EX-99.1 2 exhibit991q12019.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 13




APRIL 29, 2019
GERMAN AMERICAN BANCORP, INC. (GABC) REPORTS RECORD QUARTERLY EARNINGS.

Jasper, Indiana: April 29, 2019 -- German American Bancorp, Inc. (NASDAQ: GABC) reported record quarterly earnings of $15.1 million, or $0.60 per share, for the quarter ending on March 31, 2019. This level of quarterly earnings performance was an increase of 36%, on a per share basis, compared with fourth quarter 2018 net income of $11.0 million, or $0.44 per share, and an increase of 18%, on a per share basis, compared with the first quarter 2018 net income of $11.8 million, or $0.51 per share.

These quarterly comparisons are inclusive of the Company’s 2018 five-branch acquisition in the greater Columbus, Indiana market area on May 18, 2018 and its acquisition of First Security, Inc. on October 15, 2018. First Security was based in Owensboro, Kentucky, and operated 11 retail banking offices in the Owensboro, Bowling Green, Franklin and Lexington, Kentucky market areas and in Evansville and Newburgh, Indiana market area.

The record first quarter 2019 earnings, as compared with the fourth quarter of 2018, were partially attributable to an increased level of net interest income during the current quarter, resulting from both increased average earning assets and an improved tax-equivalent net interest margin. The increased level of average earning assets during the first quarter of 2019, compared to the fourth quarter of 2018, was largely attributable to the effect of the acquisition of First Security on October 15, 2018.

Other factors contributing to the record first quarter earnings included the recording of $1.4 million in contingency insurance revenue during the quarter and a $3.1 million decline in the level of operating expenses, as compared to the fourth quarter of 2018. The decline in operating expenses was materially due to a reduced level of acquisition-related expenses in the first quarter. The first quarter of 2019 results of operations included acquisition-related expenses of approximately $544,000 ($407,000 or $0.02 per share, on an after-tax basis), compared to $3.1 million (or $2.3 million, or $0.09 per share, on an after-tax basis) in the fourth quarter of 2018.

End of period loans and deposits as of March 31, 2019, relative to December 31, 2018 year-end balances, were relatively flat to slightly lower, as March 31, 2019 total loans declined by 3% on annualized basis, while total deposits decreased by 1% on an annualized basis. The slight decrease in loans and deposits during the quarter was largely attributable to seasonality as the first quarter is historically a slower growth period for the Company, specifically related to seasonal pay-downs within the agricultural loan portfolio. Additionally, the Company repositioned a portion of the acquired loan portfolio during the quarter, resulting in an elevated level of loan payoffs, including within the residential mortgage loan portfolio.


    

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 13

Commenting on the Company’s record first quarter performance, Mark A. Schroeder, German American’s Chairman & CEO, stated, "We’re extremely pleased with the strong start we experienced during the first quarter of this year, both in terms of earnings growth and the continued integration of First Security. Additionally, we announced the pending acquisition of Citizens First Corporation of Bowling Green, Kentucky on February 21, 2019. The combination of First Security and Citizens First in the vibrant Bowling Green market will position German American as one of market share leaders in this dynamic market.”

Schroeder continued, “While balance sheet growth was limited during the quarter due to seasonal factors, we remain very encouraged about our ability to experience strong growth throughout the balance of this year. Our loan pipelines continue to be exceptionally strong, as evidenced by the 9% growth, on an annualized basis, that we saw within our Commercial & Industrial Loans during the first quarter. We also were very pleased with the approximately 5% annualized growth in end of period balances in Non-interest-bearing Demand Deposits. Even though the current economic recovery is approaching historic length, we’re continuing to see indications that economic growth will remain strong throughout 2019."

The Company also announced its Board of Directors declared a regular quarterly cash dividend of $0.17 per share, which will be payable on May 20, 2019 to shareholders of record as of May 10, 2019.



Balance Sheet Highlights

The Company completed a five-branch acquisition of locations of First Financial Bancorp (formerly branch locations of Mainsource Financial Group, Inc. prior to its merger with First Financial Bancorp) on May 18, 2018. Four of the branches are located in Columbus, Indiana, and one in Greensburg, Indiana. In addition, on October 15, 2018, the Company completed its acquisition of First Security, Inc. ("First Security") and its subsidiary bank, First Security Bank, Inc. First Security was based in Owensboro, Kentucky, and operated 11 retail banking offices in Owensboro, Bowling Green, Franklin and Lexington, Kentucky and in Evansville and Newburgh, Indiana.

