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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): June 11, 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:
[X]
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 7.01. Regulation FD Disclosure.
Mark A. Schroeder, Chairman and Chief Executive Officer, and Bradley M. Rust, Executive Vice President and Chief Financial Officer, of German American Bancorp, Inc. will be meeting with FIG Partners, LLC and various investors in Indianapolis, Indiana on Monday, June 11, 2018. The officers intend to present the material furnished as Exhibit 99.1 herewith, in whole or in part, as part of those meetings. Such presentation material is incorporated herein by reference.
 
The information in this Item 7.01, including the information incorporated herein from Exhibit 99.1, is furnished pursuant to Item 7.01 of Form 8-K and 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.

Cautionary Note Regarding Forward-Looking Statements

This Report contains forward‐looking statements made pursuant to the safe‐harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward‐looking statements can often, but not always, be identified by the use of words like “believe”, “continue”, “pattern”, “estimate”, “project”, “intend”, “anticipate”, “expect” and similar expressions or future or conditional verbs such as “will”, “would”, “should”, “could”, “might”, “can”, “may”, or similar expressions. These forward‐looking statements include, but are not limited to, statements relating to the expected timing and benefits of German American’s proposed merger (the “Merger”) with First Security, Inc. (“First Security”), including future financial and operating results, cost savings, enhanced revenues, and accretion/dilution to reported earnings that may be realized from the Merger, as well as other statements of expectations regarding the Merger, and other statements of German American’s goals, intentions and expectations; statements regarding German American’s business plan and growth strategies; statements regarding the asset quality of German American’s loan and investment portfolios; and estimates of German American’s risks and future costs and benefits, whether with respect to the Merger or otherwise.

These forward‐looking statements are subject to significant risks, assumptions and uncertainties that may cause results to differ materially from those set forth in forward‐looking statements, including, among other things: the risk that the businesses of German American and First Security will not be integrated successfully or such integration may be more difficult, time‐consuming or costly than expected; expected revenue synergies and cost savings from the Merger may not be fully realized or realized within the expected time frame; revenues following the Merger may be lower than expected; customer and employee relationships and business operations may be disrupted by the Merger; the ability to obtain required regulatory approvals and the approval of First Security’s shareholders, and the ability to complete the Merger on the expected timeframe; the costs and effects of litigation and the possible unexpected or adverse outcomes of such litigation; possible changes in economic and business conditions; the existence or exacerbation of general geopolitical instability and uncertainty; the ability of German American to complete integration and attract new customers; possible changes in monetary and fiscal policies, and laws and regulations; the effects of easing restrictions on participants in the financial services industry; the cost and other effects of legal and administrative cases; possible changes in the creditworthiness of customers and the possible impairment of collectability of loans; fluctuations in market rates of interest; competitive factors in the banking industry; changes in the banking legislation or regulatory requirements of federal and state agencies applicable to bank holding companies and banks like German American’s affiliate bank; continued availability of earnings and excess capital sufficient for the lawful and prudent declaration of dividends; changes in market, economic, operational, liquidity, credit and interest rate risks associated with German American’s business; and other risks and factors identified in German American’s filings with the Securities and Exchange Commission. German American does not undertake any obligation to update any forward‐looking statement, whether written or oral, relating to the matters discussed in this Report. In addition, German American’s and First Security’s past results of operations do not necessarily indicate either of their anticipated future results, whether the Merger is effectuated or not.






Additional Information

Communications in this Report do not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any proxy vote or approval. The Merger will be submitted to the First Security shareholders for their consideration. In connection therewith, German American will file a Registration Statement on Form S-4 with the Securities and Exchange Commission (“SEC”) that will include a proxy statement for First Security and a prospectus for German American, as well as other relevant documents concerning the Merger. INVESTORS ARE URGED TO READ THE REGISTRATION STATEMENT AND THE CORRESPONDING PROXY STATEMENT/PROSPECTUS REGARDING THE MERGER WHEN IT BECOMES AVAILABLE, AS WELL AS ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, TOGETHER WITH ALL AMENDMENTS AND SUPPLEMENTS TO THOSE DOCUMENTS, AS THEY WILL CONTAIN IMPORTANT INFORMATION. You will be able to obtain a copy of the proxy statement/prospectus (once filed), as well as other filings containing information about German American, without charge, at the SEC’s website (http://www.sec.gov) or by accessing German American’s website (http://www.germanamerican.com) under the tab “Investor Relations” and then under the heading “Financial Information.”

