German American Bancorp, Inc. (NASDAQ: GABC) reported record
quarterly earnings of $15.1 million, or $0.60 per share, for the
quarter ending on March 31, 2019. This level of quarterly
earnings performance was an increase of 36%, on a per share basis,
compared with fourth quarter 2018 net income of $11.0 million, or
$0.44 per share, and an increase of 18%, on a per share basis,
compared with the first quarter 2018 net income of $11.8 million,
or $0.51 per share.
These quarterly comparisons are inclusive of the
Company’s 2018 five-branch acquisition in the greater Columbus,
Indiana market area on May 18, 2018 and its acquisition of First
Security, Inc. on October 15, 2018. First Security was based
in Owensboro, Kentucky, and operated 11 retail banking offices in
the Owensboro, Bowling Green, Franklin and Lexington, Kentucky
market areas and in Evansville and Newburgh, Indiana market
area.
The record first quarter 2019 earnings, as
compared with the fourth quarter of 2018, were partially
attributable to an increased level of net interest income during
the current quarter, resulting from both increased average earning
assets and an improved tax-equivalent net interest margin.
The increased level of average earning assets during the first
quarter of 2019, compared to the fourth quarter of 2018, was
largely attributable to the effect of the acquisition of First
Security on October 15, 2018.
Other factors contributing to the record first
quarter earnings included the recording of $1.4 million in
contingency insurance revenue during the quarter and a $3.1 million
decline in the level of operating expenses, as compared to the
fourth quarter of 2018. The decline in operating expenses was
materially due to a reduced level of acquisition-related expenses
in the first quarter. The first quarter of 2019 results of
operations included acquisition-related expenses of approximately
$544,000 ($407,000 or $0.02 per share, on an after-tax basis),
compared to $3.1 million (or $2.3 million, or $0.09 per share, on
an after-tax basis) in the fourth quarter of 2018.
End of period loans and deposits as of March 31,
2019, relative to December 31, 2018 year-end balances, were
relatively flat to slightly lower, as March 31, 2019 total loans
declined by 3% on annualized basis, while total deposits decreased
by 1% on an annualized basis. The slight decrease in loans
and deposits during the quarter was largely attributable to
seasonality as the first quarter is historically a slower growth
period for the Company, specifically related to seasonal pay-downs
within the agricultural loan portfolio. Additionally, the
Company repositioned a portion of the acquired loan portfolio
during the quarter, resulting in an elevated level of loan payoffs,
including within the residential mortgage loan portfolio.
Commenting on the Company’s record first quarter
performance, Mark A. Schroeder, German American’s Chairman &
CEO, stated, "We’re extremely pleased with the strong start we
experienced during the first quarter of this year, both in terms of
earnings growth and the continued integration of First
Security. Additionally, we announced the pending acquisition
of Citizens First Corporation of Bowling Green, Kentucky on
February 21, 2019. The combination of First Security and
Citizens First in the vibrant Bowling Green market will position
German American as one of market share leaders in this dynamic
market.”
Schroeder continued, “While balance sheet growth
was limited during the quarter due to seasonal factors, we remain
very encouraged about our ability to experience strong growth
throughout the balance of this year. Our loan pipelines
continue to be exceptionally strong, as evidenced by the 9% growth,
on an annualized basis, that we saw within our Commercial &
Industrial Loans during the first quarter. We also were very
pleased with the approximately 5% annualized growth in end of
period balances in Non-interest-bearing Demand Deposits. Even
though the current economic recovery is approaching historic
length, we’re continuing to see indications that economic growth
will remain strong throughout 2019."
The Company also announced its Board of
Directors declared a regular quarterly cash dividend of $0.17 per
share, which will be payable on May 20, 2019 to shareholders of
record as of May 10, 2019.
Balance Sheet Highlights
The Company completed a five-branch acquisition
of locations of First Financial Bancorp (formerly branch locations
of Mainsource Financial Group, Inc. prior to its merger with First
Financial Bancorp) on May 18, 2018. Four of the branches are
located in Columbus, Indiana, and one in Greensburg, Indiana.
In addition, on October 15, 2018, the Company completed its
acquisition of First Security, Inc. ("First Security") and its
subsidiary bank, First Security Bank, Inc. First Security was
based in Owensboro, Kentucky, and operated 11 retail banking
offices in Owensboro, Bowling Green, Franklin and Lexington,
Kentucky and in Evansville and Newburgh, Indiana.
Total assets for the Company totaled $3.896
billion at March 31, 2019, representing a decline of $33.6 million,
or 3% on an annualized basis, compared with December 31, 2018 and
an increase of $770.5 million, or 25%, compared with March 31,
2018. The increase in total assets as of March 31, 2019
compared to a year ago was driven largely by the acquisition of
First Security and the five-branch network in the Columbus and
Greensburg, Indiana markets, as well as organic loan growth.
