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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): July 29, 2019

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 [ ]
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
 
Trading Symbol(s)
 
Name of each exchange
on which registered
Common Stock, no par value
 
GABC
 
NASDAQ Global Select Market





Item 2.02. Results of Operations and Financial Condition.

On July 29, 2019, German American Bancorp, Inc. (the “Company” or “German American”) issued a press release announcing its results for the quarter ended June 30, 2019, and making other disclosures. The press release (including the accompanying unaudited consolidated financial statements as of and for the quarter ended June 30, 2019, and other financial data) is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.

The information in this Item 2.02, including the information incorporated herein from Exhibit 99.1, is furnished pursuant to Item 2.02 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.
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 $0.17 per share which will be payable on August 20, 2019, to shareholders of record as of August 10, 2019.


Item 9.01. Financial Statements and Exhibits.

(d)
Exhibits
 
 
 
 
 
 
 
Exhibit No.
 
Description
 
 
 
 
 
 
German American Bancorp, Inc. Press Release dated July 29, 2019.





* * * * * *






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: July 29, 2019
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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JULY 29, 2019
GERMAN AMERICAN BANCORP, INC. (GABC) REPORTS RECORD QUARTERLY EARNINGS.


Jasper, Indiana: July 29, 2019 -- German American Bancorp, Inc. (NASDAQ: GABC) reported record quarterly earnings of $15.3 million, or $0.61 per share, for the quarter ending on June 30, 2019. This level of quarterly earnings performance was an increase of 27%, on a per share basis, compared with the second quarter 2018 net income of $11.1 million, or $0.48 per share. The current quarter earnings also compared favorably with the first quarter 2019 net income of $15.1 million, or $0.60 per share.

These quarterly comparisons are inclusive of the Company’s 2018 five branch acquisition in the greater Columbus, Indiana market area on May 18, 2018 and its acquisition of First Security, Inc. of Owensboro, Kentucky on October 15, 2018. The Company had also previously announced the completion of its acquisition of Citizens First Corporation of Bowling Green, Kentucky as of July 1, 2019. Acquisition-related expenses from these transactions were included in the expenses in each of the quarterly period comparisons.

On a linked-quarter basis, the record second quarter 2019 earnings were attributable to a variety of factors, including an increased level of net interest income, improved levels of non-interest income within a majority of the categories of fee income and additional net gains on the sale of loans and securities. As compared to the first quarter of 2019, the Company also benefited from a reduction in the level of provision for loan loss resulting from an improved level of asset quality. Additionally, operating expenses were lower in the current quarter due to reduced levels of salaries and benefits expense and professional fees during the current quarter.

Other factors offsetting a portion of the positive quarter-over-quarter comparison, on a linked-quarter basis, included the recording of $1.4 million in insurance contingency revenue, $554,000 in bank-owned life insurance benefits, and a $262,000 gain on the sale of a former branch facility during the first quarter of 2019.

The Company also recorded strong deposit growth during the second quarter, as end of period total deposits grew by approximately $63.7 million, or approximately 8% on a linked-quarter annualized basis, and total non-maturity transaction deposits grew by approximately $100.2 million, or 16% on a linked-quarter annualized basis. Additionally, the Company experienced a strong level of loan originations during the current quarter, which was materially offset by a continued elevated level of loan pay-offs, resulting in a modest increase of $8.3 million, or 1%, on a linked-quarter annualized basis, in end of period total loans.

Commenting on the Company’s performance, Mark A. Schroeder, German American’s Chairman & CEO, stated, "We’re pleased with the extremely strong start we experienced during the first half of this year, in terms



    

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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of record earnings, exceptional deposit growth and the exceptionally strong loan pipelines we continue to experience throughout our footprint. Even though the current economic recovery is at a historic length, the economic strength and vitality in each of the markets we serve continues to be impressive. Based on these factors, we are encouraged about our ability to continue the level of exceptional performance we’ve been able to deliver during the current quarter, year-to-date and over the course of the past decade.”

The Company also announced its Board of Directors declared a regular quarterly cash dividend of $0.17 per share, which will be payable on August 20, 2019 to shareholders of record as of August 10, 2019.

