-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GxmhH5vDpgbTo41xC+K3MpxLhEXHeBKcCAMJ7uPr44McA1WQtMH4C6Q8xad1FPlC wQuVxOQ7ZntKIuvB9J4JNA== 0000714395-96-000002.txt : 19960402 0000714395-96-000002.hdr.sgml : 19960402 ACCESSION NUMBER: 0000714395-96-000002 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960401 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: GERMAN AMERICAN BANCORP CENTRAL INDEX KEY: 0000714395 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 351547518 STATE OF INCORPORATION: IN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-11244 FILM NUMBER: 96542283 BUSINESS ADDRESS: STREET 1: 711 MAIN ST STREET 2: P O BOX 810 CITY: JASPER STATE: IN ZIP: 47546 BUSINESS PHONE: 8124821314 MAIL ADDRESS: STREET 1: 711 MAIN STREET CITY: JASPER STATE: IN ZIP: 47546 FORMER COMPANY: FORMER CONFORMED NAME: GAB BANCORP DATE OF NAME CHANGE: 19950510 10-K 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (Mark one) |X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the fiscal year ended: December 31, 1995 OR | | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ---------- ----------- Commission File Number 0 -11244 GERMAN AMERICAN BANCORP (Exact name of registrant as specified in its Charter) INDIANA 35-1547518 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 711 Main Street, Box 810, Jasper, Indiana 47546 (Address of Principal Executive Offices) Zip Code Registrant's telephone number, including area code: (812) 482-1314 Securities registered pursuant to Section 12 (b) or the Act: Title of each class Name of each exchange on which registered NONE Not Applicable Securities registered pursuant to Section 12 (g) of the Act: Common Shares, $10.00 Par Value (Title of Class) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO The aggregate market value of the voting stock held by nonaffiliates of the Registrant (assuming solely for purposes of this calculation that all directors and executive officers of the Registrant are affiliates) valued at the last trade price reported by NASDAQ as of March 11, 1996 was approximately $42,000,000. As of March 22, 1996, there were outstanding 1,825,040 common shares, $10.00 par value, of the registrant. DOCUMENTS INCORPORATED BY REFERENCE (1) Portions of the Annual Report to Shareholders of German American Bancorp for 1995, to the extent stated herein, are incorporated by reference into Parts I and II. (2) Portions of the Proxy Statement of German American Bancorp for the Annual Meeting of its Shareholders to be held April 25, 1996, to the extent stated herein, are incorporated by reference into Part III. Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (section 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. | | PART I Item 1. Business General German American Bancorp (``the Company'' or the `Registrant'') is a multi- bank holding company organized in Indiana in 1982. The Company's principal subsidiaries are The German American Bank, Jasper, Indiana (`German American Bank'), The Union Bank, Loogootee, Indiana, (``Union Bank''), Winslow Bancorporation, Inc. (`Winslow''), an Indiana corporation that owns all of the outstanding capital stock of Community Trust Bank, Otwell, Indiana (`Community Bank') and First State Bank, Southwest, Indiana of Tell City, Indiana (``First State Bank'). The Company, through its four bank subsidiaries, operates fourteen (14) banking offices in five contiguous counties in southwestern Indiana and has total consolidated assets at year-end 1995 in excess of $367,000,000. German American Bank was organized under the law of Indiana in 1910. At December 31, 1995, German American Bank was the second largest of the six commercial banks with offices in Dubois County, Indiana, in terms of total assets and total deposits. German American Bank conducts its banking operations from its principal banking office in Jasper, Indiana, and from seven branch office locations throughout Dubois County. Union Bank, organized under Indiana law in 1929, operates from a single banking office in Loogootee, Martin County, Indiana. Union Bank was acquired by the Registrant on March 8, 1993. At December 31, 1995, Union Bank ranked third in asset size among the seven commercial banks and thrifts headquartered in Martin and Daviess Counties, Indiana. On April 1, 1993, the Registrant purchased all the shares of Winslow Bancorporation, Winslow, Indiana, and its subsidiary Southwestern Indiana Bank in a cash transaction. On April 1, 1994, the Registrant issued 113,286 shares for all the outstanding shares of the Otwell State Bank. Following the completion of this transaction, Otwell and Southwestern were merged into Community Trust Bank, a combined banking institution operating in the Pike County, Indiana market through three offices. On October 28, 1994, the Registrant acquired three branches of Regional Federal Savings Bank of New Albany, Indiana. The Huntingburg, Indiana branch was combined with an existing branch of the Registrant's lead bank, German American Bank. The other two former branches in Tell City and Rockport, Indiana were acquired by a new subsidiary bank of the Registrant named First State Bank, Southwest, Indiana. Each of the Company's subsidiary banks engages in a wide range of commercial and personal banking services, and German American Bank and Union Bank provide a wide range of personal and corporate trust-related services. In addition, German American Bank shares investment services income through