March 31, 2019 total loans declined $19.3
million, or 3% on an annualized basis, compared with December 31,
2018 and increased $558.6 million, or 26%, compared with March 31,
2018.
The decline during the first quarter of 2019 was
driven by a seasonal decline in agricultural loans of approximately
$17.2 million, or 19% on an annualized basis, and a decline in
retail loans of $17.8 million, or 12% on an annualized basis,
partially mitigated by an increase of $12.2 million, or 9% on an
annualized basis, of commercial and industrial loans, and an
increase of $3.4 million, or 1% on an annualized basis, of
commercial real estate loans.
|
|
|
|
|
|
End of Period
Loan Balances |
3/31/2019 |
|
12/31/2018 |
|
3/31/2018 |
(dollars in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
Commercial &
Industrial Loans |
$ |
555,967 |
|
|
$ |
543,761 |
|
|
$ |
482,219 |
|
Commercial Real Estate
Loans |
1,212,090 |
|
|
1,208,646 |
|
|
947,948 |
|
Agricultural Loans |
347,999 |
|
|
365,208 |
|
|
329,138 |
|
Consumer Loans |
281,724 |
|
|
285,534 |
|
|
216,435 |
|
Residential Mortgage
Loans |
314,634 |
|
|
328,592 |
|
|
178,108 |
|
|
$ |
2,712,414 |
|
|
$ |
2,731,741 |
|
|
$ |
2,153,848 |
|
|
|
|
|
|
|
Non-performing assets totaled $13.1 million at
March 31, 2019 compared to $13.5 million at December 31, 2018 and
$10.7 million at March 31, 2018. Non-performing assets
represented 0.34% of total assets at each of March 31, 2019,
December 31, 2018 and March 31, 2018. Non-performing loans
totaled $12.4 million at March 31, 2019 compared to $13.2 million
at December 31, 2018 and $10.6 million at March 31, 2018.
Non-performing loans represented 0.46% of total loans at March 31,
2019 compared to 0.48% at December 31, 2018 and 0.49% at March 31,
2018.
|
|
|
|
|
|
Non-performing
Assets |
|
|
|
|
|
(dollars in
thousands) |
|
|
|
|
|
|
3/31/2019 |
|
12/31/2018 |
|
3/31/2018 |
Non-Accrual Loans |
$ |
12,036 |
|
|
$ |
12,579 |
|
|
$ |
9,479 |
|
Past Due Loans (90 days
or more) |
393 |
|
|
633 |
|
|
1,105 |
|
Total
Non-Performing Loans |
12,429 |
|
|
13,212 |
|
|
10,584 |
|
Other Real Estate |
685 |
|
|
286 |
|
|
68 |
|
Total
Non-Performing Assets |
$ |
13,114 |
|
|
$ |
13,498 |
|
|
$ |
10,652 |
|
|
|
|
|
|
|
Restructured Loans |
$ |
119 |
|
|
$ |
121 |
|
|
$ |
124 |
|
|
|
|
|
|
|
The Company’s allowance for loan losses totaled
$16.2 million at March 31, 2019 compared to $15.8 million at
December 31, 2018 and $14.5 million at March 31, 2018. The
allowance for loan losses represented 0.60% of period-end loans at
March 31, 2019 compared with 0.58% of period-end loans at December
31, 2018 and 0.67% of period-end loans at March 31, 2018.
From time to time, the Company has acquired loans through bank and
branch acquisitions with the most recent being the First Security
acquisition during the fourth quarter of 2018 and a five-branch
acquisition in the second quarter of 2018. Under acquisition
accounting treatment, loans acquired are recorded at fair value
which includes a credit risk component, and therefore the allowance
on loans acquired is not carried over from the seller. The
Company held a net discount on acquired loans of $18.2 million at
March 31, 2019, $19.5 million at December 31, 2018 and $7.3 million
at March 31, 2018.
March 31, 2019 total deposits declined $7.5
million, or 1% on an annualized basis, compared with December 31,
2018 and increased $598.0 million compared with March 31, 2018.
|
|
|
|
|
|
End of Period
Deposit Balances |
3/31/2019 |
|
12/31/2018 |
|
3/31/2018 |
(dollars in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
Non-interest-bearing
Demand Deposits |
$ |
723,995 |
|
|
$ |
715,972 |
|
|
$ |
599,374 |
|
IB Demand, Savings, and
MMDA Accounts |
1,706,913 |
|
|
1,768,177 |
|
|
1,465,150 |
|
Time Deposits <
$100,000 |
248,686 |
|
|
249,309 |
|
|
193,864 |
|
Time Deposits >
$100,000 |
385,576 |
|
|
339,174 |
|
|
208,733 |
|
|
$ |
3,065,170 |
|
|
$ |
3,072,632 |
|
|
$ |
2,467,121 |
|
|
|
|
|
|
|
Results of Operations Highlights – Quarter ended March
31, 2019
Net income for the quarter ended March 31, 2019
totaled $15,067,000, or $0.60 per share, an increase of 36% on a
per share basis compared with fourth quarter 2018 net income of
$10,980,000, or $0.44 per share, and an increase of 18% on a
per share basis compared with the first quarter 2018 net income of
$11,813,000, or $0.51 per share.
