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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): April 30, 2018

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 April 30, 2018, German American Bancorp, Inc. (the “Company” or “German American”) issued a press release announcing its results for the quarter ended March 31, 2018, and making other disclosures. The press release (including the accompanying unaudited consolidated financial statements as of and for the quarter ended March 31, 2018, 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 $0.15 per share which will be payable on May 20, 2018, to shareholders of record as of May 10, 2018.

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

(d)
Exhibits
 
 
 
 
 
 
 
Exhibit No.
 
Description
 
 
 
 
 
 
Press release dated April 30, 2018. 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: April 30, 2018
By:
GERMAN AMERICAN BANCORP, INC.

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



(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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APRIL 30, 2018
GERMAN AMERICAN BANCORP, INC. (GABC) REPORTS RECORD QUARTERLY EARNINGS

Jasper, Indiana: April 30, 2018 -- German American Bancorp, Inc. (NASDAQ: GABC) reported record quarterly net income of $11.8 million, or $0.51 per share, for the first quarter of 2018. This earnings performance represents an increase of approximately $2.2 million, or 21% on a per share basis, over first quarter 2017 net income of $9.6 million, or $0.42 per share. The current quarter net income was comparable to fourth quarter 2017 reported net income of $11.6 million, or $0.51 per share.

The 2018 first quarter and the 2017 fourth quarter reported net income and earnings per share were positively impacted by the federal income tax reform legislation enacted during the fourth quarter of 2017. The lower federal income tax rate had a positive impact of approximately $1.5 million, or $0.06 per share, during the first quarter of 2018, while the fourth quarter 2017 results were enhanced by a net tax benefit of approximately $2.3 million, or $0.10 per share, related to a revaluation of deferred tax assets and liabilities in connection with the federal income tax reform legislation.

In addition to the federal income tax benefit noted above, the comparison of the record first quarter 2018 financial performance to that of the same quarter last year was largely attributable to a $1.3 million, or 16%, increase in non-interest income, primarily resulting from a $530,000 increase in trust and investment product fees, a $459,000 increase in interchange fee income, and a $290,000 increase in insurance revenues. Reported net interest income was also higher by $885,000, or 4%, in the first quarter of 2018 relative to that recorded in the first quarter of 2017, driven by a higher level of average loans outstanding. 2018 first quarter average loans outstanding increased by approximately $164.9 million, or 8%, from the average loans outstanding in the first quarter of the prior year. The year-over-year increase in loans outstanding was attributable to strong organic loan growth broadly based across the Company’s entire market area and within virtually all loan categories.

These net interest income and non-interest income revenue improvements, totaling approximately $2.2 million, were partially offset by approximately $1.4 million of increased non-interest expense, with the majority of that increase resulting from an additional $682,000 in salaries and benefits, primarily attributable to an increased number of full-time equivalent employees.

Commenting on the Company’s record quarterly financial performance in the first quarter of 2018, Mark A. Schroeder, German American’s Chairman & CEO, stated, "We continue to be extremely pleased with the pattern of consistent balance sheet growth and earnings improvement we’ve generated over the past several years. As evidenced by the strong level of loan growth we experienced within the past year and the current



    

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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indication from our clients relative to future loan demand, our business and consumer clients throughout our market area continue to display a growing confidence in the vibrancy of the economy. Based on these trends, we continue to have a positive outlook regarding our ability to generate strong financial performance throughout the balance of 2018 and in the coming years.”

The Company also announced its Board of Directors declared a regular quarterly cash dividend of $0.15 per share, which will be payable on May 20, 2018 to shareholders of record as of May 10, 2018.


Balance Sheet Highlights

Total assets for the Company decreased to $3.125 billion at March 31, 2018, representing a decline of $19.3 million, or 2% on an annualized basis, compared with December 31, 2017 and an increase of $191.9 million, or 7%, compared with March 31, 2017.

At March 31, 2018, total loans increased $8.8 million, or 2% on an annualized basis, compared with December 31, 2017 and increased $166.9 million, or 8%, compared with March 31, 2017. The increase during the first quarter of 2018 was driven by an increase of approximately $21.2 million, or 9% on an annualized basis, of commercial real estate loans, partially mitigated by a decline of $4.4 million, or 4% on an annualized basis, of commercial and industrial loans, a seasonal decline of $4.1 million, or 5% on an annualized basis, of agricultural loans and a decline of $3.9 million, or 4% on annualized basis, of retail loans.