an operating agreement with Invest Financial Corporation, a subsidiary of Kemper Financial Companies, Inc., which provides full-service brokerage operations from an office in German American's principal banking office. The Company and its subsidiary banks operate primarily in the banking industry, which accounts for over ninety percent (90%) of the Company's consolidated revenues, operating income and identifiable assets. Through its banking subsidiaries, the Company generates commercial, installment and mortgage loans and receives deposits from customers located primarily in the local market area. The overall loan portfolio is diversified among a variety of individual borrowers, with a substantial portion of such borrowers' ability to honor their indebtedness being dependent on the agriculture, poultry and wood furniture manufacturing industries. Although wood manufacturers employ a significant number of people in the Company's market area, the Company does not have a concentration of credit to companies engaged in that industry. The majority of the Company's loans are secured by specific items of collateral including business assets, consumer assets and real property. Additional information regarding the Company and its subsidiaries is included in the Company's Annual Report to Shareholders for 1995 which is filed as Exhibit 13 to this Annual Report on Form 10-K (the `Shareholders' Report''). Competition The banking business is highly competitive. The Company's subsidiary banks compete not only with financial institutions that have offices in the same counties but also compete with financial institutions that are located in other neighboring areas in obtaining deposits, making loans and providing many other types of financial services. The banking market in which the Company's banking subsidiaries operate is heavily influenced by larger financial institutions located in Evansville and Indianapolis, Indiana, Louisville, Kentucky and other cities. In addition to other commercial banks, the Company's subsidiary banks compete with savings and loan associations, savings banks, credit unions, production credit associations, federal land banks, finance companies, credit card companies, personal loan companies, money market funds, mortgage companies and other non-depository financial intermediaries. Employees At January 31, 1996 the Company and its subsidiaries employed approximately 167 employees. There are no collective bargaining agreements, and employee relations are considered to be good. Regulation and Supervision The Company is subject to the Bank Holding Company Act of 1956, as amended (`BHC Act''), and is required to file with the Board of Governors of the Federal Reserve System (`FRB'') annual reports and such additional information as the FRB may require. The FRB may also make examinations or inspections of the Company. The BHC Act prohibits a bank holding company from engaging in, or acquiring direct or indirect control of more than 5 percent of the voting shares of any company engaged in nonbanking activities. One of the principal exceptions to this prohibition is for activities deemed by the FRB to be `closely related to banking.'' Under current regulations, bank holding companies and their subsidiaries are permitted to engage in such banking-related business ventures as sales and consumer finance, equipment leasing, computer service bureau and software operations, and mortgage banking. The BHC Act and Indiana law restrict banking expansion by banks and bank holding companies. Under current Indiana law, Indiana banks may establish an unlimited number of branches anywhere within the State of Indiana. A holding company may establish non-banking offices without geographical limitation. Under the BHC Act, the Company must receive the prior written approval of the FRB or its delegate before it may acquire ownership or control of more than 5 percent of the voting shares of another bank, and under Indiana law it may not acquire 25 percent or more of the voting shares of another bank without the prior approval of the Indiana Department of Financial Institutions (`DFI''). The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 provides for nationwide interstate banking and branching. Since September 30, 1995, well-capitalized bank holding companies have been authorized, pursuant to the legislation, to acquire banks and bank holding companies in any state. The legislation also permits banks to merge across state lines, thereby creating a main bank in one state with branches in other states. Interstate branching by merger provisions will become effective on June 1, 1997, unless a state takes legislative action prior to that date. States may pass laws to either `opt- in''before June 1, 1997 or to ``opt-out'' by expressly prohibiting merger transactions involving out-of-state banks, providing the legislative action is taken before June 1, 1997. Indiana has not yet taken any legislative action with respect to such interstate mergers. The Company's subsidiary banks are under the supervision of and subject to examination by both the DFI and the Federal Deposit Insurance Corporation (`FDIC''). Regulation and examination by banking regulatory agencies are primarily for the benefit of depositors rather than shareholders. The earnings of commercial banks and their holding companies are affected not only by general economic conditions but also by the policies of various governmental regulatory