Attached files
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| 8-K - GERMAN AMERICAN BANCORP, INC. | gabc8kjan312014.htm |
| EX-99.2 - PRESS RELEASE ANNOUNCING SNOWDEN ELECTION, DATED JANUARY 31, 2014 - GERMAN AMERICAN BANCORP, INC. | ex99-2.htm |
Exhibit 99.1
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
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JANUARY 28, 2014
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GERMAN AMERICAN BANCORP, INC. (GABC)
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REPORTS RECORD 2013 EARNINGS & ANNOUNCES INCREASE IN QUARTERLY CASH DIVIDEND
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Jasper, Indiana –January 28, 2014 -- German American Bancorp, Inc. (NASDAQ: GABC) reported that the Company has again achieved record earnings for the year ended on December 31, 2013. The record financial performance in 2013 continues a trend of exceptional performance by German American, as the Company has reported record earnings for the past four consecutive years and the period of 2008-2013 represents the best six years in the Company’s history in terms of reported annual earnings. The Company’s return on average shareholder equity of 13.40% in 2013 represents the 9th consecutive year that German American has delivered double-digit returns on shareholders’ equity.
The Company’s 2013 net income of $25.4 million, or $1.98 per share, was an increase of approximately 4%, on a per share basis, over its previous record annual net income of $24.1 million, or $1.90 per share reported in 2012, and represented a 23% increase, on a per share basis, from the $20.2 million, or $1.61 per share, record earnings the Company reported in 2011. Fourth quarter earnings were $6.6 million, or $0.50 per share, an increase of approximately 2% from 2012 fourth quarter results of $6.2 million, or $0.49 per share. The Company’s 2013 fourth quarter results are inclusive of the acquisition of United Commerce Bancorp which was finalized on October 1, 2013.
This 2013 record performance was attributable to an increased level of net interest income, driven by a higher level of earning assets within both the Company’s loan portfolio and securities portfolio, significant growth in the Company’s non-interest income across virtually every operating segment, as well as attributable to, a reduced level of provision for loan loss, as the Company’s historic strong asset quality returned to pre-recessionary levels in 2013.
The Company also announced that it was increasing the level of its regular quarterly cash dividend. German American’s Board of Directors declared a regular quarterly cash dividend of $0.16 per share, which will be payable on February 20, 2014 to shareholders of record as of February 10, 2014. This level of regular quarterly cash divided represents approximately a 7% increase above the Company’s prior quarterly cash dividend level.
Mark A. Schroeder, German American Chairman & CEO, in commenting on the Company’s 2013 results stated, “We are pleased to have successfully continued in 2013 the trend of record financial performance that our Company has attained. We recognize that the ongoing achievement of these record levels of performance is only possible due to our clients’ acceptance of the financial products and services we offer. Therefore, our most important achievement in 2013 was our ability to once again deliver upon our continued pledge to our customers and our shareholders to offer the very best in financial products and services throughout our Southern Indiana footprint in a safe, sound, and secure manner.
Within our historic Southern Indiana markets, we’ve enjoyed a very strong level of organic deposit growth during the past several years. In 2012 and 2013, we saw a significant increase in the level of loan demand from both our business and consumer clients, as our market’s economic environment reflected the improvement being experienced on a national level. Additionally, our presence has been extremely well received by a growing base of new clients since our expansion into the Bloomington, Indiana market in 2007, the Evansville, Indiana market in 2010, and most recently the Columbus, Indiana market in 2012, where in December 2013 we opened a comprehensive financial center in the downtown area.
-1-
Our Company’s sole focus is on our clients located throughout Southern Indiana, and we recognize that our past, present, and future success as an organization is explicitly linked to the financial well-being of those clients and to the prosperity of the Southern Indiana communities in which we do business. We thank our many clients, located throughout our market area, for the privilege of assisting them in the achievement of their financial goals.”
Balance Sheet Highlights
Total assets for the Company increased to $2.163 billion at December 31, 2013, representing an increase of $157.5 million compared with December 31, 2012. The increase during 2013 was largely attributable to growth of the Company’s loan portfolio from throughout its footprint and attributable to the acquisition of United Commerce Bancorp effective October 1, 2013. Total assets of United Commerce at the time of acquisition totaled approximately $120.2 million.
December 31, 2013 loans outstanding increased by $100.9 million compared with September 30, 2013, and increased $177.3 million, or approximately 15%, compared to year-end 2012. The increase in loans during the fourth quarter and year ended 2013 was broad based across all categories of loans and throughout the Company’s market area. Also contributing to the loan growth in both comparative periods was the acquisition of United Commerce Bancorp. Loans acquired from United Commerce totaled approximately $76.9 million at December 31, 2013.
