-----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, IvCEJe7PnWmvlp4NUFwJ5wpSndxp6eBikcDUWE5hqRCZ7pTpb1BdVSbP+z95WBmJ nSGA6LSVOBLwtk3f9xjqJA== 0000714395-96-000003.txt : 19960515 0000714395-96-000003.hdr.sgml : 19960515 ACCESSION NUMBER: 0000714395-96-000003 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960514 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-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-11244 FILM NUMBER: 96562737 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-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) I X I Quarterly Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 for the Quarterly Period Ended March 31, 1996 Or I I 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, Jasper, Indiana 47546 (Address of Principal Executive Offices and Zip Code) Registrant's telephone number, including area code:(812) 482-1314 Indicate by check 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 ---------- ---------- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding at May 10, 1996 Common Stock, $10.00 par value 1,827,546 GERMAN AMERICAN BANCORP INDEX PART I. FINANCIAL INFORMATION Item 1. Consolidated Balance Sheets -- March 31, 1996 and December 31, 1995 Consolidated Statements of Income -- Three Months Ended March 31, 1996 and 1995 Consolidated Statements of Cash Flows -- Three Months Ended March 31, 1996 and 1995 Notes to Consolidated Financial Statements -- March 31, 1996 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits 10.1 Form of Incentive Stock Option Agreement executed January 9, 1996 between the Registrant and George W. Astrike (2,940) shares. 10.2 Schedule of Incentive Stock Option Agreements between the Registrant and its executive officers dated January 9, 1996. 27. Financial Data Schedule (b) Reports on Form 8-K The Registrant did not file any reports on Form 8-K during the quarter ended March 31, 1996. SIGNATURES PART 1.FINANCIAL INFORMATION ITEM 1.FINANCIAL STATEMENTS GERMAN AMERICAN BANCORP CONSOLIDATED BALANCE SHEET (dollar references in thousands except share data) March 31, December 31, 1996 1995 ASSETS Cash and Due from Banks $13,270 $15,421 Federal Funds Sold 12,600 12,550 Cash and Cash Equivalents 25,870 27,971 Interest-bearing Balances with Banks 899 897 Other Short-term Investments 3,979 5,929 Securities Available-for-Sale, at Market (Note 3) 79,007 78,908 Securities Held-to-Maturity, at cost (Market Value of $11,298 and $11,237 on March 31, 1996 and December 31, 1995, respectively) (Note 3) 10,794 10,607 Loans (Note 4) 235,730 231,127 Less: Unearned Income (459) (537) Allowance for Loan Losses (Note 5) (5,984) (5,933) Loans, Net 229,287 224,657 Premises, Furniture and Equipment, Net 9,601 9,624 Other Real Estate 273 286 Intangible Assets 1,935 1,990 Accrued Interest Receivable and Other Assets 7,057 6,894 TOTAL ASSETS $368,702 $367,763 LIABILITIES Noninterest-bearing Deposits $37,046 $40,855 Interest-bearing Deposits 289,262 286,724 Total Deposits 326,308 327,579 Short-term Borrowings 1,546 --- Accrued Interest Payable and Other Liabilities 3,526 3,228 TOTAL LIABILITIES 331,380 330,807 SHAREHOLDERS' EQUITY Common Stock, $10 par value; 5,000,000 shares authorized, and 1,827,460 and 1,825,040 issued and outstanding in 1996 and 1995, respectively 18,275 18,250 Preferred Stock, $10 par value; 500,000 shares authorized, no shares issued --- --- Additional Paid-in Capital 5,508 5,449 Retained Earnings 13,045 12,398 Unrealized Appreciation / (Depreciation) on Securities Available-for-Sale (Net of tax of $324 and $571 in 1996and 1995, respectively) 494 859 TOTAL SHAREHOLDERS' EQUITY 37,322 36,956 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $368,702 $367,763 See accompanying notes to consolidated financial statements. GERMAN AMERICAN BANCORP CONSOLIDATED STATEMENTS OF INCOME (dollar references in thousands except per share data) Three Months Ended March 31, 1996 1995 INTEREST INCOME Interest and Fees on Loans $5,411 $4,953 Interest on Federal Funds Sold 180 163 Interest on Short-term Investments 85 231 Interest and Dividends on Securities 1,285 1,060 TOTAL INTEREST INCOME 6,961 6,407 INTEREST EXPENSE Interest on Deposits 3,296 2,755 Interest on Short-term Borrowings 11 74 TOTAL INTEREST EXPENSE 3,307 2,829 NET INTEREST INCOME 3,654 3,578 Provision for Loan Losses 10 114 NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 3,644 3,464 NONINTEREST INCOME Income from