UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) [ X ] Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the Quarterly Period Ended September 30, 2001 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, Jasper, Indiana 47546 (Address of Principal Executive Offices and Zip Code) Registrant's telephone number, including area code: (812) 482-1314 Indicate by check 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 --- --- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding at November 1, 2001 Common Stock, No par value 10,510,321
GERMAN AMERICAN BANCORP INDEX PART I. FINANCIAL INFORMATION Item 1. Consolidated Balance Sheets - September 30, 2001 and December 31, 2000 Consolidated Statements of Income and Comprehensive Income -- Three and Nine months Ended September 30, 2001 and 2000 Consolidated Statements of Cash Flows -- Nine months Ended September 30, 2001 and 2000 Notes to Consolidated Financial Statements -- September 30, 2001 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Item 3. Quantitative and Qualitative Disclosures about Market Risk. PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K SIGNATURES
<TABLE> <CAPTION> PART 1. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS GERMAN AMERICAN BANCORP CONSOLIDATED BALANCE SHEETS (dollars in thousands except per share data) September 30, December 31, 2001 2000 ------------ ----------- (unaudited) <S> <C> <C> ASSETS Cash and Due from Banks................................................ $ 23,975 $ 26,987 Federal Funds Sold and Other Short-term Investments.................... 72,972 1,460 ------------ ----------- Cash and Cash Equivalents......................................... 96,947 28,447 Interest-bearing Time Deposits with Banks.............................. 299 1,495 Securities Available-for-Sale, at Market .............................. 142,546 185,188 Securities Held-to-Maturity, at Cost .................................. 23,283 28,454 Loans Held for Sale.................................................... 7,289 71,372 Total Loans............................................................ 671,328 710,119 Less: Unearned Income................................................. (617) (375) Allowance for Loan Losses....................................... (8,702) (9,274) ------------ ----------- Loans, Net............................................................. 662,009 700,470 Stock in FHLB of Indianapolis, and Other Restricted Stock, at cost..... 12,596 12,596 Premises, Furniture and Equipment, Net................................. 20,804 21,065 Other Real Estate...................................................... 1,048 1,579 Intangible Assets...................................................... 2,062 2,147 Accrued Interest Receivable and Other Assets........................... 24,322 26,995 ------------ ----------- TOTAL ASSETS.................................................... $ 993,205 $ 1,079,808 ============ =========== LIABILITIES Noninterest-bearing Demand Deposits.................................... $ 88,178 $ 89,146 Interest-bearing Demand, Savings and Money Market Accounts............. 217,218 194,093 Time Deposits < $100,000............................................... 345,173 350,854 Time Deposits of $100,000 or more and Brokered Deposits................ 52,392 101,477 ------------ ----------- Total Deposits.................................................... 702,961 735,570 FHLB Advances and Other Borrowings..................................... 175,941 235,230 Accrued Interest Payable and Other Liabilities......................... 11,587 11,748 ------------ ----------- TOTAL LIABILITIES............................................... 890,489 982,548 SHAREHOLDERS' EQUITY Common Stock, no par value, $1 stated value; 20,000,000 shares authorized...................................... 10,510 10,495 Preferred Stock, $10 par value; 500,000 shares authorized, no shares issued .............................. --- --- Additional Paid-in Capital............................................. 63,194 63,175 Retained Earnings...................................................... 27,311 24,353 Accumulated Other Comprehensive Income (Loss) ......................... 1,701 (763) ------------ ----------- TOTAL SHAREHOLDERS' EQUITY...................................... 102,716 97,260 ------------ ----------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY...................... $ 993,205 $ 1,079,808 ============ =========== End of period shares issued and outstanding............................ 10,510,317 10,494,708 ============ =========== <FN> See accompanying notes to consolidated financial statements. </FN> </TABLE> - 3 -
<TABLE> <CAPTION> GERMAN AMERICAN BANCORP CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (unaudited, dollars in thousands except per share data) Three months Ended September 30, 2001 2000 --------- --------- <S> <C> <C> INTEREST INCOME Interest and Fees on Loans............................................. $ 14,293 $ 16,468 Interest on Federal Funds Sold and Other Short-term Investments........ 666 134 Interest and Dividends on Securities: Taxable............................................................. 1,435 2,805 Non-taxable......................................................... 926 861 --------- --------- TOTAL INTEREST INCOME............................................. 17,320 20,268 INTEREST EXPENSE Interest on Deposits................................................... 6,789 8,092 Interest on FHLB Advances and Other Borrowings......................... 2,760 3,747 --------- --------- TOTAL INTEREST EXPENSE............................................ 9,549 11,839 --------- --------- NET INTEREST INCOME.................................................... 7,771 8,429 Provision for Loan Losses.............................................. 165 371 --------- --------- NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES................................................... 7,606 8,058 NONINTEREST INCOME Trust and Investment Product Fees...................................... 385 375 Service Charges on Deposit Accounts.................................... 692 572 Insurance Revenues..................................................... 671 630 Other Income........................................................... 235 300 Net Gains on Sales of Loans and Related Assets, and Provision for Losses on Loans Held for Sale....................................... 403 86 Net Gain / (Loss) on Sales of Securities............................... --- --- --------- --------- TOTAL NONINTEREST INCOME.......................................... 2,386 1,963 --------- --------- NONINTEREST EXPENSE Salaries and Employee Benefits......................................... 3,912 3,888 Occupancy Expense...................................................... 507 478 Furniture and Equipment Expense........................................ 477 526 Data Processing Fees................................................... 277 237 Professional Fees...................................................... 99 325 Advertising and Promotions............................................. 258 220 Supplies............................................................... 189 204 Other Operating Expenses............................................... 1,056 1,101 --------- --------- TOTAL NONINTEREST EXPENSE......................................... 6,775 6,979 --------- --------- Income before Income Taxes............................................. 3,217 3,042 Income Tax Expense..................................................... 774 620 --------- --------- NET INCOME............................................................. $ 2,443 $ 2,422 ========= ========= COMPREHENSIVE INCOME................................................... $ 3,246 $ 2,345 ========= ========= Earnings Per Share and Diluted Earnings Per Share...................... $ 0.23 $ 0.23 Dividends Per Share.................................................... $ 0.14 $ 0.13 <FN> See accompanying notes to consolidated financial statements. </FN> </TABLE> - 4 -
