Market Overview

German American Bancorp, Inc. (GABC) Reports Strong 3rd Quarter Performance

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JASPER, Ind., Oct. 26, 2015 (GLOBE NEWSWIRE) -- German American Bancorp, Inc. (NASDAQ: GABC) (the "Company" or "German American") reported today that the Company's third quarter earnings were $7.7 million, or $0.58 per diluted share, which were comparable to the strong performance the Company experienced during the third quarter of the prior year.  As compared to the second quarter 2014 reported net income of $7.3 million, or $0.55 per diluted share, the current quarter results improved by $396,000, or $0.03 per diluted share, equating to approximately a 5% increase.  On a year-to-date comparison, 2015 earnings increased to $22.4 million, or $1.69 per diluted share, as compared to $20.7 million, or $1.57 per diluted share, for the first nine months of 2014, representing an increase of approximately 8% on a per share basis.

The Company's 2015 quarterly earnings strength was attributable to increased revenue within both net interest income and non-interest income relative to both the previous quarter and the same quarter last year.  The current quarter's net interest income increase was largely attributable to the Company's growth in earning assets, and in particular growth of the loan portfolio.  During this year's third quarter, total loans, on a linked quarter annualized basis, increased by approximately 11%.  Total non-interest income increased by approximately $1.3 million during the current quarter, relative to that earned in the same quarter last year.  This year's third quarter increase in non-interest income was primarily attributable to a one-time net gain the Company booked in connection with the donation of a building and accompanying real estate to an economic development foundation in one of the Company's market areas.

The Company was also able to continue, during the current quarter, its historic level of control over loan related provision expense and non-interest operating expenses.  During the quarter, German American was able to record a $500,000 negative provision for loan losses, due to both a lower level of non-performing loans in the third quarter and a declining trend in loan losses over the past several years. While the Company's reported third quarter 2015 non-interest expenses did reflect an increase of $2.9 million compared with the same period of last year, a significant portion of that increase was related to the recording of an offsetting charitable contribution to the aforementioned net gain on the donation of a building to a local economic development foundation.  The Company also experienced a higher level of costs associated with its partially self-insured employee health insurance plan during the current quarter, relative to that experienced in recent quarters. Exclusive of these two items, third quarter operating expenses continued the recent trend of controlled year-over-year increases.

Mark A. Schroeder, German American's Chairman & CEO stated, "The strength and quality of our third quarter results are reflective of the strength and quality of the economic environment within our market area. The combination of strong loan demand and loan growth, coupled with the ability to book minimal provision for loan losses, were the primary drivers of our strong financial performance for both the third quarter and year-to-date.  Reflective of the lowest levels of unemployment within the state currently being experienced within our market area, our consumer and local business clients are investing back into the quality of life for their families and into the infrastructure and capacity of their businesses.  We're pleased that they have chosen German American to help assist them in doing so through the depth of our team of local financial professionals offering a wide array of banking, insurance, investment and wealth management products and services."

The Company also announced that its Board of Directors declared its regular quarterly cash dividend of $0.17 per share which will be payable on November 20, 2015 to shareholders of record as of November 10, 2015.

Balance Sheet Highlights

Total assets for the Company totaled $2.313 billion at September 30, 2015, an increase of $53.5 million, or 9% on an annualized basis, compared with June 30, 2015 and an increase of $107.3 million, or 5%, compared with September 30, 2014.

September 30, 2015 total loans outstanding increased $40.8 million, or 11% on an annualized basis, compared with June 30, 2015, and increased $80.5 million, or 6%, compared to September 30, 2014 total loans outstanding. The increase in loans was broad based across most categories of loans throughout the Company's market area.

       
End of Period Loan Balances 9/30/2015 6/30/2015 9/30/2014
(dollars in thousands)      
       
Commercial & Industrial Loans $404,946  $396,741  $377,845 
Commercial Real Estate Loans 600,688  584,426  586,012 
Agricultural Loans 236,619  222,298  201,867 
Consumer Loans 138,387  135,874  133,764 
Residential Mortgage Loans 136,645  137,129  137,286 
  $1,517,285  $1,476,468  $1,436,774 
       

Non-performing assets totaled $5.5 million at September 30, 2015 compared to $5.8 million of non-performing assets at June 30, 2015 and $6.3 million at September 30, 2014.  Non-performing assets represented 0.24% of total assets at September 30, 2015 compared to 0.26% of total assets at June 30, 2015 and 0.28% of total assets at September 30, 2014.  Non-performing loans totaled $5.3 million at September 30, 2015 compared to $5.4 million at June 30, 2015 and $5.8 million of non-performing loans at September 30, 2014.  Non-performing loans represented 0.35% of total loans at September 30, 2015 compared to 0.37% at June 30, 2015 and 0.40% at September 30, 2014.