authorities. In particular, the FRB regulates money and credit conditions and interest rates in order to influence general economic conditions, primarily through open-market operations in U.S. Government securities, varying the discount rate on bank borrowings, and setting reserve requirements against bank deposits. These policies have a significant influence on overall growth and distribution of bank loans, investments and deposits, and affect interest rates charged on loans and earned on investments or paid for time and savings deposits. FRB monetary policies have had a significant effect on the operating results of commercial banks in the past and this is expected to continue in the future. The general effect, if any, of such policies upon the future business and earnings of the Company cannot accurately be predicted. The Company is required by the FRB and the FDIC to maintain minimum levels of capital. These required capital levels are expressed in terms of capital ratios, known as the leverage ratio and the capital to risk-based assets ratios. The Company significantly exceeds the minimum required capital levels for each measure of capital adequacy. See `Management's Discussion and Analysis of Financial Condition and Results of Operations -- Capital Resources,''included on page 8 of the Shareholders' Report. Also, FDIC regulations define five categories of financial institutions for purposes of implementing prompt corrective action and supervisory enforcement requirements of the Federal Deposit Insurance Corporation Improvements Act of 1991. The category to which the most highly capitalized institutions are assigned is termed `Well Capitalized.'' Institutions falling into this category must have a total risk-based capital ratio (the ratio of total capital to risk- weighted assets) of at least 10%, a Tier 1 risk-based capital ratio (the ratio of Tier 1, or `core'', capital to risk-weighted assets) of at least 6%, a leverage ratio (the ratio of Tier 1 capital to total assets) of at least 5%, and must not be subject to any written agreement, order or directive from its regulator relative to meeting and maintaining a specific capital level. On December 31, 1995, the Company had a total risk-based capital ratio of 15.89%, a Tier 1 risk-based capital ratio of 14.62% (based on Tier 1 capital of $33,957,000 and total risk-weighted assets of $232,272,000), and a leverage ratio of 9.29%. The Company meets all of the requirements of the `Well Capitalized''category and, accordingly, the Company does not expect these regulations to significantly impact operations. Statistical Disclosures The following statistical data should be read in conjunction with Management's Discussion and Analysis of Financial Condition and Results of Operations (Item 7), Selected Financial Data (Item 6), and the financial statements and notes (Item 8) included elsewhere herein through incorporation by reference to the indicated pages of the Shareholders' Report. Statistical Disclosures (continued) Securities (in thousands) The following tables set forth the carrying amount of Securities at the dates indicated:
December 31, 1995 1994 1993 U.S. Treasury and other U.S. Government Agencies and Corporations ---- $17,249 $27,940 State and Political Subdivisions $9,869 21,237 16,744 Mortgage-backed Securities ---- 11,267 15,272 Corporate Securities ---- 803 1,100 Other Securities 738 717 717 Subtotal of Securities Held-to-Maturity $10,607 $51,273 $61,773 U.S. Treasury and other U.S. Government Agencies and Corporations 23,727 7,280 2,000 State and Political Subdivisions 14,232 56 ---- Mortgage-backed Securities 33,144 15,584 16,532 Corporate Securities 6,375 212 617 Subtotal of Securities Available-for-Sale 77,478 23,132 19,149 Total Securities $88,085 $74,405 $80,922
The following table sets forth the contractual maturities of securities at December 31, 1995 and the weighted average yields of such securities (calculated on the basis of the cost and effective yields weighted for the maturity of each security.) Contractual maturities may differ from actual due to rights to prepay or call. Other securities totaling $738 are comprised of restricted stock which do not have contractual maturities and are excluded from the table below.
Maturing Within After One But One Year Within Five Years Amount Yield Amount Yield U.S. Treasury and other Government Agencies and Corporations $8,844 5.67% $14,883 5.81% State and Political Subdivisions 1,140 10.41% 5,245 9.36% Mortgage-backed Securities --- --- 4,890 5.66% Corporate Securities --- --- 3,682 6.48% Totals $9,984 6.21% $28,700 6.52%
Maturing After Five But After Ten Within Ten Years Years Amount Yield Amount Yield U.S. Treasury and other Government Agencies and Corporations --- --- ---- --- State and Political Subdivisions $6,235 10.18%$ 11,481 9.73% Mortgage-backed Securities 11,071 5.53% 17,183 5.59% Corporate Securities 2,693 6.54% --- --- Totals $19,999 7.12%$ 28,664 7.24%
A tax-equivalent adjustment using a tax rate of 34 percent was used in the above table............ Statistical Disclosures (continued) The following table sets forth for the periods indicated a summary of the changes in interest earned and interest paid resulting from changes in volume and changes in rates:
