German American Bancorp, Inc. (GABC) Reports Record Quarterly Earnings

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JASPER, Ind., Oct. 29, 2018 (GLOBE NEWSWIRE) -- German American Bancorp, Inc. (NASDAQ: GABC) reported quarterly earnings of $12.6 million, or $0.55 per share, in the third quarter of 2018.  This record level of quarterly earnings performance was an increase of approximately $1.5 million, or 15% on a per share basis, over second quarter 2018 net income of $11.1 million, or $0.48 per share, and an increase of approximately $3.0 million, or 31% on a per share basis, relative to the Company’s third quarter 2017 net income of $9.7 million, or $0.42 per share.

On a year-to-date basis, reported earnings for the first nine months of 2018 were $35.6 million, or $1.55 per share, which represents an increase of approximately $6.5 million, or 22% on a per share basis, from the first nine months of  2017 net income of $29.1 million, or $1.27 per share.  2018 reported earnings were inclusive of $1.5 million in acquisition-related expenses, of which $396,000 (approximately $317,000, or $0.01 per share, on an after-tax basis) were recorded in the third quarter, with the remaining $1.1 million (approximately $867,000, or $0.04 per share, on an after-tax basis) incurred in the first half of 2018.  These acquisition-related expenses were associated with the five-branch acquisition in the Columbus and Greensburg, Indiana markets that closed on May 18, 2018 and the merger with First Security, Inc. of Owensboro, Kentucky that closed on October 15, 2018.

2018 third quarter record financial performance, relative to that of the prior quarter of this year and the same quarter last year, was largely attributable to increased net interest income, which was driven by the Company’s double-digit increases, on an annualized basis, in the level of average loans outstanding.  Average loans outstanding during the third quarter of 2018 was $2.319 billion, which was an increase of $88.7 million, or  16% on an annualized basis, relative to the average loans outstanding during the second quarter of 2018.  Relative to the average loans in the third quarter of 2017, the current quarter average loans represented an increase of $260.2 million, or 13%.  These increases in average loans outstanding were driven by organic loan growth from the Company’s existing branch footprint and from the growth related to the branch acquisition the Company completed during the second quarter.

2018 third quarter, second quarter and year-to-date reported net income and earnings per share were also positively impacted by the federal income tax reform legislation, which reduced the Company’s corporate federal income tax statutory rate of 35% to 21% effective January 1, 2018.

Commenting on German American’s record quarterly performance, Mark A. Schroeder, German American’s Chairman & CEO, stated, "The record earnings performance achieved in the third quarter was a direct result of the combined organic and acquisition growth in deposits, loans, and total assets that our Company has achieved throughout the past year.  We are very encouraged about our prospects for continued growth in the future based on the economic strength within our existing Southern Indiana markets. Furthermore, we successfully completed, earlier this month, the previously announced pending merger transaction with Owensboro, Kentucky based First Security, Inc., which expands German American’s footprint into Bowling Green, Lexington and Owensboro, three of the most economically vibrant markets in the Commonwealth of Kentucky.  This combination of First Security and German American will elevate German American’s consolidated total assets to nearly $4.0 billion, with a projected total loan portfolio of approximately $2.8 billion and total deposit balances of approximately $3.0 billion.  We welcome the communities, customers, employees and shareholders of First Security to the German American family of community banks, and look forward to further enhancing our relationships with all these stakeholders.”

The Company also announced its Board of Directors declared a regular quarterly cash dividend of $0.15 per share, which will be payable on November 20, 2018 to shareholders of record as of November 10, 2018.

Balance Sheet Highlights

Total assets for the Company increased to $3.364 billion at September 30, 2018, representing an increase of $19.2 million, or 2% on an annualized basis, compared with June 30, 2018 and an increase of $290.9 million, or 9%, compared with September 30, 2017.  The increase in total assets compared to the prior year was driven by the acquisition of a five-branch network in the Columbus and Greensburg, Indiana markets as well as organic loan growth.

