x
|
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
¨
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
INDIANA
|
35-1547518
|
|
(State
or other jurisdiction of incorporation or organization)
|
(I.R.S.
Employer Identification
No.)
|
711 Main Street, Box 810, Jasper,
Indiana
|
47546
|
|
(Address
of Principal Executive Offices)
|
(Zip
Code)
|
Title
of Each Class
|
Name
of each exchange on which registered
|
Common
Shares, No Par Value
|
The
NASDAQ Stock Market LLC
|
Preferred
Stock Purchase Rights
|
Indicate
by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act.
|
¨
Yes
|
þ
No
|
|
||
Indicate
by check mark if the registrant is not required to file reports pursuant
to Section 13 or Section 15(d) of the Act.
|
¨
Yes
|
þ
No
|
Indicate
by check mark whether the registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
|
þ
Yes
|
¨
No
|
Indicate
by check mark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File
required to be submitted and posted pursuant to Rule 405 of Regulation S-T
(§232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such
files).
¨
|
Indicate
by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Act).
|
¨
Yes
|
þ
No
|
PART
I
|
||
Item
1.
|
Business
|
3-7
|
Item
1A.
|
Risk
Factors
|
7-11
|
Item
1B.
|
Unresolved
Staff Comments
|
11
|
Item
2.
|
Properties
|
11
|
Item
3.
|
Legal
Proceedings
|
11
|
Item
4.
|
Submission
of Matters to a Vote of Security Holders
|
11
|
PART
II
|
||
Item
5.
|
Market
for Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
|
12-13
|
Item
6.
|
Selected
Financial Data
|
14
|
Item
7.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
15-31
|
Item
7A.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
31
|
Item
8.
|
Financial
Statements and Supplementary Data
|
32-67
|
Item
9.
|
Changes
in and Disagreements with Accountants on Accounting and Financial
Disclosure
|
68
|
Item
9A.
|
Controls
and Procedures
|
68
|
Item
9B.
|
Other
Information
|
68
|
PART
III
|
||
Item
10.
|
Directors
and Executive Officers of the Registrant
|
69
|
Item
11.
|
Executive
Compensation
|
69
|
Item
12.
|
Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
|
69-70
|
Item
13.
|
Certain
Relationships and Related Transactions
|
70
|
Item
14.
|
Principal
Accountant Fees and Services
|
70
|
PART
IV
|
||
Item
15.
|
Exhibits
and Financial Statement Schedules
|
71
|
SIGNATURES
|
72
|
|
INDEX
OF EXHIBITS
|
73-76
|
1)
Name
|
2)
Type of Business
|
3)
Principal Office Location
|
||
German American
Bancorp
|
Commercial
Bank
|
Jasper,
IN
|
||
German
American Insurance, Inc.
|
Multi-Line
Insurance Agency
|
Jasper,
IN
|
||
German
American Financial Advisors & Trust Company
|
|
Trust,
Brokerage, Financial Planning
|
|
Jasper,
IN
|
|
·
|
the
unknown future direction of interest rates and the timing and magnitude of
any changes in interest rates;
|
|
·
|
changes
in competitive conditions;
|
|
·
|
the
introduction, withdrawal, success and timing of asset/liability management
strategies or of mergers and acquisitions and other business initiatives
and strategies;
|
|
·
|
changes
in customer borrowing, repayment, investment and deposit
practices;
|
|
·
|
changes
in fiscal, monetary and tax
policies;
|
|
·
|
changes
in financial and capital markets;
|
|
·
|
continued
deterioration in general economic conditions, either nationally or
locally, resulting in, among other things, credit quality
deterioration;
|
|
·
|
capital
management activities, including possible future sales of new securities,
or possible repurchases or redemptions by the Company of outstanding debt
or equity securities;
|
|
·
|
risks
of expansion through acquisitions and mergers, such as unexpected credit
quality problems of the acquired loans or other assets, unexpected
attrition of the customer base of the acquired institution or branches,
and difficulties in integration of the acquired
operations;
|
|
·
|
factors
driving impairment charges on
investments;
|
|
·
|
the
impact, extent and timing of technological
changes;
|
|
·
|
litigation
liabilities, including related costs, expenses, settlements and judgments,
or the outcome of matters before regulatory agencies, whether pending or
commencing in the future;
|
|
·
|
actions
of the Federal Reserve Board;
|
|
·
|
changes
in accounting principles and
interpretations;
|
|
·
|
potential
increases of federal deposit insurance premium expense, and possible
future special assessments of FDIC premiums, either industry wide or
specific to the Company’s banking
subsidiary;
|
|
·
|
actions
of the Department of the Treasury and the Federal Deposit Insurance
Corporation under the Emergency Economic Stabilization Act and the Federal
Deposit Insurance Act and other legislative and regulatory actions and
reforms; and
|
|
·
|
the
continued availability of earnings and excess capital sufficient for the
lawful and prudent declaration and payment of cash
dividends.
|
|
·
|
potential
exposure to unknown or contingent liabilities or asset quality issues of
the acquired assets, operations or
company;
|
|
·
|
potential
exposure to unknown or contingent liabilities of the acquired assets,
operations or company;
|
|
·
|
exposure
to potential asset quality issues of the acquired assets, operations or
company;
|
|
·
|
environmental
liability with acquired real estate collateral or other real
estate;
|
|
·
|
difficulty
and expense of integrating the operations, systems and personnel of the
acquired assets, operations or
company;
|
|
·
|
potential
disruption to our ongoing business, including diversion of our
management’s time and attention;
|
|
·
|
the
possible loss of key employees and customers of the acquired operations or
company;
|
|
·
|
difficulty
in estimating the value of the acquired assets, operations or company;
and
|
|
·
|
potential
changes in banking or tax laws or regulations that may affect the acquired
assets, operations or company.
|
2009
|
2008
|
|||||||||||||||||||||||
Cash
|
Cash
|
|||||||||||||||||||||||
High
|
Low
|
Dividend
|
High
|
Low
|
Dividend
|
|||||||||||||||||||
Fourth
Quarter
|
$ | 17.31 | $ | 14.24 | $ | 0.140 | $ | 12.90 | $ | 10.65 | $ | 0.140 | ||||||||||||
Third
Quarter
|
$ | 18.33 | $ | 14.25 | $ | 0.140 | $ | 13.60 | $ | 11.00 | $ | 0.140 | ||||||||||||
Second
Quarter
|
$ | 16.04 | $ | 11.33 | $ | 0.140 | $ | 13.23 | $ | 11.39 | $ | 0.140 | ||||||||||||
First
Quarter
|
$ | 12.50 | $ | 10.40 | $ | 0.140 | $ | 13.29 | $ | 11.31 | $ | 0.140 | ||||||||||||
$ | 0.560 | $ | 0.560 |
Transfer Agent:
|
Computershare
|
Shareholder
|
Terri
A. Eckerle
|
Priority
Processing
|
Information and
|
German
American Bancorp, Inc.
|
|
250
Royall St
|
Corporate Office:
|
P.
O. Box 810
|
|
Canton,
MA 02021
|
Jasper,
Indiana 47547-0810
|
||
Contact:
Shareholder Relations
|
(812)
482-1314
|
||
(800)
884-4225
|
(800)
482-1314
|
Total
|
Maximum Number
|
|||||||||||||||
Number
|
Total Number of Shares
|
(or Approximate Dollar
|
||||||||||||||
Of Shares
|
Average Price
|
(or Units) Purchased as Part
|
Value) of Shares (or Units)
|
|||||||||||||
(or Units)
|
Paid Per Share
|
of Publicly Announced Plans
|
that May Yet Be Purchased
|
|||||||||||||
Period
|
Purchased
|
(or Unit)
|
or Programs
|
Under the Plans or Programs
(1)
|
||||||||||||
October
2009
|
— | — | — | 272,789 | ||||||||||||
November
2009
|
— | — | — | 272,789 | ||||||||||||
December
2009
|
— | — | — | 272,789 |
2009
|
2008
|
2007
|
2006
|
2005
|
||||||||||||||||
Summary
of Operations:
|
||||||||||||||||||||
Interest
Income
|
$ | 63,736 | $ | 67,845 | $ | 72,261 | $ | 63,594 | $ | 50,197 | ||||||||||
Interest
Expense
|
19,223 | 26,908 | 33,646 | 27,398 | 17,984 | |||||||||||||||
Net
Interest Income
|
44,513 | 40,937 | 38,615 | 36,196 | 32,213 | |||||||||||||||
Provision
for Loan Losses
|
3,750 | 3,990 | 3,591 | 925 | 1,903 | |||||||||||||||
Net
Interest Income after Provision
|
||||||||||||||||||||
For
Loan Losses
|
40,763 | 36,947 | 35,024 | 35,271 | 30,310 | |||||||||||||||
Non-interest
Income
|
15,859 | 18,210 | 15,704 | 15,993 | 14,502 | |||||||||||||||
Non-interest
Expense
|
40,391 | 36,716 | 37,221 | 37,059 | 31,756 | |||||||||||||||
Income
before Income Taxes
|
16,231 | 18,441 | 13,507 | 14,205 | 13,056 | |||||||||||||||
Income
Tax Expense
|
4,013 | 5,638 | 4,102 | 3,984 | 3,335 | |||||||||||||||
Net
Income
|
$ | 12,218 | $ | 12,803 | $ | 9,405 | $ | 10,221 | $ | 9,721 | ||||||||||
Year-end
Balances:
|
||||||||||||||||||||
Total
Assets
|
$ | 1,242,965 | $ | 1,190,828 | $ | 1,131,710 | $ | 1,093,424 | $ | 946,467 | ||||||||||
Total
Loans, Net of Unearned Income
|
877,822 | 890,436 | 867,721 | 796,259 | 651,956 | |||||||||||||||
Total
Deposits
|
969,643 | 941,750 | 877,421 | 867,618 | 746,821 | |||||||||||||||
Total
Long-term Debt
|
113,320 | 105,608 | 86,786 | 68,333 | 66,606 | |||||||||||||||
Total
Shareholders’ Equity
|
113,549 | 105,174 | 97,116 | 92,391 | 82,255 | |||||||||||||||
Average
Balances:
|
||||||||||||||||||||
Total
Assets
|
$ | 1,230,596 | $ | 1,174,583 | $ | 1,114,140 | $ | 1,029,838 | $ | 925,851 | ||||||||||
Total
Loans, Net of Unearned Income
|
891,322 | 880,630 | 840,849 | 715,260 | 634,526 | |||||||||||||||
Total
Deposits
|
963,928 | 922,137 | 889,736 | 814,440 | 730,220 | |||||||||||||||
Total
Shareholders’ Equity
|
109,887 | 99,711 | 93,677 | 88,451 | 84,479 | |||||||||||||||
Per
Share Data
(1)
:
|
||||||||||||||||||||
Net
Income
|
$ | 1.10 | $ | 1.16 | $ | 0.85 | $ | 0.93 | $ | 0.89 | ||||||||||
Cash
Dividends
|
0.56 | 0.56 | 0.56 | 0.56 | 0.56 | |||||||||||||||
Book
Value at Year-end
|
10.25 | 9.54 | 8.81 | 8.39 | 7.73 | |||||||||||||||
Other
Data at Year-end:
|
||||||||||||||||||||
Number
of Shareholders
|
3,364 | 3,684 | 3,647 | 3,438 | 3,494 | |||||||||||||||
Number
of Employees
|
332 | 348 | 371 | 397 | 367 | |||||||||||||||
Weighted Average Number of Shares
(1)
|
11,065,917 | 11,029,519 | 11,009,536 | 10,994,739 | 10,890,987 | |||||||||||||||
Selected
Performance Ratios:
|
||||||||||||||||||||
Return
on Assets
|
0.99 | % | 1.09 | % | 0.84 | % | 0.99 | % | 1.05 | % | ||||||||||
Return
on Equity
|
11.12 | % | 12.84 | % | 10.04 | % | 11.56 | % | 11.51 | % | ||||||||||
Equity
to Assets
|
9.14 | % | 8.83 | % | 8.58 | % | 8.45 | % | 8.69 | % | ||||||||||
Dividend
Payout
|
50.71 | % | 48.25 | % | 65.65 | % | 60.29 | % | 62.83 | % | ||||||||||
Net
Charge-offs to Average Loans
|
0.25 | % | 0.29 | % | 0.32 | % | 0.50 | % | 0.26 | % | ||||||||||
Allowance
for Loan Losses to Loans
|
1.25 | % | 1.07 | % | 0.93 | % | 0.90 | % | 1.42 | % | ||||||||||
Net
Interest Margin
|
3.95 | % | 3.82 | % | 3.83 | % | 3.96 | % | 3.92 | % |
(1)
|
Share
and Per Share Data excludes the dilutive effect of stock
options.
|
(1)
|
Effective
tax rates were determined as though interest earned on the Company’s
investments in municipal bonds and loans was fully
taxable.
|
(2)
|
Loans
held-for-sale and non-accruing loans have been included in average loans.
Interest income on loans includes loan fees of $545, $127, and $806 for
2009, 2008, and 2007, respectively.
|
|
2009 compared to 2008
|
2008 compared to 2007
|
||||||||||||||||||||||
Increase / (Decrease) Due to
(1)
|
Increase / (Decrease) Due to
(1)
|
|||||||||||||||||||||||
Volume
|
Rate
|
Net
|
Volume
|
Rate
|
Net
|
|||||||||||||||||||
Interest
Income:
|
||||||||||||||||||||||||
Federal
Funds Sold and Other
|
||||||||||||||||||||||||
Short-term
Investments
|
$ | 87 | $ | (574 | ) | $ | (487 | ) | $ | 597 | $ | (482 | ) | $ | 115 | |||||||||
Taxable
Securities
|
1,876 | (1,223 | ) | 653 | 172 | 843 | 1,015 | |||||||||||||||||
Non-taxable
Securities
|
393 | 57 | 450 | (370 | ) | 111 | (259 | ) | ||||||||||||||||
Loans
and Leases
|
705 | (5,208 | ) | (4,503 | ) | 2,922 | (8,211 | ) | (5,289 | ) | ||||||||||||||
Total
Interest Income
|
3,061 | (6,948 | ) | (3,887 | ) | 3,321 | (7,739 | ) | (4,418 | ) | ||||||||||||||
Interest
Expense:
|
||||||||||||||||||||||||
Savings
and Interest-bearing Demand
|
747 | (4,352 | ) | (3,605 | ) | 1,921 | (3,212 | ) | (1,291 | ) | ||||||||||||||
Time
Deposits
|
(693 | ) | (3,419 | ) | ( 4,112 | ) | (2,808 | ) | (1,978 | ) | (4,786 | ) | ||||||||||||
FHLB
Advances and Other Borrowings
|
180 | (148 | ) | 32 | 1,059 | (1,720 | ) | (661 | ) | |||||||||||||||
Total
Interest Expense
|
234 | (7,919 | ) | (7,685 | ) | 172 | (6,910 | ) | (6,738 | ) | ||||||||||||||
Net
Interest Income
|
$ | 2,827 | $ | 971 | $ | 3,798 | $ | 3,149 | $ | (829 | ) | $ | 2,320 |
(1)
|
The
change in interest due to both rate and volume has been allocated to
volume and rate changes in
proportion
to the
relationship
of the absolute dollar amounts of the change in
each.
