0000714395-17-000015.txt : 20170425 0000714395-17-000015.hdr.sgml : 20170425 20170425090942 ACCESSION NUMBER: 0000714395-17-000015 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20170424 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Other Events ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20170425 DATE AS OF CHANGE: 20170425 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GERMAN AMERICAN BANCORP, INC. 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: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-15877 FILM NUMBER: 17779863 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: GERMAN AMERICAN BANCORP DATE OF NAME CHANGE: 19950510 FORMER COMPANY: FORMER CONFORMED NAME: GAB BANCORP DATE OF NAME CHANGE: 19950510 8-K 1 earningsreleaseq12017.htm 8-K Document
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

______________________

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
______________________

Date of Report (Date of earliest event reported): April 24, 2017

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))



Item 2.02. Results of Operations and Financial Condition.

On April 24, 2017, German American Bancorp, Inc. (the “Company” or “German American”), issued a press release announcing its results for the quarter ended March 31, 2017, and making other disclosures. The press release (including the accompanying unaudited consolidated financial statements as of and for the quarter ended March 31, 2017, and other financial data) is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.

The information incorporated by reference herein from Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 8.01. Other Events.

Cash Dividend. As announced in the press release that is furnished as Exhibit 99.1 to this report, the Company’s Board of Directors has declared a cash dividend of $0.13 per share which will be payable on May 20, 2017 to shareholders of record as of May 10, 2017. This level of regular quarterly cash dividend represents approximately an 8% increase, after taking into consideration the Company’s recently completed three-for-two stock split, above the quarterly dividend level paid in the prior year.

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


(d)
 Exhibits
 
 
 
 
 
 
 
Exhibit No.
 
Description
 
 
 
 
 
99.1
 
Press release dated April 24, 2017. This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.




* * * * * *





SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: April 24, 2017
GERMAN AMERICAN BANCORP, INC.

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




EXHIBIT INDEX


Exhibit No.
 
Description
 
 
 
99.1
 
Press Release dated April 24, 2017
 
 
 


 EX-99.1 2 exhibit991q12017.htm 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


1 of 12


APRIL 24, 2017
GERMAN AMERICAN BANCORP, INC. (GABC) REPORTS FIRST QUARTER EARNINGS & ANNOUNCES CASH DIVIDEND INCREASE
Jasper, Indiana: April 24, 2017 -- German American Bancorp, Inc. (NASDAQ: GABC) reported that the Company has achieved strong first quarter 2017 earnings, posting net income of $9.6 million, or $0.42 per share. On a comparative per share basis, this level of quarterly earnings reflected approximately a 68% increase over reported net income of $5.1 million, or $0.25 per share, in the first quarter of 2016, and a slight decline of 5% from the fourth quarter 2016 net income of $10.1 million, or $0.44 per share. The Company’s first quarter 2016 reported net income was inclusive of one month’s operations of River Valley Bancorp, following completion of the merger transaction on March 1, 2016, and reflected merger related costs totaling approximately $3.9 million, or $2.5 million on an after tax basis, representing approximately $0.12 per share. All per share data in this release has been adjusted for and is reflective of the effect of the three-for-two stock split distributed on April 21, 2017.
First quarter 2017 performance was positively impacted by an increased level of tax equivalent net interest margin of 3.86% in the current quarter compared to 3.77% in the fourth quarter of 2016 and 3.63% in the first quarter of 2016. The Company’s net interest margin during the first quarter of 2017 benefited from the increase in general market interest rates during the fourth quarter of 2016 and the first quarter of 2017, as well as from an increased level of accretion of loan discounts on acquired loans. Additionally, on a year-over-year comparison, end of period loans outstanding as of March 31, 2017 increased by approximately 4% from the level of loans outstanding on March 31, 2016, with a similar 4% increase in total deposits between the two periods. End of period loans and deposits for both the first quarter of 2017 and the first quarter of 2016 were inclusive of the balances acquired from River Valley Bancorp on March 1, 2016.
Commenting on the Company’s continued strong financial performance, Mark A. Schroeder, German American’s Chairman & CEO, stated, "We’re pleased that our strong financial performance continued during the first quarter of 2017. One of the positive factors during the first quarter was the expansion of our net interest margin. Having operated in a historically low level of general market interest rates during most of the past decade, it is very encouraging to see this indication that recent upward movements in market interest rates had a positive impact on our margins. While loans outstanding reflected a modest decline in the quarter, this was largely related to normal seasonality within our portfolio of agricultural loans. We are also encouraged relative to the indications of potential future loan demand, as we’re seeing greater optimism from our small business clients and prospective clients. We believe our strong first quarter results places us in a position to continue to deliver upon our commitment of customer service excellence to our many consumer and business clients throughout our Southern Indiana market area."



