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| 8-K - 8-K - GERMAN AMERICAN BANCORP, INC. | a8kq32017investormeetingma.htm |
Symbol: GABC
November 2017
Investor Meeting
Presented By
2
Mark A. Schroeder, Chairman and CEO
(812) 482-0701
mark.schroeder@germanamerican.com
Bradley M. Rust, Executive VP and CFO
(812) 482-0718
brad.rust@germanamerican.com
CAUTIONARY NOTE REGARDING
FORWARD-LOOKING STATEMENTS
When used in this presentation and our oral statements, the words or phrases “believe,” “will likely result,” “are
expected to,” “will continue,” “is anticipated,” “estimate,” “project,” “plans,” or similar expressions are intended to
identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. You
are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date of this
presentation, and we do not undertake any obligation to update any forward-looking statement to reflect circumstances
or events that occur in the future. By their nature, these statements are subject to numerous risks and uncertainties
that could cause actual results to differ materially from those anticipated in the statements.
Factors that could cause actual results and performance to vary materially from those expressed or implied by any
forward-looking statement include those that are discussed in Item 1, “Business – Forward Looking Statements and
Associated Risk,” and Item 1A, “Risk Factors,” in our Annual Report on Form 10-K for 2016 as updated and
supplemented by our other SEC reports filed from time to time.
3
Southern Indiana
Community-focused
Financial Services
Organization
• $3.1 Billion Total Banking
Assets
• $1.2 Billion Investment &
Trust Assets Under
Management
• Banking, Insurance,
Investments & Trust
• $60 Million Annual Insurance
Premiums
Who We Are
• 53 Banking Offices
• 600+ FTEs
4
Diversified Economic Base
Regional Education & Health Care
Life Sciences & Technology
Agriculture, Manufacturing & Logistics
MAJOR EMPLOYERS:
Education
Indiana University
University of Southern Indiana
Vincennes University
Greater Clark County School Corp
Evansville Vanderburgh County School Corp
Monroe County School Corporation
New Albany – Floyd County School Corp
Health Care
Indiana University Health
Columbus Regional Hospital
Clark Memorial Hospital
Deaconess Hospital
Baptist Health Floyd Hospital
Good Samaritan Hospital
King’s Daughters’ Hospital
Memorial Hospital
St Vincent’s Medical Center
Manufacturing & Logistics
Aisin U.S.A. MFG, Inc.
ALCOA Warrick Operations
Amazon Fulfillment Service
American Commercial Lines/Jeffboat
Berry Plastics
Cummins, Inc. (Cummins Diesel)
Grote Industries Inc
Jasper Engines & Transmissions
Kimball International, Inc.
Koch Enterprises, Inc.
MasterBrand Cabinets, Inc.
NTN Driveshaft Inc
OFS Brands (Office-Furniture Systems)
Toyota Motor Mfg – Indiana
5
Life Sciences & Technology
Baxter BioPharma Solutions
Crane Naval Surface Weapons Center
Cook Group, Inc.