Balance Sheet Highlights

The Company completed a five-branch acquisition of locations of First Financial Bancorp (formerly branch locations of Mainsource Financial Group, Inc. prior to its merger with First Financial Bancorp) on May 18, 2018. Four of the branches are located in Columbus, Indiana, and one in Greensburg, Indiana. In addition, on October 15, 2018, the Company completed its acquisition of First Security, Inc. ("First Security") and its subsidiary bank, First Security Bank, Inc. First Security was based in Owensboro, Kentucky, and operated 11 retail banking offices in Owensboro, Bowling Green, Franklin and Lexington, Kentucky and in Evansville and Newburgh, Indiana.

Total assets for the Company totaled $3.971 billion at June 30, 2019, representing an increase of $75.2 million, or 8% on an annualized basis, compared with March 31, 2019 and an increase of $626.2 million, or 19%, compared with June 30, 2018. The increase in total assets as of June 30, 2019 compared to a year ago was driven largely by the acquisition of First Security and the five-branch network in the Columbus and Greensburg, Indiana markets, as well as organic loan growth.

June 30, 2019 total loans increased $8.3 million, or 1% on an annualized basis, compared with March 31, 2019 and increased $398.8 million, or 17%, compared with June 30, 2018.

The modest increase during the second quarter of 2019 was driven by a seasonal increase in agricultural loans of approximately $16.1 million, or 19% on an annualized basis, which was partially mitigated by a decline in retail loans of $7.7 million, or 5% on an annualized basis, driven primarily by a decline in residential real estate loans.




    

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 12

 
 
 
 
 
 
 
End of Period Loan Balances
 
6/30/2019
 
3/31/2019
 
6/30/2018
(dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial & Industrial Loans
 
$
554,290

 
$
555,967

 
$
518,299

Commercial Real Estate Loans
 
1,213,579

 
1,212,090

 
986,486

Agricultural Loans
 
364,116

 
347,999

 
352,308

Consumer Loans
 
280,963

 
281,724

 
241,315

Residential Mortgage Loans
 
307,726

 
314,634

 
223,437

 
 
$
2,720,674

 
$
2,712,414

 
$
2,321,845

 
 
 
 
 
 
 

Non-performing assets totaled $12.5 million at June 30, 2019 compared to $13.1 million at March 31, 2019 and $9.5 million at June 30, 2018. Non-performing assets represented 0.32% of total assets at June 30, 2019, 0.34% at March 31, 2019, and 0.28% at June 30, 2018. Non-performing loans totaled $11.9 million at June 30, 2019 compared to $12.4 million at March 31, 2019 and $9.5 million at June 30, 2018. Non-performing loans represented 0.44% of total loans at June 30, 2019 compared to 0.46% at March 31, 2019 and 0.41% at June 30, 2018.
 
 
 
 
 
 
Non-performing Assets
 
 
 
 
 
(dollars in thousands)
 
 
 
 
 
 
6/30/2019
 
3/31/2019
 
6/30/2018
Non-Accrual Loans
$
10,929

 
$
12,036

 
$
8,953

Past Due Loans (90 days or more)
959

 
393

 
534

       Total Non-Performing Loans
11,888

 
12,429

 
9,487

Other Real Estate
635

 
685

 
40

       Total Non-Performing Assets
$
12,523

 
$
13,114

 
$
9,527

 
 
 
 
 
 
Restructured Loans
$
118

 
$
119

 
$
123

 
 
 
 
 
 

The Company’s allowance for loan losses totaled $16.2 million at June 30, 2019 compared to $16.2 million at March 31, 2019 and $15.6 million at June 30, 2018. The allowance for loan losses represented 0.60% of period-end loans at June 30, 2019 compared with 0.60% of period-end loans at March 31, 2019 and 0.67% of period-end loans at June 30, 2018. From time to time, the Company has acquired loans through bank and branch acquisitions with the most recent (reflected in actual results) being the First Security acquisition during the fourth quarter of 2018 and a five-branch acquisition in the second quarter of 2018. Under acquisition accounting treatment, loans acquired are recorded at fair value which includes a credit risk component, and therefore the



    

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 12

allowance on loans acquired is not carried over from the seller. The Company held a net discount on acquired loans of $17.1 million at June 30, 2019, $18.2 million at March 31, 2019 and $9.6 million at June 30, 2018.

