EX-99.1 2 v063997_ex99-1.htm
GERMAN AMERICAN BANCORP, INC.

NEWS RELEASE

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


Page 1of 5

January 31, 2007                       GERMAN AMERICAN BANCORP, INC. REPORTS RECORD ANNUAL EARNINGS
 
German American Bancorp, Inc., Jasper, Indiana, (NASDAQ: GABC) reported today that its 2006 earnings achieved a record level with reported net income of $10,221,000, or $0.93 per share.  The record 2006 performance, which comes on the heels of record performance in 2005, represents an increase of approximately 5% over the prior year’s net income of $9,721,000, or $0.89 per share. 
 
The Company’s net income for the fourth quarter was $2,438,000, or $0.22 per share, compared to $2,431,000, or $0.22 per share, during the fourth quarter of last year.  The Company’s solid fourth quarter financial performance marked the eighth consecutive quarter of earnings improvement relative to the same quarterly period of the prior fiscal year.
 
A number of favorable factors resulted in the Company’s record level of earnings reported for 2006, including a nearly $4,000,000 increase, representing a 12% improvement, in the level of net interest income driven by both an increased level of earning assets and slightly higher net interest margin.  Additionally, the Company’s non-interest income increased by approximately $1,200,000, or approximately 8%, in 2006 as compared to 2005.  Other items impacting the comparison of the two years include an approximately $1,000,000 reduced level of provision for loan loss. Offsetting items to these positive earnings contributors were increases of approximately $5,000,000 in the Company’s operating expenses in 2006, largely attributable to expenses associated with the inclusion of recently acquired banking and insurance units in 2006 operations.   
 
The Company’s 2006 fourth quarter and year-to-date financial results are reflective of the operating results of the acquisitions of PCB Holding Company as of October 1, 2005, Stone City Bancshares, Inc. as of January 1, 2006, and Keach & Grove Insurance as of October 1, 2006.  
 
GERMAN AMERICAN BANCORP, INC.

NEWS RELEASE

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


Page 2 of 5
 
The Company also continued the trend of solid balance sheet growth during 2006 as evidenced by the $144 million of loan growth generated during the year.  This loan growth, which was in excess of 20%, was generated from a variety of sources, including $54 million of organic growth, $48 million from the acquisition of Stone City Bancshares, Inc., in January 2006, and $42 million from the purchase of the Southern Indiana-based agricultural loan portfolio of a regional banking company in December 2006.  
  
Mark A. Schroeder, President & Chief Executive Officer of German American Bancorp, Inc. commenting on the Company’s 2006 record financial performance, stated. “We’re extremely pleased to deliver the second consecutive year of record earnings and the eighth consecutive quarter of improved earnings performance to our shareholders.  The 2006 net income of $10,221,000 is the first time in our Company’s history that we surpassed the $10 million milestone and is a testament to the dedication of our staff and the loyalty of our customers.  The significant loan growth we experienced in 2006 along with the planned expansion of our banking footprint as of February 1st into the Bloomington, Indiana market provides a baseline upon which to build continued strong financial performance. ”
 
Schroeder continued, “Clearly, our business model, which is based on customer responsiveness and local decision-making, coupled with our financial professionals, who intimately know their local markets, and our wide array of offerings of state-of-the-art banking, investment, and insurance products and services is being embraced by the agricultural, commercial and retail businesses along with consumers located throughout our market area.  German American is uniquely positioned to provide comprehensive financial services across our entire market footprint and our success in growing our business during the past several years is evidence of our customers’ recognition and acceptance of the value our business model delivers.”    
 
The Company also announced that its Board of Directors declared a regular quarterly cash dividend of $0.14 per share which will be payable on February 20, 2007 to shareholders of record as of February 10, 2007.
 
 
GERMAN AMERICAN BANCORP, INC.

NEWS RELEASE

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


Page 3 of 5

German American Bancorp, Inc. is a $1 billion 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.  Inclusive of the soon to be opened Bloomington, Indiana banking office, the Company’s banking subsidiary, German American Bancorp, operates through six community banking affiliates with 30 banking offices in the ten contiguous Southern Indiana counties of Daviess, Dubois, Gibson, Knox, Lawrence, Martin, Monroe, Perry, Pike, and Spencer. The Company also operates German American Financial Advisors & Trust Company, a trust, brokerage and financial planning subsidiary operating from the banking offices of the bank subsidiaries and German American Insurance, Inc., a full-line property and casualty insurance subsidiary with six independent insurance offices throughout its market area. The Company’s lines of business include retail and commercial banking, mortgage banking, comprehensive wealth management, full service brokerage and trust administration, title insurance, and a full range of personal and corporate insurance products.
 
