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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark one)
|X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934.
For the fiscal year ended: December 31, 1995
OR
| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
---------- -----------
Commission File Number 0 -11244
GERMAN AMERICAN BANCORP
(Exact name of registrant as specified in its Charter)
INDIANA 35-1547518
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
711 Main Street, Box 810, Jasper, Indiana 47546
(Address of Principal Executive Offices) Zip Code
Registrant's telephone number, including area code:
(812) 482-1314
Securities registered pursuant to Section 12 (b) or the Act:
Title of each class Name of each exchange
on which registered
NONE Not Applicable
Securities registered pursuant to Section 12 (g) of the Act:
Common Shares, $10.00 Par Value
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES X NO
The aggregate market value of the voting stock held by nonaffiliates of the
Registrant (assuming solely for purposes of this calculation that all directors
and executive officers of the Registrant are affiliates) valued at the last
trade price reported by NASDAQ as of March 11, 1996 was approximately
$42,000,000.
As of March 22, 1996, there were outstanding 1,825,040 common shares, $10.00
par value, of the registrant.
DOCUMENTS INCORPORATED BY REFERENCE
(1) Portions of the Annual Report to Shareholders of German American
Bancorp for 1995, to the extent stated herein, are incorporated by reference
into Parts I and II.
(2) Portions of the Proxy Statement of German American Bancorp for the
Annual Meeting of its Shareholders to be held April 25, 1996, to the extent
stated herein, are incorporated by reference into Part III.
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K (section 229.405 of this chapter) is not contained herein,
and will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. | |
PART I
Item 1. Business
General
German American Bancorp (``the Company'' or the `Registrant'') is a multi-
bank holding company organized in Indiana in 1982. The Company's principal
subsidiaries are The German American Bank, Jasper, Indiana (`German American
Bank'), The Union Bank, Loogootee, Indiana, (``Union Bank''), Winslow
Bancorporation, Inc. (`Winslow''), an Indiana corporation that owns all of the
outstanding capital stock of Community Trust Bank, Otwell, Indiana (`Community
Bank') and First State Bank, Southwest, Indiana of Tell City, Indiana (``First
State Bank'). The Company, through its four bank subsidiaries, operates
fourteen (14) banking offices in five contiguous counties in southwestern
Indiana and has total consolidated assets at year-end 1995 in excess of
$367,000,000.
German American Bank was organized under the law of Indiana in 1910. At
December 31, 1995, German American Bank was the second largest of the six
commercial banks with offices in Dubois County, Indiana, in terms of total
assets and total deposits. German American Bank conducts its banking operations
from its principal banking office in Jasper, Indiana, and from seven branch
office locations throughout Dubois County.
Union Bank, organized under Indiana law in 1929, operates from a single
banking office in Loogootee, Martin County, Indiana. Union Bank was acquired by
the Registrant on March 8, 1993. At December 31, 1995, Union Bank ranked third
in asset size among the seven commercial banks and thrifts headquartered in
Martin and Daviess Counties, Indiana.
On April 1, 1993, the Registrant purchased all the shares of Winslow
Bancorporation, Winslow, Indiana, and its subsidiary Southwestern Indiana Bank
in a cash transaction. On April 1, 1994, the Registrant issued 113,286 shares
for all the outstanding shares of the Otwell State Bank. Following the
completion of this transaction, Otwell and Southwestern were merged into
Community Trust Bank, a combined banking institution operating in the Pike
County, Indiana market through three offices.
On October 28, 1994, the Registrant acquired three branches of Regional
Federal Savings Bank of New Albany, Indiana. The Huntingburg, Indiana branch
was combined with an existing branch of the Registrant's lead bank, German
American Bank. The other two former branches in Tell City and Rockport, Indiana
were acquired by a new subsidiary bank of the Registrant named First State Bank,
Southwest, Indiana.
Each of the Company's subsidiary banks engages in a wide range of commercial
and personal banking services, and German American Bank and Union Bank provide a
wide range of personal and corporate trust-related services. In addition,
German American Bank shares investment services income through an operating
agreement with Invest Financial Corporation, a subsidiary of Kemper Financial
Companies, Inc., which provides full-service brokerage operations from an office
in German American's principal banking office.
The Company and its subsidiary banks operate primarily in the banking
industry, which accounts for over ninety percent (90%) of the Company's
consolidated revenues, operating income and identifiable assets. Through its
banking subsidiaries, the Company generates commercial, installment and mortgage
loans and receives deposits from customers located primarily in the local market
area. The overall loan portfolio is diversified among a variety of individual
borrowers, with a substantial portion of such borrowers' ability to honor their
indebtedness being dependent on the agriculture, poultry and wood furniture
manufacturing industries. Although wood manufacturers employ a significant
number of people in the Company's market area, the Company does not have a
concentration of credit to companies engaged in that industry. The majority of
the Company's loans are secured by specific items of collateral including
business assets, consumer assets and real property.
Additional information regarding the Company and its subsidiaries is included
in the Company's Annual Report to Shareholders for 1995 which is filed as
Exhibit 13 to this Annual Report on Form 10-K (the `Shareholders' Report'').