|
% Change From
|
||||||||||||||||||||
Non-interest Income (dollars in thousands)
|
Years Ended December 31,
|
Prior Year
|
||||||||||||||||||
2009
|
2008
|
2007
|
2009
|
2008
|
||||||||||||||||
Trust
and Investment Product Fees
|
$ | 1,617 | $ | 2,288 | $ | 2,590 | (29 | )% | (12 | )% | ||||||||||
Service
Charges on Deposit Accounts
|
4,395 | 4,920 | 4,361 | (11 | ) | 13 | ||||||||||||||
Insurance
Revenues
|
5,296 | 6,306 | 5,794 | (16 | ) | 9 | ||||||||||||||
Company
Owned Life Insurance
|
1,104 | 791 | 823 | 40 | (4 | ) | ||||||||||||||
Other
Operating Income
|
2,110 | 2,412 | 1,994 | (13 | ) | 21 | ||||||||||||||
Subtotal
|
14,522 | 16,717 | 15,562 | (13 | ) | 7 | ||||||||||||||
Net
Gains on Sales of Loans and Related Assets
|
1,760 | 1,399 | 822 | 26 | 70 | |||||||||||||||
Net
Gain (Loss) on Securities
|
(423 | ) | 94 | (680 | ) | n/m |
(1)
|
n/m |
(1)
|
|||||||||||
TOTAL
NON-INTEREST INCOME
|
$ | 15,859 | $ | 18,210 | $ | 15,704 | (13 | ) | 16 |
%
Change From
|
||||||||||||||||||||
Non-interest Expense (dollars in thousands)
|
Years Ended December 31,
|
Prior Year
|
||||||||||||||||||
2009
|
2008
|
2007
|
2009
|
2008
|
||||||||||||||||
Salaries
and Employee Benefits
|
$ | 21,961 | $ | 20,786 | $ | 21,671 | 6 | % | (4 | )% | ||||||||||
Occupancy,
Furniture and Equipment Expense
|
6,035 | 5,677 | 5,379 | 6 | 6 | |||||||||||||||
FDIC
Premiums
|
1,863 | 209 | 103 | 791 | 103 | |||||||||||||||
Data
Processing Fees
|
1,368 | 1,493 | 1,370 | (8 | ) | 9 | ||||||||||||||
Professional
Fees
|
1,740 | 1,670 | 1,418 | 4 | 18 | |||||||||||||||
Advertising
and Promotion
|
993 | 1,078 | 957 | (8 | ) | 13 | ||||||||||||||
Supplies
|
528 | 570 | 625 | (7 | ) | (9 | ) | |||||||||||||
Intangible
Amortization
|
909 | 889 | 894 | 2 | (1 | ) | ||||||||||||||
Other
Operating Expenses
|
4,994 | 4,344 | 4,804 | 15 | (10 | ) | ||||||||||||||
TOTAL
NON-INTEREST EXPENSE
|
$ | 40,391 | $ | 36,716 | $ | 37,221 | 10 | (1 | ) |
Loan Portfolio
|
December 31,
|
|||||||||||||||||||
(dollars in thousands)
|
2009
|
2008
|
2007
|
2006
|
2005
|
|||||||||||||||
Commercial
and Industrial Loans
|
$ | 188,962 | $ | 175,828 | $ | 158,556 | $ | 158,502 | $ | 157,646 | ||||||||||
Commercial
Real Estate Loans
|
334,255 | 329,363 | 298,477 | 243,783 | 162,035 | |||||||||||||||
Agricultural
Loans
|
156,845 | 159,923 | 165,592 | 148,872 | 101,355 | |||||||||||||||
Consumer
Loans
|
114,736 | 127,343 | 131,110 | 132,791 | 129,587 | |||||||||||||||
Residential
Mortgage Loans
|
84,677 | 100,054 | 116,908 | 114,687 | 102,891 | |||||||||||||||
Total
Loans
|
879,475 | 892,511 | 870,643 | 798,635 | 653,514 | |||||||||||||||
Less: Unearned
Income
|
(1,653 | ) | (2,075 | ) | (2,922 | ) | (2,376 | ) | (1,558 | ) | ||||||||||
Subtotal
|
877,822 | 890,436 | 867,721 | 796,259 | 651,956 | |||||||||||||||
Less: Allowance
for Loan Losses
|
(11,016 | ) | (9,522 | ) | (8,044 | ) | (7,129 | ) | (9,265 | ) | ||||||||||
Loans,
Net
|
$ | 866,806 | $ | 880,914 | $ | 859,677 | $ | 789,130 | $ | 642,691 | ||||||||||
Ratio of Loans to Total
Loans
|
||||||||||||||||||||
Commercial
and Industrial Loans
|
21 | % | 20 | % | 18 | % | 20 | % | 24 | % | ||||||||||
Commercial
Real Estate Loans
|
38 | % | 37 | % | 35 | % | 30 | % | 25 | % | ||||||||||
Agricultural
Loans
|
18 | % | 18 | % | 19 | % | 19 | % | 15 | % | ||||||||||
Consumer
Loans
|
13 | % | 14 | % | 15 | % | 17 | % | 20 | % | ||||||||||
Residential
Mortgage Loans
|
10 | % | 11 | % | 13 | % | 14 | % | 16 | % | ||||||||||
Total
Loans
|
100 | % | 100 | % | 100 | % | 100 | % | 100 | % |
Within
|
One to Five
|
After
|
||||||||||||||
One Year
|
Years
|
Five Years
|
Total
|
|||||||||||||
Commercial
and Agricultural
|
$ | 299,615 | $ | 294,346 | $ | 86,101 | $ | 680,062 |
Interest Sensitivity
|
||||||||||||||||
Fixed Rate
|
Variable Rate
|
|||||||||||||||
Loans
maturing after one year
|
$ | 120,821 | $ | 259,626 |
Investment Portfolio, at Amortized Cost
|
December 31,
|
|||||||||||||||||||||||
(dollars in thousands)
|
2009
|
%
|
2008
|
%
|
2007
|
%
|
||||||||||||||||||
Federal
Funds Sold and Short-term Investments
|
$ | 12,002 | 5 | % | $ | 27,791 | 14 | % | $ | 2,631 | 2 | % | ||||||||||||
U.S.
Treasury and Agency Securities
|
5,000 | 2 | — | — | 25,306 | 16 | ||||||||||||||||||
Obligations
of State and Political Subdivisions
|
24,285 | 9 | 19,887 | 10 | 15,851 | 10 | ||||||||||||||||||
Mortgage-backed
Securities
|
214,591 | 83 | 151,499 | 74 | 105,302 | 69 | ||||||||||||||||||
Equity
Securities
|
2,818 | 1 | 3,620 | 2 | 4,557 | 3 | ||||||||||||||||||
Total
Securities Portfolio
|
$ | 258,696 | 100 | % | $ | 202,797 | 100 | % | $ | 153,647 | 100 | % |
December 31,
|
||||||||||||
2009
|
2008
|
2007
|
||||||||||
Securities
Held-to-Maturity
|
||||||||||||
Obligations
of State and Political Subdivisions
|
$ | 2,774 | $ | 3,326 | $ | 4,464 | ||||||
Securities
Available-for-Sale
|
||||||||||||
U.S.
Treasury and Agency Securities
|
$ | 4,970 | $ | — | $ | 25,739 | ||||||
Obligations
of State and Political Subdivisions
|
22,378 | 16,868 | 11,602 | |||||||||
Mortgage-backed
Securities
|
221,252 | 155,627 | 105,489 | |||||||||
Equity
Securities
|
2,340 | 3,345 | 5,470 | |||||||||
Subtotal
of Securities Available-for-Sale
|
250,940 | 175,840 | 148,300 | |||||||||
Total
Securities
|
$ | 253,714 | $ | 179,166 | $ | 152,764 |
Within
|
After One But
|
After Five But
|
After Ten
|
|||||||||||||||||||||||||||||
One Year
|
Within Five Years
|
Within Ten Years
|
Years
|
|||||||||||||||||||||||||||||
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
|||||||||||||||||||||||||
U.S.
Treasuries and
|
||||||||||||||||||||||||||||||||
Agencies
|
$ | — | N/A | $ | 5,000 | 3.20 | % | $ | — | N/A | $ | — | N/A | |||||||||||||||||||
State
and Political
|
||||||||||||||||||||||||||||||||
Subdivisions
|
2,040 | 8.20 | % | 4,065 | 6.82 | % | 5,550 | 5.72 | % | 12,630 | 7.37 | % | ||||||||||||||||||||
Mortgage-backed
|
||||||||||||||||||||||||||||||||
Securities
|
12,615 | 5.28 | % | 171,016 | 4.63 | % | 30,735 | 3.64 | % | 225 | 3.88 | % | ||||||||||||||||||||
Total
Securities
|
$ | 14,655 | 5.69 | % | $ | 180,081 | 4.64 | % | $ | 36,285 | 3.96 | % | $ | 12,855 | 7.31 | % |
Contractual Obligations
|
Payments Due By Period
|
|||||||||||||||||||
(dollars in thousands)
|
Total
|
Less Than 1 Year
|
1-3 Years
|
3-5 Years
|
More Than 5 Years
|
|||||||||||||||
Long-term
Borrowings
|
$ | 112,619 | $ | 30,787 | $ | 23,063 | $ | 28,075 | $ | 30,694 | ||||||||||
Time
Deposits
|
329,676 | 109,685 | 209,160 | 10,466 | 365 | |||||||||||||||
Capital
Lease Obligation
|
1,427 | 81 | 162 | 162 | 1,022 | |||||||||||||||
Operating
Lease Commitments
|
1,745 | 256 | 289 | 166 | 1,034 | |||||||||||||||
Total
Contractual Obligations
|
$ | 445,467 | $ | 140,809 | $ | 232,674 | $ | 38,869 | $ | 33,115 |
Funding Sources - Average Balances
|
% Change From
|
|||||||||||||||||||
(dollars in thousands)
|
December 31,
|
Prior Year
|
||||||||||||||||||
2009
|
2008
|
2007
|
2009
|
|
2008
|
|||||||||||||||
Demand
Deposits
|
||||||||||||||||||||
Non-interest-bearing
|
$ | 149,673 | $ | 140,962 | $ | 133,824 | 6 | % | 5 | % | ||||||||||
Interest-bearing
|
245,811 | 212,467 | 153,033 | 16 | 39 | |||||||||||||||
Savings
Deposits
|
63,182 | 57,948 | 57,266 | 9 | 1 | |||||||||||||||
Money
Market Accounts
|
164,221 | 151,645 | 119,735 | 8 | 27 | |||||||||||||||
Other
Time Deposits
|
251,906 | 258,314 | 283,994 | (2 | ) | (9 | ) | |||||||||||||
Total
Core Deposits
|
874,793 | 821,336 | 747,852 | 7 | 10 | |||||||||||||||
Certificates
of Deposits of $100,000 or
|
||||||||||||||||||||
more
and Brokered Deposits
|
89,135 | 100,801 | 141,884 | (12 | ) | (29 | ) | |||||||||||||
FHLB
Advances and
|
||||||||||||||||||||
Other
Borrowings
|
143,332 | 138,888 | 117,084 | 3 | 19 | |||||||||||||||
Total
Funding Sources
|
$ | 1,107,260 | $ | 1,061,025 | $ | 1,006,820 | 4 | 5 |
3 Months
|
3 thru
|
6 thru
|
Over
|
|||||||||||||||||
Or Less
|
6 Months
|
12 Months
|
12 Months
|
Total
|
||||||||||||||||
December
31, 2009
|
$ | 10,059 | $ | 6,177 | $ | 5,873 | $ | 41,167 | $ | 63,276 |
Non-performing Assets
|
December 31,
|
|||||||||||||||||||
(dollars in thousands)
|
2009
|
2008
|
2007
|
2006
|
2005
|
|||||||||||||||
Non-accrual
Loans
|
$ | 8,374 | $ | 8,316 | $ | 4,356 | $ | 9,652 | $ | 14,763 | ||||||||||
Past
Due Loans (90 days or more)
|
113 | 34 | 8 | — | 944 | |||||||||||||||
Restructured
Loans
|
306 | — | — | — | — | |||||||||||||||
Total
Non-performing Loans
|
8,793 | 8,350 | 4,364 | 9,652 | 15,707 | |||||||||||||||
Other
Real Estate
|
2,363 | 1,818 | 1,517 | 845 | 506 | |||||||||||||||
Total
Non-performing Assets
|
$ | 11,156 | $ | 10,168 | $ | 5,881 | $ | 10,497 | $ | 16,213 | ||||||||||
Non-performing
Loans to Total Loans
|
1.00 | % | 0.94 | % | 0.50 | % | 1.21 | % | 2.41 | % | ||||||||||
Allowance
for Loan Losses to Non-performing Loans
|
125.28 | % | 114.04 | % | 184.33 | % | 73.86 | % | 58.99 | % |
Louisville,
Kentucky
|
/s/ Crowe Horwath LLP
|
March
5, 2010
|
Crowe
Horwath LLP
|
December 31,
|
||||||||
2009
|
2008
|
|||||||
ASSETS
|
||||||||
Cash
and Due from Banks
|
$ | 16,052 | $ | 17,201 | ||||
Federal
Funds Sold and Other Short-term Investments
|
12,002 | 27,791 | ||||||
Cash
and Cash Equivalents
|
28,054 | 44,992 | ||||||
Securities
Available-for-Sale, at Fair Value
|
250,940 | 175,840 | ||||||
Securities
Held-to-Maturity, at Cost (Fair value of $2,801 and $3,358
on
|
||||||||
December
31, 2009 and 2008, respectively)
|
2,774 | 3,326 | ||||||
Loans
Held-for-Sale
|
5,706 | 3,166 | ||||||
Loans
|
879,475 | 892,511 | ||||||
Less: Unearned
Income
|
(1,653 | ) | (2,075 | ) | ||||
Allowance for Loan Losses
|
(11,016 | ) | (9,522 | ) | ||||
Loans,
Net
|
866,806 | 880,914 | ||||||
Stock
in FHLB of Indianapolis and Other Restricted Stock, at
Cost
|
10,621 | 10,621 | ||||||
Premises,
Furniture and Equipment, Net
|
22,153 | 22,330 | ||||||
Other
Real Estate
|
2,363 | 1,818 | ||||||
Goodwill
|
9,655 | 9,655 | ||||||
Intangible
Assets
|
2,618 | 3,141 | ||||||
Company
Owned Life Insurance
|
24,008 | 23,338 | ||||||
Accrued
Interest Receivable and Other Assets
|
17,267 | 11,687 | ||||||
TOTAL
ASSETS
|
$ | 1,242,965 | $ | 1,190,828 | ||||
LIABILITIES
|
||||||||
Non-interest-bearing
Demand Deposits
|
$ | 155,268 | $ | 147,977 | ||||
Interest-bearing
Demand, Savings, and Money Market Accounts
|
484,699 | 439,305 | ||||||
Time
Deposits
|
329,676 | 354,468 | ||||||
Total
Deposits
|
969,643 | 941,750 | ||||||
FHLB
Advances and Other Borrowings
|
148,121 | 131,664 | ||||||
Accrued
Interest Payable and Other Liabilities
|
11,652 | 12,240 | ||||||
TOTAL
LIABILITIES
|
1,129,416 | 1,085,654 | ||||||
Commitments
and Contingencies (Note 13)
|
||||||||
SHAREHOLDERS’
EQUITY
|
||||||||
Preferred
Stock, $10 par value; 500,000 shares authorized, no shares
issued
|
— | — | ||||||
Common
Stock, no par value, $1 stated value; 20,000,000 shares
authorized
|
11,077 | 11,030 | ||||||
Additional
Paid-in Capital
|
68,816 | 68,371 | ||||||
Retained
Earnings
|
29,041 | 23,019 | ||||||
Accumulated
Other Comprehensive Income
|
4,615 | 2,754 | ||||||
TOTAL
SHAREHOLDERS’ EQUITY
|
113,549 | 105,174 | ||||||
TOTAL
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
$ | 1,242,965 | $ | 1,190,828 | ||||
End
of period shares issued and outstanding
|
11,077,382 | 11,030,288 |
Years Ended December 31,
|
||||||||||||
2009
|
2008
|
2007
|
||||||||||
INTEREST
INCOME
|
||||||||||||
Interest
and Fees on Loans
|
$ | 53,905 | $ | 58,477 | $ | 63,852 | ||||||
Interest
on Federal Funds Sold and Other Short-term Investments
|
106 | 593 | 478 | |||||||||
Interest
and Dividends on Securities:
|
||||||||||||
Taxable
|
8,660 | 8,007 | 6,992 | |||||||||
Non-taxable
|
1,065 | 768 | 939 | |||||||||
TOTAL
INTEREST INCOME
|
63,736 | 67,845 | 72,261 | |||||||||
INTEREST
EXPENSE
|
||||||||||||
Interest
on Deposits
|
13,495 | 21,212 | 27,289 | |||||||||
Interest
on FHLB Advances and Other Borrowings
|
5,728 | 5,696 | 6,357 | |||||||||
TOTAL
INTEREST EXPENSE
|
19,223 | 26,908 | 33,646 | |||||||||
NET
INTEREST INCOME
|
