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Section 1: 8-K (8-K)

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
______________________

Date of Report (Date of earliest event reported): October 30, 2017

GERMAN AMERICAN BANCORP, INC.
(Exact name of registrant as specified in its charter)

Indiana
(State or other jurisdiction of incorporation)

001-15877
35-1547518
(Commission File Number)

(IRS Employer 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

Not Applicable
(Former name or former address, if changed since last report)
    
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ]
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 under the Securities Act (17 CFR 230.405) or Rule 12b-2 under the Exchange Act (17 CFR 240.12b-2).
Emerging growth company [ ]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act [ ]    




Item 2.02. Results of Operations and Financial Condition.

On October 30, 2017, German American Bancorp, Inc. (the “Company” or “German American”) issued a press release announcing its results for the quarter ended September 30, 2017 and making other disclosures. The press release (including the accompanying unaudited consolidated financial statements as of and for the quarter ended September 30, 2017, and other financial data) is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.

The information incorporated by reference herein from Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 8.01. Other Events.

Cash Dividend. As announced in the press release that is furnished as Exhibit 99.1 to this report, the Company’s Board of Directors has declared a cash dividend of $0.13 per share which will be payable on November 20, 2017 to shareholders of record as of November 10, 2017.

Item 9.01. Financial Statements, Pro Forma Financial Information and Exhibits.

(d)
Exhibits
 
 
 
 
 
 
 
Exhibit No.
 
Description
 
 
 
 
 
99.1
 
Press release dated October 30, 2017. This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.





* * * * * *






SIGNATURE

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 hereunto duly authorized.

Date: October 30, 2017
GERMAN AMERICAN BANCORP, INC.

 
By:
/s/ Mark A. Schroeder
Mark A. Schroeder, Chairman and Chief Executive Officer
 
 





EXHIBIT INDEX


Exhibit No.
 
Description
 
 
 
 
Press release dated October 30, 2017
 
 
 


(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit
Exhibit 99.1

NEWS RELEASE

For additional information, contact:
Mark A Schroeder, Chairman & Chief Executive Officer of German American Bancorp, Inc.
Bradley M Rust, Executive Vice President/CFO of German American Bancorp, Inc.
(812) 482-1314


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OCTOBER 30, 2017
GERMAN AMERICAN BANCORP, INC. (GABC) REPORTS SOLID THIRD QUARTER EARNINGS, RECORD YEAR-TO-DATE EARNINGS AND STRONG THIRD QUARTER LOAN GROWTH

Jasper, Indiana: October 30, 2017 -- German American Bancorp, Inc. (NASDAQ: GABC) reported another quarter of solid earnings of $9.7 million, or $0.42 per share, during the third quarter of 2017, resulting in record 2017 year-to-date net income of $29.1 million, or $1.27 per share, for the nine months ended on September 30, 2017. On a comparative per share basis, this level of quarterly earnings was a 2.3% decline from reported net income of $9.7 million, or $0.43 per share, in the second quarter of 2017. The 2017 year-to-date earnings comparison reflects a 12.4% increase, on a per share basis, over 2016 year-to-date net income of $25.1 million, or $1.13 per share, for the nine months ended on September 30, 2016.
The Company also experienced strong loan growth of $54.6 million, or 10.7% on a linked quarter annualized basis, during the current quarter, as measured from June 30, 2017 end of period loan balances. This quarterly growth in loans follows a similar level of loan growth in the second quarter of 2017 of $48.2 million, or 9.7% on a linked quarter annualized basis. Year-to-date third quarter 2017 earnings performance, relative to the same period 2016 results, was enhanced by an increase of $4.4 million, or approximately 6.3%, of net interest income, driven in part, by the aforementioned loan growth.
Commenting on the Company’s continued strong financial performance, Mark A. Schroeder, German American’s Chairman & CEO, stated, "While there were several revenue and expense items, recorded in the third quarter related to the disposition of two former branch facilities closed in the current year, that made quarterly earnings comparisons difficult, we are very encouraged about the level of our current year-to-date earnings and future earnings potential. The strong level of both loan and deposit growth we’ve experienced during the past two quarters is reflective of the economic growth and vitality throughout our southern Indiana market area, which we believe bodes well for the Company’s future profitability. We are extremely pleased by the strong double-digit growth we’ve reported in 2017 year-to-date net income, and anticipate this positive current year to prior year comparison will continue in the fourth quarter.”
The Company also announced the declaration of a regular quarterly cash dividend of $0.13 per share, which will be payable on November 20, 2017 to shareholders of record as of November 10, 2017.





