GERMAN AMERICAN BANCORP, INC.
|
(Exact name of registrant as specified in its charter)
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INDIANA
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35-1547518
|
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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711 Main Street, Box 810, Jasper, Indiana
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47546
|
|
(Address of Principal Executive Offices)
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(Zip Code)
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Title of Each Class
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Name of each exchange on which registered
|
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Common Shares, no par value
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The NASDAQ Stock Market LLC
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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
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¨
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).
|
¨
Yes
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¨
No
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|||
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K: | o |
Large accelerated filer
¨
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Accelerated filer
þ
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Non-accelerated filer
¨
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Smaller reporting company
¨
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
|
¨
Yes
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þ
No
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PART I
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||
Item 1.
|
Business
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3-11
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Item 1A.
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Risk Factors
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11-15
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Item 1B.
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Unresolved Staff Comments
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15
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Item 2.
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Properties
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15
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Item 3.
|
Legal Proceedings
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15
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Item 4.
|
Removed and Reserved
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15
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PART II
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||
Item 5.
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer
|
|
Purchases of Equity Securities
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16-17
|
|
Item 6.
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Selected Financial Data
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18
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Item 7.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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19-35
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Item 7A.
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Quantitative and Qualitative Disclosures About Market Risk
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36
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Item 8.
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Financial Statements and Supplementary Data
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37-74
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Item 9.
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Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
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75
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Item 9A.
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Controls and Procedures
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75
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Item 9B.
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Other Information
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75
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PART III
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||
Item 10.
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Directors, Executive Officers, and Corporate Governance
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76
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Item 11.
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Executive Compensation
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76
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Item 12.
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Security Ownership of Certain Beneficial Owners and Management and Related
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Stockholder Matters
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76-77
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Item 13.
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Certain Relationships and Related Transactions, and Director Independence
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77
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Item 14.
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Principal Accountant Fees and Services
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77
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PART IV
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||
Item 15.
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Exhibits, Financial Statement Schedules
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78
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SIGNATURES
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79
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INDEX OF EXHIBITS
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80-84
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Name
|
Type of Business
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Principal Office Location
|
||
German American Bancorp
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Commercial Bank
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Jasper, IN
|
||
German American Insurance, Inc.
|
Multi-Line Insurance Agency
|
Jasper, IN
|
||
German American Financial Advisors & Trust Company
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Trust, Brokerage, Financial Planning
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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;
|
|
·
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actions of the regulatory authorities under the Dodd-Frank Act and the Federal Deposit Insurance Act and other possible legislative and regulatory actions and reforms; and
|
|
·
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the continued availability of earnings and excess capital sufficient for the lawful and prudent declaration and payment of cash dividends.
|
|
·
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a decrease in the demand for loans and other products and services offered by us;
|
|
·
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a decrease in customer savings generally and in the demand for savings and investment products offered by us; and
|
|
·
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an increase in the number of customers and counterparties who become delinquent, file for protection under bankruptcy laws, or default on their loans or other obligations to us.
|
|
·
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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.
|
2010 | 2009 | ||||||||||||||||||||||
Cash
|
Cash
|
||||||||||||||||||||||
High
|
Low
|
Dividend
|
High
|
Low
|
Dividend
|
||||||||||||||||||
Fourth Quarter
|
$ | 18.81 | $ | 16.68 | $ | 0.140 | $ | 17.31 | $ | 14.24 | $ | 0.140 | |||||||||||
Third Quarter
|
$ | 17.31 | $ | 15.01 | $ | 0.140 | $ | 18.33 | $ | 14.25 | $ | 0.140 | |||||||||||
Second Quarter
|
$ | 17.03 | $ | 14.68 | $ | 0.140 | $ | 16.04 | $ | 11.33 | $ | 0.140 | |||||||||||
First Quarter
|
$ | 16.18 | $ | 14.18 | $ | 0.140 | $ | 12.50 | $ | 10.40 | $ | 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
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(812) 482-1314
|
|||||
(800) 884-4225
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(800) 482-1314
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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
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Purchased
|
(or Unit)
|
or Programs
|
Under the Plans or Programs
(1)
|
||||||||||||
October 2010
|
— | — | — | 272,789 | ||||||||||||
November 2010
|
— | — | — | 272,789 | ||||||||||||
December 2010
|
— | — | — | 272,789 |
2010
|
2009
|
2008
|
2007
|
2006
|
||||||||||||||||
Summary of Operations:
|
||||||||||||||||||||
Interest Income
|
$ | 64,193 | $ | 63,736 | $ | 67,845 | $ | 72,261 | $ | 63,594 | ||||||||||
Interest Expense
|
15,522 | 19,223 | 26,908 | 33,646 | 27,398 | |||||||||||||||
Net Interest Income
|
48,671 | 44,513 | 40,937 | 38,615 | 36,196 | |||||||||||||||
Provision for Loan Losses
|
5,225 | 3,750 | 3,990 | 3,591 | 925 | |||||||||||||||
Net Interest Income after Provision
|
||||||||||||||||||||
For Loan Losses
|
43,446 | 40,763 | 36,947 | 35,024 | 35,271 | |||||||||||||||
Non-interest Income
|
16,943 | 15,859 | 18,210 | 15,704 | 15,993 | |||||||||||||||
Non-interest Expense
|
41,361 | 40,391 | 36,716 | 37,221 | 37,059 | |||||||||||||||
Income before Income Taxes
|
19,028 | 16,231 | 18,441 | 13,507 | 14,205 | |||||||||||||||
Income Tax Expense
|
5,623 | 4,013 | 5,638 | 4,102 | 3,984 | |||||||||||||||
Net Income
|
$ | 13,405 | $ | 12,218 | $ | 12,803 | $ | 9,405 | $ | 10,221 | ||||||||||
Year-end Balances:
|
||||||||||||||||||||
Total Assets
|
$ | 1,375,888 | $ | 1,242,965 | $ | 1,190,828 | $ | 1,131,710 | $ | 1,093,424 | ||||||||||
Total Loans, Net of Unearned Income
|
917,236 | 877,822 | 890,436 | 867,721 | 796,259 | |||||||||||||||
Total Deposits
|
1,087,286 | 969,643 | 941,750 | 877,421 | 867,618 | |||||||||||||||
Total Long-term Debt
|
81,016 | 113,320 | 105,608 | 86,786 | 68,333 | |||||||||||||||
Total Shareholders’ Equity
|
121,534 | 113,549 | 105,174 | 97,116 | 92,391 | |||||||||||||||
Average Balances:
|
||||||||||||||||||||
Total Assets
|
$ | 1,330,540 | $ | 1,230,596 | $ | 1,174,583 | $ | 1,114,140 | $ | 1,029,838 | ||||||||||
Total Loans, Net of Unearned Income
|
906,127 | 891,322 | 880,630 | 840,849 | 715,260 | |||||||||||||||
Total Deposits
|
1,046,295 | 963,928 | 922,137 | 889,736 | 814,440 | |||||||||||||||
Total Shareholders’ Equity
|
119,867 | 109,887 | 99,711 | 93,677 | 88,451 | |||||||||||||||
Per Share Data
(1)
:
|
||||||||||||||||||||
Net Income
|
$ | 1.21 | $ | 1.10 | $ | 1.16 | $ | 0.85 | $ | 0.93 | ||||||||||
Cash Dividends
|
0.56 | 0.56 | 0.56 | 0.56 | 0.56 | |||||||||||||||
Book Value at Year-end
|
10.94 | 10.25 | 9.54 | 8.81 | 8.39 | |||||||||||||||
Other Data at Year-end:
|
||||||||||||||||||||
Number of Shareholders
|
3,194 | 3,364 | 3,684 | 3,647 | 3,438 | |||||||||||||||
Number of Employees
|
359 | 332 | 348 | 371 | 397 | |||||||||||||||
Weighted Average Number of Shares
(1)
|
11,098,836 | 11,065,917 | 11,029,519 | 11,009,536 | 10,994,739 | |||||||||||||||
Selected Performance Ratios:
|
||||||||||||||||||||
Return on Assets
|
1.01 | % | 0.99 | % | 1.09 | % | 0.84 | % | 0.99 | % | ||||||||||
Return on Equity
|
11.18 | % | 11.12 | % | 12.84 | % | 10.04 | % | 11.56 | % | ||||||||||
Equity to Assets
|
8.83 | % | 9.14 | % | 8.83 | % | 8.58 | % | 8.45 | % | ||||||||||
Dividend Payout
|
46.36 | % | 50.71 | % | 48.25 | % | 65.65 | % | 60.29 | % | ||||||||||
Net Charge-offs to Average Loans
|
0.32 | % | 0.25 | % | 0.29 | % | 0.32 | % | 0.50 | % | ||||||||||
Allowance for Loan Losses to Loans
|
1.45 | % | 1.25 | % | 1.07 | % | 0.93 | % | 0.90 | % | ||||||||||
Net Interest Margin
|
3.98 | % | 3.95 | % | 3.82 | % | 3.83 | % | 3.96 | % |
|
·
|
emphasizing the growth of low-cost transaction account deposits (see “SOURCES OF FUNDS” below for historical information as to the Company’s deposit mix),
|
|
·
|
maintaining a targeted concentration of at least 75% of its loan portfolio balances in loans and other extensions of credit to commercial borrowers (categorized in our financial statements as Commercial and Industrial Loans, Commercial Real Estate Loans, and Agricultural Loans) (see “USES OF FUNDS – LOANS” below for historical information concerning loan portfolio composition), and
|
|
·
|
focusing on the maintenance of strong asset quality (see “RISK MANAGEMENT – NON-PEFORMING ASSETS” below for historical information concerning certain asset quality ratios).