      
Non-performing Assets     
(dollars in thousands)     
 9/30/2015 6/30/2015 9/30/2014
Non-Accrual Loans$5,326  $5,431  $5,667 
Past Due Loans (90 days or more)10  15  96 
Total Non-Performing Loans5,336  5,446  5,763 
Other Real Estate123  317  521 
Total Non-Performing Assets$5,459  $5,763  $6,284 
      
Restructured Loans$2,309  $2,587  $2,688 
      

The Company's allowance for loan losses totaled $14.8 million at September 30, 2015 compared to $15.3 million at June 30, 2015 representing a decline of $488,000, or 13% on an annualized basis, and a decline of $822,000, or 5%, compared with September 30, 2014.  The allowance for loan losses represented 0.98% of period-end loans at September 30, 2015 compared with 1.04% of period-end loans at June 30, 2015 and 1.09% of period-end loans at September 30, 2014.  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 discount on acquired loans of $3.1 million as of September 30, 2015, $3.3 million at June 30, 2015 and $4.5 million at September 30, 2014.

Total deposits increased $41.1 million, or 9% on an annualized basis, as of September 30, 2015 compared with June 30, 2015 and increased by $39.4 million, or 2%, compared with September 30, 2014.  The increase in total deposits at September 30, 2015 compared with June 30, 2015 was predominantly due to an increase in interest bearing demand accounts, short-term time deposits gathered through the CDARS network, and longer term brokered time deposits.

       
End of Period Deposit Balances 9/30/2015 6/30/2015 9/30/2014
(dollars in thousands)      
       
Non-interest-bearing Demand Deposits $418,947  $425,547  $410,329 
IB Demand, Savings, and MMDA Accounts 1,039,520  1,014,013  1,020,504 
Time Deposits < $100,000 194,408  189,615  205,980 
Time Deposits > $100,000 150,960  133,590  127,658 
  $1,803,835  $1,762,765  $1,764,471 
       

Results of Operations Highlights – Quarter ended September 30, 2015

Net income for the quarter ended September 30, 2015 totaled $7,721,000 or $0.58 per share, an increase of $396,000 from the second quarter of 2015 net income of $7,325,000 or $0.55 per share and was relatively flat with the third quarter of 2014 net income of $7,708,000 or $0.58 per share.

                   
Summary Average Balance Sheet                  
(Tax-equivalent basis / dollars in thousands)                  
   Quarter Ended  Quarter Ended  Quarter Ended
  September 30, 2015 June 30, 2015 September 30, 2014
                   
   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 $22,155  $3  0.06% $20,540  $4  0.07% $15,788  $2  0.04%
Securities 629,470  4,541  2.89% 632,270  4,400  2.78% 627,098  4,277  2.73%
Loans and Leases 1,492,772  16,796  4.47% 1,456,699  16,630  4.58% 1,424,458  16,755  4.67%
Total Interest Earning Assets $2,144,397  $21,340  3.96% $2,109,509  $21,034  4.00% $2,067,344  $21,034  4.05%
                   
Liabilities                  
Demand Deposit Accounts $428,380      $420,341      $400,223     
IB Demand, Savings, and                  
MMDA Accounts $1,027,035  $329  0.13% $1,055,880  $345  0.13% $1,017,266  $317  0.12%
Time Deposits 355,853  658  0.73% 341,678  677  0.79% 330,494  708  0.85%
FHLB Advances and Other Borrowings 200,831  573  1.13% 160,196  450  1.13% 213,205  532  0.99%
Total Interest-Bearing Liabilities $1,583,719  $1,560  0.39% $1,557,754  $1,472  0.38% $1,560,965  $1,557  0.40%
                   
Cost of Funds     0.29%     0.28%     0.30%
Net Interest Income   $19,780      $19,562      $19,477   
Net Interest Margin     3.67%     3.72%     3.75%
                   

During the quarter ended September 30, 2015, net interest income totaled $18,859,000 representing an increase of $153,000, or 1%, from the quarter ended June 30, 2015 net interest income of $18,706,000 and an increase of $68,000, or less than 1%, compared with the quarter ended September 30, 2014 net interest income of $18,791,000.  The tax equivalent net interest margin for the quarter ended September 30, 2015 was 3.67% compared with 3.72% in the second quarter of 2015 and 3.75% in third quarter of 2014.  The decline in the net interest margin in third quarter of 2015 compared with the second quarter of 2015 was primarily attributable to a lower level of prepayment fees on commercial real estate loans than were received during the second quarter of 2015.  These prepayment fees contributed approximately 5 basis points on an annualized basis to the net interest margin during the second quarter of 2015.   Accretion of loan discounts on acquired loans contributed approximately 4 basis points to the net interest margin on an annualized basis in the third quarter of 2015, 5 basis points in the second quarter of 2015, and 6 basis points in the third quarter of 2014.