First Security and its directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of First Security in connection with the Merger. Information about certain interests of the directors and executive officers of First Security and other persons who may be deemed participants in the transaction may be obtained by reading the proxy statement/prospectus when it becomes available. Free copies of this document may be obtained as described above.




Item 9.01. Financial Statements and Exhibits.
(d)
 
Exhibits
 
 
 
 
 
 
 
 
 
Exhibit No.
 
Description
 
 
 
 
 
 
 
 





* * * * * *








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.

 
GERMAN AMERICAN BANCORP, INC.

 
By:
/s/ Mark A. Schroeder
Dated: June 11, 2018
Mark A. Schroeder, Chairman and Chief Executive Officer






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Section 2: EX-99.1 (EXHIBIT 99.1)

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Filed by German American Bancorp, Inc. pursuant to Rule 425 Under the Securities Act of 1933 Subject Company: First Security, Inc. Commission Securities Exchange Act File No: 001-15877 Symbol: GABC June 11, 2018 FIG Partners LLC


 
Presented By Mark A. Schroeder, Chairman and CEO (812) 482-0701 mark.schroeder@germanamerican.com Bradley M. Rust, Executive VP and CFO (812) 482-0718 brad.rust@germanamerican.com 2


 
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS When used in this presentation and our oral statements, the words or phrases “believe,” “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” “project,” “plans,” or similar expressions are intended to identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date of this presentation, and we do not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur in the future. By their nature, these statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from those anticipated in the statements. Factors that could cause actual results and performance to vary materially from those expressed or implied by any forward-looking statement include those that are discussed in Item 1, “Business – Forward Looking Statements and Associated Risk,” and Item 1A, “Risk Factors,” in our Annual Report on Form 10-K for 2017 as updated and supplemented by our other SEC reports filed from time to time. 3


 
Who We Are Southern Indiana Community- focused Financial Services Organization • Banking, Insurance, Investments & Trust • $3.1 Billion Total Banking Assets • $1.3 Billion Investment and Trust Assets Under Management • $60 Million Annual Insurance Premiums • 600+ FTEs • 58 Banking Offices 4


 
Diversified Economic Base Regional Education & Health Care Life Sciences & Technology Agriculture, Manufacturing & Logistics MAJOR EMPLOYERS: Education Manufacturing & Logistics Life Sciences & Technology Indiana University Aisin U.S.A. MFG, Inc. Baxter BioPharma Solutions University of Southern Indiana ALCOA Warrick Operations Crane Naval Surface Weapons Center Vincennes University Amazon Fulfillment Service Cook Group, Inc. Greater Clark County School Corp American Commercial Lines/Jeffboat Mead Johnson Nutrition Evansville Vanderburgh County School Corp Berry Plastics Monroe County School Corporation Cummins, Inc. (Cummins Diesel) Energy New Albany – Floyd County School Corp Grote Industries Inc Duke Energy Jasper Engines & Transmissions Vectren Health Care Kimball International, Inc. Koch Enterprises, Inc. Indiana University Health MasterBrand Cabinets, Inc. Columbus Regional Hospital NTN Driveshaft Inc Clark Memorial Hospital OFS Brands (Office-Furniture Systems) Deaconess Hospital Toyota Motor Mfg – Indiana Baptist Health Floyd Hospital Good Samaritan Hospital King’s Daughters’ Hospital Memorial Hospital St Vincent’s Medical Center 5


 
Indiana 6


 
Kentucky 7


 
Capitalize upon Market Strength & Growth Indiana Small MSA Market Expansion Total Market GABC Deposit Market Share # of Market Deposits Market Share*** Position Branches Heritage Markets* $ 4,992,622 32% #1 31 Evansville/Newburgh $ 4,198,662 13% #3 7 Bloomington $ 2,399,939 8% #4 3 Columbus $ 1,204,599 11% #3 5 Louisville MSA (Indiana Portion)** $ 3,048,433 3% #11 5 Total Indiana Growth $ 10,851,633 Markets * Includes the Indiana counties of Daviess, Dubois, Gibson, Jefferson, Knox, Lawrence, Martin, Perry, Pike & Spencer ** Includes the Indiana counties of Clark & Floyd *** Source: FDIC 06/30/17 Statistics. Includes the market share of MainSource Bank (completed branch purchase) in Columbus and of First Security Bank (merger pending) in Evansville/Newburgh. 8