June 30, 2019 total deposits increased $63.7 million, or 8% on an annualized basis, compared with March 31, 2019 and increased $527.4 million, or 20%, compared with June 30, 2018. The increase in total deposits in the second quarter of 2019, compared with the first quarter of 2019, was largely related to seasonal increases in public fund operating accounts.

 
 
 
 
 
 
 
End of Period Deposit Balances
 
6/30/2019
 
3/31/2019
 
6/30/2018
(dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-interest-bearing Demand Deposits
 
$
725,367

 
$
723,995

 
$
629,724

IB Demand, Savings, and MMDA Accounts
 
1,805,694

 
1,706,913

 
1,611,583

Time Deposits < $100,000
 
248,744

 
248,686

 
190,179

Time Deposits > $100,000
 
349,027

 
385,576

 
169,954

 
 
$
3,128,832

 
$
3,065,170

 
$
2,601,440

 
 
 
 
 
 
 

Results of Operations Highlights – Quarter ended June 30, 2019

Net income for the quarter ended June 30, 2019 totaled $15,271,000, or $0.61 per share, an increase of 2% on a per share basis compared with the first quarter 2019 net income of $15,067,000, or $0.60 per share, and an increase of 27% on a per share basis compared with the second quarter 2018 net income of $11,097,000, or $0.48 per share. The change in net income during the second quarter of 2019, compared with the second quarter of 2018, was impacted by the completed acquisition activity during 2018.  A detailed analysis of the factors impacting second quarter 2019 income and expenses, as compared to first quarter 2019, is included in the remaining discussion.  

Net income for each quarter presented was impacted by merger and acquisition activity during 2018 and 2019. The second quarter of 2019 results of operations included acquisition-related expenses of approximately $428,000 ($369,000 or $0.01 per share, on an after tax basis), while the first quarter of 2019 results of operations included acquisition-related expenses of approximately $544,000 ($432,000 or $0.02 per share, on an after tax basis) and the second quarter of 2018 included approximately $903,000 ($727,000 or $0.03 per share on an after tax basis).

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 



    

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 12


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Summary Average Balance Sheet
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Tax-equivalent basis / dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Quarter Ended
 
 Quarter Ended
 
 Quarter Ended
 
 
June 30, 2019
 
March 31, 2019
 
June 30, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 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
 
$
21,257

 
$
85

 
1.62
%
 
$
24,538

 
$
141

 
2.32
%
 
$
12,939

 
$
54

 
1.68
%
Securities
 
842,282

 
6,529

 
3.10
%
 
825,625

 
6,549

 
3.17
%
 
751,367

 
5,758

 
3.07
%
Loans and Leases
 
2,721,630

 
35,135

 
5.18
%
 
2,718,808

 
35,207

 
5.24
%
 
2,229,972

 
26,394

 
4.75
%
Total Interest Earning Assets
 
$
3,585,169

 
$
41,749

 
4.67
%
 
$
3,568,971

 
$
41,897

 
4.74
%
 
$
2,994,278

 
$
32,206

 
4.31
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Demand Deposit Accounts
 
$
715,681

 
 
 
 
 
$
691,107

 
 
 
 
 
$
625,158

 
 
 
 
IB Demand, Savings, and
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
        MMDA Accounts
 
$
1,797,228

 
$
2,945

 
0.66
%
 
$
1,731,118

 
$
2,695

 
0.63
%
 
$
1,560,838

 
$
1,597

 
0.41
%
Time Deposits
 
631,174

 
2,814

 
1.79
%
 
646,726

 
2,721

 
1.71
%
 
417,585

 
1,251

 
1.20
%
FHLB Advances and Other Borrowings
 
246,229

 
1,636

 
2.67
%
 
330,463

 
2,182

 
2.68
%
 
238,775

 
1,216

 
2.04
%
Total Interest-Bearing Liabilities
 
$
2,674,632

 
$
7,395

 
1.11
%
 
$
2,708,307

 
$
7,598

 
1.14
%
 
$
2,217,198

 
$
4,064

 
0.74
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cost of Funds
 
 
 