Total assets for the Company totaled $3.896 billion at March 31, 2019, representing a decline of $33.6 million, or 3% on an annualized basis, compared with December 31, 2018 and an increase of $770.5 million, or 25%, compared with March 31, 2018. The increase in total assets as of March 31, 2019 compared to a year ago was driven largely by the acquisition of First Security and the five-branch network in the Columbus and Greensburg, Indiana markets, as well as organic loan growth.

March 31, 2019 total loans declined $19.3 million, or 3% on an annualized basis, compared with December 31, 2018 and increased $558.6 million, or 26%, compared with March 31, 2018.


    

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 13


The decline during the first quarter of 2019 was driven by a seasonal decline in agricultural loans of approximately $17.2 million, or 19% on an annualized basis, and a decline in retail loans of $17.8 million, or 12% on an annualized basis, partially mitigated by an increase of $12.2 million, or 9% on an annualized basis, of commercial and industrial loans, and an increase of $3.4 million, or 1% on an annualized basis, of commercial real estate loans.

 
 
 
 
 
 
 
End of Period Loan Balances
 
3/31/2019
 
12/31/2018
 
3/31/2018
(dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial & Industrial Loans
 
$
555,967

 
$
543,761

 
$
482,219

Commercial Real Estate Loans
 
1,212,090

 
1,208,646

 
947,948

Agricultural Loans
 
347,999

 
365,208

 
329,138

Consumer Loans
 
281,724

 
285,534

 
216,435

Residential Mortgage Loans
 
314,634

 
328,592

 
178,108

 
 
$
2,712,414

 
$
2,731,741

 
$
2,153,848

 
 
 
 
 
 
 

Non-performing assets totaled $13.1 million at March 31, 2019 compared to $13.5 million at December 31, 2018 and $10.7 million at March 31, 2018. Non-performing assets represented 0.34% of total assets at each of March 31, 2019, December 31, 2018 and March 31, 2018. Non-performing loans totaled $12.4 million at March 31, 2019 compared to $13.2 million at December 31, 2018 and $10.6 million at March 31, 2018. Non-performing loans represented 0.46% of total loans at March 31, 2019 compared to 0.48% at December 31, 2018 and 0.49% at March 31, 2018.
 
 
 
 
 
 
Non-performing Assets
 
 
 
 
 
(dollars in thousands)
 
 
 
 
 
 
3/31/2019
 
12/31/2018
 
3/31/2018
Non-Accrual Loans
$
12,036

 
$
12,579

 
$
9,479

Past Due Loans (90 days or more)
393

 
633

 
1,105

       Total Non-Performing Loans
12,429

 
13,212

 
10,584

Other Real Estate
685

 
286

 
68

       Total Non-Performing Assets
$
13,114

 
$
13,498

 
$
10,652

 
 
 
 
 
 
Restructured Loans
$
119

 
$
121

 
$
124

 
 
 
 
 
 


    

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 13


The Company’s allowance for loan losses totaled $16.2 million at March 31, 2019 compared to $15.8 million at December 31, 2018 and $14.5 million at March 31, 2018. The allowance for loan losses represented 0.60% of period-end loans at March 31, 2019 compared with 0.58% of period-end loans at December 31, 2018 and 0.67% of period-end loans at March 31, 2018. From time to time, the Company has acquired loans through bank and branch acquisitions with the most recent being the First Security acquisition during the fourth quarter of 2018 and a five-branch acquisition in the second quarter of 2018. 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 net discount on acquired loans of $18.2 million at March 31, 2019, $19.5 million at December 31, 2018 and $7.3 million at March 31, 2018.

March 31, 2019 total deposits declined $7.5 million, or 1% on an annualized basis, compared with December 31, 2018 and increased $598.0 million compared with March 31, 2018.