 
 
 
 
 
 
 
End of Period Loan Balances
 
3/31/2018
 
12/31/2017
 
3/31/2017
(dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial & Industrial Loans
 
$
482,219

 
$
486,668

 
$
450,501

Commercial Real Estate Loans
 
947,948

 
926,729

 
865,717

Agricultural Loans
 
329,138

 
333,227

 
292,615

Consumer Loans
 
216,435

 
219,662

 
194,290

Residential Mortgage Loans
 
178,108

 
178,733

 
183,806

 
 
$
2,153,848

 
$
2,145,019

 
$
1,986,929

 
 
 
 
 
 
 

Non-performing assets totaled $10.7 million at March 31, 2018 compared to $11.9 million of non-performing assets at December 31, 2017 and $5.9 million at March 31, 2017. Non-performing assets represented 0.34% of total assets at March 31, 2018 compared to 0.38% of total assets at December 31, 2017 and 0.20% of total



    

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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assets at March 31, 2017. Non-performing loans totaled $10.6 million at March 31, 2018 compared to $11.8 million at December 31, 2017 and $5.7 million at March 31, 2017. Non-performing loans represented 0.49% of total loans at March 31, 2018 compared to 0.55% at December 31, 2017 and 0.29% at March 31, 2017. The decline in non-performing assets during the first quarter of 2018 was primarily attributable to a partial charge-off on a single commercial lending relationship that was downgraded during the fourth quarter of 2017.

 
 
 
 
 
 
Non-performing Assets
 
 
 
 
 
(dollars in thousands)
 
 
 
 
 
 
3/31/2018
 
12/31/2017
 
3/31/2017
Non-Accrual Loans
$
9,479

 
$
11,091

 
$
4,510

Past Due Loans (90 days or more)
1,105

 
719

 
1,183

       Total Non-Performing Loans
10,584

 
11,810

 
5,693

Other Real Estate
68

 
54

 
208

       Total Non-Performing Assets
$
10,652

 
$
11,864

 
$
5,901

 
 
 
 
 
 
Restructured Loans
$
124

 
$
149

 
$
28

 
 
 
 
 
 

The Company’s allowance for loan losses totaled $14.5 million at March 31, 2018 compared to $15.7 million at December 31, 2017 and $15.2 million at December 31, 2017. The allowance for loan losses represented 0.67% of period-end loans at March 31, 2018 compared with 0.73% of period-end loans at December 31, 2017 and 0.76% of period-end loans at March 31, 2017. The decline in the allowance for loan losses during the first quarter of 2018 was largely related to the aforementioned partial charge-off on a single commercial lending relationship down-graded during the fourth quarter of 2017. From time to time, the Company has acquired loans through bank acquisitions with the most recent being in 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 $7.3 million as of March 31, 2018, $7.6 million at December 31, 2017 and $9.2 million at March 31, 2017.

Total deposits declined $16.9 million, or 3% on an annualized basis, as of March 31, 2018 compared with December 31, 2017 and increased $140.6 million, or 6%, compared with March 31, 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


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End of Period Deposit Balances
 
3/31/2018
 
12/31/2017
 
3/31/2017
(dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-interest-bearing Demand Deposits
 
$
599,374

 
$
606,134

 
$
572,874

IB Demand, Savings, and MMDA Accounts
 
1,465,150

 
1,490,033

 
1,389,763

Time Deposits < $100,000
 
193,864

 
198,646

 
206,171

Time Deposits > $100,000
 
208,733

 
189,239

 
157,664

 
 
$
2,467,121

 
$
2,484,052

 
$
2,326,472

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Results of Operations Highlights – Quarter ended March 31, 2018

Net income for the quarter ended March 31, 2018 totaled $11,813,000, or $0.51 per share, which is relatively consistent with the fourth quarter 2017 net income of $11,621,000, or $0.51 per share, and an increase of 21% on a per share basis compared with the first quarter 2017 net income of $9,556,000, or $0.42 per share.

