0001415889-11-000722.txt : 20110801 0001415889-11-000722.hdr.sgml : 20110801 20110801153329 ACCESSION NUMBER: 0001415889-11-000722 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20110726 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Other Events ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20110801 DATE AS OF CHANGE: 20110801 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GERMAN AMERICAN BANCORP, INC. CENTRAL INDEX KEY: 0000714395 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 351547518 STATE OF INCORPORATION: IN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-15877 FILM NUMBER: 111000464 BUSINESS ADDRESS: STREET 1: 711 MAIN ST STREET 2: P O BOX 810 CITY: JASPER STATE: IN ZIP: 47546 BUSINESS PHONE: 8124821314 MAIL ADDRESS: STREET 1: 711 MAIN STREET CITY: JASPER STATE: IN ZIP: 47546 FORMER COMPANY: FORMER CONFORMED NAME: GERMAN AMERICAN BANCORP DATE OF NAME CHANGE: 19950510 FORMER COMPANY: FORMER CONFORMED NAME: GAB BANCORP DATE OF NAME CHANGE: 19950510 8-K 1 form8k-08012011_120816.htm



SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004


FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

July 26, 2011
Date of Report (Date of earliest event reported)

GERMAN AMERICAN BANCORP, INC.
(Exact name of registrant as specified in its charter)


Indiana
(State or other jurisdiction of incorporation)

001-15877
(Commission File Number)

35-1547518
(IRS Employer Identification Number)


711 Main Street
Box 810
Jasper, Indiana
(Address of principal executive offices)

47546
(Zip Code)


Registrant's telephone number, including area code:  (812) 482-1314


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):


[  ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)


[  ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)


[  ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))


[  ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))










Item 2.02.  Results of Operations and Financial Condition.


On July 26, 2011, German American Bancorp, Inc. (the "Company" or "German American"), issued a press release announcing its results for the quarter and six-month periods ended June 30, 2011, and making other disclosures. The press release (including the accompanying unaudited consolidated financial statements as of and for the quarter and six-month periods ended June 30, 2011, and other financial data) is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.


The information incorporated by reference herein from Exhibit 99.1 shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.


Item 8.01.  Other Events.


As announced in the press release that is furnished as Exhibit 99.1 to this report, the Company's Board of Directors has declared a cash dividend of $0.14 per share which will be payable on August 20, 2011 to shareholders of record as of August 10, 2011.


Item 9.01. Financial Statements, Pro Forma Financial Information and Exhibits.


Exhibits


99.1

Press release dated July 26, 2011.  This exhibit shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.









SIGNATURE

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 hereunto duly authorized.


 

GERMAN AMERICAN BANCORP, INC.



By: /s/ Mark A. Schroeder

Mark A. Schroeder, Chairman of the Board and Chief Executive Officer

 

 


Dated:  July 28, 2011









EXHIBIT INDEX


99.1

Press release dated July 26, 2011.  This exhibit shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.







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
 
July 26, 2011
GERMAN AMERICAN BANCORP, INC. (GABC)
 
 
POSTS RECORD SECOND QUARTER & YEAR-TO-DATE EARNINGS
 
Jasper, Indiana –July 26, 2011 -- German American Bancorp, Inc. (NASDAQ: GABC) reported today that its second quarter and year-to-date 2011 earnings achieved a record level of performance for the Company.  The Company’s second quarter net income of $4,864,000, or $0.39 per share, exceeded by 5%, on a per share basis, the $4,645,000, or $0.37 per share, recorded in the first quarter of this year, and was approximately 26% higher, on a per share basis, than the $3,408,000, or $0.31 per share that the Company earned in the second quarter of 2010.

On a year-to-date basis, 2011 record reported six-month earnings were $9,509,000, or $0.76 per share, an increase, on a per share basis, of 27% over the $6,659,000, or $0.60 per share, reported in the first six months of 2010.  Both the second quarter and year-to-date 2011 earnings results were inclusive of the acquisition of American Community Bancorp, Inc., and its banking subsidiary, the Bank of Evansville, that occurred as of January 1st of this year.

As compared to the reported results of the first quarter of this year, the Company’s second quarter earnings were positively influenced by a $1.2 million increased level of net interest income.  The current quarter’s net interest income improvement was largely the result of the continued strong growth within the Company’s core deposit base and the deployment of available funds into the Company’s investment securities portfolio.

Other positive contributors to the Company’s record level of performance included a $1.6 million reduction in the level of non-interest expenses in the current quarter as compared to the prior quarter.   Somewhat offsetting this enhanced level of net interest income and reduced operating expenses, the Company’s total non-interest income decreased by approximately $1.6 million during the quarter.  Much of variation in non-interest income and non-interest expenses was attributable to recording of non-recurring revenue and expenses during the first quarter of this year in connection with the acquisition of American Community Bancorp, Inc., and its banking subsidiary, Bank of Evansville.

Mark A. Schroeder, Chairman & CEO of German American, commenting on the Company’s posting of record quarterly and year-to-date financial performance stated, “We are extremely gratified that our business continues to grow and expand throughout our southern Indiana footprint. More and more families, businesses, municipalities, and not-for-profit entities are turning to German American as a source of strength and as a trusted advisor for all their financial needs within banking, insurance, investments, and trust.”

Schroeder, continued, “We are extremely thankful to all of our clients for their willingness to allow us the privilege of serving them.  It is because of their continued support of German American’s unwavering commitment to our local communities and their appreciation of our steadfast adherence to solid banking and management principles that we have been able to consistently deliver superior financial performance, and to do so once again with this quarter’s record earnings.”

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 August 20, 2011 to shareholders of record as of August 10, 2011.
 
Balance Sheet Highlights

Total assets for the Company increased by approximately $56.0 million to $1.818 billion as of June 30, 2011 compared with the quarter ended March 31, 2011.  The increase was attributable primarily to an increase in the Company’s core deposit base and corresponding increased levels of loans and securities and other short-term investments.

June 30, 2011 loans outstanding increased approximately $10.9 million, or approximately 4% on an annualized basis, compared with the quarter ended March 31, 2011.

 
 
 

End of Period Loan Balances
  
06/30/11
  
03/31/11
  
$ Change
             
Commercial & Industrial Loans
  
 $              293,439
  
 $               282,681
  
 $                  10,758
Commercial Real Estate Loans
  
                  440,704
  
                   444,531
  
                      (3,827)
Agricultural Loans
  
                   152,229
  
                    145,136
  
                        7,093
Consumer Loans
  
                   128,275
  
                   127,880
  
                             395
Residential Mortgage Loans
  
                     93,975
  
                     97,479
  
                      (3,504)
   
 $            1,108,622
  
 $           1,097,707
  
 $                   10,915
 
Non-performing assets totaled $19.9 million at June 30, 2011 compared to $22.4 million of non-performing assets at March 31, 2011.  Non-performing assets represented 1.09% of total assets at June 30, 2011 compared to 1.27% at March 31, 2011.  Non-performing loans totaled $17.6 million at June 30, 2011 compared to $18.9 million of non-performing loans at March 31, 2011.  Non-performing loans represented 1.59% of total outstanding loans at June 30, 2011 compared with 1.73% of total loans outstanding at March 31, 2011.
 