44,513 | 40,937 | 38,615 | |||||||||
Provision
for Loan Losses
|
3,750 | 3,990 | 3,591 | |||||||||
NET
INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES
|
40,763 | 36,947 | 35,024 | |||||||||
NON-INTEREST
INCOME
|
||||||||||||
Trust
and Investment Product Fees
|
1,617 | 2,288 | 2,590 | |||||||||
Service
Charges on Deposit Accounts
|
4,395 | 4,920 | 4,361 | |||||||||
Insurance
Revenues
|
5,296 | 6,306 | 5,794 | |||||||||
Company
Owned Life Insurance
|
1,104 | 791 | 823 | |||||||||
Other
Operating Income
|
2,110 | 2,412 | 1,994 | |||||||||
Net
Gains on Sales of Loans and Related Assets
|
1,760 | 1,399 | 822 | |||||||||
Net
Gain (Loss) on Securities
|
(423 | ) | 94 | (680 | ) | |||||||
TOTAL
NON-INTEREST INCOME
|
15,859 | 18,210 | 15,704 | |||||||||
NON-INTEREST
EXPENSE
|
||||||||||||
Salaries
and Employee Benefits
|
21,961 | 20,786 | 21,671 | |||||||||
Occupancy
Expense
|
3,382 | 3,249 | 3,144 | |||||||||
Furniture
and Equipment Expense
|
2,653 | 2,428 | 2,235 | |||||||||
FDIC
Premiums
|
1,863 | 209 | 103 | |||||||||
Data
Processing Fees
|
1,368 | 1,493 | 1,370 | |||||||||
Professional
Fees
|
1,740 | 1,670 | 1,418 | |||||||||
Advertising
and Promotion
|
993 | 1,078 | 957 | |||||||||
Supplies
|
528 | 570 | 625 | |||||||||
Intangible
Amortization
|
909 | 889 | 894 | |||||||||
Other
Operating Expenses
|
4,994 | 4,344 | 4,804 | |||||||||
TOTAL
NON-INTEREST EXPENSE
|
40,391 | 36,716 | 37,221 | |||||||||
Income
before Income Taxes
|
16,231 | 18,441 | 13,507 | |||||||||
Income
Tax Expense
|
4,013 | 5,638 | 4,102 | |||||||||
NET
INCOME
|
$ | 12,218 | $ | 12,803 | $ | 9,405 | ||||||
Earnings
per Share
|
$ | 1.10 | $ | 1.16 | $ | 0.85 | ||||||
Diluted
Earnings per Share
|
$ | 1.10 | $ | 1.16 | $ | 0.85 |
Accumulated
|
||||||||||||||||||||||||
Additional
|
Other
|
Total
|
||||||||||||||||||||||
Common Stock
|
Paid-in
|
Retained
|
Comprehensive
|
Shareholders’
|
||||||||||||||||||||
Shares
|
Amount
|
Capital
|
Earnings
|
Income / (Loss)
|
Equity
|
|||||||||||||||||||
Balances,
January 1, 2007
|
11,008,562 | $ | 11,008 | $ | 68,216 | $ | 13,450 | $ | (283 | ) | $ | 92,391 | ||||||||||||
Comprehensive
Income:
|
||||||||||||||||||||||||
Net
Income
|
9,405 | 9,405 | ||||||||||||||||||||||
Changes
in Unrealized Gain (Loss) on
|
1,210 | 1,210 | ||||||||||||||||||||||
Securities
Available for Sale, net
|
||||||||||||||||||||||||
Change
in Unrecognized Loss on
|
||||||||||||||||||||||||
Postretirement
Benefit Obligation
|
30 | 30 | ||||||||||||||||||||||
Change
in Unrecognized Amounts in Pension
|
41 | 41 | ||||||||||||||||||||||
Total
Comprehensive Income
|
10,686 | |||||||||||||||||||||||
Cash
Dividends ($.56 per share)
|
(6,174 | ) | (6,174 | ) | ||||||||||||||||||||
Employee
Stock Purchase Plan
|
(70 | ) | (70 | ) | ||||||||||||||||||||
Restricted
Share Grants
|
20,922 | 21 | 262 | 283 | ||||||||||||||||||||
Balances,
December 31, 2007
|
11,029,484 | 11,029 | 68,408 | 16,681 | 998 | 97,116 | ||||||||||||||||||
Comprehensive
Income:
|
||||||||||||||||||||||||
Net
Income
|
12,803 | 12,803 | ||||||||||||||||||||||
Changes
in Unrealized Gain (Loss) on
|
||||||||||||||||||||||||
Securities
Available for Sale, net
|
1,612 | 1,612 | ||||||||||||||||||||||
Change
in Unrecognized Loss on
|
||||||||||||||||||||||||
Postretirement
Benefit Obligation
|
144 | 144 | ||||||||||||||||||||||
Total
Comprehensive Income
|
14,559 | |||||||||||||||||||||||
Cash
Dividends ($.56 per share)
|
(6,177 | ) | (6,177 | ) | ||||||||||||||||||||
Adjustment
to Initially Apply ASC 715-60
|
(288 | ) | (288 | ) | ||||||||||||||||||||
Employee
Stock Purchase Plan
|
(46 | ) | (46 | ) | ||||||||||||||||||||
Restricted
Share Grants
|
804 | 1 | 9 | 10 | ||||||||||||||||||||
Balances,
December 31, 2008
|
11,030,288 | 11,030 | 68,371 | 23,019 | 2,754 | 105,174 | ||||||||||||||||||
Comprehensive
Income:
|
||||||||||||||||||||||||
Net
Income
|
12,218 | 12,218 | ||||||||||||||||||||||
Changes
in Unrealized Gain (Loss) on
|
||||||||||||||||||||||||
Securities
Available for Sale, net
|
1,908 | 1,908 | ||||||||||||||||||||||
Change
in Unrecognized Amounts in Pension
|
(47 | ) | (47 | ) | ||||||||||||||||||||
Total
Comprehensive Income
|
14,079 | |||||||||||||||||||||||
Cash
Dividends ($.56 per share)
|
(6,196 | ) | (6,196 | ) | ||||||||||||||||||||
Issuance
of Common Stock for:
|
||||||||||||||||||||||||
Exercise
of Stock Options
|
3,354 | 3 | 6 | 9 | ||||||||||||||||||||
Employee
Stock Purchase Plan
|
(2 | ) | (2 | ) | ||||||||||||||||||||
Restricted
Share Grants
|
43,740 | 44 | 441 | 485 | ||||||||||||||||||||
Balances,
December 31, 2009
|
11,077,382 | $ | 11,077 | $ | 68,816 | $ | 29,041 | $ | 4,615 | $ | 113,549 |
Years Ended December 31,
|
||||||||||||
2009
|
2008
|
2007
|
||||||||||
CASH
FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|||||||||
Net
Income
|
$ | 12,218 | $ | 12,803 | $ | 9,405 | ||||||
Adjustments
to Reconcile Net Income to Net Cash from Operating
Activities:
|
||||||||||||
Net
Accretion on Securities
|
(144 | ) | (812 | ) | (383 | ) | ||||||
Depreciation
and Amortization
|
3,688 | 3,362 | 3,140 | |||||||||
Loans
Originated for Sale
|
(145,993 | ) | (105,448 | ) | (71,091 | ) | ||||||
Proceeds
from Sales of Loans Held-for-Sale
|
145,213 | 109,378 | 67,817 | |||||||||
Loss
in Investment in Limited Partnership
|
138 | 141 | 178 | |||||||||
Provision
for Loan Losses
|
3,750 | 3,990 | 3,591 | |||||||||
Gain
on Sale of Loans, net
|
(1,760 | ) | (1,399 | ) | (822 | ) | ||||||
Gain
on Securities, net
|
— | (1,031 | ) | (62 | ) | |||||||
Loss
(Gain) on Sales of Other Real Estate and Repossessed
Assets
|
364 | 62 | (52 | ) | ||||||||
Loss
(Gain) on Disposition and Impairment of Premises and
Equipment
|
11 | (25 | ) | 120 | ||||||||
Other-than-temporary
Impairment on Securities
|
423 | 937 | 742 | |||||||||
Increase
in Cash Surrender Value of Company Owned Life Insurance
|
(670 | ) | (805 | ) | (823 | ) | ||||||
Equity
Based Compensation
|
485 | 10 | 331 | |||||||||
Change
in Assets and Liabilities:
|
||||||||||||
Interest
Receivable and Other Assets
|
(4,236 | ) | 1,798 | 1,070 | ||||||||
Interest
Payable and Other Liabilities
|
(3,062 | ) | (827 | ) | (406 | ) | ||||||
Net
Cash from Operating Activities
|
10,425 | 22,134 | 12,755 | |||||||||
CASH
FLOWS FROM INVESTING ACTIVITIES
|
||||||||||||
Proceeds
from Maturity of Other Short-term Investments
|
— | — | 200 | |||||||||
Proceeds
from Maturities of Securities Available-for-Sale
|
54,294 | 52,304 | 41,899 | |||||||||
Proceeds
from Sales of Securities Available-for-Sale
|
379 | 53,641 | 998 | |||||||||
Purchase
of Securities Available-for-Sale
|
(127,192 | ) | (130,170 | ) | (10,434 | ) | ||||||
Proceeds
from Maturities of Securities Held-to-Maturity
|
554 | 1,140 | 1,671 | |||||||||
Purchase
of Loans
|
(24,078 | ) | (29,574 | ) | (23,065 | ) | ||||||
Proceeds
from Sales of Loans
|
21,057 | 5,369 | 3,953 | |||||||||
Loans
Made to Customers, net of Payments Received
|
10,678 | (4,447 | ) | (58,503 | ) | |||||||
Proceeds
from Sales of Other Real Estate
|
1,756 | 3,068 | 2,987 | |||||||||
Property
and Equipment Expenditures
|
(2,637 | ) | (2,122 | ) | (1,372 | ) | ||||||
Proceeds
from Sales of Property and Equipment
|
4 | 65 | 62 | |||||||||
Acquire
Capitalized Lease
|
— | — | (13 | ) | ||||||||
Acquire
Insurance Agencies
|
(386 | ) | — | — | ||||||||
Net
Cash from Investing Activities
|
(65,571 | ) | (50,726 | ) | (41,617 | ) | ||||||
CASH
FLOWS FROM FINANCING ACTIVITIES
|
||||||||||||
Change
in Deposits
|
27,952 | 64,388 | 9,862 | |||||||||
Change
in Short-term Borrowings
|
8,745 | (31,328 | ) | 5,828 | ||||||||
Advances
in Long-term Debt
|
29,250 | 25,000 | 30,000 | |||||||||
Repayments
of Long-term Debt
|
(21,541 | ) | (6,167 | ) | (12,317 | ) | ||||||
Employee
Stock Purchase Plan
|
(2 | ) | (46 | ) | (118 | ) | ||||||
Dividends
Paid
|
(6,196 | ) | (6,177 | ) | (6,174 | ) | ||||||
Net
Cash from Financing Activities
|
38,208 | 45,670 | 27,081 | |||||||||
Net
Change in Cash and Cash Equivalents
|
(16,938 | ) | 17,078 | (1,781 | ) | |||||||
Cash
and Cash Equivalents at Beginning of Year
|
44,992 | 27,914 | 29,695 | |||||||||
Cash
and Cash Equivalents at End of Year
|
$ | 28,054 | $ | 44,992 | $ | 27,914 | ||||||
Cash
Paid During the Year for
|
||||||||||||
Interest
|
$ | 19,815 | $ | 27,246 | $ | 33,781 | ||||||
Income
Taxes
|
4,305 | 6,122 | 2,395 | |||||||||
Supplemental
Non Cash Disclosures
|
||||||||||||
Loans
Transferred to Other Real Estate
|
$ | 2,665 | $ | 3,353 | $ | 4,919 |
Gross
|
Gross
|
|||||||||||||||
Amortized
|
Unrealized
|
Unrealized
|
Fair
|
|||||||||||||
Securities
Available-for-Sale:
|
Cost
|
Gains
|
Losses
|
Value
|
||||||||||||
2009
|
||||||||||||||||
U.S.
Treasury and Agency Securities
|
$ | 5,000 | $ | — | $ | (30 | ) | $ | 4,970 | |||||||
Obligations
of State and Political Subdivisions
|
21,511 | 931 | (64 | ) | 22,378 | |||||||||||
Mortgage-backed
Securities - Residential
|
214,591 | 7,065 | (404 | ) | 221,252 | |||||||||||
Equity
Securities
|
2,818 | 13 | (491 | ) | 2,340 | |||||||||||
Total
|
$ | 243,920 | $ | 8,009 | $ | (989 | ) | $ | 250,940 | |||||||
2008
|
||||||||||||||||
U.S.
Treasury and Agency Securities
|
$ | — | $ | — | $ | — | $ | — | ||||||||
Obligations
of State and Political Subdivisions
|
16,561 | 307 | — | 16,868 | ||||||||||||
Mortgage-backed
Securities - Residential
|
151,499 | 4,132 | (4 | ) | 155,627 | |||||||||||
Equity
Securities
|
3,620 | 44 | (319 | ) | 3,345 | |||||||||||
Total
|
$ | 171,680 | $ | 4,483 | $ | (323 | ) | $ | 175,840 |
Gross
|
Gross
|
|||||||||||||||
Securities
Held-to-Maturity:
|
Carrying
|
Unrecognized
|
Unrecognized
|
Fair
|
||||||||||||
Amount
|
Gains
|
Losses
|
Value
|
|||||||||||||
2009
|
||||||||||||||||
Obligations
of State and Political Subdivisions
|
$ | 2,774 | $ | 27 | $ | — | $ | 2,801 | ||||||||
2008
|
||||||||||||||||
Obligations
of State and Political Subdivisions
|
$ | 3,326 | $ | 32 | $ | — | $ | 3,358 |
Amortized
|
Fair
|
|||||||
Cost
|
Value
|
|||||||
Securities
Available-for-Sale:
|
||||||||
Due
in one year or less
|
$ | 1,695 | $ | 1,701 | ||||
Due
after one year through five years
|
3,320 | 3,467 | ||||||
Due
after five years through ten years
|
9,186 | 9,157 | ||||||
Due
after ten years
|
12,310 | 13,023 | ||||||
Mortgage-backed
Securities - Residential
|
214,591 | 221,252 | ||||||
Equity
Securities
|
2,818 | 2,340 | ||||||
Total
|
$ | 243,920 | $ | 250,940 |
Carrying
|
Fair
|
|||||||
Amount
|
Value
|
|||||||
Securities
Held-to-Maturity:
|
||||||||
Due
in one year or less
|
$ | 345 | $ | 346 | ||||
Due
after one year through five years
|
744 | 754 | ||||||
Due
after five years through ten years
|
1,365 | 1,380 | ||||||
Due
after ten years
|
320 | 321 | ||||||
Total
|
$ | 2,774 | $ | 2,801 |
2009
|
2008
|
2007
|
||||||||||
Available-
|
Available-
|
Available-
|
||||||||||
for-Sale
|
for-Sale
|
for-Sale
|
||||||||||
Proceeds
from Sales and Calls
|
$ | 379 | $ | 53,641 | $ | 998 | ||||||
Gross
Gains on Sales and Calls
|
— | 1,031 | 62 | |||||||||
Income
Taxes on Gross Gains
|
— | 351 | 25 |
At December 31,
2009
:
|
Less than 12 Months
|
12 Months or More
|
Total
|
|||||||||||||||||||||
Fair
|
Unrealized
|
Fair
|
Unrealized
|
Fair
|
Unrealized
|
|||||||||||||||||||
Value
|
Loss
|
Value
|
Loss
|
Value
|
Loss
|
|||||||||||||||||||
U.S.
Treasury and Agency Securities
|
$ | 4,970 | $ | (30 | ) | $ | — | $ | — | $ | 4,970 | $ | (30 | ) | ||||||||||
Obligations
of State and Political Subdivisions
|
3,419 | (64 | ) | — | — | 3,419 | (64 | ) | ||||||||||||||||
Mortgage-backed
Securities
-
Residential
|
47,726 | (403 | ) | 40 | (1 | ) | 47,766 | (404 | ) | |||||||||||||||
Equity
Securities
|
1,533 | (491 | ) | — | — | 1,533 | (491 | ) | ||||||||||||||||
Total
|
$ | 57,648 | $ | (988 | ) | $ | 40 | $ | (1 | ) | $ | 57,688 | $ | (989 | ) |
At December 31,
2008
:
|
Less than 12 Months
|
12 Months or More
|
Total
|
|||||||||||||||||||||
Fair
|
Unrealized
|
Fair
|
Unrealized
|
Fair
|
Unrealized
|
|||||||||||||||||||
Value
|
Loss
|
Value
|
Loss
|
Value
|
Loss
|
|||||||||||||||||||
U.S.