At September 30, 2018, total loans increased $18.3 million, or 3% on an annualized basis, compared with June 30, 2018 and increased $250.5 million, or 12%, compared with September 30, 2017.  At September 30, 2018, the loans acquired as a part of the branch acquisition which closed during May  2018, totaled $112.9 million.  At September 30, 2018, total loans, excluding those acquired as a part of the branch acquisition,  increased $136.7 million, or 7%, compared with September 30, 2017.

The increase in total loans during the third quarter of 2018 compared with the second quarter of 2018 was driven by an increase of approximately $9.6 million, or 7% on an annualized basis, of commercial and industrial loans, a decline of $571,000, or less than 1% on an annualized basis, of commercial real estate loans, an increase of $6.2 million, or 7% on an annualized basis, of agricultural loans and an increase of $3.0 million, or 3% on annualized basis, of retail loans.

           
End of Period Loan Balances   9/30/2018   6/30/2018   9/30/2017
(dollars in thousands)            
             
Commercial & Industrial Loans   $ 527,938     $ 518,299     $ 474,917  
Commercial Real Estate Loans   985,915     986,486     898,752  
Agricultural Loans   358,543     352,308     327,026  
Consumer Loans   247,861     241,315     209,537  
Residential Mortgage Loans   219,916     223,437     179,481  
    $ 2,340,173     $ 2,321,845     $ 2,089,713  
             

 

Non-performing assets totaled $8.6 million at September 30, 2018 compared to $9.5 million of non-performing assets at June 30, 2018 and $10.2 million at September 30, 2017.  Non-performing assets represented 0.26% of total assets at September 30, 2018 compared to 0.28% of total assets at June 30, 2018 and 0.33% of total assets at September 30, 2017.  Non-performing loans totaled $8.5 million at September 30, 2018 compared to $9.5 million at June 30, 2018 and $9.7 million at September 30, 2017.  Non-performing loans represented 0.36% of total loans at September 30, 2018 compared to 0.41% at June 30, 2018 and 0.46% at September 30, 2017.

 

           
Non-performing Assets          
(dollars in thousands)          
  9/30/2018   6/30/2018   9/30/2017
Non-Accrual Loans $ 8,428     $ 8,953     $ 9,177  
Past Due Loans (90 days or more) 69     534     474  
Total Non-Performing Loans 8,497     9,487     9,651  
Other Real Estate 100     40     568  
Total Non-Performing Assets $ 8,597     $ 9,527     $ 10,219  
           
Restructured Loans $ 122     $ 123     $ 152  
           

 

The Company’s allowance for loan losses totaled $16.1 million at September 30, 2018 compared to $15.6 million at June 30, 2018 and $15.3 million at September 30, 2017.  The allowance for loan losses represented 0.69% of period-end loans at September 30, 2018 compared with 0.67% of period-end loans at June 30, 2018 and 0.73% of period-end loans at September 30, 2017.  From time to time, the Company has acquired loans through bank and branch acquisitions with the most recent being a branch acquisition in the second quarter of 2018.  Under acquisition accounting treatment, loans acquired are recorded at fair value which includes a credit risk component, and therefore the allowance on loans acquired is not carried over from the seller.  The Company held a net discount on acquired loans of $9.0 million as of September 30, 2018, $9.6 million at June 30, 2018 and $8.0 million at September 30, 2017.

Total deposits increased $39.4 million, or 6% on an annualized basis, as of September 30, 2018 compared with June 30, 2018 and increased $216.3 million, or 9%, compared with September 30, 2017. The increase in total deposits as of September 30, 2018 compared with September 30, 2017 was largely driven by the previously discussed branch acquisition.   At September 30, 2018, the deposits acquired as a part of the branch acquisition totaled approximately $132.1 million.