Net income for each quarter presented was
impacted by merger and acquisition activity during 2018 and
2019. The first quarter of 2019 results of operations
included acquisition-related expenses of approximately $544,000
($407,000 or $0.02 per share, on an after tax basis), while the the
fourth quarter of 2018 results of operations included
acquisition-related expenses of approximately $3,107,000
($2,343,000 or $0.09 per share, on an after tax basis) and the
first quarter of 2018 included approximately $186,000 ($139,000 or
less than $0.01 per share on an after tax basis).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Summary Average
Balance Sheet |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Tax-equivalent basis /
dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
Quarter Ended |
|
Quarter Ended |
|
|
March 31, 2019 |
|
December 31, 2018 |
|
March 31, 2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal Balance |
|
Income/ Expense |
|
Yield/ Rate |
|
Principal Balance |
|
Income/ Expense |
|
Yield/ Rate |
|
Principal Balance |
|
Income/ Expense |
|
Yield/ Rate |
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal Funds Sold and
Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term Investments |
|
$ |
24,538 |
|
|
$ |
141 |
|
|
2.32 |
% |
|
$ |
20,925 |
|
|
$ |
97 |
|
|
1.83 |
% |
|
$ |
8,556 |
|
|
$ |
56 |
|
|
2.65 |
% |
Securities |
|
825,625 |
|
|
6,549 |
|
|
3.17 |
% |
|
812,191 |
|
|
6,447 |
|
|
3.18 |
% |
|
753,589 |
|
|
5,708 |
|
|
3.03 |
% |
Loans and Leases |
|
2,718,808 |
|
|
35,207 |
|
|
5.24 |
% |
|
2,662,502 |
|
|
33,771 |
|
|
5.04 |
% |
|
2,139,704 |
|
|
24,032 |
|
|
4.55 |
% |
Total Interest
Earning Assets |
|
$ |
3,568,971 |
|
|
$ |
41,897 |
|
|
4.74 |
% |
|
$ |
3,495,618 |
|
|
$ |
40,315 |
|
|
4.58 |
% |
|
$ |
2,901,849 |
|
|
$ |
29,796 |
|
|
4.15 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand Deposit
Accounts |
|
$ |
691,107 |
|
|
|
|
|
|
|
$ |
714,504 |
|
|
|
|
|
|
|
$ |
585,432 |
|
|
|
|
|
|
IB Demand, Savings,
and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MMDA
Accounts |
|
$ |
1,731,118 |
|
|
$ |
2,695 |
|
|
0.63 |
% |
|
$ |
1,794,891 |
|
|
$ |
2,808 |
|
|
0.62 |
% |
|
$ |
1,489,363 |
|
|
$ |
1,275 |
|
|
0.35 |
% |
Time Deposits |
|
646,726 |
|
|
2,721 |
|
|
1.71 |
% |
|
593,615 |
|
|
2,151 |
|
|
1.44 |
% |
|
398,397 |
|
|
1,008 |
|
|
1.03 |
% |
FHLB Advances and Other
Borrowings |
|
330,463 |
|
|
2,182 |
|
|
2.68 |
% |
|
271,834 |
|
|
1,654 |
|
|
2.42 |
% |
|
262,784 |
|
|
1,252 |
|
|
1.93 |
% |
Total
Interest-Bearing Liabilities |
|
$ |
2,708,307 |
|
|
$ |
7,598 |
|
|
1.14 |
% |
|
$ |
2,660,340 |
|
|
$ |
6,613 |
|
|
0.99 |
% |
|
$ |
2,150,544 |
|
|
$ |
3,535 |
|
|
0.67 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Funds |
|
|
|
|
|
0.86 |
% |
|
|
|
|
|
0.75 |
% |
|
|
|
|
|
0.49 |
% |
Net Interest
Income |
|
|
|
$ |
34,299 |
|
|
|
|
|
|
|
$ |
33,702 |
|
|
|
|
|
|
|
$ |
26,261 |
|
|
|
|
Net Interest
Margin |
|
|
|
|
|
3.88 |
% |
|
|
|
|
|
3.83 |
% |
|
|
|
|
|
3.66 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
During the quarter ended March 31, 2019, net
interest income totaled $33,591,000, which represented an increase
of $608,000, or 2%, from the quarter ended December 31, 2018 net
interest income of $32,983,000 and an increase of $7,981,000, or
31%, compared with the quarter ended March 31, 2018 net interest
income of $25,610,000. The increased level of net interest income
during the first quarter of 2019 compared with both the fourth
quarter of 2018 and the first quarter of 2018 was driven primarily
by a higher level of average earning assets and an improved tax
equivalent net interest margin. The increased level of
average earning assets during the first quarter of 2019 compared
with the fourth quarter of 2018, was driven primarily by the
completed acquisition of First Security on October 15, 2018.