 
The Company’s allowance for loan losses totaled $14.8 million at June 30, 2011 representing an increase of $607,000 or 17% on an annualized basis from March 31, 2011.  The allowance for loan losses represented 1.34% of period-end loans at June 30, 2011 compared with 1.29% at March 31, 2011.  Under acquisition accounting treatment, loans are recorded at fair value which includes a credit risk component, and therefore the allowance on loans acquired is not carried over from the seller.  As of June 30, 2011 the Company held a discount on acquired loans of $7.6 million which includes loans acquired in the American Community acquisition and loans acquired in a branch acquisition completed in the second quarter of 2010.

June 30, 2011 deposits increased $36.3 million to $1.521 billion, or approximately 10% on an annualized basis, compared with March 31, 2011 total deposits.
 
End of Period Deposit Balances
  
06/30/11
  
03/31/11
  
$ Change
             
Non-interest-bearing Demand Deposits
  
 $           248,979
  
 $           242,159
  
 $               6,820
IB Demand, Savings, and MMDA Accounts
  
              876,949
  
              849,163
  
                27,786
Time Deposits < $100,000
  
              285,691
  
              291,765
  
                 (6,074)
Time Deposits > $100,000 and Brokered Deposits
  
              109,630
  
              101,859
  
                   7,771
   
 $       1,521,249
  
 $       1,484,946
  
 $             36,303
 
Results of Operations Highlights

Net income for the quarter ended June 30, 2011 totaled $4,864,000 or $0.39 per share, an increase of $219,000 from the first quarter 2011 net income of $4,645,000 or $0.37 per share and an increase of $1,456,000 from the second quarter 2010 net income of $3,408,000 or $0.31 per share.  The results of operations in both the quarter ended June 30, 2011 and March 31, 2011 were inclusive of the operations of American Community Bancorp, Inc. and its banking subsidiary the Bank of Evansville, which was acquired effective January 1, 2011.
 
 
 
 

Summary Average Balance Sheet
                
(Tax-equivalent basis / $ in thousands)
                
     
 Quarter Ended June 30, 2011
    
                 
     
 Principal Balance
    
 Income/ Expense
  
 Yield/Rate
Assets
                
Federal Funds Sold and Other
Short-term Investments
  $
                        86,689
   $
                                   66
  
0.30%
Securities
    
                            487,038
    
                                  4,236
  
3.48%
Loans and Leases
    
                       1,107,014
    
                               16,506
  
5.98%
Total Interest Earning Assets
   $
                  1,680,741
   $
                        20,808
  
4.96%
                 
Liabilities
                
Demand Deposit Accounts
   $
                       248,055
          
IB Demand, Savings, and
MMDA Accounts
   $
                        881,955
   $
                            1,239
  
0.56%
Time Deposits
    
                            391,181
    
                                  2,009
  
2.06%
FHLB Advances and
Other Borrowings
    
                            114,290
    
                                  1,009
  
3.54%
Total Interest-Bearing Liabilities
   $
                   1,387,426
   $
                            4,257
  
1.23%
                 
Cost of Funds
              
1.01%
Net Interest Income
         $
                        16,551
    
Net Interest Margin
              
3.95%
                 
Summary Average Balance Sheet
                
(Tax-equivalent basis / $ in thousands)
                
     
 Quarter Ended March 31, 2011
                 
     
 Principal Balance
    
 Income/ Expense
  
 Yield/Rate
Assets
                
Federal Funds Sold and Other
Short-term Investments
   $
                       110,226
   $
                                 65
  
0.24%
Securities
    
                            395,355
    
                                  3,412
  
3.45%
Loans and Leases
    
                       1,114,310
    
                               16,303
  
5.92%
Total Interest Earning Assets
    $
                 1,619,891
   $
                         19,780
  
4.93%
                 
Liabilities
                
Demand Deposit Accounts
   $
                        243,622
          
IB Demand, Savings, and
MMDA Accounts
   $
                       804,944
   $
                             1,266
  
0.64%
Time Deposits
    
                            400,483
    
                                  2,127
  
2.16%
FHLB Advances and
Other Borrowings
    
                            130,977
    
                                  1,019
  
3.16%
Total Interest-Bearing Liabilities
   $
                   1,336,404
   $
                           4,412
  
1.34%
                 
Cost of Funds
              
1.10%
Net Interest Income
         $
                       15,368
    
Net Interest Margin
              
3.83%

 
 
 
 
Summary Average Balance Sheet
                
(Tax-equivalent basis / $ in thousands)
                
     
 Quarter Ended June 30, 2010
    
                 
     
 Principal Balance
    
 Income/ Expense
  
 Yield/Rate
Assets
                
Federal Funds Sold and Other
Short-term Investments
  $
                          52,008
   $
                                     27
  
0.21%
Securities
    
                            274,969
    
                                  2,852
  
4.15%
Loans and Leases
    
                            901,856
    
                               13,264
  
5.90%
Total Interest Earning Assets
   $
                  1,228,833
   $
                           16,143
  
5.27%
                 
Liabilities
                
Demand Deposit Accounts
   $
                       163,227
          
IB Demand, Savings, and
MMDA Accounts
   $
                     512,680
   $
                                  461
  
0.36%
Time Deposits
    
                            353,577
    
                                  2,225
  
2.52%
FHLB Advances and
Other Borrowings
    
                            154,884
    
                                  1,340
  
3.47%
Total Interest-Bearing Liabilities
   $
                   1,021,141
   $
                            4,026
  
1.58%
                 
Cost of Funds
              
1.32%
Net Interest Income
         $
                         12,117
    
Net Interest Margin
              
3.95%
 
During the quarter ended June 30, 2011, net interest income totaled $16,264,000 representing an increase of $1,157,000 from the quarter ended March 31, 2011 net interest income of $15,107,000 and an increase of $4,349,000 compared with the quarter ended June 30, 2010 net interest income of $11,915,000.  The tax equivalent net interest margin for the quarter ended June 30, 2011 was 3.95% compared to 3.83% in the first quarter 2011 and 3.95% in the second quarter 2010.  The increased net interest income during the second quarter of 2011 compared with the first quarter of 2011 was largely the result of a higher level of earning assets driven by growth in the Company’s core deposit base and subsequent investment into the securities portfolio.  The increased net interest income during the second quarter of 2011 compared with the second quarter of 2010 was also driven by a higher level of earning assets driven by both organic core deposit growth and the acquisition of American Community.

During the quarter ended June 30, 2011, non-interest income totaled $4,362,000, a decline of $1,652,000 or 27%, compared with the quarter ended March 31, 2011, and an increase of $571,000, or 15%, compared with the second quarter of 2010.

   
Qtr. Ended
  
Qtr. Ended
  
Qtr. Ended
Non-interest Income
  
06/30/11
  
03/31/11
  
06/30/10
             
Trust and Investment Product Fees
  
 $                         495
  
 $                         464
  
 $                         395
Service Charges on
Deposit Accounts
  
                         1,074
  
                              941
  
                         1,075
Insurance Revenues
  
                         1,290
  
                        2,049
  
                         1,083
Company Owned Life Insurance
  
                             250
  
                             353
  
                              186
Interchange Fee Income
  
                             378
  
                             353
  
                             292
Other Operating Income
  
                             496
  
                             400
  
                              261
     Subtotal
  
                        3,983
  
                        4,560
  
                        3,292
Net Gains on Sales of Loans
  
                             379
  
                             409
  
                             499
Net Gain (Loss) on Securities
  
                                 -
  
                         1,045
  
                                 -
Total Non-interest Income
  
 $                    4,362
  
 $                     6,014
  
 $                     3,791
 
 
 
 
 
Deposit service charges and fees improved by $133,000 or 14% during the quarter ended June 30, 2011 compared with the first quarter of 2011 and remained relatively flat compared with the second quarter of 2010.  Deposit service charges and fees were positively impacted by increased customer utilization of the Company’s overdraft protection plan driven by the increased customer base related to the acquisition of the Bank of Evansville.

