German American Bancorp, Inc. · NASDAQ:GABC
German American Bancorp — Keefe Bruyette & Woods Community Bank Investor Conference 2020
33 slides from German American Bancorp's conference presentation, Jul 29, 2020
Slide 1: KBW Community Bank Investor Conference
German American Symbol: GABC July 28 – 30, 2020 Keefe Bruyette & Woods Community Bank Investor Conference
Slide 2: Presented By
Presented By 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 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 Indiana & Kentucky Community-focused Financial Services Organization • Banking, Insurance, Investments & Trust • $4.9 Billion Total Banking Assets • $1.6 Billion Investment and Trust Assets Under Management • $60 Million Annual Insurance Premiums • 825+ FTEs • 73 Banking Offices 4
Slide 5: COVID-19 Credit Risk Management
COVID-19 Credit Risk Management • Industry Segment Risk Profile • COVID-19 Related Loan Deferrals • Paycheck Protection Program • Strong Capital Structure 5
Slide 6: Industry Segment Profiles Affected by COVID-19
Industry Segment Profiles Affected by COVID-19 As of June 30, 2020 Industry Segment Number of Loans Outstanding % Of Total Loans (Dollars in Thousands) Balance Lodging/Hotels 51 $130,112 4.0% Student Housing 107 $94,226 2.9% Retail Shopping/ Strip Centers 61 $93,172 2.9% Restaurants 190 $50,724 1.6%
Slide 7: COVID-19 Related Loan Deferrals
COVID-19 Related Loan Deferrals As of June 30, 2020 Types of Loans Number of Loans Loan Balance % of Loan Category (Dollars in Thousands) (Excludes PPP Loans) Commercial & Industrial Loans 257 $54,300 10.8% Commercial Real Estate Loans 392 $224,664 15.3% Agricultural Loans 8 $1,175 0.3% Consumer Loa
Slide 8: SBA Payroll Protection Plan
SBA Payroll Protection Plan As of June 30, 2020 • 3,000 SBA payroll protection plan loans • $350 million total • $12.6 million potential fees (gross) 8
Slide 9: Strong Capital Structure
Strong Capital Structure Key Ratios as of June 30, 2020 TCE/ Tangible Assets 9.79% Total Risk-based 15.22% Tier 1 Risk-based 13.35% Leverage 9.97% 9
Slide 10: Diversified Economic Base: Indiana Employers
Diversified Economic Base Regional Education, Health Care Manufacturing & Logistics Life Sciences & Technology MAJOR INDIANA EMPLOYERS: Manufacturing & Logistics Energy Education Aisin U.S.A. MFG, Inc. Indiana University ALCOA Warrick Operations Indiana University Southeast Amazon Fulfillment Servic
Slide 11: Diversified Economic Base: Kentucky Employers
Diversified Economic Base Regional Education Health Care & Social Assistance Manufacturing & Logistics MAJOR KENTUCKY EMPLOYERS: Retail & Government Education University of Kentucky Manufacturing & Logistics Retail Western Kentucky University Bowling Green Metal Forming Amazon Daviess County Public
Slide 12: Capitalize upon Market Strength & Growth: Indiana
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* $ 5,300,573 34% #1 31 Evansville/Newburgh $ 4,830,382 10% #3 8 Bloomington $ 2,474,524 9% #4 3 Columbus $ 1,2
Slide 13: Capitalize upon Market Strength & Growth: Kentucky