 
 
0.83
%
 
 
 
 
 
0.86
%
 
 
 
 
 
0.54
%
Net Interest Income
 
 
 
$
34,354

 
 
 
 
 
$
34,299

 
 
 
 
 
$
28,142

 
 
Net Interest Margin
 
 
 
 
 
3.84
%
 
 
 
 
 
3.88
%
 
 
 
 
 
3.77
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

During the quarter ended June 30, 2019, net interest income totaled $33,641,000, which was relatively flat to the quarter ended March 31, 2019 net interest income of $33,591,000. The increased level of net interest income during the second quarter of 2019 compared with the first quarter of 2019 was driven primarily by a modestly higher level of average earning assets combined with an additional day during the second quarter partially mitigated by a modest decline in the stated tax equivalent net interest margin.
 
The tax equivalent net interest margin for the quarter ended June 30, 2019 was 3.84% compared with 3.88% in the first quarter of 2019. Accretion of loan discounts on acquired loans contributed approximately 12 basis points to the net interest margin on an annualized basis in the second quarter of 2019 and 16 basis points in the first quarter of 2019.




    

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 12

During the quarter ended June 30, 2019, the Company recorded a provision for loan loss of $250,000 compared with $675,000 in the first quarter of 2019. 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 June 30, 2019, non-interest income totaled $10,509,000, a decline of $1,149,000, or 10%, compared with the quarter ended March 31, 2019.

 
 
 
 
 
 
 
 
 
Quarter Ended
 
Quarter Ended
 
Quarter Ended
Non-interest Income
 
6/30/2019
 
3/31/2019
 
6/30/2018
(dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
Trust and Investment Product Fees
 
$
1,913

 
$
1,567

 
$
1,677

Service Charges on Deposit Accounts
 
2,024

 
1,900

 
1,643

Insurance Revenues
 
1,929

 
3,205

 
1,696

Company Owned Life Insurance
 
304

 
884

 
260

Interchange Fee Income
 
2,332

 
2,095

 
1,714

Other Operating Income
 
461

 
871

 
913

     Subtotal
 
8,963

 
10,522

 
7,903

Net Gains on Loans
 
1,030

 
981

 
905

Net Gains on Securities
 
516

 
155

 
74

Total Non-interest Income
 
$
10,509

 
$
11,658

 
$
8,882

 
 
 
 
 
 
 

Trust and investment product fees increased $346,000, or 22%, during the second quarter of 2019 compared with the first quarter of 2019. The increase during the second quarter of 2019 was largely attributable to increased assets under management and increased activity in the Company's wealth management group.

Insurance revenues declined $1,276,000, or 40%, during the quarter ended June 30, 2019, compared with the first quarter of 2019. The decline during the second quarter of 2019 compared with the first quarter of 2019 was primarily due to contingency revenue. Contingency revenue during the first quarter of 2019 totaled $1,375,000 compared with no contingency revenue during the second quarter of 2019. 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.




    

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 12

Company owned life insurance revenue declined $580,000, or 66%, during the quarter ended June 30, 2019, compared with the first quarter of 2019. The increase was largely related to death benefits of $554,000 received from life insurance policies during the first quarter of 2019.

Interchange fees increased $237,000, or 11%, during the second quarter of 2019 compared with the first quarter of 2019. The increase during the second quarter of 2019 compared with the first quarter of 2019 was largely attributable to increased card utilization by customers.

Other operating income declined $410,000, or 47%, during the quarter ended June 30, 2019 compared with the first quarter of 2019. The decline during the second quarter of 2019 compared with the first quarter of 2019 was largely attributable to a gain realized on the sale of a former branch facility of $262,000 during the first quarter of 2019.

The Company realized $516,000 in gains on sales of securities during the second quarter of 2019 compared with $155,000 during the first quarter of 2019.

During the quarter ended June 30, 2019, non-interest expense totaled $25,618,000, a decline of $1,141,000, or 4%, compared with the quarter ended March 31, 2019. The second quarter of 2019 included acquisition-related expenses of $428,000 while the first quarter of 2019 included acquisition-related expenses of approximately $544,000.

