10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

       [X]     Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
                 for the Quarterly Period Ended June 30, 2004.

or

       [   ]     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 incorporation or organization)	(IRS Employer 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 mark 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 by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).       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 August 2, 2004
Common Stock,
No par value	10,898,241

1

GERMAN AMERICAN BANCORP

INDEX

PART I.        FINANCIAL INFORMATION

Item 1.    Financial Statements

Consolidated Balance Sheets - June 30, 2004 and December 31, 2003

Consolidated Statements of Income and Comprehensive Income —
Three and Six months Ended June 30, 2004 and 2003

Consolidated Statements of Cash Flows — Six months Ended
June 30, 2004 and 2003

Notes to Consolidated Financial Statements — June 30, 2004

Item 2.    Management's Discussion and Analysis of Financial Condition and Results of Operations.

Item 3.    Quantitative and Qualitative Disclosures about Market Risk.

Item 4.    Controls and Procedures.

PART II.        OTHER INFORMATION

Item 2.    Changes in Securities and Use of Proceeds

Item 4.    Submission of Matters to a Vote of Security Holders

Item 5.    Other Information

Item 6.    Exhibits and Reports on Form 8-K

SIGNATURES

EXHIBIT INDEX

2

PART 1.    FINANCIAL INFORMATION
ITEM 1.     Financial Statements

GERMAN AMERICAN BANCORP
CONSOLIDATED BALANCE SHEETS
(dollars in thousands except per share data)

	June 30, 2004			December 31, 2003
	(unaudited)
ASSETS
Cash and Due from Banks	$	25,978		$	28,729
Federal Funds Sold and Other Short-term Investments		6,684			3,804
Cash and Cash Equivalents		32,662			32,533
Securities Available-for-Sale, at Fair Value		192,776			195,793
Securities Held-to-Maturity, at Cost		14,789			17,417
Loans Held-for-Sale		4,839			1,416
Total Loans		622,576			613,255
Less: Unearned Income		(1,360	)		(1,389	)
Allowance for Loan Losses		(8,957	)		(8,265	)
Loans, Net		612,259			603,601
Stock in FHLB of Indianapolis and Other Restricted Stock, at Cost		13,252			12,944
Premises, Furniture and Equipment, Net		20,913			21,605
Other Real Estate		108			749
Goodwill		1,794			1,794
Intangible Assets		2,591			2,804
Company Owned Life Insurance		18,216			17,831
Accrued Interest Receivable and Other Assets		16,260			17,459
TOTAL ASSETS	$	930,459		$	925,946
LIABILITIES
Non-interest-bearing Demand Deposits	$	114,545		$	112,689
Interest-bearing Demand, Savings, and Money Market Accounts		282,725			266,652
Time Deposits under $100,000		267,665			283,959
Time Deposits $100,000 or more and Brokered Deposits		57,123			53,833
Total Deposits		722,058			717,133
FHLB Advances and Other Borrowings		114,918			112,559
Accrued Interest Payable and Other Liabilities		12,959			13,128
TOTAL LIABILITIES		849,935			842,820
SHAREHOLDERS' EQUITY
Common Stock, no par value, $1 stated value;
20,000,000 shares authorized		10,898			10,933
Preferred Stock, $10 par value; 500,000
shares authorized, no shares issued		---			---
Additional Paid-in Capital		67,118			67,532
Retained Earnings		5,636			4,653
Accumulated Other Comprehensive Income / (Loss)		(3,128	)		8
TOTAL SHAREHOLDERS' EQUITY		80,524			83,126
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	930,459		$	925,946
End of period shares issued and outstanding		10,898,241			10,932,882

See accompanying notes to consolidated financial statements.

3

GERMAN AMERICAN BANCORP
CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME
(unaudited, dollars in thousands except per share data)

	Three Months Ended June 30,
	2004			2003
INTEREST INCOME
Interest and Fees on Loans	$	9,742		$	10,641
Interest on Federal Funds Sold and Other Short-term Investments		20			82
Interest and Dividends on Securities:
Taxable		1,397			1,247
Non-taxable		729			887
TOTAL INTEREST INCOME		11,888			12,857
INTEREST EXPENSE
Interest on Deposits		2,986			3,606
Interest on FHLB Advances and Other Borrowings		1,167			1,916
TOTAL INTEREST EXPENSE		4,153			5,522
NET INTEREST INCOME		7,735			7,335
Provision for Loan Losses		838			265
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES		6,897			7,070
NON-INTEREST INCOME
Trust and Investment Product Fees		520			448
Service Charges on Deposit Accounts		895			864
Insurance Revenues		1,228			807
Other Operating Income		861			(64	)
Gain on Sales of Loans and Related Assets		363			769
Gain on Sales of Securities		---			---
TOTAL NON-INTEREST INCOME		3,867			2,824
NON-INTEREST EXPENSE
Salaries and Employee Benefits		4,495			4,419
Occupancy Expense		618			600
Furniture and Equipment Expense		547			560
Data Processing Fees		299			280
Professional Fees		485			324
Advertising and Promotions		195			191
Supplies		150			157
Other Operating Expenses		1,072			984
TOTAL NON-INTEREST EXPENSE		7,861			7,515
Income before Income Taxes		2,903			2,379
Income Tax Expense		571			336
NET INCOME	$	2,332		$	2,043
COMPREHENSIVE INCOME (LOSS)	$	(1,432	)	$	1,217
Earnings Per Share and Diluted Earnings Per Share	$	0.21		$	0.19
Dividends Per Share	$	0.14		$	0.13

See accompanying notes to consolidated financial statements.

4

GERMAN AMERICAN BANCORP
CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME
(unaudited, dollars in thousands except per share data)

	Six Months Ended June 30,
	2004		2003
INTEREST INCOME
Interest and Fees on Loans	$	19,447	$	21,529
Interest on Federal Funds Sold and Other Short-term Investments		48		138
Interest and Dividends on Securities:
Taxable		2,681		2,781
Non-taxable		1,488		1,858
TOTAL INTEREST INCOME		23,664		26,306
INTEREST EXPENSE
Interest on Deposits		6,119		7,370
Interest on FHLB Advances and Other Borrowings		2,332		3,816
TOTAL INTEREST EXPENSE		8,451		11,186
NET INTEREST INCOME		15,213		15,120
Provision for Loan Losses		1,240		229
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES		13,973		14,891
NON-INTEREST INCOME
Trust and Investment Product Fees		976		804
Service Charges on Deposit Accounts		1,728		1,512
Insurance Revenues		2,272		1,600
Other Operating Income		1,296		112
Gain on Sales of Loans and Related Assets		545		1,306
Gain on Sales of Securities		5		23
TOTAL NON-INTEREST INCOME		6,822		5,357
NON-INTEREST EXPENSE
Salaries and Employee Benefits		9,110		8,841
Occupancy Expense		1,238		1,217
Furniture and Equipment Expense		1,110		1,111
Data Processing Fees		605		557
Professional Fees		852		609
Advertising and Promotions		424		416
Supplies		289		310
Other Operating Expenses		1,990		1,777
TOTAL NON-INTEREST EXPENSE		15,618		14,838
Income before Income Taxes		5,177		5,410
Income Tax Expense		893		929
NET INCOME	$	4,284	$	4,481
COMPREHENSIVE INCOME	$	1,148	$	3,248
Earnings Per Share and Diluted Earnings Per Share	$	0.39	$	0.39
Dividends Per Share	$	0.28	$	0.27

See accompanying notes to consolidated financial statements.

5

GERMAN AMERICAN BANCORP
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, dollars in thousands)

	Six Months Ended June 30,
	2004			2003
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income	$	4,284		$	4,481
Adjustments to Reconcile Net Income to Net Cash from Operating Activities:
Net Amortization on Securities		635			1,206
Depreciation and Amortization		1,402			1,282
Amortization and Impairment of Mortgage Servicing Rights		40			875
Net Change in Loans Held for Sale		(3,729	)		8,715
Loss on Investment in Limited Partnership		44			87
Provision for Loan Losses		1,240			229
Gain on Sale of Securities, net		(5	)		(23	)
Loss / (Gain) on Sale of Other Real Estate and Repossessed Assets		(64	)		131
Gain on Disposition and Impairment of Premises and Equipment		(3	)		(4	)
Director Stock Awards		---			304
Increase in Cash Surrender Value of Company Owned Life Insurance
(COLI)		(385	)		(116	)
Change in Assets and Liabilities:
Interest Receivable and Other Assets		1,736			387
Interest Payable and Other Liabilities		(169	)		5
Net Cash from Operating Activities		5,026			17,559
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from Maturities of Securities Available-for-Sale		15,521			80,014
Proceeds from Sales of Securities Available-for-Sale		1,986			786
Purchase of Securities Available-for-Sale		(18,878	)		(63,756	)
Proceeds from Maturities of Securities Held-to-Maturity		2,627			1,927
Purchase of Loans		(1,001	)		(3,850	)
Proceeds from Sales of Loans		1,250			633
Loans Made to Customers, net of Payments Received		(10,457	)		5,007
Proceeds from Sales of Other Real Estate		1,015			1,203
Property and Equipment Expenditures		(854	)		(1,324	)
Proceeds from the Sale of Property and Equipment		360			4
Net Cash from Investing Activities		(8,431	)		20,644
CASH FLOWS FROM FINANCING ACTIVITIES
Change in Deposits		4,925			301
Change in Short-term Borrowings		(35	)		2,722
Advances of Long-term Debt		2,500			8,000
Repayments of Long-term Debt		(106	)		(10,857	)
Issuance of Common Stock		20			20
Purchase / Retire Common Stock		(708	)		(21,447	)
Dividends Paid		(3,062	)		(3,063	)
Net Cash from Financing Activities		3,534			(24,324	)
Net Change in Cash and Cash Equivalents		129			13,879
Cash and Cash Equivalents at Beginning of Year		32,533			35,745
Cash and Cash Equivalents at End of Period	$	32,662		$	49,624

See accompanying notes to consolidated financial statements.

6

GERMAN AMERICAN BANCORP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2004
(unaudited, dollars in thousands except per share data)

Note 1 — Basis of Presentation

German American Bancorp operates primarily in the banking industry. The accounting and reporting policies of German American Bancorp and its subsidiaries conform to U.S. generally accepted accounting principles. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted. All adjustments which are, in the opinion of management, necessary for a fair presentation of the results for the periods reported have been included in the accompanying unaudited consolidated financial statements, and all such adjustments are 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 December 31, 2003 Annual Report on Form 10-K.