<TABLE> <CAPTION> GERMAN AMERICAN BANCORP CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (unaudited, dollars in thousands except per share data) Nine months Ended September 30, 2001 2000 --------- --------- <S> <C> <C> INTEREST INCOME Interest and Fees on Loans............................................. $ 45,012 $ 47,913 Interest on Federal Funds Sold and Other Short-term Investments........ 1,636 421 Interest and Dividends on Securities: Taxable............................................................. 5,453 8,441 Non-taxable......................................................... 2,639 2,610 --------- --------- TOTAL INTEREST INCOME............................................. 54,740 59,385 INTEREST EXPENSE Interest on Deposits................................................... 21,700 23,705 Interest on FHLB Advances and Other Borrowings......................... 8,836 10,009 --------- --------- TOTAL INTEREST EXPENSE............................................ 30,536 33,714 --------- --------- NET INTEREST INCOME.................................................... 24,204 25,671 Provision for Loan Losses.............................................. 495 1,036 --------- --------- NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES................................................... 23,709 24,635 NONINTEREST INCOME Trust and Investment Product Fees...................................... 976 1,073 Service Charges on Deposit Accounts.................................... 1,849 1,563 Insurance Revenues..................................................... 2,461 1,771 Other Income........................................................... 1,021 919 Net Gains on Sales of Loans and Related Assets, and Provision for Losses on Loans Held for Sale....................................... 1,126 125 Net Gain / (Loss) on Sales of Securities............................... 1 (8) --------- --------- TOTAL NONINTEREST INCOME.......................................... 7,434 5,443 --------- --------- NONINTEREST EXPENSE Salaries and Employee Benefits......................................... 12,159 11,589 Occupancy Expense...................................................... 1,505 1,460 Furniture and Equipment Expense........................................ 1,442 1,565 Data Processing Fees................................................... 791 656 Professional Fees...................................................... 560 789 Advertising and Promotions............................................. 793 665 Supplies............................................................... 538 612 Other Operating Expenses............................................... 3,478 3,354 --------- --------- TOTAL NONINTEREST EXPENSE......................................... 21,266 20,690 --------- --------- Income before Income Taxes............................................. 9,877 9,388 Income Tax Expense..................................................... 2,509 2,329 --------- --------- NET INCOME............................................................. $ 7,368 $ 7,059 ========= ========= COMPREHENSIVE INCOME................................................... $ 9,832 $ 7,756 ========= ========= Earnings Per Share and Diluted Earnings Per Share...................... $ 0.70 $ 0.67 Dividends Per Share.................................................... $ 0.42 $ 0.39 <FN> See accompanying notes to consolidated financial statements. </FN> </TABLE> - 5 -
<TABLE> <CAPTION> GERMAN AMERICAN BANCORP CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited, dollar references in thousands) Nine months Ended September 30, 2001 2000 --------- --------- <S> <C> <C> CASH FLOWS FROM OPERATING ACTIVITIES Net Income............................................................. $ 7,368 $ 7,059 Adjustments to Reconcile Net Income to Net Cash from Operating Activities: Net (Accretion) / Amortization on Securities...................... 179 112 Depreciation and Amortization..................................... 1,812 1,806 Amortization of Mortgage Servicing Rights.............................. 142 140 Net Change in Loans Held for Sale................................. 63,973 657 Loss on Investment in Limited Partnership......................... 196 138 Provision for Loan Losses......................................... 495 1,036 Loss / (Gain) on Sale of Securities............................... (1) 8 Loss / (Gain) on Sales of Loans and Related Assets, and Provision for Losses on Loans Held for Sale................. (1,126) (125) Loss / (Gain) on Sale of Property and Equipment................... (188) --- Change in Assets and Liabilities: Interest Receivable and Other Assets............................ 1,829 914 Interest Payable and Other Liabilities.......................... (161) (250) --------- --------- Total Adjustments............................................ 67,150 4,436 --------- --------- Net Cash from Operating Activities............................ 74,518 11,495 --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES Change in Interest-bearing Balances with Banks...................... 1,196 4,386 Proceeds from Maturities of Securities Available-for-Sale........... 101,537 11,002 Proceeds from Sale of Securities Available-for-Sale................. --- 742 Purchase of Securities Available-for-Sale........................... (49,327) (4,717) Proceeds from Maturities of Securities Held-to-Maturity............. 57 3,248 Purchase of Securities Held-to-Maturity............................. (540) (3,067) Purchase of Loans................................................... --- (1,472) Proceeds from Sales of Loans........................................ 2,290 500 Loans Made to Customers, net of Payments Received................... 34,819 (37,908) Proceeds from Sale of Mortgage Servicing Rights..................... --- 481 Proceeds from Sales of Other Real Estate............................ 1,813 3,652 Property and Equipment Expenditures................................. (1,474) (1,277) Proceeds from the Sale of Property and Equipment ................... 346 --- Acquire Affiliates and Adjust to Conform Fiscal Years............... (150) (298) --------- --------- Net Cash from Investing Activities.............................. 90,567 (24,728) --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES Change in Deposits.................................................. (32,609) (9,588) Change in Short-term Borrowings........................................ (41,758) (29,156) Advances of Long-term Debt.......................................... --- 122,850 Repayments of Long-term Debt........................................ (17,531) (71,636) Issuance of Common Stock............................................ 17 79 Purchase / Retirement of Common Stock............................... (93) --- Employee Stock Purchase Plan........................................ (201) (40) Dividends Paid...................................................... (4,410) (3,813) --------- --------- Net Cash from Financing Activities.............................. (96,585) 8,696 --------- --------- Net Change in Cash and Cash Equivalents................................ 68,500 (4,537) Cash and Cash Equivalents at Beginning of Year...................... 28,447 29,578 --------- --------- Cash and Cash Equivalents at End of Period.......................... $ 96,947 $ 25,041 ========= ========= Non-cash Investing Activities--See Note 5 <FN> See accompanying notes to consolidated financial statements. </FN> </TABLE> - 6 -
