UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One) |
[X] |
Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934 for the Quarterly Period Ended March 31, 2004 Or |
[ ] |
Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the Transition Period from _______________ to ___________________ |
Commission File Number 0-11244
German American Bancorp
(Exact name of registrant as specified in its charter)
INDIANA (State or other jurisdiction of incorporation or organization) |
35-1547518 (I.R.S. Employer Identification No.) |
711 Main Street, Jasper, Indiana 47546
(Address of Principal Executive Offices and Zip Code)
Registrant's telephone number, including area code: (812) 482-1314
Indicate by check whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
YES [X] NO [ ]
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).
YES [X]
NO [ ]
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.
Class Common Stock, No par value |
Outstanding at May 3, 2004 10,940,803 |
1
GERMAN AMERICAN BANCORP
INDEX
PART I. FINANCIAL INFORMATION
| Item 1. | Financial Statements | |
| Consolidated Balance Sheets — March 31, 2004 and December 31, 2003 | ||
| Consolidated Statements of Income and Comprehensive Income — Three months Ended March 31, 2004 and 2003 | ||
| Consolidated Statements of Cash Flows — Three months Ended March 31, 2004 and 2003 | ||
| Notes to Consolidated Financial Statements — March 31, 2004 | ||
| Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations. | |
| Item 3. | Quantitative and Qualitative Disclosures about Market Risk. | |
| Item 4. | Controls and Procedures. | |
PART II. OTHER INFORMATION
| Item 2. | Changes in Securities and Use of Proceeds | |
| Item 6. | Exhibits and Reports on Form 8-K | |
SIGNATURES
EXHIBIT INDEX
2
PART 1. FINANCIAL INFORMATION
ITEM 1. Financial Statements
GERMAN AMERICAN BANCORP
CONSOLIDATED BALANCE SHEETS
(dollars in thousands except per share data)
| March 31, 2004 |
December 31, 2003 | |||||||
|---|---|---|---|---|---|---|---|---|
| (unaudited) | ||||||||
| ASSETS | ||||||||
| Cash and Due from Banks | $ | 23,939 | $ | 28,729 | ||||
| Federal Funds Sold and Other Short-term Investments | 11,075 | 3,804 | ||||||
| Cash and Cash Equivalents | 35,014 | 32,533 | ||||||
| Securities Available-for-Sale, at Fair Value | 193,798 | 195,793 | ||||||
| Securities Held-to-Maturity, at Cost | 15,033 | 17,417 | ||||||
| Loans Held-for-Sale | 651 | 1,416 | ||||||
| Total Loans | 609,889 | 613,255 | ||||||
| Less: Unearned Income | (1,392 | ) | (1,389 | ) | ||||
| Allowance for Loan Losses | (8,436 | ) | (8,265 | ) | ||||
| Loans, Net | 600,061 | 603,601 | ||||||
| Stock in FHLB of Indianapolis and Other Restricted Stock, at Cost | 13,106 | 12,944 | ||||||
| Premises, Furniture and Equipment, Net | 21,502 | 21,605 | ||||||
| Other Real Estate | 754 | 749 | ||||||
| Goodwill | 1,794 | 1,794 | ||||||
| Intangible Assets | 2,697 | 2,804 | ||||||
| Company Owned Life Insurance | 18,024 | 17,831 | ||||||
| Accrued Interest Receivable and Other Assets | 15,655 | 17,459 | ||||||
| TOTAL ASSETS | $ | 918,089 | $ | 925,946 | ||||
| LIABILITIES | ||||||||
| Non-interest-bearing Demand Deposits | $ | 114,692 | $ | 112,689 | ||||
| Interest-bearing Demand, Savings, and Money Market Accounts | 271,982 | 266,652 | ||||||
| Time Deposits < $100,000 | 277,363 | 283,959 | ||||||
| Time Deposits $100,000 or more and Brokered Deposits | 60,209 | 53,833 | ||||||
| Total Deposits | 724,246 | 717,133 | ||||||
| FHLB Advances and Other Borrowings | 98,425 | 112,559 | ||||||
| Accrued Interest Payable and Other Liabilities | 11,242 | 13,128 | ||||||
| TOTAL LIABILITIES | 833,913 | 842,820 | ||||||
| SHAREHOLDERS' EQUITY | ||||||||
| Common Stock, no par value, $1 stated value; | ||||||||
| 20,000,000 shares authorized | 10,941 | 10,933 | ||||||
| Preferred Stock, $10 par value; 500,000 | ||||||||
| shares authorized, no shares issued | --- | --- | ||||||
| Additional Paid-in Capital | 67,753 | 67,532 | ||||||
| Retained Earnings | 4,846 | 4,653 | ||||||
| Accumulated Other Comprehensive Income | 636 | 8 | ||||||
| TOTAL SHAREHOLDERS' EQUITY | 84,176 | 83,126 | ||||||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 918,089 | $ | 925,946 | ||||
| End of period shares issued and outstanding | 10,940,803 | 10,932,882 | ||||||
See accompanying notes to consolidated financial statements.
