EX-99.1 2 v172779_ex99-1.htm Unassociated Document

GERMAN AMERICAN BANCORP, INC.

NEWS RELEASE

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

1 of 14

January 27, 2010
  
GERMAN AMERICAN BANCORP, INC. (GABC)
   
REPORTS STRONG 4th QUARTER AND 2009 ANNUAL
   
EARNINGS

Summary

German American Bancorp, Inc. (NASDAQ: GABC) today reported yet another quarter of strong earnings, posting 4th quarter net income of $3,321,000, or $0.30 per share.  This represents the second highest level of quarterly earnings in the Company’s history, exceeded only by the quarterly earnings recorded in the 4th quarter of 2008.  Inclusive of the strong 4th quarter results, 2009 reported earnings were $12,218,000, or $1.10 per share.  This level of annual earnings also represents the second highest reported annual financial performance in the Company’s history

In the face of a more difficult economic and operating environment in the current year, the strong level of 2009 annual earnings was only approximately 5% under the record net income of $12,803,000, or $1.16 per share, earned in 2008.  The Company’s current year performance was enhanced by a $3.6 million, or nearly a 9%, improvement in net interest income.  This improvement in net interest income resulted from the combination of an increase in the Company’s average balance of loans and investments of approximately $62 million, or nearly 6%, and an increase in the net interest margin to 3.95% as compared to 3.82% in 2008.

The Company also strengthened its level of loan loss reserves by adding approximately $1.5 million to its allowance for loan losses during the year, while the provision for loan losses was approximately $250 thousand less than what was required in provision expense in 2008.  The Company also significantly enhanced its capital position during 2009.  Largely as a result of the strong 2009 retained earnings, the Company’s capital strength, in the form of total shareholders’ equity, increased by $8.4 million, or nearly 8%, during the year.

In a direct reflection of the weakened economic environment in which the Company operated during 2009, revenues and fees generated from the Company’s insurance, investment, and trust activities declined by approximately $1.7 million, or nearly 20%, during the year while fees derived from deposit service charges declined by $500 thousand, or 11%.  Additionally, the Company experienced approximately $1.7 million in additional operating expenses due to significant increases in the level of FDIC insurance premiums, resulting from an industry-wide increase in deposit insurance assessments as the FDIC began charging higher deposit insurance premiums to all depository institutions, including healthy banks, in order to recapitalize the deposit insurance fund.  Additionally, the Company experienced approximately $1.0 million in higher health insurance costs in 2009 due to elevated claims experience within the Company’s partially self-insured health insurance plan.

 
 
 
 
GERMAN AMERICAN BANCORP, INC.

NEWS RELEASE

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

2 of 14

Mark A. Schroeder, Chief Executive Officer of German American, commenting on the 2009 financial results stated, “We continue to be very pleased that, in the face of a very difficult economic and operating environment, we were able to yet again post a very strong quarter and year in terms of earnings performance.  German American’s ability to achieve the two best years in our history in terms of financial performance during 2008 and 2009 stands in contrast to the majority of the banking industry, in which many companies posted the two worst years in their history during this same time period.  The achievement of this feat didn’t occur by accident, but rather it is the cumulative result of years of hard work and steadfast commitment to conservative, time-tested financial management strategies by a talented and dedicated group of financial professionals.

German American’s superior operating performance in the face of the current economic challenges is being recognized on both a regional and national level, culminating with an invitation to participate in a meeting at the White House with President Obama and key members of his Administration late in the 4th quarter.  At the meeting, German American was one of only 12 community banks from throughout the country from which the Administration sought input relative to the challenges and opportunities facing community banks in the current economic environment.”

Schroeder continued, “It was most certainly an honor for our organization to be invited to participate in the meeting with the President and we appreciate the positive response we received regarding our performance from the financial media and the strong level of stock performance we enjoyed during 2009, but we also recognize that we are not immune from the effect of a continued stagnant economic environment.  That said, we firmly believe that our management philosophy will serve us well in both good and more difficult times, and that, executed effectively, the conservative, time-tested financial management strategies derived from that philosophy will consistently deliver the achievement of our overall goal of superior top-quartile financial performance when compared to peer Midwestern banking companies.”