GERMAN AMERICAN BANCORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS September 30, 2001 (unaudited) Note 1 -- Basis of Presentation German American Bancorp operates primarily in the banking industry. The accounting and reporting policies of German American Bancorp and its subsidiaries conform to Generally Accepted Accounting Principles and reporting followed by the banking industry. Certain information and footnote disclosures normally included in financial statements prepared in accordance with Generally Accepted Accounting Principles have been condensed or omitted. All adjustments which are, in the opinion of management, necessary for a fair presentation of the results for the periods reported have been included in the accompanying unaudited consolidated financial statements, and all such adjustments are of a normal recurring nature. It is suggested that these consolidated financial statements and notes be read in conjunction with the financial statements and notes thereto in German American Bancorp's December 31, 2000 Annual Report on Form 10-K. On October 1, 2000 the Company completed a merger with Holland Bancorp, Inc. Holland Bancorp was merged with and into the Company, with the simultaneous merger of Holland's sole bank subsidiary, The Holland National Bank, into the Company's subsidiary, The German American Bank. This merger was accounted for as a pooling of interests and prior period financial information has been restated accordingly. Comprehensive income includes both net income and other comprehensive income. Other comprehensive income includes the change in unrealized appreciation/depreciation on securities available-for-sale, net of tax. Note 2 -- Per Share Data <TABLE> <CAPTION> Earnings and dividends per share have been retroactively computed as though shares issued for stock dividends had been outstanding for all periods presented. The computation of Earnings per Share and Diluted Earnings per Share are provided as follows: Three months Ended September 30, 2001 2000 ------------ ------------ <S> <C> <C> Earnings per Share: Net Income $ 2,443,000 $ 2,422,000 Weighted Average Shares Outstanding 10,510,261 10,494,708 ------------ ------------ Earnings per Share: $ 0.23 $ 0.23 ============ ============ Diluted Earnings per Share: Net Income $ 2,443,000 $ 2,422,000 Weighted Average Shares Outstanding 10,510,261 10,494,708 Stock Options, Net 25,353 3 ------------ ------------ Diluted Weighted Average Shares Outstanding 10,535,614 10,494,711 ------------ ------------ Diluted Earnings per Share $ 0.23 $ 0.23 ============ ============ </TABLE> - 7 -
<TABLE> <CAPTION> Three months Ended September 30, 2001 2000 ------------ ------------ <S> <C> <C> Earnings per Share: Net Income $ 7,368,000 $ 7,059,000 Weighted Average Shares Outstanding 10,501,549 10,482,833 ------------ ------------ Earnings per Share: $ 0.70 $ 0.67 ============ ============ Diluted Earnings per Share: Net Income $ 7,368,000 $ 7,059,000 Weighted Average Shares Outstanding 10,501,549 10,482,833 Stock Options, Net 5,221 1,034 ------------ ------------ Diluted Weighted Average Shares Outstanding 10,506,770 10,483,867 ------------ ------------ Diluted Earnings per Share $ 0.70 $ 0.67 ============ ============ </TABLE> <TABLE> <CAPTION> Note 3 - Securities The amortized cost and estimated market values of Securities as of September 30, 2001 are as follows (dollars in thousands): Estimated Amortized Market Cost Value ------------ ------------- <S> <C> <C> Securities Available-for-Sale: U.S. Treasury Securities and Obligations of U.S. Government Corporations and Agencies $ 3,749 $ 3,763 Obligations of State and Political Subdivisions 41,202 42,408 Asset-/Mortgage-backed Securities 77,964 79,354 Equity Securities 16,814 17,021 ------------ ------------- Total $ 139,729 $ 142,546 ============ ============= Securities Held-to-Maturity: Obligations of State and Political Subdivisions $ 23,283 $ 24,033 Asset-/Mortgage-backed Securities --- --- ------------ ------------- Total $ 23,283 $ 24,033 ============ ============= </TABLE> <TABLE> <CAPTION> The amortized cost and estimated market values of Securities as of December 31, 2000 are as follows (dollars in thousands): Estimated Amortized Market Cost Value ------------ ------------- <S> <C> <C> Securities Available-for-Sale: U.S. Treasury Securities and Obligations of U.S. Government Corporations and Agencies $ 96,315 $ 95,102 Obligations of State and Political Subdivisions 26,057 26,669 Asset-/Mortgage-backed Securities 52,004 51,336 Equity Securities 12,077 12,081 ------------ ------------- Total $ 186,453 $ 185,188 ============ ============= Securities Held-to-Maturity: Obligations of State and Political Subdivisions $ 28,093 $ 28,590 Asset-/Mortgage-backed Securities 361 363 ----------- ------------- Total $ 28,454 $ 28,953 ============ ============= </TABLE> - 8 -
Note 4 - Segment Information The Company's operations include three primary segments: retail banking, mortgage banking, and insurance operations. The retail banking segment involves attracting deposits from the general public and using such funds to originate consumer, commercial, commercial real estate, and single-family residential mortgage loans, primarily in the affiliate bank's local markets. The mortgage banking segment involves the origination and purchase of single-family residential mortgage loans; the sale of such loans in the secondary market; and the servicing of mortgage loans for investors. The insurance segment offers a full range of personal and corporate property and casualty insurance products, primarily in the affiliate banks' local markets. The retail segment is comprised of community banks with 27 banking offices in Southwestern Indiana. Net interest income from loans and investments funded by deposits and borrowings is the primary revenue of the five affiliate community banks comprising the retail-banking segment. Primary revenues for the mortgage-banking segment are net interest income from a residential real estate loan portfolio funded primarily by wholesale sources. Other revenues are gains on sales of loans and gain on sales of and capitalization of mortgage servicing rights (MSR), and loan servicing income. The insurance segment consists of five full-service independent insurance agencies in Southwestern Indiana