UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] Quarterly Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the Quarterly Period Ended September 30, 2001
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, Jasper, Indiana 47546
(Address of Principal Executive Offices and Zip Code)
Registrant's telephone number, including area code: (812) 482-1314
Indicate by check 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
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at November 1, 2001
Common Stock, No par value 10,510,321
GERMAN AMERICAN BANCORP
INDEX
PART I. FINANCIAL INFORMATION
Item 1.
Consolidated Balance Sheets - September 30, 2001 and December 31, 2000
Consolidated Statements of Income and Comprehensive Income -- Three
and Nine months Ended September 30, 2001 and 2000
Consolidated Statements of Cash Flows -- Nine months Ended September
30, 2001 and 2000
Notes to Consolidated Financial Statements -- September 30, 2001
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
GERMAN AMERICAN BANCORP
CONSOLIDATED BALANCE SHEETS
(dollars in thousands except per share data)
September 30, December 31,
2001 2000
------------ -----------
(unaudited)
ASSETS
Cash and Due from Banks................................................ $ 23,975 $ 26,987
Federal Funds Sold and Other Short-term Investments.................... 72,972 1,460
------------ -----------
Cash and Cash Equivalents......................................... 96,947 28,447
Interest-bearing Time Deposits with Banks.............................. 299 1,495
Securities Available-for-Sale, at Market .............................. 142,546 185,188
Securities Held-to-Maturity, at Cost .................................. 23,283 28,454
Loans Held for Sale.................................................... 7,289 71,372
Total Loans............................................................ 671,328 710,119
Less: Unearned Income................................................. (617) (375)
Allowance for Loan Losses....................................... (8,702) (9,274)
------------ -----------
Loans, Net............................................................. 662,009 700,470
Stock in FHLB of Indianapolis, and Other Restricted Stock, at cost..... 12,596 12,596
Premises, Furniture and Equipment, Net................................. 20,804 21,065
Other Real Estate...................................................... 1,048 1,579
Intangible Assets...................................................... 2,062 2,147
Accrued Interest Receivable and Other Assets........................... 24,322 26,995
------------ -----------
TOTAL ASSETS.................................................... $ 993,205 $ 1,079,808
============ ===========
LIABILITIES
Noninterest-bearing Demand Deposits.................................... $ 88,178 $ 89,146
Interest-bearing Demand, Savings and Money Market Accounts............. 217,218 194,093
Time Deposits < $100,000............................................... 345,173 350,854
Time Deposits of $100,000 or more and Brokered Deposits................ 52,392 101,477
------------ -----------
Total Deposits.................................................... 702,961 735,570
FHLB Advances and Other Borrowings..................................... 175,941 235,230
Accrued Interest Payable and Other Liabilities......................... 11,587 11,748
------------ -----------
TOTAL LIABILITIES............................................... 890,489 982,548
SHAREHOLDERS' EQUITY
Common Stock, no par value, $1 stated value;
20,000,000 shares authorized...................................... 10,510 10,495
Preferred Stock, $10 par value; 500,000
shares authorized, no shares issued .............................. --- ---
Additional Paid-in Capital............................................. 63,194 63,175
Retained Earnings...................................................... 27,311 24,353
Accumulated Other Comprehensive Income (Loss) ......................... 1,701 (763)
------------ -----------
TOTAL SHAREHOLDERS' EQUITY...................................... 102,716 97,260
------------ -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY...................... $ 993,205 $ 1,079,808
============ ===========
End of period shares issued and outstanding............................ 10,510,317 10,494,708
============ ===========
<FN>
See accompanying notes to consolidated financial statements.
</FN>
- 3 -
GERMAN AMERICAN BANCORP
CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME
(unaudited, dollars in thousands except per share data)
Three months Ended
September 30,
2001 2000
--------- ---------
INTEREST INCOME
Interest and Fees on Loans............................................. $ 14,293 $ 16,468
Interest on Federal Funds Sold and Other Short-term Investments........ 666 134
Interest and Dividends on Securities:
Taxable............................................................. 1,435 2,805
Non-taxable......................................................... 926 861
--------- ---------
TOTAL INTEREST INCOME............................................. 17,320 20,268
INTEREST EXPENSE
Interest on Deposits................................................... 6,789 8,092
Interest on FHLB Advances and Other Borrowings......................... 2,760 3,747
--------- ---------
TOTAL INTEREST EXPENSE............................................ 9,549 11,839
--------- ---------
NET INTEREST INCOME.................................................... 7,771 8,429
Provision for Loan Losses.............................................. 165 371
--------- ---------
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES................................................... 7,606 8,058
NONINTEREST INCOME
Trust and Investment Product Fees...................................... 385 375
Service Charges on Deposit Accounts.................................... 692 572
Insurance Revenues..................................................... 671 630
Other Income........................................................... 235 300
Net Gains on Sales of Loans and Related Assets, and Provision for
Losses on Loans Held for Sale....................................... 403 86
Net Gain / (Loss) on Sales of Securities............................... --- ---
--------- ---------
TOTAL NONINTEREST INCOME.......................................... 2,386 1,963
--------- ---------
NONINTEREST EXPENSE
Salaries and Employee Benefits......................................... 3,912 3,888
Occupancy Expense...................................................... 507 478
Furniture and Equipment Expense........................................ 477 526
Data Processing Fees................................................... 277 237
Professional Fees...................................................... 99 325
Advertising and Promotions............................................. 258 220
Supplies............................................................... 189 204
Other Operating Expenses............................................... 1,056 1,101
--------- ---------
TOTAL NONINTEREST EXPENSE......................................... 6,775 6,979
--------- ---------
Income before Income Taxes............................................. 3,217 3,042
Income Tax Expense..................................................... 774 620
--------- ---------
NET INCOME............................................................. $ 2,443 $ 2,422
========= =========
COMPREHENSIVE INCOME................................................... $ 3,246 $ 2,345
========= =========
Earnings Per Share and Diluted Earnings Per Share...................... $ 0.23 $ 0.23
Dividends Per Share.................................................... $ 0.14 $ 0.13
<FN>
See accompanying notes to consolidated financial statements.