Insurance revenues declined 37% during the quarter ended June 30, 2011 compared with the three months ended March 31, 2011 while insurance revenues increased 19% during the second quarter 2011 compared with the second quarter of 2010.  The decline for the second quarter 2011 compared to the first quarter 2011 was largely attributable to annual contingency revenue recognized in the quarter ended March 31, 2011. Contingency revenue totaled $88,000 in the quarter ended June 30, 2011 compared with $784,000 in the first quarter of 2011 and $32,000 in the quarter ended June 30, 2010.

Other operating income increased $96,000 or 24% during the quarter ended June 30, 2011 compared with the first quarter of 2011 and increased $235,000 or 90% compared with the second quarter of 2010.  The increase in the second quarter 2011 compared to both quarterly periods was related to a net gain on sale of other real estate during the second quarter of 2011 compared with a net loss on the sale of other real estate in both the quarter ended March 31, 2011 and June 30, 2010.

The Company realized a net gain on securities of $1,045,000 during the first quarter of 2011 related to the acquisition accounting treatment of the existing equity ownership position the Company held in American Community at the time of acquisition.  No gains or losses on securities were realized in the second quarter of 2011 or 2010.

During the quarter ended June 30, 2011, non-interest expense totaled $12,271,000, a decline of $1,599,000, or 12%, compared with the quarter ended March 31, 2011, and an increase of $2,369,000, or 24%, compared with the second quarter of 2010.  During the second quarter of 2011, acquisition accounting items related to the acquisition of American Community totaled $616,000, including $286,000 of non-recurring expense items.  During the first quarter of 2011, acquisition accounting items related to the acquisition of American Community totaled $1,604,000, including approximately $1,257,000 of non-recurring expense items.

   
Qtr. Ended
  
Qtr. Ended
  
Qtr. Ended
Non-interest Expense
  
06/30/11
  
03/31/11
  
06/30/10
             
Salaries and Employee Benefits
  
 $                    6,722
  
 $                     7,401
  
 $                    5,288
Occupancy, Furniture and
Equipment Expense
  
                          1,841
  
                         1,855
  
                         1,435
FDIC Premiums
  
                             382
  
                              514
  
                             336
Data Processing Fees
  
                             395
  
                          1,105
  
                             365
Professional Fees
  
                             499
  
                             605
  
                             524
Advertising and Promotion
  
                              314
  
                             303
  
                             273
Intangible Amortization
  
                             498
  
                              517
  
                             247
Other Operating Expenses
  
                         1,620
  
                         1,570
  
                         1,434
Total Non-interest Expense
  
 $                   12,271
  
 $                  13,870
  
 $                    9,902
 
Salaries and benefits declined $679,000, or approximately 9% during the quarter ended June 30, 2011, compared with the first quarter of 2011 and increased $1,434,000, or approximately 27% compared with the second quarter of 2010.  The decline during the second quarter of 2011 compared with the first quarter of 2011 was primarily in connection with one-time costs associated with the American Community acquisition during the first quarter of 2011.  The increase during the quarter ended June 30, 2011, compared with the second quarter of 2010 was primarily attributable to an increased staff size related to the acquisition of American Community.

The increase in occupancy, furniture and equipment expense during the second quarter compared with the second quarter 2010 was also primarily related to the acquisition and the costs associated with three additional branch locations.  The Company’s FDIC deposit insurance assessments decreased 26% in the second quarter of 2011 compared with the first quarter of 2011 and increased 14% compared with the second quarter of 2010.  The decrease during second quarter of 2011 compared with the first quarter of 2011 was attributable to changes in the deposit insurance assessment calculation which became effective in the second quarter 2011 related to the Dodd Frank Act.  The increase during the second quarter 2011 compared with the second quarter 2010 was largely related to the increase in the size of the Company deposit base and corresponding increase in the size of the Company’s balance sheet resulting from the acquisition of American Community and to a lesser degree an increased level of deposits resulting from core organic deposit growth unrelated to the acquisition.
 
 
 
 
 
Data processing fees declined $710,000 or 64% during the second quarter 2011 compared with the quarter ended March 31, 2011.  The decrease was largely related to running the Company’s existing core processing system and the Bank of Evansville’s core processing system during the first quarter of 2011 and other merger related costs associated with the acquisition of American Community.  The customers of the Bank of Evansville were moved to the Company’s core processing system during April 2011.

Intangible amortization increased $251,000 or 102% during the second quarter of 2011 compared with the second quarter of 2010.  The increase was primarily related to amortization of core deposit intangible resulting from the acquisition of American Community.

About German American

German American Bancorp, Inc., is a NASDAQ-traded (symbol: GABC) financial services holding company based in Jasper, Indiana.  German American, through its banking subsidiary German American Bancorp, operates 33 retail banking offices in 12 contiguous southern Indiana counties. The Company also owns a trust, brokerage, and financial planning subsidiary (German American Financial Advisors & Trust Company) and a full line property and casualty insurance agency (German American Insurance, Inc.).

Cautionary Note Regarding Forward-Looking Statements

The Company’s statements in this press release regarding the continuing growth and expansion of the Company’s business and the consistency of its financial performance could be deemed to be “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 that could cause actual experience to differ from the expectations implied in this press release include the unknown future direction of interest rates and the timing and magnitude of any changes in interest rates; changes in competitive conditions; the introduction, withdrawal, success and timing of asset/liability management strategies or of mergers and acquisitions and other business initiatives and strategies; changes in customer borrowing, repayment, investment and deposit practices; changes in fiscal, monetary and tax policies; changes in financial and capital markets; deterioration in general economic conditions, either nationally or locally, resulting in, among other things, credit quality deterioration; capital management activities, including possible future sales of new securities, or possible repurchases or redemptions by the Company of outstanding debt or equity securities; risks of expansion through acquisitions and mergers, such as unexpected credit quality problems of the acquired loans or other assets, unexpected attrition of the customer base of the acquired institution or branches, and difficulties in integration of the acquired operations; factors driving impairment charges on investments; the impact, extent and timing of technological changes; litigation liabilities, including related costs, expenses, settlements and judgments, or the outcome of matters before regulatory agencies, whether pending or commencing in the future; actions of the Federal Reserve Board; changes in accounting principles and interpretations; potential increases of federal deposit insurance premium expense, and possible future special assessments of FDIC premiums, either industry wide or specific to the Company’s banking subsidiary; actions of the regulatory authorities under the Dodd-Frank Act and the Federal Deposit Insurance Act and other possible 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.  Such statements reflect our views with respect to future events and are subject to these and other risks, uncertainties and assumptions relating to the operations, results of operations, growth strategy and liquidity of the Company.  Readers are cautioned not to place undue reliance on these forward-looking statements.  It is intended that these forward-looking statements speak only as of the date they are made.  We do not undertake any obligation to release publicly any revisions to these forward-looking statements to reflect future events or circumstances or to reflect the occurrence of unanticipated events.
 
 
 
 
 
GERMAN AMERICAN BANCORP, INC.
  