The first quarter of 2018 net income was positively impacted by lower federal income tax rates that resulted from the federal tax reform legislation enacted during the fourth quarter of 2017 that became effective January 1, 2018. The lower federal income tax rates had a positive impact of approximately $0.06 per share during the first quarter of 2018. The fourth quarter of 2017 results of operations were positively impacted by the revaluation of the Company's deferred tax assets and deferred tax liabilities related to the federal tax reform legislation. The revaluation resulted in a net tax benefit of $2,284,000, or approximately $0.10 per share during the fourth quarter of 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


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Summary Average Balance Sheet
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Tax-equivalent basis / dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Quarter Ended
 
 Quarter Ended
 
 Quarter Ended
 
 
March 31, 2018
 
December 31, 2017
 
March 31, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 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
 
$
8,556

 
$
56

 
2.65
%
 
$
10,268

 
$
34

 
1.33
%
 
$
12,554

 
$
27

 
0.88
%
Securities
 
753,589

 
5,708

 
3.03
%
 
755,659

 
6,001

 
3.18
%
 
731,871

 
5,834

 
3.19
%
Loans and Leases
 
2,139,704

 
24,032

 
4.55
%
 
2,100,432

 
23,872

 
4.51
%
 
1,974,846

 
22,440

 
4.60
%
Total Interest Earning Assets
 
$
2,901,849

 
$
29,796

 
4.15
%
 
$
2,866,359

 
$
29,907

 
4.15
%
 
$
2,719,271

 
$
28,301

 
4.20
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Demand Deposit Accounts
 
$
585,432

 
 
 
 
 
$
598,107

 
 
 
 
 
$
557,912

 
 
 
 
IB Demand, Savings, and
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
        MMDA Accounts
 
$
1,489,363

 
$
1,275

 
0.35
%
 
$
1,488,671

 
$
1,177

 
0.31
%
 
$
1,385,347

 
$
738

 
0.22
%
Time Deposits
 
398,397

 
1,008

 
1.03
%
 
376,585

 
889

 
0.94
%
 
401,155

 
705

 
0.71
%
FHLB Advances and Other Borrowings
 
262,784

 
1,252

 
1.93
%
 
226,437

 
1,090

 
1.91
%
 
226,786

 
865

 
1.55
%
Total Interest-Bearing Liabilities
 
$
2,150,544

 
$
3,535

 
0.67
%
 
$
2,091,693

 
$
3,156

 
0.60
%
 
$
2,013,288

 
$
2,308

 
0.47
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cost of Funds
 
 
 
 
 
0.49
%
 
 
 
 
 
0.44
%
 
 
 
 
 
0.34
%
Net Interest Income
 
 
 
$
26,261

 
 
 
 
 
$
26,751

 
 
 
 
 
$
25,993

 
 
Net Interest Margin
 
 
 
 
 
3.66
%
 
 
 
 
 
3.71
%
 
 
 
 
 
3.86
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

During the quarter ended March 31, 2018, net interest income totaled $25,610,000, which represented an increase of $156,000, or 1%, from the quarter ended December 31, 2017 net interest income of $25,454,000 and an increase of $885,000, or 4%, compared with the quarter ended March 31, 2017 net interest income of $24,725,000. The increased level of net interest income during the first quarter of 2018 compared with the both the fourth quarter of 2017 and first quarter of 2017 was driven primarily by a higher level of average earning assets resulting from an increased level of average loans outstanding partially offset by a higher cost of funds resulting from an increase in market interest rates.







    

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 March 31, 2018 was 3.66% compared with 3.71% in the fourth quarter of 2017 and 3.86% in the first quarter of 2017. The lower federal income tax rates during the first quarter of 2018 had an approximately 9 basis point negative impact on the Company's net interest margin.

Accretion of loan discounts on acquired loans contributed approximately 4 basis points to the net interest margin on an annualized basis in the first quarter of 2018, 6 basis points in the fourth quarter of 2017, and 17 basis points in the first quarter of 2017. The Company's cost of funds increased approximately 5 basis points in the first quarter of 2018 compared with the fourth quarter of 2017 and 15 basis points compared with the first quarter of 2017. 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 March 31, 2018, the Company recorded a provision for loan loss of $350,000 compared with a provision for loan loss of $650,000 during the fourth quarter of 2017 and a provision for loan loss of $500,000 in the first quarter of 2017. 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 March 31, 2018, non-interest income totaled $9,492,000, an increase of $1,898,000, or 25%, compared with the quarter ended December 31, 2017, and an increase of $1,304,000, or 16%, compared with the first quarter of 2017.