Treasury and Agency Securities
|
$ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
Obligations
of State and Political Subdivisions
|
— | — | — | — | — | — | ||||||||||||||||||
Mortgage-backed
Securities
-
Residential
|
1,253 | (2 | ) | 617 | (2 | ) | 1,870 | (4 | ) | |||||||||||||||
Equity
Securities
|
1,705 | (319 | ) | — | — | 1,705 | (319 | ) | ||||||||||||||||
Total
|
$ | 2,958 | $ | (321 | ) | $ | 617 | $ | (2 | ) | $ | 3,575 | $ | (323 | ) |
2009
|
2008
|
|||||||
Commercial
and Industrial Loans
|
$ | 188,962 | $ | 175,828 | ||||
Commercial
Real Estate Loans
|
334,255 | 329,363 | ||||||
Agricultural
Loans
|
156,845 | 159,923 | ||||||
Consumer
Loans
|
114,736 | 127,343 | ||||||
Residential
Mortgage Loans
|
84,677 | 100,054 | ||||||
Total
|
$ | 879,475 | $ | 892,511 |
Loans
past due over 90 days and accruing and Restructured Loans
|
$ | 419 | $ | 34 | ||||
Non-accrual
Loans
|
8,374 | 8,316 | ||||||
Total
|
$ | 8,793 | $ | 8,350 |
Information
regarding impaired loans:
|
2009
|
2008
|
|||||||
Year-end
impaired loans with no allowance for loan losses allocated
|
$ | 1,213 | $ | 1,713 | |||||
Year-end
impaired loans with allowance for loan losses allocated
|
6,932 | 4,232 | |||||||
Amount
of allowance allocated to impaired loans
|
3,024 | 1,797 |
2009
|
2008
|
2007
|
||||||||||
Average
balance of impaired loans during the year
|
$ | 6,676 | $ | 5,787 | $ | 7,376 | ||||||
Interest
income recognized during impairment
|
73 | 161 | 314 | |||||||||
Interest
income recognized on cash basis
|
71 | 161 | 304 |
Balance
|
Changes
|
Balance
|
||||||||||||||
January
1,
|
in
Persons
|
Deductions
|
December
31,
|
|||||||||||||
2009
|
Additions
|
Included
|
Collected
|
Charged-off
|
2009
|
|||||||||||
$
7,386
|
$
3,633
|
$
(1,260)
|
$
(5,330)
|
$
—
|
$
4,429
|
2009
|
2008
|
2007
|
||||||||||
Balance
as of January 1
|
$ | 9,522 | $ | 8,044 | $ | 7,129 | ||||||
Provision
for Loan Losses
|
3,750 | 3,990 | 3,591 | |||||||||
Recoveries
of Prior Loan Losses
|
918 | 612 | 568 | |||||||||
Loan
Losses Charged to the Allowance
|
(3,174 | ) | (3,124 | ) | (3,244 | ) | ||||||
Balance
as of December 31
|
$ | 11,016 | $ | 9,522 | $ | 8,044 |
2009
|
2008
|
|||||||
Land
|
$ | 4,653 | $ | 4,540 | ||||
Buildings
and Improvements
|
29,353 | 28,114 | ||||||
Furniture
and Equipment
|
17,397 | 16,922 | ||||||
Total
Premises, Furniture and Equipment
|
51,403 | 49,576 | ||||||
Less: Accumulated
Depreciation
|
(29,250 | ) | (27,246 | ) | ||||
Total
|
$ | 22,153 | $ | 22,330 |
2009
|
2008
|
|||||||
Capital
Lease
|
$ | 743 | $ | 743 | ||||
Less:
Accumulated Depreciation
|
(108 | ) | (72 | ) | ||||
Total
|
$ | 635 | $ | 671 |
2010
|
$ | 81 | ||
2011
|
81 | |||
2012
|
81 | |||
2013
|
81 | |||
2014
|
81 | |||
Thereafter
|
1,022 | |||
Total
minimum lease payments
|
1,427 | |||
Less:
Amount representing interest
|
(726 | ) | ||
Present
Value of Net Minimum Lease Payments
|
$ | 701 |
2010
|
$ | 109,685 | ||
2011
|
134,195 | |||
2012
|
74,965 | |||
2013
|
9,076 | |||
2014
|
1,390 | |||
Thereafter
|
365 | |||
Total
|
$ | 329,676 |
December
31,
|
||||||||
2009
|
2008
|
|||||||
Long-term
Advances from Federal Home Loan Bank collateralized by
qualifying
mortgages, investment securities, and mortgage-backed
securities
|
$ | 77,369 | $ | 87,392 | ||||
Term
Loans
|
6,000 | 7,500 | ||||||
Subordinated
Debentures
|
29,250 | 10,000 | ||||||
Capital
Lease Obligation
|
701 | 716 | ||||||
Long-term
Borrowings
|
113,320 | 105,608 | ||||||
Overnight
Variable Rate Advances from Federal Home Loan Bank collateralized by
qualifying mortgages, investment securities, and mortgage-backed
securities
|
$ | 1,300 | $ | — | ||||
Repurchase
Agreements
|
33,501 | 26,056 | ||||||
Short-term
Borrowings
|
34,801 | 26,056 | ||||||
Total
Borrowings
|
$ | 148,121 | $ | 131,664 |
2009
|
2008
|
|||||||
Average
Daily Balance During the Year
|
$ | 24,231 | $ | 30,995 | ||||
Average
Interest Rate During the Year
|
0.73 | % | 1.52 | % | ||||
Maximum
Month-end Balance During the Year
|
$ | 33,501 | $ | 42,975 | ||||
Weighted
Average Interest at Year-end
|
0.50 | % | 0.82 | % |
2010
|
$ | 30,787 | ||
2011
|
1,530 | |||
2012
|
21,533 | |||
2013
|
16,536 | |||
2014
|
11,539 | |||
Thereafter
|
30,694 | |||
Total
|
$ | 112,619 |
Minimum
Required
|
||||||||||||||||||||||||
To
Be Well-
|
||||||||||||||||||||||||
Minimum
Required
|
Capitalized
Under
|
|||||||||||||||||||||||
For
Capital
|
Prompt
Corrective
|
|||||||||||||||||||||||
Actual
|
Adequacy Purposes:
|
Action Regulations:
|
||||||||||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||||||||||||
Total
Capital
|
||||||||||||||||||||||||
(to
Risk Weighted Assets)
|
||||||||||||||||||||||||
Consolidated
|
$ | 135,153 | 14.09 | % | $ | 76,738 | 8.00 | % | N/A | N/A | ||||||||||||||
Bank
|
129,874 | 13.62 | 76,266 | 8.00 | $ | 95,333 | 10.00 | % | ||||||||||||||||
Tier
1 Capital
|
||||||||||||||||||||||||
(to
Risk Weighted Assets)
|
||||||||||||||||||||||||
Consolidated
|
$ | 96,887 | 10.10 | % | $ | 38,369 | 4.00 | % | N/A | N/A | ||||||||||||||
Bank
|
118,858 | 12.47 | 38,133 | 4.00 | $ | 57,200 | 6.00 | % | ||||||||||||||||
Tier
1 Capital
|
||||||||||||||||||||||||
(to
Average Assets)
|
||||||||||||||||||||||||
Consolidated
|
$ | 96,887 | 7.64 | % | $ | 50,730 | 4.00 | % | N/A | N/A | ||||||||||||||
Bank
|
118,858 | 9.50 | 50,048 | 4.00 | $ | 62,560 | 5.00 | % |
Minimum
Required
|
||||||||||||||||||||||||
To
Be Well-
|
||||||||||||||||||||||||
Minimum
Required
|
Capitalized
Under
|
|||||||||||||||||||||||
For
Capital
|
Prompt
Corrective
|
|||||||||||||||||||||||
Actual
|
Adequacy Purposes:
|
Action Regulations:
|
||||||||||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||||||||||||
Total
Capital
|
||||||||||||||||||||||||
(to
Risk Weighted Assets)
|
||||||||||||||||||||||||
Consolidated
|
$ | 109,029 | 11.42 | % | $ | 76,387 | 8.00 | % | N/A | N/A | ||||||||||||||
Bank
|
107,243 | 11.32 | 75,782 | 8.00 | $ | 94,727 | 10.00 | % | ||||||||||||||||
Tier
1 Capital
|
||||||||||||||||||||||||
(to
Risk Weighted Assets)
|
||||||||||||||||||||||||
Consolidated
|
$ | 89,507 | 9.37 | % | $ | 38,193 | 4.00 | % | N/A | N/A | ||||||||||||||
Bank
|
97,721 | 10.32 | 37,891 | 4.00 | $ | 56,836 | 6.00 | % | ||||||||||||||||
Tier
1 Capital
|
||||||||||||||||||||||||
(to
Average Assets)
|
||||||||||||||||||||||||
Consolidated
|
$ | 89,507 | 7.54 | % | $ | 47,512 | 4.00 | % | N/A | N/A | ||||||||||||||
Bank
|
97,721 | 8.29 | 47,161 | 4.00 | $ | 58,952 | 5.00 | % |
Year Ended December 31,
2009
|
||||||||||||||||
|
Weighted
Average
|
|
||||||||||||||
Number
of
|
Weighted
Average
Price
|
Life
of
Options
|
Aggregate
Intrinsic
|
|||||||||||||
Options
|
of Options
|
(in years)
|
Value
|
|||||||||||||
Outstanding
at Beginning of Period
|
248,871 | $ | 16.25 | |||||||||||||
Granted
|
— | — | ||||||||||||||
Exercised
|
(30,035 | ) | 14.50 | |||||||||||||
Forfeited
|
(2,992 | ) | 13.49 | |||||||||||||
Expired
|
(57,888 | ) | 16.77 | |||||||||||||
Outstanding
& Exercisable at End of Period
|
157,956 | $ | 16.44 | 5.90 | $ | 150 |
2009
|
2008
|
2007
|
||||||||||
Intrinsic
Value of Options Exercised
|
$ | 55 | $ | — | $ | — | ||||||
Cash
Received from Option Exercises
|
$ | — | $ | — | $ | — | ||||||
Tax
Benefit of Option Exercises
|
$ | 10 | $ | — | $ | — | ||||||
Weighted
Average Fair Value of Options Granted
|
$ | — | $ | — | $ | — |
Year
Ended
|
||||||||
December 31, 2009
|
||||||||
Weighted
|
||||||||
Restricted
|
Average
Market
|
|||||||
Shares
|
Price at Grant
|
|||||||
Outstanding
at Beginning of Period
|
— | $ | — | |||||
Granted
|
43,740 | 11.08 | ||||||
Issued
and Vested
|
43,740 | 11.08 | ||||||
Forfeited
|
— | — | ||||||
Outstanding
at End of Period
|
— | — |
Changes
in Benefit Obligation:
|
2009
|
2008
|
||||||
Obligation
at Beginning of Year
|
$ | 620 | $ | 615 | ||||
Interest
Cost
|
36 | 46 | ||||||
Benefits
Paid
|
(65 | ) | (52 | ) | ||||
Actuarial
(Gain) Loss
|
83 | 11 | ||||||
Obligation
at End of Year
|
674 | 620 | ||||||
Changes
in Plan Assets:
|
||||||||
Fair
Value at Beginning of Year
|
331 | 270 | ||||||
Actual
Return on Plan Assets
|
(1 | ) | 14 | |||||
Employer
Contributions
|
24 | 99 | ||||||
Benefits
Paid
|
(65 | ) | (52 | ) | ||||
Fair
Value at End of Year
|
289 | 331 | ||||||
Funded
Status:
|
||||||||
Funded
Status at End of Year
|
$ | (385 | ) | $ | (289 | ) |
Net
Loss (Gain)
|
$ | 268 | $ | 193 | ||||
Prior
Service Cost
|
12 | 9 | ||||||
$ | 280 | $ | 202 |
2009
|
2008
|
2007
|
||||||||||
Interest
Cost
|
$ | 36 | $ | 37 | $ | 37 | ||||||
Expected
Return on Assets
|
(7 | ) | (13 | ) | (12 | ) | ||||||
Amortization
of Transition Amount
|
— | (1 | ) | (1 | ) | |||||||
Amortization
of Prior Service Cost
|
(3 | ) | (3 | ) | (3 | ) | ||||||
Recognition
of Net Loss
|
16 | 21 | 27 | |||||||||
Net
Periodic Benefit Cost
|
$ | 42 | $ | 41 | $ | 48 | ||||||
Net
Loss During the Period
|
91 | 11 | 2 | |||||||||
Amortization
of Unrecognized Loss
|
(16 | ) | (16 | ) | (74 | ) | ||||||
Amortization
of Transition Cost
|
— | 1 | 1 | |||||||||
Amortization
of Prior Service Cost
|
3 | 4 | 3 | |||||||||
Total
Recognized in Other Comprehensive Income
|
78 | — | (68 | ) | ||||||||
Total
Recognized in Net Periodic Benefit Cost and Other
|
||||||||||||
Comprehensive
Income
|
$ | 120 | $ | 41 | $ | (20 | ) |
2009
|
2008
|
2007
|
||||||||||
Discount
Rate
|
5.29 | % | 6.17 | % | 6.25 | % | ||||||
Rate
of Compensation Increase
(1)
|
N/A | N/A | N/A | |||||||||
Weighted-average
assumptions used to determine net periodic pension cost:
|
||||||||||||
2009
|
2008
|
2007
|
||||||||||
Discount
Rate
|
6.17 | % | 6.25 | % | 5.75 | % | ||||||
Expected
Return on Plan Assets
|
2.20 | % | 4.50 | % | 4.75 | % | ||||||
Rate
of Compensation Increase
(1)
|
N/A | N/A | N/A |
Target
Allocation
|
Percentage
of Plan Assets
at
Year-end
|
|||||||||||
Asset Category
|
2010
|
2009
|
2008
|
|||||||||
Cash
|
50 | % | 100 | % | 71 | % | ||||||
Certificates
of Deposit
|
50 | % | — | % | 29 | % | ||||||
Total
|
100 | % | 100 | % | 100 | % |
2009
|
2008
|
|||||||
Obligation
at the Beginning of Year
|
$ | 450 | $ | 619 | ||||
Unrecognized
Loss (Gain)
|
7 | (174 | ) | |||||
Components
of Net Periodic Postretirement Benefit Cost
|
||||||||
Service
Cost
|
17 | 35 | ||||||
Interest
Cost
|
25 | 34 | ||||||
Net
Expected Benefit Payments
|
(53 | ) | (64 | ) | ||||
Obligation
at End of Year
|
$ | 446 | $ | 450 |
2009
|
2008
|
|||||||
Service
Cost
|
$ | 17 | $ | 35 | ||||
Interest
Cost
|
25 | 34 | ||||||
Net
Postretirement Benefit Expense
|
42 | 69 | ||||||
Net
Gain During Period Recognized in Other Comprehensive
Income
|
— | (238 | ) | |||||
Total
Recognized in Net Postretirement Benefit Expense
|
||||||||
and
Other Comprehensive Income
|
$ | 42 | $ | (169 | ) |
2009
|
2008
|
2007
|
||||||||||
Discount
Rate
|
6.00 | % | 6.00 | % | 5.50 | % |
2009
|
2008
|
|||||||
Health
Care Cost Trend Rate Assumed for Next Year
|
8.00 | % | 8.00 | % | ||||
Rate
that the Cost Trend Rate Gradually Declines to
|
4.50 | % | 4.50 | % | ||||
Year
that the Rate Reaches the Rate it is Assumed to Remain at
|
2016
|
2015
|
One-Percentage-Point
|
One-Percentage-Point
|
|||||||
Increase
|
Decrease
|
|||||||
Effect
on Total of Service and Interest Cost
|
$ | 3 | $ | (3 | ) | |||
Effect
on Postretirement Benefit Obligation
|
$ | 25 | $ | (23 | ) |
Pension
|
Postretirement
|
|||||||
Year