The tax equivalent net interest margin for the
quarter ended March 31, 2019 was 3.88% compared with 3.83% in the
fourth quarter of 2018 and 3.66% in the first quarter of
2018. Accretion of loan discounts on acquired loans
contributed approximately 16 basis points to the net interest
margin on an annualized basis in the first quarter of 2019, 13
basis points in the fourth quarter of 2018, and 4 basis points in
the first quarter of 2018.
During the quarter ended March 31, 2019, the
Company recorded a provision for loan loss of $675,000 compared
with no provision for loan loss in the fourth quarter of 2018 and
$350,000 in the first quarter of 2018. The provision during
all periods was done in accordance with the Company's standard
methodology for determining the adequacy of its allowance for loan
loss.
During the quarter ended March 31, 2019,
non-interest income totaled $11,658,000, an increase of $1,925,000,
or 20%, compared with the quarter ended December 31, 2018, and an
increase of $2,166,000, or 23%, compared with the first quarter of
2018.
|
|
|
|
|
|
|
Quarter Ended |
|
Quarter Ended |
|
Quarter Ended |
Non-interest
Income |
3/31/2019 |
|
12/31/2018 |
|
3/31/2018 |
(dollars in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
Trust and Investment
Product Fees |
$ |
1,567 |
|
|
$ |
1,645 |
|
|
$ |
1,773 |
|
Service Charges on
Deposit Accounts |
1,900 |
|
|
2,072 |
|
|
1,471 |
|
Insurance Revenues |
3,205 |
|
|
1,877 |
|
|
2,930 |
|
Company Owned Life
Insurance |
884 |
|
|
420 |
|
|
312 |
|
Interchange Fee
Income |
2,095 |
|
|
2,235 |
|
|
1,482 |
|
Other Operating
Income |
871 |
|
|
629 |
|
|
604 |
|
Subtotal |
10,522 |
|
|
8,878 |
|
|
8,572 |
|
Net Gains on Loans |
981 |
|
|
583 |
|
|
650 |
|
Net Gains on
Securities |
155 |
|
|
272 |
|
|
270 |
|
Total
Non-interest Income |
$ |
11,658 |
|
|
$ |
9,733 |
|
|
$ |
9,492 |
|
|
|
|
|
|
|
Service charges on deposit accounts declined
$172,000, or 8%, during the first quarter of 2019 compared with the
fourth quarter of 2018 and increased $429,000, or 29%, compared
with the first quarter of 2018. The decline during the first
quarter of 2019 compared with the fourth quarter of 2018 was
largely related to seasonal declines in deposit fees, while the
increase during the first quarter of 2019 compared with first
quarter of 2018 was largely attributable to the acquisitions
completed during 2018.
Insurance revenues increased $1,328,000, or 71%,
during the quarter ended March 31, 2019, compared with the fourth
quarter of 2018 and increased $275,000, or 9%, compared with the
first quarter of 2018. The increase during the first quarter
of 2019 compared with each of the fourth quarter of 2018 and the
first quarter of 2018 was primarily due to increased contingency
revenue. Contingency revenue during the first quarter of 2019
totaled $1,375,000 compared with no contingency revenue during the
fourth quarter of 2018 and $1,218,000 during the first quarter of
2018. The fluctuation in contingency revenue is a normal
course of business variance and is reflective of claims and loss
experience with insurance carriers that the Company represents
through its property and casualty insurance agency.
Typically, the majority of contingency revenue is recognized during
the first quarter of the year.
Company owned life insurance revenue increased
$464,000, or 110%, during the quarter ended March 31, 2019,
compared with the fourth quarter of 2018 and increased $572,000, or
183%, compared with the first quarter of 2018. The increases were
largely related to death benefits of $554,000 received from life
insurance policies during the first quarter of 2019.
Interchange fees declined $140,000, or 6%,
during the first quarter of 2019 compared with the fourth quarter
of 2018 and increased $613,000, or 41%, compared with the first
quarter of 2018. The increase during the first quarter of
2019 compared with the first quarter of 2018 was largely
attributable to increased card utilization by customers and the
acquisitions completed during 2018.
Other operating income increased $242,000, or
38%, during the quarter ended March 31, 2019 compared with the
fourth quarter of 2018 and increased $267,000, or 44%, compared
with the first quarter of 2018. The increase during the first
quarter quarter of 2019 compared with both comparative periods was
largely attributable to the gain realized on the sale of a former
branch facility of $262,000.