|
(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 $909, $545, and $127 for 2010, 2009, and 2008, respectively.
|
2010 compared to 2009
|
2009 compared to 2008
|
|||||||||||||||||||||||
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
|
$ | — | $ | (30 | ) | $ | (30 | ) | $ | 87 | $ | (574 | ) | $ | (487 | ) | ||||||||
Taxable Securities
|
2,993 | (1,841 | ) | 1,152 | 1,876 | (1,223 | ) | 653 | ||||||||||||||||
Non-taxable Securities
|
169 | (208 | ) | (39 | ) | 393 | 57 | 450 | ||||||||||||||||
Loans and Leases
|
890 | (1,516 | ) | (626 | ) | 705 | (5,208 | ) | (4,503 | ) | ||||||||||||||
Total Interest Income
|
4,052 | (3,595 | ) | 457 | 3,061 | (6,948 | ) | (3,887 | ) | |||||||||||||||
Interest Expense:
|
||||||||||||||||||||||||
Savings and Interest-bearing Demand
|
288 | (1,841 | ) | (1,553 | ) | 747 | (4,352 | ) | (3,605 | ) | ||||||||||||||
Time Deposits
|
384 | (1,765 | ) | ( 1,381 | ) | (693 | ) | (3,419 | ) | (4,112 | ) | |||||||||||||
FHLB Advances and Other Borrowings
|
284 | (1,051 | ) | (767 | ) | 180 | (148 | ) | 32 | |||||||||||||||
Total Interest Expense
|
956 | (4,657 | ) | (3,701 | ) | 234 | (7,919 | ) | (7,685 | ) | ||||||||||||||
Net Interest Income
|
$ | 3,096 | $ | 1,062 | $ | 4,158 | $ | 2,827 | $ | 971 | $ | 3,798 |
(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
|
||||||||||||||||||
2010
|
2009
|
2008
|
2010
|
2009
|
||||||||||||||||
Trust and Investment Product Fees
|
$ | 1,582 | $ | 1,617 | $ | 2,288 | (2 | )% | (29 | )% | ||||||||||
Service Charges on Deposit Accounts
|
4,065 | 4,395 | 4,920 | (8 | ) | (11 | ) | |||||||||||||
Insurance Revenues
|
5,347 | 5,296 | 6,306 | 1 | (16 | ) | ||||||||||||||
Company Owned Life Insurance
|
806 | 1,104 | 791 | (27 | ) | 40 | ||||||||||||||
Interchange Fee Income
|
1,243 | 969 | 909 | 28 | 7 | |||||||||||||||
Other Operating Income
|
1,740 | 1,141 | 1,503 | 52 | (24 | ) | ||||||||||||||
Subtotal
|
14,783 | 14,522 | 16,717 | 2 | (13 | ) | ||||||||||||||
Net Gains on Sales of Loans
|
2,160 | 1,760 | 1,399 | 23 | 26 | |||||||||||||||
Net Gain (Loss) on Securities
|
— | (423 | ) | 94 | n/m | (1) | n/m | (1) | ||||||||||||
TOTAL NON-INTEREST INCOME
|
$ | 16,943 | $ | 15,859 | $ | 18,210 | 7 | (13 | ) |
% Change From
|
||||||||||||||||||||
Non-interest Expense (dollars in thousands)
|
Years Ended December 31,
|
Prior Year
|
||||||||||||||||||
2010
|
2009
|
2008
|
2010
|
2009
|
||||||||||||||||
Salaries and Employee Benefits
|
$ | 22,070 | $ | 21,961 | $ | 20,786 | 0 | % | 6 | % | ||||||||||
Occupancy, Furniture and Equipment Expense
|
6,083 | 6,035 | 5,677 | 1 | 6 | |||||||||||||||
FDIC Premiums
|
1,455 | 1,863 | 209 | (22 | ) | 791 | ||||||||||||||
Data Processing Fees
|
1,411 | 1,368 | 1,493 | 3 | (8 | ) | ||||||||||||||
Professional Fees
|
2,285 | 1,740 | 1,670 | 31 | 4 | |||||||||||||||
Advertising and Promotion
|
1,255 | 993 | 1,078 | 26 | (8 | ) | ||||||||||||||
Supplies
|
755 | 528 | 570 | 43 | (7 | ) | ||||||||||||||
Intangible Amortization
|
898 | 909 | 889 | (1 | ) | 2 | ||||||||||||||
Other Operating Expenses
|
5,149 | 4,994 | 4,344 | 3 | 15 | |||||||||||||||
TOTAL NON-INTEREST EXPENSE
|
$ | 41,361 | $ | 40,391 | $ | 36,716 | 2 | 10 |
Loan Portfolio
|
December 31,
|
|||||||||||||||||||
(dollars in thousands)
|
2010
|
2009
|
2008
|
2007
|
2006
|
|||||||||||||||
Commercial and Industrial Loans and Leases
|
$ | 218,443 | $ | 188,962 | $ | 175,828 | $ | 158,556 | $ | 158,502 | ||||||||||
Commercial Real Estate Loans
|
339,555 | 334,255 | 329,363 | 298,477 | 243,783 | |||||||||||||||
Agricultural Loans
|
165,166 | 156,845 | 159,923 | 165,592 | 148,872 | |||||||||||||||
Consumer Loans
|
118,244 | 114,736 | 127,343 | 131,110 | 132,791 | |||||||||||||||
Residential Mortgage Loans
|
77,310 | 84,677 | 100,054 | 116,908 | 114,687 | |||||||||||||||
Total Loans
|
918,718 | 879,475 | 892,511 | 870,643 | 798,635 | |||||||||||||||
Less: Unearned Income
|
(1,482 | ) | (1,653 | ) | (2,075 | ) | (2,922 | ) | (2,376 | ) | ||||||||||
Subtotal
|
917,236 | 877,822 | 890,436 | 867,721 | 796,259 | |||||||||||||||
Less: Allowance for Loan Losses
|
(13,317 | ) | (11,016 | ) | (9,522 | ) | (8,044 | ) | (7,129 | ) | ||||||||||
Loans, Net
|
$ | 903,919 | $ | 866,806 | $ | 880,914 | $ | 859,677 | $ | 789,130 | ||||||||||
Ratio of Loans to Total Loans
|
||||||||||||||||||||
Commercial and Industrial Loans
|
24 | % | 21 | % | 20 | % | 18 | % | 20 | % | ||||||||||
Commercial Real Estate Loans
|
37 | % | 38 | % | 37 | % | 35 | % | 30 | % | ||||||||||
Agricultural Loans
|
18 | % | 18 | % | 18 | % | 19 | % | 19 | % | ||||||||||
Consumer Loans
|
13 | % | 13 | % | 14 | % | 15 | % | 17 | % | ||||||||||
Residential Mortgage Loans
|
8 | % | 10 | % | 11 | % | 13 | % | 14 | % | ||||||||||
Total Loans
|
100 | % | 100 | % | 100 | % | 100 | % | 100 | % |
Investment Portfolio, at Amortized Cost
|
December 31,
|
|||||||||||||||||||||||
(dollars in thousands)
|
2010
|
%
|
2009
|
%
|
2008
|
%
|
||||||||||||||||||
Federal Funds Sold and Other Short-term Investments
|
$ | 4,250 | 1 | % | $ | 12,002 | 5 | % | $ | 27,791 | 14 | % | ||||||||||||
U.S. Treasury and Agency Securities
|
— | — | 5,000 | 2 | — | — | ||||||||||||||||||
Obligations of State and Political Subdivisions
|
33,087 | 10 | 24,285 | 9 | 19,887 | 10 | ||||||||||||||||||
Mortgage-backed Securities - Residential
|
304,935 | 88 | 214,591 | 83 | 151,499 | 74 | ||||||||||||||||||
Equity Securities
|
2,418 | 1 | 2,818 | 1 | 3,620 | 2 | ||||||||||||||||||
Total Securities Portfolio
|
$ | 344,690 | 100 | % | $ | 258,696 | 100 | % | $ | 202,797 | 100 | % |
December 31,
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
Securities Held-to-Maturity
|
||||||||||||
Obligations of State and Political Subdivisions
|
$ | 1,604 | $ | 2,774 | $ | 3,326 | ||||||
Securities Available-for-Sale
|
||||||||||||
U.S. Treasury and Agency Securities
|
$ | — | $ | 4,970 | $ | — | ||||||
Obligations of State and Political Subdivisions
|
32,178 | 22,378 | 16,868 | |||||||||
Mortgage-backed Securities - Residential