</FN>
- 4 -
GERMAN AMERICAN BANCORP
CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME
(unaudited, dollars in thousands except per share data)
Nine months Ended
September 30,
2001 2000
--------- ---------
INTEREST INCOME
Interest and Fees on Loans............................................. $ 45,012 $ 47,913
Interest on Federal Funds Sold and Other Short-term Investments........ 1,636 421
Interest and Dividends on Securities:
Taxable............................................................. 5,453 8,441
Non-taxable......................................................... 2,639 2,610
--------- ---------
TOTAL INTEREST INCOME............................................. 54,740 59,385
INTEREST EXPENSE
Interest on Deposits................................................... 21,700 23,705
Interest on FHLB Advances and Other Borrowings......................... 8,836 10,009
--------- ---------
TOTAL INTEREST EXPENSE............................................ 30,536 33,714
--------- ---------
NET INTEREST INCOME.................................................... 24,204 25,671
Provision for Loan Losses.............................................. 495 1,036
--------- ---------
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES................................................... 23,709 24,635
NONINTEREST INCOME
Trust and Investment Product Fees...................................... 976 1,073
Service Charges on Deposit Accounts.................................... 1,849 1,563
Insurance Revenues..................................................... 2,461 1,771
Other Income........................................................... 1,021 919
Net Gains on Sales of Loans and Related Assets, and Provision for
Losses on Loans Held for Sale....................................... 1,126 125
Net Gain / (Loss) on Sales of Securities............................... 1 (8)
--------- ---------
TOTAL NONINTEREST INCOME.......................................... 7,434 5,443
--------- ---------
NONINTEREST EXPENSE
Salaries and Employee Benefits......................................... 12,159 11,589
Occupancy Expense...................................................... 1,505 1,460
Furniture and Equipment Expense........................................ 1,442 1,565
Data Processing Fees................................................... 791 656
Professional Fees...................................................... 560 789
Advertising and Promotions............................................. 793 665
Supplies............................................................... 538 612
Other Operating Expenses............................................... 3,478 3,354
--------- ---------
TOTAL NONINTEREST EXPENSE......................................... 21,266 20,690
--------- ---------
Income before Income Taxes............................................. 9,877 9,388
Income Tax Expense..................................................... 2,509 2,329
--------- ---------
NET INCOME............................................................. $ 7,368 $ 7,059
========= =========
COMPREHENSIVE INCOME................................................... $ 9,832 $ 7,756
========= =========
Earnings Per Share and Diluted Earnings Per Share...................... $ 0.70 $ 0.67
Dividends Per Share.................................................... $ 0.42 $ 0.39
<FN>
See accompanying notes to consolidated financial statements.
</FN>
- 5 -
GERMAN AMERICAN BANCORP
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, dollar references in thousands)
Nine months Ended
September 30,
2001 2000
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income............................................................. $ 7,368 $ 7,059
Adjustments to Reconcile Net Income to Net Cash
from Operating Activities:
Net (Accretion) / Amortization on Securities...................... 179 112
Depreciation and Amortization..................................... 1,812 1,806
Amortization of Mortgage Servicing Rights.............................. 142 140
Net Change in Loans Held for Sale................................. 63,973 657
Loss on Investment in Limited Partnership......................... 196 138
Provision for Loan Losses......................................... 495 1,036
Loss / (Gain) on Sale of Securities............................... (1) 8
Loss / (Gain) on Sales of Loans and Related Assets,
and Provision for Losses on Loans Held for Sale................. (1,126) (125)
Loss / (Gain) on Sale of Property and Equipment................... (188) ---
Change in Assets and Liabilities:
Interest Receivable and Other Assets............................ 1,829 914
Interest Payable and Other Liabilities.......................... (161) (250)
--------- ---------
Total Adjustments............................................ 67,150 4,436
--------- ---------
Net Cash from Operating Activities............................ 74,518 11,495
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Change in Interest-bearing Balances with Banks...................... 1,196 4,386
Proceeds from Maturities of Securities Available-for-Sale........... 101,537 11,002
Proceeds from Sale of Securities Available-for-Sale................. --- 742
Purchase of Securities Available-for-Sale........................... (49,327) (4,717)
Proceeds from Maturities of Securities Held-to-Maturity............. 57 3,248
Purchase of Securities Held-to-Maturity............................. (540) (3,067)
Purchase of Loans................................................... --- (1,472)
Proceeds from Sales of Loans........................................ 2,290 500
Loans Made to Customers, net of Payments Received................... 34,819 (37,908)
Proceeds from Sale of Mortgage Servicing Rights..................... --- 481
Proceeds from Sales of Other Real Estate............................ 1,813 3,652
Property and Equipment Expenditures................................. (1,474) (1,277)
Proceeds from the Sale of Property and Equipment ................... 346 ---
Acquire Affiliates and Adjust to Conform Fiscal Years............... (150) (298)
--------- ---------
Net Cash from Investing Activities.............................. 90,567 (24,728)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Change in Deposits.................................................. (32,609) (9,588)
Change in Short-term Borrowings........................................ (41,758) (29,156)
Advances of Long-term Debt.......................................... --- 122,850
Repayments of Long-term Debt........................................ (17,531) (71,636)
Issuance of Common Stock............................................ 17 79
Purchase / Retirement of Common Stock............................... (93) ---
Employee Stock Purchase Plan........................................ (201) (40)
Dividends Paid...................................................... (4,410) (3,813)
--------- ---------
Net Cash from Financing Activities.............................. (96,585) 8,696
--------- ---------
Net Change in Cash and Cash Equivalents................................ 68,500 (4,537)
Cash and Cash Equivalents at Beginning of Year...................... 28,447 29,578
--------- ---------
Cash and Cash Equivalents at End of Period.......................... $ 96,947 $ 25,041
========= =========
Non-cash Investing Activities--See Note 5
<FN>
See accompanying notes to consolidated financial statements.