    

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


2 of 12

The Company also announced an increase in the level of its regular quarterly cash dividend, reflective of the three-for-two stock split distributed on April 21, 2017. Its Board of Directors declared a regular quarterly cash dividend of $0.13 per share, which will be payable on May 20, 2017 to shareholders of record as of May 10, 2017. This level of regular quarterly cash dividend represents approximately an 8% increase, on a stock split adjusted basis, above the Company’s quarterly cash dividend level paid in the prior year.
Balance Sheet Highlights

Total assets for the Company decreased to $2.933 billion at March 31, 2017, representing a decline of $22.9 million, or 3% on an annualized basis, compared with December 31, 2016 and an increase of $66.4 million compared with March 31, 2016.

March 31, 2017 total loans declined $6.5 million, or 1% on an annualized basis, compared with December 31, 2016 and increased $68.3 million, or 4%, compared with March 31, 2016. The modest decline during the first quarter of 2017 was largely related to a seasonal decline in agricultural loans of approximately $10.5 million, or 14% on annualized basis.

 
 
 
 
 
 
 
End of Period Loan Balances
 
3/31/2017
 
12/31/2016
 
3/31/2016
(dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial & Industrial Loans
 
$
450,501

 
$
457,372

 
$
448,569

Commercial Real Estate Loans
 
865,717

 
856,094

 
812,565

Agricultural Loans
 
292,615

 
303,128

 
275,938

Consumer Loans
 
194,290

 
193,520

 
174,005

Residential Mortgage Loans
 
183,806

 
183,290

 
207,561

 
 
$
1,986,929

 
$
1,993,404

 
$
1,918,638

 
 
 
 
 
 
 











    

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

Non-performing assets totaled $5.9 million at March 31, 2017 compared to $4.0 million of non-performing assets at December 31, 2016 and $7.1 million at March 31, 2016. Non-performing assets represented 0.20% of total assets at March 31, 2017 compared to 0.14% of total assets at December 31, 2016 and 0.25% of total assets at March 31, 2016. Non-performing loans totaled $5.7 million at March 31, 2017 compared to $3.8 million at December 31, 2016 and $6.8 million of non-performing loans at March 31, 2016. Non-performing loans represented 0.29% of total loans at March 31, 2017 compared to 0.19% at December 31, 2016 and 0.35% at March 31, 2016. The increase in non-performing assets and non-performing loans during the first quarter of 2017 compared with December 31, 2016 levels was attributable to a single commercial real estate credit relationship that was placed on non-accrual status and a single agricultural relationship that was more than 90 days past due at quarter-end.

 
 
 
 
 
 
Non-performing Assets
 
 
 
 
 
(dollars in thousands)
 
 
 
 
 
 
3/31/2017
 
12/31/2016
 
3/31/2016
Non-Accrual Loans
$
4,510

 
$
3,793

 
$
6,592

Past Due Loans (90 days or more)
1,183

 
2

 
168

       Total Non-Performing Loans
5,693

 
3,795

 
6,760

Other Real Estate
208

 
242

 
343

       Total Non-Performing Assets
$
5,901

 
$
4,037

 
$
7,103

 
 
 
 
 
 
Restructured Loans
$
28

 
$
28

 
$
122

 
 
 
 
 
 

The Company’s allowance for loan losses totaled $15.2 million at March 31, 2017 compared to $14.8 million at December 31, 2016 and $15.2 million at March 31, 2016. The allowance for loan losses represented 0.76% of period-end loans at March 31, 2017 compared with 0.74% of period-end loans at December 31, 2016 and 0.79% of period-end loans at March 31, 2016. Under acquisition accounting treatment, loans acquired are recorded at fair value which includes a credit risk component, and therefore the allowance on loans acquired is not carried over from the seller. The Company held a discount on acquired loans of $9.2 million as of March 31, 2017, $10.0 million at December 31, 2016 and $13.3 million at March 31, 2016.