Note 2 — Per Share Data

Earnings and dividends per share have been retroactively computed as though shares issued for stock dividends had been outstanding for all periods presented. The computation of Earnings per Share and Diluted Earnings per Share are as follows:

	Three Months Ended June 30,
	2004		2003
Earnings per Share:
Net Income	$	2,332	$	2,043
Weighted Average Shares Outstanding		10,925,569		10,942,415
Earnings per Share:	$	0.21	$	0.19
Diluted Earnings per Share:
Net Income	$	2,332	$	2,043
Weighted Average Shares Outstanding		10,925,569		10,942,415
Stock Options, Net		29,811		43,688
Diluted Weighted Average Shares Outstanding		10,955,380		10,986,103
Diluted Earnings per Share	$	0.21	$	0.19

	Six Months Ended June 30,
	2004		2003
Earnings per Share:
Net Income	$	4,284	$	4,481
Weighted Average Shares Outstanding		10,931,184		11,403,503
Earnings per Share:	$	0.39	$	0.39
Diluted Earnings per Share:
Net Income	$	4,284	$	4,481
Weighted Average Shares Outstanding		10,931,184		11,403,503
Stock Options, Net		35,153		43,953
Diluted Weighted Average Shares Outstanding		10,966,337		11,447,456
Diluted Earnings per Share	$	0.39	$	0.39

7

Note 3 — Securities

The fair values of Securities Available-for-Sale are as follows (dollars in thousands):

	June 30, 2004		December 31, 2003
U.S. Treasury Securities and Obligations of
U.S. Government Corporations and Agencies	$	6,972	$	4,090
Obligations of State and Political Subdivisions		32,477		38,579
Asset-/Mortgage-backed Securities		137,333		136,585
Corporate Securities		508		515
Equity Securities		15,486		16,024
Total	$	192,776	$	195,793

The total carrying values and fair values of Securities Held-to-Maturity are as follows (dollars in thousands):

	Carrying Value		Fair Value
June 30, 2004:
Obligations of State and Political Subdivisions	$	14,789	$	15,112
December 31, 2003:
Obligations of State and Political Subdivisions	$	17,417	$	17,964

Note 4 — Segment Information

The Company’s operations include four primary segments: core banking, mortgage banking, financial services, and insurance operations. The core banking segment involves attracting deposits from the general public and using such funds to originate consumer, commercial, commercial real estate, and residential mortgage loans, primarily in the affiliate banks’ local markets. The mortgage banking segment involves the origination and purchase of single-family residential mortgage loans; the sale of such loans in the secondary market; the servicing of mortgage loans for investors; and the operation of a title insurance company. The financial 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 affiliate banks’ local markets.

The core banking segment is comprised of five community banks with 27 retail banking offices. Net interest income from loans and investments funded by deposits and borrowings is the primary revenue of the five affiliate community banks comprising the core-banking segment. Revenues for the mortgage-banking segment consist of net interest income from a residential real estate loan portfolio and investment securities portfolio funded primarily by wholesale sources, gains on sales of loans and gains on sales of and capitalization of mortgage servicing rights (MSR), loan servicing income, title insurance commissions and loan closing fees. The financial services segment’s revenues are comprised primarily of fees generated by German American Financial Advisors & Trust Company (GAFA). These fees are derived by providing trust, investment advisory, and brokerage services to its customers. The insurance segment consists of The Doty Agency, Inc., which provides a full line of personal and corporate insurance products as agent under five distinctive insurance agency names from five offices; and German American Reinsurance Company, Ltd. (GARC), which reinsures credit insurance products sold by the Company’s five affiliate banks. 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 German American Bancorp, which are used by management to monitor and manage the financial performance of the Company. The accounting policies of the four 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 Other column below, along with minor amounts to eliminate transactions between segments.

8

Three Months Ended June 30, 2004	Core Banking		Mortgage Banking			Financial Services		Insurance		Other			Consolidated Totals
Net Interest Income	$	7,704	$	91		$	7	$	2	$	(69	)	$	7,735
Gain on Sales of Loans and
Related Assets		239		124			---		---		---			363
Servicing Income		---		229			---		---		(40	)		189
Trust and Investment Product
Fees		1		---			541		---		(22	)		520
Insurance Revenues		33		20			6		1,204		(35	)		1,228
Noncash Items:
Provision for Loan Losses		838		---			---		---		838
MSR Amortization & Valuation		---		(187	)		---		---		---			(187	)
Provision for Income Taxes		1,080		115			23		100		(747	)		571
Segment Profit		2,796		175			34		182		(855	)		2,332
Segment Assets		887,721		27,243			2,178		7,788		5,529			930,459

Three Months Ended June 30, 2003	Core Banking		Mortgage Banking			Financial Services		Insurance		Other			Consolidated Totals
Net Interest Income	$	7,570	$	(196	)	$	4	$	2	$	(45	)	$	7,335
Gain on Sales of Loans and
Related Assets		412		357			---		---		---			769
Servicing Income		---		220			---		---		(49	)		171
Trust and Investment Product
Fees		1		---			470		---		(23	)		448
Insurance Revenues		38		52			4		744		(31	)		807
Noncash Items:
Provision for Loan Losses		390		(125	)		---		---		---			265
MSR Amortization & Valuation		---		554			---		---		---			554
Provision for Income Taxes		1,139		(151	)		15		29		(696	)		336
Segment Profit		2,859		(231	)		22		153		(760	)		2,043
Segment Assets		870,493		67,992			2,127		4,986		(9,360	)		936,238

Six Months Ended June 30, 2004	Core Banking		Mortgage Banking			Financial Services		Insurance			Other			Consolidated Totals
Net Interest Income	$	15,165	$	175		$	15	$	(3	)	$	(139	)	$	15,213
Gain on Sales of Loans and
Related Assets		333		212			---		---			---			545
Servicing Income		---		460			---		---			(80	)		380
Trust and Investment Product
Fees		2		---			1,019		---			(45	)		976
Insurance Revenues		53		27			14		2,240			(62	)		2,272
Noncash Items:
Provision for Loan Losses		1,300		(60	)		---		---			---			1,240
MSR Amortization & Valuation		---		40			---		---			---			40
Provision for Income Taxes		2,067		41			30		173			(1,418	)		893
Segment Profit		5,452		62			44		289			(1,563	)		4,284
Segment Assets		887,721		27,243			2,178		7,788			5,529			930,459

9

Six Months Ended June 30, 2003	Core Banking		Mortgage Banking			Financial Services		Insurance		Other			Consolidated Totals
Net Interest Income	$	15,382	$	(277	)	$	6	$	5	$	4		$	15,120
Gain on Sales of Loans and
Related Assets		770		536			---		---		---			1,306
Servicing Income		---		438			---		---		(102	)		336
Trust and Investment Product
Fees		2		---			849		---		(47	)		804
Insurance Revenues		86		93			4		1,481		(64	)		1,600
Noncash Items:
Provision for Loan Losses		670		(441	)		---		---		---			229
MSR Amortization & Valuation		---		875			---		---		---			875
Provision for Income Taxes		2,242		(158	)		13		113		(1,281	)		929
Segment Profit		5,740		(241	)		19		280		(1,317	)		4,481
Segment Assets		870,493		67,992			2,127		4,986		(9,360	)		936,238

Note 5 — Stock Repurchase Plan

On April 26, 2001 the Company announced that its Board of Directors approved a stock repurchase program for up to 607,754 of the outstanding Common Shares of the Company. Shares may be purchased from time to time in the open market and in large block privately negotiated transactions. The Company is not obligated to purchase any shares under the program, and the program may be discontinued at any time before the maximum number of shares specified by the program are purchased. As of June 30, 2004, the Company had purchased 251,965 shares under the program including 44,000 shares during the quarter ended June 30, 2004.

Note 6 — Self Tender Offer

On February 7, 2003 the Company commenced a self-tender offer for up to 1.05 million of its common shares, or approximately 9% of its then outstanding shares, at a purchase price of $19.05 per share. On March 20, 2003, the Company purchased 1,110,444 shares under the offer, including 60,444 shares that the Company purchased in accordance with the optional purchase provision of the offer. The Company’s total cost in purchasing the shares, including fees and expenses incurred in connection with the offer, was approximately $21,442,000.

Note 7 — Stock Compensation

Compensation expense under stock options is reported, if applicable, using the intrinsic value method. No compensation expense has been recognized in net income. Financial Accounting Standard No. 123 requires pro forma disclosures for companies that do not adopt its fair value accounting method for stock-based employee compensation. Accordingly, the following pro forma information presents net income and earnings per share had the Standard’s fair value method been used to measure compensation cost for stock option plans.

	Three months Ended June 30,
	2004		2003
Net Income as Reported	$	2,332	$	2,043
Compensation Expense Under Fair Value Method, Net of Tax		79		88
Pro forma Net Income	$	2,253	$	1,955
Pro forma Earnings per Share	$	0.21	$	0.18
Pro forma Diluted Earnings per Share	$	0.21	$	0.18
Earnings per Share as Reported	$	0.21	$	0.19
Diluted Earnings per Share as Reported	$	0.21	$	0.19

10

	Six months Ended June 30,
	2004		2003
Net Income as Reported	$	4,284	$	4,481
Compensation Expense Under Fair Value Method, Net of Tax		139		149
Pro forma Net Income	$	4,145	$	4,332
Pro forma Earnings per Share	$	0.38	$	0.38
Pro forma Diluted Earnings per Share	$	0.38	$	0.38
Earnings per Share as Reported	$	0.39	$	0.39
Diluted Earnings per Share as Reported	$	0.39	$	0.39

Note 8 — Employee Benefit Plans

The Company acquired through previous bank mergers a noncontributory defined benefit pension plan with benefits based on years of service and compensation prior to retirement. The benefits under the plan were suspended in 1998. The following table represents the components of net periodic benefit cost for the periods presented:

	Three Months Ended June 30,
	2004			2003
Service Cost	$	---		$	---
Interest Cost		14			15
Expected Return on Assets		9			9
Amortization of Transition Amount		---			---
Amortization of Prior Service Cost		(1	)		(1	)
Recognition of Net Loss		7			8
Net Periodic Benefit Cost	$	11		$	13
Loss on Settlements and Curtailments		52			None

	Six Months Ended June 30,
	2004			2003
Service Cost	$	---		$	---
Interest Cost		28			30
Expected Return on Assets		18			19
Amortization of Transition Amount		(1	)		(1	)
Amortization of Prior Service Cost		(1	)		(1	)
Recognition of Net Loss		14			17
Net Periodic Benefit Cost	$	22		$	26
Loss on Settlements and Curtailments		52			None

The Company previously disclosed in its financial statements for the year ended December 31, 2003, that it expected to make no contributions to its pension plan in 2004. As of June 30, 2004, no contributions have been made nor does the Company presently anticipate making any additional contributions to fund its pension plan in 2004.

11

Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations

GERMAN AMERICAN BANCORP
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

German American Bancorp (“the Company”) is a financial services holding company based in Jasper, Indiana. The Company’s Common Stock is traded on NASDAQ’s National Market System under the symbol GABC. The Company operates five affiliated community banks with 27 retail banking offices in the eight contiguous Southwestern Indiana counties of Daviess, Dubois, Gibson, Knox, Martin, Perry, Pike, and Spencer. The Company also operates a trust, brokerage and financial planning subsidiary which operates from the banking offices of the bank subsidiaries, and two insurance agencies with five insurance agency offices throughout its market area. The Company’s lines of business include retail and commercial banking, mortgage banking, comprehensive financial planning, full service brokerage and trust administration, title insurance, and a full range of personal and corporate insurance products.

This section presents an analysis of the consolidated financial condition of the Company as of June 30, 2004 and December 31, 2003 and the consolidated results of operations for the three and six month periods ended June 30, 2004 and 2003. This discussion 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, as well as the Management’s Discussion and Analysis of Financial Condition and Results of Operations, included in the Company’s December 31, 2003 Annual Report on Form 10-K.

MANAGEMENT OVERVIEW

This updated discussion should be read in conjunction with the Management Overview that was included in our Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Company’s December 31, 2003 Annual Report on Form 10-K and in the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2004.

The Company’s level of net income increased 14% and declined by 4% during the quarter ended and six months ended June 30, 2004 compared with 2003. Net interest income continues to be the most significant component of earnings and increased net interest income in 2004 positively impacted earnings by $400,000 or 5% for the second quarter 2004 and $93,000 or 1% for the first half of 2004, in each case compared with 2003. Net interest income for the second quarter exceeded the net interest income of the immediately preceding quarterly period for the third consecutive quarter. Also positively contributing to the Company’s earnings performance in the second quarter and the first half of 2004 compared with 2003 were significant increases in the levels of non-interest income. Increased insurance revenues from the Company’s property and casualty insurance operations, attributable principally to insurance acquisitions in 2003, and recoveries of impairment reserves on mortgage servicing rights were principally responsible for the growth of $1,043,000, or 37%, and $1,465,000 or 27% in the Company’s non-interest income in the quarter ended and six months ended June 30, 2004 from that recorded in the same periods of 2003.