Capitalize upon Market Strength & Growth Kentucky Small MSA Market Expansion Total Market GABC Deposit Market Share # of Market Deposits Market Share* Position* Branches* Owensboro $ 2,719,563 5% #6 3 Bowling Green $ 2,679,918 10% #4 6 Lexington $ 7,899,671 .2% #25 2 Total Kentucky $ 13,299,152 Grow
Slide 14: History of Superior Financial Performance
History of Superior Financial Performance Ten Years of Consecutive Record Earnings Performance Double-Digit Return on Equity for Past 15 Consecutive Fiscal Years KBW/Stifel 2010 thru 2020 Bank Honor Roll Recipient Bank Director Magazine - Bank Performance Scorecard Top 15 National Ranking for 2016 –
Slide 15: Financial Trends
TOT eee Financial ‘Trends
Slide 16: Total Assets and Annualized Return on Assets
Total Assets Annualized Return on Assets $6,000 $5,000 $4,851 $4,398 $3,929 $4,000 $3,144 $2,956 $3,000 $2,374 1.43% $2,000 1.33% 1.35% 1.38% 1.24% 1.18% $1,000 $- 12/31/15 12/31/16 12/31/17 12/31/18 12/31/19 06/30/20 (Dollars in Millions) 16
Slide 17: Total Loans, Net of Unearned Income
Total Loans, Net of Unearned Income Commercial & Agricultural Loans as % of Total Loans $3,500 $3,266 $3,250 $3,077 $3,000 $2,728 $2,750 $2,500 $2,250 $2,142 $1,990 $2,000 $1,750 $1,564 $1,500 $1,250 82% 81% 81% 82% $1,000 78% 80% $750 $500 $250 $- 12/31/15 12/31/16 12/31/17 12/31/18 12/31/19 06/30/
Slide 18: Loan Composition as of June 30, 2020
Loan Composition as of June 30, 2020 Total Loans $3,266.3 million Residential Mortgage Loans, $ 287.9 million, 9% Construction & Development Loans, Home Equity Loans, $ 194.3 million, 6% $ 217.1 million, 6% Agricultural Loans, $ 383.4 million, 12% Consumer Loans, $ 59.3 million, 2% Commercial Real E
Slide 19: Non-Performing Assets to Total Assets
Non-Performing Assets to Total Assets 2.50% 2.00% 1.50% 1.00% 0.84% 0.76% 0.63% 0.59% 0.56% 0.49%* 0.50% 0.15% 0.38% 0.40% 0.14% 0.34% 0.33% 0.00% 12/31/15 12/31/16 12/31/17 12/31/18 12/31/19 06/30/20 GABC Peer Group *Peer Group Information as of 3/31/20 19
Slide 20: Total Deposits
Total Deposits Non-Maturity Deposit Accounts as % of Total Deposits $3,979 $4,000 $3,500 $3,430 $3,073 $3,000 $2,484 $2,500 $2,350 $2,000 $1,826 86% 84% 84% 83% 82% $1,500 81% $1,000 $500 $- 12/31/15 12/31/16 12/31/17 12/31/18 12/31/19 06/30/20 (Dollars in Millions) 20
Slide 21: Deposit Composition as of June 30, 2020
Deposit Composition as of June 30, 2020 Total Deposits $3,979.4 million Non-Interest Bearing Interest Bearing Demand, Demand, $1,139.9 million, Savings & Money Market, 29% $2,267.1 million, 57% Year Cost of Cost of Deposits Funds 2015 0.22% 0.28% 2016 0.23% 0.32% 2017 0.30% 0.40% 2018 0.50% 0.61% 20
Slide 22: Total Shareholders' Equity and Return on Tangible Equity
Total Shareholders’ Equity Annualized Return on Tangible Equity $650 $595 $600 $574 $550 $500 $459 $450 $400 $365 $350 $330 $300 $252 $250 14.98% 13.82% 14.82% 13.74% 13.02% 11.91% $200 $150 $100 $50 $- 12/31/15 12/31/16 12/31/17 12/31/18 12/31/19 06/30/20 (Dollars in Millions) 22
Slide 23: Net Interest Income and Net Interest Margin