The Company also announced that its Board of Directors declared its regular quarterly cash dividend of $0.14 per share which will be payable on February 20, 2010 to shareholders of record as of February 10, 2010.

German American Bancorp, Inc. is a financial services holding company based in Jasper, Indiana. The Company’s Common Stock is traded on NASDAQ’s Global Select Market System under the symbol GABC.  The principal subsidiary of German American Bancorp, Inc. is its banking subsidiary, German American Bancorp which operates 28 retail banking offices in the ten contiguous Southern Indiana counties of Daviess, Dubois, Gibson, Knox, Lawrence, Martin, Monroe, Perry, Pike, and Spencer. German American Bancorp owns a trust, brokerage and financial planning subsidiary which operate from its banking offices and a full line property and casualty insurance agency with seven insurance agency offices throughout its market area.

 
 
 

GERMAN AMERICAN BANCORP, INC.

NEWS RELEASE

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

3 of 14

Balance Sheet Highlights

End-of-period loans outstanding declined 4% on an annualized basis during the fourth quarter of 2009 compared with the quarter-ended September 30, 2009 and approximately 1% during the year-ended December 31, 2009 compared with the year ended 2008.  The overall decline in the level of loans has largely been driven by soft loan demand in the commercial and consumer portfolios attributable to a difficult and cautious economic environment.  The decline in the residential portfolio was attributable to the significant refinance activity throughout 2009 in a historically low interest rate environment in which the Company sold the majority of its residential mortgage loan production into the secondary market.

End of Period Loan Balances
                    
Annualized
  
   
12/31/09
    
09/30/09
    
$ Change
    
% Change
  
                         
Commercial & Industrial Loans
   $ 523,217     $ 529,868     $ (6,651 )     -5 %
Agricultural Loans
     156,845       152,758       4,087       11 %
Consumer Loans
     114,736       119,489       (4,753 )     -16 %
Residential Mortgage Loans
     84,677       87,099       (2,422 )     -11 %
    $ 879,475     $ 889,214     $ (9,739 )     -4 %

End of Period Loan Balances
                    
Annual
  
   
12/31/09
    
12/31/08
    
$ Change
    
% Change
  
                         
Commercial & Industrial Loans
   $ 523,217     $ 505,191     $ 18,026       4 %
Agricultural Loans
     156,845       159,923       (3,078 )     -2 %
Consumer Loans
     114,736       127,343       (12,607 )     -10 %
Residential Mortgage Loans
     84,677       100,054       (15,377 )     -15 %
    $ 879,475     $ 892,511     $ (13,036 )     -1 %

Non-performing loans totaled $8.8 million at December 31, 2009 compared to $9.9 million of non-performing loans at September 30, 2009.  Non-performing loans represented 1.00% of total outstanding loans at December 31, 2009 compared with 1.12% of total loans outstanding at September 30, 2009.  The majority of this decline was the result of a single commercial real estate loan that migrated from the non-performing loan category to other real estate as of year-end 2009.  Non-performing loans totaled $8.4 million at year-end 2008 or 0.94% of total loans outstanding at December 31, 2008.

 
 
 

GERMAN AMERICAN BANCORP, INC.

NEWS RELEASE

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

4 of 14

The Company’s allowance for loan losses totaled $11.0 million at December 31, 2009, an increase of $228,000 or 2%, compared with $10.8 million at September 30, 2009.  The allowance for loan losses represented 1.25% of period end loans at December 31, 2009 compared with 1.22% at September 30, 2009. The allowance for loan losses represented 125% of period end non-performing loans at December 31, 2009 and 109% of period end non-performing loans at September 30, 2009.  The allowance for loan loss totaled $9.5 million at year-end 2008 and represented 1.07% of total loans and 114% of non-performing loans at December 31, 2008.

End-of-period deposits increased approximately 3% during both the quarter-ended and year-ended December 31, 2009 compared with the quarter ended September 30, 2009 and year ended December 31, 2008.  The increase was attributable to growth of the Company’s core deposit base throughout its primary market area.