    

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

Total deposits declined $23.1 million, or 4% on an annualized basis, as of March 31, 2017 compared with December 31, 2016 and increased $85.9 million, or 4%, compared with March 31, 2016.

 
 
 
 
 
 
 
End of Period Deposit Balances
 
3/31/2017
 
12/31/2016
 
3/31/2016
(dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-interest-bearing Demand Deposits
 
$
572,874

 
$
571,989

 
$
507,567

IB Demand, Savings, and MMDA Accounts
 
1,389,763

 
1,399,381

 
1,310,089

Time Deposits < $100,000
 
206,171

 
207,824

 
244,718

Time Deposits > $100,000
 
157,664

 
170,357

 
178,240

 
 
$
2,326,472

 
$
2,349,551

 
$
2,240,614

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Results of Operations Highlights – Quarter ended March 31, 2017

Net income for the quarter ended March 31, 2017 totaled $9,556,000, or $0.42 per share, which represented a decline of approximately 5% on a per share basis compared with the fourth quarter 2016 net income of $10,065,000, or $0.44 per share, and represented an increase of approximately 68% on a per share basis compared with the first quarter 2016 net income $5,146,000, or $0.25 per share. The first quarter of 2016 results of operations included one month's operations of River Valley Bancorp and were significantly impacted by merger related charges associated with the closing of the River Valley transaction which was effective March 1, 2016. These merger related charges totaled approximately $3,884,000, or $2,448,000 on an after tax basis, which represented approximately $0.12 per share during the first quarter of 2016.



    

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
 
 
March 31, 2017
 
December 31, 2016
 
March 31, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 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
 
$
12,554

 
$
27

 
0.88
%
 
$
19,738

 
$
12

 
0.24
%
 
$
20,377

 
$
17

 
0.34
%
Securities
 
731,871

 
5,834

 
3.19
%
 
737,619

 
5,582

 
3.03
%
 
696,175

 
4,926

 
2.83
%
Loans and Leases
 
1,974,846

 
22,440

 
4.60
%
 
2,004,983

 
22,734

 
4.51
%
 
1,694,643

 
18,755

 
4.45
%
Total Interest Earning Assets
 
$
2,719,271

 
$
28,301

 
4.20
%
 
$
2,762,340

 
$
28,328

 
4.09
%
 
$
2,411,195

 
$
23,698

 
3.95
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Demand Deposit Accounts
 
$
557,912

 
 
 
 
 
$
559,597

 
 
 
 
 
$
467,516

 
 
 
 
IB Demand, Savings, and
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
        MMDA Accounts
 
$
1,385,347

 
$
738

 
0.22
%
 
$
1,412,399

 
$
708

 
0.20
%
 
$
1,143,434

 
$
464

 
0.16
%
Time Deposits
 
401,155

 
705

 
0.71
%
 
412,151

 
675

 
0.65
%
 
400,353

 
691

 
0.69
%
FHLB Advances and Other Borrowings
 
226,786

 
865

 
1.55
%
 
217,033

 
829

 
1.52
%
 
243,030

 
741

 
1.23
%
Total Interest-Bearing Liabilities
 
$
2,013,288

 
$
2,308

 
0.47
%
 
$
2,041,583

 
$
2,212

 
0.43
%
 
$
1,786,817

 
$
1,896

 
0.43
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cost of Funds
 
 
 
 
 
0.34
%
 
 
 
 
 
0.32
%
 
 
 
 
 
0.32
%
Net Interest Income
 
 
 
$
25,993

 
 
 
 
 
$
26,116

 
 
 
 
 
$
21,802

 
 
Net Interest Margin
 
 
 
 
 
3.86
%
 
 
 
 
 
3.77
%
 
 
 
 
 
3.63
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

During the quarter ended March 31, 2017, net interest income totaled $24,725,000 representing a decline of $164,000, or 1%, from the quarter ended December 31, 2016 net interest income of $24,889,000 and an increase of $3,941,000, or 19%, compared with the quarter ended March 31, 2016 net interest income of $20,784,000.

