Segment Information

The Company’s operations include three primary segments: core banking, trust and investment advisory services, and insurance operations. The core banking segment involves attracting deposits from the general public and using such funds to originate consumer, commercial and agricultural, commercial and agricultural real estate, and residential mortgage loans, primarily in the Company’s local markets. The core banking segment also involves the sale of residential mortgage loans in the secondary market. The trust and investment advisory services segment involves providing trust, investment advisory, and brokerage services to customers. The insurance segment offers a full range of personal and corporate property and casualty insurance products, primarily in the Company’s banking subsidiary’s local markets.

The core banking segment is comprised by the Company’s banking subsidiary, German American Bancorp, which operated through 52 banking offices at June 30, 2017. Net interest income from loans and investments funded by deposits and borrowings is the primary revenue for the core-banking segment. The trust and investment advisory services segment’s revenues are comprised primarily of fees generated by the trust operations of the Company's banking subsidiary and by German American Investment Services, Inc. These fees are derived by providing trust, investment advisory, and brokerage services to its customers. The insurance segment primarily consists of German American Insurance, Inc., which provides a full line of personal and corporate insurance products. Commissions derived from the sale of insurance products are the primary source of revenue for the insurance segment.

The following segment financial information has been derived from the internal financial statements of the Company which are used by management to monitor and manage financial performance. The accounting policies of the three segments are the same as those of the Company. The evaluation process for segments does not include holding company income and expense. Holding company amounts are the primary differences between segment amounts and consolidated totals, and are reflected in the column labeled “Other” below, along with amounts to eliminate transactions between segments.



	Core Banking		Trust and Investment Advisory Services		Insurance		Other			Consolidated Totals
Three Months Ended
June 30, 2017
Net Interest Income	$	24,999	$	1	$	2	$	(189	)	$	24,813
Net Gains on Sales of Loans	959		—		—		—			959
Net Gains on Securities	—		—		—		—			—
Trust and Investment Product Fees	1		1,350		—		(1		)	1,350
Insurance Revenues	12		8		1,724		—			1,744
Noncash Items:
Provision for Loan Losses	350		—		—		—			350
Depreciation and Amortization	1,103		4		19		64			1,190
Income Tax Expense (Benefit)	3,615		49		48		(287		)	3,425
Segment Profit (Loss)	9,791		66		74		(92		)	9,839
Segment Assets at June 30, 2017	3,001,898		1,907		9,774		(8,776		)	3,004,803



	Core Banking		Trust and Investment Advisory Services		Insurance		Other			Consolidated Totals
Three Months Ended
June 30, 2016
Net Interest Income	$	24,873	$	1	$	1	$	(204	)	$	24,671
Net Gains on Sales of Loans	883		—		—		—			883
Net Gains on Securities	968		—		—		—			968
Trust and Investment Product Fees	2		1,221		—		—			1,223
Insurance Revenues	4		5		1,596		—			1,605
Noncash Items:
Provision for Loan Losses	350		—		—		—			350
Depreciation and Amortization	1,089		1		25		64			1,179
Income Tax Expense (Benefit)	4,419		50		58		(278		)	4,249
Segment Profit (Loss)	9,800		76		87		(175		)	9,788
Segment Assets at December 31, 2016	2,958,585		1,851		8,494		(12,936		)	2,955,994



	Core Banking		Trust and Investment Advisory Services		Insurance		Other			Consolidated Totals
Six Months Ended
June 30, 2017
Net Interest Income	$	49,908	$	2	$	4	$	(376	)	$	49,538
Net Gains on Sales of Loans	1,646		—		—		—			1,646
Net Gains on Securities	—		—		—		—			—
Trust and Investment Product Fees	2		2,594		—		(3		)	2,593
Insurance Revenues	14		13		4,357		—			4,384
Noncash Items:
Provision for Loan Losses	850		—		—		—			850
Depreciation and Amortization	2,144		7		38		128			2,317
Income Tax Expense (Benefit)	7,237		83		475		(549		)	7,246
Segment Profit (Loss)	18,756		110		747		(218		)	19,395
Segment Assets at June 30, 2017	3,001,898		1,907		9,774		(8,776		)	3,004,803



	Core Banking		Trust and Investment Advisory Services		Insurance		Other			Consolidated Totals
Six Months Ended
June 30, 2016
Net Interest Income	$	45,771	$	—	$	3	$	(319	)	$	45,455
Net Gains on Sales of Loans	1,603		—		—		—			1,603
Net Gains on Securities	968		—		—		—			968
Trust and Investment Product Fees	3		2,241		—		—			2,244
Insurance Revenues	8		13		4,311		—			4,332
Noncash Items:
Provision for Loan Losses	1,200		—		—		—			1,200
Depreciation and Amortization	2,064		2		51		110			2,227
Income Tax Expense (Benefit)	6,100		64		568		(718		)	6,014
Segment Profit (Loss)	14,881		83		877		(907		)	14,934
Segment Assets at December 31, 2016	2,958,585		1,851		8,494		(12,936		)	2,955,994