(dollar references in thousands) 1995 compared to 1994 Increase / (Decrease) Due to (1) Volume Rate Net Interest Income: Federal Funds Sold $83 $276 $359 Short-term Investments 308 95 403 Taxable Securities 88 291 379 Nontaxable Securities (2) 379 (40) 339 Loans and Leases (3) 1,372 2,529 3,901 Total Interest Income 2,230 3,151 5,381 Interest Paid: Savings 77 290 367 Time Deposits 1,291 1,581 2,872 Federal Funds Purchased and Securities Sold Under Agreements to Repurchase (99) 66 (33) Demand Notes Issued to the U.S. Treasury 12 19 31 Notes Payable 53 --- 53 Total Interest Expense 1,334 1,956 3,290 Net Interest Earnings $896 $1,195 $2,091
(dollar references in thousands) 1994 compared to 1993 Increase / (Decrease) Due to (1) Volume Rate Net Interest Income: Federal Funds Sold $71 $52 $123 Short-term Investments (100) 60 (40) Taxable Securities (258) (474) (732) Nontaxable Securities (2) 41 (2) 39 Loans and Leases (3) 970 75 1,045 Total Interest Income 724 (289) 435 Interest Paid: Savings 133 (141) (8) Time Deposits (191) (251) (442) Federal Funds Purchased and Securities Sold Under Agreements to Repurchase 76 (3) 73 Demand Notes Issued to the U.S. Treasury (2) 12 10 Notes Payable --- --- --- Total Interest Expense 16 (383) (367) Net Interest Earnings $708 $94 $802
(1)The change in interest due to both rate and volume has been allocated to volume and rate changes in proportion to the relationship of the absolute dollar amounts of the change in each. (2)Change in interest income include the effect of tax equivalent adjustments using a tax rate of 34 percent for all years presented. (3)Interest income on loans includes loan fees of $254, $253, and $206 for 1995, 1994, and 1993, respectively. Statistical Disclosures (continued) The following is a schedule of loans by major category for each reported period:
December 31, (dollar references in thousands) 1995 1994 1993 Real Estate Loans Secured by 1-4 Family Residential Properties $68,826 $67,737 $55,225 Loans to Finance Poultry Production and Other Related Operations 23,784 25,599 30,505 Loans to Finance Agricultural Production and Other Loans to Farmers 27,310 31,959 24,806 Commercial and Industrial Loans 74,612 67,662 62,321 Loans to Individuals for Household, Family and Other Personal Expenditures 34,685 29,248 26,684 Economic Development Commission Bonds 608 625 762 Term Federal Funds Sold --- --- --- Lease Financings 1,302 1,820 2,323 Total Loans $231,127 $224,650 $202,626
December 31, (dollar references in thousands) 1992 1991 Real Estate Loans Secured by 1-4 Family Residential Properties $47,170 $41,042 Loans to Finance Poultry Production and Other Related Operations 30,621 21,528 Loans to Finance Agricultural Production and Other Loans to Farmers 23,844 23,348 Commercial and Industrial Loans 61,189 60,445 Loans to Individuals for Household, Family and Other Personal Expenditures 24,183 24,594 Economic Development Commission Bonds 1,547 2,181 Term Federal Funds Sold --- 4,000 Lease Financings 2,666 2,175 Total Loans $191,220 $179,313
The following table indicates the amounts of loans (excluding residential mortgages on 1-4 family residences, installment loans and lease financing) outstanding as of December 31, 1995 which, based on remaining scheduled repayments of principal, are due in the periods indicated.
Maturing Within After One One But Within Year Five Years Commercial, Financial, Agricultural, and Poultry $40,716 $48,001 Economic Development Bonds 108 500 Total Loans $40,824 $48,501
Maturing After Five Years Total Commercial, Financial, Agricultural, and Poultry $36,989 $125,706 Economic Development Bonds 0 608 Total Loans $36,989 $126,314
Interest Sensitivity Fixed Variable Rate Rate Loans maturing after one year $16,114 $69,376
Statistical Disclosures (continued) The Provision for Loan Losses provides a reserve (the Allowance for Loan Losses) to which loan losses are charged as those losses become identifiable. Management determines the appropriate level of the Allowance for Loan Losses on a quarterly basis through an independent review by the Bank's credit review section done by employees who have no direct lending responsibilities. Through this review, all commercial loans with outstanding balances in excess of $25,000 are analyzed with particular attention paid to those loans which are considered by management to have an above-average level of risk. This analysis is evaluated by Senior Management and serves as the basis for determining the adequacy of the Allowance for Loan Losses. Through this review process a specific portion of the reserve is allocated to impaired loans and to those loans which are considered to represent significant exposure to risk, and estimated potential losses are provided based on historic loan loss experience for consumer loans, residential mortgage loans, and commercial loans not specifically reviewed. In addition, a balance of the reserve is unallocated to provide an allowance for risk, such as concentrations of credit to specific industry groups, which are difficult to quantify in an absolute dollar amount. The following table presents information concerning the aggregate amount of underperforming assets. Underperforming loans comprise: (a) loans accounted for on a nonaccrual basis (`nonaccrual loans''); (b) loans contractually past due 90 days or more as to interest or principal payments (but not included in the loans in (a) above) (`past due loans''); and (c) loans not included above which are `troubled debt restructuring'' as defined in Statement of Financial Standards No. 15 `FASB 15'', ``Accounting by Debtors and Creditors for Troubled Debt Restructurings''(``restructured loans'').