|
311,066 | 221,252 | 155,627 | |||||||||
Equity Securities
|
3,503 | 2,340 | 3,345 | |||||||||
Subtotal of Securities Available-for-Sale
|
346,747 | 250,940 | 175,840 | |||||||||
Total Securities
|
$ | 348,351 | $ | 253,714 | $ | 179,166 |
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. Treasury and Agency Securities
|
$ | — | N/A | $ | — | N/A | $ | — | N/A | $ | — | N/A | ||||||||||||||||||||
Obligations of State and Political Subdivisions
|
590 | 7.14 | % | 5,665 | 5.16 | % | 5,520 | 5.59 | % | 21,312 | 6.64 | % | ||||||||||||||||||||
Mortgage-backed Securities - Residential
|
9,924 | 4.94 | % | 267,946 | 3.76 | % | 27,065 | 3.10 | % | — | N/A | |||||||||||||||||||||
Total Securities
|
$ | 10,514 | 4.44 | % | $ | 273,611 | 3.79 | % | $ | 32,585 | 3.52 | % | $ | 21,312 | 6.64 | % |
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
|
$ | 80,332 | $ | 30 | $ | 38,069 | $ | 11,581 | $ | 30,652 | ||||||||||
Time Deposits
|
361,550 | 203,173 | 134,517 | 23,733 | 127 | |||||||||||||||
Capital Lease Obligation
|
1,346 | 81 | 162 | 162 | 941 | |||||||||||||||
Operating Lease Commitments
|
2,425 | 359 | 574 | 404 | 1,088 | |||||||||||||||
Total Contractual Obligations
|
$ | 445,653 | $ | 203,643 | $ | 173,322 | $ | 35,880 | $ | 32,808 |
Funding Sources - Average Balances
|
% Change From
|
|||||||||||||||||||
(dollars in thousands)
|
December 31,
|
Prior Year
|
||||||||||||||||||
2010
|
2009
|
2008
|
2010
|
2009
|
||||||||||||||||
Demand Deposits
|
||||||||||||||||||||
Non-interest-bearing
|
$ | 173,091 | $ | 149,673 | $ | 140,962 | 16 | % | 6 | % | ||||||||||
Interest-bearing
|
281,355 | 245,811 | 212,467 | 14 | 16 | |||||||||||||||
Savings Deposits
|
76,721 | 63,182 | 57,948 | 21 | 9 | |||||||||||||||
Money Market Accounts
|
160,889 | 164,221 | 151,645 | (2 | ) | 8 | ||||||||||||||
Other Time Deposits
|
269,286 | 251,906 | 258,314 | 7 | (2 | ) | ||||||||||||||
Total Core Deposits
|
961,342 | 874,793 | 821,336 | 10 | 7 | |||||||||||||||
Certificates of Deposits of $100,000 or more and Brokered Deposits
|
84,953 | 89,135 | 100,801 | (5 | ) | (12 | ) | |||||||||||||
FHLB Advances and
|
||||||||||||||||||||
Other Borrowings
|
150,737 | 143,332 | 138,888 | 5 | 3 | |||||||||||||||
Total Funding Sources
|
$ | 1,197,032 | $ | 1,107,260 | $ | 1,061,025 | 8 | 4 |
3 Months
|
3 thru
|
6 thru
|
Over
|
|||||||||||||||||
Or Less
|
6 Months
|
12 Months
|
12 Months
|
Total
|
||||||||||||||||
December 31, 2010
|
$ | 25,335 | $ | 11,159 | $ | 17,057 | $ | 35,036 | $ | 88,587 |
Non-performing Assets
|
December 31,
|
|||||||||||||||||||
(dollars in thousands)
|
2010
|
2009
|
2008
|
2007
|
2006
|
|||||||||||||||
Non-accrual Loans
|
$ | 10,150 | $ | 8,374 | $ | 8,316 | $ | 4,356 | $ | 9,652 | ||||||||||
Past Due Loans (90 days or more)
|
671 | 113 | 34 | 8 | — | |||||||||||||||
Restructured Loans
|
396 | 306 | — | — | — | |||||||||||||||
Total Non-performing Loans
|
11,217 | 8,793 | 8,350 | 4,364 | 9,652 | |||||||||||||||
Other Real Estate
|
2,095 | 2,363 | 1,818 | 1,517 | 845 | |||||||||||||||
Total Non-performing Assets
|
$ | 13,312 | $ | 11,156 | $ | 10,168 | $ | 5,881 | $ | 10,497 | ||||||||||
Non-performing Loans to Total Loans
|
1.22 | % | 1.00 | % | 0.94 | % | 0.50 | % | 1.21 | % | ||||||||||
Allowance for Loan Losses to Non-performing Loans
|
118.72 | % | 125.28 | % | 114.04 | % | 184.33 | % | 73.86 | % |
Report of Independent Registered Public Accounting Firm
|
Louisville, Kentucky
|
/s/ Crowe Horwath LLP
|
March 9, 2011
|
Crowe Horwath LLP
|
Consolidated Balance Sheets
|
Dollars in thousands, except per share data
|
December 31,
|
||||||||
2010
|
2009
|
|||||||
ASSETS
|
||||||||
Cash and Due from Banks
|
$ | 15,021 | $ | 16,052 | ||||
Federal Funds Sold and Other Short-term Investments
|
4,250 | 12,002 | ||||||
Cash and Cash Equivalents
|
19,271 | 28,054 | ||||||
Securities Available-for-Sale, at Fair Value
|
346,747 | 250,940 | ||||||
Securities Held-to-Maturity, at Cost (Fair value of $1,613 and $2,801 on December 31, 2010 and 2009, respectively)
|
1,604 | 2,774 | ||||||
Loans Held-for-Sale
|
11,850 | 5,706 | ||||||
Loans
|
918,718 | 879,475 | ||||||
Less: Unearned Income
|
(1,482 | ) | (1,653 | ) | ||||
Allowance for Loan Losses
|
(13,317 | ) | (11,016 | ) | ||||
Loans, Net
|
903,919 | 866,806 | ||||||
Stock in FHLB of Indianapolis and Other Restricted Stock, at Cost
|
9,207 | 10,621 | ||||||
Premises, Furniture and Equipment, Net
|
25,974 | 22,153 | ||||||
Other Real Estate
|
2,095 | 2,363 | ||||||
Goodwill
|
9,835 | 9,655 | ||||||
Intangible Assets
|
2,624 | 2,618 | ||||||
Company Owned Life Insurance
|
24,822 | 24,008 | ||||||
Accrued Interest Receivable and Other Assets
|
17,940 | 17,267 | ||||||
TOTAL ASSETS
|
$ | 1,375,888 | $ | 1,242,965 | ||||
LIABILITIES
|
||||||||
Non-interest-bearing Demand Deposits
|
$ | 184,204 | $ | 155,268 | ||||
Interest-bearing Demand, Savings, and Money Market Accounts
|
541,532 | 484,699 | ||||||
Time Deposits
|
361,550 | 329,676 | ||||||
Total Deposits
|
1,087,286 | 969,643 | ||||||
FHLB Advances and Other Borrowings
|
153,717 | 148,121 | ||||||
Accrued Interest Payable and Other Liabilities
|
13,351 | 11,652 | ||||||
TOTAL LIABILITIES
|
1,254,354 | 1,129,416 | ||||||
Commitments and Contingencies (Note 12)
|
||||||||
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
|
11,105 | 11,077 | ||||||
Additional Paid-in Capital
|
69,297 | 68,816 | ||||||
Retained Earnings
|
36,232 | 29,041 | ||||||
Accumulated Other Comprehensive Income
|
4,900 | 4,615 | ||||||
TOTAL SHAREHOLDERS’ EQUITY
|
121,534 | 113,549 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
|
$ | 1,375,888 | $ | 1,242,965 | ||||
End of period shares issued and outstanding
|
11,105,583 | 11,077,382 |
Consolidated Statements of Income
Dollars in thousands, except per share data
|
Years Ended December 31,
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
INTEREST INCOME
|
||||||||||||
Interest and Fees on Loans
|
$ | 53,266 | $ | 53,905 | $ | 58,477 | ||||||
