exhibit 13.4).
Statistical Disclosures (continued)
At December 31, 1999, in addition to nonperforming and impaired loans
above, the Company had a total of $6,021,000 of loans on its commercial loan
watch list. Loans may be placed on the watch list as a result of delinquent
status, concern about the borrower's financial condition or the value of the
collateral securing the loan, substandard classification during regulatory
examinations or simply as a result of management's desire to monitor more
closely a borrower's financial condition and performance.
It is management's belief that loans classified for regulatory purposes as
loss, doubtful, substandard, or special mention that are not included in the
table and discussion above, do not represent or result from trends or
uncertainties which will have a material impact on future operating results,
liquidity or capital resources. At December 31, 1999 there were no material
credits not already disclosed as nonperforming, impaired or as watch list about
which management is aware of possible credit problems of borrowers which causes
management to have serious doubts as to the ability of such borrowers to comply
with the loan repayment terms. This paragraph includes forward-looking
statements that are based on management's assumptions concerning future economic
and business conditions as they affect the local economy in general and the
Company's borrowers in particular, which economic and business assumptions are
inherently uncertain and subject to risk and may prove to be invalid. Readers
are also cautioned that management relies upon the truthfulness of statements
made by the borrowers, and that misrepresentation by borrowers is an inherent
risk of the activity of lending money that could cause these forward-looking
statements to be inaccurate. Actual results may differ materially from those
expressed or implied by the foregoing forward-looking statements due to the
above risks and other factors.
Summary of Loan Loss Experience
The following table summarizes changes in the allowance for loan losses
arising from loans charged-off and recoveries on loans previously charged-off,
by loan category, and additions to the allowance which have been charged to
expense (dollars in thousands).
Year Ended December 31,
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
Balance of allowance for possible
losses at beginning of period...................... $8,323 $8,574 $8,040 $8,430 $8,142
Addition of Affiliate Banks........................... 356 80 --- --- ---
Loans charged-off:
Real Estate Loans Secured by 1-4 Family
Residential Properties......................... 815 627 122 67 236
Loans to Finance Agricultural Production, Poultry
and Other Loans to Farmers......................... 222 --- --- 286 ---
Commercial and Industrial Loans....................... 184 342 401 481 107
Loans to Individuals for Household, Family
and Other Personal Expenditures.................... 784 1,075 543 321 281
--- ----- --- --- ---
Total Loans charged-off............................ 2,005 2,044 1,066 1,155 624
----- ----- ----- ----- ---
Recoveries of previously charged-off Loans:
Real Estate Loans Secured by 1-4 Family
Residential Properties......................... 100 76 1 27 6
Loans to Finance Agricultural Production, Poultry
and Other Loans to Farmers......................... 135 19 66 125 560
Commercial and Industrial Loans....................... 37 73 665 126 66
Loans to Individuals for Household, Family
and Other Personal Expenditures.................... 204 207 95 59 83
--- --- -- -- --
Total Recoveries................................... 476 375 827 337 715
--- --- --- --- ---
Net Loans recovered / (charged-off).................. (1,529) (1,669) (239) (818) 91
------ ------ ---- ---- --
Additions to allowance charged to expense............. 1,718 1,338 773 428 197
----- ----- --- --- ---
Balance at end of period.............................. $8,868 $8,323 $8,574 $8,040 $8,430
====== ====== ====== ====== ======
Ratio of net recoveries / (charge-offs) during
the period to average loans outstanding.......... (0.24)% (0.28)% (0.04)% (0.15)% 0.02%
===== ===== ===== ==== ====
Statistical Disclosures (continued)
The following table indicates the breakdown of the allowance for loan losses
for the periods indicated (dollars in thousands):
December 31, December 31, December 31,
1999 1998 1997
---- ---- ----
Ratio of Ratio of Ratio of
Loans to Loans to Loans to
Total Total Total
Allowance Loans Allowance Loans Allowance Loans
--------- ----- --------- ----- --------- -----
Residential Real Estate.............. $1,888 51.25% $1,161 49.40% $893 47.99%
Agricultural Loans................... 615 9.22% 902 10.48% 1,001 11.47%
Commercial and
Industrial Loans.................. 3,963 23.28% 2,878 22.75% 3,084 23.05%
Loans to Individuals................. 871 16.25% 1,000 17.37% 1,039 17.49%
Unallocated.......................... 1,531 N/A 2,382 N/A 2,557 N/A
----- ----- -----
Totals............................... $8,868 100.00% $8,323 100.00% $8,574 100.00%
====== ====== ======
December 31, December 31,
1996 1995
---- ----
Ratio of Ratio of
Loans to Loans to
Total Total
Allowance Loans Allowance Loans
--------- ----- --------- -----
Residential Real Estate.............. $631 47.94% $482 51.86%
Agricultural Loans................... 1,322 12.63% 2,693 12.83%
Commercial and
Industrial Loans................. 2,997 24.14% 2,722 21.05%
Loans to Individuals................. 795 15.29% 788 14.26%
Unallocated.......................... 2,295 N/A 1,745 N/A
----- -----
Totals ............................. $8,040 100.00% $8,430 100.00%
====== ======
Return on Equity and Assets
The ratio of net income to average shareholders' equity and to average total
assets, and certain other ratios, are as follows:
Year Ended December 31,
1999 1998 1997
---- ---- ----
Percentage of Net Income to:
Average Shareholders' Equity..................... 9.61% 9.67% 8.93%
Average Total Assets............................. .94% .99% .88%
Percentage of Dividends
Declared per Common Share
to Net Income per Common Share (1)............... 51.04% 46.24% 44.30%
Percentage of Average Shareholders' Equity to
Average Total Assets............................. 9.77% 10.21% 9.83%
<FN>
(1) Based on historical dividends declared by German American Bancorp without
restatement for pooling.
