Yesterday.
Today.
Tomorrow.
1910 - 2020
2019
Summary Annual Report
Numbers
Numbers
$70,000
$60,000
$50,000
$40,000
$30,000
$20,000
$10,000
$0
$600
$500
$400
$300
$200
$100
$0
$5,000
$4,500
$4,000
$3,500
$3,000
$2,500
$2,000
Net Income & Earnings Per Share
(dollars in thousands, except per share amounts)
Earnings Per Share*
1 0 Ye a r E P S C A G R 1 2 . 1 %
$24,055
$25,413
$20,249
$13,405
$0.81
$1.27
$1.07
$1.32
$1.43
$59,222
$46,529
$40,676
$35,184
$2.29
$28,344
$30,064
$1.51
$1.57
$1.99
$1.77
12/31/10
12/31/11
12/31/12
12/31/13 12/31/14 12/31/15 12/31/16
12/31/17
12/31/18 12/31/19
*Earnings Per Share adjusted for 3-for-2 stock split completed in 2017.
Total Shareholders’ Equity
(dollars in millions)
Return on Average Equity
1 0 Ye a r C A G R 1 7. 6 %
$574
$459
$365
$330
$185
$200
$168
$252
$229
$122
11.18%
12.67% 13.57% 13.40% 13.21%
12.47%
10.94%
11.59%
12.07%
11.41%
12/31/10
12/31/11
12/31/12
12/31/13 12/31/14 12/31/15 12/31/16
12/31/17
12/31/18 12/31/19
Total Assets
(dollars in millions)
Return on Average Assets
1 0 Ye a r C A G R 1 3 . 5 %
$4,398
$3,929
$2,956
$3,144
$2,006
$2,164
$1,874
$2,237
$2,374
1.24% 1.25% 1.31% 1.33%
1.24%
1.35% 1.38% 1.43%
12/31/10
12/31/11
12/31/12
12/31/13 12/31/14 12/31/15 12/31/16
12/31/17
12/31/18 12/31/19
$1,500
$1,376
$1,000
$500
1.01%
$0
1.11%
7th
consecutive year
of increased
dividends
10th
consecutive year
German American
has achieved record
earnings
15th
consecutive fiscal
year of double-digit
return on equity
Letter from
Letter from
Mark A. Schroeder
Mark A. Schroeder
Chairman and CEO
Dear Shareholders:
Dear Shareholders:
The theme of this year’s Summary Annual Report,
Yesterday-Today-Tomorrow, denotes our rich community
banking history, our exceptionally strong financial and
market position today, and our vision for continued
growth and success in the coming years. From our start
as a community bank in 1910, with two employees, fifty-
seven shareholders and $40,000 in capital stock, German
American has grown to $4.4 billion in total assets, over
800 employees, approximately 3,700 shareholders and
$574 million in total shareholders’ equity. The one constant
over these past 110 years has been our commitment to our
customers and to the communities we serve. Our steadfast
focus on doing well while doing good has served our
shareholders and all our stakeholders very well.
1
continued...
continued...
In 2019, we continued our pattern of disciplined, steady
double-digit returns on their shareholders’ equity. The
growth through our second merger transaction in the
credit for this impressive level of performance certainly
Commonwealth of Kentucky. In July, we finalized our
goes to our team of local, financial professionals
merger with Citizens First Corporation and its banking
serving their customers and communities throughout
subsidiary, Citizens First Bank, Inc. Headquartered
our footprint, but it also is due to the loyalty of our
in Bowling Green, Kentucky, Citizens First operated
clients, the economic strength of our markets, and the
eight retail banking offices in Barren, Hart, Simpson
commitment of you, our shareholders.
and Warren Counties in Kentucky. As of the closing
of this transaction, Citizens First had total assets of
As I write this letter, we are dealing with the COVID-19
approximately $456 million, total loans of approximately
$365 million, and total deposits of approximately
pandemic and the associated economic disruption
throughout our nation and within our own market
$371 million. When combined with the acquisition in
areas. Clearly, the health of our customers, employees
October 2018 of First Security, Inc., based in Owensboro,
and their families is our utmost concern, while we also
Kentucky, German American has acquired nearly
recognize this crisis will likely have a significant impact
$1 billion in banking assets within the Commonwealth.