The tax equivalent net interest margin for the quarter ended March 31, 2017 was 3.86% compared with 3.77% in the fourth quarter of 2016 and 3.63% in the first quarter of 2016. Accretion of loan discounts on acquired loans contributed approximately 17 basis points to the net interest margin on an annualized basis in the first quarter of 2017, 13 basis points in the fourth quarter of 2016, and 6 basis points in the first quarter of 2016.

During the quarter ended March 31, 2017, the Company recorded a provision for loan loss of $500,000 compared with no provision for loan loss during the fourth quarter of 2016 and a provision of $850,000 in the first quarter of 2016. The increased level of provision during the first quarter of 2017 compared with the fourth quarter of


    

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

2016 was primarily related to the down-grade of a single commercial real estate relationship to non-accrual status and two agricultural relationships down-graded during the first quarter of 2017 from pass graded credits to special mention credits. The provision during all periods was done in accordance with the Company's standard methodology for determining the adequacy of its allowance for loan loss.

During the quarter ended March 31, 2017, non-interest income totaled $8,188,000, a decline of 2% compared with the quarter ended December 31, 2016, and an increase of $971,000, or 13%, compared with the first quarter of 2016.

 
 
 
 
 
 
 
 
 
Quarter Ended
 
Quarter Ended
 
Quarter Ended
Non-interest Income
 
3/31/2017
 
12/31/2016
 
3/31/2016
(dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
Trust and Investment Product Fees
 
$
1,243

 
$
1,209

 
$
1,021

Service Charges on Deposit Accounts
 
1,484

 
1,594

 
1,233

Insurance Revenues
 
2,640

 
1,748

 
2,727

Company Owned Life Insurance
 
254

 
278

 
215

Interchange Fee Income
 
1,023

 
1,001

 
788

Other Operating Income
 
857

 
1,222

 
513

     Subtotal
 
7,501

 
7,052

 
6,497

Net Gains on Loans
 
687

 
752

 
720

Net Gains on Securities
 
—

 
553

 
—

Total Non-interest Income
 
$
8,188

 
$
8,357

 
$
7,217

 
 
 
 
 
 
 

Insurance revenues increased $892,000, or 51%, during the quarter ended March 31, 2017, compared with the fourth quarter of 2016 and declined $87,000, or 3%, compared with the first quarter of 2016. The increase during the first quarter of 2017 compared with the fourth quarter of 2016 was due to increased contingency revenue. Contingency revenue during the first quarter of 2017 totaled $992,000 compared with no contingency revenue during the fourth quarter of 2016 and $1,113,000 during the first quarter of 2016. 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.

Other operating income decreased $365,000, or 30%, during the quarter ended March 31, 2017 compared with the fourth quarter of 2016 and increased $344,000, or 67%, compared with the first quarter of 2016. 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


7 of 12

decline in the first quarter of 2017 compared with the fourth quarter of 2016 was primarily related to a gain on the disposition of a new markets tax credit limited partnership that occurred during the fourth quarter of 2016. The increase in the first quarter of 2017 compared with the first quarter of 2016 was largely attributable to increased fees associated with swap transactions with loan customers and was also attributable to the River Valley transaction.

The Company realized no gains on sales of securities during the first quarter of 2017 compared with a net gain on the sale of securities of $553,000 in the fourth quarter of 2016 and no gains during the first quarter of 2016.

During the quarter ended March 31, 2017, non-interest expense totaled $19,036,000, a decline of $319,000, or 2%, compared with the quarter ended December 31, 2016, and a decline of $1,204,000, or 6%, compared with the first quarter of 2016. During the first quarter of 2016, the Company recorded costs related to the River Valley merger transaction that totaled $3,884,000.

