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.