Mead Johnson Nutrition
Energy
Duke Energy
Vectren
6
Small MSA Market Expansion
Market
Total Market
Deposits
GABC Deposit
Market Share***
Market Share
Position
# of
Branches
Heritage Markets* $ 4,992,622 32% #1 31
Evansville/Newburgh $ 4,198,662 9% #3 7
Bloomington $ 2,399,939 8% #4 3
Columbus $ 1,204,599 2% #9 1
Louisville MSA
(Indiana Portion)** $ 3,048,433 3% #11 5
Total Growth Markets $ 10,851,633
* Includes the Indiana counties of Daviess, Dubois, Gibson, Jefferson, Knox, Lawrence, Martin, Perry, Pike & Spencer
** Includes the Indiana counties of Clark & Floyd
Capitalize upon Market Strength & Growth
*** Source: FDIC 06/30/17 Statistics
7
*Heritage Markets 2017 2007**
2017 # of
Offices
(millions) Deposits Share Deposits Share Increase
1 German American $ 1,612 32.3% $ 1,129 26.0% 42.8% 31
2 Old National Bank $ 1,063 21.3% $ 1,354 31.2% - 21.5% 16
3 Fifth Third Bank $ 456 9.1% $ 452 10.4% 0.9% 9
Market Total $ 4,993 $ 4,340 15.0%
* Heritage Markets include the Indiana counties of Daviess, Dubois, Gibson, Jefferson, Knox, Lawrence, Martin, Perry, Pike &
Spencer
** 2007 Deposits adjusted to include branches subsequently acquired by surviving banks
Source: FDIC 06/30/17 Statistics
Capitalize upon Market Strength & Growth
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Evansville/Newburgh Markets 2017 2007*
2017 # of
Offices
(millions) Deposits Share Deposits Share Increase
1 Old National Bank $ 1,690 40.3% $ 2,228 53.8% -24.1% 14
2 Fifth Third Bank $ 1,208 28.8% $ 1,184 28.6% 2.0% 12
3 German American $ 395 9.4% $ 271 6.5% 45.8% 7
Market Total $ 4,199 $ 4,140 1.4%
* 2007 Deposits adjusted to include branches subsequently acquired by surviving banks
Source: FDIC 06/30/17 Statistics
Capitalize upon Market Strength & Growth
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History of Superior Financial Performance
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Seven Years of Consecutive Record Earnings Performance
Double-Digit Return on Equity for Past 12 Consecutive Fiscal Years
Highest Performing Indiana-Domiciled Exchange-Traded Financial
Institution (Return on Equity) for 6 Out of the Past 8 Years
Consistent Achievement of Superior Asset Quality
Bank Director Magazine - Bank Performance Scorecard Top 10 National
Ranking for Past 3 Years ($1 - $5 billion Publicly-traded Companies)
# 10 Ranking in 2017
# 2 Ranking in 2016
# 4 Ranking in 2015
Bank Director Magazine - Top 10 Exchange Traded Banks for 10-Year Total
Return
# 7 Total Return of 400 (6/30/07 – 6/30/17)
Financial Trends
11
$2,006
$2,164 $2,237
$2,374
$2,956
$3,073
1.24% 1.25% 1.31%
1.33%
1.24% 1.30%
$-
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
12/31/12 12/31/13 12/31/14 12/31/15 12/31/16 9/30/17
YTD
(Dollars in Millions)
Total Assets
Annualized Return on Assets
12
$1,205
$1,382
$1,448
$1,564
$1,990
$2,086
83% 81% 81% 82% 81% 81%
$-
$250
$500
$750
$1,000
$1,250
$1,500
$1,750
$2,000
$2,250
$2,500
12/31/12 12/31/13 12/31/14 12/31/15 12/31/16 09/30/17
(Dollars in Millions)
Total Loans, Net of Unearned Income
Commercial & Agricultural Loans as % of Total Loans
13
Construction & Development
Loans, $ 94.9 million, 4%
Agricultural Loans,
$ 326.5 million, 16%
Multi-Family
Residential
Properties,
$ 126.6 million, 6%
Commercial Real Estate Non-
Owner Occupied,
$ 514.4 million, 25%
Commercial Real Estate Owner
Occupied, $ 184.5 million, 9%
Commercial & Industrial Loans,
$ 468.1 million, 22%
Consumer Loans,
$ 44.4 million, 2%
Home Equity Loans,
$145.9 million, 7%
Residential Mortgage Loans,
$ 181.0 million, 9%
Total Loans $2,086.3 million
Loan Portfolio Composition As of September 30, 2017
14
0.60%
0.44%
0.29%
0.15% 0.14%
0.33%
2.15%
1.45%