and the operations of German American Reinsurance Company, Ltd. (GARC). GARC's primary business is credit life and disability reinsurance for credit insurance products sold by the Company's five affiliate banks. Commissions derived from the sale of insurance products are the primary source of revenue for the insurance segment. The following segment financial information has been derived from the internal financial statements of German American Bancorp, which are used by management to monitor and manage the financial performance of the Company. The accounting policies of the three segments are the same as those of the Company. The evaluation process for segments does not include holding company income and expense. Holding company amounts are the primary differences between segment amounts and consolidated totals, and are reflected in the Other column below, along with minor amounts to eliminate transactions between segments. <TABLE> <CAPTION> Three Months Ended September 30, 2001 Retail Mortgage Consolidated Banking Banking Insurance Other Totals ------- -------- --------- ----- ------------ <S> <C> <C> <C> <C> <C> Net Interest Income $ 7,449 $ 252 $ 10 $ 60 $ 7,771 Gain on Sales of Loans and Related Assets, and Provision for Losses on Loans Held for Sale 206 197 --- --- 403 Servicing Income --- 172 --- (67) 105 Insurance Revenues 39 36 626 (30) 671 Noncash Items: Provision for Loan Losses 165 --- --- --- 165 MSR Amortization & Valuation --- 202 --- --- 202 Provision for Income Taxes 1,221 8 44 (499) 774 Segment Profit 2,768 27 60 (412) 2,443 Segment Assets 894,720 106,164 3,911 (11,590) 993,205 </TABLE> - 9 -
<TABLE> <CAPTION> Three Months Ended September 30, 2000 Retail Mortgage Consolidated Banking Banking Insurance Other Totals ------- -------- --------- ----- ------------ <S> <C> <C> <C> <C> <C> Net Interest Income $ 7,499 $ 877 $ 1 $ 52 $ 8,429 Gain on Sales of Loans and Related Assets, and Provision for Losses on Loans Held for Sale 78 8 --- --- 86 Servicing Income --- 91 --- (10) 81 Insurance Revenues 80 21 529 --- 630 Noncash Items: Provision for Loan Losses 233 138 --- --- 371 MSR Amortization & Valuation --- 41 --- --- 41 Provision for Income Taxes 1,161 90 51 (682) 620 Segment Profit 2,530 136 76 (320) 2,422 Segment Assets 892,694 173,939 2,753 3,754 1,073,140 Nine Months Ended September 30, 2001 Retail Mortgage Consolidated Banking Banking Insurance Other Totals ------- -------- --------- ----- ------------ Net Interest Income $ 22,707 $ 1,283 $ 28 $ 186 $ 24,204 Gain on Sales of Loans and Related Assets, and Provision for Losses on Loans Held for Sale 579 547 --- --- 1,126 Servicing Income --- 446 --- (157) 289 Insurance Revenues 151 125 2,265 (80) 2,461 Noncash Items: Provision for Loan Losses 495 --- --- --- 495 MSR Amortization & Valuation --- 433 --- --- 433 Provision for Income Taxes 3,633 207 206 (1,537) 2,509 Segment Profit 8,158 330 295 (1,415) 7,368 Segment Assets 894,720 106,164 3,911 (11,590) 993,205 Nine Months Ended September 30, 2000 Retail Mortgage Consolidated Banking Banking Insurance Other Totals ------- -------- --------- ----- ------------ Net Interest Income $ 22,596 $ 2,857 $ 7 $ 211 $ 25,671 Gain on Sales of Loans and Related Assets, and Provision for Losses on Loans Held for Sale 130 (5) --- --- 125 Servicing Income --- 313 --- (30) 283 Insurance Revenues 199 70 1,502 --- 1,771 Noncash Items: Provision for Loan Losses 628 408 --- --- 1,036 MSR Amortization & Valuation --- 140 --- --- 140 Provision for Income Taxes 3,509 319 132 (1,631) 2,329 Segment Profit 7,567 485 208 (1,201) 7,059 Segment Assets 892,694 173,939 2,753 3,754 1,073,140 </TABLE> - 10 -
Note 5 - New Accounting Pronouncements In 2001, new accounting guidance was issued that requires the purchase method of accounting for all business combinations initiated after June 30, 2001 and prohibits the use of the pooling-of-interests method of accounting after this time. Beginning in 2002, the new guidance revises the accounting for goodwill and intangible assets. Intangible assets with indefinite lives and goodwill will no longer be amortized, but will periodically be reviewed for impairment and written down if impaired. Additional disclosures about intangible assets and goodwill may be required. An initial goodwill impairment test is required during the first six months of 2002. Management is currently evaluating the financial impact of this new guidance. Beginning January 1, 2001 a new accounting standard, Financial Accounting Standards No. 133 (FAS 133), Accounting for Derivative Instruments and Hedging Activities, required all derivatives to be recorded at fair value. Unless designated as hedges, changes in these fair values will be recorded in the income statement. At January 1 and September 30, 2001 the Company's derivatives include forward commitments to sell mortgage loans and interest rate caps. The effect of adopting FAS 133 at January 1, 2001 was not material to the Company's financial statements. In conjunction with the adoption of FAS 133, the Company reclassified certain investment securities from the held-to-maturity portfolio to the available-for-sale portfolio. The reclassified securities had a carrying value of $5,637,000 and a market value of $5,784,000 resulting in a net increase in equity of $88,000 at the time of transfer. Note 6 - Stock Repurchase Plan On April 26, 2001 the Company announced that its Board of Directors approved a stock repurchase program for up to 525,000 of the outstanding Common Shares of the Company, representing nearly five percent of its outstanding shares. Shares may be purchased from time to time in the open market and in large block privately negotiated transactions. The Company is not obligated to purchase any shares under the program, and the program may be discontinued at any time before the maximum number of shares specified by the program are purchased. As of September 30, 2001, the Company had purchased 5,400 shares under the program. Note 7 - Subsequent Events On October 31, 2001 the Company declared a 5% stock dividend, payable on or before December 15, 2001 to shareholders of record on November 30, 2001. Since the stock dividend has not yet been issued, earnings and dividends per share amounts have not been restated for this dividend. The Board of Directors also declared a cash dividend of $0.14 per share payable on or before November 20, 2001 to shareholders of record on November 10, 2001. - 11 -