</FN>
Statistical Disclosures (continued)
The average amount of deposits is summarized for the periods indicated in
the following table (dollars in thousands):
December 31,
1999 1998 1997
---- ---- ----
Average Average Average
Balance Rate Balance Rate Balance Rate
------- ---- ------- ---- ------- ----
Demand Deposits
Non-interest Bearing............... $70,665 --- $58,267 --- $55,483 ---
Interest Bearing................... 80,822 1.90% 69,492 1.84% 69,491 2.23%
Savings Deposits....................... 104,303 3.13% 101,025 3.33% 90,792 3.27%
Time Deposits.......................... 435,922 5.29% 425,534 5.59% 415,093 5.61%
------- ------- -------
Totals............................. $691,712 4.03% $654,318 4.35% $630,859 4.41%
======== ======== ========
Maturities of time certificates of deposit of $100,000 or more are summarized
as follows:
December 31,
1999
3 months or less............................... $53,410
Over 3 through 6 months........................ 12,419
Over 6 through 12 months....................... 11,453
Over 12 months................................. 26,390
------
Total....................................... $103,672
========
Forward-Looking Statements
This Report contains statements relating to future results of the Company that
are considered "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements relate to, among
other things, adequacy of allowance for loan losses; simulations of changes in
interest rates; litigation results; and dividend policy. Actual results may
differ materially from those expressed or implied as a result of certain risks
and uncertainties, including, but not limited to, changes in economic
conditions; interest rate fluctuations; competitive product and pricing
pressures within the Company's markets; equity and fixed income market
fluctuations; and personal and corporate customers' bankruptcies.
Results may also differ materially due to inflation; acquisitions and
integrations of acquired businesses; technological change; changes in law;
changes in fiscal, monetary, regulatory and tax policies; success in gaining
regulatory approvals when required; the continued availability of earnings and
excess capital sufficient for the lawful and prudent declaration and payment of
cash dividends; as well as other risks and uncertainties detailed elsewhere in
this Annual Report and from time to time in the filings of the Company with the
Securities and Exchange Commission. Such forward-looking statements speak only
as of the date on which such statements are made, and the Company undertakes no
obligation to update any forward-looking statement to reflect events or
circumstances after the date on which such statement is made or to reflect the
occurrence of unanticipated events.
Item 2. Properties.
- ------------------
The Company conducts its operations from the main office building of
German American Bank at 711 Main Street, in Jasper, Indiana. The main office
building contains approximately 23,600 square feet of office space. The Banks
and other subsidiaries conduct their operations from 29 other locations in
Southwest Indiana.
Item 3. Legal Proceedings.
- -------------------------
There are no material pending legal proceedings, other than routine
litigation incidental to the business of the Company's subsidiary banks, to
which the Company or any of its subsidiaries is a party or of which any of their
property is the subject.
Item 4. Submission of Matters to a Vote of Security Holders.
- ------------------------------------------------------------
There were no matters submitted during the fourth quarter of 1999 to a
vote of security holders, by solicitation of proxies or otherwise.
Special Item. Executive Officers of the Registrant.