Net Interest Income Net Interest Margin (Tax-Equivalent) $160,000 $145,225 $140,000 $120,000 $114,610 $99,909 $100,000 $94,904 3.92% $80,000 $75,552 $74,715 $67,232 3.75% 3.76% 3.75% $60,000 3.70% 3.86% $40,000 3.66% $20,000 $- 12/31/15 12/31/16 12/31/17 12/31/18 12/31/19 6/30/19 6/30/20 YTD YTD (Do
Slide 24: Provision for Credit Losses and Net Charge-offs
Provision for Credit Losses Net Charge-off to Average Loans $12,000 $11,050 $11,000 $10,000 $9,000 $8,000 $7,000 $6,000 $5,325 $5,000 $4,000 $3,000 $2,070 $2,000 $1,750 $- $1,200 0.17% $925 $1,000 0.08% 0.03% 0.04% 0.04% 0.04% 0.03% $- 12/31/15 12/31/16 12/31/17 12/31/18 12/31/19 6/30/19 6/30/20 YTD
Slide 25: Non-Interest Income
Non-Interest Income Non-Interest Income as % of Total Revenue $50,000 $45,501 $45,000 $40,000 $37,070 $35,000 $32,013 $31,854 $30,000 $27,444 $26,504 $25,000 $22,167 26% 26% 24% 24% $20,000 23% 24% 24% $15,000 $10,000 $5,000 $- 12/31/15 12/31/16 12/31/17 12/31/18 12/31/19 6/30/19 6/30/20 YTD YTD (Do
Slide 26: Non-Interest Expense and Efficiency Ratio
Non-Interest Expense Efficiency Ratio $120,000 $114,162 $100,000 $93,553 $80,000 $76,587 $77,803 $61,326 $58,416 $60,000 60.6% $52,377 59.0% 58.3% 57.6% 57.7% $40,000 56.8% 56.9% $20,000 $- 12/31/15 12/31/16 12/31/17 12/31/18 12/31/19 6/30/19 6/30/20 YTD YTD (Dollars in Thousands) 26
Slide 27: Net Income & Earnings Per Share
Net Income & Earnings Per Share Earnings Per Share* $59,222 $60,000 $50,000 $46,529 $40,676 $40,000 $35,184 $30,064 $30,338 $30,000 $2.29 $26,727 $1.99 $1.77 $1.57 $20,000 $1.51 $1.21 $1.01 $10,000 $- 12/31/15 12/31/16 12/31/17 12/31/18 12/31/19 6/30/19 6/30/20 YTD YTD (Dollars in Thousands, Except
Slide 28: Why Invest in GABC?
TOT eee Why Invest in GABC?
Slide 29: Why Invest in GABC? Earnings Per Share Growth
Why Invest in GABC? * GABC Earnings Per Share Growth $2.29 $1.99 $1.77 $1.51 $1.57 $1.43 $1.27 $1.32 $1.07 $0.81 As of 12/31 for years shown *Earnings Per Share adjusted for 3-for-2 stock split completed in 2017 29
Slide 30: Why Invest in GABC? Tangible Book Value Per Share
Why Invest in GABC? * GABC Tangible Book Value Per Share $16.49 $13.81 $13.45 $11.94 $11.57 $10.40 $8.62 $8.92 $7.64 $6.55 As of 12/31 for years shown *Tangible Book Value Per Share adjusted for 3-for-2 stock split completed in 2017 30
Slide 31: Why Invest in GABC? Stock Price Appreciation
Why Invest in GABC? * GABC Stock Price Appreciation $35.07 $35.33 $35.62 $27.77 $22.21 $20.35 $18.95 $14.48 $12.28 $12.13 As of 12/31 for years shown *Stock Price adjusted for 3-for-2 stock split completed in 2017 31
Slide 32: Why Invest in GABC?
Why Invest in GABC? • Proven Executive Management Team • Track Record of Consistent Top Quartile Financial Performance • Experienced in Operating Plan Execution and M & A Transitions • Potential Growth within New Market Areas – Small MSA Focus • Existing Platform for Operating Efficiency • Infrastru
Slide 33: German American Bancorp, Inc.
German American Bancorp, Inc. 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 33
German American Bancorp — Keefe Bruyette & Woods Community Bank Investor Conference 2020 on 6ix