    

NEWS RELEASE

For additional information, contact:
Mark A Schroeder, Chairman & Chief Executive Officer of German American Bancorp, Inc.
Bradley M Rust, Executive Vice President/CFO of German American Bancorp, Inc.
(812) 482-1314


2 of 13


Balance Sheet Highlights

Total assets for the Company increased to $3.073 billion at September 30, 2017, representing an increase of $68.1 million, or 9% on an annualized basis, compared with June 30, 2017 and an increase of $93.3 million, or 3%, compared with September 30, 2016.

At September 30, 2017, total loans increased $54.6 million, or 11% on an annualized basis, compared with June 30, 2017 and increased $83.6 million, or 4%, compared with September 30, 2016. The increase during the third quarter of 2017 was largely related to an increase of approximately $7.2 million, or 6% on an annualized basis, of commercial and industrial loans, an increase of $28.7 million, or 13% on an annualized basis, of commercial real estate loans, an increase of $13.8 million, or 18% on an annualized basis, of agricultural loans and an increase of $5.0 million, or 5% on annualized basis, of retail loans. The increase was broadly based across the Company's entire market area.

 
 
 
 
 
 
 
End of Period Loan Balances
 
9/30/2017
 
6/30/2017
 
9/30/2016
(dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial & Industrial Loans
 
$
474,917

 
$
467,754

 
$
469,255

Commercial Real Estate Loans
 
898,752

 
870,100

 
862,998

Agricultural Loans
 
327,026

 
313,254

 
299,080

Consumer Loans
 
209,537

 
202,562

 
186,854

Residential Mortgage Loans
 
179,481

 
181,477

 
187,903

 
 
$
2,089,713

 
$
2,035,147

 
$
2,006,090

 
 
 
 
 
 
 


Non-performing assets totaled $10.2 million at September 30, 2017 compared to $4.4 million of non-performing assets at June 30, 2017 and $5.5 million at September 30, 2016. Non-performing assets represented 0.33% of total assets at September 30, 2017 compared to 0.15% of total assets at June 30, 2017 and 0.18% of total assets at September 30, 2016. Non-performing loans totaled $9.7 million at September 30, 2017 compared to $3.2 million at June 30, 2017 and $5.1 million of non-performing loans at September 30, 2016. Non-performing loans represented 0.46% of total loans at September 30, 2017 compared to 0.16% at June 30, 2017 and 0.25% at September 30, 2016. The increase in non-performing assets during the third quarter of 2017 was primarily attributable to a single commercial lending relationship that was downgraded during the quarter.




    

NEWS RELEASE

For additional information, contact:
Mark A Schroeder, Chairman & Chief Executive Officer of German American Bancorp, Inc.
Bradley M Rust, Executive Vice President/CFO of German American Bancorp, Inc.
(812) 482-1314


3 of 13

 
 
 
 
 
 
Non-performing Assets
 
 
 
 
 
(dollars in thousands)
 
 
 
 
 
 
9/30/2017
 
6/30/2017
 
9/30/2016
Non-Accrual Loans
$
9,177

 
$
3,097

 
$
4,906

Past Due Loans (90 days or more)
474

 
62

 
191

       Total Non-Performing Loans
9,651

 
3,159

 
5,097

Other Real Estate
568

 
1,289

 
355

       Total Non-Performing Assets
$
10,219

 
$
4,448

 
$
5,452

 
 
 
 
 
 
Restructured Loans
$
152

 
$
154

 
$
50

 
 
 
 
 
 

The Company’s allowance for loan losses totaled $15.3 million at September 30, 2017 compared to $15.3 million at June 30, 2017 and $15.2 million at September 30, 2016. The allowance for loan losses represented 0.73% of period-end loans at September 30, 2017 compared with 0.75% of period-end loans at June 30, 2017 and 0.76% of period-end loans at September 30, 2016. Under acquisition accounting treatment, loans acquired are recorded at fair value which includes a credit risk component, and therefore the allowance on loans acquired is not carried over from the seller. The Company held a net discount on acquired loans of $8.0 million as of September 30, 2017, $8.4 million at June 30, 2017 and $11.1 million at September 30, 2016.




