</FN>
- 6 -
GERMAN AMERICAN BANCORP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2001
(unaudited)
Note 1 -- Basis of Presentation
German American Bancorp operates primarily in the banking industry. The
accounting and reporting policies of German American Bancorp and its
subsidiaries conform to Generally Accepted Accounting Principles and reporting
followed by the banking industry. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with Generally
Accepted Accounting Principles have been condensed or omitted. All adjustments
which are, in the opinion of management, necessary for a fair presentation of
the results for the periods reported have been included in the accompanying
unaudited consolidated financial statements, and all such adjustments are of a
normal recurring nature. It is suggested that these consolidated financial
statements and notes be read in conjunction with the financial statements and
notes thereto in German American Bancorp's December 31, 2000 Annual Report on
Form 10-K.
On October 1, 2000 the Company completed a merger with Holland Bancorp, Inc.
Holland Bancorp was merged with and into the Company, with the simultaneous
merger of Holland's sole bank subsidiary, The Holland National Bank, into the
Company's subsidiary, The German American Bank. This merger was accounted for as
a pooling of interests and prior period financial information has been restated
accordingly.
Comprehensive income includes both net income and other comprehensive income.
Other comprehensive income includes the change in unrealized
appreciation/depreciation on securities available-for-sale, net of tax.
Note 2 -- Per Share Data
Earnings and dividends per share have been retroactively computed as though
shares issued for stock dividends had been outstanding for all periods
presented. The computation of Earnings per Share and Diluted Earnings per Share
are provided as follows:
Three months Ended
September 30,
2001 2000
------------ ------------
Earnings per Share:
Net Income $ 2,443,000 $ 2,422,000
Weighted Average Shares Outstanding 10,510,261 10,494,708
------------ ------------
Earnings per Share: $ 0.23 $ 0.23
============ ============
Diluted Earnings per Share:
Net Income $ 2,443,000 $ 2,422,000
Weighted Average Shares Outstanding 10,510,261 10,494,708
Stock Options, Net 25,353 3
------------ ------------
Diluted Weighted Average
Shares Outstanding 10,535,614 10,494,711
------------ ------------
Diluted Earnings per Share $ 0.23 $ 0.23
============ ============
- 7 -
Three months Ended
September 30,
2001 2000
------------ ------------
Earnings per Share:
Net Income $ 7,368,000 $ 7,059,000
Weighted Average Shares Outstanding 10,501,549 10,482,833
------------ ------------
Earnings per Share: $ 0.70 $ 0.67
============ ============
Diluted Earnings per Share:
Net Income $ 7,368,000 $ 7,059,000
Weighted Average Shares Outstanding 10,501,549 10,482,833
Stock Options, Net 5,221 1,034
------------ ------------
Diluted Weighted Average
Shares Outstanding 10,506,770 10,483,867
------------ ------------
Diluted Earnings per Share $ 0.70 $ 0.67
============ ============
Note 3 - Securities
The amortized cost and estimated market values of Securities as of September 30,
2001 are as follows (dollars in thousands):
Estimated
Amortized Market
Cost Value
------------ -------------
Securities Available-for-Sale:
U.S. Treasury Securities and Obligations of
U.S. Government Corporations and Agencies $ 3,749 $ 3,763
Obligations of State and Political Subdivisions 41,202 42,408
Asset-/Mortgage-backed Securities 77,964 79,354
Equity Securities 16,814 17,021
------------ -------------
Total $ 139,729 $ 142,546
============ =============
Securities Held-to-Maturity:
Obligations of State and Political Subdivisions $ 23,283 $ 24,033
Asset-/Mortgage-backed Securities --- ---
------------ -------------
Total $ 23,283 $ 24,033
============ =============
The amortized cost and estimated market values of Securities as of December 31,
2000 are as follows (dollars in thousands):
Estimated
Amortized Market
Cost Value
------------ -------------
Securities Available-for-Sale:
U.S. Treasury Securities and Obligations of
U.S. Government Corporations and Agencies $ 96,315 $ 95,102
Obligations of State and Political Subdivisions 26,057 26,669
Asset-/Mortgage-backed Securities 52,004 51,336
Equity Securities 12,077 12,081
------------ -------------
Total $ 186,453 $ 185,188
============ =============
Securities Held-to-Maturity:
Obligations of State and Political Subdivisions $ 28,093 $ 28,590
Asset-/Mortgage-backed Securities 361 363
----------- -------------
Total $ 28,454 $ 28,953
============ =============
- 8 -
Note 4 - Segment Information
The Company's operations include three primary segments: retail banking,
mortgage banking, and insurance operations. The retail banking segment involves
attracting deposits from the general public and using such funds to originate
consumer, commercial, commercial real estate, and single-family residential
mortgage loans, primarily in the affiliate bank's local markets. The mortgage
banking segment involves the origination and purchase of single-family
residential mortgage loans; the sale of such loans in the secondary market; and
the servicing of mortgage loans for investors. The insurance segment offers a
full range of personal and corporate property and casualty insurance products,
primarily in the affiliate banks' local markets.
The retail segment is comprised of community banks with 27 banking offices in
Southwestern Indiana. Net interest income from loans and investments funded by
deposits and borrowings is the primary revenue of the five affiliate community
banks comprising the retail-banking segment. Primary revenues for the
mortgage-banking segment are net interest income from a residential real estate
loan portfolio funded primarily by wholesale sources. Other revenues are gains
on sales of loans and gain on sales of and capitalization of mortgage servicing
rights (MSR), and loan servicing income. The insurance segment consists of five
full-service independent insurance agencies in Southwestern Indiana and the
operations of German American Reinsurance Company, Ltd. (GARC). GARC's primary
business is credit life and disability reinsurance for credit insurance products
sold by the Company's five affiliate banks. Commissions derived from the sale of
insurance products are the primary source of revenue for the insurance segment.