End of Period Deposit Balances
                    
Annualized
  
   
12/31/09
    
09/30/09
    
$ Change
    
% Change
  
                         
Non-interest-bearing Demand Deposits
   $ 155,268     $ 147,704     $ 7,564       20 %
Interest-bearing Demand, Savings,
                                
& Money Market Accounts
     484,699       475,506       9,193       8 %
Time Deposits < $100,000
     256,401       253,082       3,319       5 %
Time Deposits of $100,000 or more
                                
& Brokered Deposits
     73,275       85,046       (11,771 )     -55 %
    $ 969,643     $ 961,338     $ 8,305       3 %

End of Period Deposit Balances
                    
Annual
  
   
12/31/09
    
12/31/08
    
$ Change
    
% Change
  
                         
Non-interest-bearing Demand Deposits
   $ 155,268     $ 147,977     $ 7,291       5 %
Interest-bearing Demand, Savings,
                                
& Money Market Accounts
     484,699       439,305       45,394       10 %
Time Deposits < $100,000
     256,401       250,339       6,062       2 %
Time Deposits of $100,000 or more
                                
& Brokered Deposits
     73,275       104,129       (30,854 )     -30 %
    $ 969,643     $ 941,750     $ 27,893       3 %

 
 
 

GERMAN AMERICAN BANCORP, INC.

NEWS RELEASE

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

5 of 14

Results of Operations Highlights

Year ended December 31, 2009 compared to year ended December 31, 2008

Net income for the year ended December 31, 2009 totaled $12,218,000, a decrease of $585,000 or 5% from the year ended December 31, 2008 net income of $12,803,000.

Summary Average Balance Sheet
(Tax-equivalent basis / $ in Thousands)

   
Year Ended December 31, 2009
    
Year Ended December 31, 2008
  
   
Principal
    
Income/
    
Yield/
    
Principal
    
Income/
    
Yield/
  
   
Balance
    
Expense
    
Rate
    
Balance
    
Expense
    
Rate
  
Assets
                                    
Federal Funds Sold and Other
                                    
Short-term Investments
   $ 41,085     $ 106       0.26 %   $ 35,064     $ 593       1.69 %
Securities
     215,994       10,274       4.76 %     170,771       9,171       5.37 %
Loans and Leases
     891,322       54,166       6.08 %     880,630       58,669       6.66 %
Total Interest Earning Assets
   $ 1,148,401     $ 64,546       5.62 %   $ 1,086,465     $ 68,433       6.30 %
                                                 
Liabilities
                                                
Demand Deposit Accounts
   $ 149,673                     $ 140,962                  
                                                 
Interest-bearing Demand, Savings,
                                                
and Money Market Accounts
   $ 473,214     $ 3,241       0.68 %   $ 422,060     $ 6,846       1.62 %
Time Deposits
     341,041       10,254       3.01 %     359,115       14,366       4.00 %
FHLB Advances and Other
                                                
Borrowings
     143,332       5,728       4.00 %     138,888       5,696       4.10 %
Total Interest-Bearing Liabilities
   $ 957,587     $ 19,223       2.01 %   $ 920,063     $ 26,908       2.92 %
                                                 
Cost of Funds
                     1.67 %                     2.48 %
Net Interest Income
           $ 45,323                     $ 41,525          
Net Interest Margin
                     3.95 %                     3.82 %

During the year ended December 31, 2009, net interest income totaled $44,513,000 representing an increase of $3,576,000 or 9% from the year ended December 31, 2008.  The tax equivalent net interest margin for the year ended 2009 was 3.95% compared to 3.82% in 2008.

The provision for loan loss totaled $3,750,000 during the year ended December 31, 2009, representing a decline of $240,000 or 6% from the year ended December 31, 2008.  During 2009, the provision for loan loss represented approximately 42 basis points of average loans while net charge-offs represented approximately 25 basis points of average loans.

During the year ended December 31, 2009, non-interest income declined approximately 13% from the year ended December 31, 2008.

 
 
 

GERMAN AMERICAN BANCORP, INC.