|
Benefits
|
Benefits
|
||||||
2010
|
$ | 58 | $ | 38 | ||||
2011
|
53 | 48 | ||||||
2012
|
49 | 40 | ||||||
2013
|
104 | 42 | ||||||
2014
|
41 | 39 | ||||||
2015-2019
|
303 | 272 |
The
provision for income taxes consists of the following:
|
2009
|
2008
|
2007
|
|||||||||
Current
Federal
|
$ | 4,424 | $ | 4,604 | $ | 2,991 | ||||||
Current
State
|
25 | 476 | 504 | |||||||||
Deferred
Federal
|
(192 | ) | 719 | 634 | ||||||||
Deferred
State
|
(244 | ) | (161 | ) | (27 | ) | ||||||
Total
|
$ | 4,013 | $ | 5,638 | $ | 4,102 |
2009
|
2008
|
2007
|
||||||||||
Statutory
Rate Times Pre-tax Income
|
$ | 5,518 | $ | 6,270 | $ | 4,592 | ||||||
Add
(Subtract) the Tax Effect of:
|
||||||||||||
Income
from Tax-exempt Loans and Investments
|
(512 | ) | (351 | ) | (346 | ) | ||||||
State
Income Tax, Net of Federal Tax Effect
|
(145 | ) | 208 | 315 | ||||||||
General
Business Tax Credits
|
(466 | ) | (182 | ) | (182 | ) | ||||||
Dividends
Received Deduction
|
(5 | ) | (22 | ) | — | |||||||
Company
Owned Life Insurance
|
(375 | ) | (269 | ) | (280 | ) | ||||||
Other
Differences
|
(2 | ) | (16 | ) | 3 | |||||||
Total
Income Taxes
|
$ | 4,013 | $ | 5,638 | $ | 4,102 |
2009
|
2008
|
||||||||
Deferred
Tax Assets:
|
|||||||||
Allowance
for Loan Losses
|
$ | 3,815 | $ | 2,871 | |||||
Deferred
Compensation and Employee Benefits
|
1,585 | 1,535 | |||||||
Other-than-temporary
Impairment
|
401 | 676 | |||||||
Accrued
Expenses
|
440 | 487 | |||||||
Business
Combination Fair Value Adjustments
|
14 | 23 | |||||||
Pension
and Postretirement Plans
|
1 | — | |||||||
Other
|
271 | 113 | |||||||
Total
Deferred Tax Assets
|
6,527 | 5,705 | |||||||
Deferred
Tax Liabilities:
|
|||||||||
Depreciation
|
(179 | ) | (345 | ) | |||||
Leasing
Activities, Net
|
(3,580 | ) | (3,254 | ) | |||||
Investment
in Low Income Housing Partnerships
|
(392 | ) | (262 | ) | |||||
Unrealized
Appreciation on Securities
|
(2,404 | ) | (1,451 | ) | |||||
FHLB
Stock Dividends
|
(440 | ) | (440 | ) | |||||
Prepaid
Expenses
|
(394 | ) | (408 | ) | |||||
Intangibles
|
(105 | ) | (254 | ) | |||||
Pension
and Postretirement Plans
|
— | (30 | ) | ||||||
Other
|
(276 | ) | (18 | ) | |||||
Total
Deferred Tax Liabilities
|
(7,770 | ) | (6,462 | ) | |||||
Valuation
Allowance
|
(45 | ) | (45 | ) | |||||
Net
Deferred Tax Asset (Liability)
|
$ | (1,288 | ) | $ | (802 | ) |
2009
|
2008
|
2007
|
||||||||||
Earnings
per Share:
|
||||||||||||
Net
Income
|
$ | 12,218 | $ | 12,803 | $ | 9,405 | ||||||
Weighted
Average Shares Outstanding
|
11,065,917 | 11,029,519 | 11,009,536 | |||||||||
Earnings
per Share
|
$ | 1.10 | $ | 1.16 | $ | 0.85 | ||||||
Diluted
Earnings per Share:
|
||||||||||||
Net
Income
|
$ | 12,218 | $ | 12,803 | $ | 9,405 | ||||||
Weighted
Average Shares Outstanding
|
11,065,917 | 11,029,519 | 11,009,536 | |||||||||
Stock
Options, Net
|
3,071 | 392 | 15,690 | |||||||||
Diluted
Weighted Average Shares Outstanding
|
11,068,988 | 11,029,911 | 11,025,226 | |||||||||
Diluted
Earnings per Share
|
$ | 1.10 | $ | 1.16 | $ | 0.85 |
Years
Ending December 31:
|
Premises and Equipment
|
|||
2010
|
$ | 256 | ||
2011
|
157 | |||
2012
|
132 | |||
2013
|
84 | |||
2014
|
82 | |||
Thereafter
|
1,034 | |||
Total
|
$ | 1,745 |
2009
|
2008
|
|||||||||||||||
Fixed
|
Variable
|
Fixed
|
Variable
|
|||||||||||||
Rate
|
Rate
|
Rate
|
Rate
|
|||||||||||||
Commitments
to Fund Loans:
|
||||||||||||||||
Consumer
Lines
|
$ | 1,839 | $ | 102,628 | $ | 3,488 | $ | 98,592 | ||||||||
Commercial
Operating Lines
|
7,733 | 120,732 | 4,779 | 122,882 | ||||||||||||
Residential
Mortgages
|
8,324 | 1,387 | — | 858 | ||||||||||||
Total
Commitments to Fund Loans
|
$ | 17,896 | $ | 224,747 | $ | 8,267 | $ | 222,332 | ||||||||
Commitments
to Sell Loans
|
$ | 15,263 | $ | — | $ | 27,219 | $ | — | ||||||||
Standby
Letters of Credit
|
$ | 970 | $ | 2,517 | $ | 975 | $ | 7,580 |
Fair Value Measurements at December 31, 2009 Using
|
||||||||||||||||
Quoted Prices in
|
||||||||||||||||
Active Markets for
|
Significant Other
|
Significant
|
||||||||||||||
Identical Assets
|
Observable Inputs
|
Unobservable Inputs
|
||||||||||||||
Carrying Value
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
|||||||||||||
Assets:
|
||||||||||||||||
U.S.
Treasury and Agency Securities
|
$ | 4,970 | $ | — | $ | 4,970 | $ | — | ||||||||
Obligations
of State and Political Subdivisions
|
22,378 | — | 22,378 | — | ||||||||||||
Mortgage-backed
Securities - Residential
|
221,252 | — | 221,252 | — | ||||||||||||
Equity
Securities
|
2,340 | 1,987 | — | 353 | ||||||||||||
Loans
Held-for-Sale
|
5,706 | — | 5,706 | — |
Fair Value Measurements at December 31, 2008 Using
|
||||||||||||||||
Quoted Prices in
|
||||||||||||||||
Active Markets for
|
Significant Other
|
Significant
|
||||||||||||||
Identical Assets
|
Observable Inputs
|
Unobservable Inputs
|
||||||||||||||
Carrying Value
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
|||||||||||||
Assets:
|
||||||||||||||||
U.S.
Treasury and Agency Securities
|
$ | — | $ | — | $ | — | $ | — | ||||||||
Obligations
of State and Political Subdivisions
|
16,868 | — | 16,868 | — | ||||||||||||
Mortgage-backed
Securities - Residential
|
155,627 | — | 155,627 | — | ||||||||||||
Equity
Securities
|
3,345 | 2,190 | — | 1,155 |
Fair Value Measurements
|
||||
Using Significant
|
||||
Unobservable Inputs
|
||||
(Level 3)
|
||||
Available-for-Sale
|
||||
Securities
|
||||
Year
Ended December 31, 2009:
|
||||
Balance
of Recurring Level 3 Assets at January 1, 2009
|
$ | 1,155 | ||
Sale
of Securities
|
(379 | ) | ||
Other-than-temporary
Impairment Charges Recognized through Net Income
|
(423 | ) | ||
Ending
Balance, December 31, 2009
|
$ | 353 |
Fair Value Measurements
|
||||
Using Significant
|
||||
Unobservable Inputs
|
||||
(Level 3)
|
||||
Available-for-Sale
|
||||
Securities
|
||||
Year
Ended December 31, 2008:
|
||||
Balance
of Recurring Level 3 Assets at January 1, 2008
|
$ | 2,092 | ||
Other-than-temporary
Impairment Charges Recognized through Net Income
|
(937 | ) | ||
Ending
Balance, December 31, 2008
|
$ | 1,155 |
Fair Value Measurements at December 31, 2009 Using
|
||||||||||||||||
Quoted Prices in
|
||||||||||||||||
Active Markets for
|
Significant Other
|
Significant
|
||||||||||||||
Identical Assets
|
Observable Inputs
|
Unobservable Inputs
|
||||||||||||||
Carrying Value
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
|||||||||||||
Assets:
|
||||||||||||||||
Impaired
Loans
|
$ | 3,699 | $ | — | $ | — | $ | 3,699 | ||||||||
Other
Real Estate
|
$ | 2,363 | $ | — | $ | — | $ | 2,363 |
Fair Value Measurements at December 31, 2008 Using
|
||||||||||||||||
Quoted Prices in
|
||||||||||||||||
Active Markets for
|
Significant Other
|
Significant
|
||||||||||||||
Identical Assets
|
Observable Inputs
|
Unobservable Inputs
|
||||||||||||||
Carrying Value
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
|||||||||||||
Assets:
|
||||||||||||||||
Impaired
Loans
|
$ | 2,284 | $ | — | $ | — | $ | 2,284 | ||||||||
Other
Real Estate
|
$ | 1,818 | $ | — | $ | — | $ | 1,818 |
December 31, 2009
|
December 31, 2008
|
|||||||||||||||
Carrying
|
Fair
|
Carrying
|
Fair
|
|||||||||||||
Value
|
Value
|
Value
|
Value
|
|||||||||||||
Financial
Assets:
|
||||||||||||||||
Cash
and Short-term Investments
|
$ | 28,054 | $ | 28,054 | $ | 44,992 | $ | 44,992 | ||||||||
Securities
Held-to-Maturity
|
2,774 | 2,801 | 3,326 | 3,358 | ||||||||||||
FHLB
Stock and Other Restricted Stock
|
10,621 | N/A | 10,621 | N/A | ||||||||||||
Loans,
including Loans Held-for-Sale, Net
|
872,512 | 880,077 | 884,080 | 892,785 | ||||||||||||
Accrued
Interest Receivable
|
6,605 | 6,605 | 7,215 | 7,215 | ||||||||||||
Financial
Liabilities:
|
||||||||||||||||
Demand,
Savings, and Money Market Deposits
|
(639,967 | ) | (639,967 | ) | (587,282 | ) | (587,282 | ) | ||||||||
Time
Deposits
|
(329,676 | ) | (330,628 | ) | (354,468 | ) | (357,089 | ) | ||||||||
Short-term
Borrowings
|
(34,801 | ) | (34,801 | ) | (26,056 | ) | (26,056 | ) | ||||||||
Long-term
Debt
|
(113,320 | ) | (114,742 | ) | (105,608 | ) | (111,092 | ) | ||||||||
Accrued
Interest Payable
|
(2,292 | ) | (2,292 | ) | (2,884 | ) | (2,884 | ) | ||||||||
Unrecognized
Financial Instruments:
|
||||||||||||||||
Commitments
to Extend Credit
|
— | — | — | — | ||||||||||||
Standby
Letters of Credit
|
— | — | — | — | ||||||||||||
Commitments
to Sell Loans
|
— | — | — | — |
Trust
and
|
||||||||||||||||||||
Investment
|
||||||||||||||||||||
Core
|
Advisory
|
Consolidated
|
||||||||||||||||||
Banking
|
Services
|
Insurance
|
Other
|
Totals
|
||||||||||||||||
Net
Interest Income
|
$ | 45,825 | $ | 13 | $ | 59 | $ | (1,384 | ) | $ | 44,513 | |||||||||
Net
Gains on Sales of Loans and Related Assets
|
1,760 | — | — | — | 1,760 | |||||||||||||||
Net
Gain (Loss) on Securities
|
— | — | — | (423 | ) | (423 | ) | |||||||||||||
Trust
and Investment Product Fees
|
4 | 1,617 | — | (4 | ) | 1,617 | ||||||||||||||
Insurance
Revenues
|
82 | 18 | 5,241 | (45 | ) | 5,296 | ||||||||||||||
Noncash
Items:
|
||||||||||||||||||||
Provision
for Loan Losses
|
3,750 | — | — | — | 3,750 | |||||||||||||||
Depreciation
and Amortization
|
2,727 | 27 | 934 | — | 3,688 | |||||||||||||||
Income
Tax Expense
|
5,298 | 15 | (29 | ) | (1,271 | ) | 4,013 | |||||||||||||
Segment
Profit (Loss)
|
13,140 | 20 | (44 | ) | (898 | ) | 12,218 | |||||||||||||
Segment
Assets
|
1,236,745 | 2,182 | 8,432 | (4,394 | ) | 1,242,965 |
Trust
and
|
||||||||||||||||||||
Investment
|
||||||||||||||||||||
Core
|
Advisory
|
Consolidated
|
||||||||||||||||||
Banking
|
Services
|
Insurance
|
Other
|
Totals
|
||||||||||||||||
Net
Interest Income
|
$ | 41,725 | $ | 60 | $ | 71 | $ | (919 | ) | $ | 40,937 | |||||||||
Net
Gains on Sales of Loans and Related Assets
|
1,399 | — | — | — | 1,399 | |||||||||||||||
Net
Gain (Loss) on Securities
|
1,031 | — | — | (937 | ) | 94 | ||||||||||||||
Trust
and Investment Product Fees
|
4 | 2,312 | — | (28 | ) | 2,288 | ||||||||||||||
Insurance
Revenues
|
75 | 43 | 6,256 | (68 | ) | 6,306 | ||||||||||||||
Noncash
Items:
|
||||||||||||||||||||
Provision
for Loan Losses
|
3,990 | — | — | — | 3,990 | |||||||||||||||
Depreciation
and Amortization
|
2,490 | 25 | 847 | — | 3,362 | |||||||||||||||
Income
Tax Expense
|
6,383 | 230 | 256 | (1,231 | ) | 5,638 | ||||||||||||||
Segment
Profit (Loss)
|
13,185 | 338 | 413 | (1,133 | ) | 12,803 | ||||||||||||||
Segment
Assets
|
1,183,773 | 1,992 | 8,930 | (3,867 | ) | 1,190,828 |
Trust
and
|
||||||||||||||||||||
Investment
|
||||||||||||||||||||
Core
|
Advisory
|
Consolidated
|
||||||||||||||||||
Banking
|
Services
|
Insurance
|
Other
|
Totals
|
||||||||||||||||
Net
Interest Income
|
$ | 39,677 | $ | 94 | $ | 111 | $ | (1,267 | ) | $ | 38,615 | |||||||||
Net
Gains on Sales of Loans and Related Assets
|
822 | — | — | — | 822 | |||||||||||||||
Net
Gain (Loss) on Securities
|
— | — | — | (680 | ) | (680 | ) | |||||||||||||
Trust
and Investment Product Fees
|
3 | 2,690 | — | (103 | ) | 2,590 | ||||||||||||||
Insurance
Revenues
|
102 | 42 | 5,727 | (77 | ) | 5,794 | ||||||||||||||
Noncash
Items:
|
||||||||||||||||||||
Provision
for Loan Losses
|
3,591 | — | — | — | 3,591 | |||||||||||||||
Depreciation
and Amortization
|
2,319 | 21 | 800 | — | 3,140 | |||||||||||||||
Income
Tax Expense
|
4,896 | 316 | 262 | (1,372 | ) | 4,102 | ||||||||||||||
Segment