ITEM 2. GERMAN AMERICAN BANCORP MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS German American Bancorp ("the Company") is a multi-bank holding company based in Jasper, Indiana. The Company's Common Stock is traded on NASDAQ's National Market System under the symbol GABC. The Company operates five affiliate community banks with 27 banking offices and 5 full-service insurance agencies in the eight contiguous Southwestern Indiana counties of Daviess, Dubois, Gibson, Knox, Martin, Perry, Pike and Spencer. The banks' wide range of personal and corporate financial services include making commercial and consumer loans; marketing, originating, and servicing mortgage loans; providing trust, investment advisory and brokerage services; accepting deposits and providing safe deposit facilities. The Company's insurance activities include offering a full range of title, property, casualty, life and credit insurance products. This section presents an analysis of the consolidated financial condition of the Company as of September 30, 2001 and December 31, 2000 and the consolidated results of operations for the three-month and nine-month periods ended September 30, 2001 and 2000. This discussion should be read in conjunction with the consolidated financial statements and other financial data presented elsewhere herein and with the financial statements and other financial data, as well as the Management's Discussion and Analysis of Financial Condition and Results of Operations included in the Company's December 31, 2000 Annual Report on Form 10-K. RESULTS OF OPERATIONS Net Income: Net income increased $21,000 to $2,443,000 or $0.23 per share for the quarter ended September 30, 2001 compared to $2,422,000 or $0.23 per share for quarter ended September 30, 2000. Net income increased $309,000 to $7,368,000 or $0.70 per share for the nine months ended September 30, 2001 compared to $7,059,000 or $0.67 per share for nine months ended September 30, 2000. The increased earnings in both the three- and nine-month periods were primarily attributable to non-interest income growth from increased gains on sales of mortgage loans, increased insurance revenues and an increase in services charges on deposit accounts. <TABLE> <CAPTION> Net Interest Income: Net interest income is the Company's single largest source of earnings, and represents the difference between interest and fees realized on earning assets, less interest paid on deposits and borrowed funds. The following table summarizes German American Bancorp's net interest income (on a tax-equivalent basis, at an effective tax rate of 34%) for each of the periods presented herein (dollars in thousands): Three months Change from Ended September 30, Prior Period 2001 2000 Amount Percent ----------- ----------- --------- ------- <S> <C> <C> <C> <C> Interest Income (T/E) $ 17,843 $ 20,726 $ (2,883) -13.9% Interest Expense 9,549 11,839 (2,290) -19.3% ----------- ----------- -------- Net Interest Income (T/E) $ 8,294 $ 8,887 $ (593) -6.7% =========== =========== ======== </TABLE> Net interest income decreased $658,000 or 7.8% ($593,000 or 6.7% on a tax-equivalent basis) for the quarter ended September 30, 2001 compared with the third quarter of 2000. Net interest margin is tax-equivalent net interest income expressed as a percentage of average earning assets. For the third quarter of 2001 and 2000, the net interest margin was 3.55%. <TABLE> <CAPTION> Nine months Change from Ended September 30, Prior Period 2001 2000 Amount Percent ----------- ----------- --------- ------- <S> <C> <C> <C> <C> Interest Income (T/E) $ 56,248 $ 60,828 $ (4,580) -7.5% Interest Expense 30,536 33,714 (3,178) -9.4% ----------- ----------- --------- Net Interest Income (T/E) $ 25,712 $ 27,114 $ (1,402) -5.2% =========== =========== ========= </TABLE> - 12 -
Net interest income decreased $1,467,000 or 5.7% ($1,402,000 or 5.2% on a tax-equivalent basis) for the nine months ended September 30, 2001 compared with the first nine months of 2000. For the first nine months of 2001, the net interest margin was 3.62% compared to 3.63% for the comparable period of 2000. Late in the fourth quarter of 2000, the Company initiated a repositioning of its balance sheet within the mortgage banking component of the Company's operations to strengthen of the overall credit quality within the loan portfolio, to allow for a reduction of the Company's wholesale funding and to balance more evenly the level of interest rate risk between loans, deposits, and other funding vehicles. This repositioning primarily involved the reclassification of approximately $69.8 million of sub-prime, out-of-market mortgage loans as held-for-sale in December 2000 and the subsequent sale of these loans in February 2001. The Company no longer originates these types of loans. The decline in the Company's net interest income is largely attributable to a decline in the overall level of interest earning assets and an increase in federal funds sold and other short-term investments. The decline in interest earning assets is attributable to the call of $86.4 million of investment securities due to the declining interest rate environment during the first nine months of 2001 and the aforementioned sale of sub-prime mortgage loans. Proceeds from the called investment securities and sale of sub-prime residential mortgage loans were used to reduce short-term wholesale funding, including time deposits of $100,000 or more, brokered deposits and FHLB advances. In addition, a significant portion of these proceeds have been held in federal funds sold and other investments for use as collateral for borrowings and to reduce other short-term wholesale funds as these reach maturity during 2001. The federal funds sold and other short-term investments are typically lower yielding than the earning assets that were called and sold during 2001. A portion of these proceeds was used to reinvest in securities. Approximately $41.8 million and $49.9 million of securities were purchased during the three and nine months ended September 30, 2001. Alternative short-term investment yields have been insufficient to warrant fully reinvesting and extending the maturities of the funds held in federal funds sold and other short-term investments. Average loans outstanding (including loans held for sale) declined $75.7 million and $47.1 million during the three months and nine months ended September 30, 2001 compared with the same periods of the prior year. The sale of sub-prime residential mortgage loans previously discussed was the primary factor in the reduced level of average loans outstanding. Also contributing to the decline in average loans outstanding during the first nine months of 2001 has been the sale of a majority of the Company's residential loan production to the secondary market. While this has not improved the Company's net interest income, the increase in the level of loans sold has contributed to the Company's non-interest income growth. Provision For Loan Losses: The Company provides for loan losses through regular provisions to the allowance for loan losses. These provisions are made at levels considered necessary by management to absorb estimated losses in the loan portfolio. A detailed evaluation of the adequacy of this loan loss reserve is completed quarterly by management. The consolidated provision for loan losses was $165,000 and $495,000 for the three and nine months ended September 30, 2001 compared to $371,000 and $1,036,000 for the same periods of 2000. The lower level of provision during 2001 was primarily a result of the liquidation of the Company's sub-prime out-of-market residential mortgage loan portfolio. The provision for loan losses to be recorded in future periods will be adjusted based on the results of on-going evaluations of the adequacy of the allowance for loan losses. Net charge-offs were $295,000 or 0.17% and $1,067,000 or 0.20% annualized of average loans for the three and nine months ended September 30, 2001 compared to $522,000 or 0.27% and $1,092,000 or 0.19% annualized of average loans in the three and nine months ended September 30, 2000. A significant amount of the net charge-offs during the first quarter of 2001 and 2000 were related to the sub-prime residential real estate loans housed in the mortgage banking division. The decline in the level of net-charge-offs during the quarter ended September 30, 2001 compared with the same period of the prior year was attributable to a lower level of sub-prime charge-offs. Non-performing loans represented 0.41% of total loans at September 30, 2001 compared to 1.34% at December 31, 2000. The significant improvement is primarily related to the liquidation of substantially all of the Company's out-of-market sub-prime residential real estate portfolio. See discussion of "Financial Condition" for more information regarding nonperforming assets. - 13 -