During the quarter ended September 30, 2015, the Company recognized a negative $500,000 provision for loan loss which represented a decrease of $750,000 from the second quarter of 2015 provision for loan loss of $250,000 and a decrease of $500,000 from the third quarter of 2014 when no provision was recorded.  The negative provision for loan loss during the third quarter of 2015 was attributable to continued improvement in the asset quality metrics of the Company and was based on the Company's standard methodology for determining the adequacy of its allowance for loan and lease losses.  During the third quarter of 2015, the negative provision for loan loss represented approximately 13 basis points of average loans on an annualized basis.  The Company recognized a modest $12,000 net recovery during the third quarter of 2015.

During the quarter ended September 30, 2015, non-interest income totaled $7,757,000, an increase of $1,636,000 or 27%, compared with the quarter ended June 30, 2015, and an increase of $1,320,000, or 21%, compared with the third quarter of 2014.

       
  Quarter Ended Quarter Ended Quarter Ended
Non-interest Income 9/30/2015 6/30/2015 9/30/2014
(dollars in thousands)      
       
Trust and Investment Product Fees $1,051  $939  $901 
Service Charges on Deposit Accounts 1,237  1,220  1,300 
Insurance Revenues 1,752  1,515  1,739 
Company Owned Life Insurance 205  207  210 
Interchange Fee Income 547  563  508 
Other Operating Income 2,134  631  599 
Subtotal 6,926  5,075  5,257 
Net Gains on Loans 831  784  613 
Net Gains on Securities   262  567 
Total Non-interest Income $7,757  $6,121  $6,437 
       

Trust and investment product fees increased $112,000, or 12%, during the quarter ended September 30, 2015 compared with the second quarter of 2015 and increased $150,000, or 17%, compared with the third quarter of 2014.  The increase in revenue was primarily attributable continued growth in assets under management within in the Company's trust advisory group.

Insurance revenues increased $237,000, or 16%, during the quarter ended September 30, 2015, compared with the second quarter of 2015 and increased $13,000, or 1%, compared with the third quarter of 2014. The increase in insurance revenues in both comparative periods was primarily related to commercial insurance revenue generated through the Company's property and casualty insurance agency.

Other operating income increased $1,503,000 during the quarter ended September 30, 2015 compared with the second quarter of 2015 and increased $1,535,000 compared with the third quarter of 2014.   The donation of a building and accompanying real estate to an economic development foundation in one of the Company's market areas that had a net book value of approximately $360,000 and an estimated fair value of approximately $1.75 million resulted in a net gain on the disposition of fixed assets of approximately $1.4 million.  This transaction was the primary driver of the increase in other operating income.  A corresponding contribution expense of $1.75 million was recognized in advertising and promotion expense of the Company's income statement.

Net gains on sales of loans increased $47,000, or 6%, during the third quarter of 2015 compared with the second quarter of 2015 and increased $218,000 or 36% compared with the third quarter of 2014.  Loan sales totaled $39.1 million during the third quarter of 2015, compared with $38.9 million during the second quarter of 2015 and $28.6 million during the third quarter of 2014.

During the third quarter of 2015, the Company realized no gains on sales of securities compared with a net gain on the sale of securities of $262,000 in the second quarter of 2015 and $567,000 during the third quarter of 2014.

During the quarter ended September 30, 2015, non-interest expense totaled $16,966,000, an increase of $2,651,000, or 19%, compared with the quarter ended June 30, 2015, and an increase of $2,884,000, or 20%, compared with the third quarter of 2014.

