German American Bancorp, Inc. · NASDAQ:GABC
German American Bancorp — Sandler O'Neill East Coast Financial Services Conference 2018
30 slides from German American Bancorp's conference presentation, Nov 6, 2018
Slide 1: German American Sandler O'Neill East Coast Financial Services Conference
German American Symbol: GABC November 6 - 7, 2018 Sandler O’Neill East Coast Financial Services Conference
Slide 2: Presented By
Presented By 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 2
Slide 3: Cautionary Note Regarding Forward-Looking Statements
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 “fo
Slide 4: Who We Are
Who We Are Southern Indiana Community- focused Financial Services Organization • Banking, Insurance, Investments & Trust • $4.0 Billion Total Banking Assets • $1.5 Billion Investment and Trust Assets Under Management • $60 Million Annual Insurance Premiums • 750+ FTEs • 65 Branch Offices 4
Slide 5: Diversified Economic Base
Diversified Economic Base Regional Education & Health Care Life Sciences & Technology Agriculture, Manufacturing & Logistics MAJOR INDIANA EMPLOYERS: Manufacturing & Logistics Education Aisin U.S.A. MFG, Inc. Indiana University ALCOA Warrick Operations Life Sciences & Technology Indiana University S
Slide 6: Indiana
Indiana Non-Seasonally Adjusted Unemployment Rate County Unemployment Rates ss Lover Than US. Rate Non-Seasonally Adjusted source: ow0,Locai area Unemployment Statistics = higher Thai Us: Rabe September 2018 Indiana Non-Seasonally Adjusted Rate 3.036 Indiana Seasonally Agjusted Rate 3.5% US Non-Seas
Slide 7: Kentucky
Kentucky County Unemployment Rates Non-Seasonally Adjusted Non-Seasor ly Adjusted Unemployment Rat Source: Workforce Intelligence Branch, Kentucky Center for Education and Workforce [I 3.0% -3.0% , Kentucky Education and Workforce Development Cabinet en 4.8% -5.0% Statist [EM 6.0% - 11.7% September
Slide 8: Capitalize upon Market Strength & Growth: Indiana Small MSA Market Expansion
Capitalize upon Market Strength & Growth Indiana Small MSA Market Expansion Total Market GABC Deposit Market Share # of Market Deposits Market Share*** Position*** Branches Heritage Markets* $ 5,154,552 33% #1 31 Evansville/Newburgh $ 4,281,629 12% #3 8 Bloomington $ 2,480,309 8% #5 3 Columbus $ 1,2
Slide 9: Capitalize upon Market Strength & Growth: Kentucky Small MSA Market Expansion
Capitalize upon Market Strength & Growth Kentucky Small MSA Market Expansion Total Market GABC Deposit Market Share # of Market Deposits Market Share* Position* Branches* Owensboro $ 2,935,148 6% #6 2 Bowling Green $ 2,541,017 4% #9 3 Lexington $ 7,403,387 .5% #20 2 Total Kentucky $ 12,879,552 Growt
Slide 10: Capitalize upon Market Strength & Growth: Heritage Markets
Capitalize upon Market Strength & Growth *Heritage Markets 2018 2008** 2018 # of (millions) Deposits Share Deposits Share Increase Offices 1 German American $ 1,679 32.6% $ 1,143 26.6% 46.9% 31 2 Old National Bank $ 1,066 20.7% $ 1,283 29.8% - 16.9% 14 3 Fifth Third Bank $ 456 8.9% $ 481 11.2% -5.2%
Slide 11: Capitalize upon Market Strength & Growth: Evansville/Newburgh Markets
Capitalize upon Market Strength & Growth Evansville/Newburgh Markets 2018* 2008** 2018 # of (millions) Deposits Share Deposits Share Increase Offices 1 Old National Bank $ 1,689 39.5% $ 1,960 51.4% -13.8% 14 2 Fifth Third Bank $ 1,256 29.3% $ 1,053 27.6% 19.3% 12 3 German American $ 498 11.6% $ 312
Slide 12: History of Superior Financial Performance
History of Superior Financial Performance Eight Years of Consecutive Record Earnings Performance Double-Digit Return on Equity for Past 13 Consecutive Fiscal Years Bank Director Magazine - Bank Performance Scorecard • Top 20 National Ranking for Past 4 Years (2015 – 2018) for $1 - $5 billion Publicl
Slide 13: Financial Trends
Financial Trends op at | eee sa!