Fiduciary Activities 50 60 Service Charges on Deposit Accounts 163 147 Investment Services Income 102 48 Other Charges, Commissions, and Fees 77 129 Gain on Sales of Loans and Other Real Estate 2 16 Gain on Sales of Securities --- --- TOTAL NONINTEREST INCOME 394 400 NONINTEREST EXPENSE Salaries and Employee Benefits 1,402 1,274 Occupancy Expense 202 202 Furniture and Equipment Expense 185 177 FDIC Premiums 16 174 Computer Processing Fees 106 95 Professional Fees 57 40 Other Operating Expenses 483 474 TOTAL NONINTEREST EXPENSE 2,451 2,436 Income before Income Taxes 1,587 1,428 Income Tax Expense 496 470 Net Income $1,091 $958 Earnings Per Share (Note 2) $0.60 $0.52 Dividends Paid Per Share $0.20 $0.19 See accompanying notes to consolidated financial statements. GERMAN AMERICAN BANCORP CONSOLIDATED STATEMENTS OF CASH FLOWS (dollar references in thousands) Three Months Ended March 31, 1996 1995 CASH FLOWS FROM OPERATING ACTIVITIES Net Income $1,091 $958 Adjustments to Reconcile Net Income to Net Cash from Operating Activities: Amortization and Accretion of Investments (49) (224) Depreciation and Amortization 232 248 Provision for Loan Losses 10 114 Gain on Sales of Securities --- --- Gain on Sales of Loans and Other Real Estate (2) (16) Change in Assets and Liabilities: Unearned Income (78) (77) Interest Receivable 257 206 Other Assets (281) 50 Interest Payable 93 108 Deferred Loan Fees (1) 11 Deferred Taxes 109 (219) Other Liabilities 205 502 Total Adjustments 495 703 Net Cash from Operating Activities 1,586 1,661 CASH FLOWS FROM INVESTING ACTIVITIES Change in Interest-bearing Balances with Banks (2) 99 Proceeds from Maturities of Other Short-term Investments 3,000 22,499 Purchase of Other Short-term Investments (979) (22,677) Proceeds from Maturities of Securities Available-for-Sale 7,893 515 Proceeds from Sales of Securities Available-for-Sale --- --- Purchase of Securities Available- for-Sale (8,626) (3,000) Proceeds from Maturities of Securities Held-to-Maturity 154 3,948 Proceeds from Sales of Securities Held-to-Maturity --- --- Purchase of Securities Held-to-Maturity (342) (808) Purchase of Loans (24) --- Loans Made to Customers net of Payments Received (4,537) 1,415 Property and Equipment Expenditures (154) (433) Proceeds from Sales of Other Real Estate 15 84 Net Cash from Investing Activities (3,602) 1,642 CASH FLOWS FROM FINANCING ACTIVITIES Change in Deposits (1,271) (3,622) Change in Short-term Borrowings 1,546 3,380 Dividends Paid (366) (347) Exercise of Stock Option 6 --- Net Cash from Financing Activities (85) (589) Net Change in Cash and Cash Equivalents (2,101) 2,714 Cash and Cash Equivalents at Beginning of Year 27,971 22,286 Cash and Cash Equivalents at End of Year $25,870 $25,000 Cash Paid During the Year for: Interest $3,214 $2,721 Income Taxes 160 120 See accompanying notes to consolidated financial statements. GERMAN AMERICAN BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS March 31, 1996 Note 1 -- Basis of Presentation Certain information and footnote disclosures normally included in financial statements prepared in accordance with Generally Accepted Accounting Principles have been condensed or omitted. All adjustments made by management to these unaudited statements were of a normal recurring nature. It is suggested that these consolidated financial statements and notes be read in conjunction with the financial statements and notes thereto in the German American Bancorp's December 31, 1995 Annual Report to Shareholders. German American Bancorp (the ``Company'') is a multi-bank holding company based in Jasper, Indiana. Its four affiliate banks conduct business in fourteen offices in Dubois, Martin, Pike, Perry and Spencer Counties, Indiana. Note 2 -- Per Share Data The weighted average number of shares used in calculating earnings and dividends per share amounts were $1,827,247 and $1,826,171 at March 31, 1996 and 1995, respectively. The March 31, 1995 weighted average amount has been retroactively restated for the effect of a 5% stock declared in December 1995. Note 3 -- Securities At March 31, 1996 and December 31, 1995, U.S. Government Agency structured notes with an amortized cost of $6,800 and $9,250, respectively and fair value of $6,718 and $9,201, respectively, are included in securities available-for- sale, consisting primarily of step-up and single-index bonds. Information regarding collateralized mortgage obligations (CMO's) and real estate mortgage investment conduits (REMIC's) is as follows: March 31, December 31, 1996 1995 Amortized Cost $31,661 $29,429 Fair Value 31,650 29,474 Fixed Rate 30,220 28,041 Variable Rate 1,429 1,433 Note 4 -- Loans Loans, as presented on the balance sheet, are comprised of the following classifications: March 31, December 31, 1996 1995 (dollar references in thousands) Real Estate Loans Secured by 1-4 Family Residential Properties $68,358 $68,826 Loans to Finance Poultry Production and other Related Operations 21,287 23,784 Loans to Finance Agricultural Production and Other Loans to Farmers 27,930 27,310 Commercial and Industrial Loans 81,498 74,612 Loans to Individuals for Household, Family and Other Personal Expenditures 34,981 34,685 Economic Development Commission Bonds 600 608 Lease Financing 1,076 1,302 Total Loans $235,730 $231,127 Information regarding impaired loans is as follows at March 31, 1996 and December 31, 1995: March 31, December 31, 1996 1995 Balance of impaired loans $4,506 $6,244 Less: Portion for which no allowance for loan loss is allocated 198 215 Portion of impaired loan balance for which an allowance for credit losses is allocated $4,308 $6,029 Portion of allowance for loan losses allocated to the impaired loan balance $662 $898 Note 5 -- Allowance for Loan Losses A summary of the activity in the Allowance for Loan Losses is as follows: 1996 1995 (dollar references in thousands) Balance at January 1 $5,933 $5,669 Provision for Loan Losses 10 114 Recoveries of Prior Loan Losses 101 36 Loan Losses Charged to the Allowance (60) (125) Balance at March 31 $5,984 $5,694 Note 6 -- Stock Options As of January 1, 1996 Statement of Financial Accounting Standards No. 123 (FAS123), `Accounting for Stock-Based Compensation'' is applicable to the Company. FAS123 encourages, but does not require, the use of a `fair value based method''to account for stock-based compensation plans. The Company has elected not to change its accounting for stock options to a fair value based method, and no compensation expense was recorded for stock options granted during the three months ended March 31, 1996. ITEM 2. GERMAN AMERICAN BANCORP MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS German American Bancorp (``the Company'') is a multi-bank holding company based in Jasper, Indiana. Its four affiliate banks conduct business in fourteen offices in Dubois, Martin, Pike, Perry and Spencer Counties, Indiana. The banks provide a wide range of financial services, including accepting deposits; making commercial, mortgage and consumer loans; issuing credit life, accident and health insurance; providing trust services for personal and corporate customers; providing safe deposit facilities; and providing investment advisory and brokerage services. This section presents an analysis of the consolidated financial condition of the Company as of March 31, 1996 and December 31, 1995 and the consolidated results of operations for the quarters ended March 31, 1996 and 1995. This review should be read in conjunction with the consolidated financial statements and other financial data presented elsewhere herein and with the financial statements and other financial data and the Management's Discussion and Analysis of Financial Condition and Results of Operations included in the Company's December 31, 1995 Annual Report to Shareholders. RESULTS OF OPERATIONS Net Income for the first quarter of 1996 was $1,091,000 or $0.60 per share, an increase of 13.9 percent over the $958,000 or $0.52 per share reported in 1995. The increase in 1996 earnings relative to those of the same quarter of the prior year was impacted by an increase in net interest income, a decline in the level of provision for loan losses, an increase in Investment Services Income and a significant decline in FDIC Premiums. Partially offsetting these earnings improvements were an increase in Salaries and Benefits and a decline in Other Charges, Commissions and Fees. Net Interest Income: Net Interest Income is the Company's largest component of income and represents the difference between interest and fees earned on loans and investments and the interest paid on interest-bearing liabilities. In this discussion net interest income is presented on a `tax-equivalent'' basis whereby tax exempt income, such as interest on securities of state and political subdivisions, has been increased to the amount that