STRENGTH
based on Core Values
Summary Annual Report
2013
THE
Numbers
Total Assets
(dollars in millions)
$2,164
$2,006
$1,874
$1,376
$1,243
Total Loans, Net of Unearned Income
(dollars in millions)
Commercial and Agriculture Loans as % of Total Loans
$1,382
$1,205
$1,121
$878
77%
$917
79%
81%
83%
81%
$1,500
$1,400
$1,300
$1,200
$1,100
$1,000
$900
$800
$700
$600
12/31/09
12/31/10
12/31/11
12/31/12
12/31/13
12/31/09
12/31/10
12/31/11
12/31/12
12/31/13
Total Deposits
(dollars in millions)
Non-Maturity Deposit Accounts as % of Total Deposits
$1,812
$1,556
$1,641
$1,087
$970
66%
67%
80%
81%
76%
Total Shareholders’ Equity
(dollars in millions)
Annualized Return of Equity
$200
$185
$168
$114
$122
11.12%
11.18%
13.57%
13.40%
12.67%
$220
$200
$180
$160
$140
$120
$100
$80
$60
$40
$20
$0
12/31/09
12/31/10
12/31/11
12/31/12
12/31/13
12/31/09
12/31/10
12/31/11
12/31/12
12/31/13
Net Interest Income (Tax-Equivalent)
(dollars in thousands)
Net Interest Margin
$65,202
$67,819
$70,319
$49,481
$45,323
3.95%
3.98%
3.84%
3.74%
3.67%
Net Income & Diluted Earnings
Per Share
(dollars in thousands)
$24,055
$25,413
$20,249
$1.61
$1.98
$1.90
$12,218
$13,405
$1.21
$1.10
$27,500
$25,000
$22,500
$20,000
$17,500
$15,000
$12,500
$10,000
$7,500
$5,000
$2,500
$0
12/31/09
12/31/10
12/31/11
12/31/12
12/31/13
12/31/09
12/31/10
12/31/11
12/31/12
12/31/13
$2,200
$2,100
$2,000
$1,900
$1,800
$1,700
$1,600
$1,500
$1,400
$1,300
$1,200
$1,100
$1,000
$2,000
$1,800
$1,600
$1,400
$1,200
$1,000
$800
$600
$400
$200
$0
$75,000
$70,000
$65,000
$60,000
$55,000
$50,000
$45,000
$40,000
$35,000
$30,000
$25,000
$20,000
$15,000
$10,000
$5,000
$0
A LETTER TO OUR
Shareholders
Dear Shareholders:
Each year we choose a theme and design for our Summary Annual
Report that we believe best describes the year’s performance.
Strength based on Core Values captures the essence of your
Company’s performance in 2013 and for the past decade. On the
cover is the work of a craftsman stonecutter carving the German
American shield. Much like the steady hand of the stonecutter
working carefully and methodically to turn a block of limestone
into a work of art, the German American team has worked
carefully and methodically over the course of the past decade
to stay true to our Core Values of following a safe, sound, and
secure approach to doing business. By doing so, we have crafted
German American into one of the best performing community
banking institutions in the nation. Over the course of the past
several years, German American has received numerous industry
recognitions for consistently having posted top 10% performance
among the nation’s publicly traded community banks. Within the
past year, your Company was recognized by two separate banking
research groups as being among the top 10 publicly-traded
financial institutions in the United States within this top 10% of
community banks.
Once again in 2013, your Company achieved record earnings,
with annual net income of $25.4 million, or $1.98 per fully-diluted
share, for the year ended on December 31, 2013. This level of
record performance was approximately a 4% increase, on a per
share basis, over the prior year’s 2012 record performance of $24.1
million, or $1.90 per share, and represented a 23% increase from
the 2011 then record performance of $20.2 million, or $1.61 per
share. The period of 2008-2013 represents the best 6 years in the
Company’s 103 year history in terms of reported annual earnings,
and our return on average shareholder equity of 13.40% in 2013
represents the 9th consecutive year that German American has
delivered double-digit returns on shareholders’ equity.