    

NEWS RELEASE

For additional information, contact:
Mark A Schroeder, Chairman & Chief Executive Officer of German American Bancorp, Inc.
Bradley M Rust, Executive Vice President/CFO of German American Bancorp, Inc.
(812) 482-1314


4 of 13

Total deposits increased $61.3 million, or 10% on an annualized basis, as of September 30, 2017 compared with June 30, 2017 and increased $94.9 million, or 4%, compared with September 30, 2016.

 
 
 
 
 
 
 
End of Period Deposit Balances
 
9/30/2017
 
6/30/2017
 
9/30/2016
(dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-interest-bearing Demand Deposits
 
$
589,315

 
$
557,535

 
$
534,620

IB Demand, Savings, and MMDA Accounts
 
1,454,073

 
1,453,512

 
1,361,522

Time Deposits < $100,000
 
204,946

 
203,923

 
214,235

Time Deposits > $100,000
 
176,238

 
148,351

 
219,286

 
 
$
2,424,572

 
$
2,363,321

 
$
2,329,663

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Results of Operations Highlights – Quarter ended September 30, 2017

Net income for the quarter ended September 30, 2017 totaled $9,660,000, or $0.42 per share, which represented a decline of approximately 2% on a per share basis compared with the second quarter 2017 net income of $9,839,000, or $0.43 per share, and a decline of 7% on a per share basis compared with the third quarter 2016 net income of $10,185,000, or $0.45 per share.





    

NEWS RELEASE

For additional information, contact:
Mark A Schroeder, Chairman & Chief Executive Officer of German American Bancorp, Inc.
Bradley M Rust, Executive Vice President/CFO of German American Bancorp, Inc.
(812) 482-1314


5 of 13

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Summary Average Balance Sheet
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Tax-equivalent basis / dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Quarter Ended
 
 Quarter Ended
 
 Quarter Ended
 
 
September 30, 2017
 
June 30, 2017
 
September 30, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Principal Balance
 
 Income/ Expense
 
 Yield/ Rate
 
 Principal Balance
 
 Income/ Expense
 
 Yield/ Rate
 
 Principal Balance
 
 Income/ Expense
 
 Yield/ Rate
Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Federal Funds Sold and Other
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
        Short-term Investments
 
$
13,543

 
$
46

 
1.38
%
 
$
13,268

 
$
27

 
0.79
%
 
$
22,709

 
$
25

 
0.44
%
Securities
 
748,754

 
5,872

 
3.14
%
 
743,354

 
5,887

 
3.17
%
 
734,869

 
5,426

 
2.95
%
Loans and Leases
 
2,058,453

 
23,358

 
4.51
%
 
2,011,518

 
22,780

 
4.54
%
 
1,982,291

 
22,475

 
4.51
%
Total Interest Earning Assets
 
$
2,820,750

 
$
29,276

 
4.13
%
 
$
2,768,140

 
$
28,694

 
4.15
%
 
$
2,739,869

 
$
27,926

 
4.07
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Demand Deposit Accounts
 
$
572,204

 
 
 
 
 
$
560,763

 
 
 
 
 
$
522,994

 
 
 
 
IB Demand, Savings, and
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
        MMDA Accounts
 
$
1,447,693

 
$
1,117

 
0.31
%
 
$
1,446,994

 
$
939

 
0.26
%
 
$
1,363,654

 
$
671

 
0.20
%
Time Deposits
 
382,827

 
842

 
0.87
%
 
360,938

 
687

 
0.76
%
 
416,968

 
652

 
0.62
%
FHLB Advances and Other Borrowings
 
246,698

 
1,110

 
1.79
%
 
233,197

 
962

 
1.65
%
 
274,365

 
851

 
1.23
%
Total Interest-Bearing Liabilities
 
$
2,077,218

 
$
3,069

 
0.59
%
 
$
2,041,129

 
$
2,588

 
0.51
%
 
$
2,054,987

 
$
2,174

 
0.42
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cost of Funds
 
 
 
 
 
0.43
%
 
 
 
 
 
0.37
%
 
 
 
 
 
0.32
%
Net Interest Income
 
 
 
$
26,207

 
 
 
 
 
$
26,106

 
 
 
 
 
$
25,752

 
 
Net Interest Margin
 
 
 
 
 
3.70
%
 
 
 
 
 
3.78
%
 
 
 
 
 
3.75
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

During the quarter ended September 30, 2017, net interest income totaled $24,917,000, which represented an increase of $104,000, or slightly under 1%, from the quarter ended June 30, 2017 net interest income of $24,813,000 and an increase of $357,000, or just over 1%, compared with the quarter ended September 30, 2016 net interest income of $24,560,000.