December 31, (dollar references in thousands) 1995 1994 1993 Nonaccrual Loans $803 $983 $1,395 Past Due Loans 2,683 601 461 Restructured Loans --- --- --- Total Underperforming Loans 3,486 1,584 1,856 Other Real Estate 286 497 698 Total Underperforming Assets $3,772 $2,081 $2,554
December 31, (dollar references in thousands) 1992 1991 Nonaccrual Loans $1,693 $1,599 Past Due Loans 665 483 Restructured Loans 6 370 Total Underperforming Loans 2,364 2,452 Other Real Estate 660 748 Total Underperforming Assets $3,024 $3,200
The gross interest income that would have been recognized in 1995 on underperforming loans if the loans had been current in accordance with their original terms is $337. Interest income recognized on underperforming loans for 1995 was $280. Loans are placed on nonaccrual status when scheduled principal or interest payments are past due for 90 days or more, unless the loan is well secured and in the process of collection. In addition to the nonaccrual and restructured loans described above, there exists an additional $3,088 of loans which management feels may not be able to comply with the existing repayment terms. These credits have been considered in management's analysis of the allowance for loan losses. Statements of Financial Accounting Standards No. 114 and No. 118 were adopted January 1, 1995. These standards require recognition of loan impairment if a loan's full principal or interest payments are not expected to be received. Loans considered to be impaired are reduced to the present value of expected future cash flows or to the fair value of collateral, by allocating a portion of the allowance for loan losses to such loans. No increase to the allowance for loan losses was required at January 1, 1995 as a result of the adoption of these new standards. For additional detail on impaired loans, see Note 4 on page 26 of the Shareholders' Report. It is management's belief that loans classified for regulatory purposes as loss, doubtful, substandard, or special mention that are not included in the table and discussion above, do not represent or result from trends or uncertainties which will have a material impact on future operating results, liquidity or capital resources, and that at December 31, 1995 there were no material credits not included in the above table about which management is aware of possible credit problems of borrowers which causes management to have serious doubts as to the ability of such borrowers to comply with the loan repayment terms. This paragraph includes forward-looking statements that are based on management's assumptions concerning future economic and business conditions as they affect the local economy in general and the Company's borrowers in particular, which economic and business assumptions are inherently uncertain and subject to risk and may prove to be invalid. Readers are also cautioned that management relies upon the truthfulness of statements made by the borrowers, and that misrepresentation by borrowers is an inherent risk of the activity of lending money that could cause these forward-looking statements to be inaccurate. At December 31, 1995 loans to finance poultry operations amounted to $23,784 or 10.3% of total loans. Statistical Disclosures (continued) Summary of Loan Loss Experience (in thousands) The following table summarizes changes in the allowance for loan losses arising from loans charged-off and recoveries on loans previously charged-off, by loan category, and additions to the allowance which have been charged to expense.
Year Ended December 31, 1995 1994 1993 Balance of allowance for possibleosses at beginning of period $5,669 $4,935 $3,862 Addition of Affiliate Banks --- 195 164 Loans charged-off: Real Estate Loans Secured by 1-4 Family Residential Properties 221 101 --- Loans to Finance Poultry Production and Other Related Operations --- --- --- Loans to Finance Agricultural Production and Other Loans to Farmers --- --- 12 Commercial and Industrial Loans 20 99 378 Loans to Individuals for Household, Family and Other Personal Expenditures 98 55 53 Economic Development Bonds --- --- --- Term Federal Funds Sold --- --- --- Total Loans charged-off 339 255 443 Recoveries of previously charged-off Loans: Real Estate Loans Secured by 1-4 Family Residential Properties 6 6 14 Loans to Finance Poultry Production and Other Related Operations --- --- --- Loans to Finance Agricultural Production and Other Loans to Farmers 538 --- 500 Commercial and Industrial Loans 53 186 148 Loans to Individuals for Household, Family and Other Personal Expenditures 25 35 37 Economic Development Commission Bonds --- --- --- Term Federal Funds Sold --- --- --- Total Recoveries 622 227 699 Net Loans recovered / (charged-off) 283 (28) 256 Additions to allowance charged to expense (19) 567 653 Balance at end of period $5,933 $5,669 $4,935 Ratio of net recoveries / (charge-offs) during the period to average loans outstanding .12% (0.01%) 0.13%