Profit (Loss)
|
10,153 | 481 | 396 | (1,625 | ) | 9,405 | ||||||||||||||
Segment
Assets
|
1,121,183 | 2,201 | 9,675 | (1,349 | ) | 1,131,710 |
December
31,
|
||||||||
2009
|
2008
|
|||||||
ASSETS
|
||||||||
Cash
|
$ | 4,848 | $ | 1,121 | ||||
Securities
Available-for-Sale, at Fair Value
|
2,340 | 3,345 | ||||||
Investment
in Subsidiary Bank
|
135,491 | 113,364 | ||||||
Investment
in Non-banking Subsidiaries
|
2,783 | 2,188 | ||||||
Other
Assets
|
5,422 | 4,347 | ||||||
Total
Assets
|
$ | 150,884 | $ | 124,365 | ||||
LIABILITIES
|
||||||||
Borrowings
|
$ | 35,250 | $ | 17,500 | ||||
Other
Liabilities
|
2,085 | 1,691 | ||||||
Total
Liabilities
|
37,335 | 19,191 | ||||||
SHAREHOLDERS’
EQUITY
|
||||||||
Common
Stock
|
11,077 | 11,030 | ||||||
Additional
Paid-in Capital
|
68,816 | 68,371 | ||||||
Retained
Earnings
|
29,041 | 23,019 | ||||||
Accumulated
Other Comprehensive Income
|
4,615 | 2,754 | ||||||
Total
Shareholders’ Equity
|
113,549 | 105,174 | ||||||
Total
Liabilities and Shareholders’ Equity
|
$ | 150,884 | $ | 124,365 |
Years
Ended December 31,
|
||||||||||||
2009
|
2008
|
2007
|
||||||||||
INCOME
|
||||||||||||
Dividends
from Subsidiaries
|
||||||||||||
Bank
|
$ | 8,000 | $ | 13,000 | $ | 2,000 | ||||||
Non-bank
|
— | — | 500 | |||||||||
Dividend
and Interest Income
|
57 | 57 | 101 | |||||||||
Net
Loss on Securities
|
(423 | ) | (937 | ) | (680 | ) | ||||||
Other
Income
|
119 | 39 | 66 | |||||||||
Total
Income
|
7,753 | 12,159 | 1,987 | |||||||||
EXPENSES
|
||||||||||||
Salaries
and Employee Benefits
|
364 | 163 | 367 | |||||||||
Professional
Fees
|
342 | 245 | 309 | |||||||||
Occupancy
and Equipment Expense
|
7 | 8 | 6 | |||||||||
Interest
Expense
|
1,459 | 981 | 1,369 | |||||||||
Other
Expenses
|
292 | 324 | 413 | |||||||||
Total
Expenses
|
2,464 | 1,721 | 2,464 | |||||||||
INCOME
BEFORE INCOME TAXES AND EQUITY IN UNDISTRIBUTED INCOME OF
SUBSIDIARIES
|
5,289 | 10,438 | (477 | ) | ||||||||
Income
Tax Benefit
|
1,237 | 1,212 | 1,364 | |||||||||
INCOME
BEFORE EQUITY IN UNDISTRIBUTED INCOME OF SUBSIDIARIES
|
6,526 | 11,650 | 887 | |||||||||
Equity
in Undistributed Income of Subsidiaries
|
5,692 | 1,153 | 8,518 | |||||||||
NET
INCOME
|
12,218 | 12,803 | 9,405 | |||||||||
Other
Comprehensive Income:
|
||||||||||||
Unrealized
Gain on Securities, Net
|
1,908 | 1,612 | 1,210 | |||||||||
Changes
in Unrecognized Amounts in Pension
|
(47 | ) | — | 41 | ||||||||
Changes
in Unrecognized Loss in Postretirement Benefit Obligation
|
— | 144 | 30 | |||||||||
TOTAL
COMPREHENSIVE INCOME
|
$ | 14,079 | $ | 14,559 | $ | 10,686 |
Years
Ended December 31,
|
||||||||||||
2009
|
2008
|
2007
|
||||||||||
CASH
FLOWS FROM OPERATING ACTIVITIES
|
||||||||||||
Net
Income
|
$ | 12,218 | $ | 12,803 | $ | 9,405 | ||||||
Adjustments
to Reconcile Net Income to Net Cash from Operations
|
||||||||||||
Loss
on Securities, net
|
423 | 937 | 680 | |||||||||
Change
in Other Assets
|
(963 | ) | (39 | ) | (191 | ) | ||||||
Change
in Other Liabilities
|
325 | (493 | ) | (843 | ) | |||||||
Equity
Based Compensation
|
485 | 10 | 331 | |||||||||
Equity
in Undistributed Income of Subsidiaries
|
(5,692 | ) | (1,153 | ) | (8,518 | ) | ||||||
Net
Cash from Operating Activities
|
6,796 | 12,065 | 864 | |||||||||
CASH
FLOWS FROM INVESTING ACTIVITIES
|
||||||||||||
Capital
Contribution to Subsidiaries
|
(15,000 | ) | (250 | ) | (5,000 | ) | ||||||
Proceeds
from Sales of Securities Available-for-Sale
|
379 | — | 998 | |||||||||
Net
Cash from Investing Activities
|
(14,621 | ) | (250 | ) | (4,002 | ) | ||||||
CASH
FLOWS FROM FINANCING ACTIVITIES
|
||||||||||||
Change
in Short-term Borrowings
|
— | (3,250 | ) | 3,250 | ||||||||
Advances
in Long-term Debt
|
19,250 | — | — | |||||||||
Repayment
of Long-term Debt
|
(1,500 | ) | (1,500 | ) | (1,000 | ) | ||||||
Employee
Stock Purchase Plan
|
(2 | ) | (46 | ) | (118 | ) | ||||||
Dividends
Paid
|
(6,196 | ) | (6,177 | ) | (6,174 | ) | ||||||
Net
Cash from Financing Activities
|
11,552 | (10,973 | ) | (4,042 | ) | |||||||
Net
Change in Cash and Cash Equivalents
|
3,727 | 842 | (7,180 | ) | ||||||||
Cash
and Cash Equivalents at Beginning of Year
|
1,121 | 279 | 7,459 | |||||||||
Cash
and Cash Equivalents at End of Year
|
$ | 4,848 | $ | 1,121 | $ | 279 |
2009
|
2008
|
2007
|
||||||||||
Beginning
of Year
|
$ | 9,655 | $ | 9,655 | $ | 9,655 | ||||||
Acquired
Goodwill
|
— | — | — | |||||||||
Impairment
|
— | — | — | |||||||||
End
of Year
|
$ | 9,655 | $ | 9,655 | $ | 9,655 |
2009
|
||||||||
Gross
|
Accumulated
|
|||||||
Amount
|
Amortization
|
|||||||
Core
Banking
|
||||||||
Core
Deposit Intangible
|
$ | 2,372 | $ | 1,435 | ||||
Unidentified
Branch Acquisition Intangible
|
257 | 257 | ||||||
Insurance
|
||||||||
Customer
List
|
5,199 | 3,518 | ||||||
Total
|
$ | 7,828 | $ | 5,210 | ||||
2008
|
||||||||
Gross
|
Accumulated
|
|||||||
Amount
|
Amortization
|
|||||||
Core
Banking
|
||||||||
Core
Deposit Intangible
|
$ | 2,372 | $ | 1,253 | ||||
Unidentified
Branch Acquisition Intangible
|
257 | 243 | ||||||
Insurance
|
||||||||
Customer
List
|
4,813 | 2,805 | ||||||
Total
|
$ | 7,442 | $ | 4,301 |
2010
|
$ | 782 | ||
2011
|
512 | |||
2012
|
512 | |||
2013
|
442 | |||
2014
|
232 |
2009
|
2008
|
2007
|
||||||||||
Unrealized
Holding Gains on
Securities
Available-for-Sale
|
$ | 2,437 | $ | 2,506 | $ | 1,158 | ||||||
Reclassification
Adjustments for (Gains) Losses Later Realized in Income
|
423 | (94 | ) | 680 | ||||||||
Net
Unrealized Gains
|
2,860 | 2,412 | 1,838 | |||||||||
Amortization
of Amounts Included in Net Periodic Pension Costs
|
13 | 11 | 70 | |||||||||
Unrecognized
Loss on Pension
|
(91 | ) | (11 | ) | (2 | ) | ||||||
Unrecognized
Gain on Postretirement Benefits
|
— | 238 | 49 | |||||||||
Tax
Effect
|
(921 | ) | (894 | ) | (674 | ) | ||||||
Other
Comprehensive Income
|
$ | 1,861 | $ | 1,756 | $ | 1,281 |
Balance
|
Current
|
Balance
|
||||||||||
At
|
Period
|
at
|
||||||||||
12/31/2008
|
Change
|
12/31/2009
|
||||||||||
Unrealized
Gains on Securities Available-for-Sale
|
$ | 2,708 | $ | 1,908 | $ | 4,616 | ||||||
Unrecognized
Losses on Pension Benefits
|
(128 | ) | (47 | ) | (175 | ) | ||||||
Unrecognized
Gains on Postretirement Benefits
|
174 | — | 174 | |||||||||
Total
|
$ | 2,754 | $ | 1,861 | $ | 4,615 |
Interest
|
Net Interest
|
Net
|
Earnings
per Share
|
|||||||||||||||||
Income
|
Income
|
Income
|
Basic
|
Diluted
|
||||||||||||||||
2009
|
||||||||||||||||||||
First
Quarter
|
$ | 15,857 | $ | 10,641 | $ | 2,942 | $ | 0.27 | $ | 0.27 | ||||||||||
Second
Quarter
|
15,923 | 11,117 | 2,764 | 0.25 | 0.25 | |||||||||||||||
Third
Quarter
|
16,159 | 11,481 | 3,191 | 0.29 | 0.29 | |||||||||||||||
Fourth
Quarter
|
15,797 | 11,274 | 3,321 | 0.30 | 0.30 | |||||||||||||||
2008
|
||||||||||||||||||||
First
Quarter
|
$ | 17,825 | $ | 10,119 | $ | 3,020 | $ | 0.27 | $ | 0.27 | ||||||||||
Second
Quarter
|
16,778 | 10,065 | 3,111 | 0.28 | 0.28 | |||||||||||||||
Third
Quarter
|
16,729 | 10,446 | 3,319 | 0.30 | 0.30 | |||||||||||||||
Fourth
Quarter
|
16,513 | 10,307 | 3,353 | 0.30 | 0.30 |
Plan Category
|
Number of Securities
to be Issued upon Exercise
of Outstanding Options,
Warrants or Rights
|
Weighted Average
Exercise Price of
Outstanding Options,
Warrants and Rights
|
Number of Securities
Remaining Available for
Future Issuance under
Equity Compensation
Plans (Excluding
Securities Reflected in
First Column)
|
|||||||||
Equity compensation plans approved by security holders
|
157,956 |
(a)
|
$ | 16.44 | 1,000,000 |
(b)
|
||||||
Equity
compensation plans not approved by security holders
|
— | — | — | |||||||||
Total
|
157,956 | $ | 16.44 | 1,000,000 |
Page
#
|
|
German
American Bancorp, Inc. and Subsidiaries:
|
|
Report
of Independent Registered Public Accounting Firm on Financial
Statements
|
32
|
Consolidated
Balance Sheets at December 31, 2009 and 2008
|
33
|
Consolidated
Statements of Income, years ended December 31, 2009, 2008, and
2007
|
34
|
Consolidated
Statements of Changes in Shareholders’ Equity, years
ended December 31, 2009, 2008, and 2007
|
35
|
Consolidated
Statements of Cash Flows, years ended December 31, 2009, 2008, and
2007
|
36
|
Notes
to the Consolidated Financial Statements
|
37-67
|
GERMAN
AMERICAN BANCORP, INC.
|
||
(Registrant)
|
||
Date:
March 5,
2010
|
By/s/Mark A. Schroeder
|
|
Mark
A. Schroeder, Chairman and
|
||
Chief
Executive
Officer
|
Date:
March 5,
2010
|
By/s/Mark A. Schroeder
|
|
Mark
A. Schroeder, Chairman and Chief Executive
|
||
Officer
(principal executive officer), Director
|
||
Date:
March 5,
2010
|
By/s/Douglas A. Bawel
|
|
Douglas
A. Bawel, Director
|
||
Date:
March 5,
2010
|
By/s/Christina M. Ernst
|
|
Christina
M. Ernst, Director
|
||
Date:
March 5,
2010
|
By/s/Richard E. Forbes
|
|
Richard
E. Forbes, Director
|
||
Date:
March 5,
2010
|
By/s/U. Butch Klem
|
|
U.
Butch Klem, Director
|
||
Date:
March 5,
2010
|
By/s/J. David Lett
|
|
J.
David Lett, Director
|
||
Date:
March 5,
2010
|
By/s/Gene C. Mehne
|
|
Gene
C. Mehne, Director
|
||
Date:
March 5,
2010
|
By/s/Michael J. Voyles
|
|
Michael
J. Voyles, Director
|
||
Date:
March 5,
2010
|
By/s/Bradley M. Rust
|
|
Bradley
M. Rust, Executive Vice President and
|
||
Chief
Financial Officer (principal accounting officer
|
||
and
principal financial
officer)
|
Exhibit No.
|
Description
|
|
3.1
|
Restatement
of the Articles of Incorporation of the Registrant is incorporated by
reference from Exhibit 3 to the Registrant’s Current Report on
8-K filed May 22, 2006.
|
|
3.2
|
Restated
Bylaws of German American Bancorp, Inc., as amended and restated July 27,
2009. The copy of this exhibit filed as Exhibit 3 to the
current report on Form 8-K of the Registrant filed July 31, 2009 is
incorporated herein by reference.
|
|
4.1
|
Rights
Agreement dated April 27, 2000, is incorporated by reference from Exhibit
4.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter
ended March 31, 2005.
|
|
4.2
|
No
long-term debt instrument issued by the Registrant exceeds 10% of
consolidated total assets or is registered. In accordance with
paragraph 4 (iii) of Item 601(b) of Regulation S-K, the Registrant will
furnish the Securities and Exchange Commission copies of
long-term debt instruments and related agreements upon
request.
|
|
4.3
|
Terms
of Common Shares and Preferred Shares of the Registrant (included in
Restatement of Articles of Incorporation) are incorporated by reference
from Exhibit 3 to the Registrant’s Current Report on
8-K filed May 22, 2006.
|
|
4.4
|
Indenture
dated as of April 30, 2009 by and between Wells Fargo Bank, N.A. and
German American Bancorp, Inc., including Exhibit A thereto the form of the
certificate for the 8% redeemable subordinated debentures due 2019 issued
thereunder. This exhibit is incorporated by reference from
Exhibit 4 to the Registrant’s Current Report on Form 8-K filed May 4,
2009.
|
|
10.1
|
The
Registrant’s 1992 Stock Option Plan, as amended, is incorporated by
reference from Exhibit 10.1 to the Registrant’s Registration Statement on
Form S-4 filed October 14, 1998.*
|
|
10.2
|
Form
of Director Deferred Compensation Agreement between The German American
Bank and certain of its Directors is incorporated herein by reference from
Exhibit 10.4 to the Registrant’s Registration Statement on Form S-4 filed
January 21, 1993 (the Agreement entered into by former director George W.
