8-K
GERMAN AMERICAN BANCORP, INC. (GABC)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
______________________
Date of Report (Date of earliest event reported): May 18, 2023
GERMAN AMERICAN BANCORP, INC.
(Exact name of registrant as specified in its charter)
Indiana
(State or other jurisdiction of incorporation)
| 001-15877 | 35-1547518 | |
|---|---|---|
| (Commission File Number) | (IRS Employer Identification No.) | |
| 711 Main Street | ||
| Jasper, | Indiana | 47546 |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code: (812) 482-1314
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[☐] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[☐] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[☐] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[☐] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 under the Securities Act (17 CFR 230.405) or Rule 12b-2 under the Exchange Act (17 CFR 240.12b-2).
Emerging growth company [ ]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act [☐]
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange <br>on which registered |
|---|---|---|
| Common Stock, no par value | GABC | Nasdaq Global Select Market |
Item 7.01. Regulation FD Disclosure.
On May 18, 2023, D. Neil Dauby, Chief Executive Officer and incoming Chairman of German American Bancorp, Inc. (the “Company”), will conduct a management presentation at the Company’s 2023 Annual Meeting of Shareholders. A copy of the presentation is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.
The information in this 7.01, including the information incorporated herein from Exhibit 99.1, is furnished pursuant to Item 7.01 of Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Cautionary Note Regarding Forward-Looking Statements
Certain statements in this Report may be deemed “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Readers are cautioned that, by their nature, forward-looking statements are based on assumptions and are subject to risks, uncertainties, and other factors. Forward-looking statements can often, but not always, be identified by the use of words like “believe”, “continue”, “pattern”, “estimate”, “project”, “intend”, “anticipate”, “expect” and similar expressions or future or conditional verbs such as “will”, “would”, “should”, “could”, “might”, “can”, “may”, or similar expressions. Actual results and experience could differ materially from the anticipated results or other expectations expressed or implied by these forward-looking statements as a result of a number of factors, including but not limited to, those discussed in this press release. Factors that could cause actual experience to differ from the expectations expressed or implied in this press release include: changes in interest rates and the timing and magnitude of any such changes; unfavorable economic conditions, including a prolonged period of inflation, and the resulting adverse impact on, among other things, credit quality; the impacts related to or resulting from recent bank failures or adverse developments at other banks on general investor sentiment regarding the stability and liquidity of banks; the impacts of epidemics, pandemics or other infectious disease outbreaks; changes in competitive conditions; the introduction, withdrawal, success and timing of asset/liability management strategies or of mergers and acquisitions and other business initiatives and strategies; changes in customer borrowing, repayment, investment and deposit practices; changes in fiscal, monetary and tax policies; changes in financial and capital markets; capital management activities, including possible future sales of new securities, or possible repurchases or redemptions by the Company of outstanding debt or equity securities; risks of expansion through acquisitions and mergers, such as unexpected credit quality problems of the acquired loans or other assets, unexpected attrition of the customer base or employee base of the acquired institution or branches, and difficulties in integration of the acquired operations; factors driving impairment charges on investments; the impact, extent and timing of technological changes; potential cyber-attacks, information security breaches and other criminal activities; litigation liabilities, including related costs, expenses, settlements and judgments, or the outcome of matters before regulatory agencies, whether pending or commencing in the future; actions of the Federal Reserve Board; the possible effects of the replacement of the London Interbank Offering Rate (LIBOR); the potential for increases to, and volatility in, the balance of our allowance for credit losses and related provision expense due to the current expected credit loss (CECL) standard; changes in accounting principles and interpretations; potential increases of federal deposit insurance premium expense, and possible future special assessments of FDIC premiums, either industry wide or specific to the Company’s banking subsidiary; actions of the regulatory authorities under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and the Federal Deposit Insurance Act and other possible legislative and regulatory actions and reforms; impacts resulting from possible amendments or revisions to the Dodd-Frank Act and the regulations promulgated thereunder, or to Consumer Financial Protection Bureau rules and regulations; the continued availability of earnings and excess capital sufficient for the lawful and prudent declaration and payment of cash dividends; with respect to the Company’s merger with Citizens Union Bancorp of Shelbyville, Inc., the possibility that the benefits of the transaction, including cost savings and strategic gains, do not continue as anticipated, including as a result of the impact of, or problems arising from, the continued integration of the two companies, unexpected credit quality problems of the acquired loans or other assets, or unexpected attrition of the customer base of the acquired institution or branches; other matters discussed in this Report; and risk factors expressly identified in other Securities and Exchange Commission filings made by the Company.