 
 
 
 
 
 
 
End of Period Deposit Balances
 
3/31/2019
 
12/31/2018
 
3/31/2018
(dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-interest-bearing Demand Deposits
 
$
723,995

 
$
715,972

 
$
599,374

IB Demand, Savings, and MMDA Accounts
 
1,706,913

 
1,768,177

 
1,465,150

Time Deposits < $100,000
 
248,686

 
249,309

 
193,864

Time Deposits > $100,000
 
385,576

 
339,174

 
208,733

 
 
$
3,065,170

 
$
3,072,632

 
$
2,467,121

 
 
 
 
 
 
 

Results of Operations Highlights – Quarter ended March 31, 2019

Net income for the quarter ended March 31, 2019 totaled $15,067,000, or $0.60 per share, an increase of 36% on a per share basis compared with fourth quarter 2018 net income of $10,980,000, or $0.44 per share, and an increase of 18% on a per share basis compared with the first quarter 2018 net income of $11,813,000, or $0.51 per share.

Net income for each quarter presented was impacted by merger and acquisition activity during 2018 and 2019. The first quarter of 2019 results of operations included acquisition-related expenses of approximately $544,000 ($407,000 or $0.02 per share, on an after tax basis), while the the fourth quarter of 2018 results of operations included acquisition-related expenses of approximately $3,107,000 ($2,343,000 or $0.09 per share, on an after tax basis) and the first quarter of 2018 included approximately $186,000 ($139,000 or less than $0.01 per share on an after tax basis).


    

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 13


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Summary Average Balance Sheet
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Tax-equivalent basis / dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Quarter Ended
 
 Quarter Ended
 
 Quarter Ended
 
 
March 31, 2019
 
December 31, 2018
 
March 31, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 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
 
$
24,538

 
$
141

 
2.32
%
 
$
20,925

 
$
97

 
1.83
%
 
$
8,556

 
$
56

 
2.65
%
Securities
 
825,625

 
6,549

 
3.17
%
 
812,191

 
6,447

 
3.18
%
 
753,589

 
5,708

 
3.03
%
Loans and Leases
 
2,718,808

 
35,207

 
5.24
%
 
2,662,502

 
33,771

 
5.04
%
 
2,139,704

 
24,032

 
4.55
%
Total Interest Earning Assets
 
$
3,568,971

 
$
41,897

 
4.74
%
 
$
3,495,618

 
$
40,315

 
4.58
%
 
$
2,901,849

 
$
29,796

 
4.15
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Demand Deposit Accounts
 
$
691,107

 
 
 
 
 
$
714,504

 
 
 
 
 
$
585,432

 
 
 
 
IB Demand, Savings, and
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
        MMDA Accounts
 
$
1,731,118

 
$
2,695

 
0.63
%
 
$
1,794,891

 
$
2,808

 
0.62
%
 
$
1,489,363

 
$
1,275

 
0.35
%
Time Deposits
 
646,726

 
2,721

 
1.71
%
 
593,615

 
2,151

 
1.44
%
 
398,397

 
1,008

 
1.03
%
FHLB Advances and Other Borrowings
 
330,463

 
2,182

 
2.68
%
 
271,834

 
1,654

 
2.42
%
 
262,784

 
1,252

 
1.93
%
Total Interest-Bearing Liabilities
 
$
2,708,307

 
$
7,598

 
1.14
%
 
$
2,660,340

 
$
6,613

 
0.99
%
 
$
2,150,544

 
$
3,535

 
0.67
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cost of Funds
 
 
 
 
 
0.86
%
 
 
 
 
 
0.75
%
 
 
 
 
 
0.49
%
Net Interest Income
 
 
 
$
34,299

 
 
 
 
 
$
33,702

 
 
 
 
 
$
26,261

 
 
Net Interest Margin
 
 
 
 
 
3.88
%
 
 
 
 
 
3.83
%
 
 
 
 
 
3.66
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

During the quarter ended March 31, 2019, net interest income totaled $33,591,000, which represented an increase of $608,000, or 2%, from the quarter ended December 31, 2018 net interest income of $32,983,000 and an increase of $7,981,000, or 31%, compared with the quarter ended March 31, 2018 net interest income of $25,610,000. The increased level of net interest income during the first quarter of 2019 compared with both the fourth quarter of 2018 and the first quarter of 2018 was driven primarily by a higher level of average earning assets and an improved tax equivalent net interest margin. The increased level of average earning assets during


    

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 13

the first quarter of 2019 compared with the fourth quarter of 2018, was driven primarily by the completed acquisition of First Security on October 15, 2018.
 