Consistently staying true to our Core Values of a safe, sound,
disciplined approach to doing business has been a driving force
behind a quite challenging year from an operating perspective. The
continued downward pressure on yields on loans and investments,
driven by a prolonged period of historically low market interest
rates along with a competitive environment for
lending
opportunities, resulted in continued decline in our net interest
margin. In spite of the negative impact of lower margin pressures,
German American was able to achieve record performance by
benefiting from the efforts put forth in prior years, resulting in an
increased level of net interest income, driven by a higher level of
earning assets, and more specifically by a significant increase in
the Company’s loan portfolio. We posted increased levels of non-
interest income from our wealth management activities within our
investment, trust, and insurance divisions and from higher levels
of gains related to the sale of securities. We also benefited from a
materially reduced level of provision for loan loss expense in 2013,
as our historically strong asset quality showed further continued
improvement during the year.
Mark A. Schroeder
Chairman and CEO
We opened our first agricultural
lending office in 2013. It is
located in the western part
of our footprint, which has an
extensive agricultural base. Ag
lending has always been one of
our key industry segments and this Ag Services Office is indicative
of the opportunities we see in the future of agriculture.
In October of 2013, we successfully continued our plan of
disciplined growth and completed a merger transaction with
United Commerce Bancorp of Bloomington, Indiana. This merger
positions German American very well within the Bloomington
market through the combined strength of German American’s and
United Commerce’s existing exceptional teams of local financial
professionals and solid base of deposit and loan clients. We are
pleased to welcome United Commerce’s customers, employees,
and shareholders to German American.
We continued our planned expansion in the Columbus, Indiana
market in December of 2013. Building upon our initial commercial
banking presence in this market since 2012, we opened a new
state-of-the-art financial center. This striking facility in the heart of
the Columbus business district is part of an ongoing business plan
to increase our visibility and client base in this dynamic market
area and enables us to build our product and service offerings to
include retail banking, insurance, investments, and trust for our
growing base of clients.
We also wish to thank Gene Mehne for his 35 years of service
to your Company on our Board of Directors. Gene is not eligible
for re-election at this year’s annual meeting because our bylaws
impose an age limit on our eligible nominees. Gene’s insights into
our heritage banking markets in and around Dubois County, and
in particular into the needs of our agribusiness customers, will be
missed, and we wish him the very best.
Joining the German American Board in February of this year, Ray
Snowden, Chairperson & CEO of Memorial Hospital & Health Care
Center, brings to the board a perspective on health care, which is
an important industry to our Company and to the communities we
serve. We welcome Ray to the corporate board and look forward
to his advice and counsel and to his contribution to our combined
efforts toward our future success.
Strength based on Core Values - This time-tested approach and
philosophy of doing business allows us to look to the future of
German American, confident in our ability to build upon our past
success, while honoring our pledge to always be committed to our
clients, the communities we serve, and to you, our shareholders,
without whom, the success we’ve enjoyed would not have been
possible.
Your Company’s business philosophy has clearly delivered
rewards for our shareholders. Our fully diluted earnings per share
compound annual growth rate of 11.3% for the past 5 years and
10.5% over the past 10 years is indicative of the level of financial
performance your Company has enjoyed as a result of adhering to
the Core Values upon which German American was founded.
Sincerely,
Mark A. Schroeder
Chairman & CEO
1
OUR EXECUTIVE
Management Team
Mark A. Schroeder
Chairman and
Chief Executive Officer
Clay W. Ewing
President
Randall L. Braun
Senior Vice President,
Retail Banking
Bradley M. Rust
Executive Vice President,
and Chief Financial Officer
Keith A. Leinenbach
Senior Vice President,
and Chief Credit Officer
2
Our sole purpose is to serve Southern Indiana
BARTHOLOMEW
COUNTY
Columbus
Banking
Investments
Insurance
Ag Services
DAVIESS
COUNTY
Odon/Cannelburg
Bloomington
MONROE
COUNTY
Bedford
LAWRENCE
COUNTY
Vincennes
Washington
KNOX COUNTY
Loogootee
MARTIN
COUNTY
Petersburg
Ireland
Princeton
GIBSON COUNTY
Oakland
City
VANDERBURGH
VANDERBURGH
COUNTY
COUNTY
Winslow
PIKE
COUNTY
WARRICK
COUNTY
Evansville
Newburgh
Rockport
Dubois
Jasper
DUBOIS
COUNTY
Huntingburg
Holland
Ferdinand
SPENCER
COUNTY
PERRY
COUNTY
Tell City
Our Mission
Our Vision
We build relationships mutually beneficial
to our clients and our shareholders.
