JASPER, Ind., Jan. 31, 2007 (PRIME NEWSWIRE) -- German American Bancorp, Inc., Jasper, Indiana, (Nasdaq:GABC) reported today that its 2006 earnings achieved a record level with reported net income of $10,221,000, or $0.93 per share. The record 2006 performance, which comes on the heels of record performance in 2005, represents an increase of approximately 5% over the prior year's net income of $9,721,000, or $0.89 per share.
The Company's net income for the fourth quarter was $2,438,000, or $0.22 per share, compared to $2,431,000, or $0.22 per share, during the fourth quarter of last year. The Company's solid fourth quarter financial performance marked the eighth consecutive quarter of earnings improvement relative to the same quarterly period of the prior fiscal year.
A number of favorable factors resulted in the Company's record level of earnings reported for 2006, including a nearly $4,000,000 increase, representing a 12% improvement, in the level of net interest income driven by both an increased level of earning assets and slightly higher net interest margin. Additionally, the Company's non-interest income increased by approximately $1,200,000, or approximately 8%, in 2006 as compared to 2005. Other items impacting the comparison of the two years include an approximately $1,000,000 reduced level of provision for loan loss. Offsetting items to these positive earnings contributors were increases of approximately $5,000,000 in the Company's operating expenses in 2006, largely attributable to expenses associated with the inclusion of recently acquired banking and insurance units in 2006 operations.
The Company's 2006 fourth quarter and year-to-date financial results are reflective of the operating results of the acquisitions of PCB Holding Company as of October 1, 2005, Stone City Bancshares, Inc. as of January 1, 2006, and Keach & Grove Insurance as of October 1, 2006.
The Company also continued the trend of solid balance sheet growth during 2006 as evidenced by the $144 million of loan growth generated during the year. This loan growth, which was in excess of 20%, was generated from a variety of sources, including $54 million of organic growth, $48 million from the acquisition of Stone City Bancshares, Inc., in January 2006, and $42 million from the purchase of the Southern Indiana-based agricultural loan portfolio of a regional banking company in December 2006.
Mark A. Schroeder, President & Chief Executive Officer of German American Bancorp, Inc. commenting on the Company's 2006 record financial performance, stated, "We're extremely pleased to deliver the second consecutive year of record earnings and the eighth consecutive quarter of improved earnings performance to our shareholders. The 2006 net income of $10,221,000 is the first time in our Company's history that we surpassed the $10 million milestone and is a testament to the dedication of our staff and the loyalty of our customers. The significant loan growth we experienced in 2006 along with the planned expansion of our banking footprint as of February 1st into the Bloomington, Indiana market provides a baseline upon which to build continued strong financial performance."
Schroeder continued, "Clearly, our business model, which is based on customer responsiveness and local decision-making, coupled with 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 is being embraced by the agricultural, commercial and retail businesses along with consumers located throughout our market area. German American is uniquely positioned to provide comprehensive financial services across our entire market footprint and our success in growing our business during the past several years is evidence of our customers' recognition and acceptance of the value our business model delivers."
The Company also announced that its Board of Directors declared a regular quarterly cash dividend of $0.14 per share which will be payable on February 20, 2007 to shareholders of record as of February 10, 2007.
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. Inclusive of the soon to be opened Bloomington, Indiana banking office, the Company's banking subsidiary, German American Bancorp, operates through six community banking affiliates with 30 banking offices in the ten contiguous Southern Indiana counties of Daviess, Dubois, Gibson, Knox, Lawrence, Martin, Monroe, Perry, Pike, and Spencer. The Company also operates German American Financial Advisors & Trust Company, a trust, brokerage and financial planning subsidiary operating from the banking offices of the bank subsidiaries and German American Insurance, Inc., a full-line property and casualty insurance subsidiary with six independent insurance offices throughout its market area. The Company's lines of business include retail and commercial banking, mortgage banking, comprehensive wealth management, full service brokerage and trust administration, title insurance, and a full range of personal and corporate insurance products.
Forward-Looking Statements
German American's statements in this press release regarding financial performance, including new business opportunities, future growth opportunities, loan growth potential and asset 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; 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, INC.