The following segment financial information has been derived from the internal
financial statements of German American Bancorp, which are used by management to
monitor and manage the financial performance of the Company. The accounting
policies of the three segments are the same as those of the Company. The
evaluation process for segments does not include holding company income and
expense. Holding company amounts are the primary differences between segment
amounts and consolidated totals, and are reflected in the Other column below,
along with minor amounts to eliminate transactions between segments.
Three Months Ended September 30, 2001
Retail Mortgage Consolidated
Banking Banking Insurance Other Totals
------- -------- --------- ----- ------------
Net Interest Income $ 7,449 $ 252 $ 10 $ 60 $ 7,771
Gain on Sales of Loans and Related
Assets, and Provision for Losses
on Loans Held for Sale 206 197 --- --- 403
Servicing Income --- 172 --- (67) 105
Insurance Revenues 39 36 626 (30) 671
Noncash Items:
Provision for Loan Losses 165 --- --- --- 165
MSR Amortization & Valuation --- 202 --- --- 202
Provision for Income Taxes 1,221 8 44 (499) 774
Segment Profit 2,768 27 60 (412) 2,443
Segment Assets 894,720 106,164 3,911 (11,590) 993,205
- 9 -
Three Months Ended September 30, 2000
Retail Mortgage Consolidated
Banking Banking Insurance Other Totals
------- -------- --------- ----- ------------
Net Interest Income $ 7,499 $ 877 $ 1 $ 52 $ 8,429
Gain on Sales of Loans and Related
Assets, and Provision for Losses
on Loans Held for Sale 78 8 --- --- 86
Servicing Income --- 91 --- (10) 81
Insurance Revenues 80 21 529 --- 630
Noncash Items:
Provision for Loan Losses 233 138 --- --- 371
MSR Amortization & Valuation --- 41 --- --- 41
Provision for Income Taxes 1,161 90 51 (682) 620
Segment Profit 2,530 136 76 (320) 2,422
Segment Assets 892,694 173,939 2,753 3,754 1,073,140
Nine Months Ended September 30, 2001
Retail Mortgage Consolidated
Banking Banking Insurance Other Totals
------- -------- --------- ----- ------------
Net Interest Income $ 22,707 $ 1,283 $ 28 $ 186 $ 24,204
Gain on Sales of Loans and Related
Assets, and Provision for Losses
on Loans Held for Sale 579 547 --- --- 1,126
Servicing Income --- 446 --- (157) 289
Insurance Revenues 151 125 2,265 (80) 2,461
Noncash Items:
Provision for Loan Losses 495 --- --- --- 495
MSR Amortization & Valuation --- 433 --- --- 433
Provision for Income Taxes 3,633 207 206 (1,537) 2,509
Segment Profit 8,158 330 295 (1,415) 7,368
Segment Assets 894,720 106,164 3,911 (11,590) 993,205
Nine Months Ended September 30, 2000
Retail Mortgage Consolidated
Banking Banking Insurance Other Totals
------- -------- --------- ----- ------------
Net Interest Income $ 22,596 $ 2,857 $ 7 $ 211 $ 25,671
Gain on Sales of Loans and Related
Assets, and Provision for Losses
on Loans Held for Sale 130 (5) --- --- 125
Servicing Income --- 313 --- (30) 283
Insurance Revenues 199 70 1,502 --- 1,771
Noncash Items:
Provision for Loan Losses 628 408 --- --- 1,036
MSR Amortization & Valuation --- 140 --- --- 140
Provision for Income Taxes 3,509 319 132 (1,631) 2,329
Segment Profit 7,567 485 208 (1,201) 7,059
Segment Assets 892,694 173,939 2,753 3,754 1,073,140
- 10 -
Note 5 - New Accounting Pronouncements
In 2001, new accounting guidance was issued that requires the purchase method of
accounting for all business combinations initiated after June 30, 2001 and
prohibits the use of the pooling-of-interests method of accounting after this
time. Beginning in 2002, the new guidance revises the accounting for goodwill
and intangible assets. Intangible assets with indefinite lives and goodwill will
no longer be amortized, but will periodically be reviewed for impairment and
written down if impaired. Additional disclosures about intangible assets and
goodwill may be required. An initial goodwill impairment test is required during
the first six months of 2002. Management is currently evaluating the financial
impact of this new guidance.
Beginning January 1, 2001 a new accounting standard, Financial Accounting
Standards No. 133 (FAS 133), Accounting for Derivative Instruments and Hedging
Activities, required all derivatives to be recorded at fair value. Unless
designated as hedges, changes in these fair values will be recorded in the
income statement. At January 1 and September 30, 2001 the Company's derivatives
include forward commitments to sell mortgage loans and interest rate caps. The
effect of adopting FAS 133 at January 1, 2001 was not material to the Company's
financial statements.
In conjunction with the adoption of FAS 133, the Company reclassified certain
investment securities from the held-to-maturity portfolio to the
available-for-sale portfolio. The reclassified securities had a carrying value
of $5,637,000 and a market value of $5,784,000 resulting in a net increase in
equity of $88,000 at the time of transfer.
Note 6 - Stock Repurchase Plan
On April 26, 2001 the Company announced that its Board of Directors approved a
stock repurchase program for up to 525,000 of the outstanding Common Shares of
the Company, representing nearly five percent of its outstanding shares. Shares
may be purchased from time to time in the open market and in large block
privately negotiated transactions. The Company is not obligated to purchase any
shares under the program, and the program may be discontinued at any time before
the maximum number of shares specified by the program are purchased. As of
September 30, 2001, the Company had purchased 5,400 shares under the program.