on the economic well-being of our clients, our market
We continue to anticipate significant future growth
area, our nation, and our Company. As shareholders,
within the Commonwealth of Kentucky, both through
you can take comfort in knowing that German American
acquisitions and organic growth, in the coming years.
has weathered many difficult times over the course
of the past 110 years, yet we have always come out of
We’re extremely pleased to report that we continued
those challenges stronger. So, while it’s not possible,
our history of exceptional financial performance in 2019.
at this juncture, to fully anticipate the challenges our
Your Company, for the tenth consecutive year, achieved
Company may face during the coming year as a result
record earnings, as 2019 net income of $59.2 million,
of this unique situation, we remain humbly and quietly
or $2.29 per share, represented an increase of 15.1%,
confident in our ability to work through whatever those
on a per share basis, above the level of the prior year
issues may be and look forward to continued growth and
record 2018 earnings. We also achieved the milestone
in 2019 of posting the 15th consecutive fiscal year of
double-digit returns on shareholders’ equity. Very few
banking organizations in the nation can match this level
of financial performance: a decade of record net income
prosperity in the years to come.
Sincerely,
and earnings per share, as well as a decade and a half of
Mark A. Schroeder
Chairman & CEO
2
1910 Original
German American Bank
Building - Jasper, IN
Yesterday
Business leaders in a small town rich in
German-American heritage, Jasper, Indiana,
organized and opened a bank in 1910. It was the
community’s heritage that prompted the new
bank’s name, German American Bank.
Two employees.
Fifty seven original shareholders.
$40,000 in capital stock.
The bank office occupied one-half of the first
floor of a commercial building. In the 1940’s, the
bank was ready to expand and purchased the
office building it occupied. German American
Bank’s headquarters remain on this property to
this day.
The history of German American Bank tells
quite an extraordinary story. In our 110 years
of history, our company has experienced and
outlasted the effects of wars, boom times,
political changes, fluctuations in local, state
and federal economics, the rise of a global
economy, and a plethora of changes in the
banking landscape. Deep seated business values
of relationships, trust, people and performance
were the guiding principles and remain so
today. Serving with the intention to help
communities thrive so its people can prosper
remains at the forefront of our purpose.
In the 1980’s to mid 1990’s, German American
Bank faced the same choice as many other
small to mid sized banks: merge with a larger
bank or choose an independent growth
strategy. The Company chose the latter.
Although many banks at the time were
choosing a similar direction, German American
Bank’s approach was significantly different.
German American embarked upon a strategy
to partner with other like-minded community
banks. The goal was to afford the combined
organization the efficiencies associated with
size, while still keeping it small enough to stay
focused on the communities it served. The
commitment to community was key in German
American Bank’s vision to build a community
banking network. The Company chose to grow
close to its home base, rather than moving into
markets it wasn’t familiar with, which solidified
its position as a local community bank. German
American Bank also committed to retaining
local leadership to more effectively serve the
specific needs of customers and the community
as a whole.
3
Today
Today, German American Bank is the combination of numerous like-minded community
banking, insurance, and wealth management organizations and teams joining together to serve
local communities. Our footprint covers southern Indiana and Kentucky, and our history of
strong financial performance is a reflection of the success of this unique business model.
INDIANA
DECATUR
MONROE
BARTHOLOMEW
Greensburg
Bloomington
LAWRENCE
Bedford
Columbus
Osgood
JACKSON
North Vernon
RIPLEY
Seymour
JENNINGS
JEFFERSON
Madison
Hanover
CLARK
Sellersburg
FLOYD
Floyds
Knobs
NewNew
Albany
Albany
Jeffersonville
Jeffersonville
FAYETTE
Lexington
KNOX
DAVIESS MARTIN
Odon/Cannelburg
Loogootee
Vincennes
Washington
Petersburg Otwell
DUBOIS
Dubois
Princeton
GIBSON
Fort Branch
Oakland
City
VANDERBURGH
VANDERBURGH
Evansville
PIKE
WARRICK
Newburgh
Rockport
Jasper
Huntingburg
Holland Ferdinand
SPENCER
PERRY
Tell City
Henderson
HENDERSON
Owensboro
DAVIESS
KENTUCKY
HART
Munfordville
Horse Cave
BARREN
Glasgow
Banking location
ATM
WARREN
Bowling Green
SIMPSON
Franklin
4
We combine top-rated customer facing technology with a talented, customer-focused team
to deliver service excellence. The foundation to find the best financial products to help our
customers achieve their dreams and goals is based on strong relationships with our customers
and a deep knowledge of the communities we serve. We attain that knowledge by employing
local leaders with a servant mindset combined with a drive to succeed.