       
  Quarter Ended Quarter Ended Quarter Ended
Non-interest Expense 9/30/2015 6/30/2015 9/30/2014
(dollars in thousands)      
       
Salaries and Employee Benefits $8,998  $8,259  $7,975 
Occupancy, Furniture and Equipment Expense 1,761  1,683  1,725 
FDIC Premiums 284  284  277 
Data Processing Fees 901  870  935 
Professional Fees 787  642  516 
Advertising and Promotion 2,198  484  613 
Intangible Amortization 183  202  302 
Other Operating Expenses 1,854  1,891  1,739 
Total Non-interest Expense $16,966  $14,315  $14,082 
       

Salaries and benefits increased $739,000, or 9%, during the quarter ended September 30, 2015 compared with the second quarter of 2015 and increased $1,023,000, or 13%, compared with the third quarter of 2014.  The increase in salaries and benefits during both comparative periods was largely driven by increased costs associated with the Company's partially self insured health insurance plan. Also contributing to the increased level of salaries and benefits was an increased level of compensation in the Company's trust and investment advisory services group and retirement benefits for certain long-term employees.

Advertising and promotion increased $1,714,000 during the quarter ended September 30, 2015 compared with the second quarter of 2015 and increased $1,585,000 compared with the third quarter of 2014.  The primary driver of the increase in advertising and promotion was the recognition of a $1,750,000 contribution expense related to the donation of a building and accompanying real estate to an economic development foundation in one of the Company's market areas.

The Company's effective income tax rate was 23.9% in the quarter ended September 30, 2015, 28.6% during the quarter ended June 30, 2015 and 30.9% during the quarter ended September 30, 2014.  The decline in the effective tax rate during third quarter of 2015 compared with both periods was primarily impacted by the aforementioned donation of a building and accompanying real estate, the overall percentage change in revenue generated from tax-advantaged sources, and the timing of the reversal of certain deferred tax items.

About German American

German American Bancorp, Inc., is a NASDAQ-traded (symbol: GABC) financial services holding company based in Jasper, Indiana.  German American, through its banking subsidiary German American Bancorp, operates 37 banking offices in 13 southern Indiana counties. 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

The Company's statements in this press release contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995.  These statements include, but are not limited to, descriptions of the levels of loan and banking service demand and economic strength that management is seeing in its geographical banking footprint.  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 that could cause actual experience to differ from the expectations 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 and the Federal Deposit Insurance Act and other possible legislative and regulatory actions and reforms; and the continued availability of earnings and excess capital sufficient for the lawful and prudent declaration and payment of cash dividends.  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
      
 September 30,
2015
 June 30,
2015
 September 30,
2014
ASSETS     
Cash and Due from Banks$39,998  $31,538  $37,427 
Short-term Investments22,140  20,729  49,740 
Interest-bearing Time Deposits with Banks100  100  100 
Investment Securities625,239  618,891  575,925 
      
Loans Held-for-Sale6,410  10,622  7,590 
      
Loans, Net of Unearned Income1,513,580  1,472,646  1,432,749 
Allowance for Loan Losses(14,770) (15,258) (15,592)
Net Loans1,498,810  1,457,388  1,417,157 
      
Stock in FHLB and Other Restricted Stock8,167  8,122  9,096 
Premises and Equipment37,905  38,707  40,322 
Goodwill and Other Intangible Assets21,979  22,163  22,888 
Other Assets52,462  51,426  45,676 
TOTAL ASSETS$2,313,210  $2,259,686  $2,205,921 
      
LIABILITIES     
Non-interest-bearing Demand Deposits$418,947  $425,547  $410,329 
Interest-bearing Demand, Savings, and Money Market Accounts1,039,520  1,014,013  1,020,504 
Time Deposits345,368  323,205  333,638 
Total Deposits1,803,835  1,762,765  1,764,471 
      
Borrowings239,072  240,072  208,086 
Other Liabilities22,951  19,799  13,099 
TOTAL LIABILITIES2,065,858  2,022,636  1,985,656 
      
SHAREHOLDERS' EQUITY     
Common Stock and Surplus123,112  122,437  121,691 
Retained Earnings119,656  114,190  98,528 
Accumulated Other Comprehensive Income (Loss)4,584  423  46 
TOTAL SHAREHOLDERS' EQUITY247,352  237,050  220,265 
      
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY$2,313,210  $2,259,686  $2,205,921 
      
END OF PERIOD SHARES OUTSTANDING13,273,349  13,259,594  13,210,395 
      
BOOK VALUE PER SHARE$18.64  $17.88  $16.67 


 
GERMAN AMERICAN BANCORP, INC.
(unaudited, dollars in thousands except per share data)
           
Consolidated Statements of Income
           
  Three Months Ended Nine Months Ended
  September 30,
2015
 June 30,
2015
 September 30,
2014
 September 30,
2015
 September 30,
2014
INTEREST INCOME         
Interest and Fees on Loans$16,702  $16,537  $16,680  $49,538  $48,766 
Interest on Short-term Investments and Time Deposits3  4  2  10  8 
Interest and Dividends on Investment Securities3,714  3,637  3,666  11,049  11,080 
TOTAL INTEREST INCOME20,419  20,178  20,348  60,597  59,854 
           