• We create custom financial solutions
that help businesses and retail
customers reach their financial goals.
German American Bancorp, Inc. will build a regional presence
offering a full array of integrated financial products and services.
We will always be mindful of our community banking roots and the
importance of enhancing and growing the relationships we have
with our shareholders, customers, employees and communities.
• We develop lifelong relationships
that are based on mutual respect
and supported by the strength
and community ties of
German American.
• We support our customers and
shareholders on their quest to
greater prosperity and
quality of life.
We are deeply rooted and engaged within the communities
we serve. The German American professionals build strong
relationships that are based on a winning combination of
discipline and conservative management with a keen eye
for arising opportunities.
3
Core Values
standing the test of time
Since 1910 the people of southern Indiana have trusted
German American to help purchase homes, protect, save
and manage their money, grow businesses and farm
operations, and pass wealth from one generation to the next.
Throughout our 103 years of operation, we have grown to
offering insurance services to protect assets for individuals
and businesses and investment services to help clients
send children to college, achieve financial goals, and retire
comfortably. We have adapted to offering personal and
business clients the latest technology including online and
mobile banking and bill pay, account alerts, and text banking.
Our office locations have grown from one office in Jasper,
Indiana, a community rich in German American heritage
Joe Dedman
“During my career with German American,
I have had the opportunity to work in
various business lines and markets. One
trait I value most with this company is
the consistency of understanding that
we are in the people business. We are
relationship oriented and define success
when we work with our customers to find
the right financial products and services
that fit their needs.”
located in the heart of southwestern
Indiana, to 37 offices throughout
southern Indiana.
What has remained from the beginning
is the underlying understanding that
we are in a people business. We
are people helping people in the
communities we serve to financially
grow, prosper and thrive. We are a
team of financial professionals who
are available when our clients have
questions. No matter what latest
technology is offered to our clients,
it is all backed by customer service
excellence from our people. Clients
can pick up a phone, send us an e-mail or visit our offices and
they speak directly to a German American team member.
4
Pictured top to bottom: Laura Bogard, Peggy Merkel, Tom Acton, Jeff Cash, Gaven Oexmann, Joe Dedman, Gene Mattingly, Jane Thoma, Mike Hayes
We believe in a safe, sound and secure approach to running
our financial services company and spread this philosophy
to our clients. Financial opportunities abound around each
of us. We work with our clients to analyze opportunities
to understand which ones are the best for each particular
situation. Our clients are much more than an account with us.
They are the lifeblood of our company, and we work hard to
develop relationships to completely understand our clients’
needs and help them make the next best financial decision.
Communities rely on businesses
to help support quality of life
for the individuals and families
who reside
in them. German
American not only employs local
people from throughout southern
Indiana, we also give generously to
community activities and civic and
charitable organizations. Our team
devotes many hours to community
volunteer projects and events. Our
strong belief in creating physically,
emotionally and financially healthy
communities is a driving force at
German American.
Discipline.
Conservative.
People.
Relationships.
Community.
Opportunities.
Professional.
Hardworking.
Customer Service Excellence.
Strength based on Core Values
helps us set higher standards in
banking, insurance, investments
and trust.
Jeremy Foster
“The German American brand signifies
financial strength and stability. This
company understands and appreciates the
people and businesses who have been the
backbone of its success. Even as we grow
and expand the German American brand
into new markets like Columbus, we are
firmly grounded in the company’s vision of
being a source of strength for businesses,
individuals, families and organizations in
southern Indiana.”
John Lamb
“A company that is financially strong and
deeply committed to lasting core values
enables its employees to serve their customers
with confidence. Our company understands and
is committed to every community it serves and
invests whole heartedly into the community
both from a contributory standpoint and a
dedication to hands-on volunteer efforts.”