 
 
 
 
 
 
 
 
 
Quarter Ended
 
Quarter Ended
 
Quarter Ended
Non-interest Income
 
3/31/2018
 
12/31/2017
 
3/31/2017
(dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
Trust and Investment Product Fees
 
$
1,773

 
$
1,378

 
$
1,243

Service Charges on Deposit Accounts
 
1,471

 
1,608

 
1,484

Insurance Revenues
 
2,930

 
1,867

 
2,640

Company Owned Life Insurance
 
312

 
290

 
254

Interchange Fee Income
 
1,482

 
1,202

 
1,023

Other Operating Income
 
604

 
546

 
857

     Subtotal
 
8,572

 
6,891

 
7,501

Net Gains on Loans
 
650

 
682

 
687

Net Gains on Securities
 
270

 
21

 

Total Non-interest Income
 
$
9,492

 
$
7,594

 
$
8,188

 
 
 
 
 
 
 



    

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

Trust and investment product fees increased $395,000, or 29%, during the first quarter of 2018 compared with the fourth quarter of 2017 and increased $530,000, or 43%, compared with the first quarter of 2017. The increase was largely attributable to increased assets under management in the Company's wealth advisory group.

Insurance revenues increased $1,063,000, or 57%, during the quarter ended March 31, 2018, compared with the fourth quarter of 2017 and increased $290,000, or 11%, compared with the first quarter of 2017. The increase during the first quarter of 2018 compared with each of the fourth quarter of 2017 and the first quarter of 2017 was primarily due to increased contingency revenue. Contingency revenue during the first quarter of 2018 totaled $1,218,000 compared with no contingency revenue during the fourth quarter of 2017 and $992,000 during the first quarter of 2017. The fluctuation in contingency revenue is a normal course of business variance and is reflective of claims and loss experience with insurance carriers that the Company represents through its property and casualty insurance agency. Typically, the majority of contingency revenue is recognized during the first quarter of the year.

Interchange fees increased $280,000, or 23%, during the first quarter of 2018 compared with the fourth quarter of 2017 and increased $459,000, or 45%, compared with the first quarter of 2017. The increase during the first quarter of 2018 was largely attributable to the adoption of the new revenue recognition standard effective January 1, 2018. While the adoption of the standard did not have a significant impact on the Company's financial results, the recording of revenue gross versus net of certain expenses, in accordance with the standard, did result in the reclassification of some expenses associated with the interchange fee revenue during the first quarter of 2018.

The Company realized $270,000 in gains on sales of securities during the first quarter of 2018 compared with $21,000 during the fourth quarter of 2017 and no gains in the first quarter of 2017.

During the quarter ended March 31, 2018, non-interest expense totaled $20,455,000, an increase of $455,000, or 2%, compared with the quarter ended December 31, 2017, and an increase of $1,419,000, or 7%, compared with the first quarter of 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


8 of 13

 
 
 
 
 
 
 
 
 
Quarter Ended
 
Quarter Ended
 
Quarter Ended
Non-interest Expense
 
3/31/2018
 
12/31/2017
 
3/31/2017
(dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
Salaries and Employee Benefits
 
$
12,126

 
$
12,168

 
$
11,444

Occupancy, Furniture and Equipment Expense
 
2,409

 
2,452

 
2,182

FDIC Premiums
 
237

 
242

 
239

Data Processing Fees
 
1,127

 
1,154

 
1,011

Professional Fees
 
871

 
550

 
803

Advertising and Promotion
 
701

 
820

 
778

Intangible Amortization
 
206

 
217

 
253

Other Operating Expenses
 
2,778

 
2,397

 
2,326

Total Non-interest Expense
 
$
20,455

 
$
20,000

 
$
19,036

 
 
 
 
 
 
 

Salaries and benefits declined $42,000, or just under 1%, during the quarter ended March 31, 2018 compared with the fourth quarter of 2017 and increased $682,000, or 6%, compared with the first quarter of 2017. The increase in salaries and benefits during the first quarter of 2018 compared with the first quarter of 2017 was primarily attributable to an increased number of full-time equivalent employees.
 
Professional fees increased $321,000, or 58%, during the first quarter of 2018 compared with the fourth quarter of 2017 and increased $68,000, or 8%, compared to the first quarter of 2017. The increase during the first quarter of 2018 was primarily related to professional fees associated with the pending acquisition of five banking branches in the Columbus and Greensburg, Indiana markets.

Other operating expenses increased $381,000, or 16%, during the first quarter of 2018 compared with the fourth quarter of 2017 and increased $452,000, or 19%, compared with the first quarter of 2017. The increase in the first quarter of 2018 compared with all periods presented was largely attributable to the adoption of the aforementioned revenue recognition standard effective January 1, 2018.