would have been earned on a comparable taxable basis. This adjustment places taxable and non-taxable income on a common basis and allows and accurate comparison of rates and yields. The following table summarizes German American Bancorp's net interest income (on a tax-equivalent basis) for each of the periods presented herein. An effective tax rate of 34 percent is used on each period presented. Three Months Change from Ended March 31, Prior Period 1996 1995 Amount Percent (dollar references in thousands) Interest Income $7,178 $6,599 $579 8.8% Interest Expense 3,307 2,829 478 16.9% Net Interest Income $3,871 $3,770 $101 2.7% For the first three months of 1996, tax equivalent net interest income of $3,871,000 increased by $101,000 or 2.7% from the 1995 level. The net interest margin was 4.55% for 1996 versus 4.65% for 1995. The increase in the level of higher yielding assets, such as loans, which occurred during the period in 1996 resulted in a corresponding increase in net interest income. The decrease in net interest margin reflects the effect of the decline in general interest rates which occurred during the last half of 1995. This decrease occurred as a result of the impact on the average yields on loans and short-term investments which react more quickly to changes in general short-term interest rates than the average yields on investment securities and the average rates paid on interest- bearing deposits. Provision For Loan Losses: The Company provides for loan losses through regular provisions to the allowance for loan losses. These provisions are made at a level which is considered necessary by management to absorb estimated losses in the loan portfolio. A detailed evaluation of the adequacy of this loan loss reserve is completed quarterly by management. The consolidated provision for loan losses was $10,000 in 1996 and $114,000 in 1995. The $104,000 decline in provision during 1996 resulted from a $57,000 negative provision for loan losses at Union Bank and a significant decline in first quarter 1996 charge-offs. The negative provision at Union Bank was due to collections of previous years' charged-off loans combined with management's determination that an adequate level of loan loss reserve existed prior to the loan recoveries. Because of the adequacy of the existing reserve, the recoveries resulted in the recording of a negative provision. The amount of future years' provision for loan loss will be subject to adjustment based on the findings of future evaluations of the adequacy of the loan loss reserve. Net recoveries were $41,000 or 0.02 percent of average loans for the first three months of 1996. For the same period of 1995, net charge-offs were $89,000. Underperforming loans, as a percentage of total loans were 1.27 and 1.51 percent on March 31, 1996 and December 31, 1995, respectively. See discussion headed `Financial Condition'' for more information regarding underperforming assets. Noninterest Income: Operating noninterest income, exclusive of gains realized on the sales of Loans and Other Real Estate, for the first three months of 1996 was $392,000. This was $8,000 or 2.1 percent greater than the $384,000 posted for the same quarter of 1995. Investment Services Income for 1996 rebounded upward after a period of decline while Other Charges and Fees for 1996 declined sharply primarily in the area of insurance commissions. Noninterest Expense: Total noninterest expense for the first three months of 1996 was $2,451,000 which translates to a $15,000 or less than one percent increase over the $2,436,000 posted for the same period in 1995. The largest single component of noninterest expense, Salaries and Employee Benefits, represents 57.2% of total noninterest expenses for 1996. This expense category was $1,402,000 during the first quarter of 1996, an increase of $128,000 or ten percent from the 1995 level of $1,274,000. A significant portion of this increase is attributable to effects of changes in the Company's organizational structure which occurred in mid 1995. Prior to July 1995, the Company's executive officers and support functions served both the Company and its lead affiliate bank, German American Bank. In recognition of the increased management and administrative demands existing under a multi-bank holding company environment, the management and administrative support functions of German American Bank and the Company were segmented into