Pictured top to bottom: Terri Eckerle, Tony Loudermilk, Tracy DeCosta, Jeremy Foster, Jay Baker, Alvin Basham, John Lamb, Tony Cochren
5
6th office in Evansville
area opens on Hebron
Avenue
Sandler O’Neil Small-
Cap Bank All Star
Upgraded to the most
sophisticated Business
Online Banking System
available
New state-of-the-
art office opens in
Columbus
Double-Digit Return
on Equity for the Past
9 Consecutive Fiscal
Years (13%+ in 2013)
3
1
0
2
F
O
S
T
H
G
I
L
H
G
I
H
Rhonda Hopf
“In my career with German American, I have
valued the company’s vision for conservative
growth grounded on our core principals. Hard
work and discipline are traits our customers
have respected in us since our founding days in
1910. We appreciate that respect and
do not take it for granted.”
Mason Seay
“German American has a rich history of serving
the Agriculture community in southern Indiana.
With the opening of our Ag Services Office in
Ft. Branch, we have strengthened our
commitment to this important industry and
to the future of farming in our area. Farmers
appreciate genuine service from hardworking
people who are truly interested in the success
of their operation. At German American, we
strive to mirror these traits as we serve the
financial needs of the farming community.”
6
Pictured top to bottom: Alex Knepp, Zach Sibrel, Rhonda Hopf, David Pleiss, Dawn Andrews, Mason Seay, Neil Dauby, David Henson
3
1
0
2
F
O
S
T
H
G
I
L
H
G
I
H
MERION Capital Group
- Most Successful
Publicly-Traded Banks
(#1 in the Midwest and
#11 in the US)
Ag Services office
opened in Fort Branch
3rd office in
Bloomington with the
joining of the United
Commerce Bank team
2013 Record Earnings
Peformance
Highest Performing
(Return on Equity)
among Indiana-
domiciled Publicly-
Traded Financial
Institutions
Gene Thewes
“Looking for opportunities to improve
processes within our company has always
been a mindset at German American. When
employees come together as a team to
discuss improved efficiencies, top of mind
is always staying true to customer service
excellence. This company firmly believes
our people and our commitment to serving
customers better than any other financial
institution sets higher standards in banking,
insurance, investments and trust.”
Joel Smith
“The future of financial services is in offering
our customers the latest technology to
access their accounts with us. Even with
technology, German American will remain
committed to our core value of customer
service excellence provided by our people.
A visit to our office, a phone call, or a
question submitted through technology will
be answered by a live person that lives right
here in southern Indiana.”
Pictured top to bottom: Rodney Russell, Gene Thewes, Mark Franklin, Dave Mitchell, Sherri Alley, Joel Smith, Jean Emery, Everett Southern
7
REPORT OF INDEPENDENT REGISTERED PUBLIC
Accounting firm
We have audited in accordance with the standards of the Public Company Accounting
Oversight Board (United States) the consolidated balance sheets of German American
Bancorp, Inc. as of December 31, 2013 and 2012, and the related consolidated statements
of income, comprehensive income, changes in shareholders’ equity, and cash flows for
each of the three years in the period ended December 31, 2013, appearing in the Annual
Report on Form 10-K, not appearing herein. In our report dated March 13, 2014, also
appearing in the Annual Report on Form 10-K, we expressed an unqualified opinion on
those consolidated financial statements.
In our opinion, the information set forth in the consolidated balance sheets and
consolidated statements of income presented on pages 10 and 11 is fairly stated, in all
material respects, in relation to the consolidated financial statements from which they
have been derived.
Crowe Horwath LLP
Indianapolis, Indiana
March 13, 2014
8
FIVE YEAR
Summary
Dollars in thousands, except per share data
The following selected data should be read in conjunction with the Company’s Annual Report on Form 10-K for 2013.