 

             
End of Period Deposit Balances   9/30/2018   6/30/2018   9/30/2017
(dollars in thousands)            
             
Non-interest-bearing Demand Deposits   $ 634,421     $ 629,724     $ 589,315  
IB Demand, Savings, and MMDA Accounts   1,605,818     1,611,583     1,454,073  
Time Deposits < $100,000   189,405     190,179     204,946  
Time Deposits > $100,000   211,203     169,954     176,238  
    $ 2,640,847     $ 2,601,440     $ 2,424,572  
             

 

Results of Operations Highlights – Quarter ended September 30, 2018

Net income for the quarter ended September 30, 2018 totaled $12,639,000, or $0.55 per share, an increase of 15% on a per share basis compared with second quarter 2018 net income of $11,097,000, or $0.48 per share, and an increase of 31% on a per share basis compared with the third quarter 2017 net income of $9,660,000, or $0.42 per share.

 

Summary Average Balance Sheet
(Tax-equivalent basis / dollars in thousands)
     Quarter Ended    Quarter Ended    Quarter Ended
    September 30, 2018   June 30, 2018   September 30, 2017
                                     
     Principal 
Balance
   Income/ 
Expense
   Yield/ 
Rate
   Principal 
Balance
   Income/ 
Expense
   Yield/ 
Rate
   Principal 
Balance
   Income/ 
Expense
   Yield/ 
Rate
Assets                                    
Federal Funds Sold and Other                                    
Short-term Investments   $ 20,745     $ 101     1.94 %   $ 12,939     $ 54     1.68 %   $ 13,543     $ 46     1.38 %
Securities   755,793     5,826     3.08 %   751,367     5,758     3.07 %   748,754     5,872     3.14 %
Loans and Leases   2,318,657     28,240     4.84 %   2,229,972     26,394     4.75 %   2,058,453     23,358     4.51 %
Total Interest Earning Assets   $ 3,095,195     $ 34,167     4.39 %   $ 2,994,278     $ 32,206     4.31 %   $ 2,820,750     $ 29,276     4.13 %
                                     
Liabilities                                    
Demand Deposit Accounts   $ 636,989             $ 625,158             $ 572,204          
IB Demand, Savings, and                                    
MMDA Accounts   $ 1,617,768     $ 2,028     0.50 %   $ 1,560,838     $ 1,597     0.41 %   $ 1,447,693     $ 1,117     0.31 %
Time Deposits   425,783     1,507     1.40 %   417,585     1,251     1.20 %   382,827     842     0.87 %
FHLB Advances and Other Borrowings   257,460     1,392     2.14 %   238,775     1,216     2.04 %   246,698     1,110     1.79 %
Total Interest-Bearing Liabilities   $ 2,301,011     $ 4,927     0.85 %   $ 2,217,198     $ 4,064     0.74 %   $ 2,077,218     $ 3,069     0.59 %
                                     
Cost of Funds           0.63 %           0.54 %           0.43 %
Net Interest Income       $ 29,240             $ 28,142             $ 26,207      
Net Interest Margin           3.76 %           3.77 %           3.70 %

 

During the quarter ended September 30, 2018, net interest income totaled $28,548,000, which represented an increase of $1,079,000, or 4%, from the quarter ended June 30, 2018 net interest income of $27,469,000 and an increase of $3,631,000, or 15%, compared with the quarter ended September 30, 2017 net interest income of $24,917,000. The increased level of net interest income during the third quarter of 2018 compared with the both the second quarter of 2018 and third quarter of 2017 was driven primarily by a higher level of average earning assets.  Also contributing to the increased net interest income during the third quarter of 2018 compared with the third quarter of 2017 was an improvement in the tax equivalent net interest margin.  The increased level of average earning assets in the third quarter of  2018, compared with the second quarter of 2018, was driven by organic loan growth from the Company's existing branch footprint of $30.3 million combined with growth related to the branch acquisition of $58.4  million which was completed during May 2018.  The $30.3 million of average organic loan growth equated to approximately 6% annualized growth during third quarter of 2018, compared with the second quarter of 2018.