Competition
The banking business is highly competitive. The Company's subsidiary banks
compete not only with financial institutions that have offices in the same
counties but also compete with financial institutions that are located in other
neighboring areas in obtaining deposits, making loans and providing many other
types of financial services. The banking market in which the Company's banking
subsidiaries operate is heavily influenced by larger financial institutions
located in Evansville and Indianapolis, Indiana, Louisville, Kentucky and other
cities. In addition to other commercial banks, the Company's subsidiary banks
compete with savings and loan associations, savings banks, credit unions,
production credit associations, federal land banks, finance companies, credit
card companies, personal loan companies, money market funds, mortgage companies
and other non-depository financial intermediaries.
Employees
At January 31, 1996 the Company and its subsidiaries employed approximately
167 employees. There are no collective bargaining agreements, and employee
relations are considered to be good.
Regulation and Supervision
The Company is subject to the Bank Holding Company Act of 1956, as amended
(`BHC Act''), and is required to file with the Board of Governors of the
Federal Reserve System (`FRB'') annual reports and such additional information
as the FRB may require. The FRB may also make examinations or inspections of
the Company.
The BHC Act prohibits a bank holding company from engaging in, or acquiring
direct or indirect control of more than 5 percent of the voting shares of any
company engaged in nonbanking activities. One of the principal exceptions to
this prohibition is for activities deemed by the FRB to be `closely related to
banking.'' Under current regulations, bank holding companies and their
subsidiaries are permitted to engage in such banking-related business ventures
as sales and consumer finance, equipment leasing, computer service bureau and
software operations, and mortgage banking.
The BHC Act and Indiana law restrict banking expansion by banks and bank
holding companies. Under current Indiana law, Indiana banks may establish an
unlimited number of branches anywhere within the State of Indiana. A holding
company may establish non-banking offices without geographical limitation.
Under the BHC Act, the Company must receive the prior written approval of the
FRB or its delegate before it may acquire ownership or control of more than 5
percent of the voting shares of another bank, and under Indiana law it may not
acquire 25 percent or more of the voting shares of another bank without the
prior approval of the Indiana Department of Financial Institutions (`DFI'').
The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 provides
for nationwide interstate banking and branching. Since September 30, 1995,
well-capitalized bank holding companies have been authorized, pursuant to the
legislation, to acquire banks and bank holding companies in any state. The
legislation also permits banks to merge across state lines, thereby creating a
main bank in one state with branches in other states. Interstate branching by
merger provisions will become effective on June 1, 1997, unless a state takes
legislative action prior to that date. States may pass laws to either `opt-
in''before June 1, 1997 or to ``opt-out'' by expressly prohibiting merger
transactions involving out-of-state banks, providing the legislative action is
taken before June 1, 1997. Indiana has not yet taken any legislative action
with respect to such interstate mergers.
The Company's subsidiary banks are under the supervision of and subject to
examination by both the DFI and the Federal Deposit Insurance Corporation
(`FDIC''). Regulation and examination by banking regulatory agencies are
primarily for the benefit of depositors rather than shareholders.
The earnings of commercial banks and their holding companies are affected not
only by general economic conditions but also by the policies of various
governmental regulatory authorities. In particular, the FRB regulates money and
credit conditions and interest rates in order to influence general economic
conditions, primarily through open-market operations in U.S. Government
securities, varying the discount rate on bank borrowings, and setting reserve
requirements against bank deposits. These policies have a significant influence
on overall growth and distribution of bank loans, investments and deposits, and
affect interest rates charged on loans and earned on investments or paid for
time and savings deposits. FRB monetary policies have had a significant effect
on the operating results of commercial banks in the past and this is expected to
continue in the future. The general effect, if any, of such policies upon the
future business and earnings of the Company cannot accurately be predicted.
The Company is required by the FRB and the FDIC to maintain minimum levels of
capital. These required capital levels are expressed in terms of capital
ratios, known as the leverage ratio and the capital to risk-based assets ratios.
The Company significantly exceeds the minimum required capital levels for each
measure of capital adequacy. See `Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Capital Resources,''included
on page 8 of the Shareholders' Report.
Also, FDIC regulations define five categories of financial institutions for
purposes of implementing prompt corrective action and supervisory enforcement
requirements of the Federal Deposit Insurance Corporation Improvements Act of
1991. The category to which the most highly capitalized institutions are
assigned is termed `Well Capitalized.'' Institutions falling into this category
must have a total risk-based capital ratio (the ratio of total capital to risk-
weighted assets) of at least 10%, a Tier 1 risk-based capital ratio (the ratio
of Tier 1, or `core'', capital to risk-weighted assets) of at least 6%, a
leverage ratio (the ratio of Tier 1 capital to total assets) of at least 5%, and
must not be subject to any written agreement, order or directive from its
regulator relative to meeting and maintaining a specific capital level. On
December 31, 1995, the Company had a total risk-based capital ratio of 15.89%, a
Tier 1 risk-based capital ratio of 14.62% (based on Tier 1 capital of
$33,957,000 and total risk-weighted assets of $232,272,000), and a leverage
ratio of 9.29%. The Company meets all of the requirements of the `Well
Capitalized''category and, accordingly, the Company does not expect these
regulations to significantly impact operations.