 
Capitalize upon Market Strength & Growth Kentucky Small MSA Market Expansion Total Market GABC Deposit Market Share # of Market Deposits Market Share* Position* Branches* Owensboro $ 2,674,220 7% #5 2 Bowling Green $ 2,336,068 4% #9 3 Lexington $ 7,011,274 .4% #19 2 Total Kentucky $ 12,021,562 Growth Markets * German American deposits adjusted to include First Security Bank (merger pending) deposit market share, market share position, and branches 9


 
Capitalize upon Market Strength & Growth *Heritage Markets 2017 2007** 2017 # of (millions) Deposits Share Deposits Share Increase Offices 1 German American $ 1,612 32.3% $ 1,129 26.0% 42.8% 31 2 Old National Bank $ 1,063 21.3% $ 1,354 31.2% - 21.5% 16 3 Fifth Third Bank $ 456 9.1% $ 452 10.4% 0.9% 9 Market Total $ 4,993 $ 4,340 15.0% * Heritage Markets include the Indiana counties of Daviess, Dubois, Gibson, Jefferson, Knox, Lawrence, Martin, Perry, Pike & Spencer ** 2007 Deposits adjusted to include branches subsequently acquired by surviving banks Source: FDIC 06/30/17 Statistics 10


 
Capitalize upon Market Strength & Growth Evansville/Newburgh Markets 2017* 2007** 2017 # of (millions) Deposits Share Deposits Share Increase Offices 1 Old National Bank $ 1,690 40.3% $ 2,228 53.8% -24.1% 14 2 Fifth Third Bank $ 1,208 28.8% $ 1,184 28.6% 2.0% 12 3 German American $ 535 12.7% $ 271 6.5% 97.4% 7 Market Total $ 4,199 $ 4,140 1.4% * 2017 German American deposits adjusted to include First Security Bank deposit data (merger pending) ** 2007 Deposits adjusted to include branches subsequently acquired by surviving banks Source: FDIC 06/30/17 Statistics 11


 
History of Superior Financial Performance Eight Years of Consecutive Record Earnings Performance Double-Digit Return on Equity for Past 13 Consecutive Fiscal Years Bank Director Magazine - Bank Performance Scorecard Top 10 National Ranking for Past 3 Years ($1 - $5 billion Publicly-traded Companies) # 10 Ranking in 2017 # 2 Ranking in 2016 # 4 Ranking in 2015 Bank Director Magazine - Top 10 Exchange Traded Banks for 10-Year Total Return # 7 Total Return of 400 (6/30/07 – 6/30/17) 12


 
Financial Trends 13


 
Total Assets Annualized Return on Assets $3,500 $3,144 $3,125 $2,956 $3,000 $2,500 $2,374 $2,164 $2,237 $2,000 $1,500 1.51% 1.33% 1.35% 1.25% 1.31% 1.24% $1,000 $500 $- 12/31/13 12/31/14 12/31/15 12/31/16 12/31/17 03/31/18 (Dollars in Millions) 14


 
Total Loans, Net of Unearned Income Commercial & Agricultural Loans as % of Total Loans $2,500 $2,250 $2,142 $2,151 $1,990 $2,000 $1,750 $1,564 $1,448 $1,500 $1,382 $1,250 $1,000 $750 81% 81% 82% 81% 81% 82% $500 $250 $- 12/31/13 12/31/14 12/31/15 12/31/16 12/31/17 03/31/18 (Dollars in Millions) 15


 
Loan Portfolio Composition As of March 31, 2018 Total Loans $2,150.5 million Residential Mortgage Loans, $ 180.1 million, 8% Construction & Development Loans, $ 122.6 million, 6% Home Equity Loans, $152.0 million, 7% Agricultural Loans, $ 328.5 million, 15% Consumer Loans, $ 44.0 million, 2% Multi-Family Residential Properties, $ 123.0 million, 6% Commercial & Industrial Loans, $ 474.5 million, 22% Commercial Real Estate Non-Owner Occupied, $ 544.7 million, 25% Commercial Real Estate Owner Occupied, $ 181.1 million, 9% 16


 
Non-Performing Assets to Total Assets 2.50% 2.00% 1.45% 1.50% 1.04% 1.00% 0.84% 0.76% 0.48% 0.50% 0.44% 0.29% 0.34% 0.38% 0.15% 0.14% 0.00% 12/31/13 12/31/14 12/31/15 12/31/16 12/31/17 03/31/18 GABC Peer Group 17