    

NEWS RELEASE

For additional information, contact:
Mark A Schroeder, Chairman & Chief Executive Officer of German American Bancorp, Inc.
Bradley M Rust, Executive Vice President/CFO of German American Bancorp, Inc.
(812) 482-1314


6 of 13

The tax equivalent net interest margin for the quarter ended September 30, 2017 was 3.70% compared with 3.78% in the second quarter of 2017 and 3.75% in the third quarter of 2016. The decline in the stated net interest margin was largely attributable to a decline in the accretion of loan discounts on acquired loans and to an increase in Company's cost of funds. Accretion of loan discounts on acquired loans contributed approximately 5 basis points to the net interest margin on an annualized basis in the third quarter of 2017, 10 basis points in the second quarter of 2017, and 9 basis points in the third quarter of 2016. The Company's cost of funds increased approximately 6 basis points in the third quarter of 2017 compared with the second quarter of 2017 and 11 basis points compared with the third quarter of 2016. The higher cost of funds was largely attributable to an increase in short-term market interest rates over the past several quarters.

During the quarter ended September 30, 2017, the Company recorded a provision for loan loss of $250,000 compared with a provision for loan loss of $350,000 during the second quarter of 2017 and no provision for loan loss in the third quarter of 2016. The provision during all periods was done in accordance with the Company's standard methodology for determining the adequacy of its allowance for loan loss.

During the quarter ended September 30, 2017, non-interest income totaled $8,275,000, an increase of $478,000, or 6%, compared with the quarter ended June 30, 2017, and a decline of $109,000, or 1%, compared with the third quarter of 2016.

 
 
 
 
 
 
 
 
 
Quarter Ended
 
Quarter Ended
 
Quarter Ended
Non-interest Income
 
9/30/2017
 
6/30/2017
 
9/30/2016
(dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
Trust and Investment Product Fees
 
$
1,301

 
$
1,350

 
$
1,191

Service Charges on Deposit Accounts
 
1,608

 
1,478

 
1,612

Insurance Revenues
 
1,728

 
1,744

 
1,661

Company Owned Life Insurance
 
317

 
480

 
247

Interchange Fee Income
 
1,186

 
1,156

 
965

Other Operating Income
 
608

 
630

 
1,246

     Subtotal
 
6,748

 
6,838

 
6,922

Net Gains on Loans
 
952

 
959

 
1,004

Net Gains on Securities
 
575

 

 
458

Total Non-interest Income
 
$
8,275

 
$
7,797

 
$
8,384

 
 
 
 
 
 
 





    

NEWS RELEASE

For additional information, contact:
Mark A Schroeder, Chairman & Chief Executive Officer of German American Bancorp, Inc.
Bradley M Rust, Executive Vice President/CFO of German American Bancorp, Inc.
(812) 482-1314


7 of 13

Company owned life insurance income decreased $163,000, or 34%, during the quarter ended September 30, 2017, compared with the second quarter of 2017 and increased $70,000, or 28%, compared with the third quarter of 2016. The increase or decrease in company owned life insurance income, as the case may be, was attributable to corresponding changes in the level of death benefits received from policies during the comparative periods.

Interchange fee income increased $30,000, or 3%, during the third quarter of 2017 compared with the second quarter of 2017 and $221,000, or 23%, compared with the third quarter of 2016. The increase during the third quarter of 2017 compared with the third quarter of 2016 was largely attributable to increased card utilization by customers.

Other operating income decreased $22,000, or 3%, during the quarter ended September 30, 2017 compared with the second quarter of 2017 and decreased $638,000, or 51%, compared with the third quarter of 2016. The decline in the third quarter of 2017 compared with the third quarter of 2016 was largely attributable to decreased fees associated with swap transactions with loan customers.

While the overall variance in other operating income for the third quarter of 2017 compared with the second quarter of 2017 was minimal, non-interest income was impacted by the disposal of two former branch facilities that were closed during 2017. The net loss on the disposition of these branches totaled approximately $86,000. The loss was derived from the write-off of leasehold improvements of $553,000 on one of the branches, which was partially mitigated by the donation of another branch facility to a municipality in one of the Company's market areas that resulted in a net gain on the disposition of fixed assets of approximately $467,000. This donated branch had a book value of $306,000 and a fair value of $773,000 at the time of disposition. A corresponding contribution expense of $773,000 was recognized in advertising and promotion expense of the Company's income statement for the former branch facility that was donated.