Astrike, a copy of which was filed as Exhibit 10.4 to the Registrant’s
Registration Statement on Form S-4 filed January 21, 1993, is
substantially identical to the Agreements entered into by the other
Directors, some of whom remain directors of the Registrant). The schedule
following such Exhibit 10.4 lists the Agreements with the other Directors
and sets forth the material detail in which such Agreements differ from
the Agreement filed as such Exhibit 10.4.*
|
|
10.3
|
The
Registrant’s 1999 Long-Term Equity Incentive Plan, as amended through
February 22, 2008 is incorporated by reference from Exhibit 10.3 to the
Registrant’s Annual Report on Form 10-K for the year ended December 31,
2007.*
|
|
10.4
|
The
Registrant’s 1999 Long-Term Equity Incentive Plan, as amended through
February 22, 2008 is incorporated by reference from Exhibit 10.3 to the
Registrant’s Annual Report on Form 10-K for the year ended December 31,
2007.*
|
10.5
|
Basic
Plan Document for the Registrant’s Nonqualified Savings Plan is
incorporated by reference from Exhibit 10.4 to the Registrant’s Annual
Report on Form 10-K for the year ended December 31,
2004.*
|
|
10.6
|
Adoption
Agreement for the Registrant’s Nonqualified Savings Plan dated August 17,
2004, is incorporated by reference from Exhibit 10.5 to the Registrant’s
Annual Report on Form 10-K for the year ended December 31,
2004.*
|
|
10.7
|
First
Amendment to the Registrant’s Nonqualified Savings Plan dated August 17,
2004, is incorporated by reference from Exhibit 10.6 to the Registrant’s
Annual Report on Form 10-K for the year ended December 31,
2004.*
|
|
10.8
|
Form
of Employee Stock Option Agreement (new grant, five-year expiration, five
year 20% vesting) typically issued during 2005 and prior periods to
executive officers and other key employees as incentives is incorporated
by reference from Exhibit 10.7 to the Registrant’s Annual Report on Form
10-K for the year ended December 31, 2004.*
|
|
10.9
|
Form
of Employee Stock Option Agreement (Replacement Grant) typically issued
during 2005 and prior periods to persons who exercise other stock options
using common shares as payment for the exercise price (one year vesting)
is incorporated by reference from Exhibit 10.8 to the Registrant’s Annual
Report on Form 10-K for the year ended December 31,
2004.*
|
|
10.10
|
Form
of Non-Employee Director Stock Option Agreement (new grant, ten year
expiration, no vesting) that in prior periods was typically issued to
non-employee members of the Board of Directors as part of annual director
fee retainer (not Incentive Stock Option for tax purposes) is incorporated
by reference from Exhibit 10.9 to the Registrant’s Annual Report on Form
10-K for the year ended December 31, 2004.*
|
|
10.11
|
Form
of Employee Director Stock Option Agreement (new grant, ten year
expiration, no vesting) that in prior periods was typically issued to
employee members of the Board of Directors as part of annual director fee
retainer (intended to be Incentive Stock Option for tax purposes) is
incorporated by reference from Exhibit 10.10 to the Registrant’s Annual
Report on Form 10-K for the year ended December 31,
2004.*
|
|
10.12
|
Description
of Director Compensation Arrangements for the 12 month period ending at
2008 Annual Meeting of Shareholders is incorporated by reference from the
description included in the Company’s definitive proxy statement for the
2008 Annual Meeting of Shareholders, filed March 20, 2008, under the
caption “DIRECTOR COMPENSATION.”*
|
|
10.13
|
Description
of Director Compensation Arrangements for the 12 month period ending at
the 2009 Annual Meeting of Shareholders is incorporated by reference from
Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q for the
quarter ended June 30, 2008.*
|
|
10.14
|
Description
of Director Compensation Arrangements for the 12 month period ending at
the 2010 Annual Meeting of Shareholders
is
incorporated by reference from Exhibit 10.3 to the Registrant’s Quarterly
Report on Form 10-Q for the quarter ended June 30,
2009.*
|
|
10.15
|
Description
of Executive Management Incentive Plan for 2007 (awards payable in 2008)
is incorporated by reference from the description contained in Item 5.02
of the Registrant’s Current Report on Form 8-K filed February 12,
2007.*
|
10.16
|
Description
of Executive Management Incentive Plan for 2008 (awards payable in 2009)
is incorporated by reference from the description contained in Item 5.02
of the Registrant’s Current Report on Form 8-K filed February 28,
2008.*
|
|
10.17
|
Description
of Executive Management Incentive Plan for 2009 (awards payable in 2010)
is incorporated by reference from the description contained in Item 5.02
of the Registrant’s Current Report on Form 8-K filed February 28, 2009.
*
|
|
10.18
|
Executive
Supplemental Retirement Income Agreement dated October 1, 1996, between
First Federal Bank, F.S.B. and Bradley M. Rust as amended by a First
Amendment between Bradley M. Rust and the Registrant dated December 30,
2008.*
|
|
10.19
|
Form
of Restricted Stock Award Agreement that evidences the terms of awards of
restricted stock grants and related cash entitlements granted under the
1999 Long-Term Equity Incentive Plan is incorporated by reference from
Exhibit 99 to the Registrant’s Current Report on Form 8-K filed February
17, 2006.*
|
|
10.20
|
Resolutions
of Stock Option Committee of Board of Directors of the Registrant amending
outstanding stock options by accelerating in full all vesting periods and
exercise date restrictions and terminating replacement stock option
privileges in connection with future option exercises, adopted by written
consent effective December 29, 2005, is incorporated by reference from
Exhibit 10.18 to the Registrant’s Annual Report on Form 10-K for its
fiscal year ended December 31, 2005.*
|
|
10.21
|
Early
Retirement and General Release Agreement dated May 7, 2008 between German
American Bancorp and Stan Ruhe, is incorporated by reference from exhibit
10.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter
ended June 30, 2008.*
|
|
10.22
|
Second
Amended and Restated Loan and Subordinated Debenture Purchase Agreement
dated as of December 29, 2006, by and between JPMorgan Chase Bank, N.A.,
and German American Bancorp, Inc.,
is
incorporated by reference from Exhibit 99.1 to the Registrant’s
Current Report on 8-K filed January 5,
2007.
|
|
10.23
|
Agreed
Upon Terms and Procedures dated December 29, 2006, executed and delivered
by German American Bancorp, Inc. to JPMorgan Chase Bank, N.A., is
incorporated by reference from Exhibit 99.2 to the Registrant’s
Current Report on 8-K filed January 5,
2007.
|
|
10.24
|
Amendment
to Second Amended and Restated Loan and Subordinated Debenture Purchase
Agreement dated as of December 29, 2006, by and between JPMorgan Chase
Bank, N.A. and German American Bancorp, Inc., dated September 28,
2007,
is
incorporated by reference from Exhibit 99 to the Registrant’s
Current Report on 8-K filed October 1,
2007.
|
|
10.25
|
Second
Amendment to Second Amended and Restated Loan and Subordinated Debenture
Purchase Agreement dated as of December 29, 2006, by and between JPMorgan
Chase Bank, N.A. and German American Bancorp, Inc., dated September 30,
2008, is incorporated by reference from Exhibit 10.1 to the Registrant’s
Quarterly Report on Form 10-Q for the quarter ended September 30,
2008.
|
|
10.26
|
Third
Amendment dated March 20, 2009, to Second Amended and Restated Loan and
Subordinated Debenture Purchase Agreement dated as of December 29, 2006,
by and between JPMorgan Chase Bank, N.A. and German American Bancorp,
Inc., is incorporated by reference from Exhibit 10.1 to the Registrant’s
Quarterly Report on Form 10-Q for the quarter ended June 30,
2009.
|
10.27
|
Fourth
Amendment to Second Amended and Restated Loan and Subordinated Debenture
Purchase Agreement dated as of December 10, 2009, by and between JPMorgan
Chase Bank, N.A., and German American Bancorp, Inc. is incorporated by
reference from Exhibit 99 to the Registrant’s Current Report on
Form 8-K filed December 15, 2009.
|
|
10.28
|
German
American Bancorp, Inc., 2009 Long Term Equity Incentive Plan. This exhibit
is incorporated by reference from Exhibit 99.1 to the Registrant’s
Registration Statement on Form S-8 (No. 333-160749) filed July
23, 2009.*
|
|
10.29
|
German
American Bancorp, Inc., 2009 Employee Stock Purchase Plan.
This
exhibit is incorporated by reference from Exhibit 99.2 to the Registrant’s
Registration Statement on Form S-8 (No. 333-160749) filed July
23, 2009.*
|
|
21
|
Subsidiaries
of the Registrant
|
|
23
|
Consent
of Crowe Horwath LLP
|
|
31.1
|
Sarbanes-Oxley
Act of 2002, Section 302 Certification for Chairman and Chief Executive
Officer.
|
|
31.2
|
Sarbanes-Oxley
Act of 2002, Section 302 Certification for Executive Vice President
(Principal Financial Officer).
|
|
32.1
|
Sarbanes-Oxley
Act of 2002, Section 906 Certification for Chairman and Chief Executive
Officer.
|
|
32.2
|
Sarbanes-Oxley
Act of 2002, Section 906 Certification for Executive Vice President
(Principal Financial
Officer).
|
1.1
|
“Accrued Benefit”
means
that portion of the Supplemental Retirement Income Benefit which is
required to be expensed and accrued under generally accepted accounting
principals by any appropriate methodology which the Board may require in
the exercise of its sole discretion. Such Accrued Benefit shall
be annuitized and shall be paid to the Executive in one hundred eighty
(180) equal monthly installments. The interest factor used to
annuitize the Accrued Benefit shall be equal to the average cost of
deposits of the Bank (as determined by the Board) for the calendar year
immediately preceding the date on which the Accrued Benefit is
annuitized.
|
1.2
|
“Act”
means the Employee
Retirement Income Security Act of 1974, as now in effect and as it may be
amended from time to time.
|
1.3
|
“Bank”
means FIRST
FEDERAL BANK, A F.S.B. and any successor
thereto.
|
1.4
|
“Beneficiary”
means the
person, persons (and their heirs) or other entity designated as
Beneficiary in writing to the Bank to whom the benefit(s), the deceased
Executive would have received had he lived, is (are)
payable. If no Beneficiary is so designated, then the
Executive’s Spouse, if living, will be deemed the
Beneficiary. If the Executive’s Spouse is not living, then the
Children of the Executive will be deemed Beneficiary and take on a per
stirped basis. If there are no living Children, then the Estate
of the Executive will be deemed the
Beneficiary.
|
1.5
|
“Board”
means the Board
of Directors of the Bank.
|
1.6
|
“Cause”
means willful
misconduct, willful malfeasance, breach of fiduciary duty involving
personal profit, intentional failure to perform stated duties, willful
violation of any law, rule, regulation (other than traffic violations or
similar offenses), or final cease-and-desist order, material breach of any
provision of this Agreement, or gross negligence in matters of material
importance to the Bank. Cause shall be determined by the Board
in its sole discretion within the parameters of this
Section.
|
1.7
|
“Children”
means the
Executive’s children, both natural and adopted, then living at the time
payments are due the Children under this
Agreement.
|
1.8
|
“Code”
means the
Internal Revenue Code of 1986 as now in effect and as amended from time to
time.
|
1.9
|
“Early Retirement Date”
means retirement from service, upon meeting certain conditions as
specified in this Agreement, which is effective prior to the Normal
Retirement Date.
|
1.10
|
“Effective Date”
shall
be the effective date of this Agreement, October 1,
1996.
|
1.11
|
“Estate”
means the
estate (including, when applicable, any irrevocable trust governing the
transfer of non-probate assets) of the
Executive.
|
1.12
|
“Normal Retirement Date”
means the first day of the month coincident with or next following
the Executive’s sixty-fifth (65
th
)
birthday.
|
1.13
|
“Permanently and Totally
Disabled”
means the Executive has, for at least six (6) months,
been unable to perform the services incident to his position with the Bank
as a result of accidental bodily injury or sickness and that the status is
likely to continue for an indefinite period, as reasonably determined
subsequent to the expiration of the six (6) month period by a duly
licensed physician selected in good faith by the
Bank.
|
1.14
|
“Postponed Retirement Date”
means the first day of the month coincident with or next following
the Executive’s termination of employment with the Bank after his Normal
Retirement Date.
|
1.15
|
“Spouse”
means the
individual to whom the Executive is legally married at the time of the
Executive’s death.
|
1.16
|
“Suicide”
means the act
of intentionally killing oneself.
|
1.17
|
“Supplemental Retirement Income
Benefit”
means an annual amount equal to Twenty-Six Thousand Three
Hundred Forty Dollars ($26,340). This total shall be divided by
twelve (12) and paid in equal monthly installments for a period of one
hundred eighty (180) months.
|
1.18
|
“Survivor’s Benefit”
means Twenty-Six Thousand Three Hundred Forty Dollars ($26,340) per
year to be paid in one hundred eighty (180) equal monthly
installments.
|
1.19
|
“Vested”
means the
non-forfeitable portion of the benefit to which the Executive is
entitled.
|
1.20
|
“Vested Accrued Benefit”
means that portion of the Executive’s Accrued Benefit in which he
is vested. It is computed by multiplying the Accrued Benefit by
the vesting percentage specified in Subsection 3.5. Such Vested
Accrued Benefit shall be paid to the Executive in one hundred eighty (180)
equal monthly installments.
|
1.21
|
“Years of Service”
means
the total number of complete years of employment (including employment
before the Effective Date and authorized leaves of
absence).
|
2.1
|
Death Prior to
Termination of Employment
. It the Executive dies prior
to termination of employment with the Bank, his Beneficiary shall be
entitled to be paid the Survivor’s Benefit, commencing within thirty (30)
days of the Executive’s death.
|
2.2
|
Death After
Termination of Employment
. In the event of the
Executive’s death after his termination of employment, the Executive’s
Beneficiary shall be paid a monthly benefit for a period of one hundred
eighty (180) months, commencing within thirty (30) days of the Executive’s
death and the benefit payment shall be determined as
follows:
|
2.3
|
Death by Reason of
Suicide
. In the event the Executive dies by reason of
suicide within two (2) years of the date of execution of this Agreement,
the Bank shall be under no obligation to provide any benefits to the
Executive’s Beneficiary.
|
2.4
|
Additional Death
Benefit – Burial Expenses.
In addition to the
above-described death benefits, upon his death, the Executive’s
Beneficiary shall be entitled to receive a one-time lump sum death benefit
in the amount of Ten Thousand ($10,000.00) Dollars; provided, however,
that if the Executive terminates his employment with the Bank before July
1, 1998 for reasons other than his death or due to his becoming
Permanently and Totally Disable, the one-time lump sum death benefit
otherwise provided in this Section shall not be
payable.
|
3.1
|
Normal Retirement
Benefit
. If the Executive retires on his Normal
Retirement Date, the Bank shall commence payment of the Supplemental
Retirement Income Benefit. Such payments shall commence on the
first day of the month next following the Executive’s retirement date and
shall be payable monthly thereafter until all payments have been
made.
|
3.2
|
Early Retirement
Benefit
. If the Executive terminates his employment with
the Bank on or after reaching age sixty (60) and if he remains in
continuous service from the date of this Agreement through his employment
termination date, the Executive shall be entitled to receive the
Supplemental Retirement Income Benefit specified in Subsection 1.17,
reduced by six (6) percent per year for each year (or fraction thereof)
that the Early Retirement Date precedes the Normal Retirement
Date. Payment of this early retirement benefit shall commence
with thirty (30) days after Executive’s Early Retirement
Date.
|
3.3
|
Postponed Retirement
Benefit
. If the Executive continues his employment with
the Bank beyond his Normal Retirement Date, the postponed retirement
benefit of the Executive shall be the Supplemental Retirement Income
Benefit as set forth in Subsection 1.17. However, the Board, in
the exercise of its sole discretion, may, but is not required to, increase
benefits if retirement is postponed past the Normal Retirement
Date. The postponed retirement benefit shall not commence until
the Postponed Retirement Date.
|
3.4
|
Disability
. If
the Executive becomes Permanently and Totally Disabled prior to reaching
his retirement, while covered by the provisions of this Agreement, the
Executive shall be entitled to his Accrued Benefit at the time he becomes
Permanently and Totally Disabled. Payments shall begin within
thirty (30) days after the Executive becomes Permanently and Totally
Disabled.
|
3.5
|
Vesting
. Vested
Accrued Benefits, as described in Subsection 1.20, shall be determined
according to the following
schedule:
|
Percentage
of
|
||||
Total
Benefit
|
||||
Years of Service
|
Vested
|
|||
Less
than 5 years
|
0 | % | ||
5
years or more
|
100 | % |
7.1
|
Termination of Service
Prior to Retirement Date
. If, prior to Executive’s Early
Retirement Date, the Executive is terminated without Cause by the Bank,
the Bank shall pay to the Executive an amount equal to the Executive’s
Supplemental Retirement Income Benefit, commencing within thirty (30) days
of the Executive’s Normal Retirement Date. However, it the
Executive’s termination of employment with the Bank before his Early
Retirement Date is voluntary, he shall only be entitled to his Vested
Accrued Benefit existing at the date of termination. Payment of
the Vested Accrued Benefit shall commence within thirty (30) days after
his attainment of his Normal Retirement
Date.
|
7.2
|
Termination of Service
for Cause
. Should the Executive’s employment by the Bank
be terminated for Cause before his Normal Retirement Date, his Benefits,
including any death benefits, under this Agreement shall be forfeited and
this Agreement shall become null and
void.
|
7.3
|
Termination or
Suspension Resulting from Regulatory Actions
. Pursuant
to 12 C.F.R. § 563.39 (b), the following conditions shall apply to this
Agreement:
|
8.1
|
Named Fiduciary and
Administrator
. The Bank shall be the named fiduciary and
administrator of this Agreement. As administrator, the Bank
shall be responsible for the management, control and administration of the
Agreement as established herein. It may delegate to others
certain aspects of the management and operation responsibilities of the
Agreement including the employment of advisors and the delegation of
ministerial duties to qualified
individuals.