Summary of Operations:
Interest Income
Interest Expense
Net Interest Income
Provision for Loan Losses
Net Interest Income after Provision for Loan Losses
Non-interest Income
Non-interest Expense
Income before Income Taxes
Income Tax Expense
Net Income
Year-end Balances:
Total Assets
2013
2012
2011
2010
2009
$
75,672
$
77,160
$
80,161
$
64,193
$
63,736
7,155
68,517
350
68,167
23,615
54,905
36,877
11,464
10,912
66,248
2,412
63,836
21,811
50,923
34,724
10,669
16,180
63,981
6,800
57,181
21,576
50,782
27,975
7,726
15,522
48,671
5,225
43,446
16,943
41,361
19,028
5,623
19,223
44,513
3,750
40,763
15,859
40,391
16,231
4,013
$
25,413
$
24,055
$
20,249
$
13,405
$
12,218
$ 2,163,827
$ 2,006,300
$ 1,873,767
$ 1,375,888
$ 1,242,965
Total Loans, Net of Unearned Income
1,382,382
1,204,866
1,120,993
917,236
1,812,156
1,640,931
1,556,198
1,087,286
87,237
200,097
89,472
185,026
90,974
167,610
81,016
121,534
877,822
969,643
113,320
113,549
Total Deposits
Total Long-term Debt
Total Shareholders’ Equity
Average Balances:
Total Assets
$ 2,037,236
$ 1,934,123
$ 1,823,703
$ 1,330,540
$ 1,230,596
Total Loans, Net of Unearned Income
1,272,055
1,147,891
1,114,181
906,127
Total Deposits
Total Shareholders’ Equity
Per Share Data:
Net Income(1)
Cash Dividends
Book Value at Year-end
Other Data at Year-end:
Number of Shareholders
Number of Employees
1,695,796
1,618,712
1,521,204
1,046,295
189,689
177,207
159,765
119,867
$
$
$
1.98
0.60
15.19
3,444
478
1.90
0.56
14.64
3,105
439
1.61
0.56
13.31
3,221
417
$
1.21
$
0.56
10.94
3,194
359
891,322
963,928
109,887
1.10
0.56
10.25
3,364
332
Weighted Average Number of Shares(1)
12,807,678
12,637,743
12,587,748
11,104,887
11,068,988
Selected Performance Ratios:
Return on Assets
Return on Equity
Equity to Assets
Dividend Payout
Net Charge-offs to Average Loans
Allowance for Loan Losses to Loans
Net Interest Margin
1.25 %
13.40 %
9.25 %
30.18 %
0.10 %
1.05 %
3.67 %
1.24 %
13.57 %
9.22 %
29.38 %
0.19 %
1.29 %
3.74 %
1.11 %
12.67 %
8.95 %
34.80 %
0.43 %
1.37 %
3.84 %
1.01 %
11.18 %
8.83 %
46.36 %
0.32 %
1.45 %
3.98 %
0.99 %
11.12 %
9.14 %
50.71 %
0.25 %
1.25 %
3.95 %
(1) Share and Per Share Data includes the dilutive effect of stock options.
9
CONSOLIDATED
Balance Sheets
Dollars in thousands, except per share data
Assets
Cash and Due from Banks
Federal Funds Sold and Other Short-term Investments
Cash and Cash Equivalents
Interest-bearing Time Deposits with Banks
Securities Available-for-Sale, at Fair Value
Securities Held-to-Maturity, at Cost (Fair value of $271 and $351
on December 31, 2013 and 2012, respectively)
Loans Held-for-Sale, at Fair Value
Loans
Less:
Unearned Income
Allowance for Loan Losses
Loans, Net
Stock in FHLB of Indianapolis and Other Restricted Stock, at Cost
Premises, Furniture and Equipment, Net
Other Real Estate
Goodwill
Intangible Assets
Company Owned Life Insurance
Accrued Interest Receivable and Other Assets
TOTAL ASSETS
Liabilities
Non-interest-bearing Demand Deposits
Interest-bearing Demand, Savings, and Money Market Accounts
Time Deposits
Total Deposits
FHLB Advances and Other Borrowings
Accrued Interest Payable and Other Liabilities
TOTAL LIABILITIES
Shareholders’ Equity
Preferred Stock, no par value; 500,000 shares authorized, no shares issued
Common Stock, no par value, $1 stated value; 30,000,000 shares authorized
Additional Paid-in Capital
Retained Earnings
Accumulated Other Comprehensive Income (Loss)
TOTAL SHAREHOLDERS’ EQUITY
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
End of period shares issued and outstanding
See Annual Report on Form 10-K.