The tax equivalent net interest margin for the quarter ended September 30, 2018 was 3.76% compared with 3.77% in the second quarter of 2018 and 3.70% in the third quarter of 2017.  The lower federal income tax rates during 2018 had an approximately 9 basis point negative impact on the Company's net interest margin in both the second and third quarters of 2018 compared with 2017.  The improvement in the net interest margin,  excluding the impact of the lower federal tax rates, during third quarter of 2018 compared to both comparative periods was related to the positive impact on earning asset yields caused by the continued increase in short-term market interest rates partially offset by an increased cost of funds also related to the increased short-term interest rates.

Accretion of loan discounts on acquired loans contributed approximately 8 basis points to the net interest margin on an annualized basis in the third quarter of 2018, 7 basis points in the second quarter of 2018, and 5 basis points in the third quarter of 2017.

During the quarter ended September 30, 2018, the Company recorded a provision for loan loss of $500,000 compared with a provision for loan loss of $1,220,000 in the second quarter of 2018 and $250,000 in the third quarter of 2017.  The provision during all periods was done in accordance with the Company's standard methodology for determining the adequacy of its allowance for loan loss.

During the quarter ended September 30, 2018, non-interest income totaled $8,963,000, an  increase of $81,000, or 1%, compared with the quarter ended June 30, 2018, and an increase of $688,000, or 8%, compared with the third quarter of 2017.

 

    Quarter Ended   Quarter Ended   Quarter Ended
Non-interest Income   9/30/2018
  6/30/2018
  9/30/2017
(dollars in thousands)             
Trust and Investment Product Fees   $ 1,585     $ 1,677     $ 1,301  
Service Charges on Deposit Accounts   1,858     1,643     1,608  
Insurance Revenues   1,827     1,696     1,728  
Company Owned Life Insurance   251     260     317  
Interchange Fee Income   1,847     1,714     1,186  
Other Operating Income   639     913     608  
Subtotal   8,007     7,903     6,748  
Net Gains on Loans   866     905     952  
Net Gains on Securities   90     74     575  
Total Non-interest Income   $ 8,963     $ 8,882     $ 8,275  
             

 

Trust and investment product fees declined $92,000, or 5%, during the third quarter of 2018 compared with the second quarter of 2018 and increased $284,000, or 22%, compared with the third quarter of 2017.  The increase in the third quarter of 2018 compared with the third quarter of 2017 was largely attributable to increased assets under management in the Company's wealth advisory group.

Service charges on deposit accounts increased $215,000, or 13%, during the third quarter of 2018 compared with the second quarter of 2018 and increased $250,000, or 16%, compared with the third quarter of 2017.  The increase during the third quarter of 2018 compared with both the second quarter of 2018 and third quarter of 2017 was positively impacted by the five-branch acquisition completed during May 2018.

Interchange fees increased $133,000, or 8%, during the third quarter of 2018 compared with the second quarter of 2018 and increased $661,000, or 56%, compared with the third quarter of 2017.  The increase during the third quarter of 2018 compared with the second quarter of 2018 was largely attributable to increased card utilization by customers and the second quarter branch acquisition.  The increase during the third quarter of 2018 compared with the third quarter of 2017 was attributable to increased card utilization by customers, the branch acquisition and also attributable to the adoption of the new revenue recognition standard effective January 1, 2018.  While the adoption of the standard did not have a significant impact on the Company's financial results, the recording of revenue gross versus net of certain expenses, in accordance with the standard, did result in the reclassification of some expenses associated with the interchange fee revenue during the first first nine months of 2018.

Other operating income declined $274,000, or 30%, during the quarter ended September 30, 2018 compared with the second quarter of 2018 and increased $31,000, or 5%, compared with the third quarter of 2017.  The  decline in the third quarter of 2018 compared with the second quarter of 2018 was largely attributable to a decline in merchant card services revenue related to a non-recurring incentive payment received during the second quarter of 2018.