The tax equivalent net interest margin for the quarter ended March 31, 2019 was 3.88% compared with 3.83% in the fourth quarter of 2018 and 3.66% in the first quarter of 2018. Accretion of loan discounts on acquired loans contributed approximately 16 basis points to the net interest margin on an annualized basis in the first quarter of 2019, 13 basis points in the fourth quarter of 2018, and 4 basis points in the first quarter of 2018.

During the quarter ended March 31, 2019, the Company recorded a provision for loan loss of $675,000 compared with no provision for loan loss in the fourth quarter of 2018 and $350,000 in the first quarter of 2018. 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, 2019, non-interest income totaled $11,658,000, an increase of $1,925,000, or 20%, compared with the quarter ended December 31, 2018, and an increase of $2,166,000, or 23%, compared with the first quarter of 2018.

 
 
 
 
 
 
 
 
 
Quarter Ended
 
Quarter Ended
 
Quarter Ended
Non-interest Income
 
3/31/2019
 
12/31/2018
 
3/31/2018
(dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
Trust and Investment Product Fees
 
$
1,567

 
$
1,645

 
$
1,773

Service Charges on Deposit Accounts
 
1,900

 
2,072

 
1,471

Insurance Revenues
 
3,205

 
1,877

 
2,930

Company Owned Life Insurance
 
884

 
420

 
312

Interchange Fee Income
 
2,095

 
2,235

 
1,482

Other Operating Income
 
871

 
629

 
604

     Subtotal
 
10,522

 
8,878

 
8,572

Net Gains on Loans
 
981

 
583

 
650

Net Gains on Securities
 
155

 
272

 
270

Total Non-interest Income
 
$
11,658

 
$
9,733

 
$
9,492

 
 
 
 
 
 
 

Service charges on deposit accounts declined $172,000, or 8%, during the first quarter of 2019 compared with the fourth quarter of 2018 and increased $429,000, or 29%, compared with the first quarter of 2018. The decline during the first quarter of 2019 compared with the fourth quarter of 2018 was largely related to seasonal declines


    

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 13

in deposit fees, while the increase during the first quarter of 2019 compared with first quarter of 2018 was largely attributable to the acquisitions completed during 2018.

Insurance revenues increased $1,328,000, or 71%, during the quarter ended March 31, 2019, compared with the fourth quarter of 2018 and increased $275,000, or 9%, compared with the first quarter of 2018. The increase during the first quarter of 2019 compared with each of the fourth quarter of 2018 and the first quarter of 2018 was primarily due to increased contingency revenue. Contingency revenue during the first quarter of 2019 totaled $1,375,000 compared with no contingency revenue during the fourth quarter of 2018 and $1,218,000 during the first quarter of 2018. 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.

Company owned life insurance revenue increased $464,000, or 110%, during the quarter ended March 31, 2019, compared with the fourth quarter of 2018 and increased $572,000, or 183%, compared with the first quarter of 2018. The increases were largely related to death benefits of $554,000 received from life insurance policies during the first quarter of 2019.

Interchange fees declined $140,000, or 6%, during the first quarter of 2019 compared with the fourth quarter of 2018 and increased $613,000, or 41%, compared with the first quarter of 2018. The increase during the first quarter of 2019 compared with the first quarter of 2018 was largely attributable to increased card utilization by customers and the acquisitions completed during 2018.

Other operating income increased $242,000, or 38%, during the quarter ended March 31, 2019 compared with the fourth quarter of 2018 and increased $267,000, or 44%, compared with the first quarter of 2018. The increase during the first quarter quarter of 2019 compared with both comparative periods was largely attributable to the gain realized on the sale of a former branch facility of $262,000.

Net gains on sales of loans increased $398,000, or 68%, during the first quarter of 2019 compared with the fourth quarter of 2018 and increased $331,000, or 51%, compared with the first quarter of 2018. The increase during the first quarter of 2019 in the net gain on sale compared with both comparative periods was largely attributable to higher pricing levels on loans sold. Loan sales totaled $28.9 million during the first quarter of 2019, compared with $35.7 million during the fourth quarter of 2018 and $29.9 million during the first quarter of 2018.

During the quarter ended March 31, 2019, non-interest expense totaled $26,759,000, a decline of $3,055,000, or 10%, compared with the quarter ended December 31, 2018, and an increase of $6,304,000, or 31%, compared


    

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 13

with the first quarter of 2018. The first quarter of 2019 included acquisition-related expenses of $544,000 while the fourth quarter of 2018 included acquisition-related expenses of approximately $3,107,000 and the first quarter of 2018 included acquisition-related expenses of approximately $186,000.