Interest on Federal Funds Sold and Other Short-term Investments
|
76 | 106 | 593 | |||||||||
Interest and Dividends on Securities:
|
||||||||||||
Taxable
|
9,812 | 8,660 | 8,007 | |||||||||
Non-taxable
|
1,039 | 1,065 | 768 | |||||||||
TOTAL INTEREST INCOME
|
64,193 | 63,736 | 67,845 | |||||||||
INTEREST EXPENSE
|
||||||||||||
Interest on Deposits
|
10,561 | 13,495 | 21,212 | |||||||||
Interest on FHLB Advances and Other Borrowings
|
4,961 | 5,728 | 5,696 | |||||||||
TOTAL INTEREST EXPENSE
|
15,522 | 19,223 | 26,908 | |||||||||
NET INTEREST INCOME
|
48,671 | 44,513 | 40,937 | |||||||||
Provision for Loan Losses
|
5,225 | 3,750 | 3,990 | |||||||||
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES
|
43,446 | 40,763 | 36,947 | |||||||||
NON-INTEREST INCOME
|
||||||||||||
Trust and Investment Product Fees
|
1,582 | 1,617 | 2,288 | |||||||||
Service Charges on Deposit Accounts
|
4,065 | 4,395 | 4,920 | |||||||||
Insurance Revenues
|
5,347 | 5,296 | 6,306 | |||||||||
Company Owned Life Insurance
|
806 | 1,104 | 791 | |||||||||
Interchange Fee Income
|
1,243 | 969 | 909 | |||||||||
Other Operating Income
|
1,740 | 1,141 | 1,503 | |||||||||
Net Gains on Sales of Loans
|
2,160 | 1,760 | 1,399 | |||||||||
Net Gain (Loss) on Securities
|
— | (423 | ) | 94 | ||||||||
TOTAL NON-INTEREST INCOME
|
16,943 | 15,859 | 18,210 | |||||||||
NON-INTEREST EXPENSE
|
||||||||||||
Salaries and Employee Benefits
|
22,070 | 21,961 | 20,786 | |||||||||
Occupancy Expense
|
3,492 | 3,382 | 3,249 | |||||||||
Furniture and Equipment Expense
|
2,591 | 2,653 | 2,428 | |||||||||
FDIC Premiums
|
1,455 | 1,863 | 209 | |||||||||
Data Processing Fees
|
1,411 | 1,368 | 1,493 | |||||||||
Professional Fees
|
2,285 | 1,740 | 1,670 | |||||||||
Advertising and Promotion
|
1,255 | 993 | 1,078 | |||||||||
Supplies
|
755 | 528 | 570 | |||||||||
Intangible Amortization
|
898 | 909 | 889 | |||||||||
Other Operating Expenses
|
5,149 | 4,994 | 4,344 | |||||||||
TOTAL NON-INTEREST EXPENSE
|
41,361 | 40,391 | 36,716 | |||||||||
Income before Income Taxes
|
19,028 | 16,231 | 18,441 | |||||||||
Income Tax Expense
|
5,623 | 4,013 | 5,638 | |||||||||
NET INCOME
|
$ | 13,405 | $ | 12,218 | $ | 12,803 | ||||||
Earnings per Share
|
$ | 1.21 | $ | 1.10 | $ | 1.16 | ||||||
Diluted Earnings per Share
|
$ | 1.21 | $ | 1.10 | $ | 1.16 |
Consolidated Statements of Changes in Shareholders’ Equity
Dollars in thousands, except per share data
|
Accumulated
|
||||||||||||||||||||||||
Additional
|
Other
|
Total
|
||||||||||||||||||||||
Common Stock
|
Paid-in
|
Retained
|
Comprehensive
|
Shareholders’
|
||||||||||||||||||||
Shares
|
Amount
|
Capital
|
Earnings
|
Income
|
Equity
|
|||||||||||||||||||
Balances, January 1, 2008
|
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 | ||||||||||||||||||
Comprehensive Income:
|
||||||||||||||||||||||||
Net Income
|
13,405 | 13,405 | ||||||||||||||||||||||
Changes in Unrealized Gain (Loss) on Securities Available for Sale, net
|
474 | 474 | ||||||||||||||||||||||
Change in Unrecognized Loss on Postretirement Benefit Obligation
|
(176 | ) | (176 | ) | ||||||||||||||||||||
Change in Unrecognized Amounts in Pension
|
(13 | ) | (13 | ) | ||||||||||||||||||||
Total Comprehensive Income
|
13,690 | |||||||||||||||||||||||
Cash Dividends ($.56 per share)
|
(6,214 | ) | (6,214 | ) | ||||||||||||||||||||
Issuance of Common Stock for:
|
||||||||||||||||||||||||
Exercise of Stock Options
|
3,698 | 4 | 31 | 35 | ||||||||||||||||||||
Employee Stock Purchase Plan
|
(30 | ) | (30 | ) | ||||||||||||||||||||
Restricted Share Grants
|
24,503 | 24 | 381 | 405 | ||||||||||||||||||||
Income Tax Benefit From Restricted Share Grant
|
99 | 99 | ||||||||||||||||||||||
Balances, December 31, 2010
|
11,105,583 | $ | 11,105 | $ | 69,297 | $ | 36,232 | $ | 4,900 | $ | 121,534 |
Consolidated Statements of Cash Flows
Dollars in thousands
|
Years Ended December 31,
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
||||||||||||
Net Income
|
$ | 13,405 | $ | 12,218 | $ | 12,803 | ||||||
Adjustments to Reconcile Net Income to Net Cash from Operating Activities:
|
||||||||||||
Net Accretion on Securities
|
1,080 | (144 | ) | (812 | ) | |||||||
Depreciation and Amortization
|
3,720 | 3,688 | 3,362 | |||||||||
Loans Originated for Sale
|
(125,473 | ) | (145,993 | ) | (105,448 | ) | ||||||
Proceeds from Sales of Loans Held-for-Sale
|
121,489 | 145,213 | 109,378 | |||||||||
Loss in Investment in Limited Partnership
|
135 | 138 | 141 | |||||||||
Provision for Loan Losses
|
5,225 | 3,750 | 3,990 | |||||||||
Gain on Sale of Loans, net
|
(2,160 | ) | (1,760 | ) | (1,399 | ) | ||||||
Gain on Securities, net
|
— | — | (1,031 | ) | ||||||||
Loss (Gain) on Sales of Other Real Estate and Repossessed Assets
|
(161 | ) | 364 | 62 | ||||||||
Loss (Gain) on Disposition and Impairment of Premises and Equipment
|
(33 | ) | 11 | (25 | ) | |||||||
Other-than-temporary Impairment on Securities
|
— | 423 | 937 | |||||||||
Increase in Cash Surrender Value of Company Owned Life Insurance
|
(814 | ) | (670 | ) | (805 | ) | ||||||
Equity Based Compensation
|
405 | 485 | 10 | |||||||||
Excess Tax Benefit from Restricted Share Grant
|
(99 | ) | — | — | ||||||||
Change in Assets and Liabilities:
|
||||||||||||
Interest Receivable and Other Assets
|
(532 | ) | (4,236 | ) | 1,798 | |||||||
Interest Payable and Other Liabilities
|
1,040 | (3,062 | ) | (827 | ) | |||||||
Net Cash from Operating Activities
|
17,227 | 10,425 | 22,134 | |||||||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
||||||||||||
Proceeds from Maturities, Calls, Redemptions of Securities Available-for-Sale
|
59,795 | 54,294 | 52,304 | |||||||||
Proceeds from Sales of Securities Available-for-Sale
|
— | 379 | 53,641 | |||||||||
Purchase of Securities Available-for-Sale
|
(155,797 | ) | (127,192 | ) | (130,170 | ) | ||||||
Proceeds from Maturities of Securities Held-to-Maturity
|
1,175 | 554 | 1,140 | |||||||||
Proceeds from Redemption of Federal Home Loan Bank Stock
|
1,414 | — | — | |||||||||
Purchase of Loans
|