Partially mitigating the positive influences on performance provided by net interest income and non-interest income were increases in the level of provision for loan losses in both the three and six months ended June 30, 2004 compared with 2003. Provision for loan losses increased $573,000 and $1,011,000 in the quarter and six months ended June 30, 2004 compared with the prior year. The increased level of provision for loan losses recorded during the second quarter and first half of 2004 was attributable to increased allocations on a limited number of previously identified credits. While management believes that, with this addition to the allowance, the Company can return to a more normal level of provision for loan losses going forward, the Company continues to closely monitor specific individual credits, within the real estate development, manufacturing and lodging industry segments, that have not as yet benefited from the improving economic climate.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The financial condition and results of operations for German American Bancorp presented in the Consolidated Financial Statements, accompanying notes to the Consolidated Financial Statements, and selected financial data appearing elsewhere within this report, are to a large degree, dependent upon the Company’s accounting policies. The selection of and application of these policies involve estimates, judgments and uncertainties that are subject to change. The critical accounting policies and estimates that the Company has determined to be the most susceptible to change in the near term relate to the determination of the allowance for loan losses and the valuation of mortgage servicing rights.

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Allowance for Loan Losses

The Company maintains an allowance for loan losses to cover probable incurred credit losses at the balance sheet date. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in management’s judgment, should be charged-off. A provision for loan losses is charged to operations based on management’s periodic evaluation of the necessary allowance balance. Evaluations are conducted at least quarterly and more often if deemed necessary. The ultimate recovery of all loans is susceptible to future market factors beyond the Company’s control.

The Company has an established process to determine the adequacy of the allowance for loan losses. The determination of the allowance is inherently subjective, as it requires significant estimates, including the amounts and timing of expected future cash flows on impaired loans, estimated losses on other classified loans and pools of homogeneous loans, and consideration of past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions, and other factors, all of which may be susceptible to significant change. The allowance consists of two components of allocations, specific and general. These two components represent the total allowance for loan losses deemed adequate to cover losses inherent in the loan portfolio.

Commercial, agricultural and poultry loans are subject to a standardized grading process administered by an internal loan review function. The need for specific reserves is considered for credits when graded substandard or special mention, or when: (a) the customer’s cash flow or net worth appears insufficient to repay the loan; (b) the loan has been criticized in a regulatory examination; (c) the loan is on non-accrual; or, (d) other reasons where the ultimate collectibility of the loan is in question, or the loan characteristics require special monitoring. Specific allowances are established in cases where management has identified significant conditions or circumstances related to an individual credit that we believe indicates the loan is impaired. Specific allocations on impaired loans are determined by comparing the loan balance to the present value of expected cash flows or expected collateral proceeds. Allocations are also applied to categories of loans not considered individually impaired but for which the rate of loss is expected to be greater than historical averages, including those graded substandard or special mention and non-performing consumer or residential real estate loans. Such allocations are based on past loss experience and information about specific borrower situations and estimated collateral values.

General allocations are made for other pools of loans, including non-classified loans, homogeneous portfolios of consumer and residential real estate loans, and loans within certain industry categories believed to present unique risk of loss. General allocations of the allowance are primarily made based on a five-year historical average for loan losses for these portfolios, judgmentally adjusted for economic factors and portfolio trends.

Due to the imprecise nature of estimating the allowance for loan losses, the Company’s allowance for loan losses includes a minor unallocated component. The unallocated component of the allowance for loan losses incorporates the Company’s judgmental determination of inherent losses that may not be fully reflected in other allocations, including factors such as economic uncertainties, lending staff quality, industry trends impacting specific portfolio segments, and broad portfolio quality trends. Therefore, the ratio of allocated to unallocated components within the total allowance may fluctuate from period to period.

Mortgage Servicing Rights Valuation

Mortgage servicing rights (MSRs) are recognized and included with other assets for the allocated value of retained servicing rights on loans sold. Servicing rights are expensed in proportion to, and over the period of, estimated net servicing revenues. Impairment is evaluated based on the fair value of the rights, using groupings of the underlying loans as to type and age. Fair value is determined based upon discounted cash flows using market-based assumptions.

To determine the fair value of MSRs, the Company uses a valuation model that calculates the present value of estimated future net servicing income. In using this valuation method, the Company incorporates assumptions that market participants would use in estimating future net servicing income, which include estimates of prepayment speeds, discount rate, cost to service, escrow account earnings, contractual servicing fee income, ancillary income, late fees, and float income. The Company periodically validates its valuation model by obtaining an independent valuation of its MSRs.

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The most significant assumption used to value MSRs is prepayment rate. In general, during periods of declining interest rates, the value of MSRs decline due to increasing prepayment speeds attributable to increased mortgage refinancing activity. Prepayment rates are estimated based on published industry consensus prepayment rates. Prepayments will increase or decrease in correlation with market interest rates, and actual prepayments generally differ from initial estimates. If actual prepayment rates are different than originally estimated, the Company may receive less mortgage servicing income, which could reduce the value of the MSRs. Other assumptions used in estimating the fair value of MSRs do not generally fluctuate to the same degree as prepayment rates, and therefore the fair value of MSRs is less sensitive to changes in these other assumptions.

On a quarterly basis, the Company evaluates the possible impairment of MSRs based on the difference between the carrying amount and the current fair value of MSRs. For purposes of evaluating and measuring impairment, the Company stratifies its portfolios on the basis of certain risk characteristics, including loan type and age. If temporary impairment exists, a valuation allowance is established for any excess of amortized cost over the current fair value, by risk stratification, through a charge to income. If the Company later determines that all or a portion of the temporary impairment no longer exists for a particular strata, a reduction of the valuation allowance may be recorded as an increase to income.

The Company annually reviews MSRs for other-than-temporary impairment and recognizes a direct write-down when the recoverability of a recorded valuation allowance is determined to be remote. In determining whether other-than-temporary impairment has occurred, the Company considers both historical and projected trends in interest rates, prepayment activity within the strata, and the potential for impairment recovery through interest rate increases. Unlike a valuation allowance, a direct-write down permanently reduces the carrying value of the MSRs and the valuation allowance, precluding subsequent recoveries.

As of June 30, 2004 the Company analyzed the sensitivity of its MSRs to changes in prepayment rates. In estimating the changes in prepayment rates, market interest rates were assumed to be increased and decreased by 1.0%. At June 30, 2004 the Company’s MSRs had a fair value of $3,164,000 using a weighted average prepayment rate of 13%. Assuming a 1.0% increase in market interest rates the estimated fair value of MSRs would be $3,619,000 with a weighted average prepayment rate of 9%. Assuming a 1.0% decline in market interest rates the estimated fair value of MSRs would be $2,096,000 with a weighted average prepayment rate of 29%.

RESULTS OF OPERATIONS

Net Income:

Net income increased $289,000 or 14% to $2,332,000 or $0.21 per share for the quarter ended June 30, 2004 compared to $2,043,000 or $0.19 per share for the second quarter of 2003. The increase in net income during the second quarter of 2004 compared with 2003 was attributable principally to an increase in net interest income of $400,000 and a recovery of mortgage servicing rights impairment of $300,000 compared with an impairment charge of $456,000 in the second quarter of 2003. These increases were partially mitigated by an increase of $573,000 in the level of provision for loan losses.

Net income declined $197,000 or 4% to $4,284,000 for the six months ended June 30, 2004 compared to $4,481,000 for the same period of 2003. Earnings per share totaled $0.39 for the six month period ended June 30, 2004 and the six month period ended June 30, 2003. Earnings per share remained stable during the first half of 2004 compared with 2003 despite a modestly lower level of earnings due to the reduced average number of shares outstanding during 2004 as a result of the March 20, 2003 stock purchase. The decrease in net income during the six months ended June 30, 2004 compared with 2003 was primarily the result of an increased provision for loan losses of $1,011,000, a lower level of gains from the sale of loans and related assets of $761,000, and increased professional fees of $243,000. Partially offsetting these declines was a recovery of mortgage servicing rights impairment of $183,000 during the first half of 2004 compared with a mortgage servicing rights charge of $693,000 during the same period of 2003.

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Net Interest Income:

Net interest income is the Company’s single largest source of earnings, and represents the difference between interest and fees realized on earning assets, less interest paid on deposits and borrowed funds. The following table summarizes German American Bancorp’s net interest income (on a tax-equivalent basis, at an effective tax rate of 34%) for each of the periods presented herein (dollars in thousands):

	Three Months Ended June 30,				Change from Prior Period
	2004		2003		Amount			Percent
Interest Income (T/E)	$	12,297	$	13,353	$	(1,056	)		-7.9%
Interest Expense		4,153		5,522		(1,369	)		-24.8%
Net Interest Income (T/E)	$	8,144	$	7,831	$	313			4.0%
Net interest income increased $400,000 or 5.5% ($313,000 or 4.0% on a tax-equivalent basis) for the quarter ended June 30, 2004 compared with the same quarter of 2003. Net interest margin is tax-equivalent net interest income expressed as a percentage of average earning assets. For the second quarter of 2004, the net interest margin increased to 3.86% compared to 3.58% for the same period of 2003.
	Six Months Ended June 30,				Change from Prior Period
	2004		2003		Amount			Percent
Interest Income (T/E)	$	24,496	$	27,343	$	(2,847	)		-10.4%
Interest Expense		8,451		11,186		(2,735	)		-24.5%
Net Interest Income (T/E)	$	16,045	$	16,157	$	(112	)		-0.7%

Net interest income increased $93,000 or 1% (a decline of $112,000 or 1% on a tax-equivalent basis) for the six months ended June 30, 2004 compared with the six months ended June 30, 2003. For the first half of 2004, the net interest margin increased to 3.82% compared to 3.67% for the same period of 2003.

The Company’s increase in net interest income was largely attributable to an increase in the net interest margin that has been fueled by a decline in the Company’s cost of funds. The Company’s cost of funds has been lowered due to the historically low interest rate environment experienced throughout 2003 and 2004 and through the repayment of higher costing FHLB advances during 2003 in the Company’s mortgage banking segment.

As illustrated in Note 4 to the consolidated financial statements, the Company’s core banking segment net interest income increased by $134,000 during the second quarter 2004 compared with 2003. This increase was largely attributable to an increased level of earning assets driven by commercial loan growth and a stable net interest margin. The Company’s core banking segment net interest income declined by $217,000 for the six months ended June 30, 2004 compared with 2003. This decline was largely attributable to the continued historically low interest rate environment which resulted in a decline in overall earning asset yields including both the loan and securities portfolios. The Company’s cost of funds has lowered significantly but has not sufficiently mitigated the decline in earning asset yield. The decline in net interest income was partially mitigated in the core banking segment by an increased level of earning assets driven by commercial loan growth.

In the second quarter of 2003, the Company’s mortgage banking segment repaid a maturing FHLB advance in the amount of $10.0 million with a rate of 7.27%. Late in the third quarter of 2003, the mortgage banking segment prepaid $20.0 million of FHLB advances with an average rate of 5.99%. These advances had stated maturities in the third quarter of 2004. Late in the fourth quarter of 2003, the Company’s mortgage banking segment prepaid an additional $20.0 million of FHLB advances with an average rate of 6.19%. These advances had stated maturities in the first quarter of 2005. During 2003, these advances were carried at negative interest rate spreads ranging from approximately 3% to 5% compared to the short-term investments that had been internally matched to the contractual repayment of these advances. The extinguishment of these borrowings positively impacted the net interest margin and net interest income during the three and six month periods ended June 30, 2004 compared with the same periods of 2003. As illustrated in Note 4 to the consolidated financial statements, the increase in net interest income for the mortgage banking segment totaled $287,000 and $452,000 for the quarter and six months ended June 30, 2004 as compared with 2003.

