German American Bancorp, Inc. · NASDAQ:GABC
German American Bancorp — KBW 7th Annual Community Bank Investor Conference 2006
30 slides from German American Bancorp's conference presentation, Aug 1, 2006
Slide 1: German American Bancorp, Inc. - KBW Annual Community Bank Investor Conference
GERMAN AMERICAN BANCORP, INC. Symbol: GABC KBW 7* Annual Community Bank Investor Conference August 2, 2006
Slide 2: Mark A. Schroeder and Bradley M. Rust
Mark A. Schroeder President and CEO Bradley M. Rust Senior Vice President and CFO = = : ty V4 G rd KF “0
Slide 3: Forward-looking statements
When used inthis presentation and our oral statements, the words or phrases “believe,” “will ikely result,” ‘are expected to,” “will continue,” “is anticipated,” “estimate,” “project,” “plans,” or similar expressions are intended to identity “forward-looking statements" within the meaning of the Pri
Slide 4: Super Community Financial Services Organization
* Super Community Financial Services Organization headquartered in Jasper, Indiana $1.025 Billion Assets - 29 Banking Offices - 6 Financial Advisory = GABC Community-Based A Ke Offices Financial pees Community Bani A Siinorty Sonerip - 5 Insurance Agenc: Tawar Offices uae [Bl Planned market Expansio
Slide 5: GABC Community-Based Financial Network map
Monroe County om Bloomington cnox County _/ Daviess Knox county J Qeunty | County fe Princeton ee Gibson County @ GABC Community-Based Financial Network A\ Community bank Minority Ownership [Bi Planned Market Expansion
Slide 6: Successfully transitioned the Company
* Successfully transitioned the Company from a traditional community banking organization with a thrift-like balance sheet to commercially-focused, community-based financial service organization offering a full array of products and services. * Building of premiere Executive Management Team... Right
Slide 7: Local market Presidents
+ Local market Presidents * Decentralized decision-making ¢ Franchise approach to product, promotion, and branding * Specialized product offerings (banking, insurance, investments) * Optimization of technology utilization ¢ Standardization and centralization of back-office operations
Slide 8: Bradley M. Rust
Bradley M. Rust Senior Vice President and CFO
Slide 9: Financial Trends
Slide 10: Total assets
$1,100 $1,050 $1,000 $950 $900 $850 $957 $942 $946 $926 12/31/00 1231101 12131102 12131103 12/31/04 12/31/05 6/30/06 (Dollars in Milions)
Slide 11: Total loans
$611 $612 H 1213100 12/31/01 12/34/02 12/31/03 12/31/04 12/31/05 6/30/06 (Dollars in Millions)
Slide 12: Commercial loans as % of total loans
@ = COMMERCIAL LOANS AS % OF TOTAL LOANS $475 3462 $450 $425 $400 $375 $350 $325 $300 $275 $250 $225 | gy C | | a = ra 12/31/00 12/34/01 12/34/02 12/31/03 12/31/04 12/31/05 6/30/06 * Includes agri-business credits (Dollars in Millions)
Slide 13: Asset quality ratio
0.72% © ° 0.53% 12/3101 12/31/02 12/31/03 12/31/04 12/31/05 6/30/06
Slide 14: Total deposits
12/31/00 12/34/01 12/34/02 12/31/03 12/31/04 12/31/05 6/30/06 (Dollars in Millions)
Slide 15: Transaction deposits as a % of total funding sources
@ = TRANSACTION DEPOSITS AS A % OF TOTAL FUNDING SOURCES $450 $425 $400 $375 $350 $325 + $300 +] $283 7) 38% || | s775 1 $250 1] 28% $428 | | a aL z : a 1213100 12/31/01 12/34/02 12/34/03 12/34/04 12/31/05 6/30/06 YTD (Dollars in Millions) * Includes demand, savings, and money market deposit balance
Slide 16: Net income
$12,000 $9,721 $10,102 $10,000 $8,000 $6,000 $4,000 $2,000 $0 2001 2002 2003 2005 6/30/06 YTD Annualized (Dollars in Thousands)
Slide 17: Normalized net income
$10,600 $10,400 $10,200 $10,000 $9,800 $9,600 $9,400 $9,200 $9,000 $8,800 $9,926 $9,983 $9400 S847 $9,415 2001 2002 2003 *See Non-GAAP disclosure reconciliations 2004 2005 6/30/06 YTD Annualized (Dollars in Thousands)
Slide 18: Net interest income and net interest margin