The Company realized $575,000 in gains on sales of securities during the third quarter of 2017 compared with no gains during the second quarter of 2017 and gains of $458,000 in the third quarter of 2016.

During the quarter ended September 30, 2017, non-interest expense totaled $19,771,000, an increase of $775,000, or 4%, compared with the quarter ended June 30, 2017, and an increase of $1,118,000, or 6%, compared with the third quarter of 2016.



    

NEWS RELEASE

For additional information, contact:
Mark A Schroeder, Chairman & Chief Executive Officer of German American Bancorp, Inc.
Bradley M Rust, Executive Vice President/CFO of German American Bancorp, Inc.
(812) 482-1314


8 of 13

 
 
 
 
 
 
 
 
 
Quarter Ended
 
Quarter Ended
 
Quarter Ended
Non-interest Expense
 
9/30/2017
 
6/30/2017
 
9/30/2016
(dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
Salaries and Employee Benefits
 
$
11,570

 
$
11,460

 
$
10,572

Occupancy, Furniture and Equipment Expense
 
2,372

 
2,224

 
2,224

FDIC Premiums
 
241

 
232

 
373

Data Processing Fees
 
1,067

 
1,044

 
1,261

Professional Fees
 
551

 
913

 
777

Advertising and Promotion
 
1,315

 
630

 
687

Intangible Amortization
 
230

 
242

 
280

Other Operating Expenses
 
2,425

 
2,251

 
2,479

Total Non-interest Expense
 
$
19,771

 
$
18,996

 
$
18,653

 
 
 
 
 
 
 

Salaries and benefits increased $110,000, or 1%, during the quarter ended September 30, 2017 compared with the second quarter of 2017 and increased $998,000, or 9%, compared with the third quarter of 2016. The increase in salaries and benefits during the third quarter of 2017 compared with the third quarter of 2016 was primarily attributable to an increased number of full-time equivalent employees and higher levels of employee benefit costs including incentive compensation plan costs and health insurance costs.
 
Professional fees decreased $362,000, or 40%, during the quarter ended September 30, 2017 compared with the second quarter of 2017 and $226,000, or 29%, compared with the third quarter of 2016. The decline in the third quarter of 2017 compared with the second quarter of 2017 was primarily attributable to costs incurred during the second quarter of 2017 associated with the three-for-two stock split completed during the second quarter of 2017.

Advertising and promotion increased $685,000 during the quarter ended September 30, 2017 compared with the second quarter of 2017 and increased $628,000 compared with the third quarter of 2016. The primary driver of the increase in advertising and promotion was the aforementioned recognition of a contribution expense of $773,000 related to the donation of a former branch facility to a municipality in one of the Company's market areas.

The income tax provision during third quarter of 2017 was impacted by approximately $476,000 related to the previously discussed donation of a former branch facility and previously discussed write-off of leasehold improvements of an additional branch location that were both closed during 2017.



    

NEWS RELEASE

For additional information, contact:
Mark A Schroeder, Chairman & Chief Executive Officer of German American Bancorp, Inc.
Bradley M Rust, Executive Vice President/CFO of German American Bancorp, Inc.
(812) 482-1314


9 of 13

 
About German American
German American Bancorp, Inc., is a NASDAQ-traded (symbol: GABC) bank holding company based in Jasper, Indiana. German American, through its banking subsidiary German American Bancorp, operates 53 banking offices in 19 contiguous southern Indiana counties and one northern Kentucky county. The Company also owns an investment brokerage subsidiary (German American Investment Services, Inc.) and a full line property and casualty insurance agency (German American Insurance, Inc.).





    

NEWS RELEASE

For additional information, contact:
Mark A Schroeder, Chairman & Chief Executive Officer of German American Bancorp, Inc.
Bradley M Rust, Executive Vice President/CFO of German American Bancorp, Inc.
(812) 482-1314


