German American Bancorp, Inc. Reports Strong 3rd Quarter Results


JASPER, Ind., Oct. 30, 2007 (PRIME NEWSWIRE) -- German American Bancorp, Inc. (Nasdaq:GABC) today reported 3rd quarter 2007 net income of $2,508,000, or $0.23 per share. Net income during the same quarter last year, which included a $951,000 pre-tax ($628,000 after-tax) gain on the sale of securities, was $2,732,000, or $0.25 per share. Exclusive of the effect of the gain on sale of securities on the 2006 earnings, the 2007 earnings of $2,508,000, or $0.23 per share, represents an increase of $404,000, or $0.04 per share, which equates to increase of approximately 20%, from the prior year's same quarter results.

In comparison to the same quarter last year, virtually every category of operations showed significant improvement during 2007's third quarter as net interest income increased by $622,000, or approximately 7%. Exclusive of the effect of the previously-noted gain on sale of securities, non-interest income increased by $488,000 with approximately $272,000 of the non-interest income improvement attributable to the inclusion of the Keach & Grove insurance agency revenue in 2007 results following the acquisition of the agency in the 4th quarter of last year. After adjusting for both of these factors, current year non-interest income increased by approximately $216,000, or 6%.

Additionally, operating expenses showed significant improvement from the prior year as reported total non-interest expense declined by $240,000, or approximately 3%. This decline in non-interest expense is inclusive of the operating expenses of both the Keach & Grove agency and the Bloomington, Indiana banking office which was opened during the 1st quarter of this year. Exclusive of the $590,000 3rd quarter operating expenses of these two new components of Company operations, the improvement in the level of non-interest expense was approximately $830,000, or 9%, largely driven by reduced levels of salaries and benefits, professional fees, and data processing expenses.

Partially offsetting these positive earnings factors was a $651,000 increase in the Company's provision for loan losses. Approximately $300,000 of the increase is attributable to providing reserves for the $29 million, or 14% annualized, increase in average loans during the current quarter (relative to that of the 2nd quarter of the current year). On an end-of-period basis, loans grew by approximately $15 million, or 7% annualized since the end of the second quarter. The vast majority of the remainder of the increased level of provision for loan losses was attributable to a $268,000 charge-off resulting from the loss of a government guaranty on a single agricultural credit due to servicing issues associated with this specific credit relationship.

Commenting on the Company's 3rd quarter results, Mark Schroeder, President & CEO of German American, stated, "We're pleased to report yet another quarter of strong fundamental operating results. Our efforts to generate sustainable balance sheet, loan, and revenue growth across all business lines and throughout our market area coupled with an intent focus on controlling our operating expenses has resulted in an ongoing improvement of our overall operating effectiveness. We remain very confident that the successful execution of this strategy will continue to serve us well going forward."

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 November 20, 2007 to shareholders of record as of November 10, 2007.

German American Bancorp, Inc. is a financial services holding company based in Jasper, Indiana. The Company's Common Stock is traded on NASDAQ's Global Select Market System under the symbol GABC. The principal subsidiary of German American Bancorp, Inc. is its banking subsidiary, German American Bancorp which operates through six community banking affiliates with 30 retail banking offices in the ten contiguous Southern Indiana counties of Daviess, Dubois, Gibson, Knox, Lawrence, Martin, Monroe, Perry, Pike, and Spencer. German American Bancorp owns a trust, brokerage and financial planning subsidiary which operates from its banking offices and a full line property and casualty insurance agency with six insurance agency offices throughout its market area.

Forward-Looking Statements

German American's statements in this press release regarding its outlook for its future financial performance are "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 locally, 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
 ---------------------------------------------------------------------
                                                   September 30,
                                                2007           2006
                                            -----------    -----------
 ASSETS
   Cash and Due from Banks                  $    20,951    $    27,889
   Short-term Investments                        17,473          5,188
   Investment Securities                        150,054        210,520

 Loans Held-for-Sale                              4,562          2,800

 Loans, Net of Unearned Income                  864,990        738,923
 Allowance for Loan Losses                       (8,055)        (9,111)
                                            -----------    -----------
   Net Loans                                    856,935        729,812

 Stock in FHLB and Other Restricted Stock        10,621         11,942
 Premises and Equipment                          23,211         23,207
 Goodwill and Other Intangible Assets            13,909         12,556
 Other Assets                                    37,876         36,807
                                            -----------    -----------
 TOTAL ASSETS                               $ 1,135,592    $ 1,060,721
                                            ===========    ===========

 LIABILITIES
   Non-interest-bearing Demand Deposits     $   132,624    $   129,536
   Interest-bearing Demand, Savings, and
    Money Market Accounts                       328,847        299,216
   Time Deposits                                446,138        395,565
                                            -----------    -----------
     Total Deposits                             907,609        824,317

   Borrowings                                   119,189        132,464
   Other Liabilities                             14,102         12,931
                                            -----------    -----------
   TOTAL LIABILITIES                          1,040,900        969,712
                                            -----------    -----------

 SHAREHOLDERS' EQUITY
   Common Stock and Surplus                      79,379         79,174
   Retained Earnings                             15,450         12,553
   Accumulated Other Comprehensive Loss            (137)          (718)
                                            -----------    -----------
 TOTAL SHAREHOLDERS' EQUITY                      94,692         91,009
                                            -----------    -----------

 TOTAL LIABILITIES AND
   SHAREHOLDERS' EQUITY                     $ 1,135,592    $ 1,060,721
                                            ===========    ===========