(3,496 | ) | (24,078 | ) | (29,574 | ) | ||||||
Proceeds from Sales of Loans
|
6,778 | 21,057 | 5,369 | |||||||||
Loans Made to Customers, net of Payments Received
|
(4,874 | ) | 10,678 | (4,447 | ) | |||||||
Proceeds from Sales of Other Real Estate
|
2,575 | 1,756 | 3,068 | |||||||||
Property and Equipment Expenditures
|
(1,975 | ) | (2,637 | ) | (2,122 | ) | ||||||
Proceeds from Sales of Property and Equipment
|
512 | 4 | 65 | |||||||||
Acquire Bank Branches
|
855 | — | — | |||||||||
Acquire Insurance Customer List
|
— | (386 | ) | — | ||||||||
Net Cash from Investing Activities
|
(93,038 | ) | (65,571 | ) | (50,726 | ) | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
||||||||||||
Change in Deposits
|
67,578 | 27,952 | 64,388 | |||||||||
Change in Short-term Borrowings
|
37,900 | 8,745 | (31,328 | ) | ||||||||
Advances in Long-term Debt
|
— | 29,250 | 25,000 | |||||||||
Repayments of Long-term Debt
|
(32,305 | ) | (21,541 | ) | (6,167 | ) | ||||||
Income Tax Benefit from Restricted Share Grant
|
99 | — | — | |||||||||
Employee Stock Purchase Plan
|
(30 | ) | (2 | ) | (46 | ) | ||||||
Dividends Paid
|
(6,214 | ) | (6,196 | ) | (6,177 | ) | ||||||
Net Cash from Financing Activities
|
67,028 | 38,208 | 45,670 | |||||||||
Net Change in Cash and Cash Equivalents
|
(8,783 | ) | (16,938 | ) | 17,078 | |||||||
Cash and Cash Equivalents at Beginning of Year
|
28,054 | 44,992 | 27,914 | |||||||||
Cash and Cash Equivalents at End of Year
|
$ | 19,271 | $ | 28,054 | $ | 44,992 | ||||||
Cash Paid During the Year for
|
||||||||||||
Interest
|
$ | 15,534 | $ | 19,815 | $ | 27,246 | ||||||
Income Taxes
|
6,102 | 4,305 | 6,122 | |||||||||
Supplemental Non Cash Disclosures
|
||||||||||||
Loans Transferred to Other Real Estate
|
$ | 2,160 | $ | 2,665 | $ | 3,353 |
Notes to the Consolidated Financial Statements
Dollars in thousands, except per share data
|
Notes to the Consolidated Financial Statements
|
Dollars in thousands, except per share data
|
Notes to the Consolidated Financial Statements
|
Dollars in thousands, except per share data
|
Notes to the Consolidated Financial Statements
|
Dollars in thousands, except per share data
|
Notes to the Consolidated Financial Statements
|
Dollars in thousands, except per share data
|
Gross
|
Gross
|
|||||||||||||||
Amortized
|
Unrealized
|
Unrealized
|
Fair
|
|||||||||||||
Securities Available-for-Sale:
|
Cost
|
Gains
|
Losses
|
Value
|
||||||||||||
2010
|
||||||||||||||||
U.S. Treasury and Agency Securities
|
$ | — | $ | — | $ | — | $ | — | ||||||||
Obligations of State and Political Subdivisions
|
31,483 | 813 | (118 | ) | 32,178 | |||||||||||
Mortgage-backed Securities - Residential
|
304,935 | 7,614 | (1,483 | ) | 311,066 | |||||||||||
Equity Securities
|
2,418 | 1,085 | — | 3,503 | ||||||||||||
Total
|
$ | 338,836 | $ | 9,512 | $ | (1,601 | ) | $ | 346,747 | |||||||
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 |
Notes to the Consolidated Financial Statements
|
Dollars in thousands, except per share data
|
Gross
|
Gross
|
|||||||||||||||
Securities Held-to-Maturity:
|
Carrying
|
Unrecognized
|
Unrecognized
|
Fair
|
||||||||||||
Amount
|
Gains
|
Losses
|
Value
|
|||||||||||||
2010
|
||||||||||||||||
Obligations of State and Political Subdivisions
|
$ | 1,604 | $ | 9 | $ | — | $ | 1,613 | ||||||||
2009
|
||||||||||||||||
Obligations of State and Political Subdivisions
|
$ | 2,774 | $ | 27 | $ | — | $ | 2,801 |
Amortized
|
Fair
|
|||||||
Cost
|
Value
|
|||||||
Securities Available-for-Sale:
|
||||||||
Due in one year or less
|
$ | 415 | $ | 417 | ||||
Due after one year through five years
|
5,311 | 5,524 | ||||||
Due after five years through ten years
|
4,765 | 4,820 | ||||||
Due after ten years
|
20,992 | 21,417 | ||||||
Mortgage-backed Securities - Residential
|
304,935 | 311,066 | ||||||
Equity Securities
|
2,418 | 3,503 | ||||||
Total
|
$ | 338,836 | $ | 346,747 |
Carrying
|
Fair
|
|||||||
Amount
|
Value
|
|||||||
Securities Held-to-Maturity:
|
||||||||
Due in one year or less
|
$ | 175 | $ | 175 | ||||
Due after one year through five years
|
355 | 356 | ||||||
Due after five years through ten years
|
754 | 762 | ||||||
Due after ten years
|
320 | 320 | ||||||
Total
|
$ | 1,604 | $ | 1,613 |
2010
|
2009
|
2008
|
||||||||||
Available-
|
Available-
|
Available-
|
||||||||||
for-Sale
|
for-Sale
|
for-Sale
|
||||||||||
Proceeds from Sales and Calls
|
$ | — | $ | 379 | $ | 53,641 | ||||||
Gross Gains on Sales and Calls
|
— | — | 1,031 | |||||||||
Income Taxes on Gross Gains
|
— | — | 351 |
Notes to the Consolidated Financial Statements
|
Dollars in thousands, except per share data
|
At December 31, 2010
:
|
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
|
5,175 | (118 | ) | — | — | 5,175 | (118 | ) | ||||||||||||||||
Mortgage-backed Securities
- Residential
|
70,123 | (1,483 | ) | — | — | 70,123 | (1,483 | ) | ||||||||||||||||
Equity Securities
|
— | — | — | — | — | — | ||||||||||||||||||
Total
|
$ | 75,298 | $ | (1,601 | ) | $ | — | $ | — | $ | 75,298 | $ | (1,601 | ) |
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 | ) |
Notes to the Consolidated Financial Statements
|
Dollars in thousands, except per share data
|
2010
|
2009
|
|||||||
Commercial:
|
||||||||
Commercial and Industrial Loans and Leases
|
$ | 218,443 | $ | 188,962 | ||||
Commercial Real Estate Loans
|
339,555 | 334,255 | ||||||
Agricultural Loans
|
165,166 | 156,845 | ||||||
Retail:
|
||||||||
Home Equity Loans
|
64,437 | 59,088 | ||||||
Consumer Loans
|
53,807 | 55,648 | ||||||
Residential Mortgage Loans
|
77,310 | 84,677 | ||||||
Subtotal
|
918,718 | 879,475 | ||||||
Less: Unearned Income
|
(1,482 | ) | (1,653 | ) | ||||
Allowance for Loan Losses
|
(13,317 | ) | (11,016 | ) | ||||
Loans, net
|
$ | 903,919 | $ | 866,806 |
2010
|
2009
|
2008
|
||||||||||
Balance as of January 1
|
$ | 11,016 | $ | 9,522 | $ | 8,044 | ||||||
Provision for Loan Losses
|
5,225 | 3,750 | 3,990 | |||||||||
Recoveries of Prior Loan Losses
|
1,290 | 918 | 612 | |||||||||
Loan Losses Charged to the Allowance
