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 Bank, which operated through 58 banking offices at September 30, 2018. 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
September 30, 2018
Net Interest Income	$	28,755	$	2	$	3	$	(212	)	$	28,548
Net Gains on Sales of Loans	866		—		—		—			866
Net Gains on Securities	90		—		—		—			90
Trust and Investment Product Fees	1		1,584		—		—			1,585
Insurance Revenues	9		31		1,787		—			1,827
Noncash Items:
Provision for Loan Losses	500		—		—		—			500
Depreciation and Amortization	1,540		2		19		64			1,625
Income Tax Expense (Benefit)	2,825		109		52		(190		)	2,796
Segment Profit (Loss)	12,462		298		147		(268		)	12,639
Segment Assets at September 30, 2018	3,365,394		2,700		11,185		(15,510		)	3,363,769



	Core Banking		Trust and Investment Advisory Services		Insurance		Other			Consolidated Totals
Three Months Ended
September 30, 2017
Net Interest Income	$	25,109	$	2	$	2	$	(196	)	$	24,917
Net Gains on Sales of Loans	952		—		—		—			952
Net Gains on Securities	572		—		—		3			575
Trust and Investment Product Fees	—		1,300		—		1			1,301
Insurance Revenues	11		2		1,715		—			1,728
Noncash Items:
Provision for Loan Losses	250		—		—		—			250
Depreciation and Amortization	1,091		5		19		64			1,179
Income Tax Expense (Benefit)	3,669		31		67		(256		)	3,511
Segment Profit (Loss)	9,621		41		102		(104		)	9,660
Segment Assets at December 31, 2017	3,142,096		1,987		10,078		(9,801		)	3,144,360



	Core Banking		Trust and Investment Advisory Services		Insurance		Other			Consolidated Totals
Nine Months Ended
September 30, 2018
Net Interest Income	$	82,217	$	4	$	8	$	(602	)	$	81,627
Net Gains on Sales of Loans	2,421		—		—		—			2,421
Net Gains on Securities	434		—		—		—			434
Trust and Investment Product Fees	3		5,032		—		—			5,035
Insurance Revenues	15		35		6,403		—			6,453
Noncash Items:
Provision for Loan Losses	2,070		—		—		—			2,070
Depreciation and Amortization	3,971		4		59		192			4,226
Income Tax Expense (Benefit)	7,556		341		386		(677		)	7,606
Segment Profit (Loss)	34,702		952		1,116		(1,221		)	35,549
Segment Assets at September 30, 2018	3,365,394		2,700		11,185		(15,510		)	3,363,769



	Core Banking		Trust and Investment Advisory Services		Insurance		Other			Consolidated Totals
Nine Months Ended
September 30, 2017
Net Interest Income	$	75,017	$	4	$	6	$	(572	)	$	74,455
Net Gains on Sales of Loans	2,598		—		—		—			2,598
Net Gains on Securities	572		—		—		3			575
Trust and Investment Product Fees	2		3,894		—		(2		)	3,894
Insurance Revenues	25		15		6,072		—			6,112
Noncash Items:
Provision for Loan Losses	1,100		—		—		—			1,100
Depreciation and Amortization	3,235		12		57		192			3,496
Income Tax Expense (Benefit)	10,906		114		542		(805		)	10,757
Segment Profit (Loss)	28,377		151		849		(322		)	29,055
Segment Assets at December 31, 2017	3,142,096		1,987		10,078		(9,801		)	3,144,360