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End of Period Loan Balances
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12/31/13
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09/30/13
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12/31/12
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(dollars in thousands)
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Commercial & Industrial Loans
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$ | 350,955 | $ | 338,770 | $ | 335,373 | ||||||
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Commercial Real Estate Loans
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582,066 | 530,260 | 488,496 | |||||||||
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Agricultural Loans
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192,880 | 185,868 | 179,906 | |||||||||
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Consumer Loans
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130,628 | 121,772 | 115,540 | |||||||||
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Residential Mortgage Loans
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128,683 | 107,620 | 88,586 | |||||||||
| $ | 1,385,212 | $ | 1,284,290 | $ | 1,207,901 | |||||||
Non-performing assets totaled $9.4 million at December 31, 2013 compared to $7.5 million of non-performing assets at September 30, 2013 and $12.0 million at December 31, 2012. Non-performing assets represented 0.44% of total assets at December 31, 2013 compared to 0.37% of total assets at September 30, 2013, and compared to 0.60% at December 31, 2012. Non-performing loans totaled $8.4 million at December 31, 2013 compared to $6.9 million at September 30, 2013, and compared to $10.4 million of non-performing loans at December 31, 2012. Non-performing loans represented 0.61% of total loans at December 31, 2013 compared with 0.54% of total outstanding loans at September 30, 2013 and 0.86% of total loans outstanding at December 31, 2012. Non-performing assets attributable to the United Commerce acquisition totaled $2.7 million and non-performing loans attributable to the United Commerce acquisition totaled $1.8 million at December 31, 2013.
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Non-performing Assets
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(dollars in thousands)
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12/31/13
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09/30/13
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12/31/12
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Non-Accrual Loans
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$ | 8,378 | $ | 6,857 | $ | 10,357 | ||||||
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Past Due Loans (90 days or more)
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8 | 91 | - | |||||||||
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Total Non-Performing Loans
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8,386 | 6,948 | 10,357 | |||||||||
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Other Real Estate
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1,029 | 584 | 1,645 | |||||||||
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Total Non-Performing Assets
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$ | 9,415 | $ | 7,532 | $ | 12,002 | ||||||
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Restructured Loans
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$ | 2,418 | $ | 2,536 | $ | 362 | ||||||
-2-
The Company’s allowance for loan losses totaled $14.6 million at December 31, 2013 representing an increase of $120,000 or 3% on an annualized basis from September 30, 2013 and a decrease of $936,000 or 6% compared with year-end 2012. The allowance for loan losses represented 1.05% of period end loans at December 31, 2013 compared with 1.13% of period-end loans at September 30, 2013 and 1.29% of period-end loans at December 31, 2012. 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 discount on acquired loans of $5.9 million (including $3.9 million attributable to the United Commerce acquisition) as of December 31, 2013, $2.1 million at September 30, 2013 and $3.5 million at year-end 2012.
Total deposits increased $141.1 million as of December 31, 2013 compared with September 30, 2013 total deposits and increased by approximately $171.2 million or 10% compared with year-end 2012. Deposits acquired from United Commerce totaled approximately $95.7 million at year-end 2013.
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End of Period Deposit Balances
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12/31/13
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09/30/13
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12/31/12
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(dollars in thousands)
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Non-interest-bearing Demand Deposits
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$ | 400,024 | $ | 364,110 | $ | 349,174 | ||||||
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IB Demand, Savings, and MMDA Accounts
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1,063,098 | 974,748 | 962,574 | |||||||||
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Time Deposits < $100,000
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224,361 | 215,082 | 233,422 | |||||||||
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Time Deposits > $100,000
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124,673 | 117,099 | 95,761 | |||||||||
| $ | 1,812,156 | $ | 1,671,039 | $ | 1,640,931 | |||||||
Results of Operations Highlights – Year ended December 31, 2013
Net income for the year ended December 31, 2013 totaled $25,413,000 or $1.98 per share, an increase of $1,358,000 or approximately 4% on a per share basis, from the year ended December 31, 2012 net income of $24,055,000 or $1.90 per share.
