JASPER, Ind., Nov. 1, 2006 (PRIMEZONE) -- German American Bancorp, Inc. (Nasdaq:GABC) reported today that its third quarter and year-to-date net income increased by approximately 10% and 7%, respectively, over the prior year's net income for the same periods.
The Company's net income for the third quarter was $2,732,000, or $0.25 per share, compared to $2,471,000, or $0.23 per share, during the third quarter of last year. On a year-to-date basis, 2006 earnings were $7,783,000, or $0.71 per share, which compares favorably to the reported nine months' net income and earnings per share for 2005 which were $7,290,000 and $0.67 per share, respectively.
Current year earnings were positively affected by increases within the Company's net interest income and non-interest income as well as a reduced level of provision for loan losses. The improvement in the level of net-interest income was attributable to annualized loan growth of approximately 18% in both the third quarter and year-to-date. The increase in non-interest income was primarily credited to the gain derived from the sale of the Company's portfolio of agency-issued preferred stock during the third quarter while the reduction in provision was due to improvements in the quality of the Company's loan portfolio. An offsetting factor to these positive earnings contributors was an increased level of non-interest related operating expenses primarily attributable to the inclusion of recently acquired banking units and costs associated with the Company's conversion of its core processing system during the third quarter of 2006.
The Company's 2006 third quarter and year-to-date financial results are reflective of the operating results of the recent acquisitions of PCB Holding Company as of October 1, 2005 and Stone City Bancshares, Inc. as of January 1, 2006.
The Company also announced the planned expansion of its banking footprint into the Bloomington, Indiana market and the recent acquisition of Keach & Grove Insurance of Bedford, Indiana. The acquisition of Keach & Grove Insurance, which is expected to increase the Company's annual insurance commission revenues by approximately $1,100,000, was completed as of October 1, 2006. The Company plans to expand its banking and investment services into the Bloomington, Indiana market (in Monroe County, just north of its operations in Bedford, in Lawrence County, Indiana) by opening an office in Bloomington during the first quarter of 2007.
Mark A. Schroeder, President & Chief Executive Officer of German American Bancorp, Inc. stated. "We're pleased to report yet another quarter of solid earnings and strong loan growth. The depth of our financial professionals, who intimately know their local markets, and our wide array of offerings of state-of-the-art banking, investment, and insurance products and services are paying dividends in terms of new business opportunities. Area agricultural, commercial and retail businesses along with consumers located throughout our market area are, in increasing numbers, turning to German American for all their financial needs."
Schroeder continued, "We're very excited about the potential growth opportunities we believe our planned expansion into the Bloomington market and our recent Bedford-based insurance agency acquisition will provide for both customers and shareholders. German American is uniquely positioned to provide comprehensive financial services across our entire market footprint and our recent success is evidence of our customers' recognition and acceptance of the value our business model delivers. "
The Company's Board of Directors declared a regular quarterly cash dividend of $0.14 per share which will be payable on November 20, 2006 to shareholders of record as of November 10, 2006.
German American Bancorp, Inc. is a $1 billion financial services holding company based in Jasper, Indiana. The Company's Common Stock is traded on NASDAQ's National Market System under the symbol GABC. The Company engages in retail, commercial and mortgage banking businesses through six community banking affiliates and 29 banking offices in the nine contiguous Southern Indiana counties of Daviess, Dubois, Gibson, Knox, Lawrence, Martin, Perry, Pike, and Spencer. The Company provides comprehensive wealth management, full service brokerage and trust administration at its banking offices through its subsidiary, German American Financial Advisors & Trust Company. The Company also offers a full line of property and casualty insurance and personal insurance through six independent insurance offices located throughout the Company's market area by its subsidiary, German American Insurance, Inc., and title insurance through its First Title Insurance Company subsidiary.
Cautionary Statement Regarding Forward-Looking Information
German American's statements in this press release regarding future growth opportunities as a result of the planned Bloomington branch opening and increased insurance commission revenues, and regarding improvements in its loan quality, may be deemed to include "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 which could cause actual results and experience to differ from these expectations include changes in interest rates; changes in competitive conditions; the introduction, withdrawal, success and timing of asset/liability management strategies or of mergers and acquisitions and other business initiatives and strategies; the ability to retain the acquired insurance agency's clientele; changes in customer borrowing, repayment, investment and deposit practices; changes in fiscal, monetary and tax policies; changes in financial and capital markets; changes in general economic conditions, either nationally or regionally, resulting in, among other things, credit quality deterioration; capital management activities; actions of the Federal Reserve Board; changes in accounting principles and interpretations; and legislative and regulatory actions and reforms. These forward-looking statements speak only as of the date of this press release and German American undertakes no obligation to update any such forward-looking statement to reflect events or circumstances that occur after the date hereof.