During the quarter ended September 30, 2018, non-interest expense totaled $21,576,000, a decline of $132,000, or 1%, compared with the quarter ended June 30, 2018, and an increase of $1,805,000, or 9%, compared with the third quarter of 2017.   The third quarter of 2018 included a full quarter of operating expenses for the five-branch acquisition completed during the second quarter of  2018.  The third quarter of 2018 included acquisition-related expenses of a non-recurring nature of approximately $396,000 (approximately $317,000 or $0.01 per share, on an after tax basis) while the second quarter of 2018 included acquisition-related expenses of approximately $904,000  (approximately $727,000 or $0.03 per share, on an after-tax basis) for the five-branch acquisition that closed on May 18, 2018 and the acquisition of First Security, Inc. that closed on October 15, 2018.

 

    Quarter Ended   Quarter Ended   Quarter Ended
Non-interest Expense   9/30/2018   6/30/2018   9/30/2017
(dollars in thousands)             
Salaries and Employee Benefits   $ 12,134     $ 12,019     $ 11,570  
Occupancy, Furniture and Equipment Expense   2,738     2,527     2,372  
FDIC Premiums   324     238     241  
Data Processing Fees   1,309     1,398     1,067  
Professional Fees   793     1,361     551  
Advertising and Promotion   851     857     1,315  
Intangible Amortization   430     306     230  
Other Operating Expenses   2,997     3,002     2,425  
Total Non-interest Expense   $ 21,576     $ 21,708     $ 19,771  
             

 

Salaries and benefits increased $115,000, or 1%, during the quarter ended September 30, 2018 compared with the second quarter of 2018 and increased $564,000, or 5%, compared with the third quarter of 2017.  The increase in salaries and benefits during the third quarter of 2018 compared with both the second quarter of 2018 and the third quarter of 2017 was primarily attributable to an increased number of full-time equivalent employees.

Occupancy, furniture and equipment expense increased $211,000, or 8%, during the third quarter of 2018 compared with the second quarter of 2018 and increased $366,000, or 15%, compared to the third quarter of 2017.  The increase during the third quarter of 2018 compared to both the second quarter of 2018 and the third quarter of 2017 was primarily due to operating costs related to the acquisition of the five banking branches in the Columbus and Greensburg, Indiana markets as well as other facilities the Company has placed into service over the past twelve months.

Data processing fees declined $89,000, or 6%, during the third quarter of 2018 compared with the second  quarter of 2018 and increased $242,000, or 23%, compared to the third quarter of 2017.  The decline during the third quarter of 2018 compared with the second quarter of 2018 was driven by a lower level of conversion-related costs associated with the aforementioned branch acquisition.  The higher level of costs during the third quarter of 2018 compared with the third quarter of 2017 was primarily attributable to costs associated with merger and acquisition activity during 2018 and overall growth of the Company.

Professional fees declined $568,000, or 42%, during the third quarter of 2018 compared with the second  quarter of 2018 and increased $242,000, or 44%, compared to the third quarter of 2017.  The decline during the third quarter of 2018 compared to the second quarter of 2018 was was largely related to a lower level of professional fees associated with the previously discussed merger and acquisition activity of the Company.  The increase during the third quarter of 2018 compared with the third quarter of 2017 was due to professional fees related to merger and acquisition activity during 2018, while there were no professional fee costs for acquisitions during the third quarter of 2017.

Advertising and promotion expense declined $6,000, or less than 1%, during the third quarter of 2018 compared with the second quarter of 2018 and declined $464,000, or 35%, compared to the third quarter of 2017.  The decline in the third quarter of 2018 compared to the third quarter of 2017 was primarily related to the donation of a former branch facility to a municipality in one of the Company's market areas during the third quarter of 2017.

Intangible amortization increased $124,000, or 41%, during the quarter ended September 30, 2018 compared with the second quarter of 2018 and increased $200,000, or 87%, compared with the third quarter of 2017.  The increase in intangible amortization was attributable to the previously discussed branch acquisition completed during the second quarter of 2018.