Year Ended December 31, 1992 1991 Balance of allowance for possibleosses at beginning of period $3,204 $2,898 Addition of Affiliate Banks --- --- Loans charged-off: Real Estate Loans Secured by 1-4 Family Residential Properties 96 65 Loans to Finance Poultry Production and Other Related Operations --- --- Loans to Finance Agricultural Production and Other Loans to Farmers 29 758 Commercial and Industrial Loans 835 891 Loans to Individuals for Household, Family and Other Personal Expenditures 76 100 Economic Development Bonds --- --- Term Federal Funds Sold --- --- Total Loans charged-off 1,036 1,814 Recoveries of previously charged-off Loans: Real Estate Loans Secured by 1-4 Family Residential Properties 46 --- Loans to Finance Poultry Production and Other Related Operations --- --- Loans to Finance Agricultural Production and Other Loans to Farmers 132 54 Commercial and Industrial Loans 504 106 Loans to Individuals for Household, Family and Other Personal Expenditures 28 17 Economic Development Commission Bonds --- --- Term Federal Funds Sold --- --- Total Recoveries 710 177 Net Loans recovered / (charged-off) (326) (1,637) Additions to allowance charged to expense 984 1,943 Balance at end of period $3,862 $3,204 Ratio of net recoveries / (charge-offs) during the period to average loans outstanding (0.17%) (0.95%)
Statistical Disclosures (continued) The following table indicates the breakdown of the allowance for loan losses for the periods indicated:
(dollar references in thousands) December 31, December 31, 1995 1994 Allowance Ratio of Allowance Ratio of Loans to Loans to Total Total Loans Loans Real Estate Loans $3 29.78% $185 30.15% Poultry Loans 1,493 10.29% 918 11.40% Agricultural Loans 726 11.82% 944 14.23% Commercial and Industrial Loans 1,976 32.84% 1,101 30.92% Loans to Individuals 58 15.01% 146 13.02% Economic Development Commission Bonds --- 0.26% --- 0.28% Term Federal Funds Sold --- -- Unallocated 1,677 N/A 2,375 N/A Totals $5,933 100.00% $5,669 100.00%
(dollar references in thousands) December 31, 1993 Allowance Ratio of Loans to Total Loans Real Estate Loans $118 27.25% Poultry Loans 65 15.05% Agricultural Loans 872 12.24% Commercial and Industrial Loans 906 31.91% Loans to Individuals 128 13.17% Economic Development Commission Bonds --- 0.38% Term Federal Funds Sold --- Unallocated 2,846 N/A Totals $4,935 100.00%
(dollar references in thousands) December 31, December 31, 1992 1991 Allowance Ratio of Allowance Ratio of Loans to Loans to Total Total Loans Loans Real Estate Loans $29 24.67% $28 22.89% Poultry Loans 60 16.01% 57 12.01% Agricultural Loans 148 12.47% 212 13.02% Commercial and Industrial Loans 1,229 33.39% 1,468 34.91% Loans to Individuals 116 12.65% 114 13.72% Economic Development Commission Bonds --- 0.81% --- 1.22% Term Federal Funds Sold --- --- 2.23% Unallocated 2,280 N/A 1,325 N/A Totals $3,862 100.00% $3,204 100.00%
Statistical Disclosures (continued) The average amount of deposits is summarized for the periods indicated in the following table:
December 31, 1995 1994 Average Average Balance Rate Balance Rate Demand Deposits Non-interest Bearing $32,576 --- $30,279 --- Interest Bearing 40,134 2.29% 41,009 2.30% Savings Deposits 52,177 3.01% 48,166 2.45% Time Deposits 191,202 5.30% 164,422 4.42% Totals $316,089 4.00% $283,876 3.31%
December 31, 1993 Average Balance Rate Demand Deposits Non-interest Bearing $27,278 --- Interest Bearing 37,924 2.50% Savings Deposits 45,841 2.58% Time Deposits 168,659 4.57% Totals $279,702 3.52%
Maturities of time certificates of deposit of $100,000 or more are summarized as follows:
December 31, 1995 3 months or less $4,639 Over 3 through 6 months 7,960 Over 6 through 12 months 6,602 Over 12 months 7,532 Total $26,733
Return on Equity and Assets The ratio of net income to average shareholders' equity and to average total assets, and certain other ratios, are as follows:
Year Ended December 31, 1995 1994 1993 Percentage of Net Income to: Average Shareholders' Equity 11.68% 10.85% 9.62% Average Total Assets 1.13% 1.08% 0.93% Percentage of Dividends Declared per Common Share to Net Income per Common Share (1) 34.55% 35.79% 40.99% Percentage of Average Shareholders' Equity to Average Total Assets 9.65% 9.91% 9.69% (1) Based on historical dividends declared by German American Bancorp without restatement for pooling.
Item 2. Properties. The Company owns no material physical properties except through its subsidiaries. Office space for employees is leased from the German American Bank. German American Bank conducts its operations from its main office building at 711 Main Street, in Jasper, Indiana. The main office building is owned by German American and contains approximately 23,600 square feet of office space. There is no indebtedness on such property on which German American's main office is located. German American Bank has seven branches, three of which are located in Jasper, and one each in the Dubois County towns of Huntingburg, Ferdinand, Dubois and Ireland. Of these branch facilities, five are owned by German American Bank and two are leased. Union Bank's main office facility in Loogootee, Indiana, contains approximately 12,000 square feet of space. The facility was constructed in 1988 and is owned by Union Bank. Community Bank conducts its operations from three locations, all of which are owned by Community Bank. Community Bank's principal banking office is located in Otwell, Indiana, in a building containing approximately 2,850 square feet. First State Bank's main office facility, located in Tell City, Indiana, constructed in 1981, contains approximately 13,900 square feet. The branch office located in Rockport, Indiana contains approximately 1,660 square feet. Both of these facilities are owned by First State Bank. Item 3. Legal Proceedings. There are no pending legal proceedings, other than routine litigation incidental to the business of the Company's subsidiary banks, of a material nature in which the Company or any of its subsidiaries is involved. Item 4. Submission of Matters to a Vote of Security Holders. There was no matter submitted during the fourth quarter of 1995 to a vote of security holders, by solicitation of proxies or otherwise. Special Item. Executive Officers of the Registrant.