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Summary Average Balance Sheet
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(Tax-equivalent basis / dollars in thousands)
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Year Ended December 31, 2013
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Year Ended December 31, 2012
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Principal Balance
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Income/ Expense
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Yield/Rate
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Principal Balance
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Income/ Expense
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Yield/Rate
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Assets
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Federal Funds Sold and Other
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Short-term Investments
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$ | 15,507 | $ | 30 | 0.19 | % | $ | 44,999 | $ | 91 | 0.20 | % | ||||||||||||
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Securities
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628,949 | 15,582 | 2.48 | % | 619,910 | 16,689 | 2.69 | % | ||||||||||||||||
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Loans and Leases
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1,272,055 | 61,862 | 4.86 | % | 1,147,891 | 61,951 | 5.40 | % | ||||||||||||||||
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Total Interest Earning Assets
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$ | 1,916,511 | $ | 77,474 | 4.04 | % | $ | 1,812,800 | $ | 78,731 | 4.34 | % | ||||||||||||
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Liabilities
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Demand Deposit Accounts
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$ | 355,841 | $ | 313,812 | ||||||||||||||||||||
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IB Demand, Savings, and
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MMDA Accounts
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$ | 1,000,486 | $ | 1,573 | 0.16 | % | $ | 947,707 | $ | 1,764 | 0.19 | % | ||||||||||||
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Time Deposits
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339,469 | 3,124 | 0.92 | % | 357,193 | 5,194 | 1.45 | % | ||||||||||||||||
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FHLB Advances and Other Borrowings
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136,569 | 2,458 | 1.80 | % | 118,201 | 3,954 | 3.35 | % | ||||||||||||||||
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Total Interest-Bearing Liabilities
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$ | 1,476,524 | $ | 7,155 | 0.48 | % | $ | 1,423,101 | $ | 10,912 | 0.77 | % | ||||||||||||
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Cost of Funds
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0.37 | % | 0.60 | % | ||||||||||||||||||||
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Net Interest Income
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$ | 70,319 | $ | 67,819 | ||||||||||||||||||||
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Net Interest Margin
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3.67 | % | 3.74 | % | ||||||||||||||||||||
-3-
During the year ended December 31, 2013, net interest income totaled $68,517,000 representing an increase of $2,269,000 or 3% from the year ended December 31, 2012 net interest income of $66,248,000. The increased net interest income during 2013 compared with 2012 was driven by a higher level of earning assets attributable primarily to average loan growth and an overall decline in the Company’s cost of funds. The tax equivalent net interest margin for the year ended December 31, 2013 was 3.67% compared to 3.74% in 2012. The decline in the net interest margin during 2013 compared with the 2012 was largely attributable to the continued downward pressure on earning asset yields. Also contributing to the decline in the net interest margin and earning assets yields was a reduction in the accretion of loan discount on acquired loans during 2013 compared with 2012. During 2013 the accretion contributed approximately 8 basis points to the net interest margin while in 2012 the accretion contributed approximately 12 basis points to the net interest margin. Partially mitigating the decline in earning assets yields was a 23 basis points decline in the Company’s cost of funds during 2013 compared to 2012 which was driven primarily by a continued decline in deposit rates.
The provision for loan loss totaled $350,000 during the year ended December 31, 2013 representing a decline of $2,062,000, or 85%, from the year ended December 31, 2012. During 2013, the provision for loan loss represented approximately 3 basis points of average loans while net charge-offs represented approximately 10 basis points of average loans. The significant decline in the Company’s provision for loan loss during 2013 compared with 2012 was largely attributable to a lower level of net charge-offs and overall improvement in the level of adversely classified and non-performing loans.
During the year ended December 31, 2013, non-interest income increased approximately 8% from the year ended December 31, 2012.
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Year Ended
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Year Ended
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Non-interest Income
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12/31/13
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12/31/12
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(dollars in thousands)
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Trust and Investment Product Fees
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$ | 3,358 | $ | 2,657 | ||||
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Service Charges on Deposit Accounts
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4,144 | 4,076 | ||||||
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Insurance Revenues
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6,217 | 5,524 | ||||||
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Company Owned Life Insurance
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965 | 974 | ||||||
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Interchange Fee Income
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1,854 | 1,724 | ||||||
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Other Operating Income
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2,003 | 1,955 | ||||||
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Subtotal
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18,541 | 16,910 | ||||||
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Net Gains on Loans
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2,645 | 3,234 | ||||||
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Net Gains (Loss) on Securities
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2,429 | 1,667 | ||||||
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Total Non-interest Income
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$ | 23,615 | $ | 21,811 | ||||
Trust and investment product fees increased $701,000, or 26%, during 2013 compared with 2012. The increase was attributable to increased trust revenues and increased retail brokerage revenues. Insurance revenues increased approximately $693,000, or 13%, during 2013 as compared to 2012 as a result of increased contingency revenue and increased commercial insurance revenue. Contingency revenue totaled $246,000 during 2013 compared with $88,000 during 2012.
Net gains on sales of loans decreased $589,000, or 18%, during 2013 compared with the same period of 2012. Loan sales totaled $166.6 million during 2013 compared with $186.8 million during 2012. The net gain on securities increased $762,000, or 46%, during 2013 compared with 2012. During 2013, the Company realized net gains on the sale of securities of $2,429,000 related to the sale of $90.5 million of securities. Included in the gain during 2013 was a $343,000 gain the Company realized related to the acquisition accounting treatment of the existing equity ownership position the Company held in United Commerce at the time of acquisition. During 2012, the Company realized net gains on the sale of securities of $1,667,000 related to the sale of approximately $94.3 million of securities.