 END OF PERIOD SHARES OUTSTANDING            11,029,484     11,009,187

 BOOK VALUE PER SHARE                       $      8.59    $      8.27


                     GERMAN AMERICAN BANCORP, INC.
        (unaudited, dollars in thousands except per share data)

                   Consolidated Statements of Income
 ---------------------------------------------------------------------
                     Three Months Ended           Nine Months Ended
                        September 30,               September 30,
                     2007          2006          2007          2006
                 -----------   -----------   -----------   -----------
 INTEREST INCOME
   Interest and
    Fees on
    Loans        $    16,585   $    13,799   $    47,498   $    38,994
   Interest on
    Short-term
    Investments          145           105           349           367
   Interest and
    Dividends on
    Investment
    Securities         1,908         2,470         6,078         7,138
                 -----------   -----------   -----------   -----------
   TOTAL INTEREST
    INCOME            18,638        16,374        53,925        46,499
                 -----------   -----------   -----------   -----------

 INTEREST EXPENSE
   Interest on
    Deposits           7,326         5,586        20,581        15,136
   Interest on
    Borrowings         1,581         1,679         4,744         4,480
                 -----------   -----------   -----------   -----------
   TOTAL INTEREST
    EXPENSE            8,907         7,265        25,325        19,616
                 -----------   -----------   -----------   -----------

 NET INTEREST
  INCOME               9,731         9,109        28,600        26,883
   Provision for
    Loan Losses          941           290         3,244           634
                 -----------   -----------   -----------   -----------
   NET INTEREST
    INCOME AFTER
    PROVISION FOR
    LOAN LOSSES        8,790         8,819        25,356        26,249
                 -----------   -----------   -----------   -----------

 NON-INTEREST
  INCOME
   Net Gain on
    Sales of
    Loans and
    Related Assets       226            83           602           750
   Net Gain on
    Securities            --           951            --           951
   Other
    Non-interest
    Income             3,729         3,384        11,443        10,361
                 -----------   -----------   -----------   -----------
   TOTAL
    NON-INTEREST
    INCOME             3,955         4,418        12,045        12,062
                 -----------   -----------   -----------   -----------

 NON-INTEREST
  EXPENSE
   Salaries and
    Benefits           5,395         5,403        16,452        15,954
   Other
    Non-interest
    Expenses           3,676         3,908        11,476        11,396
                 -----------   -----------   -----------   -----------
   TOTAL
    NON-INTEREST
    EXPENSE            9,071         9,311        27,928        27,350
                 -----------   -----------   -----------   -----------

   Income before
    Income Taxes       3,674         3,926         9,473        10,961
   Income Tax
    Expense            1,166         1,194         2,843         3,178
                 -----------   -----------   -----------   -----------

 NET INCOME      $     2,508   $     2,732   $     6,630   $     7,783
                 ===========   ===========   ===========   ===========

 EARNINGS PER
  SHARE & DILUTED
  EARNINGS PER
  SHARE          $      0.23   $      0.25   $      0.60   $      0.71


 WEIGHTED AVERAGE
  SHARES
  OUTSTANDING     11,008,562    10,994,686    11,008,562    10,993,944
 DILUTED
  WEIGHTED
  AVERAGE SHARES
  OUTSTANDING     11,025,877    11,008,102    11,026,989    11,002,108


                    GERMAN AMERICAN BANCORP, INC.
       (unaudited, dollars in thousands except per share data)

                     Three Months Ended           Nine Months Ended
                        September 30,               September 30,
                    2007          2006          2007          2006
                 -----------   -----------   -----------   -----------

 EARNINGS
  PERFORMANCE
  RATIOS
   Annualized
    Return on
    Average
    Assets              0.89%         1.06%         0.80%         1.02%
   Annualized
    Return on
    Average
    Equity             11.16%        12.19%         9.64%        11.78%
   Net Interest
    Margin              3.78%         3.95%         3.81%         3.99%
   Efficiency
    Ratio (1)          65.64%        67.47%        67.94%        68.74%
   Net Overhead
    Expense to
    Average
    Earning
    Assets (2)          1.97%         2.06%         2.08%         2.19%

 ASSET QUALITY
  RATIOS
   Annualized Net
    Charge-offs
    to Average
    Loans               0.31%         0.11%         0.37%         0.24%
   Allowance for
    Loan Losses
    to Period
    End Loans                                       0.93%         1.23%
   Non-performing
    Assets to
    Period End
    Assets                                          0.53%         1.20%
   Non-performing
    Loans to
    Period End
    Loans                                           0.54%         1.58%


 SELECTED BALANCE
  SHEET & OTHER
  FINANCIAL DATA
   Average
    Assets       $ 1,124,035   $ 1,034,691   $ 1,109,139   $ 1,017,580
   Average
    Earning
    Assets       $ 1,038,211   $   948,209   $ 1,019,275   $   929,498
   Average
    Total
    Loans        $   863,405   $   722,394   $   832,600   $   703,070
   Average
    Demand
    Deposits     $   131,011   $   124,545   $   133,096   $   128,924
   Average
    Interest
    Bearing
    Liabilities  $   889,430   $   807,967   $   870,907   $   787,420
   Average
    Equity       $    89,874   $    89,612   $    91,668   $    88,059

   Period End
    Non-performing
    Assets (3)                               $     6,037   $    12,727
   Period End
    Non-performing
    Loans (4)                                $     4,644   $    11,645

   Tax Equivalent
    Net Interest
    Income       $     9,863   $     9,383   $    29,061   $    27,728
   Net Charge-offs
    during
    Period       $       662   $       197   $     2,318   $     1,272

 (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.


            

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