Other operating expenses declined $5,000, or less than 1%, during the third quarter of 2018 compared with the second quarter of 2018 and increased $572,000, or 24%, compared with the third quarter of 2017.  The increase in the third quarter of 2018 compared with the third quarter of 2017 was largely attributable to the adoption of the revenue recognition standard effective January 1, 2018 and the reclassification of expense as previously discussed.

The Company’s effective income tax rate was 18.1% during the three months ended September 30, 2018 compared with an effective tax rate of 17.3% during the second quarter of 2018 and 26.7% during the third quarter of 2017.  The Company's effective tax rate and provision for income tax was positively impacted during the first three quarters of 2018 by the reduction of federal income tax rates from a statutory rate of 35% to 21% effective January 1, 2018 related to the federal tax reform legislation enacted during the fourth quarter of 2017.

 

About German American

German American Bancorp, Inc. is a NASDAQ-traded (symbol: GABC) bank holding company based in Jasper, Indiana.  Following the merger and planned merger integration of First Security, Inc., German American, through its banking subsidiary German American Bank, will operate 66 banking offices in 20 contiguous southern Indiana counties and five counties in Kentucky.  The Company also owns an investment brokerage subsidiary (German American Investment Services, Inc.) and a full line property and casualty insurance agency (German American Insurance, Inc.).

 

Cautionary Note Regarding Forward-Looking Statements

Certain statements in this press release may be deemed “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.  Readers are cautioned that, by their nature, forward-looking statements are based on assumptions and are subject to risks, uncertainties, and other factors. Actual results and experience could differ materially from the anticipated results or other expectations expressed or implied by these forward-looking statements as a result of a number of factors, including but not limited to, those discussed in this press release. Factors that could cause actual experience to differ from the expectations expressed or implied in this press release include the unknown future direction of interest rates and the timing and magnitude of any changes in interest rates; changes in competitive conditions; the introduction, withdrawal, success and timing of asset/liability management strategies or of mergers and acquisitions and other business initiatives and strategies; changes in customer borrowing, repayment, investment and deposit practices; changes in fiscal, monetary and tax policies; changes in financial and capital markets; potential deterioration in general economic conditions, either nationally or locally, resulting in, among other things, credit quality deterioration; capital management activities, including possible future sales of new securities, or possible repurchases or redemptions by the Company of outstanding debt or equity securities; risks of expansion through acquisitions and mergers, such as unexpected credit quality problems of the acquired loans or other assets, unexpected attrition of the customer base of the acquired institution or branches, and difficulties in integration of the acquired operations; factors driving impairment charges on investments; the impact, extent and timing of technological changes; potential cyber-attacks, information security breaches and other criminal activities; litigation liabilities, including related costs, expenses, settlements and judgments, or the outcome of matters before regulatory agencies, whether pending or commencing in the future; actions of the Federal Reserve Board; changes in accounting principles and interpretations; the expected impact of  U.S. tax regulations passed in December 2017; potential increases of federal deposit insurance premium expense, and possible future special assessments of FDIC premiums, either industry wide or specific to the Company’s banking subsidiary; actions of the regulatory authorities under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act") and the Federal Deposit Insurance Act and other possible legislative and regulatory actions and reforms; impacts resulting from possible amendments or revisions to the Dodd-Frank Act and the regulations promulgated thereunder, or to Consumer Financial Protection Bureau rules and regulations; the continued availability of earnings and excess capital sufficient for the lawful and prudent declaration and payment of cash dividends; and other risk factors expressly identified in the Company’s filings with the United States Securities and Exchange Commission. Such statements reflect our views with respect to future events and are subject to these and other risks, uncertainties and assumptions relating to the operations, results of operations, growth strategy and liquidity of the Company. Readers are cautioned not to place undue reliance on these forward-looking statements. It is intended that these forward-looking statements speak only as of the date they are made. We do not undertake any obligation to release publicly any revisions to these forward-looking statements to reflect future events or circumstances or to reflect the occurrence of unanticipated events.