-4-
During the year ended December 31, 2013, non-interest expense increased approximately $3,982,000, or 8%, compared with the year ended December 31, 2012.
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Year Ended
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Year Ended
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Non-interest Expense
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12/31/13
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12/31/12
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(dollars in thousands)
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Salaries and Employee Benefits
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$ | 31,482 | $ | 29,086 | ||||
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Occupancy, Furniture and Equipment Expense
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7,741 | 7,064 | ||||||
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FDIC Premiums
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1,050 | 1,116 | ||||||
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Data Processing Fees
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1,765 | 1,071 | ||||||
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Professional Fees
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2,577 | 2,247 | ||||||
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Advertising and Promotion
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1,863 | 1,714 | ||||||
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Intangible Amortization
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1,416 | 1,655 | ||||||
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Other Operating Expenses
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7,011 | 6,970 | ||||||
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Total Non-interest Expense
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$ | 54,905 | $ | 50,923 | ||||
Salaries and employee benefits increased $2,396,000, or 8%, during 2013 compared with 2012. The increase was primarily the result of an increased number of full-time equivalent employees due in part to an increased number of banking locations including the acquisition of United Commerce, increased costs related to the Company’s health insurance plan, and the termination of a frozen defined benefit pension plan. Also contributing to the increase was approximately $287,000 of merger-related salary and benefit costs related to the acquisition of United Commerce.
Occupancy, furniture and equipment expense increased $677,000, or 10%, during 2013 compared with 2012. The increase was largely attributable to service contracts related to equipment and software, additional branch banking locations, and the acquisition of United Commerce Bancorp. The costs associated with United Commerce totaled $127,000 during 2013.
Data processing fees increased $694,000, or 65%, during 2013 compared with 2012. The increase was largely related to the resolution of a contractual dispute during 2012 related to the acquisition of American Community Bancorp. An expense for the cancellation of a data processing contract was recorded in the first half of 2011, and upon resolution of the contractual dispute, a portion of that accrued expense was reversed during 2012. Also contributing to the increase was $261,000 in data processing charges for United Commerce Bancorp.
Results of Operations Highlights – Quarter ended December 31, 2013
Net income for the quarter ended December 31, 2013 totaled $6,589,000, an increase of $106,000, or 2%, from the third quarter of 2013 net income of $6,483,000 and an increase of $395,000, or 6%, compared with the fourth quarter of 2012 net income of $6,194,000. On a per share basis, net income totaled $0.50 per share during the fourth quarter of 2013 representing a 2% decline from the $0.51 per share recorded in the third quarter of 2013 and an increase of 2% from the $0.49 recorded in the fourth quarter of 2012.
-5-
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Summary Average Balance Sheet
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(Tax-equivalent basis / dollars in thousands)
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Quarter Ended
December 31, 2013
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Quarter Ended
September 30, 2013
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Quarter Ended
December 31, 2012
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Principal Balance
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Income/ Expense
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Yield/
Rate
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Principal Balance
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Income/ Expense
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Yield/
Rate
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Principal Balance
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Income/ Expense
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Yield/
Rate
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Assets
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Federal Funds Sold and Other
Short-term Investments |
$ | 18,544 | $ | 5 | 0.09 | % | $ | 11,868 | $ | 2 | 0.08 | % | $ | 22,910 | $ | 7 | 0.12 | % | |||||||||
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Securities
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629,912 | 4,112 | 2.61 | % | 617,475 | 3,898 | 2.53 | % | 632,773 | 3,942 | 2.49 | % | |||||||||||||||
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Loans and Leases
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1,372,391 | 16,471 | 4.77 | % | 1,269,222 | 15,368 | 4.81 | % | 1,194,173 | 15,377 | 5.13 | % | |||||||||||||||
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Total Interest Earning Assets
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$ | 2,020,847 | $ | 20,588 | 4.05 | % | $ | 1,898,565 | $ | 19,268 | 4.04 | % | $ | 1,849,856 | $ | 19,326 | 4.16 | % | |||||||||
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Liabilities
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Demand Deposit Accounts
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$ | 396,215 | $ | 349,323 | $ | 342,396 | |||||||||||||||||||||
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IB Demand, Savings, and MMDA Accounts
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$ | 1,054,668 | $ | 407 | 0.15 | % | $ | 979,049 | $ | 387 | 0.16 | % | $ | 967,147 | $ | 394 | 0.16 | % | |||||||||
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Time Deposits
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355,626 | 757 | 0.84 | % | 333,000 | 758 | 0.90 | % | 341,510 | 1,041 | 1.21 | % | |||||||||||||||
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FHLB Advances and Other
Borrowings
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125,764 | 480 | 1.51 | % | 161,092 | 475 | 1.17 | % | 117,526 | 888 | 3.01 | % | |||||||||||||||
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Total Interest-Bearing Liabilities
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$ | 1,536,058 | $ | 1,644 | 0.42 | % | $ | 1,473,141 | $ | 1,620 | 0.44 | % | $ | 1,426,183 | $ | 2,323 | 0.65 | % | |||||||||
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Cost of Funds
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0.32 | % | 0.34 | % | 0.50 | % | |||||||||||||||||||||
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Net Interest Income
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$ | 18,944 | $ | 17,648 | $ | 17,003 | |||||||||||||||||||||
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Net Interest Margin
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3.73 | % | 3.70 | % | 3.66 | % | |||||||||||||||||||||
During the quarter ended December 31, 2013, net interest income totaled $18,388,000 representing an increase of $1,196,000, or 7%, from the quarter ended September 30, 2013 net interest income of $17,192,000 and an increase of $1,794,000, or approximately 11%, compared with the quarter ended December 30, 2012 net interest income of $16,594,000. The tax equivalent net interest margin for the quarter ended December 31, 2013 was 3.73% compared to 3.70% in the third quarter of 2013 and 3.66% in the fourth quarter of 2012. Accretion of loan discounts on acquired loans contributed approximately 7 basis points on an annualized basis to the net interest margin in the fourth quarter of 2013 compared with 10 basis points in both the third quarter of 2013 and 8 basis points in the fourth quarter of 2012.