(unaudited, dollars in thousands except per share data)
Consolidated Balance Sheets
--------------------------------------------------------------------
December 31,
2006 2005
------------ ------------
ASSETS
Cash and Due from Banks $ 23,960 $ 27,644
Short-term Investments 5,735 5,287
Investment Securities 185,557 189,834
Loans Held-for-Sale 1,601 1,901
Loans, Net of Unearned Income 796,259 651,956
Allowance for Loan Losses (7,129) (9,265)
------------ ------------
Net Loans 789,130 642,691
Stock in FHLB and Other Restricted
Stock 10,621 14,095
Premises and Equipment 23,245 20,233
Goodwill and Other Intangible Assets 14,629 6,201
Other Assets 38,996 38,581
------------ ------------
TOTAL ASSETS $ 1,093,474 $ 946,467
============ ============
LIABILITIES
Non-interest-bearing Demand Deposits $ 137,671 $ 130,383
Interest-bearing Demand, Savings, and
Money Market Accounts 329,690 307,007
Time Deposits 400,257 309,431
------------ ------------
Total Deposits 867,618 746,821
Borrowings 119,889 105,394
Other Liabilities 13,526 11,997
------------ ------------
TOTAL LIABILITIES 1,001,033 864,212
------------ ------------
SHAREHOLDERS' EQUITY
Common Stock and Surplus 79,224 74,427
Retained Earnings 13,450 9,391
Accumulated Other Comprehensive Loss (233) (1,563)
------------ ------------
TOTAL SHAREHOLDERS' EQUITY 92,441 82,255
------------ ------------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 1,093,474 $ 946,467
============ ============
END OF PERIOD SHARES OUTSTANDING 11,008,562 10,643,514
BOOK VALUE PER SHARE $ 8.40 $ 7.73
Consolidated Statements of Income
---------------------------------------------------------------------
Three Months Ended Year Ended
December 31, December 31,
2006 2005 2006 2005
----------- ----------- ----------- -----------
INTEREST INCOME
Interest and Fees
on Loans $ 14,496 $ 11,249 $ 53,490 $ 41,751
Interest on
Short-term
Investments 178 122 545 316
Interest and
Dividends on
Investment
Securities 2,421 2,074 9,559 8,130
----------- ----------- ----------- -----------
TOTAL INTEREST
INCOME 17,095 13,445 63,594 50,197
----------- ----------- ----------- -----------
INTEREST EXPENSE
Interest on Deposits 6,193 3,991 21,329 13,389
Interest on
Borrowings 1,589 1,196 6,069 4,595
----------- ----------- ----------- -----------
TOTAL INTEREST
EXPENSE 7,782 5,187 27,398 17,984
----------- ----------- ----------- -----------
Net Interest Income 9,313 8,258 36,196 32,213
Provision for Loan
Losses 291 178 925 1,903
Net Interest Income
after
----------- ----------- ----------- -----------
Provision for Loan
Losses 9,022 8,080 35,271 30,310
----------- ----------- ----------- -----------
NON-INTEREST INCOME
Net Gain on Sales
of Loans and
Related Assets 100 301 850 1,000
Net Gain on
Securities -- -- 951 --
Other Non-interest
Income 3,530 3,207 13,589 13,194
----------- ----------- ----------- -----------
TOTAL NON-INTEREST
INCOME 3,630 3,508 15,390 14,194
----------- ----------- ----------- -----------
NON-INTEREST EXPENSE
Salaries and
Benefits 5,537 4,919 21,491 18,511
Other Non-interest
Expenses 3,871 3,358 14,965 12,937
----------- ----------- ----------- -----------
TOTAL NON-INTEREST
EXPENSE 9,408 8,277 36,456 31,448
----------- ----------- ----------- -----------
Income before
Income Taxes 3,244 3,311 14,205 13,056
Income Tax Expense 806 880 3,984 3,335
----------- ----------- ----------- -----------
NET INCOME $ 2,438 $ 2,431 $ 10,221 $ 9,721
=========== =========== =========== ===========
EARNINGS PER SHARE &
DILUTED EARNINGS
PER SHARE $ 0.22 $ 0.22 $ 0.93 $ 0.89
WEIGHTED AVERAGE
SHARES OUTSTANDING 10,997,099 11,009,579 10,994,739 10,890,987
DILUTED WEIGHTED
AVERAGE SHARES
OUTSTANDING 11,003,640 11,013,394 11,005,667 10,896,822
GERMAN AMERICAN BANCORP, INC.
(unaudited, dollars in thousands except per share data)
Three Months Ended Year Ended
December 31, December 31,
2006 2005 2006 2005
---------- ---------- ---------- ----------
EARNINGS
PERFORMANCE RATIOS
Annualized Return
on Average Assets 0.91% 1.03% 0.99% 1.05%
Annualized Return
on Average Equity 10.88% 11.06% 11.56% 11.51%
Net Interest Margin 3.89% 3.92% 3.96% 3.92%
Efficiency
Ratio (a) 71.52% 68.67% 69.25% 66.02%
Net Overhead
Expense to Average
Earning Assets (b) 2.36% 2.20% 2.24% 2.02%
ASSET QUALITY RATIOS
Annualized Net
Charge-offs to
Average Loans 1.21% 0.32% 0.50% 0.26%
Allowance for Loan
Losses to Period
End Loans 0.90% 1.42%
Non-performing
Assets to Period
End Assets 0.96% 1.71%
Non-performing
Loans to Period
End Loans 1.21% 2.41%
SELECTED BALANCE
SHEET & OTHER
FINANCIAL DATA
Average Assets $1,066,214 $ 943,430 $1,029,838 $ 925,851
Average Earning
Assets $ 977,310 $ 869,038 $ 941,549 $ 853,323
Average Total Loans $ 751,432 $ 652,030 $ 715,260 $ 634,526
Average Demand
Deposits $ 132,237 $ 122,540 $ 129,759 $ 121,662
Average Interest
Bearing
Liabilities $ 830,346 $ 720,508 $ 798,240 $ 707,490
Average Equity $ 89,616 $ 87,898 $ 88,451 $ 84,479
Period End Non-
performing Loans
(c) $ 9,652 $ 15,707
Tax Equivalent Net
Interest Income $ 9,524 $ 8,546 $ 37,252 $ 33,443
Net Charge-offs
during Period $ 2,273 $ 522 $ 3,545 $ 1,678
(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.
(c) Non-performing loans are defined as Non-accrual Loans, Loans
Past Due 90 days or more, and Restructured Loans.