Net gains on sales of loans increased $398,000,
or 68%, during the first quarter of 2019 compared with the fourth
quarter of 2018 and increased $331,000, or 51%, compared with the
first quarter of 2018. The increase during the first quarter
of 2019 in the net gain on sale compared with both comparative
periods was largely attributable to higher pricing levels on loans
sold. Loan sales totaled $28.9 million during the first
quarter of 2019, compared with $35.7 million during the fourth
quarter of 2018 and $29.9 million during the first quarter of
2018.
During the quarter ended March 31, 2019,
non-interest expense totaled $26,759,000, a decline of $3,055,000,
or 10%, compared with the quarter ended December 31, 2018, and an
increase of $6,304,000, or 31%, compared with the first quarter of
2018. The first quarter of 2019 included acquisition-related
expenses of $544,000 while the fourth quarter of 2018 included
acquisition-related expenses of approximately $3,107,000 and the
first quarter of 2018 included acquisition-related expenses of
approximately $186,000.
|
|
|
|
|
|
|
Quarter Ended |
|
Quarter Ended |
|
Quarter Ended |
Non-interest
Expense |
3/31/2019 |
|
12/31/2018 |
|
3/31/2018 |
(dollars in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
Salaries and Employee
Benefits |
$ |
15,044 |
|
|
$ |
15,027 |
|
|
$ |
12,126 |
|
Occupancy, Furniture
and Equipment Expense |
3,219 |
|
|
3,203 |
|
|
2,409 |
|
FDIC Premiums |
288 |
|
|
234 |
|
|
237 |
|
Data Processing
Fees |
1,583 |
|
|
3,108 |
|
|
1,127 |
|
Professional Fees |
1,327 |
|
|
2,337 |
|
|
871 |
|
Advertising and
Promotion |
870 |
|
|
1,083 |
|
|
701 |
|
Intangible
Amortization |
843 |
|
|
810 |
|
|
206 |
|
Other Operating
Expenses |
3,585 |
|
|
4,012 |
|
|
2,778 |
|
Total
Non-interest Expense |
$ |
26,759 |
|
|
$ |
29,814 |
|
|
$ |
20,455 |
|
|
|
|
|
|
|
Salaries and benefits increased $17,000, or less
than 1%, during the quarter ended March 31, 2019 compared with the
fourth quarter of 2018 and increased $2,918,000, or 24%, compared
with the first quarter of 2018. The increase in salaries and
benefits during the first quarter of 2019 compared with both the
fourth quarter of 2018 and the first quarter of 2018 was primarily
attributable to an increased number of full-time equivalent
employees due in part to the acquisition transactions completed
during 2018. The fourth quarter of 2018 also included
approximately $474,000 of acquisition-related salary and benefit
costs.
Occupancy, furniture and equipment expense
increased $16,000, or less than 1%, during the first quarter of
2019 compared with the fourth quarter of 2018 and increased
$810,000, or 34%, compared to the first quarter of 2018. The
increase during the first quarter of 2019 compared with the first
quarter of 2018 was primarily due to operating costs related to the
acquisitions completed during 2018 as well as other facilities the
Company has placed into service over the past several quarters.
Data processing fees declined $1,525,000, or
49%, during the first quarter of 2019 compared with the fourth
quarter of 2018 and increased $456,000, or 40%, compared to the
first quarter of 2018. The decline during the first quarter
of 2019 compared with the fourth quarter of 2018 was driven by
acquisition and conversion-related costs which totaled
approximately $1,668,000 during the fourth quarter of 2018.
The increase in data processing fees during the first quarter of
2019 compared with the first quarter of 2018 was also related to
the on-going operating costs associated with the acquisitions
completed during 2018.
Professional fees declined $1,010,000, or 43%,
during the first quarter of 2019 compared with the fourth quarter
of 2018 and increased $456,000, or 52%, compared to the first
quarter of 2018. The decline during the first quarter of 2019
compared to the fourth quarter of 2018 was due in part to
professional fees related to merger and acquisition activity during
2018 and to fees related to certain contract negotiations.
The increase in professional fees during the first quarter of 2019
compared with 2018 was largely related to acquisition related
professional fees. Merger and acquisition related
professional fees totaled approximately $508,000 during the first
quarter of 2019 compared with $730,000 in the fourth quarter of
2018 and $177,000 during the first quarter of 2018.
Professional fees during the fourth quarter of 2018 also included
approximately $930,000 in fees related to certain contract
negotiations.
Intangible amortization increased $33,000, or
4%, during the quarter ended March 31, 2019 compared with the
fourth quarter of 2018 and increased $637,000, or 309%, compared
with the first quarter of 2018. The increase in intangible
amortization was attributable to the previously discussed
acquisitions completed during 2018.