The provision for loan loss totaled $600,000 during the quarter ended December 31, 2013 representing an increase of $1,000,000 from the third quarter of 2013. During the fourth quarter of 2013, the provision for loan loss represented approximately 17 basis points of average loans on an annualized basis while net charge-offs represented approximately 14 basis points of average loans on an annualized basis.
During the quarter ended December 31, 2013, non-interest income totaled $6,151,000, an increase of $707,000 or 13%, compared with the quarter ended September 30, 2013, and an increase of $132,000, or 2%, compared with the fourth quarter of 2012.
-6-
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Quarter Ended
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Quarter Ended
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Quarter Ended
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Non-interest Income
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12/31/13
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09/30/13
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12/31/12
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(dollars in thousands)
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Trust and Investment Product Fees
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$ | 925 | $ | 802 | $ | 638 | ||||||
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Service Charges on Deposit Accounts
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1,110 | 1,029 | 1,075 | |||||||||
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Insurance Revenues
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1,559 | 1,495 | 1,306 | |||||||||
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Company Owned Life Insurance
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249 | 233 | 251 | |||||||||
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Interchange Fee Income
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462 | 449 | 415 | |||||||||
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Other Operating Income
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456 | 395 | 455 | |||||||||
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Subtotal
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4,761 | 4,403 | 4,140 | |||||||||
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Net Gains on Loans
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469 | 613 | 904 | |||||||||
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Net Gains (Loss) on Securities
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921 | 428 | 975 | |||||||||
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Total Non-interest Income
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$ | 6,151 | $ | 5,444 | $ | 6,019 | ||||||
Trust and investment product fees increased $123,000, or 15%, during fourth quarter of 2013 compared with the third quarter of 2013 and increased $287,000, or 45%, compared with the fourth quarter of 2012. The increase was attributable to increased trust revenues and increased retail brokerage revenues. Insurance revenues increased $64,000, or 4%, during the quarter ended December 31, 2013, compared with the third quarter of 2013 and increased $253,000, or 19%, compared with the fourth quarter of 2012. The change in both comparative periods was largely attributable to commercial related insurance revenues.
Net gains on sales of loans totaled $469,000 during the quarter ended December 31, 2013, a decrease of $144,000, or 23%, compared to the third quarter of 2013 and a decrease of $435,000, or 48%, compared with the fourth quarter of 2012. Loan sales totaled $26.6 million during the fourth quarter of 2013, compared with $43.2 million during the third quarter of 2013 and $58.6 million during the fourth quarter of 2012.
During the fourth quarter of 2013, the Company realized a net gain on the sale of securities of $921,000 which included a $343,000 gain the Company realized related to the acquisition accounting treatment of the existing equity ownership position the Company held in United Commerce at the time of acquisition. The Company realized gains related to the sales of securities of $428,000 in the third quarter of 2013 and $975,000 in the fourth quarter of 2012.
During the quarter ended December 31, 2013, non-interest expense totaled $14,598,000, an increase of $1,014,000, or 7%, compared with the quarter ended September 30, 2013, and an increase of $1,419,000, or 11%, compared with the fourth quarter of 2012.