- ------------- -------------------------------------
NAME AGE TITLE AND FIVE YEAR HISTORY
George W. Astrike (64) Chairman of the Board for the Company since January 1, 1999; Chairman and Chief
Executive Officer of the Company from 1995 through 1998; Chairman of German American
Bank since 1995; Chairman and President of German American Bank prior thereto.
Director of Citizens State Bank and First American Bank from date of Acquisition
through April 1999. Director of all other subsidiaries since acquisition by the
Company.
Mark A. Schroeder (46) President and Chief Executive Officer since January 1, 1999; President and Chief
Operating Officer of the Company from 1995 through 1998; Vice President / Chief
Operating Officer prior thereto. Director of each of the other subsidiaries since
acquisition by the Company.
Clay W. Ewing (44) Executive Vice President - Retail Banking of German American Bancorp since May, 1999;
Director of First American Bank since May, 1999; President and Chief Executive Officer
of First State Bank since 1995. Director of First State Bank since 1994.
Stan J. Ruhe (48) Executive Vice President - Credit Administration of the Company since 1995; Director of
Citizens State Bank since May, 1999; Executive Vice President of German American Bank
since 1995; Senior Vice President - Credit Administration prior thereto.
Richard E. Trent (41) Senior Vice President and Chief Financial Officer since April 1999; Vice President and
Chief Financial Officer of the Company since December, 1997; Vice President, Budgets &
Financial Analysis of CNB Bancshares from January, 1997; Manager of Finance and
Planning, Wells Fargo Bank from August, 1996; Various financial officer capacities
within American General Finance, Inc. and subsidiaries prior thereto.
<FN>
Messrs. Schroeder, Ruhe and Astrike have been associated with the Company in various capacities since 1972, 1982, and 1983,
respectively.
There are no family relationships between any of the officers of the
Corporation. All officers are elected for a term of one year.
</FN>
PART II
The information in Part II of this report is incorporated by reference to
the indicated sections of the Registrant's annual report to shareholders for the
fiscal year ended December 31, 1999 ("Shareholders' Report").
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters.
- ------------------------------------------------------------------------------
See "Market and Dividend Information" on page 37 of the Shareholders'
Report which is filed as Exhibit 13.1 to this report and is incorporated herein
by reference. "Market and Dividend Information" that is incorporated by
reference herein contains statements relating to future results of the Company
that are considered "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995, including dividend policy.
Actual results may differ materially from those expressed or implied therein as
a result of certain risks and uncertainties, including those risks and
uncertainties expressed in "Market and Dividend Information," and those risks
and uncertainties that are described in Item 1 of this report, "Business," under
the caption "Forward-Looking Statements," which description is incorporated
herein by reference.
Item 6. Selected Financial Data.
- ---------------------------------
See "Five Year Summary of Consolidated Financial Statements and Related
Statistics" on page 1 of the Shareholders' Report which is filed as Exhibit 13.2
to this report and is incorporated herein by reference.
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
- --------------------------------------------------------------------------------
See "Management's Discussion and Analysis" on pages 2 through 13 of the
Shareholders' Report which is filed as Exhibit 13.3 to this report and is
incorporated herein by reference.
"Management's Discusision and Analysis" that is incorporated by reference
herein contains statements relating to future results of the Company that are
considered "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements relate to, among
other things, adequacy of allowance of loan losses; simulation of changes in
interest rates; litigation results; and dividend policy. Actual results may
differ materially from those expressed or implied therein as a result of certain
risks and uncertainties, including those risks and uncertainties expressed in
"Management's Discussion and Analysis," and those risks and uncertainties that
are described in Item 1 of this report, "Business," under the caption
"Forward-Looking Statements," which description is incorporated herein by
reference.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
- ---------------------------------------------------------------------
The Company's exposure to market risk is reviewed on a regular basis by
the Asset/Liability Committees and Boards of Directors of the holding company
and its affiliate banks. Primary market risks which impact the Company's
operations are liquidity risk and interest rate risk.
The liquidity of the parent company is dependent upon the receipt of
dividends from its bank subsidiaries, which are subject to certain regulatory
limitations explained in Note 9 to the consolidated financial statements in the
Company's Shareholders' Report. The affiliate banks' source of funding is
predominately core deposits, maturities of securities, repayments of loan
principal and interest, federal funds purchased, securities sold under
agreements to repurchase and long-term borrowings from the Federal Home Loan
Bank. Further detail is provided in the sections entitled SOURCES OF FUNDS and
USES OF FUNDS contained in Management's Discussion and Analysis in the Company's
Shareholders' Report, which is filed as Exhibit 13.3 to this report and is
incorporated by reference herein.