|
(4,214 | ) | (3,174 | ) | (3,124 | ) | ||||||
Balance as of December 31
|
$ | 13,317 | $ | 11,016 | $ | 9,522 |
Commercial
|
||||||||||||||||||||||||||||||||
and
|
||||||||||||||||||||||||||||||||
Industrial
|
Commercial
|
Home
|
Residential
|
|||||||||||||||||||||||||||||
Loans and
|
Real Estate
|
Agricultural
|
Equity
|
Consumer
|
Mortgage
|
|||||||||||||||||||||||||||
Total
|
Leases
|
Loans
|
Loans
|
Loans
|
Loans
|
Loans
|
Unallocated
|
|||||||||||||||||||||||||
Allowance for Loan Losses:
|
||||||||||||||||||||||||||||||||
Ending Allowance Balance
|
||||||||||||||||||||||||||||||||
Attributable to Loans:
|
||||||||||||||||||||||||||||||||
Individually Evaluated for Impairment
|
$ | 4,583 | $ | 1,387 | $ | 3,196 | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||
Collectively Evaluated for Impairment
|
8,734 | 2,326 | 4,301 | 750 | 220 | 362 | 543 | 232 | ||||||||||||||||||||||||
Total Ending Allowance Balance
|
$ | 13,317 | $ | 3,713 | $ | 7,497 | $ | 750 | $ | 220 | $ | 362 | $ | 543 | $ | 232 | ||||||||||||||||
Loans:
|
||||||||||||||||||||||||||||||||
Loans
Individually Evaluated
for Impairment
|
$ | 16,833 | $ | 3,421 | $ | 13,357 | $ | 55 | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||
Loans Collectively Evaluated for Impairment
|
907,525 | 215,840 | 327,413 | 167,933 | 64,652 | 54,048 | 77,639 | — | ||||||||||||||||||||||||
Total Ending Loans Balance
(1)
|
$ | 924,358 | $ | 219,261 | $ | 340,770 | $ | 167,988 | $ | 64,652 | $ | 54,048 | $ | 77,639 | $ | — |
Notes to the Consolidated Financial Statements
|
Dollars in thousands, except per share data
|
Information regarding impaired loans:
|
2010
|
2009
|
||||||||||
Year-end impaired loans with no allowance for loan losses allocated
|
$ | 2,868 | $ | 1,213 | ||||||||
Year-end impaired loans with allowance for loan losses allocated
|
13,841 | 6,932 | ||||||||||
Amount of allowance allocated to impaired loans
|
4,583 | 3,024 |
2010
|
2009
|
2008
|
||||||||||
Average balance of impaired loans during the year
|
$ | 10,166 | $ | 6,676 | $ | 5,787 | ||||||
Interest income recognized during impairment
|
78 | 73 | 161 | |||||||||
Interest income recognized on cash basis
|
78 | 71 | 161 |
Unpaid
|
Allowance for
|
|||||||||||
Principal
|
Recorded
|
Loan Losses
|
||||||||||
Balance
|
Investment
|
Allocated
|
||||||||||
With no related allowance recorded:
|
||||||||||||
Commercial and Industrial Loans and Leases
|
$ | 570 | $ | 585 | $ | — | ||||||
Commercial Real Estate Loans
|
2,243 | 2,231 | — | |||||||||
Agricultural Loans
|
55 | 55 | — | |||||||||
With an allowance recorded:
|
||||||||||||
Commercial and Industrial Loans and Leases
|
2,779 | 2,836 | 1,387 | |||||||||
Commercial Real Estate Loans
|
11,062 | 11,126 | 3,196 | |||||||||
Agricultural Loans
|
— | — | — | |||||||||
Total
|
$ | 16,709 | $ | 16,833 | $ | 4,583 |
2010
|
2009
|
|||||||||||
Loans past due over 90 days and accruing and Restructured Loans
|
$ | 1,067 | $ | 419 | ||||||||
Non-accrual Loans
|
10,150 | 8,374 | ||||||||||
Total
|
$ | 11,217 | $ | 8,793 |
Loans Past Due
|
||||||||||||
Over 90 Days
|
||||||||||||
Non-Accrual
|
& Still Accruing
|
|||||||||||
Commercial and Industrial Loans and Leases
|
$ | 514 | $ | 547 | ||||||||
Commercial Real Estate Loans
|
8,718 | 103 | ||||||||||
Agricultural Loans
|
55 | — | ||||||||||
Home Equity Loans
|
156 | — | ||||||||||
Consumer Loans
|
103 | 38 | ||||||||||
Residential Mortgage Loans
|
604 | — | ||||||||||
Total
|
$ | 10,150 | $ | 688 |
Notes to the Consolidated Financial Statements
|
Dollars in thousands, except per share data
|
Greater than
|
||||||||||||||||||||||||
30-59 Days
|
60-89 Days
|
90 Days
|
Total
|
Loans Not
|
||||||||||||||||||||
Total
|
Past Due
|
Past Due
|
Past Due
|
Past Due
|
Past Due
|
|||||||||||||||||||
Commercial and Industrial Loans and Leases
|
$ | 219,261 | $ | 1,876 | $ | 782 | $ | 1,011 | $ | 3,669 | $ | 215,592 | ||||||||||||
Commercial Real Estate Loans
|
340,770 | 149 | 700 | 5,843 | 6,692 | 334,078 | ||||||||||||||||||
Agricultural Loans
|
167,988 | 363 | — | 55 | 418 | 167,570 | ||||||||||||||||||
Home Equity Loans
|
64,652 | 132 | 12 | 156 | 300 | 64,352 | ||||||||||||||||||
Consumer Loans
|
54,048 | 604 | 95 | 108 | 807 | 53,241 | ||||||||||||||||||
Residential Mortgage Loans
|
77,639 | 2,112 | 580 | 604 | 3,296 | 74,343 | ||||||||||||||||||
Total
(1)
|
$ | 924,358 | $ | 5,236 | $ | 2,169 | $ | 7,777 | $ | 15,182 | $ | 909,176 |
Notes to the Consolidated Financial Statements
|
Dollars in thousands, except per share data
|
Special
|
||||||||||||||||
Pass
|
Mention
|
Substandard
|
Doubtful
|
|||||||||||||
Commercial and Industrial Loans and Leases
|
$ | 192,494 | $ | 14,782 | $ | 11,985 | $ | — | ||||||||
Commercial Real Estate Loans
|
295,863 | 27,304 | 17,603 | — | ||||||||||||
Agricultural Loans
|
161,871 | 3,294 | 2,823 | — | ||||||||||||
Total
|
$ | 650,228 | $ | 45,380 | $ | 32,411 | $ | — |
Home Equity
|
Consumer
|
Residential
|
||||||||||
Loans
|
Loans
|
Mortgage Loans
|
||||||||||
Performing
|
$ | 64,496 | $ | 53,907 | $ | 77,035 | ||||||
Nonperforming
|
156 | 141 | 604 | |||||||||
Total
|
$ | 64,652 | $ | 54,048 | $ | 77,639 |
Balance
|
Changes
|
Balance
|
||||||||||||||||||||
January 1,
|
in Persons
|
Deductions
|
December 31,
|
|||||||||||||||||||
2010
|
Additions
|
Included
|
Collected
|
Charged-off
|
2010
|
|||||||||||||||||
$ | 4,429 | $ | 4,411 | $ | (1,295 | ) | $ | (3,539 | ) | $ | — | $ | 4,006 |
2010
|
2009
|
|||||||
Land
|
$ | 5,709 | $ | 4,653 | ||||
Buildings and Improvements
|
32,643 | 29,353 | ||||||
Furniture and Equipment
|
16,859 | 17,397 | ||||||
Total Premises, Furniture and Equipment
|
55,211 | 51,403 | ||||||
Less: Accumulated Depreciation
|
(29,237 | ) | (29,250 | ) | ||||
Total
|
$ | 25,974 | $ | 22,153 |
2010
|
2009
|
|||||||
Capital Lease
|
$ | 743 | $ | 743 | ||||
Less: Accumulated Depreciation
|
(144 | ) | (108 | ) | ||||
Total
|
$ | 599 | $ | 635 |
Notes to the Consolidated Financial Statements
|
Dollars in thousands, except per share data