Other operating expenses declined $427,000, or
11%, during the first quarter of 2019 compared with the fourth
quarter of 2018 and increased $807,000, or 29%, compared with the
first quarter of 2018. The decline in the first quarter of
2019 compared with the fourth quarter of 2018 was partially
attributable to acquisition-related expenses that totaled
approximately $176,000 during the fourth quarter of
2018. The increase during the first quarter of 2019
compared with the first quarter of 2018 was largely attributable to
the operating costs related to the acquisitions completed in
2018.
About German American
German American Bancorp, Inc. is a NASDAQ-traded
(symbol: GABC) bank holding company based in Jasper, Indiana.
German American, through its banking subsidiary German American
Bank, operates 65 banking offices in 20 contiguous southern Indiana
counties and four counties in Kentucky. The Company also owns
an investment brokerage subsidiary (German American Investment
Services, Inc.) and a full line property and casualty insurance
agency (German American Insurance, Inc.).
Cautionary Note Regarding Forward-Looking Statements
Certain statements in this press release may be
deemed “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 this press release. Factors that could cause actual
experience to differ from the expectations expressed or implied in
this press release include the unknown future direction of interest
rates and the timing and magnitude of any 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; potential deterioration in general economic conditions,
either nationally or locally, resulting in, among other things,
credit quality deterioration; capital management activities,
including possible future sales of new securities, or possible
repurchases or redemptions by the Company of outstanding debt or
equity securities; risks of expansion through acquisitions and
mergers, such as unexpected credit quality problems of the acquired
loans or other assets, unexpected attrition of the customer base of
the acquired institution or branches, and difficulties in
integration of the acquired operations; factors driving impairment
charges on investments; the impact, extent and timing of
technological changes; potential cyber-attacks, information
security breaches and other criminal activities; litigation
liabilities, including related costs, expenses, settlements and
judgments, or the outcome of matters before regulatory agencies,
whether pending or commencing in the future; actions of the Federal
Reserve Board; changes in accounting principles and
interpretations; potential increases of federal deposit insurance
premium expense, and possible future special assessments of FDIC
premiums, either industry wide or specific to the Company’s banking
subsidiary; actions of the regulatory authorities under the
Dodd-Frank Wall Street Reform and Consumer Protection Act (the
"Dodd-Frank Act") and the Federal Deposit Insurance Act and other
possible legislative and regulatory actions and reforms; impacts
resulting from possible amendments or revisions to the Dodd-Frank
Act and the regulations promulgated thereunder, or to Consumer
Financial Protection Bureau rules and regulations; the continued
availability of earnings and excess capital sufficient for the
lawful and prudent declaration and payment of cash dividends; and
other risk factors expressly identified in the Company’s filings
with the United States Securities and Exchange Commission. Such
statements reflect our views with respect to future events and are
subject to these and other risks, uncertainties and assumptions
relating to the operations, results of operations, growth strategy
and liquidity of the Company. Readers are cautioned not to place