Such statements reflect our views with respect to future events and are subject to these and other risks, uncertainties and assumptions relating to the operations, results of operations, growth strategy and liquidity of the Company.
Readers are cautioned not to place undue reliance on these forward-looking statements. It is intended that these forward-looking statements speak only as of the date they are made. The Company does not undertake any obligation to release publicly any revisions to these forward-looking statements to reflect future events or circumstances or to reflect the occurrence of unanticipated events.
Item 9.01. Financial Statements and Exhibits.
| (d) | Exhibits | |
|---|---|---|
| Exhibit No. | Description | |
| 99.1 | Annual Meeting Management Presentation dated May 18, 2023. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
* * * * * *
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| GERMAN AMERICAN BANCORP, INC. | ||
|---|---|---|
| Date: May 18, 2023 | By: | /s/ D Neil Dauby |
| D Neil Dauby, President and Chief Executive Officer |
gabc2023annualmeetingman
WELCOME 2023 Annual Meeting
D. Neil Dauby Chairman & CEO
Management Report
F o rw a rd L o o k in g S ta te m e n t 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 2022 as updated and supplemented by our other SEC reports filed from time to time.
2022 Year in Review
Who We Are Indiana & Kentucky Community-focused Financial Services Organization • Banking, Insurance, Investments & Trust • $6.2 Billion Total Banking Assets • $2.3 Billion Investment and Trust Assets Under Management • $72 Million Annual Insurance Premiums • ~ 865 Team Members • 77 Banking Offices
$3,929 $4,398 $4,978 $5,609 $6,156 1.38% 1.43% 1.32% 1.57% 1.26% $- $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 (Dollars in Millions) Total Assets Return on Average Assets 1.47% * * Adjusted Return on Average Assets is a non-GAAP financial measure. Refer to “Use of Non-GAAP Financial Measures” for additional information, including a reconciliation to the comparable GAAP financial measure.
$46,529 $59,222 $62,210 $84,137 $81,825 $95,922 $1.99 $2.29 $2.34 $3.17 $2.78 $3.26 $- $1.00 $2.00 $3.00 $4.00 $5.00 $6.00 $7.00 $8.00 $9.00 $10.00 $- $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 12/31/22 Net Income & Earnings Per Share Earnings Per Share (As Adjusted *)* Adjusted Net-Income and adjusted Earnings per Share are non-GAAP financial measures. Refer to “Use of Non- GAAP Financial Measures” for additional information, including a reconciliation to the comparable GAAP financial measure. (Dollars in Thousands except per share data)
Wealth Management Fees, $10.1 million, 17% Service Charges on Deposit Accounts, $11.5 million, 19% Insurance Revenues, $10.0 million, 17% Interchange Fee Income, $15.8 million, 27% Other Operating Income, $7.3 million 12% Net Gains on Sales of Loans, $3.8 million, 7% Net Gains on Sales of Securities, $0.6 million, 1% Non-Interest Income as of December 31, 2022 Total Non-Interest Income $59.1 million
S & P Global Market Intelligence Ranks the Best- Performing Community Bank, Credit Unions and US Public Banks for 2022 German American Bank Ranked as a Top 20 Bank in the nation by S & P Global Market Intelligence JASPER, Ind., March 23, 2023 -- German American Bancorp, Inc. (Nasdaq: GABC) has earned the #19 ranking out of 196 community banks in the nation on the S&P Global Market Intelligence annual ranking of 2022’s best-performing community banks with assets between $3 billion and $10 billion. German American was the only bank serving Indiana or Kentucky listed within the top 20 rankings. “It’s a great honor to be ranked in the top 20 of community banks in the nation by S&P Global, and the only bank serving Indiana or Kentucky listed as a top 20 bank,” said Neil Dauby, President and CEO. “With the current volatility in the banking sector, we hope our shareholders, customers, employees and our communities find this welcome news as the ranking speaks to the strength and resilience of our organization. This recognition is a testament to the hard work and dedication of the entire German American team, and we are very proud to receive it.” About German American German American Bancorp, Inc. is a Nasdaq-traded (symbol: GABC) financial holding company based in Jasper, Indiana. German American, through its banking subsidiary German American Bank, operates 77 banking offices in 20 southern Indiana counties and 14 counties in Kentucky. The Company also owns an investment brokerage subsidiary (German American Investment Services, Inc.) and a full line property and casualty insurance agency (German American Insurance, Inc.).