(unaudited, dollars in thousands except per share data)
  
                   
Consolidated Balance Sheets
  
                   
                   
   
June 30,
    
March 31,
    
June 30,
  
   
2011
    
2011
    
2010
  
                   
ASSETS
                  
     Cash and Due from Banks
   $ 28,105     $ 25,606     $ 17,110  
     Short-term Investments
     79,668       48,665       19,399  
     Interest-bearing Time Deposits with Banks
     8,360       10,372       -  
     Investment Securities
     486,830       472,449       300,441  
                         
     Loans Held-for-Sale
     6,097       2,862       10,768  
                         
     Loans, Net of Unearned Income
     1,106,747       1,096,123       912,938  
     Allowance for Loan Losses
     (14,780 )     (14,173 )     (10,813 )
        Net Loans
     1,091,967       1,081,950       902,125  
                         
     Stock in FHLB and Other Restricted Stock
     8,340       9,863       10,621  
     Premises and Equipment
     35,949       35,550       26,182  
     Goodwill and Other Intangible Assets
     24,457       24,955       12,891  
     Other Assets
     47,899       49,367       41,391  
     TOTAL ASSETS
   $ 1,817,672     $ 1,761,639     $ 1,340,928  
                         
LIABILITIES
                        
     Non-interest-bearing Demand Deposits
   $ 248,979     $ 242,159     $ 166,922  
     Interest-bearing Demand, Savings, and
                        
         Money Market Accounts
     876,949       849,163       522,438  
     Time Deposits
     395,321       393,624       360,496  
        Total Deposits
     1,521,249       1,484,946       1,049,856  
                         
     Borrowings
     119,257       110,750       157,861  
     Other Liabilities
     17,083       14,609       13,054  
    TOTAL LIABILITIES
     1,657,589       1,610,305       1,220,771  
                         
SHAREHOLDERS' EQUITY
                        
     Common Stock and Surplus
     107,293       107,127       80,125  
     Retained Earnings
     42,220       39,119       32,595  
     Accumulated Other Comprehensive Income
     10,570       5,088       7,437  
TOTAL SHAREHOLDERS' EQUITY
     160,083       151,334       120,157  
                         
TOTAL LIABILITIES AND
                        
  SHAREHOLDERS' EQUITY
   $ 1,817,672     $ 1,761,639     $ 1,340,928  
                         
END OF PERIOD SHARES OUTSTANDING
     12,593,222       12,590,304       11,104,918  
                         
BOOK VALUE PER SHARE
   $ 12.71     $ 12.02     $ 10.82  

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

     
Three Months Ended
    
Six Months Ended
     
June 30,
    
March 31,
    
June 30,
    
June 30,
    
June 30,
     
2011
    
2011
    
2010
    
2011
    
2010
                               
INTEREST INCOME
                            
Interest and Fees on Loans
 $
16,446
   $
 16,241
   $
13,194
   $
32,687
   $
          26,033
    Interest on Short-term Investments and Time Deposits
  
                      66
    
   65
    
              27
    
        131
    
                     36
    Interest and Dividends on Investment Securities
  
                4,009
    
 3,213
    
        2,720
    
      7,222
    
                5,455
   TOTAL INTEREST INCOME
  
              20,521
    
 19,519
    
 15,941
    
    40,040
    
                31,524
                               
INTEREST EXPENSE
                            
    Interest on Deposits
  
                3,248
    
3,393
    
2,686
    
  6,641
    
                5,298
    Interest on Borrowings
  
                1,009
    
 1,019
    
    1,340
    
    2,028
    
            2,662
   TOTAL INTEREST EXPENSE
  
                4,257
    
   4,412
    
      4,026
    
  8,669
    
               7,960
                               
    NET INTEREST INCOME
  
              16,264
    
  15,107
    
    11,915
    
 31,371
    
              23,564
    Provision for Loan Losses
  
                1,300
    
   1,300
    
1,000
    
2,600
    
               2,500
    NET INTEREST INCOME AFTER
                            
     PROVISION FOR LOAN LOSSES
  
              14,964
    
 13,807
    
10,915
    
28,771
    
                21,064
                               
NON-INTEREST INCOME
                            
    Net Gain on Sales of Loans
  
                   379
    
  409
    
499
    
 788
    
                    817
Net Gain (Loss) on
Securities
  
                      -
    
  1,045
    
  -
    
     1,045
    
                         -
    Other Non-interest Income
  
                3,983
    
4,560
    
      3,292
    
  8,543
    
                  7,553
  TOTAL NON-INTEREST INCOME
  
                4,362
    
6,014
    
3,791
    
  10,376
    
               8,370
                               
NON-INTEREST EXPENSE
                            
    Salaries and Benefits
  
                6,722
    
  7,401
    
5,288
    
  14,123
    
10,837
Other Non-interest
Expenses
  
                5,549
    
6,469
    
4,614
    
12,018
    
                9,331
  TOTAL NON-INTEREST EXPENSE
  
               12,271
    
13,870
    
9,902
    
26,141
    
            20,168
                               
    Income before Income
Taxes
  
                7,055
    
 5,951
    
  4,804
    
  13,006
    
               9,266
    Income Tax Expense
  
                 2,191
    
 1,306
    
 1,396
    
3,497
    
       2,607
                               
NET INCOME
 $
 4,864
    $
4,645
   $
3,408
   $
9,509
   $
6,659
                               
EARNINGS PER SHARE & DILUTED EARNINGS PER SHARE
 $
 0.39
   $
0.37
   $
0.31
   $
0.76
   $
          0.60
                               
                               
WEIGHTED AVERAGE SHARES OUTSTANDING
  
12,592,324
    
12,546,310
    
11,103,095
    
12,546,310
    
11,092,447
DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING
  
12,597,879
    
12,554,876
    
11,108,160
    
12,552,531
    
11,097,343
 
 
 
 
 
GERMAN AMERICAN BANCORP, INC.
(unaudited, dollars in thousands except per share data)
                     
                     
     
Three Months Ended
  
Six Months Ended
     
June 30,
  
March 31,
  
June 30,
  
June 30,
  
June 30,
     
2011
  
2011
  
2010
  
2011
  
2010
EARNINGS PERFORMANCE RATIOS
                    
 
Annualized Return on
Average Assets
  
1.08%
  
1.06%
  
1.04%
  
1.07%
  
1.04%
 
Annualized Return on
Average Equity
  
12.62%
  
11.91%
  
11.57%
  
12.26%
  
11.43%
 
Net Interest Margin
  
3.95%
  
3.83%
  
3.95%
  
3.89%
  
4.02%
 
Efficiency Ratio (1)
  
58.67%
  
64.87%
  
62.24%
  
61.81%
  
62.36%
 
Net Overhead Expense to
Average Earning Assets (2)
  
1.88%
  
1.94%
  
1.99%
  
1.91%
  
1.97%
                       
ASSET QUALITY RATIOS
                    
 
Annualized Net Charge-offs
to Average Loans
 
0.25%
  
0.16%
  
0.40%
  
0.20%
  
0.61%
 
Allowance for Loan Losses
to Period End Loans
 
1.34%
  
1.29%
  
1.18%
        
 
Non-performing Assets to
Period End Assets
  
1.09%
  
1.27%
  
0.79%
        
 
Non-performing Loans to
Period End Loans
  
1.59%
  
1.73%
  
0.96%
        
 
Loans 30-89 Days Past Due
to Period End Loans
  
0.43%
  
0.46%
  
0.86%
        
                       
                       