The Company’s effective income tax rate was 17.4% during the three months ended March 31, 2018 compared with an effective tax rate of 6.3% during the fourth quarter of 2017 and 28.6% during the first quarter of 2017. During the quarter ended March 31, 2018, the Company recorded a provision for income tax expense of $2,484,000 compared with a provision for income tax expense of $777,000 during the fourth quarter of 2017 and $3,821,000 in the first quarter of 2017. The provision for income tax was positively impacted during the first quarter of 2018 by the reduction of federal income tax rates from a statutory rate of 35% to 21% effective



    

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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January 1, 2018 related to the federal tax reform legislation enacted during the fourth quarter of 2017. The fourth quarter of 2017 income tax provision was positively impacted by the revaluation of the Company's deferred tax assets and deferred tax liabilities also related to federal tax reform legislation. The revaluation resulted in a net tax benefit of $2,284,000 during the fourth quarter of 2017.

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


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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; the expected impact of U.S. tax regulations passed in December 2017; 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 (the "Dodd-Frank Act") and the Federal Deposit Insurance Act and other possible legislative and regulatory actions and reforms; impacts resulting from possible amendments or revisions to the Dodd-Frank Act and the regulations promulgated thereunder, or to Consumer Financial Protection Bureau rules and regulations; 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
 
 
 
 
 
 
 
March 31, 2018
 
December 31, 2017
 
March 31, 2017
ASSETS
 
 
 
 
 
     Cash and Due from Banks
$
32,023

 
$
58,233

 
$
30,151

     Short-term Investments
8,187

 
12,126

 
7,288

     Investment Securities
737,957

 
740,994

 
726,352

 
 
 
 
 
 
     Loans Held-for-Sale
6,628

 
6,719

 
6,856

 
 
 
 
 
 
     Loans, Net of Unearned Income
2,150,546

 
2,141,638

 
1,983,572

     Allowance for Loan Losses
(14,460
)
 
(15,694
)
 
(15,166
)
        Net Loans
2,136,086

 
2,125,944

 
1,968,406

 
 
 
 
 
 
     Stock in FHLB and Other Restricted Stock
13,048

 
13,048

 
13,048

     Premises and Equipment
58,024

 
54,246

 
49,718

     Goodwill and Other Intangible Assets
55,954

 
56,160

 
56,849

     Other Assets
77,111

 
76,890

 
74,476

   TOTAL ASSETS
$
3,125,018

 
$
3,144,360

 
$
2,933,144

 
 
 
 
 
 
LIABILITIES
 
 
 
 
 
     Non-interest-bearing Demand Deposits
$
599,374

 
$
606,134

 
$
572,874

     Interest-bearing Demand, Savings, and Money Market Accounts
1,465,150

 
1,490,033

 
1,389,763

     Time Deposits
402,597

 
387,885

 
363,835

        Total Deposits
2,467,121

 
2,484,052

 
2,326,472

 
 
 
 
 
 
     Borrowings
274,473

 
275,216

 
241,358

     Other Liabilities
19,419

 
20,521

 
24,098

   TOTAL LIABILITIES
2,761,013

 
2,779,789

 
2,591,928

 
 
 
 
 
 
SHAREHOLDERS' EQUITY
 
 
 
 
 
     Common Stock and Surplus
188,501

 
188,222

 
187,300

     Retained Earnings
187,342

 
178,969

 
156,322

     Accumulated Other Comprehensive Income
(11,838
)
 
(2,620
)
 
(2,406
)
SHAREHOLDERS' EQUITY
364,005

 
364,571

 
341,216

 
 
 
 
 
 
   TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
$
3,125,018

 
$
3,144,360

 
$
2,933,144

 
 
 
 
 
 
END OF PERIOD SHARES OUTSTANDING
22,968,813

 
22,934,403

 
22,929,417

 
 
 
 
 
 
TANGIBLE BOOK VALUE PER SHARE (1)
$
13.41

 
$
13.45

 
$
12.40

 
 
 
 
 
 
 
(1) 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
 
 
March 31, 2018
 
December 31, 2017
 
March 31, 2017
INTEREST INCOME
 
 
 
 
 
   Interest and Fees on Loans
$
23,950

 
$
23,699

 
$
22,262

   Interest on Short-term Investments and Time Deposits
56

 
34

 
27

   Interest and Dividends on Investment Securities
5,139

 
4,877

 
4,744

  TOTAL INTEREST INCOME
29,145

 
28,610

 
27,033

 
 
 
 
 
 
 
INTEREST EXPENSE
 
 
 
 
 
   Interest on Deposits
2,283

 
2,066

 
1,443

   Interest on Borrowings
1,252

 
1,090

 
865

  TOTAL INTEREST EXPENSE
3,535

 
3,156

 
2,308

 
 