distinct groups with additional staffing implemented as deemed appropriate. Although this organizational change did result in an increased level of Salaries & Benefits, Company management believes the increased management focus at both the Bank and Bancorp level will result in increased operating efficiency. During 1995, the FDIC reduced the commercial bank deposit insurance premium rates as a result of the Bank Insurance Fund (`BIF'') reaching full capitalization of its congressionally mandated level. The full impact of this rate reduction became evident in 1996. Additional assessments or premiums may arise in 1996 from proposals before Congress which would result in the recapitalization of the Savings Association Insurance Fund (`SAIF''). Under this proposal, institutions holding deposits insured by SAIF would be subject to a one-time assessment followed by a reduction in ongoing FDIC premiums similar to that currently in place for BIF insured deposits. All of the deposits of First State Bank, a newly-formed affiliate are insured under SAIF. Therefore, the implementation of this proposal would increase 1996 total FDIC premiums by approximately $150,000 to an estimated $210,000 for 1996. Subsequent years premiums following any such SAIF assessment are anticipated to be $2,000 per affiliate bank or a total of $8,000. The statements in this paragraph relating to FDIC premiums and assessments for 1996 and future years are forward-looking statements which may or may not be accurate due to the impossibility of predicting future Congressional or regulatory actions or the future capitalization levels of BIF and SAIF. FINANCIAL CONDITION As of March 31, 1996, total assets increased to $368,702,000 compared to $367,763,000 at December 31, 1995. Deposits fell $1,271,000 in 1996 reflecting normal seasonal fluctuations in the Company's deposit base and the customers continued utilization of other investment alternatives. Total loans rose by $4,681,000 or roughly two percent from the year-end mark of $230,590,000. The following analyzes German American Bancorp's underperforming assets at March 31, 1996 and December 31, 1995. March 31, 1996 December 31, 1995 (dollar references in thousands) Loans which are contractually past due 90 days or more $2,470 $803 Nonaccrual Loans 535 2,683 Renegotiated Loans --- --- Total Underperforming Loans 3,005 3,486 Other Real Estate 273 286 Total Underperforming Assets $3,278 $3,772 Allowance for Loan Loss to Underperforming Loans 199.13% 170.20% Underperforming Loans to Total Loans 1.27% 1.51% Underperforming loans at March 31, 1996 were 13.8% less than the $3,486,000 of underperforming loans at December 31, 1995. This decline is attributable to the overall improvement of the loan portfolio and to the reduction in the balance of an individual credit in the nonaccrual category. Stated as a percentage of total loans, underperforming loans were 1.27% and 1.51% for March 31, 1996 and December 31, 1995, respectively. The allowance for loan loss stated as a percentage of underperforming loans equaled 199.13% and 170.20% for the same two dates respectively. Underperforming loans include $2,454 and $2,646 of impaired loans at March 31, 1996 and December 31, 1995 (See Note 4 to the consolidated financial statements). The overall loan portfolio is diversified among a variety of individual borrowers, with a substantial portion of debtors' ability to honor their contracts dependent on the agricultural, poultry and wood 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. Capital Resources: Industry regulations provide guidelines for determining the capital adequacy of bank holding companies and banks. These guidelines provide for a more narrow definition of core capital and assign a measure of risk to the various categories of assets. Minimum levels of capital are required to be maintained in proportion to total risk-weighted assets and off-balance sheet exposures such as loan commitments and standby letters of credit. Tier 1, or core capital, consists of shareholders' equity less goodwill, core deposit intangibles, and certain tax receivables defined by bank regulations. Tier 2 capital is defined as the amount of the allowance for loan losses which does not exceed 1.25% of gross risk adjusted assets. Total capital is the sum of Tier 1 and Tier 2 capital. The minimum requirements under these standards are a 3.0% leverage ratio, which is Tier 1 capital