Note 7 - Subsequent Events
On October 31, 2001 the Company declared a 5% stock dividend, payable on or
before December 15, 2001 to shareholders of record on November 30, 2001. Since
the stock dividend has not yet been issued, earnings and dividends per share
amounts have not been restated for this dividend. The Board of Directors also
declared a cash dividend of $0.14 per share payable on or before November 20,
2001 to shareholders of record on November 10, 2001.
- 11 -
ITEM 2.
GERMAN AMERICAN BANCORP
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
German American Bancorp ("the Company") is a multi-bank holding company based in
Jasper, Indiana. The Company's Common Stock is traded on NASDAQ's National
Market System under the symbol GABC. The Company operates five affiliate
community banks with 27 banking offices and 5 full-service insurance agencies 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.
This section presents an analysis of the consolidated financial condition of the
Company as of September 30, 2001 and December 31, 2000 and the consolidated
results of operations for the three-month and nine-month periods ended September
30, 2001 and 2000. This discussion should be read in conjunction with the
consolidated financial statements and other financial data presented elsewhere
herein and with the financial statements and other financial data, as well as
the Management's Discussion and Analysis of Financial Condition and Results of
Operations included in the Company's December 31, 2000 Annual Report on Form
10-K.
RESULTS OF OPERATIONS
Net Income:
Net income increased $21,000 to $2,443,000 or $0.23 per share for the quarter
ended September 30, 2001 compared to $2,422,000 or $0.23 per share for quarter
ended September 30, 2000. Net income increased $309,000 to $7,368,000 or $0.70
per share for the nine months ended September 30, 2001 compared to $7,059,000 or
$0.67 per share for nine months ended September 30, 2000. The increased earnings
in both the three- and nine-month periods were primarily attributable to
non-interest income growth from increased gains on sales of mortgage loans,
increased insurance revenues and an increase in services charges on deposit
accounts.
Net Interest Income:
Net interest income is the Company's single largest source of earnings, and
represents the difference between interest and fees realized on earning assets,
less interest paid on deposits and borrowed funds. The following table
summarizes German American Bancorp's net interest income (on a tax-equivalent
basis, at an effective tax rate of 34%) for each of the periods presented herein
(dollars in thousands):
Three months Change from
Ended September 30, Prior Period
2001 2000 Amount Percent
----------- ----------- --------- -------
Interest Income (T/E) $ 17,843 $ 20,726 $ (2,883) -13.9%
Interest Expense 9,549 11,839 (2,290) -19.3%
----------- ----------- --------
Net Interest Income (T/E) $ 8,294 $ 8,887 $ (593) -6.7%
=========== =========== ========
Net interest income decreased $658,000 or 7.8% ($593,000 or 6.7% on a
tax-equivalent basis) for the quarter ended September 30, 2001 compared with the
third quarter of 2000. Net interest margin is tax-equivalent net interest income
expressed as a percentage of average earning assets. For the third quarter of
2001 and 2000, the net interest margin was 3.55%.
Nine months Change from
Ended September 30, Prior Period
2001 2000 Amount Percent
----------- ----------- --------- -------
Interest Income (T/E) $ 56,248 $ 60,828 $ (4,580) -7.5%
Interest Expense 30,536 33,714 (3,178) -9.4%
----------- ----------- ---------
Net Interest Income (T/E) $ 25,712 $ 27,114 $ (1,402) -5.2%
=========== =========== =========
- 12 -
Net interest income decreased $1,467,000 or 5.7% ($1,402,000 or 5.2% on a
tax-equivalent basis) for the nine months ended September 30, 2001 compared with
the first nine months of 2000. For the first nine months of 2001, the net
interest margin was 3.62% compared to 3.63% for the comparable period of 2000.
Late in the fourth quarter of 2000, the Company initiated a repositioning of its
balance sheet within the mortgage banking component of the Company's operations
to strengthen of the overall credit quality within the loan portfolio, to allow
for a reduction of the Company's wholesale funding and to balance more evenly
the level of interest rate risk between loans, deposits, and other funding
vehicles. This repositioning primarily involved the reclassification of
approximately $69.8 million of sub-prime, out-of-market mortgage loans as
held-for-sale in December 2000 and the subsequent sale of these loans in
February 2001. The Company no longer originates these types of loans.
The decline in the Company's net interest income is largely attributable to a
decline in the overall level of interest earning assets and an increase in
federal funds sold and other short-term investments. The decline in interest
earning assets is attributable to the call of $86.4 million of investment
securities due to the declining interest rate environment during the first nine
months of 2001 and the aforementioned sale of sub-prime mortgage loans. Proceeds
from the called investment securities and sale of sub-prime residential mortgage
loans were used to reduce short-term wholesale funding, including time deposits
of $100,000 or more, brokered deposits and FHLB advances. In addition, a
significant portion of these proceeds have been held in federal funds sold and
other investments for use as collateral for borrowings and to reduce other
short-term wholesale funds as these reach maturity during 2001. The federal
funds sold and other short-term investments are typically lower yielding than
the earning assets that were called and sold during 2001. A portion of these
proceeds was used to reinvest in securities. Approximately $41.8 million and
$49.9 million of securities were purchased during the three and nine months
ended September 30, 2001. Alternative short-term investment yields have been
insufficient to warrant fully reinvesting and extending the maturities of the
funds held in federal funds sold and other short-term investments.
Average loans outstanding (including loans held for sale) declined $75.7 million
and $47.1 million during the three months and nine months ended September 30,
2001 compared with the same periods of the prior year. The sale of sub-prime
residential mortgage loans previously discussed was the primary factor in the
reduced level of average loans outstanding. Also contributing to the decline in
average loans outstanding during the first nine months of 2001 has been the sale
of a majority of the Company's residential loan production to the secondary
market. While this has not improved the Company's net interest income, the
increase in the level of loans sold has contributed to the Company's
non-interest income growth.
