German American Bancorp, Inc. · NASDAQ:GABC
German American Bancorp — KBW Winter Financial Services Conference 2023
27 slides from German American Bancorp's conference presentation, Feb 15, 2023
Slide 1: German American KBW Winter Financial Services Conference
German American Symbol: GABC February 15, 2023 KBW Winter Financial Services Conference
Slide 2: Presented By
Presented By 2 D. Neil Dauby, President and Chief Executive Officer (812) 482-0707 neil.dauby@germanamerican.com Bradley M. Rust, Sr. EVP, COO and CFO (812) 482-0718 brad.rust@germanamerican.com
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 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
Slide 5: History of Superior Financial Performance
H is to ry o f S u p e ri o r F in a n ci a l P e rf o rm a n ce Eleven Consecutive Years of Increased Dividends Twelve of the past Thirteen Years of Improved Earnings Performance Double-Digit Return on Equity for 18 Consecutive Fiscal Years KBW/Stifel 2010 thru 2022 Bank Honor Roll Recipien
Slide 6: Financial Trends
FINANCIAL TRENDS 6
Slide 7: Total Assets and Return on Average Assets
$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% * 7 * Based on Adjusted Net-Income, which is a non-GAAP financial measur
Slide 8: Total Loans, Net of Unearned Income
$2,728 $3,077 $3,088 $3,004 $3,785 78% 80% 82% 81% 81% $- $250 $500 $750 $1,000 $1,250 $1,500 $1,750 $2,000 $2,250 $2,500 $2,750 $3,000 $3,250 $3,500 $3,750 $4,000 12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 (Dollars in Millions) Total Loans, Net of Unearned Income Commercial & Agricultural Loans a
Slide 9: Loan Portfolio Composition
Total Loans $3,784.9 million Loan Portfolio Composition as of December 31, 2022 9 Construction & Development Loans, $363.9 million, 10% Agricultural Loans, $425.2 million, 11% Commercial & Industrial Loans, $622.8 million, 16% Commercial Real Estate Owner Occupied, $463.8 million, 12% Commercial Rea
Slide 10: Non-Performing Assets to Total Assets
0.34% 0.33% 0.44% 0.26% 0.23% 0.45% 0.45% 0.52% 0.34% 0.29% * 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 Non-Performing Assets to Total Assets GABC Peer Group 10 *Peer Group (St. Louis Federal Reserve District BHC with Total Assets between $3 and $10 billion) Da
Slide 11: Total Deposits
$3,073 $3,430 $4,107 $4,744 $5,350 81% 82% 88% 93% 92% $(500) $500 $1,500 $2,500 $3,500 $4,500 $5,500 $6,500 12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 (Dollars in Millions) Total Deposits Non-Maturity Deposit Accounts as % of Total Deposits 11
Slide 12: Deposit Composition and Cost of Funds
Non-Interest Bearing Demand, $ 1,691.8 million, 32% Interest Bearing Demand, Savings & Money Market, $ 3,229.8 million, 60% Time Deposits, $ 428.5 million, 8% Deposit Composition as of December 31, 2022 Total Deposits $5,350.1 million 12 Year Cost of Deposits Cost of Funds 2018 0.50% 0.61% 2019 0.72
Slide 13: Shareholders' Equity and Return on Average Tangible Equity
$459 $574 $625 $668 $558 14.82% 14.98% 13.46% 16.38% 19.51% $- $50 $100 $150 $200 $250 $300 $350 $400 $450 $500 $550 $600 $650 $700 $750 12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 (Dollars in Millions) Total Shareholders’ Equity Return on Average Tangible Equity 13 *Based on Adjusted Net-Income, w
Slide 14: Net Interest Income and Net Interest Margin
$114,610 $145,225 $155,243 $160,830 $200,584 3.75% 3.92% 3.63% 3.31% 3.45% 3.00% 3.50% 4.00% 4.50% 5.00% 5.50% $- $50,000 $100,000 $150,000 $200,000 $250,000 12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 (Dollars in Thousands) Net Interest Income Net Interest Margin (Tax-Equivalent) 14
Slide 15: Provision for Credit Losses and Net Charge-offs
$2,070 $5,325 $17,550 $(6,500) $6,350 $50 0.08% 0.17% 0.08% 0.11% 0.06% $(8,000) $(6,000) $(4,000) $(2,000) $- $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 $18,000 $20,000 12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 12/31/22 (Dollars in Thousands) Provision for Credit Losses Net Char
Slide 16: Non-Interest Income
$37,070 $45,501 $54,474 $59,462 $59,133 24% 24% 26% 27% 23% 10% 20% 30% 40% 50% 60% 70% $- $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 (Dollars in Thousands) Non-Interest Income Non-Interest Income as % of Total Revenue 16
Slide 17: Non-Interest Income Composition
17 Wealth Management Fees, $10.1, 17% Service Charges on Deposit Accounts, $11.5, 19% Insurance Revenues, $10.0, 17% Interchange Fee Income, $15.8, 27% Other Operating Income, $7.3, 12% Net Gains on Sales of Loans, $3.8, 7% Net Gains on Sales of Securities, $0.6, 1% Non-Interest Income as of Decembe
Slide 18: Non-Interest Expense and Efficiency Ratio
$93,553 $114,162 $117,123 $124,007 $154,191 $141,868 60.6% 59.0% 55.0% 55.1% 57.9% 53.3% 50.0% 55.0% 60.0% 65.0% 70.0% 75.0% 80.0% $- $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 $140,000 $160,000 $180,000 12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 12/31/22 (Dollars in Thousands) Non-Interest
Slide 19: Net Income and Earnings Per Share
$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
Slide 20: Completed M&A - Citizens Union Bank
Expands German American’s market share position in the attractive Louisville, Kentucky MSA • Enhanced market share to a top-10 overall market share position in a major metro market • Increased German American’s deposit market share rank to top 5 of banks with less than $20 billion in assets (1) • P
Slide 21: Why Invest in GABC?
WHY INVEST IN GABC? 21
Slide 22: GABC Earnings Per Share Growth
22 Why Invest in GABC? $1.07 $1.27 $1.32 $1.43 $1.51 $1.57 $1.77 $1.99 $2.29 $2.34 $3.17 $2.78 $3.26 GABC Earnings Per Share Growth * As of 12/31 for years shown *Earnings Per Share adjusted for 3-for-2 stock split completed in 2017 ** (As Adjusted) ** Adjusted Earnings per Share is a non-GAAP finan
Slide 23: GABC Dividends Per Share Growth
23 $0.40 $0.43 $0.45 $0.48 $0.52 $0.60 $0.68 $0.76 $0.84 $0.92 GABC Dividends Per Share Growth Why Invest in GABC? As of 12/31 for years shown * *Dividends per share adjusted for 3-for-2 stock split completed in 2017
Slide 24: Why Invest in GABC
Why Invest in GABC 24 • Proven Executive Management Team • Track Record of Consistent Top Quartile Financial Performance • Experienced in Operating Plan Execution and M & A Transitions • Organic Growth Opportunities within New Market Areas – Small MSA and Large Major Metro • Existing Platform for Co
Slide 25: Use of Non-GAAP Measures
USE OF NON-GAAP MEASURES 25 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
Slide 26: Non-GAAP Reconciliation
USE OF NON-GAAP MEASURES 26 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 Befo
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