 
 
 
 
 
 
 
 
 
Quarter Ended
 
Quarter Ended
 
Quarter Ended
Non-interest Expense
 
3/31/2019
 
12/31/2018
 
3/31/2018
(dollars in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
Salaries and Employee Benefits
 
$
15,044

 
$
15,027

 
$
12,126

Occupancy, Furniture and Equipment Expense
 
3,219

 
3,203

 
2,409

FDIC Premiums
 
288

 
234

 
237

Data Processing Fees
 
1,583

 
3,108

 
1,127

Professional Fees
 
1,327

 
2,337

 
871

Advertising and Promotion
 
870

 
1,083

 
701

Intangible Amortization
 
843

 
810

 
206

Other Operating Expenses
 
3,585

 
4,012

 
2,778

Total Non-interest Expense
 
$
26,759

 
$
29,814

 
$
20,455

 
 
 
 
 
 
 

Salaries and benefits increased $17,000, or less than 1%, during the quarter ended March 31, 2019 compared with the fourth quarter of 2018 and increased $2,918,000, or 24%, compared with the first quarter of 2018. The increase in salaries and benefits during the first quarter of 2019 compared with both the fourth quarter of 2018 and the first quarter of 2018 was primarily attributable to an increased number of full-time equivalent employees due in part to the acquisition transactions completed during 2018. The fourth quarter of 2018 also included approximately $474,000 of acquisition-related salary and benefit costs.

Occupancy, furniture and equipment expense increased $16,000, or less than 1%, during the first quarter of 2019 compared with the fourth quarter of 2018 and increased $810,000, or 34%, compared to the first quarter of 2018. The increase during the first quarter of 2019 compared with the first quarter of 2018 was primarily due to operating costs related to the acquisitions completed during 2018 as well as other facilities the Company has placed into service over the past several quarters.

Data processing fees declined $1,525,000, or 49%, during the first quarter of 2019 compared with the fourth quarter of 2018 and increased $456,000, or 40%, compared to the first quarter of 2018. The decline during the first quarter of 2019 compared with the fourth quarter of 2018 was driven by acquisition and conversion-related costs which totaled approximately $1,668,000 during the fourth quarter of 2018. The increase in data


    

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 13

processing fees during the first quarter of 2019 compared with the first quarter of 2018 was also related to the on-going operating costs associated with the acquisitions completed during 2018.
 
Professional fees declined $1,010,000, or 43%, during the first quarter of 2019 compared with the fourth quarter of 2018 and increased $456,000, or 52%, compared to the first quarter of 2018. The decline during the first quarter of 2019 compared to the fourth quarter of 2018 was due in part to professional fees related to merger and acquisition activity during 2018 and to fees related to certain contract negotiations. The increase in professional fees during the first quarter of 2019 compared with 2018 was largely related to acquisition related professional fees. Merger and acquisition related professional fees totaled approximately $508,000 during the first quarter of 2019 compared with $730,000 in the fourth quarter of 2018 and $177,000 during the first quarter of 2018. Professional fees during the fourth quarter of 2018 also included approximately $930,000 in fees related to certain contract negotiations.

Intangible amortization increased $33,000, or 4%, during the quarter ended March 31, 2019 compared with the fourth quarter of 2018 and increased $637,000, or 309%, compared with the first quarter of 2018. The increase in intangible amortization was attributable to the previously discussed acquisitions completed during 2018.

Other operating expenses declined $427,000, or 11%, during the first quarter of 2019 compared with the fourth quarter of 2018 and increased $807,000, or 29%, compared with the first quarter of 2018. The decline in the first quarter of 2019 compared with the fourth quarter of 2018 was partially attributable to acquisition-related expenses that totaled approximately $176,000 during the fourth quarter of 2018. The increase during the first quarter of 2019 compared with the first quarter of 2018 was largely attributable to the operating costs related to the acquisitions completed in 2018.