Provision For Loan Losses:
The Company provides for loan losses through regular provisions to the allowance
for loan losses. These provisions are made at levels considered necessary by
management to absorb estimated losses in the loan portfolio. A detailed
evaluation of the adequacy of this loan loss reserve is completed quarterly by
management.
The consolidated provision for loan losses was $165,000 and $495,000 for the
three and nine months ended September 30, 2001 compared to $371,000 and
$1,036,000 for the same periods of 2000. The lower level of provision during
2001 was primarily a result of the liquidation of the Company's sub-prime
out-of-market residential mortgage loan portfolio. The provision for loan losses
to be recorded in future periods will be adjusted based on the results of
on-going evaluations of the adequacy of the allowance for loan losses.
Net charge-offs were $295,000 or 0.17% and $1,067,000 or 0.20% annualized of
average loans for the three and nine months ended September 30, 2001 compared to
$522,000 or 0.27% and $1,092,000 or 0.19% annualized of average loans in the
three and nine months ended September 30, 2000. A significant amount of the net
charge-offs during the first quarter of 2001 and 2000 were related to the
sub-prime residential real estate loans housed in the mortgage banking division.
The decline in the level of net-charge-offs during the quarter ended September
30, 2001 compared with the same period of the prior year was attributable to a
lower level of sub-prime charge-offs.
Non-performing loans represented 0.41% of total loans at September 30, 2001
compared to 1.34% at December 31, 2000. The significant improvement is primarily
related to the liquidation of substantially all of the Company's out-of-market
sub-prime residential real estate portfolio. See discussion of "Financial
Condition" for more information regarding nonperforming assets.
- 13 -
Non-interest Income:
Non-interest income for the quarter ended September 30, 2001 increased $423,000
or 22% compared with the quarter ended September 30, 2000. The increase resulted
primarily from growth in Net Gains on Sales of Loans and Related Assets and in
Service Charges on Deposit Accounts. Non-interest income for the nine months
ended September 30, 2001 increased $1,991,000 or 37% compared with the nine
months ended September 30, 2000. The increase resulted primarily from growth in
Net Gains on Sales of Loans and Related Assets, Insurance Revenues, and Service
Charges on Deposit Accounts.
Service Charges on Deposit Accounts increased $120,000 or 21% and $286,000 or
18% for the three- and nine-month periods ended September 30, 2001 compared with
the same periods of the 2000. A change in fee structure implemented during the
third quarter of 2001 and a general increase in collections of fees were
generally responsible for these increases.
Insurance Revenues increased $690,000 or 39% for the nine months ended September
30, 2001 compared with the same periods during 2000. The increase was due to an
overall growth in the property and casualty insurance operations of Doty
Insurance Agency, Inc. In addition, Insurance Revenues increased $374,000 during
the nine months ended September 30, 2001 compared with the prior year because of
the initiation during 2000 of the Company's credit life and disability
reinsurance operation through German American Reinsurance Company, Ltd. (GARC).
No insurance revenues were realized by GARC until late 2000.
Net Gains on Sales of Loans and Related Assets, and Provision for Market Losses
on Loans Held for Sale are derived predominantly from the Company's mortgage
banking division. The net gain increased $317,000 and $1,001,000 in the quarter
and nine months ended September 30, 2001 compared with 2000. The increased gain
on sales of loans resulted from an increased level of residential loan
production and a corresponding increase in loan sales to the secondary markets.
A lowering interest rate environment fueled these increases during the first
nine months of 2001. Loan sales totaled $34.1 million and $93.1 million during
the three and nine months ended September 30, 2001 (excluding the sub-prime
sale) compared with $9.7 and $21.5 million in the same periods of 2000.
Other non-interest income decreased $65,000 during the three months ended
September 30, 2001 compared with 2000. The decline was due to impairment
adjustments of $157,000 recognized during the period on mortgage servicing
rights. The impairment adjustments were caused by the decline in market interest
rates.
Other non-interest income increased $102,000 during the nine months ended
September 30, 2001 compared with the same period of the prior year. The
increased income is primarily the result of a gain on the sale of a former
branch office facility and an increase in title search and loan closing fees
generated by the Company's title insurance operation. The Company sold a
duplicative branch office facility acquired in a recent acquisition for a gain
of $202,000 during the first quarter 2001. The branch operations were merged
into an existing branch location. Title search and loan closing fees generated
by the Company's title insurance operation increased $101,000 during the period.
This increase was due to an increased level of loan production by the Company's
affiliate banks. The gain from the branch office sale and the increased fee
income from the title company's operations were partially offset by impairment
adjustments of $290,000 recognized on mortgage servicing rights during the nine
months ended September 30, 2001. No impairment adjustments on mortgage servicing
rights were recognized in the three or nine months ended September 30, 2000.
Non-interest Expense:
Non-interest expenses decreased $204,000 or 3% for the three months ended
September 30, 2001 as compared with same period of 2000. This decline was
primarily attributable to a lower level of Professional Fees. Professional Fees
expense declined $226,000 and $229,000 during the three months and nine months
ended September 30, 2001 as compared with the same periods of the prior year.
These declines were primarily attributable to a decline in professional fees
associated with acquisition activities.
- 14 -
Non-interest expenses increased $576,000 for the nine months ended September 30,
2001 compared to 2000. This increase was primarily attributable to an increase
in Salaries and Employee Benefits. Salaries and Employee Benefits increased
$507,000 or 5% during the nine months ended September 30, 2001 compared with the
same period in 2000. Salaries and Employee Benefits comprised approximately 57%
of total non-interest expense in the first half of 2001 and 56% in 2000. The
increase in Salaries and Employee Benefits was primarily attributable to two
factors. First, the Company transitioned to a pay-for-performance incentive plan
in late 2000 and the first half of 2001 resulting in increased compensation
expense. Second, employee medical insurance benefit costs increased 26% during
the nine months ended September 30, 2001 compared with the same period in 2000.
