German American Bancorp, Inc. · NASDAQ:GABC
German American Bancorp — KBW 9th Annual Community Bank Investor Conference 2008
28 slides from German American Bancorp's conference presentation, Jul 29, 2008
Slide 1: German American Bancorp, Inc. - KBW Annual Community Bank Investor Conference
German AmericaiBancorp, Inc. Symbol: GABC KBW 9" Annual Community Bank Investor Conference July 30, 2008
Slide 2: Presented By
Presented By Mark A. Schroeder President and CEO Bradley M. Rust Executive Vice President and CFO
Slide 3: Forward-looking statements
When used in this presentation and our oral statements, the words or phrases “believe,” “wil ikely result” “are expected to,” “will continue,” “is anticipated,” “estimate,” “project,” “plans,” or similar expressions are intended to identiy “forward Jooking statements” within the meaning of the Priva
Slide 4: Who We Are
Who We Ate © Super Community Financial Services Organization headquartered in os Jasper, Indiana - $1.2 Billion Assets ©) GARC Community-Based Finacial Network - 28 Banking Offices - 8 Financial Advisory Offices - 6 Insurance Agency Offices
Slide 5: Diversified Economic Base
e Diversified Economic Base Regional Education & Health Care e Light Manufacturing & Technology e Agriculture e Stable Economic Environment © Minimal Big 3 Auto Influence Minimal Organized Labor Influence e Major Employers ¢ Indiana University © Crane Naval Surface Warfare Center Toyota Motor Manufa
Slide 6: Transition to commercially-focused community-based financial services
© 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. + Repositioning of the balance sheet and development of n
Slide 7: Formal process to achieve top quartile performance
* Ongoing formal process to facilitate achievement of top quartile performance among comparable peer group > Continuing Asset Quality Focus > No/Low Transaction Funding Emphasis > Operating Expense Control o Branch Office Optimization o Legal & Professional Fees o Data Processing Costs o Other Opera
Slide 8: Decentralized decision-making and franchise approach
* 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 MEETING EVERY NEED, EVERY CUSTOMER, EVERY
Slide 9: Strategic Initiatives
Strategicdnitialives
Slide 10: Development of fee income and balance sheet repositioning
¢ Development of sources of fee income > Insurance revenue — 97'" percentile * > Investment advisory fees — 934 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 asse
Slide 11: Evolution to common legal structure
¢ Evolution to common legal structure > Charter consolidation completed > Regional community banking model * Office of the President > President — Commercial & Retail Banking > President — Private Banking & Wealth Management > Blending of traditional community bank model with line of business model
Slide 12: External Growth Opportunities
External Growth Opportunities * DeNovo branching strategy > Bloomington market > Expands market potential by 40% * Disciplined and selective mergers and acquisitions > Adjacent market areas offering improved growth potential > In-market opportunities allowing improved operating efficiencies
Slide 13: Bradley M. Rust, Executive Vice President and CFO
Geentan Americanebaneorn, in Bradley M. Rust Executive Vice President and CFO
Slide 14: Financial Trends
Financial Trends
Slide 15: Total Assets
Total Assets $1,200 + $1,150 $1,100 + $1,050 $1,000 + $950 $900 + a7 P| 12/31/04 12/31/05 12/31/06 12/31/07 06/30/08 $850 - (Dollars In Millions)
Slide 16: Total Loans, Net of Unearned Income
Total Loans, Net of Unearned Income ml] = : = d be “ 12/31/04 12/31/05 12/31/06 §=12/31/07 —-6/30/08 (Dollars In Millions)
Slide 17: Total Commercial Loans
Total Commercial Loans * 12/31/04 12/31/05 12/31/06 = 12/31/07 06/30/08 * Includes agricultural & agri-business credits (Dollars In Millions)
Slide 18: Loan Portfolio Composition
Loan Portfolio Composition (June 30, 2008) Consumer Loans 13% Residential Mortgage Loan: Commercial & 12% Industrial Loans 54% Agricultural Loans 18% Construction & Development 3%
Slide 19: Provision for Loan Loss
Provision for Loan Loss 12/31/04 12/31/05 12/31/06 12/31/07 06/30/08 Annualized (Dollars In Thousands) tied
Slide 20: Non-Performing Loans to Total Loans
Non-Performing Loans to Total Loans 3.00% 2.50% + 2.00% + 1.50% + 1.00% + 0.50% + 0.50% 0.00% 12/31/04 12/31/05 12/31/06 12/31/07 = 06/30/08
Slide 21: Risk Profile
Risk Profile Loan Portialia Portfolio Type as % of Capital Peer Group Construction & Development Loans 142.5% Non-Owner Commercial Real Estate 294.0% Total Commercial Real Estate 400.9% Home Equity Loans 279% Asset Quality Ratios Non-Performing Loans (as % of loans) 141% Non-Performing Loans & OREO.
Slide 22: Net Interest Income (Tax-Equivalent)
Net Interest Income (Tax-Equivalent) ¢= T/E Net Interest Margin $42,000 $40,000 $38,000 $36,000 $34,000 {$32,867 $33,443 ir < | $32,000 i= | $30,000 $28,000 : 12/31/04 12/3105 12/31/06 12/31/07 6/30/08 Annualized
Slide 23: Total Non-Interest Income
Total Non-Interest Income (Excluding Securities Gains/Losses) $18,480 $19,000 $18,000 $17,000 $16,000 $15,000 $14,000 $13,000 $12,000 $11,000 $10,000 $15,042 $14,502 $13,298 12/31/04 = 12/31/05 12/31/06 = 12/31/07 ~— 6/30/08 Annualized (Dollars In Thousands) oe
Slide 24: Total Non-Interest Expense
Total Non-Interest Expense $40,000 $37,059 $37,221 $36,666 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 5 lll lll 12/31/04 = 12/31/05 12/31/06 = 12/31/07: 06/30/08 Annualized $30,609 $31,756 (Dollars In Thousands)
Slide 25: Net Income & Earnings Per Share
Net Income & Earnings Per Share $14,000 $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $- $12,262 $10,221 $9,721 $9,405 = |m laa ee ee 12/31/04 = 12/31/05 12/31/06 = 12/31/07 ~—— 06/30/08 Annualized (Dollars In Thousands)
Slide 26: Why Invest in GABC?
Why Invest in GABC? * Focus on increasing long-term institutional ownership > Proven ability of plan execution > Potential of organizational efficiency gains > Infrastructure in place for future EPS growth > Attractive valuation* >> Relative P/E ratio — 10.5 x (Annualized YTD 2008) >> Dividend yield
Slide 27: Non-GAAP Disclosure Reconciliation
German American Bancorp, Inc. ‘Non-GAAP Disclosure Rec ‘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-GAA
Slide 28: Mark A. Schroeder and Bradley M. Rust contacts
Mark A. Schroeder, President and CEO (812) 482-0701 mark.schroeder@germanamericanbancorp.com Bradley M. Rust, Executive Vice President and CFO. (812) 482-0718 brad.rust@germanamericanbancorp.com
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