Statistical Disclosures
The following statistical data should be read in conjunction with
Management's Discussion and Analysis of Financial Condition and Results of
Operations (Item 7), Selected Financial Data (Item 6), and the financial
statements and notes (Item 8) included elsewhere herein through incorporation by
reference to the indicated pages of the Shareholders' Report.
Statistical Disclosures (continued)
Securities (in thousands)
The following tables set forth the carrying amount of Securities at the dates
indicated:
December 31,
1995 1994 1993
U.S. Treasury and other
U.S. Government Agencies
and Corporations ---- $17,249 $27,940
State and Political Subdivisions $9,869 21,237 16,744
Mortgage-backed Securities ---- 11,267 15,272
Corporate Securities ---- 803 1,100
Other Securities 738 717 717
Subtotal of Securities
Held-to-Maturity $10,607 $51,273 $61,773
U.S. Treasury and other U.S.
Government Agencies
and Corporations 23,727 7,280 2,000
State and Political Subdivisions 14,232 56 ----
Mortgage-backed Securities 33,144 15,584 16,532
Corporate Securities 6,375 212 617
Subtotal of Securities
Available-for-Sale 77,478 23,132 19,149
Total Securities $88,085 $74,405 $80,922
The following table sets forth the contractual maturities of securities at
December 31, 1995 and the weighted average yields of such securities (calculated
on the basis of the cost and effective yields weighted for the maturity of each
security.) Contractual maturities may differ from actual due to rights to
prepay or call. Other securities totaling $738 are comprised of restricted
stock which do not have contractual maturities and are excluded from the table
below.
Maturing
Within After One But
One Year Within Five Years
Amount Yield Amount Yield
U.S. Treasury and
other Government
Agencies and
Corporations $8,844 5.67% $14,883 5.81%
State and Political
Subdivisions 1,140 10.41% 5,245 9.36%
Mortgage-backed
Securities --- --- 4,890 5.66%
Corporate Securities --- --- 3,682 6.48%
Totals $9,984 6.21% $28,700 6.52%
Maturing
After Five But After Ten
Within Ten Years Years
Amount Yield Amount Yield
U.S. Treasury and
other Government
Agencies and
Corporations --- --- ---- ---
State and Political
Subdivisions $6,235 10.18%$ 11,481 9.73%
Mortgage-backed
Securities 11,071 5.53% 17,183 5.59%
Corporate Securities 2,693 6.54% --- ---
Totals $19,999 7.12%$ 28,664 7.24%
A tax-equivalent adjustment using a tax rate of 34 percent was used in the above
table............
Statistical Disclosures (continued)
The following table sets forth for the periods indicated a summary of the
changes in interest earned and interest paid resulting from changes in volume
and changes in rates:
(dollar references in thousands)
1995 compared to 1994
Increase / (Decrease) Due to (1)
Volume Rate Net
Interest Income:
Federal Funds Sold $83 $276 $359
Short-term Investments 308 95 403
Taxable Securities 88 291 379
Nontaxable Securities (2) 379 (40) 339
Loans and Leases (3) 1,372 2,529 3,901
Total Interest Income 2,230 3,151 5,381
Interest Paid:
Savings 77 290 367
Time Deposits 1,291 1,581 2,872
Federal Funds Purchased
and Securities Sold
Under Agreements to
Repurchase (99) 66 (33)
Demand Notes Issued to
the U.S. Treasury 12 19 31
Notes Payable 53 --- 53
Total Interest Expense 1,334 1,956 3,290
Net Interest Earnings $896 $1,195 $2,091
(dollar references in thousands)
1994 compared to 1993
Increase / (Decrease) Due to (1)
Volume Rate Net
Interest Income:
Federal Funds Sold $71 $52 $123
Short-term Investments (100) 60 (40)
Taxable Securities (258) (474) (732)
Nontaxable Securities (2) 41 (2) 39
Loans and Leases (3) 970 75 1,045
Total Interest Income 724 (289) 435
Interest Paid:
Savings 133 (141) (8)
Time Deposits (191) (251) (442)
Federal Funds Purchased
and Securities Sold
Under Agreements to
Repurchase 76 (3) 73
Demand Notes Issued to
the U.S. Treasury (2) 12 10
Notes Payable --- --- ---
Total Interest Expense 16 (383) (367)
Net Interest Earnings $708 $94 $802
(1)The change in interest due to both rate and volume has been allocated to
volume and rate changes in proportion to the relationship of the absolute
dollar amounts of the change in each.
(2)Change in interest income include the effect of tax equivalent adjustments
using a tax rate of 34 percent for all years presented.
(3)Interest income on loans includes loan fees of $254,
$253, and $206 for 1995, 1994, and 1993, respectively.