 
 
 
 
 
 
 
 
 
Quarter Ended
 
Quarter Ended
 
Quarter Ended
Non-interest Expense
 
3/31/2017
 
12/31/2016
 
3/31/2016
(dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
Salaries and Employee Benefits
 
$
11,444

 
$
11,604

 
$
11,601

Occupancy, Furniture and Equipment Expense
 
2,182

 
2,229

 
1,887

FDIC Premiums
 
239

 
111

 
328

Data Processing Fees
 
1,011

 
1,079

 
2,165

Professional Fees
 
803

 
797

 
1,318

Advertising and Promotion
 
778

 
797

 
544

Intangible Amortization
 
253

 
262

 
208

Other Operating Expenses
 
2,326

 
2,476

 
2,189

Total Non-interest Expense
 
$
19,036

 
$
19,355

 
$
20,240

 
 
 
 
 
 
 

Salaries and benefits declined $160,000, or 1%, during the quarter ended March 31, 2017 compared with the fourth quarter of 2016 and declined $157,000, or 1%, compared with the first quarter of 2016. The decline in salaries and benefits during the first quarter of 2017 compared with the fourth quarter of 2016 was attributable to a reduced level of incentive compensation expense partially offset by higher levels of health insurance costs and retirement plan costs. The decline in the first quarter of 2017 compared with the first quarter of 2016 was primarily attributable to the settlement of various employment and benefit arrangements related to the River


    

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

Valley merger in the first quarter of 2016, partially offset by having River Valley's operations included for a full quarter in 2017 as compared to one month in 2016.
 
Data processing fees declined $68,000, or 6%, in the first quarter of 2017 compared with the fourth quarter of 2016 and declined $1,154,000, or 53%, compared with the first quarter of 2016. The decline during the first quarter of 2017 compared with first quarter of 2016 was primarily related to expenses totaling $1,198,000 associated with the acquisition of River Valley that were incurred during the first quarter of 2016.

Professional fees were relatively stable in the first quarter of 2017 compared with the fourth quarter of 2016 and declined $515,000, or 39%, compared to the first quarter of 2016. The decline during the first quarter of 2017 compared with first quarter of 2016 was primarily related to expenses totaling $599,000 associated with the acquisition of River Valley that were incurred during the first quarter of 2016.

About German American
German American Bancorp, Inc., is a NASDAQ-traded (symbol: GABC) bank holding company based in Jasper, Indiana. German American, through its banking subsidiary German American Bancorp, operates 51 banking offices in 19 contiguous southern Indiana counties and one northern Kentucky county. The Company also owns an investment brokerage subsidiary (German American Investment Services, Inc.) and a full line property and casualty insurance agency (German American Insurance, Inc.).




    

NEWS RELEASE

For additional information, contact:
Mark A Schroeder, Chairman & Chief Executive Officer of German American Bancorp, Inc.
Bradley M Rust, Executive Vice President/CFO of German American Bancorp, Inc.
(812) 482-1314


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 and the Federal Deposit Insurance Act and other possible legislative and regulatory actions and reforms; the continued availability of earnings and excess capital sufficient for the lawful and prudent declaration and payment of cash dividends; and other risk factors expressly identified in the Company’s filings with the United States Securities and Exchange Commission. Such statements reflect our views with respect to future events and are subject to these and other risks, uncertainties and assumptions relating to the operations, results of operations, growth strategy and liquidity of the Company. Readers are cautioned not to place undue reliance on these forward-looking statements. It is intended that these forward-looking statements speak only as of the date they are made. We do not undertake any obligation to release publicly any revisions to these forward-looking statements to reflect future events or circumstances or to reflect the occurrence of unanticipated events.




GERMAN AMERICAN BANCORP, INC.
(unaudited, dollars in thousands except per share data)
 
 
 
 
 
 
Consolidated Balance Sheets
 
 
 
 
 
 
 
March 31, 2017
 
December 31, 2016
 
March 31, 2016
ASSETS
 
 
 
 
 
     Cash and Due from Banks
$
30,151

 
$
48,467

 
$
34,734

     Short-term Investments
7,288

 
16,349

 
14,312

     Interest-bearing Time Deposits with Banks
—

 
—

 
1,992

     Investment Securities
726,352

 
709,786

 
715,611

 
 
 
 
 
 
     Loans Held-for-Sale
6,856

 
15,273

 
8,700

 
 
 
 
 
 