NAME AGE TITLE AND FIVE YEAR HISTORY George W. Astrike (60) Chairman and CEO of the Company in 1995; Chairman and President /CEO prior thereto. Chairman of German American Bank in 1995; Chairman and President prior thereto. Director of each of the other Banks since acquisition by the Company. Mark A. Schroeder (42) President / Chief Operating Officer / Chief Financial Officer of the Company in 1995; Vice President / Chief Financial Officer prior thereto. Director of each of the other Banks since acquisition by the Company. Urban Giesler (58) Treasurer and Secretary of the Corporation; Senior Vice President Personal Banking of German American Bank since January, 1993; Senior Vice President - Retail Lending of German American Bank prior thereto. John M. Gutgsell (40) Vice President and Controller of the Company in 1995; Vice President and Controller of German American Bank prior thereto. Stan J. Ruhe (44) Executive Vice President - Credit Administration of the Company in 1995. Executive Vice President of German American Bank in 1995; Senior Vice President - Credit Administration prior thereto. James E. Essany (41) Senior Vice President - Marketing in 1995; Senior Vice President - Operations / Administration of German American Bank prior thereto.
There are no family relationships between any of the officers of the Corporation. All officers are elected for a term of one year. PART II The information in Part II of this report is incorporated by reference to the indicated sections of the Registrant's annual report to shareholders for the fiscal year ended December 31, 1995 (`Shareholders' Report''). Item 5. Market for Registrant's Common Equity and Related Stockholder Matters. See ``Market and Dividend Information'' on page 35 of the Shareholders' Report which section is incorporated herein by reference. Item 6. Selected Financial Data. See ``Five Year Summary of Financial Statements and Related Statistics'' on page 1 of the Shareholders' Report which section is incorporated herein by reference. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations. See ``Management's Discussion and Analysis of Financial Condition and Results of Operations''on pages 2 through 14 of the Shareholders' Report which section is incorporated herein by reference. Item 8. Financial Statements and Supplementary Data. The financial statements of the Corporation and related notes on pages 15 through 33 of the Shareholders' Report and the Auditors' Report thereon on page 34 of the Shareholders' Report, and the Interim Financial Data on page 3 of the Shareholders' Report, are all incorporated herein by reference. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. Not Applicable. PART III Item 10. Directors and Executive Officers of the Registrant. Information relating to Directors of the Corporation will be included under the caption `Election of Directors'' in the Corporation's Proxy Statement for the Annual Meeting of Shareholders to be held on April 25, 1996 which will be filed with the Commission within 120 days of the end of the fiscal year covered by this Report (the `1996 Proxy Statement''), which section is incorporated herein by reference in partial answer to this Item. Information relating to Executive Officers of the Corporation is included under the caption `Executive Officers of the Registrant'' under Part I of this Report on Form 10-K. Information relating to Section 16(a) reporting will be included in the 1996 Proxy Statement under the caption `Section 16(a) Reporting'', which is incorporated herein by reference. Item 11. Executive Compensation. Information relating to compensation of the Corporation's Executive Officers and Directors will be included under the captions `Executive Compensation'' and `Election of Directors -- Compensation of Directors'' in the 1996 Proxy Statement of the Corporation, which sections are incorporated herein by reference. Item 12. Security Ownership of Certain Beneficial Owners and Management. Information relating to security ownership of certain beneficial owners and management of the Corporation will be included under the captions `Election of Directors''and ``Principal Owners of Common Shares'' of the 1996 Proxy Statement of the Corporation, which sections are incorporated herein by reference. Item 13. Certain Relationships and Related Transactions. Information responsive to this Item 13 will be included under the captions `Certain Business Relationships and Transactions'' and ``Executive Compensation - - Compensation Committee Interlocks and Insider Participation''of the 1996 Proxy Statement of the Corporation, which sections are incorporated herein by reference. PART IV Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K. a) The following 1995, 1994, and 1993 consolidated financial statements of the Corporation, and the Auditors' Report thereon, included on pages 15 through 34 of the Shareholders' Reports, are incorporated into Item 8 of this report by reference. Location in 1. Financial Statements Shareholders' Report German American Bancorp and Subsidiaries Consolidated Balance Sheets at December 31, 1995 and December 31, 1994 Page 15 Consolidated Statements of Income, years ended December 31, 1995, 1994, and 1993 Page 16 Consolidated Statements of Cash Flows, years ended December 31, 1995, 1994, and 1993 Page 17 Consolidated Statements of Changes in Shareholders'Equity, years ended December 31, 1995, 1994, and 1993 Page 18 Notes to the Consolidated Financial Statements Pages 19 - 33 Independent Auditors' Report Page 34 2. Other financial statements