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 Bank, operates 65 banking offices in 20 contiguous southern Indiana counties and four counties in Kentucky. 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


10 of 13

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 (the "Dodd-Frank Act") and the Federal Deposit Insurance Act and other possible legislative and regulatory actions and reforms; impacts resulting from possible amendments or revisions to the Dodd-Frank Act and the regulations promulgated thereunder, or to Consumer Financial Protection Bureau rules and regulations; 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, 2019
 
December 31, 2018
 
March 31, 2018
ASSETS
 
 
 
 
 
     Cash and Due from Banks
$
45,038

 
$
64,549

 
$
32,023

     Short-term Investments
14,740

 
32,251

 
8,187

     Investment Securities
824,950

 
812,964

 
737,957

 
 
 
 
 
 
     Loans Held-for-Sale
8,586

 
4,263

 
6,628

 
 
 
 
 
 
     Loans, Net of Unearned Income
2,708,832

 
2,728,059

 
2,150,546

     Allowance for Loan Losses
(16,243
)
 
(15,823
)
 
(14,460
)
        Net Loans
2,692,589

 
2,712,236

 
2,136,086

 
 
 
 
 
 
     Stock in FHLB and Other Restricted Stock
13,048

 
13,048

 
13,048

     Premises and Equipment
89,600

 
80,627

 
58,024

     Goodwill and Other Intangible Assets
112,920

 
113,645

 
55,954

     Other Assets
94,053

 
95,507

 
77,111

   TOTAL ASSETS
$
3,895,524

 
$
3,929,090

 
$
3,125,018

 
 
 
 
 
 
LIABILITIES
 
 
 
 
 
     Non-interest-bearing Demand Deposits
$
723,995

 
$
715,972

 
$
599,374

     Interest-bearing Demand, Savings, and Money Market Accounts
1,706,913

 
1,768,177

 
1,465,150

     Time Deposits
634,262

 
588,483

 
402,597

        Total Deposits
3,065,170

 
3,072,632

 
2,467,121

 
 
 
 
 
 
     Borrowings
317,480

 
376,409

 
274,473

     Other Liabilities
33,687

 
21,409

 
19,419

   TOTAL LIABILITIES
3,416,337

 
3,470,450

 
2,761,013

 
 
 
 
 
 
SHAREHOLDERS' EQUITY
 
 
 
 
 
     Common Stock and Surplus
254,625

 
254,314

 
188,501

     Retained Earnings
222,246

 
211,424

 
187,342

     Accumulated Other Comprehensive Income (Loss)
2,316

 
(7,098
)
 
(11,838
)
SHAREHOLDERS' EQUITY
479,187

 
458,640

 
364,005

 
 
 
 
 
 
   TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
$
3,895,524

 
$
3,929,090

 
$
3,125,018

 
 
 
 
 
 
END OF PERIOD SHARES OUTSTANDING
24,992,238

 
24,967,458

 
22,968,813

 
 
 
 
 
 
TANGIBLE BOOK VALUE PER SHARE (1)
$
14.66

 
$
13.81

 
$
13.41

 
 
 
 
 
 
 
(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.



GERMAN AMERICAN BANCORP, INC.
 
(unaudited, dollars in thousands except per share data)
 
 
 
 
 
 
 
 
 
Consolidated Statements of Income
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
 
 
March 31, 2019
 
December 31, 2018
 
March 31, 2018
 
INTEREST INCOME
 
 
 
 
 
 
   Interest and Fees on Loans
$
35,119

 
$
33,678

 
$
23,950

 
   Interest on Short-term Investments
141

 
97

 
56

 
   Interest and Dividends on Investment Securities
5,929

 
5,821

 
5,139

 
  TOTAL INTEREST INCOME
41,189

 
39,596

 
29,145

 
 
 
 
 
 
 
 
 
INTEREST EXPENSE
 
 
 
 
 
 
   Interest on Deposits
5,416

 
4,959

 
2,283

 
   Interest on Borrowings
2,182

 
1,654

 
1,252

 
  TOTAL INTEREST EXPENSE
7,598

 
6,613

 
3,535

 
 
 
 
 
 
 
 
 
   NET INTEREST INCOME
33,591

 
32,983

 
25,610

 
   Provision for Loan Losses
675

 
—

 
350

 
   NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES
32,916

 
32,983

 
25,260

 
 
 
 
 
 
 
 
 
NON-INTEREST INCOME
 
 
 
 
 
 
   Net Gain on Sales of Loans
981

 
583

 
650

 
   Net Gain on Securities
155

 
272

 
270

 
   Other Non-interest Income
10,522

 
8,878

 
8,572

 
  TOTAL NON-INTEREST INCOME
11,658

 
9,733

 
9,492

 
 