Professional Fees declined $229,000 and Furniture and Equipment Expense declined
$123,000 during the nine months ended September 30, 2001 as compared with the
same periods of the prior year. These declines were offset by increases in Data
Processing Fees, Advertising and Promotions, and Other Operating Expenses.
The Other Operating Expense category of non-interest expense increased $124,000
or 4% during the nine months ended September 30, 2001 compared with the same
period of 2000. This increase was largely related to costs of building insurance
claim reserves by GARC. No expenses associated with building these claim
reserves were realized by GARC until late 2000.
Income Taxes:
The Company's effective income tax rate approximated 24% and 25% of pre-tax
income during the three and nine months ended September 30, 2001 and 20% and 25%
of pre-tax income during the same periods of 2000. The effective tax rates in
all periods were lower than the blended statutory rate of 39.6%. The lower
effective rates result primarily from the Company's tax-exempt investment income
on securities and loans, and from income tax credits generated from investments
in affordable housing projects. The significantly lower effective rate during
the third quarter 2000 resulted from a tax law clarification during 2000 that
allowed a portion of the Company's revenues to be apportioned outside the state
of Indiana. The clarification resulted in a tax refund for the 1999 tax year
during the third quarter 2000.
FINANCIAL CONDITION
Total assets at September 30, 2001 decreased $86.6 million to $993.2 million
compared with $1.080 billion in total assets at December 31, 2000. Loans, net of
unearned income and allowance for loan losses, decreased by $38.5 million during
the nine months ended September 30, 2001. This decline was primarily isolated to
the Company's residential loan portfolio. In the current interest rate
environment, the Company has sold a majority of new residential loan production
in the secondary market. Loans Held for Sale declined by $64.1 million primarily
as a result of the sale of sub-prime residential mortgage loans that was
completed in February 2001.
Investment securities declined $47.8 million to $165.8 million at September 30,
2001 compared with $213.6 million at year-end. The decline was the result of the
call of $86.4 million of investment securities during the first nine months of
2001. Federal Funds Sold and Other Short-term Investments have increased $71.5
million during the first nine months of 2001 as a result of the called
securities and sale of sub-prime residential mortgage loans. A significant
portion of these proceeds have been held in Federal Funds Sold and Other
Short-term Investments for use as collateral for borrowings and to reduce other
short-term wholesale funds as these reach maturity during 2001. Approximately
$41.8 million and $49.9 million of securities were purchased during the three
and nine months ended September 30, 2001. Alternative short-term investment
yields have been insufficient to warrant fully reinvesting and extending the
maturities of the funds held in federal funds sold and other short-term
investments.
Total deposits decreased by $32.6 million during the nine months ended September
30, 2001 with the majority of the decline in Time Deposits $100,000 or more and
Brokered Deposits. These types of deposits have been reduced by $49.1 million
since year-end while Interest-bearing demand, Savings, and Money Market Deposits
have increased $23.1 million. FHLB Advances and Other Borrowings declined by
$59.3 million during the nine months ended September 30, 2001. Proceeds from the
called securities and sub-prime residential mortgage loan sale were used to
reduce jumbo deposits and borrowings.
- 15 -
Non-performing Assets:
The following is an analysis of the Company's non-performing assets at September
30, 2001 and December 31, 2000 (dollars in thousands):
September 30, December 31,
2001 2000
------------ -----------
Non-accrual Loans $ 1,864 $ 8,014
Loans contractually past due 90 days or more 1,220 1,513
Renegotiated Loans --- ---
----------- --------
Total Non-performing Loans 3,084 9,527
----------- --------
Other Real Estate 1,048 1,579
----------- --------
Total Non-performing Assets $ 4,132 $ 11,106
=========== ========
Allowance for Loan Loss to Non-performing Loans 282.17% 97.34%
Non-performing Loans to Total Loans 0.46% 1.34%
The significant decline in non-performing loans was the result of the
liquidation of substantially all of the mortgage banking division's sub-prime
out-of-market residential real estate loan portfolio. Capital Resources:
Shareholders' equity totaled $102.7 million at September 30, 2001 or 10.3% of
total assets, an increase of $5.5 million from December 31, 2000.
Federal banking regulations provide guidelines for determining the capital
adequacy of bank holding companies and banks. These guidelines provide for a
more narrow definition of core capital and assign a measure of risk to the
various categories of assets. The Company is required to maintain minimum levels
of capital in proportion to total risk-weighted assets and off-balance sheet
exposures such as loan commitments and standby letters of credit.
Tier 1, or core capital, consists of shareholders' equity less goodwill, core
deposit intangibles, and certain deferred tax assets defined by bank
regulations. Tier 2 capital currently consists of the amount of the allowance
for loan losses which does not exceed a defined maximum allowance limit of 1.25
percent of gross risk adjusted assets. Total capital is the sum of Tier 1 and
Tier 2 capital.
The minimum requirements under these standards are generally at least a 4.0
percent leverage ratio, which is Tier 1 capital divided by defined "total
assets"; 4.0 percent Tier 1 capital to risk-adjusted assets; and, an 8.0 percent
total capital to risk-adjusted assets ratios. Under these guidelines, the
Company, on a consolidated basis, and each of its affiliate banks individually,
have capital ratios that substantially exceed the regulatory minimums.
The Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA)
requires federal regulatory agencies to define capital tiers. These are:
well-capitalized, adequately-capitalized, under-capitalized, significantly
under-capitalized, and critically under-capitalized. Under these regulations, a
"well-capitalized" entity must achieve a Tier 1 Risk-based capital ratio of at
least 6.0 percent; a total capital ratio of at least 10.0 percent; and, a
leverage ratio of at least 5.0 percent, and not be under a capital directive
order.