The Company monitors interest rate risk by the use of computer simulation
modeling to estimate the potential impact on its net interest income under
various interest rate scenarios, and by estimating its static interest rate
sensitivity position. Management's approach to monitoring and mitigating these
risks is explained in the LIQUIDITY AND INTEREST RATE RISK MANAGEMENT section of
Management's Discussion and Analysis in the Company's Shareholders' Report.
Another method by which the Company's interest rate risk position can be
estimated is by computing estimated changes in its net portfolio value ("NPV").
This method estimates interest rate risk exposure from movements in interest
rates by using interest rate sensitivity analysis to determine the change in the
NPV of discounted cash flows from assets and liabilities. NPV represents the
market value of portfolio equity and is equal to the estimated market value of
assets minus the estimated market value of liabilities. Computations are based
on a number of assumptions, including the relative levels of market interest
rates and prepayments in mortgage loans and certain types of investments. These
computations do not contemplate any actions management may undertake in response
to changes in interest rates, and should not be relied upon as indicative of
actual results. In addition, certain shortcomings are inherent in the method of
computing NPV. Should interest rates remain or decrease below current levels,
the proportion of adjustable rate loans could decrease in future periods due to
refinancing activity. In the event of an interest rate change, prepayment levels
would likely be different from those assumed in the table. Lastly, the ability
of many borrowers to repay their adjustable rate debt may decline during a
rising interest rate environment.
The table below provides an assessment of the risk to NPV in the event of
sudden and sustained 1% and 2% increases and decreases in prevailing interest
rates. The table indicates that as of December 31, 1999 the Company's estimated
NPV might be expected to decrease in the event of an increase in prevailing
interest rates, and might be expected to increase in the event of a decrease in
prevailing interest rates (dollars in thousands).
Interest Rate Sensitivity as of December 31, 1999
Net Portfolio Value
Net Portfolio as a % of Present Value
Value of Assets
----- ---------
Changes
In rates $ Amount $ Change NPV Ratio Change
-------- -------- -------- --------- ------
+2% $62,795 (23.0)% 6.66% 161 b.p.
+1% 73,014 (10.5) 7.57 70 b.p.
Base 81,584 --- 8.27 ---
-1% 90,506 10.9 8.95 68 b.p.
-2% 87,989 7.9 8.65 38 b.p.
The above discussion, and the portions of "Management's Discusision and
Analysis" that are incorporated by reference into the above discussion, contains
statements relating to future results of the Company that are considered
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements relate to, among other things,
simulation of changes in interest rates. Actual results may differ materially
from those expressed or implied therein as a result of certain risks and
uncertainties, including those risks and uncertainties expressed above, those
that are described in "Management's Discussion and Analysis," and those that are
described in Item 1 of this report, "Business," under the caption
"Forward-Looking Statements," which description is incorporated herein by
reference.
Item 8. Financial Statements and Supplementary Data.
- -----------------------------------------------------
The financial statements of the Company and related notes on pages 14
through 35 of the Shareholders' Report and the Independent Auditors' Report
thereon on page 36 of the Shareholders' Report which are filed as Exhibit 13.4
to this report, are incorporated herein by reference.
The financial statements of the Company and related notes that are
incorporated by reference herein may contain statements relating to future
results of the Company that are considered "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995. These
statements relate to, among other things, adequacy of allowance of loan losses;
simulation of changes in interest rates; litigation results; and dividend
policy. Actual results may differ materially from those expressed or implied
therein as a result of certain risks and uncertainties, including those risks
and uncertainties expressed in such financial statements and those risks and
uncertainties that are described in Item 1 of this report, "Business," under the
caption "Forward-Looking Statements," which description is incorporated herein
by reference.
The Interim Financial Data on page 6 of the Shareholders' Report, which
is included in the "Management's Discussion and Analysis" filed as Exhibit 13.3
to this report, is incorporated herein by reference.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
- --------------------------------------------------------------------------------
Not Applicable.
PART III
Item 10. Directors and Executive Officers of the Registrant.
- -------------------------------------------------------------
Information relating to Directors of the Corporation will be included
under the caption "Election of Directors" in the Company's Proxy Statement for
the Annual Meeting of Shareholders to be held on April 27, 2000 which will be
filed with the Commission within 120 days of the end of the fiscal year covered
by this Report (the "2000 Proxy Statement"), which section is incorporated
herein by reference in partial answer to this Item.