 

GERMAN AMERICAN BANCORP, INC.
(unaudited, dollars in thousands except per share data)
           
Consolidated Balance Sheets
           
  September 30, 2018   June 30, 2018   September 30, 2017
ASSETS                      
Cash and Due from Banks $ 50,980     $ 60,244     $ 44,804  
Short-term Investments 14,604     11,038     9,758  
Investment Securities 739,980     739,834     741,710  
           
Loans Held-for-Sale 9,178     9,552     8,484  
           
Loans, Net of Unearned Income 2,336,625     2,318,510     2,086,325  
Allowance for Loan Losses (16,051)     (15,637)     (15,321)  
Net Loans 2,320,574     2,302,873     2,071,004  
           
Stock in FHLB and Other Restricted Stock 13,048     13,048     13,048  
Premises and Equipment 69,267     66,641     51,355  
Goodwill and Other Intangible Assets 65,548     65,978     56,378  
Other Assets 80,590     75,336     76,348  
TOTAL ASSETS $ 3,363,769     $ 3,344,544     $ 3,072,889  
           
LIABILITIES          
Non-interest-bearing Demand Deposits $ 634,421     $ 629,724     $ 589,315  
Interest-bearing Demand, Savings, and Money Market Accounts 1,605,818     1,611,583     1,454,073  
Time Deposits 400,608     360,133     381,184  
Total Deposits 2,640,847     2,601,440     2,424,572  
           
Borrowings 327,039     354,803     261,941  
Other Liabilities 19,760     17,761     25,751  
TOTAL LIABILITIES 2,987,646     2,974,004     2,712,264  
           
SHAREHOLDERS' EQUITY          
Common Stock and Surplus 189,195     188,885     187,917  
Retained Earnings 204,188     194,994     169,859  
Accumulated Other Comprehensive Income (Loss) (17,260)     (13,339)     2,849  
SHAREHOLDERS' EQUITY 376,123     370,540     360,625  
           
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 3,363,769     $ 3,344,544     $ 3,072,889  
           
END OF PERIOD SHARES OUTSTANDING 22,968,078     22,967,898     22,930,017  
           
TANGIBLE BOOK VALUE PER SHARE (1) $ 13.52     $ 13.26     $ 13.27  
           
 
(1) Tangible Book Value per Share is defined as Total Shareholders' Equity less Goodwill and Other Intangible Assets divided by End of Period Shares Outstanding.

 

 

GERMAN AMERICAN BANCORP, INC.
(unaudited, dollars in thousands except per share data)
                     
Consolidated Statements of Income
                     
    Three Months Ended   Nine Months Ended
    September 30, 
2018
  June 30, 
2018
  September 30, 
2017
  September 30, 
2018
  September 30, 
2017
INTEREST INCOME                  
Interest and Fees on Loans $ 28,148     $ 26,308     $ 23,182     $ 78,406     $ 68,046  
Interest on Short-term Investments 101     54     46     211     100  
Interest and Dividends on Investment Securities 5,226     5,171     4,758     15,536     14,274  
TOTAL INTEREST INCOME 33,475     31,533     27,986     94,153     82,420  
                     
INTEREST EXPENSE                  
Interest on Deposits 3,535     2,848     1,959     8,666     5,028  
Interest on Borrowings 1,392     1,216     1,110     3,860     2,937  
TOTAL INTEREST EXPENSE 4,927     4,064     3,069     12,526     7,965  
                     
NET INTEREST INCOME 28,548     27,469     24,917     81,627     74,455  
Provision for Loan Losses 500     1,220     250     2,070     1,100  
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 28,048     26,249     24,667     79,557     73,355  
                     
NON-INTEREST INCOME                  
Net Gain on Sales of Loans 866     905     952     2,421     2,598  
Net Gain on Securities 90     74     575     434     575  
Other Non-interest Income 8,007     7,903     6,748     24,482     21,087  
TOTAL NON-INTEREST INCOME 8,963     8,882     8,275     27,337     24,260  
                     