|
8.2
|
Claims Procedure and
Arbitration
. In the event that benefits under this
Agreement are not paid to the Executive (or to his Beneficiary in the case
of the Executive’s death) and such claimants feel they are
entitled to receive such benefits, then a written claim must be
made to the Bank within sixty (60) days from the date payments are
refused. The Bank shall review the written claim and, if the
claim is denied, in whole or in part, they shall provide in writing within
sixty (60) days of receipt of such claim their specific reasons for such
denial, reference to the provisions of this Agreement upon which the
denial is based and any additional material or information necessary to
perfect the claim. Such written notice shall further indicate
the additional steps to be taken by claimants if a further review of the
claim denial is desired.
|
9.1
|
No Effect on
Employment Rights
. Nothing contained herein shall confer
upon the Executive the right to be retained in the service of the Bank nor
limit the right of the Bank to discharge or otherwise deal with the
Executive without regard to the existence of this
Agreement.
|
9.2
|
Disclosure
. Each
Executive shall receive a copy of his Agreement and the Bank will make
available, upon request, a copy of the rules and regulations that govern
this type of Agreement.
|
9.3
|
State
Law
. The Agreement is established under, and will be
construed according to, the laws of the State of Indiana, to the extent
that such laws are not preempted by the Act and valid regulations
published thereunder.
|
9.4
|
Severability
. In
the event that any of the provisions of this Agreement or portion thereof,
are held to be inoperative or invalid by any court of competent
jurisdiction, then: (1) insofar as is reasonable, effect will be given to
the intent manifested in the provisions held invalid or inoperative, and
(2) the validity and enforceability of the remaining provisions will not
be affected thereby.
|
9.5
|
Incapacity of
Recipient
. In the event the Executive is declared
incompetent and a conservator or other person legally charged with the
care of his person or of his estate is appointed, any benefits under the
Agreement to which such Executive is entitled shall be paid to such
conservator or other person legally charged with the care of his person or
his Estate.
|
9.6
|
Recovery of Estate
Taxes
. If the Executive’s gross Estate for federal
estate tax purposes includes any amount determined by reference to and on
account of this Executive Supplemental Retirement Income Agreement, and if
the Beneficiary is other than the Executive’s Estate, then the Executive’s
Estate shall be entitled to recover from the Beneficiary receiving such
benefit under the terms of the Deferred Compensation Benefit an amount by
which the total estate tax due by the Executive’s Estate, exceeds the
total estate tax which would have been payable if the value of such
benefit had not been included in the Executive’s gross Estate. If there is
more than on person receiving such benefit, the right of recovery shall be
against each such person in proportion to the benefits received by each
such person. In the event any Beneficiary has a liability
hereunder, such Beneficiary may petition the Bank for a lump sum payment
in an amount not to exceed the Beneficiary’s liability
hereunder.
|
9.7
|
Unclaimed
Benefit
. The Executive shall keep the Bank informed of
his current address and the current address of his
Beneficiaries. The Bank shall not be obligated to search for
the whereabouts of any person. If within three years after the
actual death of the Executive the Bank is unable to locate any Beneficiary
of the Executive, then the Bank may fully discharge its obligation by
payment to the Estate.
|
9.8
|
Limitations on
Liability
. Notwithstanding any of the preceding
provisions of the Agreement and except for the benefits otherwise payable
under this Agreement, neither the Bank, nor any individual acting as an
employee or agent of the Bank or as a member of the Board shall be liable
to the Executive or any other person for any claim, loss, liability or
expense incurred in connection with the
Agreement.
|
9.9
|
Gender
. Whenever,
in this Agreement, words are used in the masculine or neuter gender, they
shall be read and construed as in the masculine, feminine or neuter
gender, whenever they should so
apply.
|
9.10
|
Affect on Other
Corporate Benefit Agreements
. Nothing contained in this
Agreement shall affect the right of the Executive to participate in, or be
covered by, any qualified or non-qualified pension, profit sharing, group,
bonus or other supplemental compensation or fringe benefit agreement
constituting a part of the Bank’s existing or future compensation
structure.
|
9.11
|
Headings
. Heading
and sub-headings in this Agreement are inserted for reference and
convenience only and shall not be deemed a part of this
Agreement.
|
10.1
|
Non-Compete
Clause
. The Executive expressly agrees that, as
consideration for the agreements of the Bank contained herein and as a
condition to the performance by the Bank of its obligations hereunder,
throughout the entire period beginning at the time of termination of
employment until the final payment is made to Executive, as provided
herein, he will not, without the prior written consent of the Board,
engage in, become interested, directly or indirectly, as a sole
proprietor, as a partner in a partnership, or as a 5% or greater
shareholder in a corporation, nor become associated with, in the capacity
of an employee, director, officer, principal, agent, trustee or in any
other capacity whatsoever, any enterprise conducted in the trading area of
the business of the Bank which may be deemed to be competitive with any
business earned on by the Bank as of the date of the termination of the
Executive’s employment or his
retirement.
|
10.2
|
Breach
. In
the event of any breach by the Executive of the agreements and covenants
contained herein, the Board shall direct that any unpaid balance of any
payments to the Executive under this Agreement be suspended, and shall
thereupon notify the Executive of such suspensions, in
writing. Thereupon, if the Board shall determine that said
breach by the Executive has continued for a period of one (1) month
following notification of such suspension, all rights of the Executive and
his Beneficiaries under this Agreement, including rights to further
payments hereunder, shall thereupon
terminate.
|
12.1
|
This
Agreement sets forth the entire understanding of the parties hereto with
respect to the transactions contemplated hereby, and any previous
agreements or understandings between the parties hereto regarding the
subject matter hereof are merged into and superseded by this
Agreement.
|
12.2
|
This
agreement shall be executed in triplicate, each copy of which, when so
executed and delivered, shall be an original, but all three copies shall
together constitute one and the same
instrument.
|
By/s/Bradley M. Rust
|
Bradley
M. Rust, Executive
|
FIRST
FEDERAL BANK, A F.S.B.
|
By/s/Frank D. Baracani
|
Frank
D. Baracani
|
President
|
(Title)
|
1.13
|
“Permanently and Totally
Disabled”
means the Executive: (i) is unable to engage in any
substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death or
can be expected to last for a continuous period of not less than twelve
(12) months; or (ii) is, by reason of any medically determinable physical
or mental impairment which can be expected to result in death or can be
expected to last for a continuous period of not less than twelve (12)
months, receiving income replacement benefits for a period of not less
than three (3) months under an accident and health plan covering employees
of GABC. Medical determination of Disability may be made by
either the Social Security Administration or by the provider of an
accident or health plan covering employees of GABC. Upon the
request of the plan administrator, the Executive must submit proof to the
plan administrator of the Social Security Administration’s or the
provider’s determination.
|
1.14a
|
“Specified Employee”
means any individual who, at any time during the twelve (12) month
period ending on the identification date (as determined by GABC or its
delegate), is a specified employee under Section 409A of the Code, as
determined by GABC (or its delegate). The determination of
“specified employees,” including the number and identity of persons
considered “specified employees” and identification date, shall be made by
GABC (or its delegate) in accordance with the provisions of Sections
416(i) and 409A of the Code.
|
1.18a
|
“Termination of
Employment”
means a “separation from service” with the meaning of
section 409A of the Code and the guidance
thereunder.
|
3.2
|
Early Retirement
Benefit.
If the Executive remains in continuous service
to the GABC from the date of this Agreement through Termination of
Employment, then upon Termination of Employment on or after reaching age
sixty (60) and before the Normal Retirement Date, then the Executive shall
be entitled to receive the Supplemental Retirement Income Benefit reduced
by six percent (6%) per year for each year (or fraction thereof) that the
Early Retirement Date precedes the Normal Retirement
Date. Payment shall commence on the first day of the month next
following Termination of Employment and shall continue monthly until all
payments have been made.
|
3.3
|
Postponed Retirement
Benefit.
If the Executive remains in continuous service
to GABC after the Normal Retirement Date, the postponed retirement benefit
shall be the Supplemental Retirement Income Benefit. Prior to
Termination of Employment, the Board, in its sole discretion, may, but is
not required to, increase the postponed retirement benefit if retirement
is postponed past the Normal Retirement Date. Payment shall
commence on the first day of the month next following Termination of
Employment and shall continue monthly until all payments have been
made.
|
3.6
|
Restriction on Timing
of Distributions.
Notwithstanding any provision of this
Agreement to the contrary, if the Executive is considered a Specified
Employee at Termination of Employment, the provisions of this Section 3.6
shall govern all distributions hereunder. Benefit distributions
that are made due to a Termination of Employment occurring while the
Executive is a Specified Employee shall not be made during the first six
(6) months following Termination of Employment, rather any distribution
which would otherwise be paid to the Executive during such period shall be
accumulated and paid to the Executive in a lump sum on the first day of
the seventh month following the Termination of Employment. All
subsequent distributions shall be paid in the manner
specified.
|
3.7
|
Distributions Upon
Income Inclusion Under Section 409A of the Code.
If any
amount is required to be included in income by the Executive prior to
receipt due to a failure of this Agreement to meet the requirements of
Code Section 409A and related Treasury guidance or Regulations, the
Executive may petition the Plan Administrator for a distribution of that
portion the Accrued Benefit that is required to be included in the
Executive’s income. Upon the grant of such a petition, which
grant shall not be unreasonably withheld, GABC shall distribute to the
Executive immediately available funds in an amount equal to the portion of
the Accrued Benefit required to be included in income as a result of the
failure of this Agreement to meet the requirement of Code Section 409A and
related Treasury guidance or Regulations, within ninety (90) days of the
date when the Executive’s petition is granted. Such a
distribution shall affect and reduce the Executive’s benefits to be paid
under this Agreement.
|
3.8
|
Change in Form or
Timing of Distributions
. All changes in the form or
timing of distributions hereunder must comply with the requirements of
Code Section 409A, which generally provide that such
changes:
|
|
(a)
|
may
not accelerate the time or schedule of any distribution, except as
provided in Section 409A of the Code and the regulations
thereunder;
|
|
(b)
|
must,
for benefits distributable under Sections 3.1, 3.2, 3.3 and 7.1, delay the
commencement of distributions for a minimum of five (5) years from the
date the first distribution was originally scheduled to be made;
and
|
|
(c)
|
must
take effect not less than twelve (12) months after the election is
made.
|
7.1
|
Termination of
Employment Prior to Age Sixty.
If, prior to age sixty
(60), the Executive is terminated without Cause by GABC, GABC shall pay to
the Executive an amount equal to the Executive’s Supplemental Retirement
Income Benefit, commencing within thirty (30) days of the Executive’s
Normal Retirement Date. However, if the Executive’s Termination
of Employment with GABC before age sixty (60) is voluntary, he shall only
be entitled to his Vested Accrued Benefit existing at the Termination of
Employment. Payment of the Vested Accrued Benefit shall
commence within thirty (30) days after his attainment of Normal Retirement
Date.
|
9.6
|
Compliance with
Section 409A.
|
11.1
|
Amendments.
This
Agreement may be amended only by a written agreement signed by GABC and
the Executive. However, GABC may unilaterally amend this
Agreement to conform with written directives to GABC from its auditors or
banking regulators or to comply with legislative changes or tax law,
including without limitation Section 409A of the Code and any and all
Treasury regulations and guidance promulgated
thereunder.
|
11.2
|
Plan Termination
Generally.
GABC and the Executive may terminate this
Agreement at any time. The benefit hereunder shall be the
Accrued Benefit as of the date the Agreement is
terminated. Except as provided in Section 11.3, the termination
of this Agreement shall not cause a distribution of benefits under this
Agreement. Rather, after such termination benefit distributions
will be made at the earliest distribution event permitted under Section
II, Section III and Section
VII.
|
11.3
|
Plan Terminations
Under Section 409A.
Notwithstanding anything to the
contrary in Section 11.2, if this Agreement terminates in the following
circumstances:
|
|
(a)
|
Within
thirty (30) days before or twelve (12) months after a change in the
ownership or effective control of GABC, or in the ownership of a
substantial portion of the assets of GABC as described in Section
409A(2)(A)(v) of the Code, provided that all distributions are made no
later than twelve (12) months following such termination of the Agreement
and further provided that all GABC’s arrangements which are substantially
similar to the Agreement are terminated so the Executive and all
participants in the similar arrangements are required to receive all
amounts of compensation deferred under the terminated arrangements within
twelve (12) months of the termination of the
arrangements;
|
|
(b)
|
Upon
GABC’s dissolution or with the approval of a bankruptcy court provided
that the amounts deferred under the Agreement are included in the
Executive’s gross income in the latest of (i) the calendar year in which
the Agreement terminates; (ii) the calendar year in which the amount is no
longer subject to a substantial risk of forfeiture; or (iii) the first
calendar year in which the distribution is administratively practical;
or
|
|
(c)
|
Upon
GABC’s termination of this and all other non-account balance plans (as
referenced in Section 409A of the Code or the regulations thereunder),
provided that all distributions are made no earlier than twelve (12)
months and no later than twenty-four (24) months following such
termination, and GABC does not adopt any new non-account balance plans for
a minimum of five (5) years following the date of such termination (or
such lesser period permitted under Code Section
409A);
|
Executive:
|
German
American Bancorp
|
|
By/s/Bradley M. Rust
|
By
/s/Mark A.
Schroeder
|
|
Bradley
M. Rust
|
Title
President/CEO
|
Name of Subsidiary
|
State/Jurisdiction of
Incorporation/Organization
|
Other Names under which
Subsidiary Does Business
|
||
German
American Bancorp
|
Indiana
|
German
American Bank; Peoples Bank; First American Bank; First State Bank;
Citizens State Bank; Stone City Bank
|
||
GAB
Investment Company, Inc.
|
Nevada
|
|||
GAB
Investment Center, Inc.
|
Nevada
|
|||
GAB
Investments, LLC
|
Nevada
|
|||
GAB
Capital Funding Corp.
|
Nevada
|
|||
GAB
Funding Corp.
|
Maryland
|
|||
First
Title Insurance Company
|
Indiana
|
|||
GABC
Leasing, Inc.
|
Indiana
|
|||
GABC
Holdings, Inc.
|
Indiana
|
|||
German
American Financial Advisors & Trust
Company
|
Indiana
|
German
American Financial Advisors
|
||
German
American Insurance, Inc.
|
Indiana
|
Doty
Insurance; Stafford-Williams Insurance; Knox County Insurance; Smith &
Bell Insurance; Keach & Grove Insurance; First State
Insurance
|
||
Allied
Premium Finance Company
|
Indiana
|
|||
GABC
Risk Management, Inc.
|
Nevada
|
|||
German
American Reinsurance Company, Ltd.
|
Turks
and Caicos Islands
|
|||
Financial
Services of Southern Indiana, Inc.
|
Indiana
|
/s/Crowe Horwath LLP
|
Crowe
Horwath LLP
|
1.
|
I
have reviewed this Annual Report on Form 10-K of German American Bancorp,
Inc. (the “registrant”):
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
|
4.
|
The
registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant
and have:
|
5.
|
The
registrant's other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to
the registrant's auditors and the audit committee of the registrant's
board of directors (or persons performing the equivalent
functions):
|
March 5, 2010
|
Date
|
/s/ Mark A. Schroeder
|
Mark
A. Schroeder
|
Chairman
and Chief Executive
Officer
|
1.
|
I
have reviewed this Annual Report on Form 10-K of German American Bancorp,
Inc., (the “registrant”):
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
|
4.
|
The
registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and
have:
|
5.
|
The
registrant's other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to
the registrant's auditors and the audit committee of the registrant's
board of directors (or persons performing the equivalent
functions):
|
March 5, 2010
|
Date
|
/s/ Bradley M. Rust
|
Bradley
M. Rust
|
Executive
Vice President and Chief Financial Officer
|
(principal
accounting officer and principal financial
officer)
|
March 5, 2010
|
Date
|
/s/ Mark A. Schroeder
|
Mark
A. Schroeder
|
Chairman
and Chief Executive
Officer
|
March 5, 2010
|
Date
|
/s/ Bradley M. Rust
|
Bradley
M. Rust
|
Executive
Vice President and Chief Financial Officer
|
(principal
accounting officer and principal financial
officer)
|