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Earning assets declined by $28.6 million during the second quarter of 2004 and $35.9 million during the six months ended June 30, 2004 compared with the same periods in 2003. These declines were largely attributable to a decreased residential mortgage loan portfolio and the repayment of FHLB advances within the mortgage banking segment. The decline in interest earning assets was also attributable, to a lesser degree, to the previously discussed self-tender offer and the purchase of Company Owned Life Insurance (COLI) during mid-2003.

Average loans increased by $4.8 million during the quarter ended June 30, 2004 compared with 2003. This increase was due in large part to commercial loan growth and a slowing of the refinance activity within the Company’s residential loan portfolio in 2004 compared with the refinance activity during 2003. Average loans declined during the six months ended June 30, 2004 compared with 2003 by $3.6 million. The reduction in loans was attributable to the refinance activity in the residential loan industry throughout 2003 that was fueled by a historically low interest rate environment and the Company’s sale of a majority of residential loan production in the secondary markets.

Average residential mortgage loans declined $39.1 million or 26% and $45.3 million or 29% in the three and six month periods ended June 30, 2004 compared with the same periods of 2003. Partially mitigating the decline in average residential mortgage loans was growth in the commercial loan portfolio. Average commercial loans increased by $39.3 million or 11% and during both the three and six months ended June 30, 2004 compared with the same periods of 2003.

The Company purchased $10.0 million of COLI during July 2003. COLI is an earning asset, however, for financial statement purposes is not considered an interest-earning asset. The increase in cash value on COLI is reported in the non-interest income section of the consolidated statements of income. Because this $10.0 million consisted of funds that were previously invested in interest bearing assets, this purchase had a detrimental effect on net interest income, but not necessarily on net income.

Provision For Loan Losses:

The Company provides for loan losses through regular provisions to the allowance for loan losses. The provision is affected by net charge-offs on loans and changes in specific and general allocations of the allowance. Provisions for loan losses totaled $838,000 during the quarter ended June 30, 2004 compared with $265,000 in the second quarter of 2003. Provisions for loan losses totaled $1,240,000 during the six months ended June 30, 2004 compared with $229,000 during the same period of 2003. The increased level of provision for loan losses was primarily the result of increased specific allocations on individual credits classified as substandard in previous quarters.

The provisions for loan losses made during the quarter and six month periods ended June 30, 2004 were made at a level deemed necessary by management to absorb estimated, probable incurred losses in the loan portfolio. A detailed evaluation of the adequacy of the allowance for loan losses is completed quarterly by management, the results of which are used to determine provisions for loan losses. Management estimates the allowance balance required using past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions, and other factors.

The Company’s allowance for loan losses and subsequent provisions for loan losses are typically analyzed at the individual affiliate bank level, the segment level, and finally at the consolidated level. During the second quarter of 2004, the core banking segment’s provision for loan losses totaled $838,000 while the mortgage banking segment had no provision for loan losses. These levels compare with a provision in the core banking segment of $390,000 and a negative provision of $125,000 in the mortgage banking segment during the quarter ended June 30, 2003. For the six months ended June 30, 2004 the core banking segment’s provision for loan losses totaled $1,300,000 while the mortgage banking had a negative $60,000 provision for loan losses. These levels compare with a provision in the core banking segment of $670,000 and a negative provision of $441,000 in the mortgage banking segment during the six months ended June 30, 2003.

Net charge-offs totaled $318,000 or 0.20% of average loans outstanding during the second quarter of 2004 compared with $154,000 or 0.10% during the same period of 2003. Net charge-offs totaled $548,000 or 0.18% of average loans outstanding during the six months ended June 30, 2004 compared with a net recovery of $9,000 during the same period of 2003. Non-performing loans increased to $3,596,000 or 0.58% of total loans at June 30, 2004 compared with $2,779,000 or 0.45% of total loans at year-end 2003 and $3,160,000 or 0.52% of total loans at June 30, 2003.

The composition of the loan portfolio changed during the first half of 2004 compared with the same period of 2003, continuing a trend toward a greater concentration in commercial and agricultural loans and less concentration in residential mortgage loans. Commercial and agricultural loans represented 65% of the total loan portfolio as of June 30, 2004 compared with 63% at year-end 2003 and 59% at June 30, 2003. This trend has also contributed to the increased level of provision for loan losses.

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Non-interest Income:

Non-interest income increased for both the three and six month periods ended June 30, 2004 compared with the same periods of the prior year. Non-interest income increased $1,043,000 or 37% and $1,465,000 or 27% during the quarter and six months ended June 30, 2004 compared to the same periods of 2003. The increases in Trust and Investment Product Fees, Service Charges on Deposit Accounts, Insurance Revenues, and Other Operating Income were offset by a decline in Net Gains on Sales of Loans and Related Assets.

Trust and Investment Product Fees increased $72,000 or 16% and $172,000 or 21% during the three and six month periods ended June 30, 2004 compared to the same periods of 2003. The increases were the result of the expansion of the sales generated by the Company’s financial services subsidiary. Service Charges on Deposit Accounts increased $31,000 or 4% and $216,000 or 14% for the quarter and six months June 30, 2004. The increases were primarily attributable to the introduction of an overdraft protection service program during the second quarter of 2003.

Insurance Revenues increased $421,000 or 52% and $672,000 or 42% during the three and six months ended June 30, 2004 compared to the same periods of 2003. The increased insurance revenues were primarily the result of property and casualty insurance agency acquisitions completed late in the third quarter of 2003.

Other Operating Income increased $925,000 and $1,184,000 for the quarter and six months June 30, 2004. The increase in Other Operating Income was predominately due to a recovery of mortgage servicing right impairment. The recovery of mortgage servicing right impairment totaled $300,000 and $183,000 for the three and six month periods ended June 30, 2004 compared with impairment charges of $456,000 and $693,000 for the same periods of 2003. Also contributing to the increase in Other Operating Income was the purchase of $10.0 million of Company Owned Life Insurance during the third quarter of 2003. The cash surrender value income on COLI increased $134,000 and $269,000 during the three and six months ended June 30, 2004 compared with the same periods of 2003.

Net Gains on Sales of Loans and Related Assets decreased $406,000 or 53% and $761,000 or 58% for the three and six month periods ended June 30, 2004 compared with the same periods of 2003. The decline was primarily attributable to lower levels of loan originations and sales of loans to the secondary market as compared to 2003. Loan sales totaled $17.5 million and $28.0 million during the three and six month periods ended June 30, 2004 compared with $54.4 million and $101.5 million in 2003.

Non-interest Expense:

Non-interest expense increased $346,000 or 5% and $780,000 or 5% during the three and six month periods ended June 30, 2004 compared to the same periods of 2003. For both time periods the increase was primarily the result of increased Salaries and Employee Benefits, Professional Fees and Other Operating Expenses.

Salaries and Employee Benefits Expense increased $76,000 or 2% and $269,000 or 3% during the quarter and six months ended June 30, 2004 compared with 2003. The increase in Salaries and Employee Benefits Expense was primarily in the insurance and financial services segments. These increases were due to an increase in employees resulting from the acquisition of property and casualty insurance agencies completed late in the third quarter of 2003 and increased sales-related incentives from increased trust and investment product fees and increased property and casualty insurance revenues. These increases were mitigated by declines in the level of employees and corresponding salaries and benefits expense in the Company’s other segments during 2004 compared with 2003.

During the three and six months ended June 30, 2004, Professional Fees Expense increased $161,000 or 50% and $243,000 or 40% compared with the same periods of 2003. The increase was primarily attributable to expenses associated with ensuring the Company’s compliance with the provisions of the Sarbanes-Oxley Act.

Other Operating Expense increased $88,000 or 9% and $213,000 or 12% during the quarter and six months ended June 30, 2004 compared with 2003. The increase in Other Operating Expense was primarily due to an increased level of intangible amortization resulting from the previously mentioned property and casualty insurance agency acquisitions.

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Income Taxes:

The Company’s effective income tax rate approximated 20% and 17% of pre-tax income during the three and six months ended June 30, 2004 and 14% and 17% during the three and six months ended June 30, 2003. The higher effective tax rate during the quarter ended June 30, 2004 compared with the same period of 2003 was the result of a higher level of before tax net income and a lower level of tax-exempt investment income. The effective tax rate in all periods is lower than the blended statutory rate of 39.6%. The lower effective rates in both 2004 and 2003 primarily resulted from the Company’s tax-exempt investment income on securities and loans, income tax credits generated from investments in affordable housing projects, and income generated by subsidiaries domiciled in a state with no state or local income tax.

FINANCIAL CONDITION

Total assets at June 30, 2004 increased $5.4 million to $930.5 million compared with $925.9 million in total assets at December 31, 2003. Investment Securities decreased $5.6 million to $207.6 million at June 30, 2004 compared with $213.2 million at year-end. Loans, net of unearned income and allowance for loan losses, increased $8.7 million during the six months ended June 30, 2004 primarily due to commercial and agricultural loan growth.

Total Deposits at June 30, 2004 increased $4.9 million to $722.1 million compared with $717.1 in total deposits at December 31, 2003. Demand, savings, and money market accounts increased $17.9 million while time deposits declined $13.0 million. FHLB Advances and Other Borrowings increased $2.4 million to $114.9 million at June 30, 2004 compared with $112.6 million at year-end. The increase in borrowings was the result of increased usage of short-term variable rate FHLB advances and federal funds purchased.

Non-performing Assets:

The following is an analysis of the Company’s non-performing assets at June 30, 2004 and December 31, 2003 (dollars in thousands):

	June 30, 2004			December 31, 2003
Non-accrual Loans	$	2,381		$	1,817
Past Due Loans (90 days or more)		1,215			962
Restructured Loans		---			---
Total Non-performing Loans		3,596			2,779
Other Real Estate		108			749
Total Non-performing Assets	$	3,704		$	3,528
Allowance for Loan Loss to Non-performing Loans		249.08	%		297.41	%
Non-performing Loans to Total Loans		0.58	%		0.45	%

Capital Resources:

Federal banking 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. The Company is required to maintain minimum levels of capital 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 deferred tax assets defined by bank regulations. Tier 2 capital currently consists of the amount of the allowance for loan losses which does not exceed a defined maximum allowance limit of 1.25 percent of gross risk adjusted assets. Total capital is the sum of Tier 1 and Tier 2 capital.

The minimum requirements under these standards are generally at least a 4.0 percent leverage ratio, which is Tier 1 capital divided by defined “total assets”; 4.0 percent Tier 1 capital to risk-adjusted assets; and, an 8.0 percent 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 exceed the regulatory minimums.

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The Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA) requires federal regulatory agencies to define capital tiers. These are: well-capitalized, adequately-capitalized, under-capitalized, significantly under-capitalized, and critically under-capitalized. Under these regulations, a “well-capitalized” entity must achieve a Tier 1 Risk-based capital ratio of at least 6.0 percent; a total capital ratio of at least 10.0 percent; and, a leverage ratio of at least 5.0 percent, and not be under a capital directive. All of the Company’s affiliate banks are categorized as well-capitalized as of June 30, 2004.

At June 30, 2004, management is not under such a capital directive, nor is it 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.

The table below presents the Company’s consolidated capital ratios under regulatory guidelines:

	Minimum for Capital Adequacy Purposes		To be Well Capitalized Under Prompt Corrective Action Provisions (FDICIA)		At June 30, 2004		At December 31, 2003
Leverage Ratio	4	.00%	5	.00%	8	.30%	8	.40%
Tier 1 Capital to Risk-adjusted Assets	4	.00%	6	.00%	10	.59%	11	.11%
Total Capital to Risk-adjusted Assets	8	.00%	10	.00%	11	.82%	12	.30%

Shareholders’ equity totaled $80.5 million at June 30, 2004 or 8.7% of total assets, a decrease of $2.6 million from December 31, 2003. This decline was primarily attributable to a change in accumulated other comprehensive income related the change in market value of the Company’s available for sale investment security portfolio.