 
 
 
 
 
   NET INTEREST INCOME
25,610

 
25,454

 
24,725

   Provision for Loan Losses
350

 
650

 
500

   NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES
25,260

 
24,804

 
24,225

 
 
 
 
 
 
 
NON-INTEREST INCOME
 
 
 
 
 
   Net Gain on Sales of Loans
650

 
682

 
687

   Net Gain on Securities
270

 
21

 

   Other Non-interest Income
8,572

 
6,891

 
7,501

  TOTAL NON-INTEREST INCOME
9,492

 
7,594

 
8,188

 
 
 
 
 
 
 
NON-INTEREST EXPENSE
 
 
 
 
 
   Salaries and Benefits
12,126

 
12,168

 
11,444

   Other Non-interest Expenses
8,329

 
7,832

 
7,592

  TOTAL NON-INTEREST EXPENSE
20,455

 
20,000

 
19,036

 
 
 
 
 
 
 
   Income before Income Taxes
14,297

 
12,398

 
13,377

   Income Tax Expense
2,484

 
777

 
3,821

 
 
 
 
 
 
 
NET INCOME
$
11,813

 
$
11,621

 
$
9,556

 
 
 
 
 
 
 
BASIC EARNINGS PER SHARE
$
0.51

 
$
0.51

 
$
0.42

DILUTED EARNINGS PER SHARE
$
0.51

 
$
0.51

 
$
0.42

 
 
 
 
 
 
 
WEIGHTED AVERAGE SHARES OUTSTANDING
22,940,402

 
22,930,666

 
22,908,648

DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING
22,940,402

 
22,930,666

 
22,908,648

 
 
 
 
 
 
 


 
 
 
 
 




GERMAN AMERICAN BANCORP, INC.
(unaudited, dollars in thousands except per share data)
 
 
 
 
 
 
 
 
 
Three Months Ended
 
 
March 31,
 
December 31,
 
March 31,
 
 
2018
 
2017
 
2017
EARNINGS PERFORMANCE RATIOS
 
 
 
 
 
 
Annualized Return on Average Assets
1.51
%
 
1.51
%
 
1.31
%
 
Annualized Return on Average Equity
13.00
%
 
12.83
%
 
11.39
%
 
Net Interest Margin
3.66
%
 
3.71
%
 
3.86
%
 
Efficiency Ratio (1)
57.21
%
 
58.23
%
 
55.69
%
 
Net Overhead Expense to Average Earning Assets (2)
1.51
%
 
1.73
%
 
1.60
%
 
 
 
 
 
 
 
ASSET QUALITY RATIOS
 
 
 
 
 
 
Annualized Net Charge-offs to Average Loans
0.30
%
 
0.05
%
 
0.03
%
 
Allowance for Loan Losses to Period End Loans
0.67
%
 
0.73
%
 
0.76
%
 
Non-performing Assets to Period End Assets
0.34
%
 
0.38
%
 
0.20
%
 
Non-performing Loans to Period End Loans
0.49
%
 
0.55
%
 
0.29
%
 
Loans 30-89 Days Past Due to Period End Loans
0.33
%
 
0.32
%
 
0.37
%
 
 
 
 
 
 
 
SELECTED BALANCE SHEET & OTHER FINANCIAL DATA
 
 
 
 
 
 
Average Assets
$
3,120,971

 
$
3,078,875

 
$
2,926,095

 
Average Earning Assets
$
2,901,849

 
$
2,866,359

 
$
2,719,271

 
Average Total Loans
$
2,139,704

 
$
2,100,432

 
$
1,974,846

 
Average Demand Deposits
$
585,432

 
$
598,107

 
$
557,912

 
Average Interest Bearing Liabilities
$
2,150,544

 
$
2,091,693

 
$
2,013,288

 
Average Equity
$
363,579

 
$
362,356

 
$
335,586

 
 
 
 
 
 
 
 
Period End Non-performing Assets (3)
$
10,652

 
$
11,864

 
$
5,901

 
Period End Non-performing Loans (4)
$
10,584

 
$
11,810

 
$
5,693

 
Period End Loans 30-89 Days Past Due (5)
$
7,013

 
$
6,865

 
$
7,337

 
 
 
 
 
 
 
 
Tax Equivalent Net Interest Income
$
26,261

 
$
26,751

 
$
25,993

 
Net Charge-offs during Period
$
1,584

 
$
277

 
$
143

 
 
 
 
 
 
 
 
 
 
 
 
 
 
(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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