Statistical Disclosures (continued)
The following is a schedule of loans by major category for each reported
period:
December 31,
(dollar references in thousands)
1995 1994 1993
Real Estate Loans Secured
by 1-4 Family Residential
Properties $68,826 $67,737 $55,225
Loans to Finance Poultry
Production and Other Related
Operations 23,784 25,599 30,505
Loans to Finance Agricultural
Production and Other Loans
to Farmers 27,310 31,959 24,806
Commercial and Industrial
Loans 74,612 67,662 62,321
Loans to Individuals for
Household, Family and Other
Personal Expenditures 34,685 29,248 26,684
Economic Development
Commission Bonds 608 625 762
Term Federal Funds Sold --- --- ---
Lease Financings 1,302 1,820 2,323
Total Loans $231,127 $224,650 $202,626
December 31,
(dollar references in thousands)
1992 1991
Real Estate Loans Secured
by 1-4 Family Residential
Properties $47,170 $41,042
Loans to Finance Poultry
Production and Other Related
Operations 30,621 21,528
Loans to Finance Agricultural
Production and Other Loans
to Farmers 23,844 23,348
Commercial and Industrial
Loans 61,189 60,445
Loans to Individuals for
Household, Family and Other
Personal Expenditures 24,183 24,594
Economic Development
Commission Bonds 1,547 2,181
Term Federal Funds Sold --- 4,000
Lease Financings 2,666 2,175
Total Loans $191,220 $179,313
The following table indicates the amounts of loans (excluding residential
mortgages on 1-4 family residences, installment loans and lease financing)
outstanding as of December 31, 1995 which, based on remaining scheduled
repayments of principal, are due in the periods indicated.
Maturing
Within After One
One But Within
Year Five Years
Commercial, Financial,
Agricultural, and Poultry $40,716 $48,001
Economic Development Bonds 108 500
Total Loans $40,824 $48,501
Maturing
After
Five
Years Total
Commercial, Financial,
Agricultural, and Poultry $36,989 $125,706
Economic Development Bonds 0 608
Total Loans $36,989 $126,314
Interest Sensitivity
Fixed Variable
Rate Rate
Loans maturing after
one year $16,114 $69,376
Statistical Disclosures (continued)
The Provision for Loan Losses provides a reserve (the Allowance for Loan
Losses) to which loan losses are charged as those losses become identifiable.
Management determines the appropriate level of the Allowance for Loan Losses on
a quarterly basis through an independent review by the Bank's credit review
section done by employees who have no direct lending responsibilities. Through
this review, all commercial loans with outstanding balances in excess of $25,000
are analyzed with particular attention paid to those loans which are considered
by management to have an above-average level of risk. This analysis is
evaluated by Senior Management and serves as the basis for determining the
adequacy of the Allowance for Loan Losses. Through this review process a
specific portion of the reserve is allocated to impaired loans and to those
loans which are considered to represent significant exposure to risk, and
estimated potential losses are provided based on historic loan loss experience
for consumer loans, residential mortgage loans, and commercial loans not
specifically reviewed. In addition, a balance of the reserve is unallocated to
provide an allowance for risk, such as concentrations of credit to specific
industry groups, which are difficult to quantify in an absolute dollar amount.
The following table presents information concerning the aggregate amount of
underperforming assets. Underperforming loans comprise: (a) loans accounted for
on a nonaccrual basis (`nonaccrual loans''); (b) loans contractually past due
90 days or more as to interest or principal payments (but not included in the
loans in (a) above) (`past due loans''); and (c) loans not included above which
are `troubled debt restructuring'' as defined in Statement of Financial
Standards No. 15 `FASB 15'', ``Accounting by Debtors and Creditors for Troubled
Debt Restructurings''(``restructured loans'').
December 31,
(dollar references in thousands)
1995 1994 1993
Nonaccrual Loans $803 $983 $1,395
Past Due Loans 2,683 601 461
Restructured Loans --- --- ---
Total Underperforming
Loans 3,486 1,584 1,856
Other Real Estate 286 497 698
Total Underperforming
Assets $3,772 $2,081 $2,554
December 31,
(dollar references in thousands)
1992 1991
Nonaccrual Loans $1,693 $1,599
Past Due Loans 665 483
Restructured Loans 6 370
Total Underperforming
Loans 2,364 2,452
Other Real Estate 660 748
Total Underperforming
Assets $3,024 $3,200
The gross interest income that would have been recognized in 1995 on
underperforming loans if the loans had been current in accordance with their
original terms is $337. Interest income recognized on underperforming loans for
1995 was $280.
Loans are placed on nonaccrual status when scheduled principal or interest
payments are past due for 90 days or more, unless the loan is well secured and
in the process of collection. In addition to the nonaccrual and restructured
loans described above, there exists an additional $3,088 of loans which
management feels may not be able to comply with the existing repayment terms.
These credits have been considered in management's analysis of the allowance for
loan losses.
Statements of Financial Accounting Standards No. 114 and No. 118 were adopted
January 1, 1995. These standards require recognition of loan impairment if a
loan's full principal or interest payments are not expected to be received.
Loans considered to be impaired are reduced to the present value of expected
future cash flows or to the fair value of collateral, by allocating a portion of
the allowance for loan losses to such loans. No increase to the allowance for
loan losses was required at January 1, 1995 as a result of the adoption of these
new standards. For additional detail on impaired loans, see Note 4 on page 26
of the Shareholders' Report.