3
| Three Months Ended March 31, |
||||||||
|---|---|---|---|---|---|---|---|---|
| 2004 |
2003 | |||||||
| INTEREST INCOME | ||||||||
| Interest and Fees on Loans | $ | 9,705 | $ | 10,888 | ||||
| Interest on Federal Funds Sold and Other Short-term Investments | 28 | 56 | ||||||
| Interest and Dividends on Securities: | ||||||||
| Taxable | 1,284 | 1,534 | ||||||
| Non-taxable | 759 | 971 | ||||||
| TOTAL INTEREST INCOME | 11,776 | 13,449 | ||||||
| INTEREST EXPENSE | ||||||||
| Interest on Deposits | 3,133 | 3,764 | ||||||
| Interest on FHLB Advances and Other Borrowings | 1,165 | 1,900 | ||||||
| TOTAL INTEREST EXPENSE | 4,298 | 5,664 | ||||||
| NET INTEREST INCOME | 7,478 | 7,785 | ||||||
| Provision for Loan Losses | 402 | (36 | ) | |||||
| NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES | 7,076 | 7,821 | ||||||
| NON-INTEREST INCOME | ||||||||
| Trust and Investment Product Fees | 456 | 356 | ||||||
| Service Charges on Deposit Accounts | 833 | 648 | ||||||
| Insurance Revenues | 1,044 | 793 | ||||||
| Other Operating Income | 435 | 176 | ||||||
| Gain on Sales of Loans and Related Assets | 182 | 537 | ||||||
| Net Gain / (Loss) on Sales of Securities | 5 | 23 | ||||||
| TOTAL NON-INTEREST INCOME | 2,955 | 2,533 | ||||||
| NON-INTEREST EXPENSE | ||||||||
| Salaries and Employee Benefits | 4,615 | 4,422 | ||||||
| Occupancy Expense | 620 | 617 | ||||||
| Furniture and Equipment Expense | 563 | 551 | ||||||
| Data Processing Fees | 306 | 277 | ||||||
| Professional Fees | 367 | 285 | ||||||
| Advertising and Promotions | 229 | 225 | ||||||
| Supplies | 139 | 153 | ||||||
| Other Operating Expenses | 918 | 793 | ||||||
| TOTAL NON-INTEREST EXPENSE | 7,757 | 7,323 | ||||||
| Income before Income Taxes | 2,274 | 3,031 | ||||||
| Income Tax Expense | 322 | 593 | ||||||
| NET INCOME | $ | 1,952 | $ | 2,438 | ||||
| COMPREHENSIVE INCOME | $ | 2,580 | $ | 2,031 | ||||
| Earnings Per Share | $ | 0.18 | $ | 0.21 | ||||
| Diluted Earnings Per Share | $ | 0.18 | $ | 0.20 | ||||
| Dividends Per Share | $ | 0.14 | $ | 0.13 | ||||
See accompanying notes to consolidated financial statements.