10 of 13

Cautionary Note Regarding Forward-Looking Statements

Certain statements in this press release may be deemed “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Readers are cautioned that, by their nature, forward-looking statements are based on assumptions and are subject to risks, uncertainties, and other factors. Actual results and experience could differ materially from the anticipated results or other expectations expressed or implied by these forward-looking statements as a result of a number of factors, including but not limited to, those discussed in this press release. Factors that could cause actual experience to differ from the expectations expressed or implied in this press release include the unknown future direction of interest rates and the timing and magnitude of any changes in interest rates; changes in competitive conditions; the introduction, withdrawal, success and timing of asset/liability management strategies or of mergers and acquisitions and other business initiatives and strategies; changes in customer borrowing, repayment, investment and deposit practices; changes in fiscal, monetary and tax policies; changes in financial and capital markets; potential deterioration in general economic conditions, either nationally or locally, resulting in, among other things, credit quality deterioration; capital management activities, including possible future sales of new securities, or possible repurchases or redemptions by the Company of outstanding debt or equity securities; risks of expansion through acquisitions and mergers, such as unexpected credit quality problems of the acquired loans or other assets, unexpected attrition of the customer base of the acquired institution or branches, and difficulties in integration of the acquired operations; factors driving impairment charges on investments; the impact, extent and timing of technological changes; potential cyber-attacks, information security breaches and other criminal activities; litigation liabilities, including related costs, expenses, settlements and judgments, or the outcome of matters before regulatory agencies, whether pending or commencing in the future; actions of the Federal Reserve Board; changes in accounting principles and interpretations; potential increases of federal deposit insurance premium expense, and possible future special assessments of FDIC premiums, either industry wide or specific to the Company’s banking subsidiary; actions of the regulatory authorities under the Dodd-Frank Wall Street Reform and Consumer Protection Act and the Federal Deposit Insurance Act and other possible legislative and regulatory actions and reforms; the continued availability of earnings and excess capital sufficient for the lawful and prudent declaration and payment of cash dividends; and other risk factors expressly identified in the Company’s filings with the United States Securities and Exchange Commission. Such statements reflect our views with respect to future events and are subject to these and other risks, uncertainties and assumptions relating to the operations, results of operations, growth strategy and liquidity of the Company. Readers are cautioned not to place undue reliance on these forward-looking statements. It is intended that these forward-looking statements speak only as of the date they are made. We do not undertake any obligation to release publicly any revisions to these forward-looking statements to reflect future events or circumstances or to reflect the occurrence of unanticipated events.





GERMAN AMERICAN BANCORP, INC.
(unaudited, dollars in thousands except per share data)
 
 
 
 
 
 
Consolidated Balance Sheets
 
 
 
 
 
 
 
September 30, 2017
 
June 30, 2017
 
September 30, 2016
ASSETS
 
 
 
 
 
     Cash and Due from Banks
$
44,804

 
$
36,833

 
$
38,329

     Short-term Investments
9,758

 
7,204

 
16,455

     Interest-bearing Time Deposits with Banks

 

 
744

     Investment Securities
741,710

 
740,578

 
732,911

 
 
 
 
 
 
     Loans Held-for-Sale
8,484

 
9,844

 
12,967

 
 
 
 
 
 
     Loans, Net of Unearned Income
2,086,325

 
2,031,743

 
2,002,380

     Allowance for Loan Losses
(15,321
)
 
(15,320
)
 
(15,154
)
        Net Loans
2,071,004

 
2,016,423

 
1,987,226

 
 
 
 
 
 
     Stock in FHLB and Other Restricted Stock
13,048

 
13,048

 
13,048

     Premises and Equipment
51,355

 
49,249

 
48,074

     Goodwill and Other Intangible Assets
56,378

 
56,607

 
56,767

     Other Assets
76,348

 
75,017

 
73,019

   TOTAL ASSETS
$
3,072,889

 
$
3,004,803

 
$
2,979,540

 
 
 
 
 
 
LIABILITIES
 
 
 
 
 
     Non-interest-bearing Demand Deposits
$
589,315

 
$
557,535

 
$
534,620

     Interest-bearing Demand, Savings, and Money Market Accounts
1,454,073

 
1,453,512

 
1,361,522

     Time Deposits
381,184

 
352,274

 
433,521

        Total Deposits
2,424,572

 
2,363,321

 
2,329,663

 
 
 
 
 
 
     Borrowings
261,941

 
263,469

 
279,110

     Other Liabilities
25,751

 
23,059

 
29,776

   TOTAL LIABILITIES
2,712,264

 
2,649,849

 
2,638,549

 
 
 
 
 
 
SHAREHOLDERS' EQUITY
 
 
 
 
 
     Common Stock and Surplus
187,917

 
187,613

 
186,519

     Retained Earnings
169,859

 
163,181

 
142,347

     Accumulated Other Comprehensive Income
2,849

 
4,160

 
12,125

   TOTAL SHAREHOLDERS' EQUITY
360,625

 
354,954

 
340,991

 
 