NEWS RELEASE

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

6 of 14

Non-interest Income
  
Year
    
Year
              
   
Ended
    
Ended
              
   
12/31/09
    
12/31/08
    
$ Change
    
% Change
  
                         
Trust and Investment Product Fees
   $ 1,617     $ 2,288     $ (671 )     -29 %
Service Charges on Deposit Accounts
     4,395       4,920       (525 )     -11 %
Insurance Revenues
     5,296       6,306       (1,010 )     -16 %
Company Owned Life Insurance
     1,104       791       313       40 %
Other Operating Income
     2,110       2,412       (302 )     -13 %
Subtotal
     14,522       16,717       (2,195 )     -13 %
Net Gains on Sales of Loans and
                                
Related Assets
     1,760       1,399       361       26 %
Net Gain (Loss) on Securities
     (423 )     94       (517 )     n/m  
Total Non-interest Income
   $ 15,859     $ 18,210     $ (2,351 )     -13 %

n/m = not meaningful

Trust and investment product fees decreased 29% during the year ended December 31, 2009 compared with the year ended December 31, 2008.  This decline was primarily attributable to continued difficult market conditions and changes in customers’ investment preferences.  Deposit service charges and fees declined by 11% due in large part to less customer utilization of the Company’s overdraft protection program.  Insurance revenues declined 16% during the year ended December 31, 2009 compared with 2008. The decline was largely attributable to a decrease in contingency revenue and lower levels of commercial insurance revenues from the Company’s property and casualty insurance subsidiary.  Company owned life insurance income increased 40% during 2009 compared with 2008 resulting from death benefits received from life insurance policies during 2009.

During 2009, the net gain on sale of residential loans increased 26% from the gain recognized in 2008 driven largely by a higher level of loans sold into the secondary market during 2009 as compared to 2008.  The net loss on securities during 2009 was related to the recognition of other-than-temporary impairment charges on the Company’s portfolio of non-controlling investments in other banking organizations.
 

GERMAN AMERICAN BANCORP, INC.

NEWS RELEASE

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

7 of 14

During the year ended December 31, 2009, non-interest expense increased approximately 10% compared with year ended December 31, 2008.

Non-interest Expense
  
Year
    
Year
              
   
Ended
    
Ended
              
   
12/31/09
    
12/31/08
    
$ Change
    
% Change
  
                         
Salaries and Employee Benefits
   $ 21,961     $ 20,786     $ 1,175       6 %
Occupancy, Furniture and Equipment Expense
     6,035       5,677       358       6 %
FDIC Premiums
     1,863       209       1,654       791 %
Data Processing Fees
     1,368       1,493       (125 )     -8 %
Professional Fees
     1,740       1,670       70       4 %
Advertising and Promotion
     993       1,078       (85 )     -8 %
Intangible Amortization
     909       889       20       2 %
Other Operating Expenses
     5,522       4,914       608       12 %
Total Non-interest Expense
   $ 40,391     $ 36,716     $ 3,675       10 %

Salaries and benefits expense increased approximately 6% during 2009 compared with 2008.  The increase was primarily the result of increased costs associated with the Company’s partially self-insured health insurance plan.  Occupancy, furniture and equipment expense increased 6% during 2009 compared with 2008 due in large part to depreciation expense associated with renovations of existing branch facilities and upgrades to and purchases of information technology systems.

The Company’s FDIC deposit insurance assessments increased 791% during the year-ended December 31, 2009 compared with the same period of 2008.  This increase resulted from an industry-wide increase in quarterly assessments as the FDIC began to recapitalize the deposit insurance fund, in addition to an industry wide special assessment in the second quarter of 2009 of approximately $550,000 which represented 5 basis points of the Company’s subsidiary bank’s total assets less Tier 1 Capital.

Other operating expenses increased by 12% during the year ended December 31, 2009 compared with 2008.  The increase was largely attributable to an increased level of loan collection costs during 2009 and to amortization expense related to a new markets tax credit project in which the Company invested in the fourth quarter of 2009.

 
 
 

GERMAN AMERICAN BANCORP, INC.