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Quarter Ended
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Quarter Ended
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Quarter Ended
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Non-interest Expense
|
12/31/13
|
09/30/13
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12/31/12
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(dollars in thousands)
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Salaries and Employee Benefits
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$ | 8,556 | $ | 7,515 | $ | 7,677 | ||||||
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Occupancy, Furniture and Equipment Expense
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2,153 | 1,891 | 1,791 | |||||||||
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FDIC Premiums
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274 | 261 | 265 | |||||||||
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Data Processing Fees
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680 | 383 | 325 | |||||||||
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Professional Fees
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421 | 970 | 470 | |||||||||
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Advertising and Promotion
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410 | 447 | 506 | |||||||||
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Intangible Amortization
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372 | 329 | 386 | |||||||||
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Other Operating Expenses
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1,732 | 1,788 | 1,759 | |||||||||
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Total Non-interest Expense
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$ | 14,598 | $ | 13,584 | $ | 13,179 | ||||||
-7-
Salaries and benefits increased $1,041,000, or 14%, during the quarter ended December 31, 2013 compared with the third quarter of 2013 and increased $879,000, or 11%, compared with the fourth quarter of 2012. The increase in salaries and benefits during the fourth quarter of 2013 compared with the third quarter of 2013 was largely related to an increased level of full-time equivalent employees resulting primarily from the United Commerce acquisition and increased costs related to the Company’s health insurance plan. Also contributing to the increase was approximately $287,000 of merger-related salary and benefit costs related to the acquisition of United Commerce.
Occupancy, furniture and equipment expense increased $262,000, or 14%, during the fourth quarter of 2013 compared with third quarter of 2013 and increased $362,000, or 20%, compared with the fourth quarter of 2012. The increase was largely attributable to service contracts related to equipment and software, additional branch banking locations, and the acquisition of United Commerce Bancorp. The costs associated with United Commerce totaled $127,000 during 2013.
Data processing fees increased $297,000, or 78%, during the fourth quarter of 2013 compared with third quarter of 2013 and increased $355,000, or 109%, compared with the fourth quarter of 2012. The increase was largely attributable to $261,000 in data processing charges for United Commerce Bancorp.
Professional fees decreased $549,000, or 57%, during the quarter ended December 31, 2013 compared with the third quarter of 2013 and declined $49,000, or 10%, compared with the fourth quarter of 2012. The Company had higher professional fees associated with the acquisition of United Commerce Bancorp and higher professional fees associated with the Company’s review of its overall operating effectiveness and efficiency that were expensed during the third quarter of 2013 which drove the overall decrease in professional fees in the fourth quarter of 2013 compared with the third quarter of 2013.
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 36 retail banking offices in 13 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 continuation of its trend of record-setting financial performance and the establishment of a new level of regular quarterly dividend 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 Wall Street Reform and Consumer Protection 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.
-8-
GERMAN AMERICAN BANCORP, INC.
(unaudited, dollars in thousands except per share data)
|
Consolidated Balance Sheets
|
||||||||||||
|
December 31,
|
September 30,
|
December 31,
|
||||||||||
|
2013
|
2013
|
2012
|
||||||||||
|
ASSETS
|
||||||||||||
|
Cash and Due from Banks
|
$ | 37,370 | $ | 46,657 | $ | 41,624 | ||||||
|
Short-term Investments
|
22,762 | 18,014 | 7,463 | |||||||||
|
Interest-bearing Time Deposits with Banks
|
100 | - | 2,707 | |||||||||
|
Investment Securities
|
606,300 | 608,921 | 587,948 | |||||||||
|
Loans Held-for-Sale
|
9,265 | 9,054 | 16,641 | |||||||||
|
Loans, Net of Unearned Income
|
1,382,382 | 1,281,442 | 1,204,866 | |||||||||
|
Allowance for Loan Losses
|
(14,584 | ) | (14,464 | ) | (15,520 | ) | ||||||
|
Net Loans
|
1,367,798 | 1,266,978 | 1,189,346 | |||||||||
|
Stock in FHLB and Other Restricted Stock
|
9,004 | 8,340 | 8,340 | |||||||||
|
Premises and Equipment
|
40,430 | 36,679 | 36,554 | |||||||||
|
Goodwill and Other Intangible Assets
|
23,864 | 20,512 | 21,557 | |||||||||
|
Other Assets
|
46,934 | 44,967 | 94,120 | |||||||||
|
TOTAL ASSETS
|
$ | 2,163,827 | $ | 2,060,122 | $ | 2,006,300 | ||||||
|
LIABILITIES
|
||||||||||||
|
Non-interest-bearing Demand Deposits
|
$ | 400,024 | $ | 364,110 | $ | 349,174 | ||||||
|
Interest-bearing Demand, Savings, and
|
||||||||||||
|
Money Market Accounts
|
1,063,098 | 974,748 | 962,574 | |||||||||
|
Time Deposits
|
349,034 | 332,181 | 329,183 | |||||||||
|
Total Deposits
|
1,812,156 | 1,671,039 | 1,640,931 | |||||||||
|
Borrowings
|
140,770 | 191,554 | 161,006 | |||||||||
|
Other Liabilities
|
10,804 | 12,386 | 19,337 | |||||||||
|
TOTAL LIABILITIES
|
1,963,730 | 1,874,979 | 1,821,274 | |||||||||
|
SHAREHOLDERS' EQUITY
|
||||||||||||
|
Common Stock and Surplus
|
121,196 | 108,505 | 108,254 | |||||||||
|
Retained Earnings
|
84,164 | 79,550 | 66,421 | |||||||||
|
Accumulated Other Comprehensive Income (Loss)
|
(5,263 | ) | (2,912 | ) | 10,351 | |||||||
|
TOTAL SHAREHOLDERS' EQUITY
|
200,097 | 185,143 | 185,026 | |||||||||
|
TOTAL LIABILITIES AND
|
||||||||||||
|
SHAREHOLDERS' EQUITY
|
$ | 2,163,827 | $ | 2,060,122 | $ | 2,006,300 | ||||||
|
END OF PERIOD SHARES OUTSTANDING
|
13,172,793 | 12,666,836 | 12,636,656 | |||||||||
|
BOOK VALUE PER SHARE
|
$ | 15.19 | $ | 14.62 | $ | 14.64 | ||||||
-9-
GERMAN AMERICAN BANCORP, INC.