Non-interest Income: Non-interest income for the quarter ended September 30, 2001 increased $423,000 or 22% compared with the quarter ended September 30, 2000. The increase resulted primarily from growth in Net Gains on Sales of Loans and Related Assets and in Service Charges on Deposit Accounts. Non-interest income for the nine months ended September 30, 2001 increased $1,991,000 or 37% compared with the nine months ended September 30, 2000. The increase resulted primarily from growth in Net Gains on Sales of Loans and Related Assets, Insurance Revenues, and Service Charges on Deposit Accounts. Service Charges on Deposit Accounts increased $120,000 or 21% and $286,000 or 18% for the three- and nine-month periods ended September 30, 2001 compared with the same periods of the 2000. A change in fee structure implemented during the third quarter of 2001 and a general increase in collections of fees were generally responsible for these increases. Insurance Revenues increased $690,000 or 39% for the nine months ended September 30, 2001 compared with the same periods during 2000. The increase was due to an overall growth in the property and casualty insurance operations of Doty Insurance Agency, Inc. In addition, Insurance Revenues increased $374,000 during the nine months ended September 30, 2001 compared with the prior year because of the initiation during 2000 of the Company's credit life and disability reinsurance operation through German American Reinsurance Company, Ltd. (GARC). No insurance revenues were realized by GARC until late 2000. Net Gains on Sales of Loans and Related Assets, and Provision for Market Losses on Loans Held for Sale are derived predominantly from the Company's mortgage banking division. The net gain increased $317,000 and $1,001,000 in the quarter and nine months ended September 30, 2001 compared with 2000. The increased gain on sales of loans resulted from an increased level of residential loan production and a corresponding increase in loan sales to the secondary markets. A lowering interest rate environment fueled these increases during the first nine months of 2001. Loan sales totaled $34.1 million and $93.1 million during the three and nine months ended September 30, 2001 (excluding the sub-prime sale) compared with $9.7 and $21.5 million in the same periods of 2000. Other non-interest income decreased $65,000 during the three months ended September 30, 2001 compared with 2000. The decline was due to impairment adjustments of $157,000 recognized during the period on mortgage servicing rights. The impairment adjustments were caused by the decline in market interest rates. Other non-interest income increased $102,000 during the nine months ended September 30, 2001 compared with the same period of the prior year. The increased income is primarily the result of a gain on the sale of a former branch office facility and an increase in title search and loan closing fees generated by the Company's title insurance operation. The Company sold a duplicative branch office facility acquired in a recent acquisition for a gain of $202,000 during the first quarter 2001. The branch operations were merged into an existing branch location. Title search and loan closing fees generated by the Company's title insurance operation increased $101,000 during the period. This increase was due to an increased level of loan production by the Company's affiliate banks. The gain from the branch office sale and the increased fee income from the title company's operations were partially offset by impairment adjustments of $290,000 recognized on mortgage servicing rights during the nine months ended September 30, 2001. No impairment adjustments on mortgage servicing rights were recognized in the three or nine months ended September 30, 2000. Non-interest Expense: Non-interest expenses decreased $204,000 or 3% for the three months ended September 30, 2001 as compared with same period of 2000. This decline was primarily attributable to a lower level of Professional Fees. Professional Fees expense declined $226,000 and $229,000 during the three months and nine months ended September 30, 2001 as compared with the same periods of the prior year. These declines were primarily attributable to a decline in professional fees associated with acquisition activities. - 14 -
Non-interest expenses increased $576,000 for the nine months ended September 30, 2001 compared to 2000. This increase was primarily attributable to an increase in Salaries and Employee Benefits. Salaries and Employee Benefits increased $507,000 or 5% during the nine months ended September 30, 2001 compared with the same period in 2000. Salaries and Employee Benefits comprised approximately 57% of total non-interest expense in the first half of 2001 and 56% in 2000. The increase in Salaries and Employee Benefits was primarily attributable to two factors. First, the Company transitioned to a pay-for-performance incentive plan in late 2000 and the first half of 2001 resulting in increased compensation expense. Second, employee medical insurance benefit costs increased 26% during the nine months ended September 30, 2001 compared with the same period in 2000. Professional Fees declined $229,000 and Furniture and Equipment Expense declined $123,000 during the nine months ended September 30, 2001 as compared with the same periods of the prior year. These declines were offset by increases in Data Processing Fees, Advertising and Promotions, and Other Operating Expenses. The Other Operating Expense category of non-interest expense increased $124,000 or 4% during the nine months ended September 30, 2001 compared with the same period of 2000. This increase was largely related to costs of building insurance claim reserves by GARC. No expenses associated with building these claim reserves were realized by GARC until late 2000. Income Taxes: The Company's effective income tax rate approximated 24% and 25% of pre-tax income during the three and nine months ended September 30, 2001 and 20% and 25% of pre-tax income during the same periods of 2000. The effective tax rates in all periods were lower than the blended statutory rate of 39.6%. The lower effective rates result primarily from the Company's tax-exempt investment income on securities and loans, and from income tax credits generated from investments in affordable housing projects. The significantly lower effective rate during the third quarter 2000 resulted from a tax law clarification during 2000 that allowed a portion of the Company's revenues to be apportioned outside the state of Indiana. The clarification resulted in a tax refund for the 1999 tax year during