divided by defined `total assets'', 4.0% Tier 1 capital to risk-adjusted assets and 8.0% total capital to risk-adjusted assets ratios. Under these guidelines, the Company, on a consolidated basis, and each of its affiliate banks individually, have capital ratios that substantially exceed the regulatory minimums. The table below presents the Company's consolidated capital ratios under the regulatory guidelines. At March 31, 1996, management is not aware of any current recommendations by banking regulatory authorities which, if they were to be implemented, would have, or are reasonably likely to have, a material effect on the Company's liquidity, capital resources or operations. RISK BASED CAPITAL STRUCTURE ($ in thousands) March 31, December 31, 1996 1995 Tier 1 Capital: Shareholders' Equity as presented on Balance Sheet $37,322 $36,956 Add / (Subtract): Unrealized Depreciation / Appreciation on Securities Available-for-Sale (494) (859) Less: Intangible Assets and Ineligible Deferred Tax Assets (2,129) (2,140) Total 34,699 33,957 Tier 2 Capital: Qualifying Allowance for Loan Loss 2,998 2,943 Total Capital $37,697 $36,900 Risk-adjusted Assets $236,871 $232,272 Tier 1 Capital to Total Assets (leverage ratio) 9.49% 9.29% Tier 1 Capital to Risk-adjusted Assets 14.65% 14.62% Total Capital to Risk-adjusted Assets 15.91% 15.89% LIQUIDITY The Consolidated Statement of Cash Flows presented in another section of this report details the elements of change in the Company's cash and cash equivalents. During the first quarter of 1996, the net cash from operating activities, including net income of $1,091,000 provided $1,586,000 of available cash. The proceeds from the maturities of securities and short-term investments (net of purchases) provided more cash of $1,098,000. An increase in short-term borrowings made available $1,546,000 for a total cash inflow of $4,230,000. Major cash outflows experienced during the first quarter of 1996 include dividends of $366,000, property and equipment purchases of $154,000 and the net funding outlay of loans and deposits in the amount of $5,832,000. Total cash outflows for the period exceeded inflows by $2,101,000 leaving a cash and cash equivalent balance of $25,870,000 at March 31, 1996. PART II. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits Exhibit No. Description 10.1 Incentive Stock Option Agreement executed January 9, 1996 between the Registrant and George W. Astrike (2,940 shares). 10.2 Schedule of Incentive Stock Option Agreements between the Registrant and its executive officers dated January 9, 1996. 27 Financial Data Schedule for the period ended March 31, 1996. (b) Reports on Form 8-K The Registrant did not file any reports on Form 8-K during the quarter ended March 31, 1996. SIGNATURES 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 thereunto duly authorized. GERMAN AMERICAN BANCORP Date May 14, 1996 By/s/George W. Astrike ---------------------- ------------------------ George W. Astrike Chairman Date May 14, 1996 By/s/John M. Gutgsell ---------------------- ------------------------- John M. Gutgsell Controller and Principal Accounting Officer EX-27 2
9 3-MOS MAR-31-1996 MAR-31-1996 13,270 899 12,600 0 79,007 10,794 11,298 235,271 5,984 368,702 326,308 1,546 3,526 0 18,275 0 0 19,047 368,702 5,411 1,285 265 6,961 3,296 3,307 3,654 10 0 2,451 1,587 1,587 0 0 1,091 .60 .60 4.30 535 2,470 0 3,005 5,933 60 101 5,984 5,984 0 712
EX-1 3 EX-10.1 January 9, 1996 Mr. George W. Astrike German American Bancorp 711 Main Street P O Box 810 Jasper, IN 47547-0810 RE: Incentive Stock Option Agreement Dear Mr. Astrike: The Stock Option Committee of the Board of Directors of German American Bancorp (the `Corporation''), pursuant to section 7 of the GAB Bancorp 1992 Stock Option Plan (the `Plan''), hereby grants to you, in replacement of a portion of the shares covered by your option dated April 20, 1993, which has been exercised in part as of this date, a replacement option (the `Option''), which Option shall have the following terms and conditions, in addition to those provided in the Plan: 1. Number of Shares: 2,940 shares, subject to adjustment as provided in the Plan. 2. Exercise Price: $31.25 per share, subject to adjustment as provided in the Plan. 3. Expiration Date: The Option, to the extent unexercised, shall expire at 12:00 noon, Jasper time, on April 19, 2003. 