undue reliance on these forward-looking statements. It is intended
that these forward-looking statements speak only as of the date
they are made. We do not undertake any obligation to release
publicly any revisions to these forward-looking statements to
reflect future events or circumstances or to reflect the occurrence
of unanticipated events.
GERMAN AMERICAN BANCORP, INC. |
(unaudited, dollars in thousands except per
share data) |
|
|
|
|
|
|
Consolidated Balance Sheets |
|
|
|
|
|
|
|
March 31, 2019 |
|
December 31, 2018 |
|
March 31, 2018 |
ASSETS |
|
|
|
|
|
Cash and Due from
Banks |
$ |
45,038 |
|
|
$ |
64,549 |
|
|
$ |
32,023 |
|
Short-term Investments |
14,740 |
|
|
32,251 |
|
|
8,187 |
|
Investment Securities |
824,950 |
|
|
812,964 |
|
|
737,957 |
|
|
|
|
|
|
|
Loans
Held-for-Sale |
8,586 |
|
|
4,263 |
|
|
6,628 |
|
|
|
|
|
|
|
Loans,
Net of Unearned Income |
2,708,832 |
|
|
2,728,059 |
|
|
2,150,546 |
|
Allowance
for Loan Losses |
(16,243 |
) |
|
(15,823 |
) |
|
(14,460 |
) |
Net
Loans |
2,692,589 |
|
|
2,712,236 |
|
|
2,136,086 |
|
|
|
|
|
|
|
Stock in
FHLB and Other Restricted Stock |
13,048 |
|
|
13,048 |
|
|
13,048 |
|
Premises
and Equipment |
89,600 |
|
|
80,627 |
|
|
58,024 |
|
Goodwill
and Other Intangible Assets |
112,920 |
|
|
113,645 |
|
|
55,954 |
|
Other
Assets |
94,053 |
|
|
95,507 |
|
|
77,111 |
|
TOTAL ASSETS |
$ |
3,895,524 |
|
|
$ |
3,929,090 |
|
|
$ |
3,125,018 |
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
Non-interest-bearing Demand Deposits |
$ |
723,995 |
|
|
$ |
715,972 |
|
|
$ |
599,374 |
|
Interest-bearing Demand, Savings, and Money Market Accounts |
1,706,913 |
|
|
1,768,177 |
|
|
1,465,150 |
|
Time
Deposits |
634,262 |
|
|
588,483 |
|
|
402,597 |
|
Total
Deposits |
3,065,170 |
|
|
3,072,632 |
|
|
2,467,121 |
|
|
|
|
|
|
|
Borrowings |
317,480 |
|
|
376,409 |
|
|
274,473 |
|
Other
Liabilities |
33,687 |
|
|
21,409 |
|
|
19,419 |
|
TOTAL LIABILITIES |
3,416,337 |
|
|
3,470,450 |
|
|
2,761,013 |
|
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY |
|
|
|
|
|
Common
Stock and Surplus |
254,625 |
|
|
254,314 |
|
|
188,501 |
|
Retained
Earnings |
222,246 |
|
|
211,424 |
|
|
187,342 |
|
Accumulated Other Comprehensive Income (Loss) |
2,316 |
|
|
(7,098 |
) |
|
(11,838 |
) |
SHAREHOLDERS'
EQUITY |
479,187 |
|
|
458,640 |
|
|
364,005 |
|
|
|
|
|
|
|
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
$ |
3,895,524 |
|
|
$ |
3,929,090 |
|
|
$ |
3,125,018 |
|
|
|
|
|
|
|
END OF PERIOD
SHARES OUTSTANDING |
24,992,238 |
|
|
24,967,458 |
|
|
22,968,813 |
|
|
|
|
|
|
|
TANGIBLE BOOK
VALUE PER SHARE (1) |
$ |
14.66 |
|
|
$ |
13.81 |
|
|
$ |
13.41 |
|
|
|
|
|
|
|
|
(1)
Tangible Book Value per Share is defined as Total Shareholders'
Equity less Goodwill and Other Intangible Assets divided by End of
Period Shares Outstanding. |
GERMAN AMERICAN BANCORP, INC. |
(unaudited, dollars in thousands except per
share data) |
|
|
|
|
|
|
Consolidated Statements of
Income |
|
|
|
|
|
|
|
Three Months Ended |
|
March 31, 2019 |
|
December 31, 2018 |
|
March 31, 2018 |
INTEREST
INCOME |
|
|
|
|
|
Interest and Fees on
Loans |
$ |
35,119 |
|
|
$ |
33,678 |
|
|
$ |
23,950 |
|
Interest
on Short-term Investments |
141 |
|
|
97 |
|
|
56 |
|
Interest
and Dividends on Investment Securities |
5,929 |
|
|
5,821 |
|
|
5,139 |
|
TOTAL INTEREST INCOME |
41,189 |
|
|
39,596 |
|
|
29,145 |
|
|
|
|
|
|
|
INTEREST
EXPENSE |
|
|
|
|
|
Interest
on Deposits |
5,416 |
|
|
4,959 |
|
|
2,283 |
|
Interest
on Borrowings |
2,182 |
|
|
1,654 |
|
|
1,252 |
|
TOTAL INTEREST EXPENSE |
7,598 |
|
|
6,613 |
|
|
3,535 |
|
|
|
|
|
|
|
NET INTEREST INCOME |
33,591 |
|
|
32,983 |
|
|
25,610 |
|
Provision
for Loan Losses |
675 |
|
|
— |
|
|
350 |
|
NET INTEREST INCOME AFTER PROVISION FOR LOAN