1.04%
0.84%
0.76%
0.51%*
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
12/31/12 12/31/13 12/31/14 12/31/15 12/31/16 09/30/17
Non- Performing Assets to Total Assets
GABC Peer Group 15 * Peer Group Information as of 06/30/17
0.19%
0.10%
-0.01%
0.03%
0.04%
0.04%
0.59%
0.25%
0.15%
0.08%
0.10%
0.07%*
-0.10%
0.15%
0.40%
0.65%
0.90%
12/31/12 12/31/13 12/31/14 12/31/15 12/31/16 09/30/17
Net Charge-offs to Average Loans
GABC Peer Group 16 * Peer Group Information as of 06/30/17
$1,641
$1,812 $1,780 $1,826
$2,350
$2,425
80% 81% 81%
83% 84% 84%
$-
$500
$1,000
$1,500
$2,000
$2,500
12/31/12 12/31/13 12/31/14 12/31/15 12/31/16 09/30/17
(Dollars in Millions)
Total Deposits
Non-Maturity Deposit Accounts as % of Total Deposits
17
Non-Interest Bearing Demand,
$589.3 million, 24%
Interest Bearing Demand,
Savings & Money Market,
$1,454.1 million, 60%
Time Deposits, $381.2 million,
16%
18
Total Deposit Composition as of September 30, 2017
Cost of Funds
2012 0.60%
2013 0.37%
2014 0.30%
2015 0.28%
2016 0.32%
09/30/17 YTD 0.38%
Total Deposits $2,424.6 million
$185
$200
$229
$252
$330
$361
13.57% 13.40% 13.21% 12.47%
10.94%
11.16%
$-
$50
$100
$150
$200
$250
$300
$350
$400
12/31/12 12/31/13 12/31/14 12/31/15 12/31/16 09/30/17
YTD
(Dollars in Millions)
Total Shareholders’ Equity
Annualized Return on Equity
19
$67,819 $70,319
$76,991 $79,072
$99,470
$73,354
$78,306
3.74%
3.67%
3.76%
3.70%
3.75% 3.75% 3.78%
$-
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
12/31/12 12/31/13 12/31/14 12/31/15 12/31/16 09/30/16
YTD
09/30/17
YTD
(Dollars in Thousands)
Net Interest Income (Tax-Equivalent)
Net Interest Margin
20
$21,811
$23,615 $23,937
$27,444
$32,013
$23,656
$24,260
24% 25% 24%
26%
24% 24% 24%
$-
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
12/31/12 12/31/13 12/31/14 12/31/15 12/31/16 09/30/16
YTD
09/30/17
YTD
(Dollars in Thousands)
Non-Interest Income
Non-Interest Income as % of Total Revenue
21
22
$50,923
$54,905
$57,713
$61,326
$76,587
$57,232 $57,803
56.8%
58.5%
57.2% 57.6%
58.3% 59.0%
56.4%
$-
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$90,000
12/31/12 12/31/13 12/31/14 12/31/15 12/31/16 09/30/16
YTD
09/30/17
YTD
(Dollars in Thousands)
Non-Interest Expense
Efficiency Ratio
$24,055
$25,413
$28,344
$30,064
$35,184
$25,119
$29,055
$1.27 $1.32
$1.43 $1.51
$1.57
$1.13
$1.27
$-
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
12/31/12 12/31/13 12/31/14 12/31/15 12/31/16 9/30/16
YTD
9/30/17
YTD
(Dollars in Thousands, Except Per Share Amounts)
Net Income & Earnings Per Share
Earnings Per Share
23
*Earnings Per Share adjusted for 3-for-2 stock split completed in 2017
*
Why Invest in GABC?
24
$0.57
$0.77 $0.73
$0.81
$1.07
$1.27 $1.32
$1.43
$1.51 1.57
GABC Earnings Per Share Growth
*
25 As of 12/31 for years shown
Why Invest in GABC?
*Earnings Per Share adjusted for 3-for-2 stock split completed in 2017
$6.55
$7.64
$8.62
$8.92
$10.40
$11.57
$11.94
GABC Tangible Book Value Per Share
Why Invest in GABC?
As of 12/31 for years shown 26
*Tangible Book Value Per Share adjusted for 3-for-2 stock split completed in 2017
*
$12.28 $12.13
$14.48
$18.95
$20.35
$22.21
$35.07
GABC Stock Price Appreciation
Why Invest in GABC?
As of 12/31 for years shown 27
*Stock Price adjusted for 3-for-2 stock split completed in 2017
*
• Proven Executive Management Team
• Track Record of Consistent Top Quartile Financial Performance
• Experienced in Operating Plan Execution and M & A
Transitions
• Potential Growth within New Market Areas – Small MSA Focus
• Existing Platform for Operating Efficiency
• Infrastructure in Place for Perpetuating Ongoing EPS Growth
• Consistent Strong Dividend Yield and Dividend Pay-out
Capacity
Why Invest in GABC?
28