(unaudited, dollars in thousands except per share data)
Consolidated Statements of Income
|
Three Months Ended
|
Year Ended
|
|||||||||||||||||||
|
December 31,
|
September 30,
|
December 31,
|
December 31,
|
December 31,
|
||||||||||||||||
|
2013
|
2013
|
2012
|
2013
|
2012
|
||||||||||||||||
|
INTEREST INCOME
|
||||||||||||||||||||
|
Interest and Fees on Loans
|
$ | 16,405 | $ | 15,307 | $ | 15,311 | $ | 61,632 | $ | 61,691 | ||||||||||
|
Interest on Short-term Investments and Time Deposits
|
5 | 2 | 7 | 30 | 91 | |||||||||||||||
|
Interest and Dividends on Investment Securities
|
3,622 | 3,503 | 3,599 | 14,010 | 15,378 | |||||||||||||||
|
TOTAL INTEREST INCOME
|
20,032 | 18,812 | 18,917 | 75,672 | 77,160 | |||||||||||||||
|
INTEREST EXPENSE
|
||||||||||||||||||||
|
Interest on Deposits
|
1,164 | 1,145 | 1,435 | 4,697 | 6,958 | |||||||||||||||
|
Interest on Borrowings
|
480 | 475 | 888 | 2,458 | 3,954 | |||||||||||||||
|
TOTAL INTEREST EXPENSE
|
1,644 | 1,620 | 2,323 | 7,155 | 10,912 | |||||||||||||||
|
NET INTEREST INCOME
|
18,388 | 17,192 | 16,594 | 68,517 | 66,248 | |||||||||||||||
|
Provision for Loan Losses
|
600 | (400 | ) | 691 | 350 | 2,412 | ||||||||||||||
|
NET INTEREST INCOME AFTER
|
||||||||||||||||||||
|
PROVISION FOR LOAN LOSSES
|
17,788 | 17,592 | 15,903 | 68,167 | 63,836 | |||||||||||||||
|
NON-INTEREST INCOME
|
||||||||||||||||||||
|
Net Gain on Sales of Loans
|
469 | 613 | 904 | 2,645 | 3,234 | |||||||||||||||
|
Net Gain on Securities
|
921 | 428 | 975 | 2,429 | 1,667 | |||||||||||||||
|
Other Non-interest Income
|
4,761 | 4,403 | 4,140 | 18,541 | 16,910 | |||||||||||||||
|
TOTAL NON-INTEREST INCOME
|
6,151 | 5,444 | 6,019 | 23,615 | 21,811 | |||||||||||||||
|
NON-INTEREST EXPENSE
|
||||||||||||||||||||
|
Salaries and Benefits
|
8,556 | 7,515 | 7,677 | 31,482 | 29,086 | |||||||||||||||
|
Other Non-interest Expenses
|
6,042 | 6,069 | 5,502 | 23,423 | 21,837 | |||||||||||||||
|
TOTAL NON-INTEREST EXPENSE
|
14,598 | 13,584 | 13,179 | 54,905 | 50,923 | |||||||||||||||
|
Income before Income Taxes
|
9,341 | 9,452 | 8,743 | 36,877 | 34,724 | |||||||||||||||
|
Income Tax Expense
|
2,752 | 2,969 | 2,549 | 11,464 | 10,669 | |||||||||||||||
|
NET INCOME
|
$ | 6,589 | $ | 6,483 | $ | 6,194 | $ | 25,413 | $ | 24,055 | ||||||||||
|
BASIC EARNINGS PER SHARE
|
$ | 0.50 | $ | 0.51 | $ | 0.49 | $ | 1.99 | $ | 1.91 | ||||||||||
|
DILUTED EARNINGS PER SHARE
|
$ | 0.50 | $ | 0.51 | $ | 0.49 | $ | 1.98 | $ | 1.90 | ||||||||||
|
WEIGHTED AVERAGE SHARES OUTSTANDING
|
13,164,889 | 12,666,780 | 12,631,538 | 12,786,065 | 12,622,049 | |||||||||||||||
|
DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING
|
13,191,772 | 12,691,164 | 12,651,225 | 12,807,678 | 12,637,743 | |||||||||||||||
-10-
GERMAN AMERICAN BANCORP, INC.