the third quarter 2000. FINANCIAL CONDITION Total assets at September 30, 2001 decreased $86.6 million to $993.2 million compared with $1.080 billion in total assets at December 31, 2000. Loans, net of unearned income and allowance for loan losses, decreased by $38.5 million during the nine months ended September 30, 2001. This decline was primarily isolated to the Company's residential loan portfolio. In the current interest rate environment, the Company has sold a majority of new residential loan production in the secondary market. Loans Held for Sale declined by $64.1 million primarily as a result of the sale of sub-prime residential mortgage loans that was completed in February 2001. Investment securities declined $47.8 million to $165.8 million at September 30, 2001 compared with $213.6 million at year-end. The decline was the result of the call of $86.4 million of investment securities during the first nine months of 2001. Federal Funds Sold and Other Short-term Investments have increased $71.5 million during the first nine months of 2001 as a result of the called securities and sale of sub-prime residential mortgage loans. A significant portion of these proceeds have been held in Federal Funds Sold and Other Short-term Investments for use as collateral for borrowings and to reduce other short-term wholesale funds as these reach maturity during 2001. Approximately $41.8 million and $49.9 million of securities were purchased during the three and nine months ended September 30, 2001. Alternative short-term investment yields have been insufficient to warrant fully reinvesting and extending the maturities of the funds held in federal funds sold and other short-term investments. Total deposits decreased by $32.6 million during the nine months ended September 30, 2001 with the majority of the decline in Time Deposits $100,000 or more and Brokered Deposits. These types of deposits have been reduced by $49.1 million since year-end while Interest-bearing demand, Savings, and Money Market Deposits have increased $23.1 million. FHLB Advances and Other Borrowings declined by $59.3 million during the nine months ended September 30, 2001. Proceeds from the called securities and sub-prime residential mortgage loan sale were used to reduce jumbo deposits and borrowings. - 15 -
Non-performing Assets: <TABLE> <CAPTION> The following is an analysis of the Company's non-performing assets at September 30, 2001 and December 31, 2000 (dollars in thousands): September 30, December 31, 2001 2000 ------------ ----------- <S> <C> <C> Non-accrual Loans $ 1,864 $ 8,014 Loans contractually past due 90 days or more 1,220 1,513 Renegotiated Loans --- --- ----------- -------- Total Non-performing Loans 3,084 9,527 ----------- -------- Other Real Estate 1,048 1,579 ----------- -------- Total Non-performing Assets $ 4,132 $ 11,106 =========== ======== Allowance for Loan Loss to Non-performing Loans 282.17% 97.34% Non-performing Loans to Total Loans 0.46% 1.34% </TABLE> The significant decline in non-performing loans was the result of the liquidation of substantially all of the mortgage banking division's sub-prime out-of-market residential real estate loan portfolio. Capital Resources: Shareholders' equity totaled $102.7 million at September 30, 2001 or 10.3% of total assets, an increase of $5.5 million from December 31, 2000. Federal banking regulations provide guidelines for determining the capital adequacy of bank holding companies and banks. These guidelines provide for a more narrow definition of core capital and assign a measure of risk to the various categories of assets. The Company is required to maintain minimum levels of capital in proportion to total risk-weighted assets and off-balance sheet exposures such as loan commitments and standby letters of credit. Tier 1, or core capital, consists of shareholders' equity less goodwill, core deposit intangibles, and certain deferred tax assets defined by bank regulations. Tier 2 capital currently consists of the amount of the allowance for loan losses which does not exceed a defined maximum allowance limit of 1.25 percent of gross risk adjusted assets. Total capital is the sum of Tier 1 and Tier 2 capital. The minimum requirements under these standards are generally at least a 4.0 percent leverage ratio, which is Tier 1 capital divided by defined "total assets"; 4.0 percent Tier 1 capital to risk-adjusted assets; and, an 8.0 percent total capital to risk-adjusted assets ratios. Under these guidelines, the Company, on a consolidated basis, and each of its affiliate banks individually, have capital ratios that substantially exceed the regulatory minimums. The Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA) requires federal regulatory agencies to define capital tiers. These are: well-capitalized, adequately-capitalized, under-capitalized, significantly under-capitalized, and critically under-capitalized. Under these regulations, a "well-capitalized" entity must achieve a Tier 1 Risk-based capital ratio of at least 6.0 percent; a total capital ratio of at least 10.0 percent; and, a leverage ratio of at least 5.0 percent, and not be under a capital directive order. At September 30, 2001 management is not under such a capital directive, nor is it aware of any current recommendations by banking regulatory authorities which, if they were to be implemented, would have or are reasonably likely to have, a material effect on the Company's liquidity, capital resources or operations. - 16 -
<TABLE> <CAPTION> The table below presents the Company's consolidated capital ratios under regulatory guidelines: To be Well Capitalized Under Prompt Minimum for Corrective Capital Action At At Adequacy Provisions September 30, December 31, Purposes (FDICIA) 2001 2000 ----------- ------------ ------------ ----------- <S> <C> <C> <C> <C> Leverage Ratio 4.00% 5.00% 9.87% 8.91% Tier 1 Capital to Risk-adjusted Assets 4.00% 6.00% 13.69% 13.13% Total Capital to Risk-adjusted Assets 8.00% 10.00% 14.91% 14.38% </TABLE> Liquidity: The Consolidated Statement of Cash Flows details the elements of change in the Company's cash and cash equivalents. During the first nine months of 2001, operating activities provided $74.5 million of available cash, which included net income of $7.4 million. Major cash outflows experienced during the nine months ended September 30, 2001 included $4.4 million in dividends, a $32.6 million decrease in deposits and $59.3 million in repayment of borrowings. The proceeds from the maturities and sales of securities exceeded the cash outflows from the purchases of securities by approximately $51.7 million. Total cash inflows for the period exceeded outflows by $68.5 million, leaving cash and cash equivalents of $96.9 million at September 30, 2001. Forward-looking Statements: The Company from time to time in its oral and written communications makes statements relating to its expectations regarding the future. These types of statements are considered "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements can include statements about adequacy of allowance for loan losses and the quality of the Company's loans and other assets; simulations of changes in interest rates; litigation results; dividend policy; estimated cost savings, plans and objectives for future operations; and expectations about