SELECTED BALANCE SHEET & OTHER FINANCIAL DATA
                    
 
Average Assets
 $
 1,803,334
  
 $     1,750,042
  
 $    1,314,847
  
 $     1,776,829
  
 $     1,284,043
 
Average Earning Assets
 $
1,680,741
  
 $     1,619,891
  
 $    1,228,833
  
 $     1,650,484
  
 $     1,198,429
 
Average Total Loans
 $
 1,107,014
  
 $     1,114,310
  
 $       901,856
  
 $     1,110,642
  
 $       889,810
 
Average Demand Deposits
 $
 248,055
  
 $        243,622
  
 $       163,227
  
 $        245,851
  
 $       158,748
 
Average Interest
Bearing Liabilities
 $
 1,387,426
  
 $     1,336,404
  
 $    1,021,141
  
 $     1,362,056
  
 $       995,738
 
Average Equity
 $
 154,168
  
 $        156,059
  
 $       117,801
  
 $        155,108
  
 $       116,525
                       
 
Period End Non-performing
Assets (3)
 $ 
 19,902
  
 $          22,377
  
 $         10,629
        
 
Period End Non-performing
Loans (4)
 $
 17,585
  
 $          18,943
  
 $           8,807
        
 
Period End Loans 30-89
Days Past Due (5)
 $
 4,728
  
 $            5,015
  
 $           7,866
        
                       
 
Tax Equivalent Net
Interest Income
 $
 16,551
  
 $          15,368
  
 $         12,117
  
 $         31,919
  
 $         23,973
 
Net Charge-offs during
Period
 $
 693
  
 $              444
  
 $             900
  
$            1,137
  
 $           2,703
                       
(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.
              
EX-99 2 ex99-08012011_120826.htm ex99-1.htm
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
 
July 26, 2011
GERMAN AMERICAN BANCORP, INC. (GABC)
 
 
POSTS RECORD SECOND QUARTER & YEAR-TO-DATE EARNINGS
 
Jasper, Indiana –July 26, 2011 -- German American Bancorp, Inc. (NASDAQ: GABC) reported today that its second quarter and year-to-date 2011 earnings achieved a record level of performance for the Company.  The Company’s second quarter net income of $4,864,000, or $0.39 per share, exceeded by 5%, on a per share basis, the $4,645,000, or $0.37 per share, recorded in the first quarter of this year, and was approximately 26% higher, on a per share basis, than the $3,408,000, or $0.31 per share that the Company earned in the second quarter of 2010.

On a year-to-date basis, 2011 record reported six-month earnings were $9,509,000, or $0.76 per share, an increase, on a per share basis, of 27% over the $6,659,000, or $0.60 per share, reported in the first six months of 2010.  Both the second quarter and year-to-date 2011 earnings results were inclusive of the acquisition of American Community Bancorp, Inc., and its banking subsidiary, the Bank of Evansville, that occurred as of January 1st of this year.

As compared to the reported results of the first quarter of this year, the Company’s second quarter earnings were positively influenced by a $1.2 million increased level of net interest income.  The current quarter’s net interest income improvement was largely the result of the continued strong growth within the Company’s core deposit base and the deployment of available funds into the Company’s investment securities portfolio.

Other positive contributors to the Company’s record level of performance included a $1.6 million reduction in the level of non-interest expenses in the current quarter as compared to the prior quarter.   Somewhat offsetting this enhanced level of net interest income and reduced operating expenses, the Company’s total non-interest income decreased by approximately $1.6 million during the quarter.  Much of variation in non-interest income and non-interest expenses was attributable to recording of non-recurring revenue and expenses during the first quarter of this year in connection with the acquisition of American Community Bancorp, Inc., and its banking subsidiary, Bank of Evansville.

Mark A. Schroeder, Chairman & CEO of German American, commenting on the Company’s posting of record quarterly and year-to-date financial performance stated, “We are extremely gratified that our business continues to grow and expand throughout our southern Indiana footprint. More and more families, businesses, municipalities, and not-for-profit entities are turning to German American as a source of strength and as a trusted advisor for all their financial needs within banking, insurance, investments, and trust.”

Schroeder, continued, “We are extremely thankful to all of our clients for their willingness to allow us the privilege of serving them.  It is because of their continued support of German American’s unwavering commitment to our local communities and their appreciation of our steadfast adherence to solid banking and management principles that we have been able to consistently deliver superior financial performance, and to do so once again with this quarter’s record earnings.”

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 August 20, 2011 to shareholders of record as of August 10, 2011.
 
Balance Sheet Highlights

Total assets for the Company increased by approximately $56.0 million to $1.818 billion as of June 30, 2011 compared with the quarter ended March 31, 2011.  The increase was attributable primarily to an increase in the Company’s core deposit base and corresponding increased levels of loans and securities and other short-term investments.

June 30, 2011 loans outstanding increased approximately $10.9 million, or approximately 4% on an annualized basis, compared with the quarter ended March 31, 2011.

 
 
 

End of Period Loan Balances
  
06/30/11
  
03/31/11
  
$ Change
             
Commercial & Industrial Loans
  
 $              293,439
  
 $               282,681
  
 $                  10,758
Commercial Real Estate Loans
  
                  440,704
  
                   444,531
  
                      (3,827)
Agricultural Loans
  
                   152,229
  
                    145,136
  
                        7,093
Consumer Loans
  
                   128,275
  
                   127,880
  
                             395
Residential Mortgage Loans
  
                     93,975
  
                     97,479
  
                      (3,504)
   
 $            1,108,622
  
 $           1,097,707
  
 $                   10,915
 
Non-performing assets totaled $19.9 million at June 30, 2011 compared to $22.4 million of non-performing assets at March 31, 2011.  Non-performing assets represented 1.09% of total assets at June 30, 2011 compared to 1.27% at March 31, 2011.  Non-performing loans totaled $17.6 million at June 30, 2011 compared to $18.9 million of non-performing loans at March 31, 2011.  Non-performing loans represented 1.59% of total outstanding loans at June 30, 2011 compared with 1.73% of total loans outstanding at March 31, 2011.
 
 
The Company’s allowance for loan losses totaled $14.8 million at June 30, 2011 representing an increase of $607,000 or 17% on an annualized basis from March 31, 2011.  The allowance for loan losses represented 1.34% of period-end loans at June 30, 2011 compared with 1.29% at March 31, 2011.  Under acquisition accounting treatment, loans are recorded at fair value which includes a credit risk component, and therefore the allowance on loans acquired is not carried over from the seller.  As of June 30, 2011 the Company held a discount on acquired loans of $7.6 million which includes loans acquired in the American Community acquisition and loans acquired in a branch acquisition completed in the second quarter of 2010.

June 30, 2011 deposits increased $36.3 million to $1.521 billion, or approximately 10% on an annualized basis, compared with March 31, 2011 total deposits.
 
End of Period Deposit Balances
  
06/30/11
  
03/31/11
  
$ Change
             
Non-interest-bearing Demand Deposits
  
 $           248,979
  
 $           242,159
  
 $               6,820
IB Demand, Savings, and MMDA Accounts
  
              876,949
  
              849,163
  
                27,786
Time Deposits < $100,000
  
              285,691
  
              291,765
  
                 (6,074)
Time Deposits > $100,000 and Brokered Deposits
  
              109,630
  
              101,859
  
                   7,771
   
 $       1,521,249
  
 $       1,484,946
  
 $             36,303
 
Results of Operations Highlights

Net income for the quarter ended June 30, 2011 totaled $4,864,000 or $0.39 per share, an increase of $219,000 from the first quarter 2011 net income of $4,645,000 or $0.37 per share and an increase of $1,456,000 from the second quarter 2010 net income of $3,408,000 or $0.31 per share.  The results of operations in both the quarter ended June 30, 2011 and March 31, 2011 were inclusive of the operations of American Community Bancorp, Inc. and its banking subsidiary the Bank of Evansville, which was acquired effective January 1, 2011.
 