It is management's belief that loans classified for regulatory purposes as
loss, doubtful, substandard, or special mention that are not included in the
table and discussion above, do not represent or result from trends or
uncertainties which will have a material impact on future operating results,
liquidity or capital resources, and that at December 31, 1995 there were no
material credits not included in the above table about which management is aware
of possible credit problems of borrowers which causes management to have serious
doubts as to the ability of such borrowers to comply with the loan repayment
terms. This paragraph includes forward-looking statements that are based on
management's assumptions concerning future economic and business conditions as
they affect the local economy in general and the Company's borrowers in
particular, which economic and business assumptions are inherently uncertain and
subject to risk and may prove to be invalid. Readers are also cautioned that
management relies upon the truthfulness of statements made by the borrowers, and
that misrepresentation by borrowers is an inherent risk of the activity of
lending money that could cause these forward-looking statements to be
inaccurate.
At December 31, 1995 loans to finance poultry operations amounted to $23,784
or 10.3% of total loans.
Statistical Disclosures (continued)
Summary of Loan Loss Experience
(in thousands)
The following table summarizes changes in the allowance for loan losses
arising from loans charged-off and recoveries on loans previously charged-off,
by loan category, and additions to the allowance which have been charged to
expense.
Year Ended December 31,
1995 1994 1993
Balance of allowance
for possibleosses at
beginning of period $5,669 $4,935 $3,862
Addition of Affiliate
Banks --- 195 164
Loans charged-off:
Real Estate Loans
Secured by 1-4
Family Residential
Properties 221 101 ---
Loans to Finance
Poultry Production
and Other Related
Operations --- --- ---
Loans to Finance
Agricultural Production
and Other Loans to
Farmers --- --- 12
Commercial and
Industrial Loans 20 99 378
Loans to Individuals
for Household, Family
and Other Personal
Expenditures 98 55 53
Economic Development
Bonds --- --- ---
Term Federal Funds Sold --- --- ---
Total Loans charged-off 339 255 443
Recoveries of previously
charged-off Loans:
Real Estate Loans
Secured by 1-4 Family
Residential Properties 6 6 14
Loans to Finance Poultry
Production and
Other Related Operations --- --- ---
Loans to Finance
Agricultural Production
and Other Loans to Farmers 538 --- 500
Commercial and
Industrial Loans 53 186 148
Loans to Individuals
for Household, Family
and Other Personal
Expenditures 25 35 37
Economic Development
Commission Bonds --- --- ---
Term Federal Funds Sold --- --- ---
Total Recoveries 622 227 699
Net Loans recovered
/ (charged-off) 283 (28) 256
Additions to allowance
charged to expense (19) 567 653
Balance at end of period $5,933 $5,669 $4,935
Ratio of net recoveries /
(charge-offs) during
the period to average
loans outstanding .12% (0.01%) 0.13%
Year Ended December 31,
1992 1991
Balance of allowance
for possibleosses at
beginning of period $3,204 $2,898
Addition of Affiliate
Banks --- ---
Loans charged-off:
Real Estate Loans
Secured by 1-4
Family Residential
Properties 96 65
Loans to Finance
Poultry Production
and Other Related
Operations --- ---
Loans to Finance
Agricultural Production
and Other Loans to
Farmers 29 758
Commercial and
Industrial Loans 835 891
Loans to Individuals
for Household, Family
and Other Personal
Expenditures 76 100
Economic Development
Bonds --- ---
Term Federal Funds Sold --- ---
Total Loans charged-off 1,036 1,814
Recoveries of previously
charged-off Loans:
Real Estate Loans
Secured by 1-4 Family
Residential Properties 46 ---
Loans to Finance Poultry
Production and
Other Related Operations --- ---
Loans to Finance
Agricultural Production
and Other Loans to Farmers 132 54
Commercial and
Industrial Loans 504 106
Loans to Individuals
for Household, Family
and Other Personal
Expenditures 28 17
Economic Development
Commission Bonds --- ---
Term Federal Funds Sold --- ---
Total Recoveries 710 177
Net Loans recovered
/ (charged-off) (326) (1,637)
Additions to allowance
charged to expense 984 1,943
Balance at end of period $3,862 $3,204
Ratio of net recoveries /
(charge-offs) during
the period to average
loans outstanding (0.17%) (0.95%)
Statistical Disclosures (continued)
The following table indicates the breakdown of the allowance for loan losses for
the periods indicated:
(dollar references in thousands)
December 31, December 31,
1995 1994
Allowance Ratio of Allowance Ratio of
Loans to Loans to
Total Total
Loans Loans
Real Estate Loans $3 29.78% $185 30.15%
Poultry Loans 1,493 10.29% 918 11.40%
Agricultural Loans 726 11.82% 944 14.23%
Commercial and
Industrial Loans 1,976 32.84% 1,101 30.92%
Loans to Individuals 58 15.01% 146 13.02%
Economic Development