Forward-Looking Statements
 
German American’s statements in this press release regarding financial performance, including new business opportunities, future growth opportunities, loan growth potential and asset quality, may be deemed to include “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.   Readers are cautioned that, by their nature, forward-looking statements are based on assumptions and are subject to risks, uncertainties, and other factors. Actual results and experience could differ materially from the anticipated results or other expectations expressed or implied by these forward-looking statements as a result of a number of factors, including but not limited to, those discussed in the press release.  Factors which could cause actual results and experience to differ from these expectations include changes in interest rates; changes in competitive conditions; the introduction, withdrawal, success and timing of asset/liability management strategies or of mergers and acquisitions and other business initiatives and strategies; changes in customer borrowing, repayment, investment and deposit practices; changes in fiscal, monetary and tax policies; changes in financial and capital markets; changes in general economic conditions, either nationally or regionally, resulting in, among other things, credit quality deterioration; capital management activities; actions of the Federal Reserve Board; changes in accounting principles and interpretations; and legislative and regulatory actions and reforms.  These forward-looking statements speak only as of the date of this press release and German American undertakes no obligation to update any such forward-looking statement to reflect events or circumstances that occur after the date hereof.  
 
 
GERMAN AMERICAN BANCORP, INC.

NEWS RELEASE

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


Page 4 of 5
GERMAN AMERICAN BANCORP, INC.
(unaudited, dollars in thousands except per share data)
 
Consolidated Balance Sheets
 
    
December 31, 
  
     
2006
    
2005
  
               
ASSETS
              
Cash and Due from Banks
 
$
23,960
  
$
27,644
  
Short-term Investments
   
5,735
   
5,287
 
Investment Securities
    
185,557
   
189,834
 
               
Loans Held-for-Sale
    
1,601
   
1,901
 
               
Loans, Net of Unearned Income
    
796,259
   
651,956
 
Allowance for Loan Losses
    
(7,129
)
  
(9,265
)
Net Loans
    
789,130
   
642,691
 
               
Stock in FHLB and Other Restricted Stock
    
10,621
   
14,095
 
Premises and Equipment
    
23,245
   
20,233
 
Goodwill and Other Intangible Assets
    
14,629
   
6,201
 
Other Assets
    
38,996
   
38,581
 
TOTAL ASSETS
  
$
1,093,474
  
$
946,467
  
               
LIABILITIES
              
Non-interest-bearing Demand Deposits
  
$
137,671
  
$
130,383
  
Interest-bearing Demand, Savings, and
              
Money Market Accounts
    
329,690
   
307,007
 
Time Deposits
    
400,257
   
309,431
 
Total Deposits
    
867,618
   
746,821
 
               
Borrowings
    
119,889
   
105,394
 
Other Liabilities
    
13,526
   
11,997
 
TOTAL LIABILITIES
    
1,001,033
   
864,212
 
               
SHAREHOLDERS' EQUITY
              
Common Stock and Surplus
    
79,224
   
74,427
 
Retained Earnings
    
13,450
   
9,391
 
Accumulated Other Comprehensive Loss
    
(233
)
  
(1,563
)
TOTAL SHAREHOLDERS' EQUITY
    
92,441
   
82,255
 
               
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
  
$
1,093,474
  
$
946,467
  
               
END OF PERIOD SHARES OUTSTANDING
    
11,008,562
   
10,643,514
 
               
BOOK VALUE PER SHARE
  
$
8.40
  
$
7.73
  
 
 
 
    