LOSSES |
32,916 |
|
|
32,983 |
|
|
25,260 |
|
|
|
|
|
|
|
NON-INTEREST
INCOME |
|
|
|
|
|
Net Gain
on Sales of Loans |
981 |
|
|
583 |
|
|
650 |
|
Net Gain
on Securities |
155 |
|
|
272 |
|
|
270 |
|
Other
Non-interest Income |
10,522 |
|
|
8,878 |
|
|
8,572 |
|
TOTAL NON-INTEREST INCOME |
11,658 |
|
|
9,733 |
|
|
9,492 |
|
|
|
|
|
|
|
NON-INTEREST
EXPENSE |
|
|
|
|
|
Salaries
and Benefits |
15,044 |
|
|
15,027 |
|
|
12,126 |
|
Other
Non-interest Expenses |
11,715 |
|
|
14,787 |
|
|
8,329 |
|
TOTAL NON-INTEREST EXPENSE |
26,759 |
|
|
29,814 |
|
|
20,455 |
|
|
|
|
|
|
|
Income
before Income Taxes |
17,815 |
|
|
12,902 |
|
|
14,297 |
|
Income
Tax Expense |
2,748 |
|
|
1,922 |
|
|
2,484 |
|
|
|
|
|
|
|
NET
INCOME |
$ |
15,067 |
|
|
$ |
10,980 |
|
|
$ |
11,813 |
|
|
|
|
|
|
|
BASIC EARNINGS
PER SHARE |
$ |
0.60 |
|
|
$ |
0.44 |
|
|
$ |
0.51 |
|
DILUTED
EARNINGS PER SHARE |
$ |
0.60 |
|
|
$ |
0.44 |
|
|
$ |
0.51 |
|
|
|
|
|
|
|
WEIGHTED
AVERAGE SHARES OUTSTANDING |
24,971,863 |
|
|
24,962,878 |
|
|
22,940,402 |
|
DILUTED
WEIGHTED AVERAGE SHARES OUTSTANDING |
24,971,863 |
|
|
24,962,878 |
|
|
22,940,402 |
|
|
|
|
|
|
|
|
|
|
|
|
|
GERMAN AMERICAN BANCORP, INC. |
(unaudited, dollars in thousands except per
share data) |
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
March 31, |
|
December 31, |
|
March 31, |
|
|
2019 |
|
2018 |
|
2018 |
EARNINGS PERFORMANCE RATIOS |
|
|
|
|
|
|
Annualized Return on
Average Assets |
1.55 |
% |
|
1.15 |
% |
|
1.51 |
% |
|
Annualized Return on
Average Equity |
12.98 |
% |
|
10.05 |
% |
|
13.00 |
% |
|
Net Interest
Margin |
3.88 |
% |
|
3.83 |
% |
|
3.66 |
% |
|
Efficiency Ratio
(1) |
58.23 |
% |
|
68.64 |
% |
|
57.21 |
% |
|
Net Overhead Expense to
Average Earning Assets (2) |
1.69 |
% |
|
2.30 |
% |
|
1.51 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSET QUALITY RATIOS |
|
|
|
|
|
|
|
|
|
|
|
|
Annualized Net
Charge-offs to Average Loans |
0.04 |
% |
|
0.03 |
% |
|
0.30 |
% |
|
Allowance for Loan
Losses to Period End Loans |
0.60 |
% |
|
0.58 |
% |
|
0.67 |
% |
|
Non-performing Assets
to Period End Assets |
0.34 |
% |
|
0.34 |
% |
|
0.34 |
% |
|
Non-performing Loans to
Period End Loans |
0.46 |
% |
|
0.48 |
% |
|
0.49 |
% |
|
Loans 30-89 Days Past
Due to Period End Loans |
0.45 |
% |
|
0.54 |
% |
|
0.33 |
% |
|
|
|
|
|
|
|
SELECTED BALANCE SHEET & OTHER FINANCIAL
DATA |
|
|
|
|
|
|
Average Assets |
$ |
3,886,723 |
|
|
$ |
3,834,251 |
|
|
$ |
3,120,971 |
|
|
Average Earning
Assets |
$ |
3,568,971 |
|
|
$ |
3,495,618 |
|
|
$ |
2,901,849 |
|
|
Average Total
Loans |
$ |
2,718,808 |
|
|
$ |
2,662,502 |
|
|
$ |
2,139,704 |
|
|
Average Demand
Deposits |
$ |
691,107 |
|
|
$ |
714,504 |
|
|
$ |
585,432 |
|
|
Average Interest
Bearing Liabilities |
$ |
2,708,307 |
|
|
$ |
2,660,340 |
|
|
$ |
2,150,544 |
|
|
Average Equity |
$ |
464,234 |
|
|
$ |
437,177 |
|
|
$ |
363,579 |
|
|
|
|
|
|
|
|
|
Period End
Non-performing Assets (3) |
$ |
13,114 |
|
|
$ |
13,498 |
|
|
$ |
10,652 |
|
|
Period End
Non-performing Loans (4) |
$ |
12,429 |
|
|
$ |
13,212 |
|
|
$ |
10,584 |
|
|
Period End Loans 30-89
Days Past Due (5) |
$ |
12,197 |
|
|
$ |
14,815 |
|
|
$ |
7,013 |
|
|
|
|
|
|
|
|
|
Tax Equivalent Net
Interest Income |
$ |
34,299 |
|
|
$ |
33,702 |
|
|
$ |
26,261 |
|
|
Net Charge-offs during
Period |
$ |
255 |
|
|
$ |
228 |
|
|
$ |
1,584 |
|
|
|
|
|
|
|
|
(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. |
(5) |
Loans 30-89 days past
due and still accruing. |
|
|
|
|
|
For additional information, contact:Mark
A Schroeder, Chairman & Chief Executive Officer of
German American Bancorp, Inc.Bradley M Rust,
Executive Vice President/CFO of German American Bancorp, Inc.(812)
482-1314
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