 
 
 
 
 
 
 
NON-INTEREST EXPENSE
 
 
 
 
 
 
   Salaries and Benefits
15,044

 
15,027

 
12,126

 
   Other Non-interest Expenses
11,715

 
14,787

 
8,329

 
  TOTAL NON-INTEREST EXPENSE
26,759

 
29,814

 
20,455

 
 
 
 
 
 
 
 
 
   Income before Income Taxes
17,815

 
12,902

 
14,297

 
   Income Tax Expense
2,748

 
1,922

 
2,484

 
 
 
 
 
 
 
 
 
NET INCOME
$
15,067

 
$
10,980

 
$
11,813

 
 
 
 
 
 
 
 
 
BASIC EARNINGS PER SHARE
$
0.60

 
$
0.44

 
$
0.51

 
DILUTED EARNINGS PER SHARE
$
0.60

 
$
0.44

 
$
0.51

 
 
 
 
 
 
 
 
 
WEIGHTED AVERAGE SHARES OUTSTANDING
24,971,863

 
24,962,878

 
22,940,402

 
DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING
24,971,863

 
24,962,878

 
22,940,402

 
 
 
 
 
 
 
 
 


 
 
 
 
 
 



GERMAN AMERICAN BANCORP, INC.
 
(unaudited, dollars in thousands except per share data)
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
 
 
 
March 31,
 
December 31,
 
March 31,
 
 
 
 
2019
 
2018
 
2018
 
EARNINGS PERFORMANCE RATIOS
 
 
 
 
 
 
 
 
Annualized Return on Average Assets
 
1.55
%
 
1.15
%
 
1.51
%
 
 
Annualized Return on Average Equity
 
12.98
%
 
10.05
%
 
13.00
%
 
 
Net Interest Margin
 
3.88
%
 
3.83
%
 
3.66
%
 
 
Efficiency Ratio (1)
 
58.23
%
 
68.64
%
 
57.21
%
 
 
Net Overhead Expense to Average Earning Assets (2)
 
1.69
%
 
2.30
%
 
1.51
%
 
 
 
 
 
 
 
 
 
 
ASSET QUALITY RATIOS
 
 
 
 
 
 
 
 
Annualized Net Charge-offs to Average Loans
 
0.04
%
 
0.03
%
 
0.30
%
 
 
Allowance for Loan Losses to Period End Loans
 
0.60
%
 
0.58
%
 
0.67
%
 
 
Non-performing Assets to Period End Assets
 
0.34
%
 
0.34
%
 
0.34
%
 
 
Non-performing Loans to Period End Loans
 
0.46
%
 
0.48
%
 
0.49
%
 
 
Loans 30-89 Days Past Due to Period End Loans
 
0.45
%
 
0.54
%
 
0.33
%
 
 
 
 
 
 
 
 
 
 
SELECTED BALANCE SHEET & OTHER FINANCIAL DATA
 
 
 
 
 
 
 
 
Average Assets
 
$
3,886,723

 
$
3,834,251

 
$
3,120,971

 
 
Average Earning Assets
 
$
3,568,971

 
$
3,495,618

 
$
2,901,849

 
 
Average Total Loans
 
$
2,718,808

 
$
2,662,502

 
$
2,139,704

 
 
Average Demand Deposits
 
$
691,107

 
$
714,504

 
$
585,432

 
 
Average Interest Bearing Liabilities
 
$
2,708,307

 
$
2,660,340

 
$
2,150,544

 
 
Average Equity
 
$
464,234

 
$
437,177

 
$
363,579

 
 
 
 
 
 
 
 
 
 
 
Period End Non-performing Assets (3)
 
$
13,114

 
$
13,498

 
$
10,652

 
 
Period End Non-performing Loans (4)
 
$
12,429

 
$
13,212

 
$
10,584

 
 
Period End Loans 30-89 Days Past Due (5)
 
$
12,197

 
$
14,815

 
$
7,013

 
 
 
 
 
 
 
 
 
 
 
Tax Equivalent Net Interest Income
 
$
34,299

 
$
33,702

 
$
26,261

 
 
Net Charge-offs during Period
 
$
255

 
$
228

 
$
1,584

 
 
 
 
 
 
 
 
 
 
(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.