10
$
December 31,
2013
2012
37,370
22,762
60,132
100
606,032
268
9,265
$
41,624
7,463
49,087
2,707
587,602
346
16,641
1,385,212
1,207,901
(2,830 )
(14,584 )
(3,035 )
(15,520 )
1,367,798
1,189,346
9,004
40,430
1,029
20,536
3,328
31,178
14,727
8,340
36,554
1,645
18,865
2,692
30,223
62,252
$
2,163,827
$ 2,006,300
$
400,024
$
349,174
1,063,098
349,034
962,574
329,183
1,812,156
1,640,931
140,770
10,804
161,006
19,337
1,963,730
1,821,274
-
13,174
108,022
84,164
(5,263 )
-
12,637
95,617
66,421
10,351
200,097
185,026
$
2,163,827
$ 2,006,300
13,173,793
12,636,656
CONSOLIDATED
Statements of Income
Dollars in thousands, except per share data
Interest Income
Interest and Fees on Loans
Interest on Federal Funds Sold and Other Short-term Investments
Interest and Dividends on Securities:
Taxable
Non-taxable
$
TOTAL INTEREST INCOME
Interest Expense
Interest on Deposits
Interest on FHLB Advances and Other Borrowings
TOTAL INTEREST EXPENSE
NET INTEREST INCOME
Provision for Loan Losses
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES
Non-Interest Income
Trust and Investment Product Fees
Service Charges on Deposit Accounts
Insurance Revenues
Company Owned Life Insurance
Interchange Fee Income
Other Operating Income
Net Gains on Sales of Loans
Net Gain on Securities
TOTAL NON-INTEREST INCOME
Non-Interest Expense
Salaries and Employee Benefits
Occupancy Expense
Furniture and Equipment Expense
FDIC Premiums
Data Processing Fees
Professional Fees
Advertising and Promotion
Intangible Amortization
Other Operating Expenses
TOTAL NON-INTEREST EXPENSE
Income before Income Taxes
Income Tax Expense
Net Income
Basic Earnings per Share
Diluted Earnings per Share
See Annual Report on Form 10-K.
2013
Years Ended December 31,
2012
2011
$
61,632
30
11,091
2,919
75,672
4,697
2,458
7,155
68,517
350
68,167
3,358
4,144
6,217
965
1,854
2,003
2,645
2,429
$
61,691
91
12,946
2,432
77,160
6,958
3,954
10,912
66,248
2,412
63,836
2,657
4,076
5,524
974
1,724
1,955
3,234
1,667
64,445
216
13,677
1,823
80,161
11,986
4,194
16,180
63,981
6,800
57,181
2,145
4,154
5,819
1,100
1,501
1,452
2,381
3,024
23,615
21,811
21,576
31,482
4,545
3,196
1,050
1,765
2,577
1,863
1,416
7,011
54,905
36,877
11,464
25,413
1.99
1.98
$
$
$
29,086
4,277
2,787
1,116
1,071
2,247
1,714
1,655
6,970
50,923
34,724
10,669
24,055
1.91
1.90
$
$
$
$
$
$
27,992
4,264
2,934
1,473
2,092
2,056
1,525
1,956
6,490
50,782
27,975
7,726
20,249
1.61
1.61
11
BOARD OF
Directors
M. Darren Root
Michael J. Voyles
Mark A. Schroeder
J. David Lett
Chris A. Ramsey
Thomas W. Seger
Ray W. Snowden
Douglas A. Bawel
U. Butch Klem
Christina M. Ernst
Gene C. Mehne
Marc D. Fine
12
CAUTIONARY NOTE REGARDING
Forward-Looking Statements
This Summary Annual Report, including our CEO’s letter to our Shareholders on Page 1,
includes forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995, relating to our expectations concerning our opportunities
for future growth and expansion, and other matters. Readers are cautioned that actual
results and performance may differ materially from any of our present expectations
that are expressed or implied by any forward-looking statement due to the inherent
uncertainties in predicting the future, and risks affecting German American and its stock,
including those that are described in Item 1, “Business - Forward Looking Statements and
Associated Risks” and in Item 1A, “Risk Factors,” in our accompanying Annual Report on
Form 10-K. You may review that document (and our other SEC filings) via the internet
through the Investor Relations section of our website, www.germanamerican.com. This
report speaks only as of March 13, 2014, and we do not promise anyone that it will be
updated for changes or events after that date.
13
001CSN167F