GERMAN AMERICAN BANCORP (unaudited, dollars in thousands except per share data Consolidated Balance Sheets --------------------------------------------------------------------- September 30, 2006 2005 ----------- ----------- ASSETS Cash and Due from Banks $ 27,889 $ 22,761 Short-term Investments 5,188 8,982 Investment Securities 210,520 189,464 Loans Held-for-Sale 2,800 2,779 Loans, Net of Unearned Income 738,923 625,618 Allowance for Loan Losses (9,111) (9,370) ----------- ----------- Net Loans 729,812 616,248 Stock in FHLB and Other Restricted Stock 11,942 13,829 Premises and Equipment 23,207 19,867 Goodwill and Other Intangible Assets 12,556 3,856 Other Assets 36,807 40,089 ----------- ----------- TOTAL ASSETS $ 1,060,721 $ 917,875 =========== =========== LIABILITIES Non-interest-bearing Demand Deposits $ 129,536 $ 119,772 Interest-bearing Demand, Savings, and Money Market Accounts 301,257 283,490 Time Deposits 393,524 308,386 ----------- ----------- Total Deposits 824,317 711,648 Borrowings 132,464 111,283 Other Liabilities 12,931 10,532 ----------- ----------- TOTAL LIABILITIES 969,712 833,463 ----------- ----------- SHAREHOLDERS' EQUITY Common Stock and Surplus 79,174 76,438 Retained Earnings 12,553 8,512 Accumulated Other Comprehensive Loss (718) (538) ----------- ----------- TOTAL SHAREHOLDERS' EQUITY 91,009 84,412 ----------- ----------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,060,721 $ 917,875 =========== =========== END OF PERIOD SHARES OUTSTANDING 11,009,187 10,827,205 BOOK VALUE PER SHARE $ 8.27 $ 7.80 GERMAN AMERICAN BANCORP (unaudited, dollars in thousands except per share data Consolidated Statements of Income ------------------------------------------------------------------- Three Months Ended Nine Months Ended September 30, September 30, 2006 2005 2006 2005 ------- ------- ------- ------- INTEREST INCOME Interest and Fees on Loans $13,799 $10,514 $38,994 $30,502 Interest on Short-term Investments 105 55 367 194 Interest and Dividends on Investment Securities 2,470 2,007 7,138 6,056 ------- ------- ------- ------- TOTAL INTEREST INCOME 16,374 12,576 46,499 36,752 ------- ------- ------- ------- INTEREST EXPENSE Interest on Deposits 5,586 3,427 15,136 9,398 Interest on Borrowings 1,679 1,168 4,480 3,399 ------- ------- ------- ------- TOTAL INTEREST EXPENSE 7,265 4,595 19,616 12,797 ------- ------- ------- ------- Net Interest Income 9,109 7,981 26,883 23,955 Provision for Loan Losses 290 552 634 1,725 Net Interest Income after Provision for Loan Losses 8,819 7,429 26,249 22,230 ------- ------- ------- ------- NON-INTEREST INCOME Net Gain on Sales of Loans and Related Assets 83 234 750 699 Net Gain/(Loss) on Securities 951 -- 951 -- Other Non- interest Income 3,304 3,254 10,059 9,987 ------- ------- ------- ------- TOTAL NON- INTEREST INCOME 4,338 3,488 11,760 10,686 ------- ------- ------- ------- NON-INTEREST EXPENSE Salaries and Benefits 5,403 4,465 15,954 13,592 Other Non- interest Expenses 3,828 3,060 11,094 9,579 ------- ------- ------- ------- TOTAL NON- INTEREST EXPENSE 9,231 7,525 27,048 23,171 ------- ------- ------- ------- Income before Income Taxes 3,926 3,392 10,961 9,745 Income Tax Expense 1,194 921 3,178 2,455 ------- ------- ------- ------- NET INCOME $ 2,732 $ 2,471 $ 7,783 $ 7,290 ======= ======= ======= ======= EARNINGS PER SHARE & DILUTED EARNINGS PER SHARE $ 0.25 $ 0.23 $ 0.71 $ 0.67 WEIGHTED AVERAGE SHARES OUTSTANDING 10,994,686 10,826,729 10,993,994 10,851,022 DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING 11,008,102 10,832,686 11,002,679 10,857,891 EARNINGS PERFORMANCE RATIOS Annualized Return on Average Assets 1.06% 1.08% 1.02% 1.06% Annualized Return on Average Equity 12.19% 11.87% 11.78% 11.66% Net Interest Margin 3.95% 3.92% 3.99% 3.93% Efficiency Ratio (a) 67.29% 63.96% 68.50% 65.12% Net Overhead Expense to Average Earning Assets (b) 2.06% 1.92% 2.19% 1.96% ASSET QUALITY RATIOS Annualized Net Charge-offs to Average Loans 0.11% 0.43% 0.24% 0.25% Allowance for Loan Losses to Period End Loans 1.23% 1.50% Non-performing Assets to Period End Assets 1.20% 1.76% Non-performing Loans to Period End Loans 1.58% 2.52% (a) 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. (b) Net Overhead Expense is defined as Total Non-interest Income less Total Non-interest Expense.