NEWS RELEASE

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

8 of 14

Quarter ended December 31, 2009 compared to quarter ended September 30, 2009

Net income for the quarter ended December 31, 2009 totaled $3,321,000, an increase of $130,000 or 4% from third quarter 2009 net income of $3,191,000.

Summary Average Balance Sheet
(Tax-equivalent basis / $ in Thousands)

   
Quarter Ended December 31, 2009
    
Quarter Ended September 30, 2009
  
   
Principal
    
Income/
    
Yield/
    
Principal
    
Income/
    
Yield/
  
   
Balance
    
Expense
    
Rate
    
Balance
    
Expense
    
Rate
  
Assets
                                    
Federal Funds Sold and Other Short-term Investments
   $ 74,452     $ 42       0.22 %   $ 36,627     $ 25       0.27 %
Securities
     230,417       2,557       4.44 %     216,013       2,570       4.76 %
Loans and Leases
     890,740       13,414       5.98 %     903,917       13,773       6.05 %
Total Interest Earning Assets
   $ 1,195,609     $ 16,013       5.32 %   $ 1,156,557     $ 16,368       5.63 %
                                                 
Liabilities
                                                
Demand Deposit Accounts
   $ 156,644                     $ 147,437                  
                                                 
Interest-bearing Demand, Savings, and Money Market Accounts
   $ 507,124     $ 736       0.58 %   $ 481,052     $ 822       0.68 %
Time Deposits
     337,294       2,290       2.69 %     336,251       2,307       2.72 %
FHLB Advances and Other Borrowings
     151,602       1,497       3.92 %     149,602       1,549       4.11 %
Total Interest-Bearing Liabilities
   $ 996,020     $ 4,523       1.80 %   $ 966,905     $ 4,678       1.92 %
                                                 
Cost of Funds
                     1.50 %                     1.61 %
Net Interest Income
           $ 11,490                     $ 11,690          
Net Interest Margin
                     3.82 %                     4.02 %

During the quarter ended December 31, 2009, net interest income totaled $11,274,000 representing a decrease of $207,000 or 2% compared with the third quarter of 2009.  The tax equivalent net interest margin for the fourth quarter 2009 was 3.82% compared with 4.02% in the third quarter of 2009.  The decline in net interest income and net interest margin was attributable to lower outstanding loan balances and increased levels of core deposits that during much of the fourth quarter 2009 had not been fully invested into the Company’s securities portfolio.

 
 
 

GERMAN AMERICAN BANCORP, INC.

NEWS RELEASE

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

9 of 14

The provision for loan loss totaled $750,000 during the quarter ended December 31, 2009, representing a decline of $500,000 or 40% from the third quarter of 2009.  During the fourth quarter of 2009, the annualized provision for loan loss represented approximately 34 basis points of average loans while net charge-offs represented approximately 23 basis points of average loans.

During the quarter ended fourth quarter of 2009, non-interest income decreased approximately 8% from the third quarter of 2009.

Non-interest Income
  
Qtr Ended
    
Qtr Ended
              
   
12/31/09
    
09/30/09
    
$ Change
    
% Change
  
                         
Trust and Investment Product Fees
   $ 305     $ 465     $ (160 )     -34 %
Service Charges on Deposit Accounts
     1,124       1,131       (7 )     -1 %
Insurance Revenues
     1,265       1,254       11       1 %
Company Owned Life Insurance
     466       200       266       133 %
Other Operating Income
     643       595       48       8 %
Subtotal
     3,803       3,645       158       4 %
Net Gains on Sales of Loans and
                                
Related Assets
     323       411       (88 )     -21 %
Net Gain (Loss) on Securities
     (389 )     —       (389 )     — %
Total Non-interest Income
   $ 3,737     $ 4,056     $ (319 )     -8 %

Trust and investment product fees decreased 34% during the quarter ended December 31, 2009 compared with the third quarter of 2009.  This decline was primarily attributable to continued difficult market conditions and internal reorganizations including a change in the Company’s broker/dealer relationship for retail investment products.  Company owned life insurance income increased 133% during fourth quarter of 2009 compared with the third quarter of 2009 resulting from death benefits received from life insurance policies during the quarter ended December 31, 2009.  The net loss on securities during the fourth quarter of 2009 was the result of the recognition of other-than-temporary impairment charges on the Company’s portfolio of non-controlling investments in other banking organizations.