Information relating to Executive Officers of the Corporation is included
under the caption "Executive Officers of the Registrant" under Part I of this
Report on Form 10-K, and is incorporated herein by reference.
Item 11. Executive Compensation.
- ---------------------------------
Information relating to compensation of the Corporation's Executive
Officers and Directors will be included under the captions "Executive
Compensation" and "Election of Directors -- Compensation of Directors" in the
2000 Proxy Statement of the Corporation, which sections are incorporated herein
by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
- -------------------------------------------------------------------------
Information relating to security ownership of certain beneficial owners
and management of the Corporation will be included under the captions "Election
of Directors" and "Principal Owners of Common Shares" of the 2000 Proxy
Statement of the Corporation, which sections are incorporated herein by
reference.
Item 13. Certain Relationships and Related Transactions.
- ---------------------------------------------------------
Information responsive to this Item 13 will be included under the
captions "Executive Compensation - Certain Business Relationships and
Transactions" and "Executive Compensation - Compensation Committee Interlocks
and Insider Participation" of the 2000 Proxy Statement of the Corporation, which
sections are incorporated herein by reference.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
- ---------------------------------------------------------------------------
a) The following Consolidated Financial Statements of the Corporation, and the
Auditors' Report therein, included on pages 14 through 36 of the Shareholders'
Report, are incorporated into Item 8 of this report by reference.
Location in
Shareholders' Report
--------------------
1. Financial Statements
German American Bancorp and Subsidiaries
Consolidated Balance Sheets at December 31,
1999 and December 31, 1998 Page 14
Consolidated Statements of Income, years
ended December 31, 1999, 1998, and 1997 Page 15
Consolidated Statements of Cash Flows, years
ended December 31, 1999, 1998, and 1997 Page 16
Consolidated Statements of Changes in
Shareholders' Equity, years ended
December 31, 1999, 1998, and 1997 Page 17
Notes to the Consolidated Financial
Statements Pages 18 - 35
Independent Auditors' Report Page 36
2. Other financial statements and schedules are omitted because they are
not required or because the required information is included in the
consolidated financial statements or related notes.
b) Reports on Form 8-K
No reports on Form 8-K were filed by the Registrant during the quarter
ended December 31, 1999.
c) Exhibits:
The Exhibits described in the Exhibit List immediately following the
"Signatures" pages of this report (which are incorporated herein by reference)
are hereby filed as part of this report.
Pursuant to the requirements of Section 13 of the Securities Exchange Act of
1934, the Registrant has duly caused this Report to be signed on its behalf by
the undersigned thereunto duly authorized.
GERMAN AMERICAN BANCORP
(Registrant)
Date: March 28 , 2000 By/s/Mark A. Schroeder
---------------- ----------------------
Mark A. Schroeder, President and Director
Chief Executive Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Date: March 28 , 2000 By/s/Mark A. Schroeder
---------------- ----------------------
Mark A. Schroeder, President and Director
(Chief Executive Officer)
Date: March 28 , 2000 By/s/George W. Astrike
---------------- ----------------------
George W. Astrike, Director
Date: March 28 , 2000 By/s/David G. Buehler
---------------- ---------------------
David G. Buehler, Director
Date:
---------------- --------------------
David B. Graham, Director
Date:
---------------- -----------------------
William R. Hoffman, Director
Date:
---------------- --------------------
Michael B. Lett, Director
Date:
---------------- -----------------------
C. James McCormick, Director
Date: March 28 , 2000 By/s/Gene C. Mehne
---------------- ------------------
Gene C. Mehne, Director
Date: March 28 , 2000 By/s/Robert L. Ruckriegel
---------------- -------------------------
Robert L. Ruckriegel, Director
Date: March 28 , 2000 By/s/Larry J. Seger
---------------- -------------------
Larry J. Seger, Director
Date: March 28 , 2000 By/s/Joseph F. Steurer
---------------- ----------------------
Joseph F. Steurer, Director
Date:
---------------- ------------------
C.L. Thompson, Director
Date:
---------------- ----------------------
Michael J. Voyles, Director
Date: March 28 , 2000 By/s/Richard E. Trent
---------------- ---------------------
Richard E. Trent, Senior Vice President
(Chief Financial Officer and
Principal Accounting Officer)
Executive
Compensation
Plans and Exhibit
Arrangements* Number Exhibit List
- ------------- ------ ------------
2.1 Agreement of Merger dated December 8, 1997, among the Registrant, CSB Bancorp
and the Citizens State Bank of Petersburg, as amended, is incorporated by
reference from Exhibit 2.1 to the Registrant's Registration Statement on Form
S-4 filed February 26, 1998.