Liquidity:

The Consolidated Statement of Cash Flows details the elements of change in the Company’s cash and cash equivalents. During the six months ended June 30, 2004, operating activities provided $5.0 million of available cash, which included net income of $4.3 million. In addition, cash outflows included $3.1 million in dividends paid to shareholders. The cash inflows from the maturities and sales of securities exceeded the cash outflows from purchases of securities by approximately $1.3 million. Total cash and cash equivalents remained relatively stable during the six months ended June 30, 2004 ending at $32.7 million compared with $32.5 at year-end 2003.

The Company does not have access at the parent-company level to the sources of funds that are available to its bank subsidiaries to support their operations. The Company derives most of its parent-company revenues from dividends paid to the parent company by its bank subsidiaries. These subsidiaries are subject to statutory restrictions on their ability to pay dividends to the parent company. Therefore, in conjunction with the closing of the purchase by the Company of its stock under the tender offer, the parent company on March 20, 2003, established a two-year $15.0 million revolving line of credit with Bank One, N.A., Chicago, Illinois. The parent company may borrow funds under this line of credit for the purpose of funding stock repurchases and parent company working capital needs. The Company drew $8.0 million on the line of credit on the date of establishment and an additional $1.5 million during the first quarter of 2004 and an additional $1.0 million during the second quarter of 2004. In the near-term, the Company plans to refinance this line of credit at maturity, while the Company’s longer-term plans continue to be to repay the credit line through dividends from its subsidiary banks.

FORWARD-LOOKING STATEMENTS

The Company from time to time in its oral and written communications makes statements relating to its expectations regarding the future. These types of statements are considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. The Company may include forward-looking statements in filings with the Securities and Exchange Commission (“SEC”), such as this Form 10-Q, in other written materials, and in oral statements made by senior management to analysts, investors, representatives of the media, and others. Such forward looking statements can include statements about the Company’s net interest income or net interest margin; adequacy of allowance for loan losses and the quality of the Company’s loans and other assets; simulations of changes in interest rates; litigation results; dividend policy; estimated cost savings, plans and objectives for future operations; and expectations about the Company’s financial and business performance and other business matters as well as economic and market conditions and trends. They often can be identified by the use of words like “expect,” “may,” “will,” “would,” “could,” “should,” “intend,” “project,” “estimate,” “believe” or “anticipate,” or similar expressions. In Item 2 of this Quarterly Report, forward looking statements include, but are not limited to, the statements in Management Overview regarding expectations with respect to future provisions for loan losses, and the statement in Liquidity that the Company’s long term plan is to utilize dividends from its subsidiary banks to repay amounts borrowed by the parent company from Bank One under its line of credit.

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It is intended that these forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the forward-looking statement is made. 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 may differ materially from the expectations of the Company that are expressed or implied by any forward-looking statement.

The discussion elsewhere in this Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” lists some of the factors that could cause the Company’s actual results or experience to vary materially from those expressed or implied by any forward-looking statements. Other risks, uncertainties, and factors that could cause the Company’s actual results or experience to vary materially from those expressed or implied by any forward-looking statement include the unknown future direction of interest rates and the timing and magnitude of any changes in interest rates; effects of changes in competitive conditions; acquisitions of other businesses by the Company and costs of integrations of such acquired businesses; the introduction, withdrawal, success and timing of 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; changes in general economic conditions, either nationally or regionally, resulting in, among other things, credit quality deterioration; the impact, extent and timing of technological changes; capital management activities; actions of the Federal Reserve Board and legislative and regulatory actions and reforms; and the continued availability of earnings and excess capital sufficient for the lawful and prudent declaration and payment of cash dividends by the Company and by its subsidiaries. Investors should consider these risks, uncertainties, and other factors, in addition to those mentioned by the Company in its Annual Report on Form 10-K for its fiscal year ended December 31, 2003, and other SEC filings from time to time, when considering any forward-looking statement.

Item 3.    Quantitative and Qualitative Disclosures About Market Risk

The Company’s exposure to market risk is reviewed on a regular basis by the Asset/Liability Committees and Boards of Directors of the holding company and its affiliate banks. Primary market risks which impact the Company’s operations are liquidity risk and interest rate risk.

The liquidity of the parent company is dependent upon the receipt of dividends from its bank subsidiaries, which are subject to certain regulatory limitations. The affiliate banks’ source of funding is predominately core deposits, maturities of securities, repayments of loan principal and interest, federal funds purchased, securities sold under agreements to repurchase and borrowings from the Federal Home Loan Bank.

The Company monitors interest rate risk by the use of computer simulation modeling to estimate the potential impact on its net interest income under various interest rate scenarios, and by estimating its static interest rate sensitivity position. Another method by which the Company’s interest rate risk position can be estimated is by computing estimated changes in its net portfolio value (“NPV”). This method estimates interest rate risk exposure from movements in interest rates by using interest rate sensitivity analysis to determine the change in the NPV of discounted cash flows from assets and liabilities.

NPV represents the market value of portfolio equity and is equal to the estimated market value of assets minus the estimated market value of liabilities. Computations are based on a number of assumptions, including the relative levels of market interest rates and prepayments in mortgage loans and certain types of investments. These computations do not contemplate any actions management may undertake in response to changes in interest rates, and should not be relied upon as indicative of actual results. In addition, certain shortcomings are inherent in the method of computing NPV. Should interest rates remain or decrease below current levels, the proportion of adjustable rate loans could decrease in future periods due to refinancing activity. In the event of an interest rate change, prepayment levels would likely be different from those assumed in the table. Lastly, the ability of many borrowers to repay their adjustable rate debt may decline during a rising interest rate environment.

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The table below provides an assessment of the risk to NPV in the event of a sudden and sustained 2% increase and decrease in prevailing interest rates (dollars in thousands).

Interest Rate Sensitivity as of June 30, 2004
	Net Portfolio Value			Net Portfolio Value as a % of Present Value of Assets
Changes In rates	$ Amount	% Change		NPV Ratio		Change
+2%	$110,010	2	.02%	12	.10%	54 b.p.
Base	107,833		---	11	.56	---
-2%	94,976	(11	.92)	10	.00	(155) b.p.

Item 3 includes forward-looking statements. See “Forward-looking Statements” included in Part I Item 2 of this Report for a discussion of certain factors that could cause the Company’s actual exposure to market risk to vary materially from that expressed or implied above. These factors include possible changes in economic conditions; interest rate fluctuations, competitive product and pricing pressures within the Company’s markets; and equity and fixed income market fluctuations. Actual experience may also vary materially to the extent that the Company’s assumptions described above prove to be inaccurate.

Item 4.    Controls and Procedures.

As of June 30, 2004, the Company carried out an evaluation, under the supervision and with the participation of its principal executive officer and principal financial officer, of the effectiveness of the design and operation of its disclosure controls and procedures. Based on this evaluation, the Company’s principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures are effective in timely alerting them to material information required to be included in the Company’s periodic reports filed with the Securities and Exchange Commission. It should be noted that the design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

There was no change in the Company’s internal control over financial reporting that occurred during the Company’s second fiscal quarter of 2004 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II.    OTHER INFORMATION

Item 2.    Changes in Securities and Use of Proceeds

(e)         The following table sets forth information regarding the Company’s purchases of its common shares during each of the three months ended June 30, 2004.

Period	Total Number Of Shares (or Units) Purchased		Average Price Paid Per Share (or Unit)	Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs		Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs (1)
April 2004		---	---		---	399,789
May 2004		26,000	$15.91		26,000	373,789
June 2004		19,144(2)	$16.36		18,000	355,789

1.        On April 26, 2001, the Company announced that its Board of Directors had approved a stock repurchase program for up to 607,754 of its outstanding common shares, of which the Company had purchased 251,965 common shares through June 30, 2004. The Board of Directors established no expiration date for this program. The Company purchased 44,000 shares under this program during the quarter ended June 30, 2004.

2.        During June 2004, 1,144 of the shares purchased were acquired by the Company from certain persons who held options (“optionees”) to acquire the Company’s common shares under its 1999 Long-Term Equity Incentive Plan (“Plan”) in connection with the exercises by such optionees of their options during June 2004. Under the terms of the Plan, optionees are generally entitled to pay some or all of the exercise price of their options by delivering to the Company common shares that the optionee may already own, subject to certain conditions. The Company is generally obligated to purchase any such common shares delivered to it by such optionees for this purpose and to apply the market value of those tendered shares as of the date of exercise of the options toward the exercise prices due upon exercise of the options. Shares acquired by the Company pursuant to option exercises under the Plan are not made pursuant to the repurchase program described by Note 1 and do not reduce the number of shares available for purchase under that program.

Item 4.    Submission of Matters to a Vote of Security Holders

The Company held its Annual Meeting of Shareholders on April 23, 2004. At the Annual Meeting, the shareholders elected the following Directors for three-year terms expiring in the year 2007:

Nominee	Votes Cast for	Votes Withheld/Abstained	Broker Non-Votes
William R. Hoffman	8,334,929	432,774	0
J. David Lett	8,384,149	383,554	0
Chet Thompson	8,336,532	431,171	0

Item 5.    Other Information

On June 30, 2004, the Company signed agreements to purchase up to 9.9% of the common stock of Bank of Evansville, N.A. Under one of the agreements, the company purchased 73,285 shares from existing shareholders on June 30, 2004 at $13.25 per share. Under a separate agreement, the Company agreed (subject to regulatory approval) to purchase directly from the Bank of Evansville (or its proposed new holding company, American Community Bancorp, Inc.) 83,375 newly issued shares for $12.625 per share. Closing of the purchase of the new shares is expected to occur promptly upon the receipt of all necessary regulatory approvals and the expiration of all applicable waiting periods. These contingencies are expected to be satisfied by late August or early September, 2004.

As a part of the latter agreement, the Company has certain rights, subject to certain conditions including closing of the additional investment, to designate a representative on the Board of Directors of Bank of Evansville and American Community Bancorp, Inc. The Company intends to designate its President and Chief Executive Officer Mark Schroeder, as its representative.

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Bank of Evansville, N.A. is a full service commercial bank that opened on July 2, 2001, to provide community banking for businesses and consumers in Evansville, Indiana. At June 30, 2004, Bank of Evansville had total assets of approximately $147 million.

Item 6.    Exhibits and Reports on Form 8-K

(a)         The following exhibits are filed herewith:

3.1 Restatement of Articles of Incorporation of the Registrant is incorporated by reference to Exhibit 3.01 to the Registrant’s Current Report on Form 8-K filed May 5, 2000.

3.2 Restated Bylaws of the Registrant, as amended through April 22, 2004.

4.1 Rights Agreement dated April 27, 2000 is incorporated by reference to Exhibit 4.01 to Registrant’s Current Report on Form 8-K filed May 5, 2000.

4.2 No long-term debt instrument issued by the Registrant exceeds 10% of consolidated total assets. In accordance with paragraph 4 (iii) of Item 601(b) of Regulation S-K, the Registrant will furnish the Securities and Exchange Commission copies of long-term debt instruments and related agreements upon requests.

4.3 Terms of Common Shares and Preferred Shares of German American Bancorp found in Restatement of Articles of Incorporation are incorporated by reference to Exhibit 3.01 to Registrant’s Current Report on From 8-K filed May 5, 2000.