 
 
 
 
   TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
$
3,072,889

 
$
3,004,803

 
$
2,979,540

 
 
 
 
 
 
END OF PERIOD SHARES OUTSTANDING (1)
22,930,017

 
22,929,627

 
22,900,575

 
 
 
 
 
 
TANGIBLE BOOK VALUE PER SHARE (1) (2)
$
13.27

 
$
13.01

 
$
12.41

 
 
 
 
 
 
(1) As Adjusted for the 3 for 2 Stock Split distributed on April 21, 2017.
(2) Tangible Book Value per Share is defined as Total Shareholders' Equity less Goodwill and Other Intangible Assets divided by End of Period Shares Outstanding.




GERMAN AMERICAN BANCORP, INC.
(unaudited, dollars in thousands except per share data)
 
 
 
 
 
 
 
 
 
 
 
Consolidated Statements of Income
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Nine Months Ended
 
 
September 30, 2017
 
June 30, 2017
 
September 30, 2016
 
September 30, 2017
 
September 30, 2016
INTEREST INCOME
 
 
 
 
 
 
 
 
 
   Interest and Fees on Loans
$
23,182

 
$
22,602

 
$
22,311

 
$
68,046

 
$
63,645

   Interest on Short-term Investments and Time Deposits
46

 
27

 
25

 
100

 
62

   Interest and Dividends on Investment Securities
4,758

 
4,772

 
4,398

 
14,274

 
12,557

  TOTAL INTEREST INCOME
27,986

 
27,401

 
26,734

 
82,420

 
76,264

 
 
 
 
 
 
 
 
 
 
 
INTEREST EXPENSE
 
 
 
 
 
 
 
 
 
   Interest on Deposits
1,959

 
1,626

 
1,323

 
5,028

 
3,804

   Interest on Borrowings
1,110

 
962

 
851

 
2,937

 
2,445

  TOTAL INTEREST EXPENSE
3,069

 
2,588

 
2,174

 
7,965

 
6,249

 
 
 
 
 
 
 
 
 
 
 
   NET INTEREST INCOME
24,917

 
24,813

 
24,560

 
74,455

 
70,015

   Provision for Loan Losses
250

 
350

 

 
1,100

 
1,200

   NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES
24,667

 
24,463

 
24,560

 
73,355

 
68,815

 
 
 
 
 
 
 
 
 
 
 
NON-INTEREST INCOME
 
 
 
 
 
 
 
 
 
   Net Gain on Sales of Loans
952

 
959

 
1,004

 
2,598

 
2,607

   Net Gain on Securities
575

 

 
458

 
575

 
1,426

   Other Non-interest Income
6,748

 
6,838

 
6,922

 
21,087

 
19,623

  TOTAL NON-INTEREST INCOME
8,275

 
7,797

 
8,384

 
24,260

 
23,656

 
 
 
 
 
 
 
 
 
 
 
NON-INTEREST EXPENSE
 
 
 
 
 
 
 
 
 
   Salaries and Benefits
11,570

 
11,460

 
10,572

 
34,474

 
32,357

   Other Non-interest Expenses
8,201

 
7,536

 
8,081

 
23,329

 
24,875

  TOTAL NON-INTEREST EXPENSE
19,771

 
18,996

 
18,653

 
57,803

 
57,232

 
 
 
 
 
 
 
 
 
 
 
   Income before Income Taxes
13,171

 
13,264

 
14,291

 
39,812

 
35,239

   Income Tax Expense
3,511

 
3,425

 
4,106

 
10,757

 
10,120

 
 
 
 
 
 
 
 
 
 
 
NET INCOME
$
9,660

 
$
9,839

 
$
10,185

 
$
29,055

 
$
25,119

 
 
 
 
 
 
 
 
 
 
 
BASIC EARNINGS PER SHARE (1)
$
0.42

 
$
0.43

 
$
0.45

 
$
1.27

 
$
1.13

DILUTED EARNINGS PER SHARE (1)
$
0.42

 
$
0.43

 
$
0.45

 
$
1.27

 
$
1.13

 
 
 
 
 
 
 
 
 
 
 
WEIGHTED AVERAGE SHARES OUTSTANDING (1)
22,929,864

 
22,929,426

 
22,886,721

 
22,922,724

 
22,221,780

DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING (1)
22,929,864

 
22,929,426

 
22,886,721

 
22,922,724

 
22,224,419

 
 
 
 
 
 
 
 
 
 
 
(1) 
As Adjusted for the 3 for 2 Stock Split distributed on April 21, 2017.
 