 
 
 

Summary Average Balance Sheet
                
(Tax-equivalent basis / $ in thousands)
                
     
 Quarter Ended June 30, 2011
    
                 
     
 Principal Balance
    
 Income/ Expense
  
 Yield/Rate
Assets
                
Federal Funds Sold and Other
Short-term Investments
   $
                        86,689
   $
                                   66
  
0.30%
Securities
    
                            487,038
    
                                  4,236
  
3.48%
Loans and Leases
    
                       1,107,014
    
                               16,506
  
5.98%
Total Interest Earning Assets
   $
                  1,680,741
   $
                        20,808
  
4.96%
                 
Liabilities
                
Demand Deposit Accounts
   $
                       248,055
          
IB Demand, Savings, and
MMDA Accounts
   $
                        881,955
   $
                            1,239
  
0.56%
Time Deposits
    
                            391,181
    
                                  2,009
  
2.06%
FHLB Advances and
Other Borrowings
    
                            114,290
    
                                  1,009
  
3.54%
Total Interest-Bearing Liabilities
   $
                   1,387,426
   $
                            4,257
  
1.23%
                 
Cost of Funds
              
1.01%
Net Interest Income
         $
                        16,551
    
Net Interest Margin
              
3.95%
                 
Summary Average Balance Sheet
                
(Tax-equivalent basis / $ in thousands)
                
     
 Quarter Ended March 31, 2011
                 
     
 Principal Balance
    
 Income/ Expense
  
 Yield/Rate
Assets
                
Federal Funds Sold and Other
Short-term Investments
    $
                       110,226
   $
                                 65
  
0.24%
Securities
    
                            395,355
    
                                  3,412
  
3.45%
Loans and Leases
    
                       1,114,310
    
                               16,303
  
5.92%
Total Interest Earning Assets
    $
                 1,619,891
   $
                         19,780
  
4.93%
                 
Liabilities
                
Demand Deposit Accounts
   $
                        243,622
          
IB Demand, Savings, and
MMDA Accounts
   $
                       804,944
   $
                             1,266
  
0.64%
Time Deposits
    
                            400,483
    
                                  2,127
  
2.16%
FHLB Advances and
Other Borrowings
    
                            130,977
    
                                  1,019
  
3.16%
Total Interest-Bearing Liabilities
   $
                   1,336,404
   $
                           4,412
  
1.34%
                 
Cost of Funds
              
1.10%
Net Interest Income
         $
                       15,368
    
Net Interest Margin
              
3.83%

 
 
 
 
Summary Average Balance Sheet
                
(Tax-equivalent basis / $ in thousands)
                
     
 Quarter Ended June 30, 2010
    
                 
     
 Principal Balance
    
 Income/ Expense
  
 Yield/Rate
Assets
                
Federal Funds Sold and Other
Short-term Investments
   $
                          52,008
   $
                                     27
  
0.21%
Securities
    
                            274,969
    
                                  2,852
  
4.15%
Loans and Leases
    
                            901,856
    
                               13,264
  
5.90%
Total Interest Earning Assets
   $
                  1,228,833
   $
                           16,143
  
5.27%
                 
Liabilities
                
Demand Deposit Accounts
   $
                       163,227
          
IB Demand, Savings, and
MMDA Accounts
    $
                     512,680
   $
                                  461
  
0.36%
Time Deposits
    
                            353,577
    
                                  2,225
  
2.52%
FHLB Advances and
Other Borrowings
    
                            154,884
    
                                  1,340
  
3.47%
Total Interest-Bearing Liabilities
   $
                   1,021,141
   $
                            4,026
  
1.58%
                 
Cost of Funds
              
1.32%
Net Interest Income
         $
                         12,117
    
Net Interest Margin
              
3.95%
 
During the quarter ended June 30, 2011, net interest income totaled $16,264,000 representing an increase of $1,157,000 from the quarter ended March 31, 2011 net interest income of $15,107,000 and an increase of $4,349,000 compared with the quarter ended June 30, 2010 net interest income of $11,915,000.  The tax equivalent net interest margin for the quarter ended June 30, 2011 was 3.95% compared to 3.83% in the first quarter 2011 and 3.95% in the second quarter 2010.  The increased net interest income during the second quarter of 2011 compared with the first quarter of 2011 was largely the result of a higher level of earning assets driven by growth in the Company’s core deposit base and subsequent investment into the securities portfolio.  The increased net interest income during the second quarter of 2011 compared with the second quarter of 2010 was also driven by a higher level of earning assets driven by both organic core deposit growth and the acquisition of American Community.

During the quarter ended June 30, 2011, non-interest income totaled $4,362,000, a decline of $1,652,000 or 27%, compared with the quarter ended March 31, 2011, and an increase of $571,000, or 15%, compared with the second quarter of 2010.

   
Qtr. Ended
  
Qtr. Ended
  
Qtr. Ended
Non-interest Income
  
06/30/11
  
03/31/11
  
06/30/10
             
Trust and Investment Product Fees
  
 $                         495
  
 $                         464
  
 $                         395
Service Charges on
Deposit Accounts
  
                         1,074
  
                              941
  
                         1,075
Insurance Revenues
  
                         1,290
  
                        2,049
  
                         1,083
Company Owned Life Insurance
  
                             250
  
                             353
  
                              186
Interchange Fee Income
  
                             378
  
                             353
  
                             292
Other Operating Income
  
                             496
  
                             400
  
                              261
     Subtotal
  
                        3,983
  
                        4,560
  
                        3,292
Net Gains on Sales of Loans
  
                             379
  
                             409
  
                             499
Net Gain (Loss) on Securities
  
                                 -
  
                         1,045
  
                                 -
Total Non-interest Income
  
 $                    4,362
  
 $                     6,014
  
 $                     3,791
 
 
 
 
 
Deposit service charges and fees improved by $133,000 or 14% during the quarter ended June 30, 2011 compared with the first quarter of 2011 and remained relatively flat compared with the second quarter of 2010.  Deposit service charges and fees were positively impacted by increased customer utilization of the Company’s overdraft protection plan driven by the increased customer base related to the acquisition of the Bank of Evansville.

Insurance revenues declined 37% during the quarter ended June 30, 2011 compared with the three months ended March 31, 2011 while insurance revenues increased 19% during the second quarter 2011 compared with the second quarter of 2010.  The decline for the second quarter 2011 compared to the first quarter 2011 was largely attributable to annual contingency revenue recognized in the quarter ended March 31, 2011. Contingency revenue totaled $88,000 in the quarter ended June 30, 2011 compared with $784,000 in the first quarter of 2011 and $32,000 in the quarter ended June 30, 2010.

Other operating income increased $96,000 or 24% during the quarter ended June 30, 2011 compared with the first quarter of 2011 and increased $235,000 or 90% compared with the second quarter of 2010.  The increase in the second quarter 2011 compared to both quarterly periods was related to a net gain on sale of other real estate during the second quarter of 2011 compared with a net loss on the sale of other real estate in both the quarter ended March 31, 2011 and June 30, 2010.

The Company realized a net gain on securities of $1,045,000 during the first quarter of 2011 related to the acquisition accounting treatment of the existing equity ownership position the Company held in American Community at the time of acquisition.  No gains or losses on securities were realized in the second quarter of 2011 or 2010.