Our financial strength enables us to make the greatest impact and demonstrates our
commitment to corporate responsibility. We support education, social welfare and human
services efforts, the arts, economic development and community organizations.
Our Mission
German American is dedicated to helping individuals, families and businesses
achieve greater prosperity and quality of life. Together, our financial team builds
lasting client relationships based on integrity, responsive service, innovation, and
shared values. We support the communities we serve and believe that when a
community thrives, its people prosper.
German American Bank
Headquarters - Jasper, IN
2020
5
5
Tomorrow
The world of banking will continue to change which will continue to impact how we deliver
financial services. German American Bank is committed to investing in secure, innovative
technology while also making certain that our culture of local-people-helping-local-people
succeed stays at the center of our principles.
With a keen eye on opportunities, a mindset of continuous improvement and a commitment
to financial performance and corporate responsibility, our German American Bank team faces
tomorrow with confidence, agility, and optimism.
6
Our Shield
Historical photos and
records indicate a shield has been a
graphic icon of German American Bank
since our inception in 1910.
Today
7
Report of Independent Registered Public Accounting Firm
Board of Directors and Shareholders
German American Bancorp, Inc.
Jasper, Indiana
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, 2019 and 2018, 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, 2019, appearing in the Annual
Report on Form 10-K, not appearing herein. In our report dated March 2, 2020, 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 LLP
Indianapolis, Indiana
March 2, 2020
8
Five Year Summary
The following selected data should be read in conjunction with the
Company’s Annual Report on Form 10-K for 2019.
Dollars in thousands, except per share data
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
2019
2018
2017
2016
2015
$ 176,474
$ 133,749
$ 111,030
$ 103,365
$
81,620
31,249
145,225
5,325
139,900
45,501
114,162
71,239
12,017
19,139
114,610
2,070
112,540
37,070
93,553
56,057
9,528
11,121
99,909
1,750
98,159
31,854
77,803
52,210
11,534
8,461
94,904
1,200
93,704
32,013
76,587
49,130
13,946
6,068
75,552
-
75,552
27,444
61,326
41,670
11,606
$
59,222
$
46,529
$
40,676
$
35,184
$
30,064
$ 4,397,672
$ 3,929,090
$ 3,144,360
$ 2,955,994
$ 2,373,701
Total Loans, Net of Unearned Income
3,077,091
2,728,059
2,141,638
1,989,955
1,564,347
Total Deposits
Total Long-term Debt
Total Shareholders’ Equity
Average Balances:
Total Assets
3,430,021
3,072,632
2,484,052
2,349,551
1,826,376
181,950
573,820
126,635
458,640
141,717
364,571
120,560
330,267
95,606
252,348
$ 4,128,535
$ 3,380,409
$ 3,002,695
$ 2,841,096
$ 2,267,555
Total Loans, Net of Unearned Income
2,899,939
2,339,089
2,036,717
1,904,779
1,483,752
Total Deposits
Total Shareholders’ Equity
Per Share Data:
Net Income(1)
Cash Dividends
Book Value at Year-end
Tangible Book Value Per Share(2)
Other Data at Year-end:
Number of Shareholders
Number of Employees
3,293,934
2,716,712
2,395,146
2,249,892
1,825,913
519,010
385,476
350,913
321,520
241,018
$
$
$
2.29
0.68
21.51
16.49
3,672
821
1.99
0.60
18.37
13.81
3,705
747
1.77
0.52
15.90
13.45
3,459
621
$
1.57
$
0.48
14.42
11.94
3,513
605
1.51
0.45
12.67
11.57
3,343
479
Weighted Average Number of Shares(1)
25,824,538
23,381,616
22,924,726
22,391,115
19,888,374
Selected Performance Ratios:
Return on Assets
Return on Equity
Equity to Assets
Dividend Payout
Net Charge-offs (Recoveries) to Average Loans
Allowance for Loan Losses to Loans
Net Interest Margin
1.43 %
11.41 %
13.05 %
29.64 %
0.17 %
0.53 %
3.92 %
1.38 %
12.07 %
11.67 %
30.25 %
0.08 %
0.58 %
3.75 %
1.35 %
11.59 %
11.59 %
29.11 %
0.04 %
0.73 %
3.76 %
1.24 %
10.94 %
11.17 %
30.21 %
0.04 %
0.74 %
3.75 %
1.33 %
12.47 %
10.63 %
29.97 %
0.03 %
0.92 %
3.70 %
(1) Share and Per Share Data includes the dilutive effect of stock options.