4. Exercisability: The Option shall become exercisable in full on the first day following the expiration of twelve months following the date of this Option, and shall be canceled, as specified pursuant to Section 7 of the Plan, if you sell shares of common stock of the Company during such twelve-month period, subject to the exceptions expressed in such Section 7. The Option, which is intended to qualify as an `incentive stock option'' within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended, shall be in all respects limited and conditioned as provided in the Plan. A copy of the Plan is enclosed with this letter. During your lifetime, the Option will be exercisable only by you. Neither the Option nor any right thereunder may be transferred other than by will or the laws of descent and distribution. Exercise of the Option shall be subject to your making the representations set forth below and any representations to such other matters as the Committee, in its discretion, may determine to be necessary or advisable to evidence compliance with requirements under the Securities Act of 1933, as amended, or state securities laws for registering or exempting from registration any offer of sale of the Corporation's securities pursuant to the Plan. This letter, upon your delivery of an executed copy to the Corporation, shall constitute a binding incentive stock option agreement between you and the Corporation. Very truly yours, GERMAN AMERICAN BANCORP BY THE STOCK OPTION COMMITTEE OF THE BOARD OF DIRECTORS BY: By/s/Joseph F. Steurer ---------------------------------------------- Chairman of the Stock Option Committee ACKNOWLEDGMENT AND AGREEMENT I hereby acknowledge receipt of this letter granting me the above Option as well as receipt of a copy of the Plan, and I acknowledge and agree to be bound by the following: 1. I have received a copy of the Plan and agree to be bound by the terms and conditions set forth therein. 2. The Common Shares subject to the Option are being offered pursuant to the `private offering'' exemption provided by Section 4(2) of the Securities Act of 1933, as amended (the `1933 Act''). In that connection, I agree that I will acquire Common Shares pursuant to this Option for investment purposes for my own account without any view to redistribute them to others. Further, I agree not to sell, pledge, hypothecate, or otherwise transfer Common Shares acquired pursuant to the Option except upon delivery to the Corporation of an opinion of counsel or such other evidence as may be satisfactory to the Corporation that such transfer is exempt from registration under the 1933 Act, as amended, applicable state securities laws, or any rule or regulation promulgated thereunder. 3. The certificates evidencing the Common Shares, including both originally and subsequently issued certificates, will bear a restrictive legend substantially as follows: The Common Shares represented by this certificate have not been registered under the Securities Act of 1933, as amended, or the securities laws of any state and have been acquired in a private offering. Sales, pledges, hypothecations, and other transfers of the Common may be made only upon delivery to the Corporation of an opinion of counsel or other evidence satisfactory to the Corporation that such transfer is exempt from registration under the Securities Act of 1933, as amended, applicable state securities laws, or any rule or regulation promulgated thereunder. 4. The Corporation will issue instructions to its transfer agent, Fifth Third Bank, not to honor request for transfer of Common Shares issued subject to the Option, whether or not evidenced by originally or subsequently issued certificates, unless the conditions set forth in the preceding legend have been satisfied. EXECUTED the 9th day of January, 1996. By/s/George W. Astrike - ------------------------------------ George W. Astrike EX-10 4 EX-10.2 German American Bancorp Schedule of Incentive Stock Option Agreements between the Registrant and its executive officers dated January 9, 1996. Executive Officer Number of Exercise Price Shares Granted Per Share George W. Astrike 2,940 $31.25 Stan Ruhe 727 $31.25 Urban Giesler 311 $31.25 James E. Essany 315 $31.25 Total 4,293 The above options were granted on the same form of agreement as the agreement with Mr. Astrike filed as Exhibit 10.1 to the Registrant's report on Form 10-Q for the quarterly period ended March 31, 1996. -----END PRIVACY-ENHANCED MESSAGE-----