Commission Bonds --- 0.26% --- 0.28%
Term Federal Funds
Sold --- --
Unallocated 1,677 N/A 2,375 N/A
Totals $5,933 100.00% $5,669 100.00%
(dollar references in thousands)
December 31,
1993
Allowance Ratio of
Loans to
Total
Loans
Real Estate Loans $118 27.25%
Poultry Loans 65 15.05%
Agricultural Loans 872 12.24%
Commercial and
Industrial Loans 906 31.91%
Loans to Individuals 128 13.17%
Economic Development
Commission Bonds --- 0.38%
Term Federal Funds
Sold ---
Unallocated 2,846 N/A
Totals $4,935 100.00%
(dollar references in thousands)
December 31, December 31,
1992 1991
Allowance Ratio of Allowance Ratio of
Loans to Loans to
Total Total
Loans Loans
Real Estate Loans $29 24.67% $28 22.89%
Poultry Loans 60 16.01% 57 12.01%
Agricultural Loans 148 12.47% 212 13.02%
Commercial and
Industrial Loans 1,229 33.39% 1,468 34.91%
Loans to Individuals 116 12.65% 114 13.72%
Economic Development
Commission Bonds --- 0.81% --- 1.22%
Term Federal Funds
Sold --- --- 2.23%
Unallocated 2,280 N/A 1,325 N/A
Totals $3,862 100.00% $3,204 100.00%
Statistical Disclosures (continued)
The average amount of deposits is summarized for the periods indicated in the
following table:
December 31,
1995 1994
Average Average
Balance Rate Balance Rate
Demand Deposits
Non-interest Bearing $32,576 --- $30,279 ---
Interest Bearing 40,134 2.29% 41,009 2.30%
Savings Deposits 52,177 3.01% 48,166 2.45%
Time Deposits 191,202 5.30% 164,422 4.42%
Totals $316,089 4.00% $283,876 3.31%
December 31,
1993
Average
Balance Rate
Demand Deposits
Non-interest Bearing $27,278 ---
Interest Bearing 37,924 2.50%
Savings Deposits 45,841 2.58%
Time Deposits 168,659 4.57%
Totals $279,702 3.52%
Maturities of time certificates of deposit of $100,000 or more are summarized
as follows:
December 31,
1995
3 months or less $4,639
Over 3 through 6 months 7,960
Over 6 through 12 months 6,602
Over 12 months 7,532
Total $26,733
Return on Equity and Assets
The ratio of net income to average shareholders' equity and to average total
assets, and certain other ratios, are as follows:
Year Ended December 31,
1995 1994 1993
Percentage of Net Income to:
Average Shareholders' Equity 11.68% 10.85% 9.62%
Average Total Assets 1.13% 1.08% 0.93%
Percentage of Dividends
Declared per Common Share
to Net Income per
Common Share (1) 34.55% 35.79% 40.99%
Percentage of Average
Shareholders' Equity to
Average Total Assets 9.65% 9.91% 9.69%
(1) Based on historical dividends declared by German American Bancorp
without restatement for pooling.
Item 2. Properties.
The Company owns no material physical properties except through its
subsidiaries. Office space for employees is leased from the German American
Bank.
German American Bank conducts its operations from its main office building
at 711 Main Street, in Jasper, Indiana. The main office building is owned by
German American and contains approximately 23,600 square feet of office space.
There is no indebtedness on such property on which German American's main office
is located. German American Bank has seven branches, three of which are located
in Jasper, and one each in the Dubois County towns of Huntingburg, Ferdinand,
Dubois and Ireland. Of these branch facilities, five are owned by German
American Bank and two are leased.
Union Bank's main office facility in Loogootee, Indiana, contains
approximately 12,000 square feet of space. The facility was constructed in 1988
and is owned by Union Bank.
Community Bank conducts its operations from three locations, all of which
are owned by Community Bank. Community Bank's principal banking office is
located in Otwell, Indiana, in a building containing approximately 2,850 square
feet.
First State Bank's main office facility, located in Tell City, Indiana,
constructed in 1981, contains approximately 13,900 square feet. The branch
office located in Rockport, Indiana contains approximately 1,660 square feet.
Both of these facilities are owned by First State Bank.
Item 3. Legal Proceedings.
There are no pending legal proceedings, other than routine litigation
incidental to the business of the Company's subsidiary banks, of a material
nature in which the Company or any of its subsidiaries is involved.
Item 4. Submission of Matters to a Vote of Security Holders.
There was no matter submitted during the fourth quarter of 1995 to a vote of
security holders, by solicitation of proxies or otherwise.
Special Item. Executive Officers of the Registrant.
NAME AGE TITLE AND FIVE YEAR HISTORY
George W. Astrike (60) Chairman and CEO of the Company
in 1995; Chairman and President
/CEO prior thereto. Chairman of
German American Bank in 1995;
Chairman and President prior
thereto. Director of each of
the other Banks since
acquisition by the Company.
Mark A. Schroeder (42) President / Chief Operating
Officer / Chief Financial
Officer of the Company in 1995;
Vice President / Chief
Financial Officer prior
thereto. Director of each of
the other Banks since
acquisition by the Company.