Non-Interest Bearing Demand, $ 1,601.2 million, 31% Interest Bearing Demand, Savings & Money Market, $ 3,039.4 million, 59% Time Deposits, $ 514.3 million, 10% Total Deposits $5,154.9 million Business, 33% Retail, 49% Public Fund, 18% 21% of Total Deposits are Uninsured as of 03/31/23 Average Deposit Account Size equals $25,500 Types of Deposits NOTES: Deposit Composition as of March 31, 2023
Sources of Liquidity FHLB Borrowings Overnight Borrowings from other FIs Securities Portfolio Wholesale Brokered Deposits FRB Discount Window FRB Bank Term Funding Program
Capital Ratios 03/31/23 Ratio 12/31/22 Ratio Minimum for Capital Adequacy Purposes Total Capital (to Risk Weighted Assets) ……………….. 15.89% 15.45% 8.00% Tier 1 (Core) Capital (to Risk Weighted Assets) …………. 14.32% 13.97% 6.00% Common Tier 1 (CET 1) Captial Ratio (to Risk Weighted Assets) …………………………………..….. 13.60% 13.26% 4.50% Tier 1 Capital (to Average Assets) ……………………………...…………11.08% 10.50% 4.00%
YTD Price Change (As of 05/15/23) -27.04 -28.09 -35.59 -40.00 -37.50 -35.00 -32.50 -30.00 -27.50 -25.00 -22.50 -20.00 -17.50 -15.00 -12.50 -10.00 -7.50 -5.00 -2.50 0.00 GABC Average of Midwestern Peer Group * S&P Regional Banks Select Industry Index * Midwestern Peer Group used for Proxy Statement Compensation purposes
17.79% 220.17% 554.52% 13.19% 158.70% 118.10% 0.00% 100.00% 200.00% 300.00% 400.00% 500.00% 600.00% 700.00% 5 year 10 year 15 year GABC S&P Regional Banks Select Industry Index Cumulative Total Shareholder Return
Use of Non-GAAP Measures The accounting and reporting policies of German American Bancorp, Inc. (the “Company”) conform to U.S. generally accepted accounting principles (“GAAP”) and general practices within the banking industry. As a supplement to GAAP, the Company has provided certain, non-GAAP financial measures, which it believes are useful because they assist investors in assessing the Company’s operating performance. Specifically, the Company has presented its provision for credit losses, non-interest expense, net income, earnings per share, and return on average assets on an as adjusted basis for the year ended December 31, 2022 to reflect the exclusion of the following items related to the CUB merger: (1) the Current Expected Credit Losses (“CECL”) “Day 1” provision expense for acquired loans that have only insignificant credit deterioration (i.e., non-PCD loans), and (2) non- recurring acquisition-related expenses. Management believes excluding such items from these financial measures may be useful in assessing the Company’s underlying operational performance since the merger transaction does not pertain to its core business operations and exclusion may facilitate better comparability between periods. In addition, management believes that excluding non-recurring acquisition-related expenses and the CECL Day 1 non-PCD provision expense such measures may be useful to the Company, as well as analysts and investors, since these expenses can vary significantly based on the size, type, and structure of each acquisition. Additionally, management believes excluding these items may enhance comparability for peer comparison purposes. Although intended to enhance investors’ understanding of the Company’s business and performance, these non-GAAP financial measures should not be considered an alternative to GAAP. Non-GAAP Reconciliation Dollars in Thousands, except per share amounts Year Ended 12/31/2022 Adjustments1 Adjusted 12/31/22 Total Revenue $ 259,717 $ - $ 259,717 Provision for Credit Losses Expense 6,350 (6,300) 50 Non-interest Expense 154,191 (12,323) 141,868 Income Before Income Taxes 99,176 18,623 117,799 Incom Tax Expense 17,351 4,526 21,877 Net Income $ 81,825 $ 14,097 $ 95,922 Weighted Average Shares Outstanding 29,464,591 - 29,457,396 Earnings Per Share $ 2.78 $ 0.48 $ 3.26 Net Income $ 81,825 $ 14,097 $ 95,922 Average Assets $ 6,514,030 $ - $ 6,514,030 Return on Average Assets 1.26% 1.47% 1 The Provision for Credit Losses adjustment reflects the initial increase in allowance for credit losses required on acquired non-PCD loans through the provision for credit losses as a result of the completion of the CUB merger. The Non- interest expense adjustment reflects non-recurring acquistion-related expenses for the completed CUB merger.