During the quarter ended June 30, 2011, non-interest expense totaled $12,271,000, a decline of $1,599,000, or 12%, compared with the quarter ended March 31, 2011, and an increase of $2,369,000, or 24%, compared with the second quarter of 2010.  During the second quarter of 2011, acquisition accounting items related to the acquisition of American Community totaled $616,000, including $286,000 of non-recurring expense items.  During the first quarter of 2011, acquisition accounting items related to the acquisition of American Community totaled $1,604,000, including approximately $1,257,000 of non-recurring expense items.

   
Qtr. Ended
  
Qtr. Ended
  
Qtr. Ended
Non-interest Expense
  
06/30/11
  
03/31/11
  
06/30/10
             
Salaries and Employee Benefits
  
 $                    6,722
  
 $                     7,401
  
 $                    5,288
Occupancy, Furniture and
Equipment Expense
  
                          1,841
  
                         1,855
  
                         1,435
FDIC Premiums
  
                             382
  
                              514
  
                             336
Data Processing Fees
  
                             395
  
                          1,105
  
                             365
Professional Fees
  
                             499
  
                             605
  
                             524
Advertising and Promotion
  
                              314
  
                             303
  
                             273
Intangible Amortization
  
                             498
  
                              517
  
                             247
Other Operating Expenses
  
                         1,620
  
                         1,570
  
                         1,434
Total Non-interest Expense
  
 $                   12,271
  
 $                  13,870
  
 $                    9,902
 
Salaries and benefits declined $679,000, or approximately 9% during the quarter ended June 30, 2011, compared with the first quarter of 2011 and increased $1,434,000, or approximately 27% compared with the second quarter of 2010.  The decline during the second quarter of 2011 compared with the first quarter of 2011 was primarily in connection with one-time costs associated with the American Community acquisition during the first quarter of 2011.  The increase during the quarter ended June 30, 2011, compared with the second quarter of 2010 was primarily attributable to an increased staff size related to the acquisition of American Community.

The increase in occupancy, furniture and equipment expense during the second quarter compared with the second quarter 2010 was also primarily related to the acquisition and the costs associated with three additional branch locations.  The Company’s FDIC deposit insurance assessments decreased 26% in the second quarter of 2011 compared with the first quarter of 2011 and increased 14% compared with the second quarter of 2010.  The decrease during second quarter of 2011 compared with the first quarter of 2011 was attributable to changes in the deposit insurance assessment calculation which became effective in the second quarter 2011 related to the Dodd Frank Act.  The increase during the second quarter 2011 compared with the second quarter 2010 was largely related to the increase in the size of the Company deposit base and corresponding increase in the size of the Company’s balance sheet resulting from the acquisition of American Community and to a lesser degree an increased level of deposits resulting from core organic deposit growth unrelated to the acquisition.
 
 
 
 
 
Data processing fees declined $710,000 or 64% during the second quarter 2011 compared with the quarter ended March 31, 2011.  The decrease was largely related to running the Company’s existing core processing system and the Bank of Evansville’s core processing system during the first quarter of 2011 and other merger related costs associated with the acquisition of American Community.  The customers of the Bank of Evansville were moved to the Company’s core processing system during April 2011.

Intangible amortization increased $251,000 or 102% during the second quarter of 2011 compared with the second quarter of 2010.  The increase was primarily related to amortization of core deposit intangible resulting from the acquisition of American Community.

About German American

German American Bancorp, Inc., is a NASDAQ-traded (symbol: GABC) financial services holding company based in Jasper, Indiana.  German American, through its banking subsidiary German American Bancorp, operates 33 retail banking offices in 12 contiguous southern Indiana counties. The Company also owns a trust, brokerage, and financial planning subsidiary (German American Financial Advisors & Trust Company) and a full line property and casualty insurance agency (German American Insurance, Inc.).

Cautionary Note Regarding Forward-Looking Statements

The Company’s statements in this press release regarding the continuing growth and expansion of the Company’s business and the consistency of its financial performance could be deemed to be “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 that could cause actual experience to differ from the expectations implied in this press release include the unknown future direction of interest rates and the timing and magnitude of any changes in interest rates; changes in competitive conditions; the introduction, withdrawal, success and timing of asset/liability management strategies or of mergers and acquisitions and other business initiatives and strategies; changes in customer borrowing, repayment, investment and deposit practices; changes in fiscal, monetary and tax policies; changes in financial and capital markets; deterioration in general economic conditions, either nationally or locally, resulting in, among other things, credit quality deterioration; capital management activities, including possible future sales of new securities, or possible repurchases or redemptions by the Company of outstanding debt or equity securities; risks of expansion through acquisitions and mergers, such as unexpected credit quality problems of the acquired loans or other assets, unexpected attrition of the customer base of the acquired institution or branches, and difficulties in integration of the acquired operations; factors driving impairment charges on investments; the impact, extent and timing of technological changes; litigation liabilities, including related costs, expenses, settlements and judgments, or the outcome of matters before regulatory agencies, whether pending or commencing in the future; actions of the Federal Reserve Board; changes in accounting principles and interpretations; potential increases of federal deposit insurance premium expense, and possible future special assessments of FDIC premiums, either industry wide or specific to the Company’s banking subsidiary; actions of the regulatory authorities under the Dodd-Frank Act and the Federal Deposit Insurance Act and other possible 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.  Such statements reflect our views with respect to future events and are subject to these and other risks, uncertainties and assumptions relating to the operations, results of operations, growth strategy and liquidity of the Company.  Readers are cautioned not to place undue reliance on these forward-looking statements.  It is intended that these forward-looking statements speak only as of the date they are made.  We do not undertake any obligation to release publicly any revisions to these forward-looking statements to reflect future events or circumstances or to reflect the occurrence of unanticipated events.
 
 
 
 
 
GERMAN AMERICAN BANCORP, INC.
  
(unaudited, dollars in thousands except per share data)
  
                   
Consolidated Balance Sheets
  
                   
                   
   
June 30,
    
March 31,
    
June 30,
  
   
2011
    
2011
    
2010
  
                   
ASSETS
                  
     Cash and Due from Banks
   $ 28,105     $ 25,606     $ 17,110  
     Short-term Investments
     79,668       48,665       19,399  
     Interest-bearing Time Deposits with Banks
     8,360       10,372       -  
     Investment Securities
     486,830       472,449       300,441  
                         
     Loans Held-for-Sale
     6,097       2,862       10,768  
                         
     Loans, Net of Unearned Income
     1,106,747       1,096,123       912,938  
     Allowance for Loan Losses
     (14,780 )     (14,173 )     (10,813 )
        Net Loans
     1,091,967       1,081,950       902,125  
                         
     Stock in FHLB and Other Restricted Stock
     8,340       9,863       10,621  
     Premises and Equipment
     35,949       35,550       26,182  
     Goodwill and Other Intangible Assets
     24,457       24,955       12,891  
     Other Assets
     47,899       49,367       41,391  
     TOTAL ASSETS
   $ 1,817,672     $ 1,761,639     $ 1,340,928  
                         
LIABILITIES
                        
     Non-interest-bearing Demand Deposits
   $ 248,979     $ 242,159     $ 166,922  
     Interest-bearing Demand, Savings, and
                        
         Money Market Accounts
     876,949       849,163       522,438  
     Time Deposits
     395,321       393,624       360,496  
        Total Deposits
     1,521,249       1,484,946       1,049,856  
                         