Three Months Ended
December 31,
    
Year Ended
December 31,
  
     
2006
    
2005
    
2006
    
2005
  
                           
INTEREST INCOME
                          
Interest and Fees on Loans
 
$
14,496
  
$
11,249
  
$
53,490
  
$
41,751
  
Interest on Short-term Investments
   
178
   
122
   
545
   
316
 
Interest and Dividends on Investment Securities
    
2,421
   
2,074
   
9,559
   
8,130
 
TOTAL INTEREST INCOME
    
17,095
   
13,445
   
63,594
   
50,197
 
                           
INTEREST EXPENSE
                          
Interest on Deposits
   
6,193
   
3,991
   
21,329
   
13,389
 
Interest on Borrowings
    
1,589
   
1,196
   
6,069
   
4,595
 
TOTAL INTEREST EXPENSE 
    
7,782
   
5,187
   
27,398
   
17,984
 
                           
Net Interest Income
   
9,313
   
8,258
   
36,196
   
32,213
 
Provision for Loan Losses
    
291
   
178
   
925
   
1,903
 
Net Interest Income after
                                         
Provision for Loan Losses
    
9,022
   
8,080
   
35,271
   
30,310
 
                           
NON-INTEREST INCOME
                          
Net Gain on Sales of Loans and Related Assets
    
100
   
301
   
850
   
1,000
 
Net Gain on Securities
    
-
   
-
   
951
   
-
 
Other Non-interest Income
    
3,530
   
3,207
   
13,589
   
13,194
 
TOTAL NON-INTEREST INCOME 
    
3,630
   
3,508
   
15,390
   
14,194
 
                           
NON-INTEREST EXPENSE
                          
Salaries and Benefits
    
5,537
   
4,919
   
21,491
   
18,511
 
Other Non-interest Expenses
    
3,871
   
3,358
   
14,965
   
12,937
 
TOTAL NON-INTEREST EXPENSE
    
9,408
   
8,277
   
36,456
   
31,448
 
                           
Income before Income Taxes
    
3,244
   
3,311
   
14,205
   
13,056
 
Income Tax Expense
    
806
   
880
   
3,984
   
3,335
 
                           
NET INCOME
  
$
2,438
  
$
2,431
  
$
10,221
  
$
9,721
  
                           
EARNINGS PER SHARE & DILUTED EARNINGS PER SHARE
  
$
0.22
  
$
0.22
  
$
0.93
  
$
0.89
  
                           
                           
WEIGHTED AVERAGE SHARES OUTSTANDING
    
10,997,099
   
11,009,579
   
10,994,739
   
10,890,987
 
DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING
    
11,003,640
   
11,013,394
   
11,005,667
   
10,896,822
 
 
 
GERMAN AMERICAN BANCORP, INC.

NEWS RELEASE

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

Page 5 of 5
GERMAN AMERICAN BANCORP, INC.
(unaudited, dollars in thousands except per share data)
 
 
    
Three Months Ended
December 31, 
    
Year Ended
December 31,
  
     
2006
    
2005
    
2006
    
2005
  
EARNINGS PERFORMANCE RATIOS
                          
Annualized Return on Average Assets
    
0.91
%
  
1.03
%
  
0.99
%
  
1.05
%
Annualized Return on Average Equity
    
10.88
%
  
11.06
%
  
11.56
%
  
11.51
%
Net Interest Margin
    
3.89
%
  
3.92
%
  
3.96
%
  
3.92
%
Efficiency Ratio (1)
    
71.52
%
  
68.67
%
  
69.25
%
  
66.02
%
Net Overhead Expense to Average Earning Assets (2)
    
2.36
%
  
2.20
%
  
2.24
%
  
2.02
%
                           
ASSET QUALITY RATIOS
                          
Annualized Net Charge-offs to Average Loans
    
1.21
%
  
0.32
%
  
0.50
%
  
0.26
%
Allowance for Loan Losses to Period End Loans
                
0.90
%
  
1.42
%
Non-performing Assets to Period End Assets
                
0.96
%
  
1.71
%
Non-performing Loans to Period End Loans
                
1.21
%
  
2.41
%
                           
                           
SELECTED BALANCE SHEET & OTHER FINANCIAL DATA
                          
Average Assets
  
$
1,066,214
  
$
943,430
  
$
1,029,838
  
$
925,851
  
Average Earning Assets
  
$
977,310
  
$
869,038
  
$
941,549
  
$
853,323
  
Average Total Loans
  
$
751,432
  
$
652,030
  
$
715,260
  
$
634,526
  
Average Demand Deposits
  
$
132,237
  
$
122,540
  
$
129,759
  
$
121,662
  
Average Interest Bearing Liabilities
  
$
830,346
  
$
720,508
  
$
798,240
  
$
707,490
  
Average Equity
  
$
89,616
  
$
87,898
  
$
88,451
  
$
84,479
  
                           
Period End Non-performing Loans (3)
              
$
9,652
  
$
15,707
  
                           
Tax Equivalent Net Interest Income
  
$
9,524
  
$
8,546
  
$
37,252
  
$
33,443
  
Net Charge-offs during Period
  
$
2,273
  
$
522
  
$
3,545
  
$
1,678
  
 
(1)  Efficiency Ratio is defined as Non-interest Expense divided by the sum of Net Interest Income, on a tax equivalent basis, and Non-interest Income.
(2)  Net Overhead Expense is defined as Total Non-interest Income less Total Non-interest Expense.
(3)  Non-performing loans are defined as Non-accrual Loans, Loans Past Due 90 days or more, and Restructured Loans.