a 4 i 4 | q i & @ = NET INTEREST MARGIN (TAX-EQUIVALENT) $37,000 $36,000 $35,000 $34,000 $33,000 $32,000 $34,000 $30,000 $29,000 $28,000 $36,692 $34,237 $34,308 $32,867 $33, ay 2001 2002 2003 2004 2005 6/30/06 YTD Annualized (Dollars in Thousands)
Slide 19: Non-interest income as % of total revenue
@ = NON-INTEREST INCOME AS % OF TOTAL REVENUE $14,844 Medial $14,194 $14,000 gizgs4 $13.02 $13,000 $12,000 $44,000 | | $10,000 ss $9,000 22% 22% $8,000 2 ci = 2001 2002 2003 2004* 2005 6/30/06 YTD Annualized “Excludes $3,682 non-cash other-than-temporary impairment charge from $9,620 reported non-in
Slide 20: Normalized efficiency ratio
@ = NORMALIZED EFFICIENCY RATIO $40,000 $35,634 $35,000 $29,308 $78,967 $30,321 $30,609 S348 | $30,000 ee ae $25,000 $20,000 ° 67.8% | | + + 65.3% 65.1% ss $15,000 $10,000 2001 2002 2003" 2004 2005 6/30/06 See Non-GAAP disclosure reconeiliations YTO Annualized *Excludes $1,898 prepayment fee on debt
Slide 21: Normalized return on equity
7 2001 2002 2003* 2004 2005 6/30/06 YTD Annualized * See Non-GAAP disclosure reconciliations
Slide 22: Going Forward
BIOS INOW.
Slide 23: Development of sources of fee income
* Development of sources of fee income > Insurance revenue — 97" percentile > Investment advisory fees — 96" percentile + Repositioning of balance sheet structure > Continued growth of no/low cost transaction deposits > Maintenance of at least 2/3 - 1/3 commercial/retail loan mix > Improve low quali
Slide 24: Evolution to common legal structure
* Evolution to common legal structure > Charter consolidation in progress > Divisional community banking model * Creation of Office of the President > President - Commercial Financial Services > President — Retail Financial Services > Blending of traditional community bank model with line of busines
Slide 25: De novo branching strategy
* DeNovo branching strategy > Bloomington/Bedford market > Expands market potential by 50% * Seasoning of existing minority ownership relationships > Indianapolis - Evansville — Lafayette — Louisville markets * Disciplined and selective mergers and acquisitions > Adjacent market areas offering impro
Slide 26: Focus on increasing long-term institutional ownership
* Focus on increasing long-term institutional ownership > Proven ability of plan execution > Infrastructure in place for future EPS growth > Attractive valuation >> Relative P/E ratio- 14.2 x LTM An >> Dividend yield - 4.34% = kK am —l i > Potential of pending organizational changes oO Z O Y KF
Slide 27: Non-GAAP financial measures
oe ese E it} 74 a ry FE ty) isiaa eS teatro These materials contain certain financial measures determined by methods other than in accordance with accounting principles generally accepted in the United States of America (‘GAAP’) The slide presentation furnished herewith uses the non-GAAP financial m
Slide 28: Normalized net income reconciliation
Net Income, as reported Plus: Intangible amortization expense, tax adjusted Prepaymentfee on debt fxtinguishment tx ads Non-cash otherthantempora Trypan charg, tax agus Normalized net income Weighted average # of shares Normalized eaming per share ‘Average shareholders’ equity Less: Average Goodwill
Slide 29: Return on equity, EPS and efficiency ratio reconciliation
Return on equity, as reported Plus: Intangible amortization expense, tax adjusted Prepayment fee on debt extinguishment, tax adjusted Non-cash other-than-temporary impairment charge, tax adjusted Return on equity Earnings per share, as reported Plus: Intangible amortization expense, tax adjusted Pre
Slide 30: Mark A. Schroeder and Bradley M. Rust contact details
Mark A. Schroeder, President and CEO (812) 482-0701 mark.schroeder@germanamericanbancorp.com Bradley M. Rust, Senior Vice President and CFO (812) 482-0718 brad.rust@germanamericanbancorp.com
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