INTEREST EXPENSE         
Interest on Deposits987  1,022  1,025  3,002  3,098 
Interest on Borrowings573  450  532  1,481  1,448 
TOTAL INTEREST EXPENSE1,560  1,472  1,557  4,483  4,546 
           
NET INTEREST INCOME18,859  18,706  18,791  56,114  55,308 
Provision for Loan Losses(500) 250      550 
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES19,359  18,456  18,791  56,114  54,758 
           
NON-INTEREST INCOME         
Net Gain on Sales of Loans831  784  613  2,364  1,475 
Net Gain on Securities  262  567  725  1,039 
Other Non-interest Income6,926  5,075  5,257  17,931  15,706 
TOTAL NON-INTEREST INCOME7,757  6,121  6,437  21,020  18,220 
           
NON-INTEREST EXPENSE         
Salaries and Benefits8,998  8,259  7,975  26,082  24,285 
Other Non-interest Expenses7,968  6,056  6,107  20,032  19,026 
TOTAL NON-INTEREST EXPENSE16,966  14,315  14,082  46,114  43,311 
           
Income before Income Taxes10,150  10,262  11,146  31,020  29,667 
Income Tax Expense2,429  2,937  3,438  8,668  8,967 
           
NET INCOME$7,721  $7,325  $7,708  $22,352  $20,700 
           
BASIC EARNINGS PER SHARE$0.58  $0.55  $0.58  $1.69  $1.57 
DILUTED EARNINGS PER SHARE$0.58  $0.55  $0.58  $1.69  $1.57 
           
WEIGHTED AVERAGE SHARES OUTSTANDING13,265,893  13,256,026  13,210,395  13,247,954  13,200,025 
DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING13,273,510  13,263,604  13,230,675  13,255,510  13,221,000 


 
GERMAN AMERICAN BANCORP, INC.
(unaudited, dollars in thousands except per share data)
           
  Three Months Ended Nine Months Ended
  September 30, June 30, September 30, September 30, September 30,
  2015 2015 2014 2015 2014
EARNINGS PERFORMANCE RATIOS         
 Annualized Return on Average Assets1.36% 1.31% 1.41% 1.33% 1.28%
 Annualized Return on Average Equity12.75% 12.27% 14.19% 12.52% 13.08%
 Net Interest Margin3.67% 3.72% 3.75% 3.70% 3.76%
 Efficiency Ratio (1)61.61% 55.74% 54.34% 57.87% 57.41%
 Net Overhead Expense to Average Earning Assets (2)1.72% 1.55% 1.48% 1.58% 1.64%
           
ASSET QUALITY RATIOS         
 Annualized Net Charge-offs to Average Loans% 0.04% (0.01)% 0.01% (0.04)%
 Allowance for Loan Losses to Period End Loans0.98% 1.04% 1.09%    
 Non-performing Assets to Period End Assets0.24% 0.26% 0.28%    
 Non-performing Loans to Period End Loans0.35% 0.37% 0.40%    
 Loans 30-89 Days Past Due to Period End Loans0.24% 0.21% 0.25%    
           
SELECTED BALANCE SHEET & OTHER FINANCIAL DATA         
 Average Assets$2,274,034  $2,240,528  $2,191,484  $2,247,395  $2,159,241 
 Average Earning Assets$2,144,397  $2,109,509  $2,067,344  $2,116,893  $2,034,131 
 Average Total Loans$1,492,772  $1,456,699  $1,424,458  $1,464,632  $1,395,529 
 Average Demand Deposits$428,380  $420,341  $400,223  $425,379  $402,070 
 Average Interest Bearing Liabilities$1,583,719  $1,557,754  $1,560,965  $1,562,689  $1,534,555 
 Average Equity$242,307  $238,731  $217,268  $238,104  $210,995 
           
 Period End Non-performing Assets (3)$5,459  $5,763  $6,284     
 Period End Non-performing Loans (4)$5,336  $5,446  $5,763     
 Period End Loans 30-89 Days Past Due (5)$3,634  $3,025  $3,652     
           
 Tax Equivalent Net Interest Income$19,780  $19,562  $19,477  $58,662  $57,219 
 Net Charge-offs during Period$(12) $161  $(42) $159  $(458)
           
           
 (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, 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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