 
 
 
 
 
 
 
 




GERMAN AMERICAN BANCORP, INC.
(unaudited, dollars in thousands except per share data)
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Nine Months Ended
 
 
September 30,
 
June 30,
 
September 30,
 
September 30,
 
September 30,
 
 
2017
 
2017
 
2016
 
2017
 
2016
EARNINGS PERFORMANCE RATIOS
 
 
 
 
 
 
 
 
 
 
Annualized Return on Average Assets
1.27
%
 
1.32
%
 
1.38
%
 
1.30
%
 
1.20
%
 
Annualized Return on Average Equity
10.78
%
 
11.34
%
 
12.07
%
 
11.16
%
 
10.60
%
 
Net Interest Margin
3.70
%
 
3.78
%
 
3.75
%
 
3.78
%
 
3.75
%
 
Efficiency Ratio (1)
57.34
%
 
56.03
%
 
54.64
%
 
56.36
%
 
59.00
%
 
Net Overhead Expense to Average Earning Assets (2)
1.63
%
 
1.62
%
 
1.50
%
 
1.61
%
 
1.71
%
 
 
 
 
 
 
 
 
 
 
 
ASSET QUALITY RATIOS
 
 
 
 
 
 
 
 
 
 
Annualized Net Charge-offs to Average Loans
0.05
%
 
0.04
%
 
0.03
%
 
0.04
%
 
0.03
%
 
Allowance for Loan Losses to Period End Loans
0.73
%
 
0.75
%
 
0.76
%
 
 
 
 
 
Non-performing Assets to Period End Assets
0.33
%
 
0.15
%
 
0.18
%
 
 
 
 
 
Non-performing Loans to Period End Loans
0.46
%
 
0.16
%
 
0.25
%
 
 
 
 
 
Loans 30-89 Days Past Due to Period End Loans
0.48
%
 
0.26
%
 
0.39
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SELECTED BALANCE SHEET & OTHER FINANCIAL DATA
 
 
 
 
 
 
 
 
 
 
Average Assets
$
3,033,055

 
$
2,970,745

 
$
2,943,564

 
$
2,977,023

 
$
2,797,677

 
Average Earning Assets
$
2,820,750

 
$
2,768,140

 
$
2,739,869

 
$
2,769,758

 
$
2,612,284

 
Average Total Loans
$
2,058,453

 
$
2,011,518

 
$
1,982,291

 
$
2,015,245

 
$
1,871,134

 
Average Demand Deposits
$
572,204

 
$
560,763

 
$
522,994

 
$
563,679

 
$
497,620

 
Average Interest Bearing Liabilities
$
2,077,218

 
$
2,041,129

 
$
2,054,987

 
$
2,044,112

 
$
1,958,222

 
Average Equity
$
358,299

 
$
347,035

 
$
337,449

 
$
347,057

 
$
315,895

 
 
 
 
 
 
 
 
 
 
 
 
Period End Non-performing Assets (3)
$
10,219

 
$
4,448

 
$
5,452

 
 
 
 
 
Period End Non-performing Loans (4)
$
9,651

 
$
3,159

 
$
5,097

 
 
 
 
 
Period End Loans 30-89 Days Past Due (5)
$
10,089

 
$
5,238

 
$
7,776

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tax Equivalent Net Interest Income
$
26,207

 
$
26,106

 
$
25,752

 
$
78,306

 
$
73,354

 
Net Charge-offs during Period
$
249

 
$
196

 
$
150

 
$
587

 
$
484

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) 
Efficiency Ratio is defined as Non-interest Expense divided by the sum of Net Interest Income, on a tax equivalent basis, and Non-interest Income.
 
 
 
 
(2) 
Net Overhead Expense is defined as Total Non-interest Expense less Total Non-interest Income.
 
 
 
 
(3) 
Non-performing assets are defined as Non-accrual Loans, Loans Past Due 90 days or more, Restructured Loans, and Other Real Estate Owned.
 
 
 
 
(4) 
Non-performing loans are defined as Non-accrual Loans, Loans Past Due 90 days or more, and Restructured Loans.
 
 
 
 
(5) 
Loans 30-89 days past due and still accruing.
 
 
 
 
 
 
 
 
 


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