(unaudited, dollars in thousands except per share data)
|
Three Months Ended
|
Year Ended
|
|||||||||||||||||||
|
December 31,
|
September 30,
|
December 31,
|
December 31,
|
December 31,
|
||||||||||||||||
|
2013
|
2013
|
2012
|
2013
|
2012
|
||||||||||||||||
|
EARNINGS PERFORMANCE RATIOS
|
||||||||||||||||||||
|
Annualized Return on Average Assets
|
1.23 | % | 1.29 | % | 1.26 | % | 1.25 | % | 1.24 | % | ||||||||||
|
Annualized Return on Average Equity
|
13.07 | % | 14.25 | % | 13.48 | % | 13.40 | % | 13.57 | % | ||||||||||
|
Net Interest Margin
|
3.73 | % | 3.70 | % | 3.66 | % | 3.67 | % | 3.74 | % | ||||||||||
|
Efficiency Ratio (1)
|
58.17 | % | 58.82 | % | 57.25 | % | 58.45 | % | 56.82 | % | ||||||||||
|
Net Overhead Expense to Average Earning Assets (2)
|
1.67 | % | 1.71 | % | 1.55 | % | 1.63 | % | 1.61 | % | ||||||||||
|
ASSET QUALITY RATIOS
|
||||||||||||||||||||
|
Annualized Net Charge-offs to Average Loans
|
0.14 | % | 0.13 | % | 0.37 | % | 0.10 | % | 0.19 | % | ||||||||||
|
Allowance for Loan Losses to Period End Loans
|
1.05 | % | 1.13 | % | 1.29 | % | ||||||||||||||
|
Non-performing Assets to Period End Assets
|
0.44 | % | 0.37 | % | 0.60 | % | ||||||||||||||
|
Non-performing Loans to Period End Loans
|
0.61 | % | 0.54 | % | 0.86 | % | ||||||||||||||
|
Loans 30-89 Days Past Due to Period End Loans
|
0.28 | % | 0.32 | % | 0.39 | % | ||||||||||||||
|
SELECTED BALANCE SHEET & OTHER FINANCIAL DATA
|
||||||||||||||||||||
|
Average Assets
|
$ | 2,145,960 | $ | 2,016,376 | $ | 1,972,666 | $ | 2,037,236 | $ | 1,934,123 | ||||||||||
|
Average Earning Assets
|
$ | 2,020,847 | $ | 1,898,565 | $ | 1,849,856 | $ | 1,916,511 | $ | 1,812,800 | ||||||||||
|
Average Total Loans
|
$ | 1,372,391 | $ | 1,269,222 | $ | 1,194,173 | $ | 1,272,055 | $ | 1,147,891 | ||||||||||
|
Average Demand Deposits
|
$ | 396,215 | $ | 349,323 | $ | 342,396 | $ | 355,841 | $ | 313,812 | ||||||||||
|
Average Interest Bearing Liabilities
|
$ | 1,536,058 | $ | 1,473,141 | $ | 1,426,183 | $ | 1,476,524 | $ | 1,423,101 | ||||||||||
|
Average Equity
|
$ | 201,662 | $ | 181,960 | $ | 183,841 | $ | 189,689 | $ | 177,207 | ||||||||||
|
Period End Non-performing Assets (3)
|
$ | 9,415 | $ | 7,532 | $ | 12,002 | ||||||||||||||
|
Period End Non-performing Loans (4)
|
$ | 8,386 | $ | 6,948 | $ | 10,357 | ||||||||||||||
|
Period End Loans 30-89 Days Past Due (5)
|
$ | 3,829 | $ | 4,140 | $ | 4,646 | ||||||||||||||
|
Tax Equivalent Net Interest Income
|
$ | 18,944 | $ | 17,648 | $ | 17,003 | $ | 70,319 | $ | 67,819 | ||||||||||
|
Net Charge-offs during Period
|
$ | 480 | $ | 399 | $ | 1,093 | $ | 1,286 | $ | 2,204 | ||||||||||
|
(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.
|
|||||||
-11-