performance and economic and market conditions and trends. They often can be identified by the use of words like "expect," "may," "could," "intend," "project," "estimate," "believe" or "anticipate." The Company may include forward-looking statements in filings with the Securities and Exchange Commission ("SEC"), such as this Form 10-Q, in other written materials, and in oral statements made by senior management to analysts, investors, representatives of the media, and others. It is intended that these forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the forward-looking statement is made. Readers are cautioned that, by their nature, forward-looking statements are based on assumptions and are subject to risks, uncertainties, and other factors. Actual results may differ materially from the expectations of the Company that are expressed or implied by any forward-looking statement. Factors that could cause the Company's actual results to vary materially from those expressed or implied by any forward-looking statements include the effects of competition, technological changes and legal and regulatory developments; acquisitions of other businesses by the Company and integration of such acquired businesses; changes in fiscal, monetary and tax policies; market, economic, operational, liquidity, credit and interest rate risks associated with the Company's business; inflation; competition in the financial services industry; changes in general economic conditions, either nationally or regionally, resulting in, among other things, credit quality deterioration; changes in the securities markets; and the continued availability of earnings and excess capital sufficient for the lawful and prudent declaration and payment of cash dividends. Investors should consider these risks, uncertainties, and other factors in addition to those mentioned by the Company in its Form 10-K report for the year ended December 31, 2000 and from time to time in the Company's other SEC reports when considering any forward-looking statement. - 17 -
Item 3. Quantitative and Qualitative Disclosures About Market Risk The Company's exposure to market risk is reviewed on a regular basis by the Asset/Liability Committees and Boards of Directors of the holding company and its affiliate banks. Primary market risks which impact the Company's operations are liquidity risk and interest rate risk. The liquidity of the parent company is dependent upon the receipt of dividends from its bank subsidiaries, which are subject to certain regulatory limitations. The affiliate banks' source of funding is predominately core deposits, maturities of securities, repayments of loan principal and interest, federal funds purchased, securities sold under agreements to repurchase and borrowings from the Federal Home Loan Bank. The Company monitors interest rate risk by the use of computer simulation modeling to estimate the potential impact on its net interest income under various interest rate scenarios, and by estimating its static interest rate sensitivity position. Another method by which the Company's interest rate risk position can be estimated is by computing estimated changes in its net portfolio value ("NPV"). This method estimates interest rate risk exposure from movements in interest rates by using interest rate sensitivity analysis to determine the change in the NPV of discounted cash flows from assets and liabilities. NPV represents the market value of portfolio equity and is equal to the estimated market value of assets minus the estimated market value of liabilities. Computations are based on a number of assumptions, including the relative levels of market interest rates and prepayments in mortgage loans and certain types of investments. These computations do not contemplate any actions management may undertake in response to changes in interest rates, and should not be relied upon as indicative of actual results. In addition, certain shortcomings are inherent in the method of computing NPV. Should interest rates remain or decrease below current levels, the proportion of adjustable rate loans could decrease in future periods due to refinancing activity. In the event of an interest rate change, prepayment levels would likely be different from those assumed in the table. Lastly, the ability of many borrowers to repay their adjustable rate debt may decline during a rising interest rate environment. The table below provides an assessment of the risk to NPV in the event of sudden and sustained 2% increase and decrease in prevailing interest rates (dollars in thousands). <TABLE> <CAPTION> Interest Rate Sensitivity as of September 30, 2001 Net Portfolio Value Net Portfolio as a % of Present Value Value of Assets Changes ---------------------- ----------------------- In rates $ Amount % Change NPV Ratio Change -------- -------- -------- --------- ------ <S> <C> <C> <C> <C> <C> +2% $ 90,785 (15.0)% 9.31% (128) b.p. Base 106,813 --- 10.60 --- -2% 104,186 (2.5) 10.45 (45) b.p. </TABLE> Item 3 includes forward-looking statements. See "Forward-looking Statements" included in Item 2 of this Report for a discussion of certain factors that could cause the Company's actual exposure to market risk to vary materially from that expressed or implied above. These factors include possible changes in economic conditions; interest rate fluctuations, competitive product and pricing pressures within the Company's markets; and equity and fixed income market fluctuations. Actual experience may also vary materially to the extent that the Company's assumptions described above prove to be inaccurate. - 18 -
PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) The following exhibits are filed herewith: 3.1 Restatement of Articles of Incorporation of the Registrant is incorporated by reference to Exhibit 3.01 to Registrant's Current Report on Form 8-K filed May 5, 2000. 3.2 Restated Bylaws of the Registrant as amended April 26, 2001 is incorporated by reference to Exhibit 3.2 to the Registrant's quarterly report on Form 10-Q for the quarter ended June 30, 2001. 4.1 Rights Agreement dated April 27, 2000 is incorporated by reference to Exhibit 4.01 to Registrant's Current Report on Form 8-K filed May 5, 2000. 4.2 No long-term debt instrument issued by the Registrant exceeds 10% of consolidated total assets. In accordance with paragraph 4 (iii) of Item 601(b) of Regulation S-K, the Registrant will furnish the Securities and Exchange Commission upon request copes of long-term debt instruments and related agreements. 4.3 Terms of Common Shares and Preferred Shares of German American Bancorp found in Restatement of Articles of Incorporation are incorporated by reference to Exhibit 3.01 to Registrant's Current Report on Form 8-K filed May 5, 2000. (b) Reports on Form 8-K There were no reports on Form 8-K filed during the period ended September 30, 2001. - 19 -
SIGNATURES 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 thereunto duly authorized. GERMAN AMERICAN BANCORP Date November 13, 2001 By /s/ Mark A. Schroeder ----------------- -------------------------------------------- Mark A. Schroeder President and CEO Date November 13, 2001 By /s/ Richard E. Trent ----------------- -------------------------------------------- Richard E. Trent Chief Financial Officer and Principal Accounting Officer - 20 -