     Loans, Net of Unearned Income
1,983,572

 
1,989,955

 
1,914,948

     Allowance for Loan Losses
(15,166
)
 
(14,808
)
 
(15,161
)
        Net Loans
1,968,406

 
1,975,147

 
1,899,787

 
 
 
 
 
 
     Stock in FHLB and Other Restricted Stock
13,048

 
13,048

 
13,048

     Premises and Equipment
49,718

 
48,230

 
47,617

     Goodwill and Other Intangible Assets
56,849

 
56,893

 
57,359

     Other Assets
74,476

 
72,801

 
73,567

   TOTAL ASSETS
$
2,933,144

 
$
2,955,994

 
$
2,866,727

 
 
 
 
 
 
LIABILITIES
 
 
 
 
 
     Non-interest-bearing Demand Deposits
$
572,874

 
$
571,989

 
$
507,567

     Interest-bearing Demand, Savings, and Money Market Accounts
1,389,763

 
1,399,381

 
1,310,089

     Time Deposits
363,835

 
378,181

 
422,958

        Total Deposits
2,326,472

 
2,349,551

 
2,240,614

 
 
 
 
 
 
     Borrowings
241,358

 
258,114

 
278,698

     Other Liabilities
24,098

 
18,062

 
25,777

   TOTAL LIABILITIES
2,591,928

 
2,625,727

 
2,545,089

 
 
 
 
 
 
SHAREHOLDERS' EQUITY
 
 
 
 
 
     Common Stock and Surplus
187,300

 
187,005

 
185,930

     Retained Earnings
156,322

 
149,666

 
127,867

     Accumulated Other Comprehensive Income (Loss)
(2,406
)
 
(6,404
)
 
7,841

   TOTAL SHAREHOLDERS' EQUITY
341,216

 
330,267

 
321,638

 
 
 
 
 
 
   TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
$
2,933,144

 
$
2,955,994

 
$
2,866,727

 
 
 
 
 
 
END OF PERIOD SHARES OUTSTANDING (2)
22,929,417

 
22,904,157

 
22,896,229

 
 
 
 
 
 
TANGIBLE BOOK VALUE PER SHARE (1) (2)
$
12.40

 
$
11.94

 
$
11.54

 
 
 
 
 
 
(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.
(2) As Adjusted for the 3 for 2 Stock Split.



GERMAN AMERICAN BANCORP, INC.
(unaudited, dollars in thousands except per share data)
 
 
 
 
 
 
 
Consolidated Statements of Income
 
 
 
 
 
 
 
 
 
Three Months Ended
 
 
March 31, 2017
 
December 31, 2016
 
March 31, 2016
INTEREST INCOME
 
 
 
 
 
   Interest and Fees on Loans
$
22,262

 
$
22,557

 
$
18,664

   Interest on Short-term Investments and Time Deposits
27

 
12

 
17

   Interest and Dividends on Investment Securities
4,744

 
4,532

 
3,999

  TOTAL INTEREST INCOME
27,033

 
27,101

 
22,680

 
 
 
 
 
 
 
INTEREST EXPENSE
 
 
 
 
 
   Interest on Deposits
1,443

 
1,383

 
1,155

   Interest on Borrowings
865

 
829

 
741

  TOTAL INTEREST EXPENSE
2,308

 
2,212

 
1,896

 
 
 
 
 
 
 
   NET INTEREST INCOME
24,725

 
24,889

 
20,784

   Provision for Loan Losses
500

 
—

 
850

   NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES
24,225

 
24,889

 
19,934

 
 
 
 
 
 
 
NON-INTEREST INCOME
 
 
 
 
 
   Net Gain on Sales of Loans
687

 
752

 
720

   Net Gain on Securities
—

 
553

 
—

   Other Non-interest Income
7,501

 
7,052

 
6,497

  TOTAL NON-INTEREST INCOME
8,188

 
8,357

 
7,217

 
 
 
 
 
 
 
NON-INTEREST EXPENSE
 
 
 
 
 
   Salaries and Benefits
11,444

 
11,604

 
11,601

   Other Non-interest Expenses
7,592

 
7,751

 
8,639

  TOTAL NON-INTEREST EXPENSE
19,036

 
19,355

 
20,240

 
 
 
 