4
| Three Months Ended March 31, |
||||||||
|---|---|---|---|---|---|---|---|---|
| 2004 |
2003 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net Income | $ | 1,952 | $ | 2,438 | ||||
| Adjustments to Reconcile Net Income to Net Cash from Operating Activities: | ||||||||
| Net Amortization on Securities | 397 | 575 | ||||||
| Depreciation and Amortization | 702 | 644 | ||||||
| Amortization and Impairment of Mortgage Servicing Rights | 227 | 321 | ||||||
| Net Change in Loans Held for Sale | 670 | 3,320 | ||||||
| Loss on Investment in Limited Partnership | (20 | ) | (31 | ) | ||||
| Provision for Loan Losses | 402 | (36 | ) | |||||
| (Gain) on Sale of Securities, net | (5 | ) | (23 | ) | ||||
| Loss / (Gain) on Sale of Other Real Estate and Repossessed Assets | (1 | ) | 143 | |||||
| Loss / (Gain) on Disposition and Impairment of Premises and | ||||||||
| Equipment | --- | (3 | ) | |||||
| Increase in Cash Surrender Value of Company Owned Life Insurance | ||||||||
| (COLI) | (193 | ) | (58 | ) | ||||
| Change in Assets and Liabilities: | ||||||||
| Interest Receivable and Other Assets | 1,349 | 862 | ||||||
| Interest Payable and Other Liabilities | (1,886 | ) | (479 | ) | ||||
| Net Cash from Operating Activities | 3,594 | 7,673 | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Proceeds from Maturities of Securities Available-for-Sale | 8,160 | 35,715 | ||||||
| Proceeds from Sales of Securities Available-for-Sale | 1,986 | 786 | ||||||
| Purchase of Securities Available-for-Sale | (7,732 | ) | (15,436 | ) | ||||
| Proceeds from Maturities of Securities Held-to-Maturity | 2,382 | 1,211 | ||||||
| Proceeds from Sales of Loans | 1,250 | --- | ||||||
| Loans Made to Customers, net of Payments Received | 1,620 | 12,071 | ||||||
| Proceeds from Sales of Other Real Estate | 264 | 345 | ||||||
| Property and Equipment Expenditures | (492 | ) | (1,074 | ) | ||||
| Proceeds from the Sale of Property and Equipment | --- | 3 | ||||||
| Net Cash from Investing Activities | 7,438 | 33,621 | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Change in Deposits | 7,113 | (3,263 | ) | |||||
| Change in Short-term Borrowings | (15,528 | ) | (1,123 | ) | ||||
| Advances of Long-term Debt | 1,500 | 8,000 | ||||||
| Repayments of Long-term Debt | (106 | ) | (857 | ) | ||||
| Purchase/Retire Common Stock | --- | (21,443 | ) | |||||
| Dividends Paid | (1,530 | ) | (1,604 | ) | ||||
| Net Cash from Financing Activities | (8,551 | ) | (20,290 | ) | ||||
| Net Change in Cash and Cash Equivalents | 2,481 | 21,004 | ||||||
| Cash and Cash Equivalents at Beginning of Year | 32,533 | 35,745 | ||||||
| Cash and Cash Equivalents at End of Period | $ | 35,014 | $ | 56,749 | ||||
See accompanying notes to consolidated financial statements.
5
Note 1 – Basis of Presentation
German American Bancorp operates primarily in the banking industry. The accounting and reporting policies of German American Bancorp and its subsidiaries conform to accounting principles generally accepted in the United States of America. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. All adjustments which are, in the opinion of management, necessary for a fair presentation of the results for the periods reported have been included in the accompanying unaudited consolidated financial statements, and all such adjustments are of a normal recurring nature. It is suggested that these consolidated financial statements and notes be read in conjunction with the financial statements and notes thereto in the German American Bancorp December 31, 2003 Annual Report on Form 10-K.
Note 2 – Per Share Data
Earnings and dividends per share have been retroactively computed as though shares issued for stock dividends had been outstanding for all periods presented. The computation of Earnings per Share and Diluted Earnings per Share are as follows:
| Three Months Ended March 31, |
||||||||
|---|---|---|---|---|---|---|---|---|
| 2004 |
2003 | |||||||
| Earnings per Share: | ||||||||
| Net Income | $ | 1,952 | $ | 2,438 | ||||
| Weighted Average Shares Outstanding | 10,936,799 | 11,869,714 | ||||||
| Earnings per Share: | $ | 0.18 | $ | 0.21 | ||||
| Diluted Earnings per Share: | ||||||||
| Net Income | $ | 1,952 | $ | 2,438 | ||||
| Weighted Average Shares Outstanding | 10,936,799 | 11,869,714 | ||||||
| Stock Options, Net | 40,189 | 45,600 | ||||||
| Diluted Weighted Average Shares Outstanding | 10,976,988 | 11,915,314 | ||||||
| Diluted Earnings per Share | $ | 0.18 | $ | 0.20 | ||||
Note 3 – Securities
The fair values of Securities Available-for-Sale are as follows (dollars in thousands):
| March 31, 2004 |
December 31, 2003 | |||||||
|---|---|---|---|---|---|---|---|---|
| Earnings per Share: | ||||||||
| U.S. Treasury Securities and Obligations of | ||||||||
| U.S. Government Corporations and Agencies | $ | 5,125 | $ | 4,090 | ||||
| Obligations of State and Political Subdivisions | 35,321 | 38,579 | ||||||
| Asset-/Mortgage-backed Securities | 136,896 | 136,585 | ||||||