31.1 Sarbanes-Oxley Act of 2002, Section 302 Certification for President and Chief Executive Officer

31.2 Sarbanes-Oxley Act of 2002, Section 302 Certification for Senior Vice President (Principal Financial Officer)

32.1 Sarbanes-Oxley Act of 2002, Section 906 Certification for President and Chief Executive Officer

32.2 Sarbanes-Oxley Act of 2002, Section 906 Certification for Senior Vice President (Principal Financial Officer)

(b)         Reports on Form 8-K

The Registrant filed a Report on Form 8-K on April 29, 2004 to furnish under Item 12 its press release announcing its results of operations for the quarter ended March 31, 2004.

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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.

Date  August 5, 2004 GERMAN AMERICAN BANCORP


By /s/ Mark A. Schroeder Mark A. Schroeder
President and CEO

Date  August 5, 2004


By /s/ Bradley M. Rust Bradley M. Rust
Senior Vice President and
Principal Financial Officer

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EXHIBIT INDEX

3.1 Restatement of Articles of Incorporation of the Registrant is incorporated by reference to Exhibit 3.01 to the Registrant’s Current Report on Form 8-K filed May 5, 2000.

3.2 Restated Bylaws of the Registrant, as amended through April 22, 2004.

4.1 Rights Agreement dated April 27, 2000 is incorporated by reference to Exhibit 4.01 to Registrant’s Current Report on Form 8-K filed May 5, 2000.

4.2 No long-term debt instrument issued by the Registrant exceeds 10% of consolidated total assets. In accordance with paragraph 4 (iii) of Item 601(b) of Regulation S-K, the Registrant will furnish the Securities and Exchange Commission copies of long-term debt instruments and related agreements upon requests.

4.3 Terms of Common Shares and Preferred Shares of German American Bancorp found in Restatement of Articles of Incorporation are incorporated by reference to Exhibit 3.01 to Registrant’s Current Report on From 8-K filed May 5, 2000.

31.1 Sarbanes-Oxley Act of 2002, Section 302 Certification for President and Chief Executive Officer

31.2 Sarbanes-Oxley Act of 2002, Section 302 Certification for Senior Vice President (Principal Financial Officer)

32.1 Sarbanes-Oxley Act of 2002, Section 906 Certification for President and Chief Executive Officer

32.2 Sarbanes-Oxley Act of 2002, Section 906 Certification for Senior Vice President (Principal Financial Officer)

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EX-3.2

RESTATED BYLAWS
OF GERMAN AMERICAN BANCORP
(as amended through April 22, 2004)

ARTICLE I

Meetings of Shareholders

        Section 1.1.    Annual Meetings.    Annual meetings of the shareholders of the Corporation shall be held at such hour and at such place within or without the State of Indiana as shall be designated by the Board of Directors.

        Section 1.2.    Special Meetings.    Special meetings of the shareholders of the Corporation may be called at any time by the Board of Directors or the President and shall be called by the Board of Directors if the Secretary receives written, dated, and signed demands for a special meeting, describing in reasonable detail the purpose or purposes for which it is to be held, from the holders of shares representing at least 25 percent of all votes entitled to be cast on any issue proposed to be considered at the proposed special meeting. If the Secretary receives one or more proper written demands for a special meeting of shareholders, the Board of Directors may set a record date for determining shareholders entitled to make such demand. The Board of Directors or the President, as the case may be, calling a special meeting of shareholders shall set the date, time, and place of such meeting, which may be held within or without the State of Indiana.

        Section 1.3.    Notices.    A written notice, stating the date, time and place of any meeting of the shareholders, and in the case of a special meeting the purpose or purposes for which such meeting is called, shall be delivered or mailed by the Secretary of the Corporation, to each shareholder of record of the Corporation entitled to notice of or to vote at such meeting no fewer than 10 nor more than 60 days before the date of the meeting, or as otherwise provided by the Corporation Law. In the event of a special meeting of shareholders required to be called as the result of a demand therefore made by shareholders, such notice shall be given no later than the sixtieth day after the Corporation’s receipt of the demand requiring the meeting to be called. Notice of shareholders’ meetings, if mailed, shall be mailed, postage prepaid, to each shareholder at his address shown in the Corporation’s current record of shareholders.

        A shareholder or his proxy may at any time waive notice of a meeting if the waiver is in writing and is delivered to the Corporation for inclusion in the minutes or filing with the Corporation’s records. A shareholder’s attendance at a meeting, whether in person or by proxy, (a) waives objection to lack of notice or defective notice of the meeting, unless the shareholders or his proxy at the beginning of the meeting objects to holding the meeting or transacting business at the meeting, and (b) waives objection to consideration of a particular matter at the meeting that is not within the purpose or purposes described in the meeting notice, unless the shareholder or his proxy objects to considering the matter when it is presented. Each shareholder who has in the manner above provided waived notice or objection to notice of the shareholders’ meeting shall be conclusively presumed to have been given due notice of such meeting, including the purpose or purposes thereof.

        If an annual or special shareholders’ meeting is adjourned to a different date, time or place, notice need not be given of the new date, time or place if the new date, time or place is announced at the meeting before adjournment, unless a new record date is or must be established for the adjourned meeting.

        Section 1.4.      Voting.    Except as otherwise provided by the Corporation Law or the Corporation’s Articles of Incorporation, each capital share of any class of the Corporation that is outstanding at the record date and represented in person or by proxy at the annual or special meeting shall entitle the record holder thereof, or his proxy, to one vote on each matter voted on at the meeting.

        Section 1.5.    Quorum.    Unless the Corporation’s Articles of Incorporation or the Corporation Law provide otherwise, at all meetings of shareholders a majority of the votes entitled to be cast on a matter, represented in person or by proxy, constitutes a quorum for action on the matter. Action may be taken at a shareholders’ meeting only on matters with respect to which a quorum exists; provided, however, that any meeting of shareholders, including annual and special meetings and any adjournments thereof, may be adjourned to a later date although less than a quorum is present. Once a share is represented for any purpose at a meeting, it is deemed present for any quorum purposes for the remainder of the meeting and for any meeting held pursuant to an adjournment of that meeting unless a new record date is or must be set for that adjourned meeting.

        Section 1.6.    Vote Required to Take Action.    If a quorum exists as to a matter to be considered at a meeting of shareholders, action on such matter (other than the election of Directors) is approved if the votes properly cast favoring the action exceed the votes properly cast opposing the action, unless the Corporation’s Articles of Incorporation or the Corporation Law requires a greater number of affirmative votes. Directors shall be elected by a plurality of the votes properly cast.

        Section 1.7.    Record Date.    Only such persons shall be entitled to notice of or to vote, in person or by proxy, at any shareholders’ meeting as shall appear as shareholders upon the books of the Corporation as of such record date as the Board of Directors shall determine, which date may not be earlier than the date 70 days immediately preceding the meeting unless otherwise permitted by the Corporation Law. In the absence of such determination, the record date shall be the fiftieth day immediately preceding the date of such meeting. Unless otherwise provided by the Board of Directors, shareholders shall be determined as of the close of business on the record date.

        Section 1.8.    Proxies.    A shareholder may vote his shares either in person or by proxy. A shareholder may appoint a proxy to vote or otherwise act for the shareholder (including authorizing the proxy to receive, or to waive, notice of any shareholders’ meetings within the effective period of such proxy) by signing an appointment form, either personally or by the shareholder’s attorney-in-fact. An appointment of a proxy is effective when received by the Secretary or other officer or agent authorized to tabulate votes and is effective for 11 months unless a longer period is expressly provided in the appointment form. The proxy’s authority may be limited to a particular meeting or may be general and authorize the proxy to represent the shareholder at any meeting of shareholders held within the time provided in the appointment form. Subject to the Corporation Law and to any express limitation on the proxy’s authority appearing on the face of the appointment form, the Corporation is entitled to accept the proxy’s vote or other action as that of the shareholder making the appointment.

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ARTICLE II

Directors

        Section 2.1.    Number and Term.    The business of the Corporation shall be managed by a Board of Directors consisting of at least 9 Directors and no more than 14 Directors. The exact number of Directors of the Corporation shall be fixed by the Board of Directors within the range established by the preceding sentence, and may be changed within that range from time to time by the Board of Directors. The Directors shall be divided, effective immediately following the election of Directors at the annual meeting of shareholders in 2001, into three equal (or as nearly equal as possible) classes. Only one class of Directors shall be elected at any annual meeting held after the annual meeting in 2001, and the term of each class of Directors elected at each annual meeting held after the annual meeting in 2001 shall be three years. Two classes of Directors shall be elected at the annual meeting of shareholders in 2001, and a Director elected at that meeting may be elected for a term of two or three years expiring at the annual meetings of shareholders to be held in 2003 and 2004, in order to re-structure the terms of all Directors in a manner that will, in the judgment of the Board of Directors, result in the appropriate classification of Directors and the appropriate staggering of their terms of service. Despite the expiration of a Director’s term, the Director shall continue to serve until his successor is elected and qualified, or until the earlier of his death, resignation, disqualification, or removal, or until there is a decrease in the number of Directors. No Director shall be elected after reaching the age of 69 years. The Board of Directors may in its discretion from time to time consider and grant waivers from the Director qualification requirements included in the immediately preceding two sentences to permit a Director who otherwise would not be qualified under this Section 2.1 nevertheless to be elected and serve on the Board of Directors. Vacancies caused by an increase in the number of Directors shall be apportioned so as to make the classes as nearly equal as possible. The Directors and each of them shall have no authority to bind the Corporation except when acting as a Board or as a committee established by the Board and granted authority to bind the Corporation.

        Section 2.2.    Quorum and Vote Required to Take Action.    A majority of the members of the Board of Directors (the size of which shall be determined in accordance with the latest action of the Board of Directors fixing the number of Directors) shall be necessary to constitute a quorum for the transaction of any business, except the filling of vacancies. If a quorum is present when a vote is taken, the affirmative vote of a majority of the Directors present shall be the act of the Board of Directors, unless the act of a greater number is required by the Corporation Law, the Corporation’s Articles of Incorporation or these Bylaws.

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        Section 2.3.    Annual and Regular Meetings.    The Board of Directors shall meet annually, without notice, on the same day as the annual meeting of the shareholders, for the purpose of transacting such business as properly may come before the meeting. Other regular meetings of the Board of Directors, in addition to said annual meeting, shall be held on such dates, at such times, and at such places as shall be fixed by resolution adopted by the Board of Directors or otherwise communicated to the Directors. The Board of Directors may at any time alter the date for the next regular meeting of the Board of Directors.

        Section 2.4.    Special Meetings.    Special meetings of the Board of Directors may be called by the President or by a majority of the Board of Directors upon not less than 24 hours’ notice given to each Director of the date, time and place of the meeting, which notice need not specify the purpose or purposes of the special meeting. Such notice may be communicated in person (either in writing or orally), by telephone, telegraph, teletype or other form of wire or wireless communication or by mail, and shall be effective at the earlier of the time of its receipt or, if mailed, five days after its mailing. Notice of any meeting of the Board may be waived in writing at any time if the waiver is signed by the Director entitled to the notice and is filed with the minutes of Corporate records. A Director’s attendance at or participation in a meeting waives any required notice to the Director of the meeting, unless the Director at the beginning of the meeting (or promptly upon the Director’s arrival) objects to holding the meeting or transacting business at the meeting and does not thereafter vote for or assent to action taken at the meeting.

        Section 2.5.    Written Consents.    Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting if the action is taken by all members of the Board. The action must be evidenced by one or more written consents describing the action taken, signed by each Director, and included in the minutes or filed with the corporate records reflecting the action taken. Action taken under this Section 2.5 is effective when the last Director signs the consent, unless the consent specifies a different prior or subsequent effective date, in which case the action is effective on or as of the specified date. A consent signed under this Section 2.5 has the effect of a meeting vote and may be described as such in any document.