Urban Giesler (58) Treasurer and Secretary of the
Corporation; Senior Vice
President Personal Banking of
German American Bank since
January, 1993; Senior Vice
President - Retail Lending of
German American Bank prior
thereto.
John M. Gutgsell (40) Vice President and Controller
of the Company in 1995; Vice
President and Controller of
German American Bank prior
thereto.
Stan J. Ruhe (44) Executive Vice President -
Credit Administration of the
Company in 1995. Executive Vice
President of German American
Bank in 1995; Senior Vice
President - Credit
Administration prior thereto.
James E. Essany (41) Senior Vice President -
Marketing in 1995; Senior
Vice President - Operations /
Administration of German
American Bank prior thereto.
There are no family relationships between any of the officers of the
Corporation. All officers are elected for a term of one year.
PART II
The information in Part II of this report is incorporated by reference to
the indicated sections of the Registrant's annual report to shareholders for the
fiscal year ended December 31, 1995 (`Shareholders' Report'').
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters.
See ``Market and Dividend Information'' on page 35 of the Shareholders'
Report which section is incorporated herein by reference.
Item 6. Selected Financial Data.
See ``Five Year Summary of Financial Statements and Related Statistics'' on
page 1 of the Shareholders' Report which section is incorporated herein by
reference.
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
See ``Management's Discussion and Analysis of Financial Condition and
Results of Operations''on pages 2 through 14 of the Shareholders' Report which
section is incorporated herein by reference.
Item 8. Financial Statements and Supplementary Data.
The financial statements of the Corporation and related notes on pages 15
through 33 of the Shareholders' Report and the Auditors' Report thereon on page
34 of the Shareholders' Report, and the Interim Financial Data on page 3 of the
Shareholders' Report, are all incorporated herein by reference.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
Not Applicable.
PART III
Item 10. Directors and Executive Officers of the Registrant.
Information relating to Directors of the Corporation will be included under
the caption `Election of Directors'' in the Corporation's Proxy Statement for
the Annual Meeting of Shareholders to be held on April 25, 1996 which will be
filed with the Commission within 120 days of the end of the fiscal year covered
by this Report (the `1996 Proxy Statement''), which section is incorporated
herein by reference in partial answer to this Item.
Information relating to Executive Officers of the Corporation is included
under the caption `Executive Officers of the Registrant'' under Part I of this
Report on Form 10-K.
Information relating to Section 16(a) reporting will be included in the 1996
Proxy Statement under the caption `Section 16(a) Reporting'', which is
incorporated herein by reference.
Item 11. Executive Compensation.
Information relating to compensation of the Corporation's Executive Officers
and Directors will be included under the captions `Executive Compensation'' and
`Election of Directors -- Compensation of Directors'' in the 1996 Proxy
Statement of the Corporation, which sections are incorporated herein by
reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
Information relating to security ownership of certain beneficial owners and
management of the Corporation will be included under the captions `Election of
Directors''and ``Principal Owners of Common Shares'' of the 1996 Proxy
Statement of the Corporation, which sections are incorporated herein by
reference.
Item 13. Certain Relationships and Related Transactions.
Information responsive to this Item 13 will be included under the captions
`Certain Business Relationships and Transactions'' and ``Executive Compensation
- - Compensation Committee Interlocks and Insider Participation''of the 1996
Proxy Statement of the Corporation, which sections are incorporated herein by
reference.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
a) The following 1995, 1994, and 1993 consolidated financial statements of the
Corporation, and the Auditors' Report thereon, included on pages 15 through 34
of the Shareholders' Reports, are incorporated into Item 8 of this report by
reference.
Location in
1. Financial Statements Shareholders' Report
German American Bancorp and Subsidiaries
Consolidated Balance Sheets at December 31,
1995 and December 31, 1994 Page 15
Consolidated Statements of Income, years
ended December 31, 1995, 1994, and 1993 Page 16
Consolidated Statements of Cash Flows, years
ended December 31, 1995, 1994, and 1993 Page 17
Consolidated Statements of Changes in
Shareholders'Equity, years ended
December 31, 1995, 1994, and 1993 Page 18
Notes to the Consolidated Financial
Statements Pages 19 - 33
Independent Auditors' Report Page 34
2. Other financial statements and schedules are omitted because they are not
required or because the required information is included in the consolidated
financial statements or related notes.
b) Reports on Form 8-K
No reports on Form 8-K were filed during the three months ended December
31, 1995.
c) Exhibits:
The Exhibits described in the Exhibit List immediately following the
`Signatures'' page of this report (which is incorporated herein by reference)
are hereby filed as part of this report.
Pursuant to the requirements of Section 13 of the Securities Exchange Act of
1934, the Registrant has duly caused this Report to be signed on its behalf by
the undersigned thereunto duly authorized.