     Borrowings
     119,257       110,750       157,861  
     Other Liabilities
     17,083       14,609       13,054  
    TOTAL LIABILITIES
     1,657,589       1,610,305       1,220,771  
                         
SHAREHOLDERS' EQUITY
                        
     Common Stock and Surplus
     107,293       107,127       80,125  
     Retained Earnings
     42,220       39,119       32,595  
     Accumulated Other Comprehensive Income
     10,570       5,088       7,437  
TOTAL SHAREHOLDERS' EQUITY
     160,083       151,334       120,157  
                         
TOTAL LIABILITIES AND
                        
  SHAREHOLDERS' EQUITY
   $ 1,817,672     $ 1,761,639     $ 1,340,928  
                         
END OF PERIOD SHARES OUTSTANDING
     12,593,222       12,590,304       11,104,918  
                         
BOOK VALUE PER SHARE
   $ 12.71     $ 12.02     $ 10.82  

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

     
Three Months Ended
    
Six Months Ended
     
June 30,
    
March 31,
    
June 30,
    
June 30,
    
June 30,
     
2011
    
2011
    
2010
    
2011
    
2010
                               
INTEREST INCOME
                            
Interest and Fees on Loans
  $
16,446
   $
 16,241
   $
13,194
   $
32,687
   $
          26,033
    Interest on Short-term Investments and Time Deposits
  
                      66
    
   65
    
              27
    
        131
    
                     36
    Interest and Dividends on Investment Securities
  
                4,009
    
 3,213
    
        2,720
    
      7,222
    
                5,455
   TOTAL INTEREST INCOME
  
              20,521
    
 19,519
    
 15,941
    
    40,040
    
                31,524
                               
INTEREST EXPENSE
                            
    Interest on Deposits
  
                3,248
    
3,393
    
2,686
    
  6,641
    
                5,298
    Interest on Borrowings
  
                1,009
    
 1,019
    
    1,340
    
    2,028
    
            2,662
   TOTAL INTEREST EXPENSE
  
                4,257
    
   4,412
    
      4,026
    
  8,669
    
               7,960
                               
    NET INTEREST INCOME
  
              16,264
    
  15,107
    
    11,915
    
 31,371
    
              23,564
    Provision for Loan Losses
  
                1,300
    
   1,300
    
1,000
    
2,600
    
               2,500
    NET INTEREST INCOME AFTER
                            
     PROVISION FOR LOAN LOSSES
  
              14,964
    
 13,807
    
10,915
    
28,771
    
                21,064
                               
NON-INTEREST INCOME
                            
    Net Gain on Sales of Loans
  
                   379
    
  409
    
499
    
 788
    
                    817
Net Gain (Loss) on
Securities
  
                      -
    
  1,045
    
  -
    
     1,045
    
                         -
    Other Non-interest Income
  
                3,983
    
4,560
    
      3,292
    
  8,543
    
                  7,553
  TOTAL NON-INTEREST INCOME
  
                4,362
    
6,014
    
3,791
    
  10,376
    
               8,370
                               
NON-INTEREST EXPENSE
                            
    Salaries and Benefits
  
                6,722
    
  7,401
    
5,288
    
  14,123
    
10,837
Other Non-interest
Expenses
  
                5,549
    
6,469
    
4,614
    
12,018
    
                9,331
  TOTAL NON-INTEREST EXPENSE
  
               12,271
    
13,870
    
9,902
    
26,141
    
            20,168
                               
    Income before Income
Taxes
  
                7,055
    
 5,951
    
  4,804
    
  13,006
    
               9,266
    Income Tax Expense
  
                 2,191
    
 1,306
    
 1,396
    
3,497
    
       2,607
                               
NET INCOME
 $
 4,864
    $
4,645
   $
3,408
   $
9,509
   $
6,659
                               
EARNINGS PER SHARE & DILUTED EARNINGS PER SHARE
 $
 0.39
   $
0.37
   $
0.31
   $
0.76
   $
          0.60
                               
                               
WEIGHTED AVERAGE SHARES OUTSTANDING
  
12,592,324
    
12,546,310
    
11,103,095
    
12,546,310
    
11,092,447
DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING
  
12,597,879
    
12,554,876
    
11,108,160
    
12,552,531
    
11,097,343
 
 
 
 
 
GERMAN AMERICAN BANCORP, INC.
(unaudited, dollars in thousands except per share data)
                     
                     
     
Three Months Ended
  
Six Months Ended
     
June 30,
  
March 31,
  
June 30,
  
June 30,
  
June 30,
     
2011
  
2011
  
2010
  
2011
  
2010
EARNINGS PERFORMANCE RATIOS
                    
 
Annualized Return on
Average Assets
  
1.08%
  
1.06%
  
1.04%
  
1.07%
  
1.04%
 
Annualized Return on
Average Equity
  
12.62%
  
11.91%
  
11.57%
  
12.26%
  
11.43%
 
Net Interest Margin
  
3.95%
  
3.83%
  
3.95%
  
3.89%
  
4.02%
 
Efficiency Ratio (1)
  
58.67%
  
64.87%
  
62.24%
  
61.81%
  
62.36%
 
Net Overhead Expense to
Average Earning Assets (2)
  
1.88%
  
1.94%
  
1.99%
  
1.91%
  
1.97%
                       
ASSET QUALITY RATIOS
                    
 
Annualized Net Charge-offs
to Average Loans
  
0.25%
  
0.16%
  
0.40%
  
0.20%
  
0.61%
 
Allowance for Loan Losses
to Period End Loans
  
1.34%
  
1.29%
  
1.18%
        
 
Non-performing Assets to
Period End Assets
  
1.09%
  
1.27%
  
0.79%
        
 
Non-performing Loans to
Period End Loans
  
1.59%
  
1.73%
  
0.96%
        
 
Loans 30-89 Days Past Due
to Period End Loans
  
0.43%
  
0.46%
  
0.86%
        
                       
                       
SELECTED BALANCE SHEET & OTHER FINANCIAL DATA
                    
 
Average Assets
 $
 1,803,334
  
 $     1,750,042
  
 $    1,314,847
  
 $     1,776,829
  
 $     1,284,043
 
Average Earning Assets
 $
1,680,741
  
 $     1,619,891
  
 $    1,228,833
  
 $     1,650,484
  
 $     1,198,429
 
Average Total Loans
 $
 1,107,014
  
 $     1,114,310
  
 $       901,856
  
 $     1,110,642
  
 $       889,810
 
Average Demand Deposits
 $
 248,055
  
 $        243,622
  
 $       163,227
  
 $        245,851
  
 $       158,748
 
Average Interest
Bearing Liabilities
 $
 1,387,426
  
 $     1,336,404
  
 $    1,021,141
  
 $     1,362,056
  
 $       995,738
 
Average Equity
 $
 154,168
  
 $        156,059
  
 $       117,801
  
 $        155,108
  
 $       116,525
                       
 
Period End Non-performing
Assets (3)
 $ 
 19,902
  
 $          22,377
  
 $         10,629
        
 
Period End Non-performing
Loans (4)
 $
 17,585
  
 $          18,943
  
 $           8,807
        
 
Period End Loans 30-89
Days Past Due (5)
 $
 4,728
  
 $            5,015
  
 $           7,866
        
                       
 
Tax Equivalent Net
Interest Income
 $
 16,551
  
 $          15,368
  
 $         12,117
  
 $         31,919
  
 $         23,973
 
Net Charge-offs during
Period
 $
 693
  
 $              444
  
 $             900
  
$            1,137
  
 $           2,703
                       
(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.