Slide 14: Total Assets and Annualized Return on Assets
Total Assets Annualized Return on Assets $3,500 $3,364 $3,144 $2,956 $3,000 $2,500 $2,374 $2,164 $2,237 $2,000 $1,500 1.47% 1.33% 1.35% 1.25% 1.31% 1.24% $1,000 $500 $- 12/31/13 12/31/14 12/31/15 12/31/16 12/31/17 09/30/18 (Dollars in Millions) 14
Slide 15: Total Loans, Net of Unearned Income
Total Loans, Net of Unearned Income Commercial & Agricultural Loans as % of Total Loans $2,500 $2,337 $2,250 $2,142 $1,990 $2,000 $1,750 $1,564 $1,448 $1,500 $1,382 $1,250 $1,000 $750 81% 81% 82% 81% 81% 80% $500 $250 $- 12/31/13 12/31/14 12/31/15 12/31/16 12/31/17 09/30/18 (Dollars in Millions) 15
Slide 16: Loan Portfolio Composition
Loan Portfolio Composition As of September 30, 2018 Total Loans $2,336.6 million Residential Mortgage Loans, $ 220.6 million, 9% Construction & Development Loans, $ 121.8 million, 5% Home Equity Loans, Agricultural Loans, $ 175.0 million, 8% $ 358.3 million, 15% Consumer Loans, $ 54.0 million, 2% Mu
Slide 17: Non-Performing Assets to Total Assets
Non-Performing Assets to Total Assets 2.50% 2.00% 1.45% 1.50% 1.04% 1.00% 0.84% 0.76% 0.48% 0.45%* 0.50% 0.44% 0.29% 0.38% 0.15% 0.14% 0.26% 0.00% 12/31/13 12/31/14 12/31/15 12/31/16 12/31/17 09/30/18 GABC Peer Group * Peer Group Information as of 6/30/18 17
Slide 18: Total Deposits
Total Deposits Non-Maturity Deposit Accounts as % of Total Deposits $3,000 $2,641 $2,484 $2,500 $2,350 $2,000 $1,812 $1,780 $1,826 $1,500 85% 83% 84% 84% 81% 81% $1,000 $500 $- 12/31/13 12/31/14 12/31/15 12/31/16 12/31/17 09/30/18 (Dollars in Millions) 18
Slide 19: Total Deposit Composition
Total Deposit Composition as of September 30, 2018 Total Deposits $2,640.8 million Non-Interest Bearing Demand, $634.4 million, 24% Interest Bearing Demand, Savings & Money Market, $1,605.8 million, 61% Cost of Funds 2013 0.37% 2014 0.30% 2015 0.28% Time Deposits, $400.6 million, 15% 2016 0.32% 2017
Slide 20: Total Shareholders' Equity and Annualized Return on Equity
Total Shareholders’ Equity Annualized Return on Equity $400 $376 $365 $350 $330 $300 $252 $250 $229 $200 $200 $150 13.40% 13.21% 12.88% 12.47% 10.94% 11.59% $100 $50 $- 12/31/13 12/31/14 12/31/15 12/31/16 12/31/17 09/30/18 (Dollars in Millions) 20
Slide 21: Net Interest Income and Net Interest Margin
Net Interest Income (Tax Equivalent) Net Interest Margin $120,000 $105,057 $99,470 $100,000 $83,643 $79,072 $78,306 $80,000 $76,991 $70,319 $60,000 3.76% 3.75% 3.76% 3.78% 3.70% 3.67% $40,000 3.72% $20,000 $- 12/31/13 12/31/14 12/31/15 12/31/16 12/31/17 09/30/17 09/30/18 YTD YTD (Dollars in Thousand
Slide 22: Non-Interest Income
Non-Interest Income Non-Interest Income as % of Total Revenue $35,000 $32,013 $31,854 $30,000 $27,444 $27,337 $25,000 $23,615 $23,937 $24,260 $20,000 26% $15,000 25% 25% 24% 24% 24% 23% $10,000 $5,000 $- 12/31/13 12/31/14 12/31/15 12/31/16 12/31/17 09/30/17 09/30/18 YTD YTD (Dollars in Thousands) 22
Slide 23: Non-Interest Expense and Efficiency Ratio
Non-Interest Expense Efficiency Ratio $90,000 $80,000 $76,587 $77,803 $70,000 $63,739 $61,326 $57,713 $57,803 $60,000 $54,905 $50,000 $40,000 58.5% 58.3% 57.6% $30,000 57.2% 56.8% 57.4% $20,000 56.4% $10,000 $- 12/31/13 12/31/14 12/31/15 12/31/16 12/31/17 09/30/17 09/30/18 YTD YTD (Dollars in Thousa
Slide 24: Net Income & Earnings Per Share
Net Income & Earnings Per Share Earnings Per Share* $45,000 $40,676 $40,000 $35,184 $35,549 $35,000 $30,064 $30,000 $28,344 $29,055 $25,413 $25,000 $20,000 $1.77 $1.57 $1.55 $15,000 $1.43 $1.51 $1.32 $1.27 $10,000 $5,000 $- 12/31/13 12/31/14 12/31/15 12/31/16 12/31/17 09/30/17 09/30/18 YTD YTD (Doll
Slide 25: Why Invest in GABC?
Why Invest in GABC? op at Eg eS ake oa
Slide 26: Why Invest in GABC? Earnings Per Share Growth
Why Invest in GABC? * GABC Earnings Per Share Growth $1.77 $1.51 $1.57 $1.43 $1.27 $1.32 $1.07 $0.81 $0.77 $0.73 As of 12/31 for years shown *Earnings Per Share adjusted for 3-for-2 stock split completed in 2017 26
Slide 27: Why Invest in GABC? Tangible Book Value Per Share
Why Invest in GABC? GABC Tangible Book Value Per Share * $13.45 $11.94 $11.57 $10.40 $8.92 $8.62 $7.64 As of 12/31 for years shown *Tangible Book Value Per Share adjusted for 3-for-2 stock split completed in 2017 27
Slide 28: Why Invest in GABC? Stock Price Appreciation
Why Invest in GABC? * GABC Stock Price Appreciation $35.07 $35.33 $22.21 $20.35 $18.95 $14.48 $12.13 As of 12/31 for years shown *Stock Price adjusted for 3-for-2 stock split completed in 2017 28
Slide 29: Why Invest in GABC?
Why Invest in GABC? Increasing long-term institutional ownership • 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
Slide 30: Mark A. Schroeder and Bradley M. Rust contact details
Mark A. Schroeder, Chairman and CEO (812) 482-0701 mark.schroeder@germanamerican.com Bradley M. Rust, EVP and CFO (812) 482-0718 brad.rust@germanamerican.com 30
German American Bancorp — Sandler O'Neill East Coast Financial Services Conference 2018 on 6ix