 
 
 

GERMAN AMERICAN BANCORP, INC.

NEWS RELEASE

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

10 of 14

During the quarter ended December 31, 2009, non-interest expense increased approximately 2% compared with the third quarter of 2009.

 
Qtr Ended
    
Qtr Ended
              
   
12/31/09
    
09/30/09
    
$ Change
    
% Change
  
                         
Salaries and Employee Benefits
   $ 5,405     $ 5,427     $ (22 )     — %
Occupancy, Furniture and Equipment Expense
     1,504       1,532       (28 )     -2 %
FDIC Premiums
     313       330       (17 )     -5 %
Data Processing Fees
     346       321       25       8 %
Professional Fees
     443       285       158       55 %
Advertising and Promotion
     240       266       (26 )     -10 %
Intangible Amortization
     232       235       (3 )     -1 %
    1,675       1,523       152       10 %
Total Non-interest Expense
   $ 10,158     $ 9,919     $ 239       2 %

Salaries and benefits expense remained stable during the fourth quarter of 2009 compared with the third quarter of 2009.  Professional fees increased 55% during the quarter ended December 31, 2009 compared with the third quarter of 2009.  This increase was primarily attributable to an increased level of legal fees.

Other operating expenses increased by 10% during the fourth quarter of 2009 compared with the third quarter of 2009.  The increase was largely attributable to an increased level of loan collection costs during the fourth quarter 2009 and to amortization expense related to a new markets tax credit project in which the Company invested in the fourth quarter of 2009.  The increase was partially mitigated by reduced loss claims activity at the Company’s captive insurance company.

 
 
 

GERMAN AMERICAN BANCORP, INC.

NEWS RELEASE

For additional information, contact:
Mark A Schroeder, Chief Executive Officer of German American Bancorp, Inc.
Bradley M Rust, Executive Vice President/CFO of German American Bancorp, Inc.
(812) 482-1314
 
11 of 14

Forward Looking Statements

The Company's statement in this press release regarding the Company’s expectations concerning achieving its goal of superior top quartile financial performance when compared to peer Midwestern banking companies" is a "forward-looking statement” 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 that could cause actual experience to differ from the expectations implied in this press release 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; continued deterioration in general economic conditions, either nationally or locally, resulting in, among other things, credit quality deterioration and dampened loan demand; actions of the Federal Reserve Board; changes in accounting principles and interpretations; and actions of the Department of the Treasury and the Federal Deposit Insurance Corporation under the Emergency Economic Stabilization Act of 2008 and the Federal Deposit Insurance Act and other 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, Chief Executive Officer of German American Bancorp, Inc.
Bradley M Rust, Executive Vice President/CFO of German American Bancorp, Inc.
(812) 482-1314
 
12 of 14

GERMAN AMERICAN BANCORP, INC.
(unaudited, dollars in thousands except per share data)

Consolidated Balance Sheets

   
December 31,
    
September 30,
    
December 31,
  
   
2009
    
2009
    
2008
  
                   
ASSETS
                  
     Cash and Due from Banks
   $ 16,052     $ 19,137     $ 17,201  
     Short-term Investments
     12,002       40,813       27,791  
     Investment Securities
     253,714       206,502       179,166  
                         
     Loans Held-for-Sale
     5,706       8,105       3,166  
                         
     Loans, Net of Unearned Income
     877,822       887,449       890,436  
     Allowance for Loan Losses
     (11,016 )     (10,788 )     (9,522 )
        Net Loans
     866,806       876,661       880,914  
                         
     Stock in FHLB and Other Restricted Stock
     10,621       10,621       10,621  
     Premises and Equipment
     22,153       22,237       22,330  
     Goodwill and Other Intangible Assets
     12,273       12,505       12,796  
     Other Assets
     43,638       37,234       36,843  
     TOTAL ASSETS
   $ 1,242,965     $ 1,233,815     $ 1,190,828  
                         