|
2011
|
$ | 81 | ||
2012
|
81 | |||
2013
|
81 | |||
2014
|
81 | |||
2015
|
81 | |||
Thereafter
|
941 | |||
Total minimum lease payments
|
1,346 | |||
Less: Amount representing interest
|
(662 | ) | ||
Present Value of Net Minimum Lease Payments
|
$ | 684 |
2011
|
$ | 203,173 | ||
2012
|
96,552 | |||
2013
|
37,965 | |||
2014
|
1,697 | |||
2015
|
22,036 | |||
Thereafter
|
127 | |||
Total
|
$ | 361,550 |
December 31,
|
||||||||
2010
|
2009
|
|||||||
Long-term Advances from Federal Home Loan Bank collateralized by qualifying mortgages, investment securities, and mortgage-backed securities
|
$ | 46,582 | $ | 77,369 | ||||
Term Loans
|
4,500 | 6,000 | ||||||
Subordinated Debentures
|
29,250 | 29,250 | ||||||
Capital Lease Obligation
|
684 | 701 | ||||||
Long-term Borrowings
|
81,016 | 113,320 | ||||||
Overnight Variable Rate Advances from Federal Home Loan Bank collateralized by qualifying mortgages, investment securities, and mortgage-backed securities
|
$ | 30,000 | $ | 1,300 | ||||
Federal Funds Purchased
|
6,700 | — | ||||||
Repurchase Agreements
|
36,001 | 33,501 | ||||||
Short-term Borrowings
|
72,701 | 34,801 | ||||||
Total Borrowings
|
$ | 153,717 | $ | 148,121 |
Notes to the Consolidated Financial Statements
|
Dollars in thousands, except per share data
|
2010
|
2009
|
|||||||
Average Daily Balance During the Year
|
$ | 43,568 | $ | 24,231 | ||||
Average Interest Rate During the Year
|
0.47 | % | 0.73 | % | ||||
Maximum Month-end Balance During the Year
|
$ | 58,393 | $ | 33,501 | ||||
Weighted Average Interest Rate at Year-end
|
0.35 | % | 0.50 | % |
2011
|
$ | 30 | ||
2012
|
21,533 | |||
2013
|
16,536 | |||
2014
|
11,539 | |||
2015
|
42 | |||
Thereafter
|
30,652 | |||
Total
|
$ | 80,332 |
Notes to the Consolidated Financial Statements
|
Dollars in thousands, except per share data
|
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
|
$ | 142,981 | 14.18 | % | $ | 80,682 | 8.00 | % | N/A | N/A | ||||||||||||||
Bank
|
131,969 | 13.19 | 80,013 | 8.00 | $ | 100,016 | 10.00 | % | ||||||||||||||||
Tier 1 Capital
|
||||||||||||||||||||||||
(to Risk Weighted Assets)
|
||||||||||||||||||||||||
Consolidated
|
$ | 104,628 | 10.37 | % | $ | 40,341 | 4.00 | % | N/A | N/A | ||||||||||||||
Bank
|
119,457 | 11.94 | 40,006 | 4.00 | $ | 60,010 | 6.00 | % | ||||||||||||||||
Tier 1 Capital
|
||||||||||||||||||||||||
(to Average Assets)
|
||||||||||||||||||||||||
Consolidated
|
$ | 104,628 | 7.61 | % | $ | 54,990 | 4.00 | % | N/A | N/A | ||||||||||||||
Bank
|
119,457 | 8.74 | 54,643 | 4.00 | $ | 68,304 | 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
|
$ | 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 | % |
Notes to the Consolidated Financial Statements
|
Dollars in thousands, except per share data
|
Year Ended December 31, 2010
|
||||||||||||||||
Weighted
|
Weighted Average
|
Aggregate
|
||||||||||||||
Number of
|
Average Price
|
Life of Options
|
Intrinsic
|
|||||||||||||
Options
|
of Options
|
(in years)
|
Value
|
|||||||||||||
Outstanding at Beginning of Period
|
157,956 | $ | 16.44 | |||||||||||||
Granted
|
— | — | ||||||||||||||
Exercised
|
(13,205 | ) | 12.93 | |||||||||||||
Forfeited
|
— | — | ||||||||||||||
Expired
|
(8,700 | ) | 15.30 | |||||||||||||
Outstanding & Exercisable at End of Period
|
136,051 | $ | 16.86 | 5.69 | $ | 212,158 |
2010
|
2009
|
2008
|
||||||||||
Intrinsic Value of Options Exercised
|
$ | 46 | $ | 55 | $ | — | ||||||
Cash Received from Option Exercises
|
$ | — | $ | — | $ | — | ||||||
Tax Benefit of Option Exercises
|
$ | 19 | $ | 10 | $ | — | ||||||
Weighted Average Fair Value of Options Granted
|
$ | — | $ | — | $ | — |
Notes to the Consolidated Financial Statements
|
Dollars in thousands, except per share data
|
Year Ended
|
Year Ended
|
Year Ended
|
||||||||||
12/31/2010
|
12/31/2009
|
12/31/2008
|
||||||||||
Restricted Stock Expense
|
$ | 405 | $ | 485 | $ | 10 | ||||||
Cash Entitlement Expense
|
380 | 461 | — | |||||||||
Tax Effect
|
(311 | ) | (375 | ) | (4 | ) | ||||||
Net of Tax
|
474 | 571 | 6 |
Year Ended
|
||||||||
December 31, 2010
|
||||||||
Weighted
|
||||||||
Restricted
|
Average Market
|
|||||||
Shares
|
Price at Grant
|
|||||||
Outstanding at Beginning of Period
|
— | $ | — | |||||
Granted
|
24,503 | 16.56 | ||||||
Issued and Vested
|
(24,503 | ) | 16.56 | |||||
Forfeited
|
— | — | ||||||
Outstanding at End of Period
|
— | — |
Notes to the Consolidated Financial Statements
|
Dollars in thousands, except per share data
|
Notes to the Consolidated Financial Statements
|
Dollars in thousands, except per share data
|
2010
|
2009
|
2008
|
||||||||||
Interest Cost
|
$ | 34 | $ | 36 | $ | 37 | ||||||
Expected Return on Assets
|
(3 | ) | (7 | ) | (13 | ) | ||||||
Amortization of Transition Amount
|
— | — | (1 | ) | ||||||||
Amortization of Prior Service Cost
|
(3 | ) | (3 | ) | (3 | ) | ||||||
Recognition of Net Loss
|
25 | 16 | 21 | |||||||||
Net Periodic Benefit Cost
|
$ | 53 | $ | 42 | $ | 41 | ||||||
Net Loss During the Period
|
43 | 91 | 11 | |||||||||
Amortization of Unrecognized Loss
|
(25 | ) | (16 | ) | (16 | ) | ||||||
Amortization of Transition Cost
|
— | — | 1 | |||||||||
Amortization of Prior Service Cost
|
3 | 3 | 4 | |||||||||
Total Recognized in Other Comprehensive Income
|
21 | 78 | — | |||||||||
Total Recognized in Net Periodic Benefit Cost and Other Comprehensive Income
|
$ | 74 | $ | 120 | $ | 41 |
Notes to the Consolidated Financial Statements
|
Dollars in thousands, except per share data
|
2010
|
2009
|
2008
|
||||||||||
Discount Rate
|
4.60 | % | 5.29 | % | 6.17 | % | ||||||
Rate of Compensation Increase
(1)
|
N/A | N/A | N/A |
2010
|
2009
|
2008
|
||||||||||
Discount Rate
|
5.29 | % | 6.17 | % | 6.25 | % | ||||||
Expected Return on Plan Assets
|
1.00 | % | 2.20 | % | 4.50 | % | ||||||
Rate of Compensation Increase
(1)
|
N/A | N/A | N/A |
(1)
|
Benefits under the plan were suspended in 1998; therefore, the weighted-average rate of increase in future compensation levels was not applicable for all years presented.