 
 
 
 
 
 
 
 
 
Quarter Ended
 
Quarter Ended
 
Quarter Ended
Non-interest Expense
 
6/30/2019
 
3/31/2019
 
6/30/2018
(dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
Salaries and Employee Benefits
 
$
14,117

 
$
15,044

 
$
12,019

Occupancy, Furniture and Equipment Expense
 
3,212

 
3,219

 
2,527

FDIC Premiums
 
245

 
288

 
238

Data Processing Fees
 
1,803

 
1,583

 
1,398

Professional Fees
 
1,174

 
1,327

 
1,361

Advertising and Promotion
 
936

 
870

 
857

Intangible Amortization
 
802

 
843

 
306

Other Operating Expenses
 
3,329

 
3,585

 
3,002

Total Non-interest Expense
 
$
25,618

 
$
26,759

 
$
21,708

 
 
 
 
 
 
 




    

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 12

Salaries and benefits declined $927,000, or 6%, during the quarter ended June 30, 2019 compared with the first quarter of 2019. The decline in salaries and benefits during the second quarter of 2019 compared with the first quarter of 2019 was primarily attributable to a reduced level of incentive compensation expense and a reduced level of other employee benefit expense.

Data processing fees increased $220,000, or 14%, during the second quarter of 2019 compared with the first quarter of 2019. The increase during the second quarter of 2019 compared with the first quarter of 2019 was driven by acquisition-related costs which totaled approximately $214,000 during the second quarter of 2019.
 
Professional fees declined $153,000, or 12%, during the second quarter of 2019 compared with the first quarter of 2019. The decline during the second quarter of 2019 compared to the first quarter of 2019 was due in large part to a decline in professional fees related to merger and acquisition activity partially offset by an increase in other professional fees primarily associated with the Company's annual shareholders' meeting. Merger and acquisition-related professional fees totaled approximately $205,000 during the second quarter of 2019 compared with $508,000 in the first quarter of 2019.

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 Bank, operates 75 banking offices in 20 contiguous southern Indiana counties, six counties in Kentucky and one county in Tennessee. 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


9 of 12

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 (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
 
 
 
 
 
 
 
June 30, 2019
 
March 31, 2019
 
June 30, 2018
ASSETS
 
 
 
 
 
     Cash and Due from Banks
$
48,634

 
$
45,038

 
$
60,244

     Short-term Investments
41,623

 
14,740

 
11,038

     Investment Securities
841,045

 
824,950

 
739,834

 
 
 
 
 
 
     Loans Held-for-Sale
14,184

 
8,586

 
9,552

 
 
 
 
 
 
     Loans, Net of Unearned Income
2,717,028

 
2,708,832

 
2,318,510

     Allowance for Loan Losses
(16,239
)
 
(16,243
)
 
(15,637
)
        Net Loans
2,700,789

 
2,692,589

 
2,302,873

 
 
 
 
 
 
     Stock in FHLB and Other Restricted Stock
13,048

 
13,048

 
13,048

     Premises and Equipment
89,413

 
89,600

 
66,641

     Goodwill and Other Intangible Assets
113,309

 
112,920

 
65,978

     Other Assets
108,694

 
94,053

 
75,336

   TOTAL ASSETS
$
3,970,739

 
$
3,895,524

 
$
3,344,544

 
 
 
 
 
 
LIABILITIES
 
 
 
 
 
     Non-interest-bearing Demand Deposits
$
725,367

 
$
723,995

 
$
629,724

     Interest-bearing Demand, Savings, and Money Market Accounts
1,805,694

 
1,706,913

 
1,611,583

     Time Deposits
597,771

 
634,262

 
360,133

        Total Deposits
3,128,832

 
3,065,170

 
2,601,440

 
 
 
 
 
 
     Borrowings
305,940

 
317,480

 
354,803

     Other Liabilities
36,556

 
33,687

 
17,761

   TOTAL LIABILITIES
3,471,328

 
3,416,337

 
2,974,004

 
 
 
 
 
 
SHAREHOLDERS' EQUITY
 
 
 