LIABILITIES
                        
     Non-interest-bearing Demand Deposits
   $ 155,268     $ 147,704     $ 147,977  
     Interest-bearing Demand, Savings, and
                        
         Money Market Accounts
     484,699       475,506       439,305  
     Time Deposits
     329,676       338,128       354,468  
        Total Deposits
     969,643       961,338       941,750  
                         
     Borrowings
     148,121       147,199       131,664  
     Other Liabilities
     11,652       12,888       12,240  
    TOTAL LIABILITIES
     1,129,416       1,121,425       1,085,654  
                         
SHAREHOLDERS' EQUITY
                        
     Common Stock and Surplus
     79,893       79,764       79,401  
     Retained Earnings
     29,041       27,272       23,019  
     Accumulated Other Comprehensive Income
     4,615       5,354       2,754  
TOTAL SHAREHOLDERS' EQUITY
     113,549       112,390       105,174  
                         
TOTAL LIABILITIES AND
                        
  SHAREHOLDERS' EQUITY
   $ 1,242,965     $ 1,233,815     $ 1,190,828  
                         
END OF PERIOD SHARES OUTSTANDING
     11,077,382       11,077,382       11,030,288  
                         
BOOK VALUE PER SHARE
   $ 10.25     $ 10.15     $ 9.54  

 
 
 

GERMAN AMERICAN BANCORP, INC.

NEWS RELEASE

For additional information, contact:
Mark A Schroeder, Chief Executive Officer of German American Bancorp, Inc.
Bradley M Rust, Executive Vice President/CFO of German American Bancorp, Inc.
(812) 482-1314
 
  
13 of 14
 
GERMAN AMERICAN BANCORP, INC.
(unaudited, dollars in thousands except per share data)

Consolidated Statements of Income

   
Three Months Ended
    
Year Ended
  
   
December 31,
    
September 30,
    
December 31,
    
December 31,
    
December 31,
  
   
2009
    
2009
    
2008
    
2009
    
2008
  
                               
INTEREST INCOME
                              
Interest and Fees on Loans
   $ 13,332     $ 13,706     $ 14,178     $ 53,905     $ 58,477  
Interest on Short-term Investments
     42       25       27       106       593  
Interest and Dividends on Investment Securities
     2,423       2,428       2,308       9,725       8,775  
TOTAL INTEREST INCOME
     15,797       16,159       16,513       63,736       67,845  
                                         
INTEREST EXPENSE
                                        
Interest on Deposits
     3,026       3,129       4,808       13,495       21,212  
Interest on Borrowings
     1,497       1,549       1,398       5,728       5,696  
TOTAL INTEREST EXPENSE
     4,523       4,678       6,206       19,223       26,908  
                                         
NET INTEREST INCOME
     11,274       11,481       10,307       44,513       40,937  
Provision for Loan Losses
     750       1,250       874       3,750       3,990  
NET INTEREST INCOME AFTER
                                        
PROVISION FOR LOAN LOSSES
     10,524       10,231       9,433       40,763       36,947  
                                         
NON-INTEREST INCOME
                                        
Net Gain on Sales of Loans and Related Assets
     323       411       341       1,760       1,399  
Net Gain (Loss) on Securities
     (389 )     -       (85 )     (423 )     94  
Other Non-interest Income
     3,803       3,645       4,105       14,522       16,717  
TOTAL NON-INTEREST INCOME
     3,737       4,056       4,361       15,859       18,210  
                                         
NON-INTEREST EXPENSE
                                        
Salaries and Benefits
     5,405       5,427       5,116       21,961       20,786  
Other Non-interest Expenses
     4,753       4,492       4,108       18,430       15,930  
TOTAL NON-INTEREST EXPENSE
     10,158       9,919       9,224       40,391       36,716  
                                         
Income before Income Taxes
     4,103       4,368       4,570       16,231       18,441  
Income Tax Expense
     782       1,177       1,217       4,013       5,638  
                                         
NET INCOME
   $ 3,321     $ 3,191     $ 3,353     $ 12,218     $ 12,803  
                                         
EARNINGS PER SHARE & DILUTED EARNINGS PER SHARE
   $ 0.30     $ 0.29     $ 0.30     $ 1.10     $ 1.16  
                                         
WEIGHTED AVERAGE SHARES OUTSTANDING
     11,077,382       11,075,709       11,029,624       11,065,917       11,029,519  
                                         
DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING
     11,085,472       11,084,768       11,030,243       11,068,988       11,029,911  

 
 
 

GERMAN AMERICAN BANCORP, INC.