2.2 Agreement of Merger dated January 30, 1998, among the Registrant, FSB
Corporation and the FSB Bank of Francisco, as amended, is incorporated by
reference from Exhibit 2.2 to the Registrant's Registration Statement on Form
S-4 filed February 26, 1998.
2.3 Agreement and Plan of Reorganization between the Registrant and 1ST BANCORP
dated August 6, 1998, is incorporated by reference from Exhibit 2 to the
Registrant's Registration Statement on Form S-4 filed October 14, 1998.
3.1 Restated Articles of Incorporation of the Registrant as amended April 23, 1998
are Incorporated by reference to Exhibit 3 to Registrant''s Quarterly Report on
Form 10-Q for the quarter ended June 30, 1998.
3.2 Restated Bylaws of the Registrant as amended August 14, 1990, are incorporated
by reference to Exhibit 3.2 to Registrant's Form 10-K for the year ended
December 31, 1995.
4 No long-term debt instrument issued by the Registrant exceeds 10% of
consolidated total assets. In accordance with paragraph 4 (iii) of Item 601(b)
of Regulation S-K, the Registrant will furnish the Securities and Exchange
Commission upon request copes of long-term debt instruments and related
agreements.
X 10.1 The Registrant's 1992 Stock Option Plan, as ammended, is incorporated by
reference from Exhibit 10.1 to the Registrant's Registration Statement on Form
S-4 filed October 14, 1998.
X 10.2 Schedule identifying material terms of Incentive Stock Options (including
replacement options) granted to the Registrant's executive officers under the
Registrant's 1992 Stock Option Plan.
X 10.3 Executive Deferred Compensation Agreement dated December 1, 1992, between The
German American Bank and George W. Astrike, is incorporated herein by reference
from Exhibit 10.3 to the Registrant's Registration Statement on Form S-4 filed
January 21, 1993.
X 10.4 Director Deferred Compensation Agreement between The German American Bank and
certain of its Directors, is incorporated herein by reference from Exhibit 10.4
to the Registrant's Registration Statement on Form S-4 filed January 21, 1993
(The Agreement entered into by George W. Astrike, a copy of which was filed as
Exhibit 10.4 to the Registrant's Registration Statement on Form S-4 filed
January 21, 1993, is substantially identical to the Agreements entered into by
the other Directors.) The schedule following Exhibit 10.4 lists the Agreements
with the other Directors and sets forth the material detail in which such
Agreements differ from the Agreement filed as Exhibit 10.4.
Executive
Compensation
Plans and Exhibit
Arrangements* Number Exhibit List
- ------------- ------ ------------
X 10.5 Stock Option Agreement between the Registrant and George W. Astrike dated
September 2, 1998 is incorporated by reference or from Exhibit 10.9 to the
Registrant's Registration Statement on Form S-4 filed October 14, 1998.
X 10.6 Non-Qualified Index Executive Supplemental Agreement dated September 1, 1998
between the Registant and George W. Astrike is incorporated by reference from
Exhibit 10.10 to the Registrant's 1998 form 10-K filed March 26, 1999.
X 10.7 Split Dollar Life Insurance Plan Agreement dated November 5, 1998 between the
Registrant and George W. Astrike is incorporated by reference from Exhibit
10.11 to the Registrant's 1998 form 10-K filed March 26, 1999.
X 10.8 Consulting Agreement dated August 21, 1998 between the Registrant and George W.
Astrike.
13.1 Market and Dividend Information (page 37) of the Registrant's Annual Report to
Shareholders for the year ended December 31, 1999.
13.2 Five Year Summary of Consolidated Financial Statements and Related Statistics
(page 1) of the Registrant's Annual Report to Shareholders for the year ended
December 31, 1999.
13.3 Management's Discussion and Analysis of Financial Condition and Results of
Operations (pages 2 through 13) of the Registrant's Annual Report to
Shareholders for the year ended December 31, 1999.
13.4 Consolidated financial statements and related notes (pages 14 through 35),
Auditor's Report (page 36) of the Registrant's Annual Report to Shareholders
for the year ended December 31, 1999.
21 Subsidiaries of the Registrant.
23.1 Consent of Crowe, Chizek and Company LLP
23.2 Consent of Gaither, Rutherford & Co., LLP
23.3 Consent of KPMG LLP
27 Financial Data Schedule.
99.1 Opinion of Gaither, Rutherford & Co., LLP
99.2 Opinion of KPMG LLP