 
 
     Common Stock and Surplus
254,935

 
254,625

 
188,885

     Retained Earnings
233,269

 
222,246

 
194,994

     Accumulated Other Comprehensive Income (Loss)
11,207

 
2,316

 
(13,339
)
SHAREHOLDERS' EQUITY
499,411

 
479,187

 
370,540

 
 
 
 
 
 
   TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
$
3,970,739

 
$
3,895,524

 
$
3,344,544

 
 
 
 
 
 
END OF PERIOD SHARES OUTSTANDING
24,992,238

 
24,992,238

 
22,967,898

 
 
 
 
 
 
TANGIBLE BOOK VALUE PER SHARE (1)
$
15.45

 
$
14.66

 
$
13.26

 
 
 
 
 
 
 
(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
 
Six Months Ended
 
 
June 30, 2019
 
March 31, 2019
 
June 30, 2018
 
June 30, 2019
 
June 30, 2018
INTEREST INCOME
 
 
 
 
 
 
 
 
 
   Interest and Fees on Loans
$
35,046

 
$
35,119

 
$
26,308

 
$
70,165

 
$
50,258

   Interest on Short-term Investments
85

 
141

 
54

 
226

 
110

   Interest and Dividends on Investment Securities
5,905

 
5,929

 
5,171

 
11,834

 
10,310

  TOTAL INTEREST INCOME
41,036

 
41,189

 
31,533

 
82,225

 
60,678

 
 
 
 
 
 
 
 
 
 
 
INTEREST EXPENSE
 
 
 
 
 
 
 
 
 
   Interest on Deposits
5,759

 
5,416

 
2,848

 
11,175

 
5,131

   Interest on Borrowings
1,636

 
2,182

 
1,216

 
3,818

 
2,468

  TOTAL INTEREST EXPENSE
7,395

 
7,598

 
4,064

 
14,993

 
7,599

 
 
 
 
 
 
 
 
 
 
 
   NET INTEREST INCOME
33,641

 
33,591

 
27,469

 
67,232

 
53,079

   Provision for Loan Losses
250

 
675

 
1,220

 
925

 
1,570

   NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES
33,391

 
32,916

 
26,249

 
66,307

 
51,509

 
 
 
 
 
 
 
 
 
 
 
NON-INTEREST INCOME
 
 
 
 
 
 
 
 
 
   Net Gain on Sales of Loans
1,030

 
981

 
905

 
2,011

 
1,555

   Net Gain on Securities
516

 
155

 
74

 
671

 
344

   Other Non-interest Income
8,963

 
10,522

 
7,903

 
19,485

 
16,475

  TOTAL NON-INTEREST INCOME
10,509

 
11,658

 
8,882

 
22,167

 
18,374

 
 
 
 
 
 
 
 
 
 
 
NON-INTEREST EXPENSE
 
 
 
 
 
 
 
 
 
   Salaries and Benefits
14,117

 
15,044

 
12,019

 
29,161

 
24,145

   Other Non-interest Expenses
11,501

 
11,715

 
9,689

 
23,216

 
18,018

  TOTAL NON-INTEREST EXPENSE
25,618

 
26,759

 
21,708

 
52,377

 
42,163

 
 
 
 
 
 
 
 
 
 
 
   Income before Income Taxes
18,282

 
17,815

 
13,423

 
36,097

 
27,720

   Income Tax Expense
3,011

 
2,748

 
2,326

 
5,759

 
4,810

 
 
 
 
 
 
 
 
 
 
 
NET INCOME
$
15,271

 
$
15,067

 
$
11,097

 
$
30,338

 
$
22,910

 
 
 
 
 
 
 
 
 
 
 
BASIC EARNINGS PER SHARE
$
0.61

 
$
0.60

 
$
0.48

 
$
1.21

 
$
1.00

DILUTED EARNINGS PER SHARE
$
0.61

 
$
0.60

 
$
0.48

 
$
1.21

 
$
1.00

 
 
 
 
 
 
 
 
 
 
 
WEIGHTED AVERAGE SHARES OUTSTANDING
24,992,238

 
24,971,863

 
22,968,178

 
24,982,107

 
22,954,367

DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING
24,992,238

 
24,971,863

 
22,968,178

 
24,982,107

 
22,954,367

 
 