 
Total Deposits Non-Maturity Deposit Accounts as % of Total Deposits $3,000 $2,484 $2,467 $2,500 $2,350 $2,000 $1,812 $1,780 $1,826 $1,500 83% 84% 84% 84% 81% 81% $1,000 $500 $- 12/31/13 12/31/14 12/31/15 12/31/16 12/31/17 03/31/18 (Dollars in Millions) 18


 
Total Deposit Composition as of March 31, 2018 Total Deposits $2,467.1 million Non-Interest Bearing Demand, $599.4 million, 24% Interest Bearing Demand, Savings & Money Market, $1,465.1 million, 60% Cost of Funds 2013 0.37% 2014 0.30% 2015 0.28% Time Deposits, $402.6 million, 16% 2016 0.32% 2017 0.40% Q1 2018 0.49% 19


 
Total Shareholders’ Equity Annualized Return on Equity $400 $365 $364 $350 $330 $300 $252 $250 $229 $200 $200 $150 13.40% 13.21% 13.00% 12.47% 10.94% 11.59% $100 $50 $- 12/31/13 12/31/14 12/31/15 12/31/16 12/31/17 03/31/18 (Dollars in Millions) 20


 
Net Interest Income Net Interest Margin (Tax-Equivalent) $120,000 $105,057 $99,470 $100,000 $79,072 $80,000 $76,991 $70,319 $60,000 3.76% 3.75% 3.76% 3.70% 3.67% $40,000 $25,993 $26,261 $20,000 3.86% 3.66% $- 12/31/13 12/31/14 12/31/15 12/31/16 12/31/17 Q1 '17 Q1 '18 (Dollars in Thousands) 21


 
Non-Interest Income Non-Interest Income as % of Total Revenue $35,000 $32,013 $31,854 $30,000 $27,444 $25,000 $23,615 $23,937 $20,000 26% $15,000 25% 24% 24% 23% $9,492 $10,000 $8,188 27% 24% $5,000 $- 12/31/13 12/31/14 12/31/15 12/31/16 12/31/17 Q1 '17 Q1 '18 (Dollars in Thousands) 22


 
Non-Interest Expense Efficiency Ratio $90,000 $80,000 $76,587 $77,803 $70,000 $61,326 $57,713 $60,000 $54,905 $50,000 $40,000 58.5% 58.3% 57.6% $30,000 57.2% 56.8% $19,036 $20,445 $20,000 57.2% $10,000 55.7% $- 12/31/13 12/31/14 12/31/15 12/31/16 12/31/17 Q1 '17 Q1 '18 (Dollars in Thousands) 23


 
Net Income & Earnings Per Share Earnings Per Share $45,000 $40,676 $40,000 $35,184 $35,000 $30,064 $30,000 $28,344 $25,413 $25,000 $20,000 $1.77 $1.57 $15,000 $1.43 $1.51 $1.32 $11,813 $9,556 $10,000 $0.51 $5,000 $0.42 $- 12/31/13 12/31/14 12/31/15 12/31/16 12/31/17 Q1 '17 Q1 '18 (Dollars in Thousands, Except Per Share Amounts) *Earnings Per Share adjusted for 3-for-2 stock split completed in 2017 24


 
Why Invest in GABC? 25


 
Why Invest in GABC? * GABC Earnings Per Share Growth $1.77 $1.51 $1.57 $1.43 $1.27 $1.32 $1.07 $0.81 $0.77 $0.73 As of 12/31 for years shown 26 *Earnings Per Share adjusted for 3-for-2 stock split completed in 2017


 
Why Invest in GABC? GABC Tangible Book Value Per Share Growth * $13.45 $11.94 $11.57 $10.40 $8.92 $8.62 $7.64 As of 12/31 for years shown 27 *Tangible Book Value Per Share adjusted for 3-for-2 stock split completed in 2017


 
Why Invest in GABC? * GABC Stock Price Appreciation $35.07 $35.33 $22.21 $20.35 $18.95 $14.48 $12.13 As of 12/31 for years shown 28 *Stock Price adjusted for 3-for-2 stock split completed in 2017


 
Why Invest in GABC? • Proven Executive Management Team • Track Record of Consistent Top Quartile Financial Performance • Experienced in Operating Plan Execution and M & A Transitions • Potential Growth within New Market Areas – Small MSA Focus • Existing Platform for Operating Efficiency • Infrastructure in Place for Perpetuating Ongoing EPS Growth • Consistent Strong Dividend Yield and Dividend Pay-out Capacity 29


 
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