GERMAN AMERICAN BANCORP
(Registrant)
Date: March 15, 1996 By/s/George W. Astrike
George W. Astrike,
Chairman of the Board
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Date: March 15, 1996 By/s/George W. Astrike
George W. Astrike,
Chairman of the
Board and Director (Chief
Executive Officer)
Date: March 15, 1996 By/s/Mark A. Schroeder
Mark A. Schroeder,
President and Director
(Principal Financial
Officer)
Date: March 15, 1996 By/s/David G. Buehler
David G. Buehler, Director
Date: March 15, 1996 By/s/Michael B. Lett
Michael B. Lett, Director
Date: March 15, 1996 By/s/Gene C. Mehne
Gene C. Mehne, Director
Date: March 15, 1996 By/s/Robert L. Ruckriegel
Robert L. Ruckriegel,
Director
Date: March 15, 1996 By/s/William R. Hoffman
William R. Hoffman,
Director
Date: March 15, 1996 By/s/Joseph F. Steurer
Joseph F. Steurer,
Director
Date:
A. Wayne (Skip) Place Jr.,
Director
Date:
Larry J. Seger, Director
Date: March 15, 1996 By/s/John M. Gutgsell
John M. Gutgsell,
Controller (Principal
Accounting Officer)
Executive
Compensation
Plans and Exhibit
Arrangements** Number Description of Exhibit
3.1 Restated Articles of Incorporation of
the Registrant as amended
April 24, 1995.
3.2 Restated Bylaws of the Registrant as
amended August 14, 1990.
10.1 Purchase and Assumption Agreement
between the Registrant and Regional
Federal Savings Bank dated July 8,
1994, is incorporated by reference to
Exhibit 2 to the Company's Quarterly
Report on Form 10-Q, as amended by
Form 10-Q/A filed on or about
September 19, 1994.
10.2 Sublease entered by and between
Buehler Foods, Inc. and The German
American Bank dated January 2, 1987
(Huntingburg Banking Center Branch)
is incorporated by reference from
Exhibit 10.5 to the Registrant's
Registration Statement on Form S-4
filed February 28, 1994
(No. 33-75762) (the ``Otwell S-4'').
10.3 Sublease entered by and between
Buehler Foods, Inc. and the Bank
dated August 1, 1990 (The Crossing
Shopping Center Branch) is
incorporated by reference to Exhibit
10.12 of the Registrant's Report on
Form 10-K for the year ended
December 31, 1990.
10.4 Letter dated January 5, 1995 from the
German American Bank to Buehler
Foods, Inc. notifying Buehler Foods,
Inc. of exercise of renewal
option on The Crossing Shopping
Center Branch. (Exhibit 10.3).
X 10.5 The Company's 1992 Stock Option Plan
is incorporated by reference from
Exhibit 10.1 to the Unibancorp S-4.
X 10.6 Executive Deferred Compensation
Agreement dated December 1, 1992
between the German American Bank and
George W. Astrike, is incorporated
herein by reference from Exhibit 10.3
to the Unibancorp S-4.
X 10.7 Director Deferred Compensation
Agreement between The German
American Bank and certain of its
Directors, is incorporated herein by
reference from Exhibit 10.4 to the
S-4. (The Agreement entered into by
George W. Astrike, a copy of
which was filed as Exhibit 10.4 to
the S-4, is substantially identical
to the Agreements entered into by
the other Directors.) The schedule
following Exhibit 10.4 to the S-4
lists the Agreements with the other
Directors and sets forth the material
detail in which such Agreements
differ from the Agreement filed as
Exhibit 10.4 to the Unibancorp S-4.
X 10.8 Incentive stock option agreement
between the Company and George W.
Astrike dated April 20, 1993, is
incorporated by reference from
Exhibit 10.6 to the Otwell S-4.
X 10.9 Form of Incentive Stock Option
Agreement executed April 20, 1993
between the Company and each of Mark
A. Schroeder (5000 shares), James E.
Essany (1500 shares), Urban Giesler
(1500 shares) and Stan J. Ruhe (3000
shares) (all numbers and prices
unadjusted for stock splits and stock
dividends) is incorporated by
reference from Exhibit 10.7 to the
Otwell S-4.
X 10.10 Form of Incentive Stock Option
Agreement executed December 30,
1994 between the Registrant and George
W. Astrike (1700 shares) and Mark
A. Schroeder (1500 shares) is incorporated
by reference to Exhibit 10.12 of the
Registrant's Report on Form 10-K for the
year ended December 31, 1994.
X 10.11 Form of Incentive Stock Option
Agreement executed July 10, 1995
between the Registrant and Mark A.
Schroeder is incorporated by
reference to Exhibit 10.1 to the
Company's Quarterly Report on Form
10-Q filed on or about
November 13, 1995.
X 10.12 Schedule of Incentive Stock Option
Agreements between the Registrant
and its executive officers dated
July 10, 1995.
11 Computation of Earnings Per Share.
13 Registrant's Annual Report to
Shareholders for the year ended
December 31, 1995. This exhibit,
except to the extent specifically
incorporated by reference herein, is
furnished for the information of the
Commission only and is not to be
deemed `filed'' as a part of this Report.
21 Subsidiaries of the Registrant.
23 Consents of Experts and Counsel.
27 Financial Data Schedule.
**Exhibits that describe or evidence all management contracts or compensatory
plans or arrangements required
to be filed as exhibits to this Report are indicated by an `X'' in this
column.