        Section 2.6.    Participation by Conference Telephone.    The Board of Directors may permit any or all Directors to participate in a regular or special meeting by, or through the use of, any means of communication, such as conference telephone, by which all Directors participating may simultaneously hear each other during the meeting. A Director participating in a meeting by such means shall be deemed to be present in person at the meeting.

        Section 2.7.    Committees.

        (a)         The Board of Directors may create one or more committees and appoint members of the Board of Directors to serve on them, by resolution of the Board of Directors adopted by a majority of all the Directors in office when the resolution is adopted. Each committee may have one or more members, and all the members of a committee shall serve at the pleasure of the Board of Directors.

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        (b)         To the extent specified by the Board of Directors in the resolutions creating a committee, each committee may exercise all of the authority of the Board of Directors; provided, however, that a committee may not:

        (1)         authorize dividends or other distributions as defined by the Corporation Law, except a committee may authorize or approve a reacquisition of shares if done according to a formula or method prescribed by the Board of Directors;

        (2)         approve or propose to shareholders action that is required to be approved by shareholders;

        (3)         fill vacancies on the Board of Directors or on any of its committees;

        (4)         amend the Corporation’s Articles of Incorporation;

        (5)         adopt, amend, repeal or waive any provision of these Bylaws; or

        (6)         approve a plan of merger not requiring shareholder approval.

        (c)         Except to the extent inconsistent with the resolutions creating a committee, Sections 2.2 through 2.6 of these Bylaws, which govern meetings, action without meetings, notice and waiver of notice, quorum and voting requirements, and telephone participation in meetings of the Board of Directors, apply to the committee and its members as well.

ARTICLE III

Officers

        Section 3.1.    Designation, Selection and Terms.    The officers of the Corporation shall consist of the President and the Secretary. The Board of Directors may also elect a Chairman of the Board and one or more Vice Presidents, Assistant Secretaries and such other officers or assistant officers as it may from time to time determine by resolution creating the office and defining the duties thereof. In defining the duties of officers, the Board of Directors may designate a chief executive officer, a chief operating officer, a chief administrative officer, a chief financial officer, a chief accounting officer or similar functional titles. The officers of the Corporation shall be elected by the Board of Directors and need not be selected from among the members of the Board of Directors, except for the Chairman of the Board, who shall be a member of the Board of Directors. Any two or more offices may be held by the same person. All officers shall serve at the pleasure of the Board of Directors. The election or appointment of an officer does not itself create contract rights.

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        Section 3.2.    Removal.    The Board of Directors may remove any officer at any time with or without cause, except that a two-thirds affirmative vote of all other members of said Board shall be required to remove the Chairman of the Board and/or the President. Vacancies in such offices, however occurring, may be filled by the Board of Directors at any meeting of the Board of Directors, except that two-thirds affirmative vote of all remaining members of said Board shall be required to fill any vacancy created by the removal of the Chairman of the Board and/or the President.

        Section 3.3.    Chairman of the Board.    If the Board of Directors determines to elect a Chairman of the Board, he or she shall be selected from among the members of the Board of Directors. The Chairman of the Board shall preside at all meetings of the shareholders and the Board of Directors at which he or she shall be present, and shall perform the duties and have the powers of the President in his or her absence or in the event of the inability or refusal of the President to act. The Chairman of the Board shall serve the Corporation in such other capacities and perform such other duties as are incident to his or her office or may from time to time be delegated to him or her by the Board of Directors or defined in these Bylaws.

        Section 3.4.    President.    The President shall have and may exercise all of the powers and duties as are incident to his or her office or may from time to time be delegated to him or her by the Board of Directors or defined in these Bylaws. In the event that no Chairman of the Board has been elected, or in the event that an elected Chairman of the Board is absent or unable or unwilling to act, the President shall perform the duties and have the powers of the Chairman of the Board.

        Section 3.5.    Secretary.    The Secretary shall be the custodian of the books, papers and records of the Corporation and of its corporate seal, if any, and shall be responsible for seeing that the Corporation maintains the records required by the Corporation Law (other than accounting records) and that the Corporation files with the Indiana Secretary of State the annual report required by the Corporation Law. The Secretary shall be responsible for preparing minutes of the meetings of the shareholders and of the Board of Directors and for authenticating records of the Corporation, and he shall perform all of the other duties usual in the office of the Secretary of a corporation.

ARTICLE IV

Indemnification of Officers,
Directors and Other Eligible Persons

        Section 4.1.    General.    To the extent not inconsistent with applicable law, every Eligible Person shall be indemnified by the Corporation against all Liability and reasonable Expense that may be incurred by him in connection with or resulting from any Claim:

        (a)         if such Eligible Person is Wholly Successful with respect to the Claim, or

        (b)         if not Wholly Successful, then if such Eligible Person is determined, as provided in either Section 4.3(a) or 4.3(b) of this Article IV, to have:

        (1)         conducted himself in good faith; and

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        (2)         reasonably believed:

(i) in the case of conduct in his official capacity with the Corporation, that his conduct was in its best interest; and

(ii) all other cases, that his conduct was at least not opposed to its best interest; and

        (3)         in the case of any criminal proceeding, either.

(i) had reasonable cause to believe his conduct was lawful; or

(ii) had no reasonable cause to believe his conduct was unlawful.

The termination of any Claim, by judgment, order, settlement (whether with or without court approval) or conviction or upon a plea of guilty or of nolo contendere, or its equivalent, shall not create a presumption that an Eligible Person did not meet the standards of conduct set forth in clause (b) of this Section 4.1. The actions of an Eligible Person with respect to an employee benefit plan subject the Employee Retirement Income Security Act of 1974 shall be deemed to have been taken in what the Eligible Person reasonably believed to be the best interests of the Corporation or at least not opposed to its best interests if the Eligible Person reasonable believed he was acting in conformity with the requirements of such Act or he reasonable believed his actions to be in the interests of the participants in or beneficiaries of the plan.

         Section 4.2.    Definitions.

        (a)         The term “Claim” as used in this Article IV shall include every pending, threatened, or completed claim, action, suit, or proceeding and all appeals thereof (whether brought by or in the right of this Corporation or any other corporation or otherwise), civil, criminal, administrative, or investigative, formal or informal, in which an Eligible Person may become involved, as a party or otherwise: (i) by reason of his being or having been an Eligible Person, or (ii) by reason of any action taken or not taken by him in his capacity as an Eligible Person, whether or not he continued in such capacity at the time such Liability or Expense shall have been incurred.

        (b)         The term “Eligible Person” as used in this Article IV shall mean every person (and the estate, heirs and personal representatives of such person) who is or was a Director, officer, employee or agent of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee, agent, or fiduciary of another foreign or domestic corporation, partnership, joint venture, trust, employee benefit plan or other organization or entity, whether for profit or not. An Eligible Person shall also be considered to have been serving an employee benefit plan at the request of the Corporation if his duties to the Corporation also imposed duties on, or otherwise involved services by, him to the plan or to participants in or beneficiaries of the plan.

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        (c)         The terms “Liability” and “Expense” as used in this Article IV shall include, but shall not be limited to, counsel fees and disbursements and amounts of judgments, fines, or penalties against (including excise taxes assessed with respect to an employee benefit plan), and amounts paid in settlement by or on behalf of, and Eligible Person.

        (d)         The term “Wholly Successful” as used in this Article IV shall mean (i) termination of any Claim against the Eligible Person in question without any finding of liability or guilt against him, (ii) approval by a court, with knowledge of the indemnity herein provided, of a settlement of any Claim, or (iii) the expiration of a reasonable period of time after making or threatened making of any Claim without the institution of the same, without any payment or promise made to induce a settlement.

         Section 4.3.    Procedure.

        (a)         Every Eligible Person claiming indemnification hereunder (other than one who has been Wholly Successful with respect to any Claim) shall be entitled to indemnification (i) if special independent legal counsel, which may be regular counsel of the Corporation or other disinterested person or persons, in either case selected by the Board of Directors, whether or not a disinterested quorum exists (such counsel or person or persons being hereinafter called the “Referee”), shall deliver to the Corporation a written finding that such Eligible Person has met the standards of conduct set forth in clause (b) of Section 4.1, and (ii) if the Board of Directors, acting upon such written finding, so determines. The Board of Directors shall, if an Eligible Person is found to be entitled to indemnification pursuant to the preceding sentence, also determine the reasonableness of the Eligible Person’s Expenses. The Eligible Person claiming indemnification shall, if requested, appear before the Referee, answer questions that the Referee deems relevant, and shall be given ample opportunity to present to the Referee evidence upon which he relies for indemnification. The Corporation shall, at the request of the Referee, make available facts, opinions or other evidence in any way relevant to the Referee’s finding that are within the possession or control of the Corporation.

        (b)         If an Eligible Person claiming indemnification pursuant to Section 4.3(a) of this Article IV is found not to be entitled thereto, or if the Board of Directors fails to select a Referee under Section 4.3(a) within a reasonable amount of time following a written request of an Eligible Person for the selection of a Referee, or if the Referee or the Board of Directors fails to make a determination under Section 4.3(a) within a reasonable amount of time following the selection of a Referee, the Eligible Person may apply for indemnification with respect to a Claim to a court of competent jurisdiction, including a court in which the Claim is pending against the Eligible Person. On receipt of an application, the Court, after giving notice to the Corporation and giving the Corporation ample opportunity to present to the court any information or evidence relating to the claim for indemnification that the Corporation deems appropriate, may order indemnification if it determines that the Eligible Person is entitled to indemnification with respect to the Claim because such Eligible Person met the standards of conduct set forth in clause (b) of Section 4.1 of this Article IV. If the court determines that the Eligible Person is entitled to indemnification, the court shall also determine the reasonableness of the Eligible Person’s Expenses.

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        Section 4.4.    Nonexclusive Rights.    The right of indemnification provided in this Article IV shall be in addition to any rights to which any Eligible Person may otherwise be entitled. Irrespective of the provisions of this Article IV, the Board of Directors may, at any time and from time to time, (a) approve indemnification of any Eligible Person to the full extent permitted by the provisions of applicable law at the time in effect, whether on account of past or future transactions, and (b) authorize the Corporation to purchase and maintain insurance on behalf of any Eligible Person against any Liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the Corporation would have the power to indemnify him against such liability.

        Section 4.5.    Expenses.    Expenses incurred by an Eligible Person with respect to any Claim may be advanced by the Corporation (by action of the Board of Directors, whether or not a disinterested quorum exists) prior to the final disposition thereof upon receipt of any undertaking by or on behalf of the recipient to repay such amount unless he is determined to be entitled to indemnification.

        Section 4.6.    Contract.    The provisions of this Article IV shall be deemed to be a contract between the Corporation and each Eligible Person, and an Eligible Person’s rights hereunder with respect to a Claim shall not be diminished or otherwise adversely affected by any repeal, amendment, or modification of this Article IV that occurs subsequent to the date of any action taken or not taken by reason of which such Eligible Person becomes involved in a Claim. Notwithstanding anything in this Article IV to the contrary, whenever the Corporation files a registration statement with the Securities and Exchange Commission under the Securities Act of 1933, as amended, that includes a promise or undertaking that in any way limits or conditions the Corporation’s obligations under this Article IV to an Eligible Person with respect to a Claim arising under that registration statement, then such promise or undertaking shall be considered to be applicable law in respect of the Corporation’s indemnification obligations hereunder, and the Corporation may comply with those limits or conditions to the extent required by its promise or undertaking without thereby being deemed to be in violation of its contract obligations to any Eligible Person under this Article IV.

        Section 4.7.    Effective Date.    The provisions of this Article IV shall be applicable to Claims made or commenced after the adoption hereof, whether arising from acts or omissions to act occurring before or after the adoption hereof.

ARTICLE V

Checks

        All checks, drafts, or other orders for payment of money shall be signed in the name of the Corporation by such officers or persons as shall be designated from time to time by resolution adopted by the Board of Directors and included in the minute book of the Corporation.