NON-INTEREST EXPENSE                  
Salaries and Benefits 12,134     12,019     11,570     36,279     34,474  
Other Non-interest Expenses 9,442     9,689     8,201     27,460     23,329  
TOTAL NON-INTEREST EXPENSE 21,576     21,708     19,771     63,739     57,803  
                     
Income before Income Taxes 15,435     13,423     13,171     43,155     39,812  
Income Tax Expense 2,796     2,326     3,511     7,606     10,757  
                     
NET INCOME $ 12,639     $ 11,097     $ 9,660     $ 35,549     $ 29,055  
                     
BASIC EARNINGS PER SHARE $ 0.55     $ 0.48     $ 0.42     $ 1.55     $ 1.27  
DILUTED EARNINGS PER SHARE $ 0.55     $ 0.48     $ 0.42     $ 1.55     $ 1.27  
                     
WEIGHTED AVERAGE SHARES OUTSTANDING 22,968,047     22,968,178     22,929,864     22,958,977     22,922,724  
DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING 22,968,047     22,968,178     22,929,864     22,958,977     22,922,724  
                     

 

 

GERMAN AMERICAN BANCORP, INC.
(unaudited, dollars in thousands except per share data)
                       
      Three Months Ended   Nine Months Ended
      September 30,   June 30,   September 30,   September 30,   September 30,
      2018   2018   2017   2018   2017
EARNINGS PERFORMANCE RATIOS
                   
Annualized Return on Average Assets   1.52 %   1.38 %   1.27 %   1.47 %   1.30 %
Annualized Return on Average Equity   13.47 %   12.15 %   10.78 %   12.88 %   11.16 %
Net Interest Margin   3.76 %   3.77 %   3.70 %   3.72 %   3.78 %
Efficiency Ratio (1)   56.48 %   58.63 %   57.34 %   57.43 %   56.36 %
Net Overhead Expense to Average Earning Assets (2)   1.63 %   1.71 %   1.63 %   1.62 %   1.61 %
                       
ASSET QUALITY RATIOS
                   
Annualized Net Charge-offs to Average Loans   0.01 %   0.01 %   0.05 %   0.10 %   0.04 %
Allowance for Loan Losses to Period End Loans   0.69 %   0.67 %   0.73 %        
Non-performing Assets to Period End Assets   0.26 %   0.28 %   0.33 %        
Non-performing Loans to Period End Loans   0.36 %   0.41 %   0.46 %        
Loans 30-89 Days Past Due to Period End Loans   0.65 %   0.52 %   0.48 %        
                       
SELECTED BALANCE SHEET & OTHER FINANCIAL DATA
                   
 Average Assets   $ 3,333,005     $ 3,226,091     $ 3,033,055     $ 3,227,466     $ 2,977,023  
Average Earning Assets   $ 3,095,195     $ 2,994,278     $ 2,820,750     $ 3,002,543     $ 2,769,758  
Average Total Loans   $ 2,318,657     $ 2,229,972     $ 2,058,453     $ 2,230,100     $ 2,015,245  
Average Demand Deposits   $ 636,989     $ 625,158     $ 572,204     $ 616,048     $ 563,679  
Average Interest Bearing Liabilities   $ 2,301,011     $ 2,217,198     $ 2,077,218     $ 2,223,469     $ 2,044,112  
Average Equity   $ 375,255     $ 365,197     $ 358,299     $ 368,053     $ 347,057  
                       
Period End Non-performing Assets (3)   $ 8,597     $ 9,527     $ 10,219          
Period End Non-performing Loans (4)   $ 8,497     $ 9,487     $ 9,651          
Period End Loans 30-89 Days Past Due (5)   $ 15,110     $ 12,146     $ 10,089          
                       
Tax Equivalent Net Interest Income   $ 29,240     $ 28,142     $ 26,207     $ 83,643     $ 78,306  
Net Charge-offs during Period   $ 86     $ 43     $ 249     $ 1,713     $ 587  
                       
(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.

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