At September 30, 2001 management is not under such a capital directive, nor is
it aware of any current recommendations by banking regulatory authorities which,
if they were to be implemented, would have or are reasonably likely to have, a
material effect on the Company's liquidity, capital resources or operations.
- 16 -
The table below presents the Company's consolidated capital ratios under
regulatory guidelines:
To be Well
Capitalized
Under Prompt
Minimum for Corrective
Capital Action At At
Adequacy Provisions September 30, December 31,
Purposes (FDICIA) 2001 2000
----------- ------------ ------------ -----------
Leverage Ratio 4.00% 5.00% 9.87% 8.91%
Tier 1 Capital to Risk-adjusted Assets 4.00% 6.00% 13.69% 13.13%
Total Capital to Risk-adjusted Assets 8.00% 10.00% 14.91% 14.38%
Liquidity:
The Consolidated Statement of Cash Flows details the elements of change in the
Company's cash and cash equivalents. During the first nine months of 2001,
operating activities provided $74.5 million of available cash, which included
net income of $7.4 million. Major cash outflows experienced during the nine
months ended September 30, 2001 included $4.4 million in dividends, a $32.6
million decrease in deposits and $59.3 million in repayment of borrowings.
The proceeds from the maturities and sales of securities exceeded the cash
outflows from the purchases of securities by approximately $51.7 million. Total
cash inflows for the period exceeded outflows by $68.5 million, leaving cash and
cash equivalents of $96.9 million at September 30, 2001.
Forward-looking Statements:
The Company from time to time in its oral and written communications makes
statements relating to its expectations regarding the future. These types of
statements are considered "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. Such forward-looking
statements can include statements about adequacy of allowance for loan losses
and the quality of the Company's loans and other assets; simulations of changes
in interest rates; litigation results; dividend policy; estimated cost savings,
plans and objectives for future operations; and expectations about performance
and economic and market conditions and trends. They often can be identified by
the use of words like "expect," "may," "could," "intend," "project," "estimate,"
"believe" or "anticipate."
The Company may include forward-looking statements in filings with the
Securities and Exchange Commission ("SEC"), such as this Form 10-Q, in other
written materials, and in oral statements made by senior management to analysts,
investors, representatives of the media, and others. It is intended that these
forward-looking statements speak only as of the date they are made, and the
Company undertakes no obligation to update any forward-looking statement to
reflect events or circumstances after the date on which the forward-looking
statement is made.
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 may differ materially from the expectations of the Company that
are expressed or implied by any forward-looking statement. Factors that could
cause the Company's actual results to vary materially from those expressed or
implied by any forward-looking statements include the effects of competition,
technological changes and legal and regulatory developments; acquisitions of
other businesses by the Company and integration of such acquired businesses;
changes in fiscal, monetary and tax policies; market, economic, operational,
liquidity, credit and interest rate risks associated with the Company's
business; inflation; competition in the financial services industry; changes in
general economic conditions, either nationally or regionally, resulting in,
among other things, credit quality deterioration; changes in the securities
markets; and the continued availability of earnings and excess capital
sufficient for the lawful and prudent declaration and payment of cash dividends.
Investors should consider these risks, uncertainties, and other factors in
addition to those mentioned by the Company in its Form 10-K report for the year
ended December 31, 2000 and from time to time in the Company's other SEC reports
when considering any forward-looking statement.
- 17 -
Item 3. 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.
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 borrowings
from the Federal Home Loan Bank.
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. 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 2% increase and decrease in prevailing interest rates (dollars in
thousands).
Interest Rate Sensitivity as of September 30, 2001
Net Portfolio Value
Net Portfolio as a % of Present
Value Value of Assets
Changes ---------------------- -----------------------
In rates $ Amount % Change NPV Ratio Change
-------- -------- -------- --------- ------
+2% $ 90,785 (15.0)% 9.31% (128) b.p.
Base 106,813 --- 10.60 ---
-2% 104,186 (2.5) 10.45 (45) b.p.
Item 3 includes forward-looking statements. See "Forward-looking Statements"
included in Item 2 of this Report for a discussion of certain factors that could
cause the Company's actual exposure to market risk to vary materially from that
expressed or implied above. These factors include possible changes in economic
conditions; interest rate fluctuations, competitive product and pricing
pressures within the Company's markets; and equity and fixed income market
fluctuations. Actual experience may also vary materially to the extent that the
Company's assumptions described above prove to be inaccurate.
- 18 -
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) The following exhibits are filed herewith:
3.1 Restatement of Articles of Incorporation of the Registrant is
incorporated by reference to Exhibit 3.01 to Registrant's Current
Report on Form 8-K filed May 5, 2000.
3.2 Restated Bylaws of the Registrant as amended April 26, 2001 is
incorporated by reference to Exhibit 3.2 to the Registrant's quarterly
report on Form 10-Q for the quarter ended June 30, 2001.
4.1 Rights Agreement dated April 27, 2000 is incorporated by reference to
Exhibit 4.01 to Registrant's Current Report on Form 8-K filed May 5,
2000.
4.2 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.
4.3 Terms of Common Shares and Preferred Shares of German American Bancorp
found in Restatement of Articles of Incorporation are incorporated by
reference to Exhibit 3.01 to Registrant's Current Report on Form 8-K
filed May 5, 2000.
(b) Reports on Form 8-K
There were no reports on Form 8-K filed during the period ended September 30,
2001.
- 19 -
SIGNATURES
Pursuant to the requirements 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
Date November 13, 2001 By /s/ Mark A. Schroeder
----------------- --------------------------------------------
Mark A. Schroeder
President and CEO
Date November 13, 2001 By /s/ Richard E. Trent
----------------- --------------------------------------------
Richard E. Trent
Chief Financial Officer and
Principal Accounting Officer
- 20 -