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ARTICLE VI

Loans

        Such of the officers of the Corporation as shall be designated from time to time by any resolution adopted by the Board of Directors and included in the minute book of the Corporation shall have the power, with such limitations thereon as may be fixed by the Board of Directors, to borrow money in the Corporation’s behalf, to establish credit, to discount bills and papers, to pledge collateral, and to execute such notices, bonds, debentures, or other evidences of indebtedness, and such mortgages, trust indentures, and other instruments in connection therewith, as may be authorized from time to time by such Board of Directors.

ARTICLE VII

Execution of Documents

        The Chairman of the Board, the President or any officer designated by either of them, may, in the Corporation’s name, sign all deeds, leases, contracts or similar documents that may be authorized by the Board of Directors unless otherwise directed by the Board of Directors or otherwise provided herein or in the Corporation’s Restated Articles of Incorporation, or as otherwise required by law.

ARTICLE VIII

Shares

        Section 8.1.    Execution.    Certificates for capital shares of the Corporation shall be signed by the President and the Secretary or by two officers designated from time to time by the Board of Directors and the seal of the Corporation (or a facsimile thereof), if any, may be thereto affixed. Where any such certificate is also signed by a transfer agent or a registrar, or both, the signatures of the officers of the Corporation may be facsimiles. The Corporation may issue and deliver any such certificate notwithstanding that any such officer who shall have signed, or whose facsimile signature shall have been imprinted on, such certificate shall have ceased to be such officer.

        Section 8.2.    Contents.    Each certificate shall state on its face the name of the Corporation and that it is organized under the laws of the State of Indiana, the name of the person to whom it is issued, and the number and class and the designation of the series, if any, of shares the certificate represents, and, whenever the Corporation is authorized to issue more than one class of shares or different series within a class, each certificate issued after the effectiveness of such authorization shall further state conspicuously on its front or back that the Corporation will furnish the shareholder, upon his written request and without charge, a summary of the designations, relative rights, preferences and limitations applicable to each class and series and the authority of the Board of Directors to determine variations in rights, preferences and limitations for future series.

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        Section 8.3.    Transfers.    Except as otherwise provided by law or by resolution of the Board of Directors, transfers of shares of the Corporation shall be made only on the books of the Corporation by the holder thereof in person or by duly authorized attorney, on payment of all taxes thereon and surrender for cancellation of the certificate or certificates for such shares (except as hereinafter provided in the case of loss, destruction or mutilation of certificates) properly endorsed by the holder thereof or accompanied by the proper evidence of succession, assignment or authority to transfer and delivered to the Secretary or an Assistant Secretary.

        Section 8.4.    Share Transfer Records.    There shall be entered upon the share records of the Corporation the number of each certificate issued; the name and address of the registered holder of such certificate; the number, kind and class or series of shares represented by such certificate; the date of issue; whether the shares are originally issued or transferred; the registered holder from whom transferred; and such other information as is commonly required to be shown by such records. The share records of the Corporation shall be kept at its principal office, unless the Corporation appoints a transfer agent or registrar, in which case the Corporation shall keep at its principal office a complete and accurate shareholders’ list giving the name and addresses of all shareholders and the number and class of shares held by each. If a transfer agent is appointed by the Corporation, shareholders shall give written notice of any changes in their addresses from time to time to the transfer agent.

        Section 8.5.    Transfer Agents and Registrars.    The Board of Directors may appoint one or more transfer agents and one or more registrars and may require each share certificate to bear the signature of either or both.

        Section 8.6.  Loss, Destruction or Mutilation of Certificates. The holder of any of the shares of the Corporation shall immediately notify the Corporation of any loss, destruction or mutilation of the certificate therefore, and the Board of Directors may, in its discretion, cause to be issued to him a new certificate or certificates of shares upon the surrender of the mutilated certificate or, in the case of loss or destruction, upon satisfactory proof of such loss or destruction. The Board of Directors may, in its discretion, require the holder of the lost or destroyed certificate or his legal representative to give the Corporation a bond in such sum and in such form, and with such surety or sureties as it may direct, to indemnify the Corporation, its transfer agents and its registrars, if any, against any claim that may be made against them or any of them with respect to the shares represented by the certificate or certificates alleged to have been lost or destroyed, but the Board of Directors may, in its discretion, refuse to issue a new certificate or certificates, save upon the order of a court having jurisdiction in such matters.

        Section 8.7.    Form of Certificates.    The form of the certificates for shares of the Corporation shall conform to the requirements of Section 8.2 of these Bylaws and be in such printed form as shall from time to time be approved by resolution of the Board of Directors.

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ARTICLE IX

Seal

        The corporate seal of the Corporation shall, if the Corporation elects to have one, be in the form of a disc, with the name of the Corporation on the periphery thereof and the word “SEAL” in the center.

ARTICLE X

Miscellaneous

        Section 10.1.    Corporation Law.    The provisions of the Corporation Law, as it may from time to time be amended, applicable to all matters relevant to, but not specifically covered by, these Bylaws are hereby, by reference, incorporated in and made a part of these Bylaws. The term “Corporation Law” as used in these Bylaws means the Indiana Business Corporation Law, as amended from time to time.

        Section 10.2.    Fiscal Year.    The fiscal year of the Corporation shall end on the thirty first day of December of each year.

        Section 10.3.    Control Share Acquisition and Business Combination Chapters.

        (a)         The provisions of I.C. 23-1-42 of the Corporation Law are applicable to the Corporation as of and after March 14, 1989. The provisions of LC. 23-1-43 of the Corporation Law are not applicable to the Corporation.

        (b)         In the event (i) that no acquiring person statement complying with I.C. 23-1-42-6 has been delivered to the Corporation with respect to a control share acquisition on or before the date of mailing a notice of redemption of control shares pursuant to Section 10.3(c), or (ii) that control shares are not accorded full voting rights by the shareholders pursuant to I.C. 23-1-42-9, the Corporation shall have the power, at its option, to redeem any or all control shares at the fair value thereof, in accordance with the time and other requirements specified by I.C. 23-1-42-10 and this Section 10.3. “Fair Value” for purposes of the preceding sentence shall be deemed to be equal to the fair market value per share of the class or series of which the control shares are part immediately prior to the first public announcement of the intent or plan of the acquiring person to make a control share acquisition (“Announcement Date”). Such fair market value shall be determined by (i) the highest reported closing sale price during the thirty-day period immediately preceding the Announcement Date if such shares are listed on a securities exchange registered under the Securities Exchange Act of 1934 or if closing sales prices are reported on the National Market of the National Association of Securities Dealers, Inc. Automatic Quotation System (“NASDAQ”), or any similar system of automated dissemination of quotations of securities prices then in common use, or (ii) if such shares are not listed on any such exchange or such closing sales prices are not reported on the National Market, the highest closing bid quotation with respect to such shares during the thirty-day period immediately preceding the Announcement Date as reported on NASDAQ or any similar system then in use, or (iii) if no such quotations are available, the fair market value of such shares immediately prior to the Announcement Date as determined by the Board of Directors in good faith by such other reasonable method as the Board of Directors of the Corporation shall, in its discretion, select and apply.

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        (c)         In case the Corporation shall desire to exercise its right to redeem control shares pursuant to Section 10.3(b), notice of such redemption shall be given to the holders of the control shares to be redeemed by mailing to such holders, within the time period, if any, specified by I.C. 23-1-42-10, a notice of such redemption by first class mail, postage prepaid, not less than thirty (30) days prior to the redemption date, to their last addresses as they shall appear upon the stock transfer records of the Corporation. Any notice which is mailed in the manner herein provided shall be conclusively presumed to have been duly given, whether or not the holder receives the notice, as of the date of mailing of the notice. In any case, failure to give due notice by mail to the holder of any control share, or any defect in such notice, shall not affect the validity of the proceedings for the redemption of any other control share. Each such notice shall specify the redemption date, the number of control shares to be redeemed held by such holder, the place of redemption and the redemptive price at which the control shares are to be redeemed. Such notice shall further state that payment of the redemption price will be made upon presentation and surrender of the certificate(s) representing the control shares (with such instruments of transfer and other assurances as the Corporation may reasonably request) and that from and after the redemption date such holder shall have no rights with respect to such control shares (including no rights to vote or to receive distributions in respect thereof with respect to matters for which the record date shall fall on or after the redemption date) except the right to receive the redemption price (without interest) upon compliance with the procedures specified by this Section 10.3.

        (d)         The Board of Directors may by resolution specify such other procedures as may in its discretion be deemed necessary or advisable for the purpose of implementing this Section 10.3 and is hereby empowered to determine, on the basis of the information known to it, all matters with respect to which a determination is required under I.C. 23-1-42 in connection with redemption of control shares.

        (e)         Terms used in this Section 10.3 not otherwise defined shall, unless the context otherwise requires, have the meanings assigned to them by I.C. 23-1-42.

        Section 10.4.    Definition of Articles of Incorporation.    The term “Articles of Incorporation” as used in these Bylaws means the Articles of Incorporation of the Corporation, as amended and restated from time to time.

        Section 10.5.    Amendments.    These Bylaws may be rescinded, changed or amended, and provisions hereof may be waived, at any annual, regular or special meeting of the Board of Directors by the affirmative vote of a majority of the number of Directors then in office, except as otherwise required by the Corporation’s Articles of Incorporation or by the Corporation Law.

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EX-31

Exhibit 31.1

Sarbanes-Oxley Act of 2002, Section 302 Certification for President and Chief Executive Officer

I, Mark A. Schroeder, President and Chief Executive Officer of German American Bancorp, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of German American Bancorp (the “registrant”):

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) [clause omitted pursuant to SEC Release Nos. 33-8238 and 34-47986] for the registrant and have:

a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)    [paragraph omitted pursuant to SEC Release Nos. 33-8238 and 34-47986];

c)    Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)    Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

August 5, 2004

Date


By  /s/ Mark A. Schroeder Mark A. Schroeder
President and Chief Executive Officer

EX-31

Exhibit 31.2

Sarbanes-Oxley Act of 2002, Section 302 Certification for Senior Vice President (Principal Financial Officer)

I, Bradley M. Rust, Senior Vice President (principal financial officer) of German American Bancorp, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of German American Bancorp (the “registrant”):

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. ased on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) [clause omitted pursuant to SEC Release Nos. 33-8238 and 34-47986] for the registrant and have:

a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)    [paragraph omitted pursuant to SEC Release Nos. 33-8238 and 34-47986];

c)    Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)    Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

August 5, 2004

Date


By  /s/ Bradley M. Rust Bradley M. Rust
Principal Financial Officer

EX-32

Exhibit 32.1

Sarbanes-Oxley Act of 2002, Section 906 Certification for President and Chief Executive Officer

I, Mark A. Schroeder, President and Chief Executive Officer of German American Bancorp, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)    the Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2004 (the “Periodic Report”) which this statement accompanies fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and

(2)     information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of German American Bancorp.

This certificate is being furnished solely for purposes of Section 906 and is not being filed as part of the Periodic Report.

August 5, 2004

Date


By  /s/ Mark A. Schroeder Mark A. Schroeder
President and Chief Executive Officer

EX-32

Exhibit 32.2

Sarbanes-Oxley Act of 2002, Section 906 Certification for Senior Vice President (Principal Financial Officer)

I, Bradley M. Rust, Senior Vice President (principal financial officer) of German American Bancorp, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)     the Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2004 (the “Periodic Report”) which this statement accompanies fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and

(2)     information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of German American Bancorp.

This certificate is being furnished solely for purposes of Section 906 and is not being filed as part of the Periodic Report.

August 5, 2004

Date


By  /s/ Bradley M. Rust Bradley M. Rust
Principal Financial Officer