9
(2) Tangible Book Value per Share is defined as Total Shareholders’ Equity less Goodwill
and Other Intangible Assets divided by End of Period Shares Outstanding.
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
Other Investments
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
Common Stock, no par value, $1 stated value; 45,000,000 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,
2019
2018
59,971
43,913
103,884
1,985
854,825
353
$
64,549
32,001
96,550
250
812,611
353
17,713
4,263
3,081,973
2,731,741
(4,882 )
(16,278 )
(3,682 )
(15,823 )
3,060,813
2,712,236
13,968
96,651
425
121,306
12,656
68,883
44,210
13,048
80,627
286
103,681
9,964
59,896
35,325
$
4,397,672
$ 3,929,090
$
832,985
$
715,972
1,965,640
1,768,177
631,396
588,483
3,430,021
3,072,632
349,686
44,145
376,409
21,409
3,823,852
3,470,450
26,671
278,954
253,090
15,105
24,967
229,347
211,424
(7,098 )
573,820
458,640
$
4,397,672
$ 3,929,090
26,671,368
24,967,458
Consolidated Statements of Income
Dollars in thousands, except per share data
2019
Years Ended December 31,
2018
2017
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 Gains 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
Dividends per Share
See Annual Report on Form 10-K.
$
$
$
$
11
152,481
522
13,910
9,561
176,474
23,805
7,444
31,249
145,225
5,325
139,900
7,278
8,718
8,940
2,005
9,450
3,229
4,633
1,248
$
112,084
308
$
12,398
8,959
133,749
13,625
5,514
19,139
114,610
2,070
112,540
6,680
7,044
8,330
1,243
7,278
2,785
3,004
706
91,745
134
10,898
8,253
111,030
7,094
4,027
11,121
99,909
1,750
98,159
5,272
6,178
7,979
1,341
4,567
2,641
3,280
596
45,501
37,070
31,854
63,885
9,988
3,788
533
7,927
4,674
4,230
3,721
15,416
114,162
71,239
12,017
59,222
2.29
2.29
0.68
$
$
$
$
51,306
7,735
3,142
1,033
6,942
5,362
3,492
1,752
12,789
93,553
56,057
9,528
46,529
1.99
1.99
0.60
$
$
$
$
46,642
6,609
2,621
954
4,276
2,817
3,543
942
9,399
77,803
52,210
11,534
40,676
1.77
1.77
0.52
Board of Directors
Zachary W. Bawel
Christina M. Ernst
Marc D. Fine
Jason M. Kelly
U. Butch Klem
J. David Lett
Lee A. Mitchell
Chris A. Ramsey
M. Darren Root
Christina M. Ryan
Mark A. Schroeder
Thomas W. Seger
Jack W. Sheidler
Raymond W. Snowden
Tyson J. Wagler
12
Cautionary Note Regarding Forward-Looking Statements
Cautionary Note Regarding Forward-Looking Statements
This Summary Annual Report, including our CEO’s letter to our Shareholders beginning
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 prosperity, and other matters. Readers are
cautioned that actual results and performance may differ materially from those
expectations 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 2, 2020, and we do not promise anyone that it will be
updated for changes or events after that date.
13
001CSN42CC