 
 
 
 
 
 
 
 
 


 
 
 
 
 
 
 
 
 




GERMAN AMERICAN BANCORP, INC.
(unaudited, dollars in thousands except per share data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
 
 
June 30,
 
March 31,
 
June 30,
 
June 30,
 
June 30,
 
 
 
2019
 
2019
 
2018
 
2019
 
2018
EARNINGS PERFORMANCE RATIOS
 
 
 
 
 
 
 
 
 
 
 
Annualized Return on Average Assets
 
1.56
%
 
1.55
%
 
1.38
%
 
1.56
%
 
1.44
%
 
Annualized Return on Average Equity
 
12.60
%
 
12.98
%
 
12.15
%
 
12.78
%
 
12.57
%
 
Net Interest Margin
 
3.84
%
 
3.88
%
 
3.77
%
 
3.86
%
 
3.71
%
 
Efficiency Ratio (1)
 
57.10
%
 
58.23
%
 
58.63
%
 
57.67
%
 
57.93
%
 
Net Overhead Expense to Average Earning Assets (2)
 
1.69
%
 
1.69
%
 
1.71
%
 
1.69
%
 
1.61
%
 
 
 
 
 
 
 
 
 
 
 
 
ASSET QUALITY RATIOS
 
 
 
 
 
 
 
 
 
 
 
Annualized Net Charge-offs to Average Loans
 
0.04
%
 
0.04
%
 
0.01
%
 
0.04
%
 
0.15
%
 
Allowance for Loan Losses to Period End Loans
 
0.60
%
 
0.60
%
 
0.67
%
 
 
 
 
 
Non-performing Assets to Period End Assets
 
0.32
%
 
0.34
%
 
0.28
%
 
 
 
 
 
Non-performing Loans to Period End Loans
 
0.44
%
 
0.46
%
 
0.41
%
 
 
 
 
 
Loans 30-89 Days Past Due to Period End Loans
 
0.39
%
 
0.45
%
 
0.52
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SELECTED BALANCE SHEET & OTHER FINANCIAL DATA
 
 
 
 
 
 
 
 
 
 
 
Average Assets
 
$
3,908,669

 
$
3,886,723

 
$
3,226,091

 
$
3,897,757

 
$
3,173,821

 
Average Earning Assets
 
$
3,585,169

 
$
3,568,971

 
$
2,994,278

 
$
3,577,115

 
$
2,948,319

 
Average Total Loans
 
$
2,721,630

 
$
2,718,808

 
$
2,229,972

 
$
2,720,227

 
$
2,185,087

 
Average Demand Deposits
 
$
715,681

 
$
691,107

 
$
625,158

 
$
703,462

 
$
605,405

 
Average Interest Bearing Liabilities
 
$
2,674,632

 
$
2,708,307

 
$
2,217,198

 
$
2,691,376

 
$
2,184,055

 
Average Equity
 
$
484,891

 
$
464,234

 
$
365,197

 
$
474,619

 
$
364,392

 
 
 
 
 
 
 
 
 
 
 
 
 
Period End Non-performing Assets (3)
 
$
12,523

 
$
13,114

 
$
9,527

 
 
 
 
 
Period End Non-performing Loans (4)
 
$
11,888

 
$
12,429

 
$
9,487

 
 
 
 
 
Period End Loans 30-89 Days Past Due (5)
 
$
10,605

 
$
12,197

 
$
12,146

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tax Equivalent Net Interest Income
 
$
34,354

 
$
34,299

 
$
28,142

 
$
68,653

 
$
54,403

 
Net Charge-offs during Period
 
$
254

 
$
255

 
$
43

 
$
509

 
$
1,627

 
 
 
 
 
 
 
 
 
 
 
 
(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, and Other Real Estate Owned.
 
 
 
 
(4) 
Non-performing loans are defined as Non-accrual Loans and Loans Past Due 90 days or more.
 
 
 
 
(5) 
Loans 30-89 days past due and still accruing.
 
 
 
 
 
 
 
 
 
 


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