and schedules are omitted because they are not required or because the required information is included in the consolidated financial statements or related notes. b) Reports on Form 8-K No reports on Form 8-K were filed during the three months ended December 31, 1995. c) Exhibits: The Exhibits described in the Exhibit List immediately following the `Signatures'' page of this report (which is incorporated herein by reference) are hereby filed as part of this report. Pursuant to the requirements of Section 13 of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized. GERMAN AMERICAN BANCORP (Registrant) Date: March 15, 1996 By/s/George W. Astrike George W. Astrike, Chairman of the Board Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Date: March 15, 1996 By/s/George W. Astrike George W. Astrike, Chairman of the Board and Director (Chief Executive Officer) Date: March 15, 1996 By/s/Mark A. Schroeder Mark A. Schroeder, President and Director (Principal Financial Officer) Date: March 15, 1996 By/s/David G. Buehler David G. Buehler, Director Date: March 15, 1996 By/s/Michael B. Lett Michael B. Lett, Director Date: March 15, 1996 By/s/Gene C. Mehne Gene C. Mehne, Director Date: March 15, 1996 By/s/Robert L. Ruckriegel Robert L. Ruckriegel, Director Date: March 15, 1996 By/s/William R. Hoffman William R. Hoffman, Director Date: March 15, 1996 By/s/Joseph F. Steurer Joseph F. Steurer, Director Date: A. Wayne (Skip) Place Jr., Director Date: Larry J. Seger, Director Date: March 15, 1996 By/s/John M. Gutgsell John M. Gutgsell, Controller (Principal Accounting Officer)
Executive Compensation Plans and Exhibit Arrangements** Number Description of Exhibit 3.1 Restated Articles of Incorporation of the Registrant as amended April 24, 1995. 3.2 Restated Bylaws of the Registrant as amended August 14, 1990. 10.1 Purchase and Assumption Agreement between the Registrant and Regional Federal Savings Bank dated July 8, 1994, is incorporated by reference to Exhibit 2 to the Company's Quarterly Report on Form 10-Q, as amended by Form 10-Q/A filed on or about September 19, 1994. 10.2 Sublease entered by and between Buehler Foods, Inc. and The German American Bank dated January 2, 1987 (Huntingburg Banking Center Branch) is incorporated by reference from Exhibit 10.5 to the Registrant's Registration Statement on Form S-4 filed February 28, 1994 (No. 33-75762) (the ``Otwell S-4''). 10.3 Sublease entered by and between Buehler Foods, Inc. and the Bank dated August 1, 1990 (The Crossing Shopping Center Branch) is incorporated by reference to Exhibit 10.12 of the Registrant's Report on Form 10-K for the year ended December 31, 1990. 10.4 Letter dated January 5, 1995 from the German American Bank to Buehler Foods, Inc. notifying Buehler Foods, Inc. of exercise of renewal option on The Crossing Shopping Center Branch. (Exhibit 10.3). X 10.5 The Company's 1992 Stock Option Plan is incorporated by reference from Exhibit 10.1 to the Unibancorp S-4. X 10.6 Executive Deferred Compensation Agreement dated December 1, 1992 between the German American Bank and George W. Astrike, is incorporated herein by reference from Exhibit 10.3 to the Unibancorp S-4. X 10.7 Director Deferred Compensation Agreement between The German American Bank and certain of its Directors, is incorporated herein by reference from Exhibit 10.4 to the S-4. (The Agreement entered into by George W. Astrike, a copy of which was filed as Exhibit 10.4 to the S-4, is substantially identical to the Agreements entered into by the other Directors.) The schedule following Exhibit 10.4 to the S-4 lists the Agreements with the other Directors and sets forth the material detail in which such Agreements differ from the Agreement filed as Exhibit 10.4 to the Unibancorp S-4. X 10.8 Incentive stock option agreement between the Company and George W. Astrike dated April 20, 1993, is incorporated by reference from Exhibit 10.6 to the Otwell S-4. X 10.9 Form of Incentive Stock Option Agreement executed April 20, 1993 between the Company and each of Mark A. Schroeder (5000 shares), James E. Essany (1500 shares), Urban Giesler (1500 shares) and Stan J. Ruhe (3000 shares) (all numbers and prices unadjusted for stock splits and stock dividends) is incorporated by reference from Exhibit 10.7 to the Otwell S-4. X 10.10 Form of Incentive Stock Option Agreement executed December 30, 1994 between the Registrant and George W. Astrike (1700 shares) and Mark A. Schroeder (1500 shares) is incorporated by reference to Exhibit 10.12 of the Registrant's Report on Form 10-K for the year ended December 31, 1994. X 10.11 Form of Incentive Stock Option Agreement executed July 10, 1995 between the Registrant and Mark A. Schroeder is incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q filed on or about November 13, 1995. X 10.12 Schedule of Incentive Stock Option Agreements between the Registrant and its executive officers dated July 10, 1995. 11 Computation of Earnings Per Share. 13 Registrant's Annual Report to Shareholders for the year ended December 31, 1995. This exhibit, except to the extent specifically incorporated by reference herein, is furnished for the information of the Commission only and is not to be deemed `filed'' as a part of this Report. 21 Subsidiaries of the Registrant. 23 Consents of Experts and Counsel. 27 Financial Data Schedule.
**Exhibits that describe or evidence all management contracts or compensatory plans or arrangements required to be filed as exhibits to this Report are indicated by an `X'' in this column. -----END PRIVACY-ENHANCED MESSAGE-----