 
 
 
   Income before Income Taxes
13,377

 
13,891

 
6,911

   Income Tax Expense
3,821

 
3,826

 
1,765

 
 
 
 
 
 
 
NET INCOME
$
9,556

 
$
10,065

 
$
5,146

 
 
 
 
 
 
 
BASIC EARNINGS PER SHARE (1)
$
0.42

 
$
0.44

 
$
0.25

DILUTED EARNINGS PER SHARE (1)
$
0.42

 
$
0.44

 
$
0.25

 
 
 
 
 
 
 
WEIGHTED AVERAGE SHARES OUTSTANDING (1)
22,908,648

 
22,887,567

 
20,887,284

DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING (1)
22,908,648

 
22,887,567

 
20,893,399

 
 
 
 
 
 
 
(1) 
As Adjusted for the 3 for 2 Stock Split.
 
 
 
 
 



GERMAN AMERICAN BANCORP, INC.
(unaudited, dollars in thousands except per share data)
 
 
 
 
 
 
 
 
 
Three Months Ended
 
 
March 31,
 
December 31,
 
March 31,
 
 
2017
 
2016
 
2016
EARNINGS PERFORMANCE RATIOS
 
 
 
 
 
 
Annualized Return on Average Assets
1.31
%
 
1.36
%
 
0.81
%
 
Annualized Return on Average Equity
11.39
%
 
11.90
%
 
7.39
%
 
Net Interest Margin
3.86
%
 
3.77
%
 
3.63
%
 
Efficiency Ratio (1)
55.69
%
 
56.15
%
 
69.75
%
 
Net Overhead Expense to Average Earning Assets (2)
1.60
%
 
1.59
%
 
2.16
%
 
 
 
 
 
 
 
ASSET QUALITY RATIOS
 
 
 
 
 
 
Annualized Net Charge-offs to Average Loans
0.03
%
 
0.07
%
 
0.03
%
 
Allowance for Loan Losses to Period End Loans
0.76
%
 
0.74
%
 
0.79
%
 
Non-performing Assets to Period End Assets
0.20
%
 
0.14
%
 
0.25
%
 
Non-performing Loans to Period End Loans
0.29
%
 
0.19
%
 
0.35
%
 
Loans 30-89 Days Past Due to Period End Loans
0.37
%
 
0.36
%
 
0.34
%
 
 
 
 
 
 
 
SELECTED BALANCE SHEET & OTHER FINANCIAL DATA
 
 
 
 
 
 
Average Assets
$
2,926,095

 
$
2,970,408

 
$
2,556,431

 
Average Earning Assets
$
2,719,271

 
$
2,762,340

 
$
2,411,195

 
Average Total Loans
$
1,974,846

 
$
2,004,983

 
$
1,694,643

 
Average Demand Deposits
$
557,912

 
$
559,597

 
$
467,516

 
Average Interest Bearing Liabilities
$
2,013,288

 
$
2,041,583

 
$
1,786,817

 
Average Equity
$
335,586

 
$
338,270

 
$
278,483

 
 
 
 
 
 
 
 
Period End Non-performing Assets (3)
$
5,901

 
$
4,037

 
$
7,103

 
Period End Non-performing Loans (4)
$
5,693

 
$
3,795

 
$
6,760

 
Period End Loans 30-89 Days Past Due (5)
$
7,337

 
$
7,109

 
$
6,562

 
 
 
 
 
 
 
 
Tax Equivalent Net Interest Income
$
25,993

 
$
26,116

 
$
21,802

 
Net Charge-offs during Period
$
143

 
$
346

 
$
128

 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) 
Efficiency Ratio is defined as Non-interest Expense divided by the sum of Net Interest Income, on a tax equivalent basis, and Non-interest Income.
(2) 
Net Overhead Expense is defined as Total Non-interest Expense less Total Non-interest Income.
(3) 
Non-performing assets are defined as Non-accrual Loans, Loans Past Due 90 days or more, Restructured Loans, and Other Real Estate Owned.
(4) 
Non-performing loans are defined as Non-accrual Loans, Loans Past Due 90 days or more, and Restructured Loans.
(5) 
Loans 30-89 days past due and still accruing.