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
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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.