NEWS RELEASE

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

14 of 14
 
(unaudited, dollars in thousands except per share data)

   
Three Months Ended
    
Year Ended
  
   
December 31,
    
September 30,
    
December 31,
    
December 31,
    
December 31,
  
   
2009
    
2009
    
2008
    
2009
    
2008
  
EARNINGS PERFORMANCE RATIOS
                              
Annualized Return on Average Assets
     1.04 %     1.03 %     1.12 %     0.99 %     1.09 %
Annualized Return on Average Equity
     11.69 %     11.59 %     13.15 %     11.12 %     12.84 %
Net Interest Margin
     3.82 %     4.02 %     3.76 %     3.95 %     3.82 %
Efficiency Ratio (1)
     66.71 %     63.00 %     62.13 %     66.02 %     61.46 %
Net Overhead Expense to Average Earning Assets (2)
     2.15 %     2.03 %     1.75 %     2.14 %     1.70 %
                                         
ASSET QUALITY RATIOS
                                        
Annualized Net Charge-offs to Average Loans
     0.23 %     0.33 %     0.32 %     0.25 %     0.29 %
Allowance for Loan Losses to Period End Loans
     1.25 %     1.22 %     1.07 %                
Non-performing Assets to Period End Assets
     0.90 %     1.03 %     0.85 %                
Non-performing Loans to Period End Loans
     1.00 %     1.12 %     0.94 %                
Loans 30-89 Days Past Due to Period End Loans
     0.64 %     0.81 %     0.91 %                
                                         
                                         
SELECTED BALANCE SHEET & OTHER FINANCIAL DATA
                                        
Average Assets
   $ 1,279,199     $ 1,238,386     $ 1,201,263     $ 1,230,596     $ 1,174,583  
Average Earning Assets
   $ 1,195,609     $ 1,156,557     $ 1,113,173     $ 1,148,401     $ 1,086,465  
Average Total Loans
   $ 890,740     $ 903,917     $ 892,435     $ 891,322     $ 880,630  
Average Demand Deposits
   $ 156,644     $ 147,437     $ 149,137     $ 149,673     $ 140,962  
Average Interest Bearing Liabilities
   $ 996,020     $ 966,905     $ 937,170     $ 957,587     $ 920,063  
Average Equity
   $ 113,640     $ 110,151     $ 101,973     $ 109,887     $ 99,711  
                                         
Period End Non-performing Assets (3)
   $ 11,156     $ 12,676     $ 10,168                  
Period End Non-performing Loans (4)
   $ 8,793     $ 9,928     $ 8,350                  
Period End Loans 30-89 Days Past Due (5)
   $ 5,625     $ 7,152     $ 8,061                  
                                         
Tax Equivalent Net Interest Income
   $ 11,490     $ 11,690     $ 10,486     $ 45,323     $ 41,525  
Net Charge-offs during Period
   $ 522     $ 757     $ 710     $ 2,256     $ 2,512  

(1)
Efficiency Ratio is defined as Non-interest Expense divided by the sum of Net Interest Income, on a tax equivalent basis, and Non-interest Income.
(2)
Net Overhead Expense is defined as Total Non-interest Expense less Total Non-interest Income.
(3)
Non-performing assets are defined as Non-accrual Loans, Loans Past Due 90 days or more, Restructured Loans, and Other Real Estate Owned.
(4)
Non-performing loans are defined as Non-accrual Loans, Loans Past Due 90 days or more, and Restructured Loans.
(5)
Loans 30-89 days past due and still accruing.