|
Target
|
Percentage of Plan Assets
|
|||||||||||
Allocation
|
at Year-end
|
|||||||||||
Asset Category
|
2011
|
2010
|
2009
|
|||||||||
Cash
|
40 | % | 38 | % | 100 | % | ||||||
Certificates of Deposit
|
60 | % | 62 | % | 0 | % | ||||||
Total
|
100 | % | 100 | % | 100 | % |
2010
|
2009
|
|||||||
Obligation at the Beginning of Year
|
$ | 446 | $ | 450 | ||||
Unrecognized Loss (Gain)
|
107 | 7 | ||||||
Components of Net Periodic Postretirement Benefit Cost
|
||||||||
Service Cost
|
19 | 17 | ||||||
Interest Cost
|
26 | 25 | ||||||
Net Expected Benefit Payments
|
(38 | ) | (53 | ) | ||||
Obligation at End of Year
|
$ | 560 | $ | 446 |
Notes to the Consolidated Financial Statements
|
Dollars in thousands, except per share data
|
2010
|
2009
|
|||||||
Service Cost
|
$ | 19 | $ | 17 | ||||
Interest Cost
|
26 | 25 | ||||||
Net Postretirement Benefit Expense
|
45 | 42 | ||||||
Net Gain During Period Recognized in Other Comprehensive Income
|
— | — | ||||||
Total Recognized in Net Postretirement Benefit Expense and Other Comprehensive Income
|
$ | 45 | $ | 42 |
2010
|
2009
|
2008
|
||||||||||
Discount Rate
|
4.72 | % | 6.00 | % | 6.00 | % |
2010
|
2009
|
|||||||||||
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
|
2017 | 2016 |
One-Percentage-Point
|
One-Percentage-Point
|
|||||||
Increase
|
Decrease
|
|||||||
Effect on Total of Service and Interest Cost
|
$ | 3 | $ | (3 | ) | |||
Effect on Postretirement Benefit Obligation
|
$ | 33 | $ | (30 | ) |
Pension
|
Postretirement
|
|||||||
Year
|
Benefits
|
Benefits
|
||||||
2011
|
$ | 53 | $ | 46 | ||||
2012
|
48 | 39 | ||||||
2013
|
108 | 45 | ||||||
2014
|
40 | 43 | ||||||
2015
|
52 | 60 | ||||||
2016-2020
|
302 | 324 |
Notes to the Consolidated Financial Statements
|
Dollars in thousands, except per share data
|
The provision for income taxes consists of the following:
|
2010
|
2009
|
2008
|
|||||||||
Current Federal
|
$ | 6,147 | $ | 4,424 | $ | 4,604 | ||||||
Current State
|
480 | 25 | 476 | |||||||||
Deferred Federal
|
(686 | ) | (192 | ) | 719 | |||||||
Deferred State
|
(318 | ) | (244 | ) | (161 | ) | ||||||
Total
|
$ | 5,623 | $ | 4,013 | $ | 5,638 |
2010
|
2009
|
2008
|
||||||||||
Statutory Rate Times Pre-tax Income
|
$ | 6,660 | $ | 5,518 | $ | 6,270 | ||||||
Add (Subtract) the Tax Effect of:
|
||||||||||||
Income from Tax-exempt Loans and Investments
|
(533 | ) | (512 | ) | (351 | ) | ||||||
State Income Tax, Net of Federal Tax Effect
|
105 | (145 | ) | 208 | ||||||||
General Business Tax Credits
|
(365 | ) | (466 | ) | (182 | ) | ||||||
Dividends Received Deduction
|
— | (5 | ) | (22 | ) | |||||||
Company Owned Life Insurance
|
(282 | ) | (375 | ) | (269 | ) | ||||||
Other Differences
|
38 | (2 | ) | (16 | ) | |||||||
Total Income Taxes
|
$ | 5,623 | $ | 4,013 | $ | 5,638 |
2010
|
2009
|
|||||||||||
Deferred Tax Assets:
|
||||||||||||
Allowance for Loan Losses
|
$ | 4,784 | $ | 3,815 | ||||||||
Deferred Compensation and Employee Benefits
|
1,458 | 1,585 | ||||||||||
Other-than-temporary Impairment
|
399 | 401 | ||||||||||
Accrued Expenses
|
636 | 440 | ||||||||||
Business Combination Fair Value Adjustments
|
18 | 14 | ||||||||||
Pension and Postretirement Plans
|
125 | 1 | ||||||||||
Intangibles
|
42 | — | ||||||||||
Other
|
237 | 271 | ||||||||||
Total Deferred Tax Assets
|
7 ,699 | 6,527 | ||||||||||
Deferred Tax Liabilities:
|
||||||||||||
Depreciation
|
(141 | ) | (179 | ) | ||||||||
Leasing Activities, Net
|
(4,037 | ) | (3,580 | ) | ||||||||
Investment in Low Income Housing Partnerships
|
(270 | ) | (392 | ) | ||||||||
Unrealized Appreciation on Securities
|
(2,821 | ) | (2,404 | ) | ||||||||
FHLB Stock Dividends
|
(388 | ) | (440 | ) | ||||||||
Prepaid Expenses
|
(410 | ) | (394 | ) | ||||||||
Intangibles
|
— | (105 | ) | |||||||||
Other
|
(164 | ) | (276 | ) | ||||||||
Total Deferred Tax Liabilities
|
(8,231 | ) | (7,770 | ) | ||||||||
Valuation Allowance
|
(45 | ) | (45 | ) | ||||||||
Net Deferred Tax Liability
|
$ | (577 | ) | $ | (1,288 | ) |
Notes to the Consolidated Financial Statements
|
Dollars in thousands, except per share data
|
2010
|
2009
|
2008
|
||||||||||
Earnings per Share:
|
||||||||||||
Net Income
|
$ | 13,405 | $ | 12,218 | $ | 12,803 | ||||||
Weighted Average Shares Outstanding
|
11,098,836 | 11,065,917 | 11,029,519 | |||||||||
Earnings per Share
|
$ | 1.21 | $ | 1.10 | $ | 1.16 | ||||||
Diluted Earnings per Share:
|
||||||||||||
Net Income
|
$ | 13,405 | $ | 12,218 | $ | 12,803 | ||||||
Weighted Average Shares Outstanding
|
11,098,836 | 11,065,917 | 11,029,519 | |||||||||
Stock Options, Net
|
6,051 | 3,071 | 392 | |||||||||
Diluted Weighted Average Shares Outstanding
|
11,104,887 | 11,068,988 | 11,029,911 | |||||||||
Diluted Earnings per Share
|
$ | 1.21 | $ | 1.10 | $ | 1.16 |
Years Ending December 31:
|
Premises and Equipment
|
|||
2011
|
$ | 359 | ||
2012
|
311 | |||
2013
|
263 | |||
2014
|
224 | |||
2015
|
180 | |||
Thereafter
|
1,088 | |||
Total
|
$ | 2,425 |
Notes to the Consolidated Financial Statements
|
Dollars in thousands, except per share data
|
2010
|
2009
|
|||||||||||||||
Fixed
|
Variable
|
Fixed
|
Variable
|
|||||||||||||
Rate
|
Rate
|
Rate
|
Rate
|
|||||||||||||
Commitments to Fund Loans:
|
||||||||||||||||
Consumer Lines
|
$ | 5,041 | $ | 107,602 | $ | 1,839 | $ | 102,628 | ||||||||
Commercial Operating Lines
|
6,082 | 130,780 | 7,733 | 120,732 | ||||||||||||
Residential Mortgages
|
16,922 | 110 | 8,324 | 1,387 | ||||||||||||
Total Commitments to Fund Loans
|
$ | 28,045 | $ | 238,492 | $ | 17,896 | $ | 224,747 | ||||||||
Commitments to Sell Loans
|
$ | 30,413 | $ | — | $ | 15,263 | $ | — | ||||||||
Standby Letters of Credit
|
$ | 1,185 | $ | 4,560 | $ | 970 | $ | 2,517 |
Notes to the Consolidated Financial Statements
|
Dollars in thousands, except per share data
|
Fair Value Measurements at December 31, 2010 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
|
32,178 | — | 32,178 | — | ||||||||||||
Mortgage-backed Securities - Residential
|
311,066 | — | 311,066 | — | ||||||||||||
Equity Securities
|
3,503 | 3,150 | — | 353 | ||||||||||||
Loans Held-for-Sale
|
11,850 | — | 11,850 | — |
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 | — |
Notes to the Consolidated Financial Statements
|
Dollars in thousands, except per share data
|
Available-for-Sale Securities
|
||||||||
2010
|
2009
|
|||||||
Balance of Recurring Level 3 Assets at January 1
|
$ | 353 | $ | 1,155 | ||||
Sale of Securities
|
— | (379 | ) | |||||
Other-than-temporary Impairment Charges Recognized through Net Income
|
— | (423 | ) | |||||
Ending Balance, December 31
|
$ | 353 | $ | 353 |
Fair Value Measurements at December 31, 2010 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 with Specific Allocations
|
||||||||||||||||
Commercial and Industrial Loans
|
$ | 1,451 | $ | — | $ | — | $ | 1,451 | ||||||||
Commercial Real Estate Loans
|
$ | 7,868 | $ | — | $ | — | $ | 7,868 | ||||||||
Other Real Estate
|
||||||||||||||||
Commercial Real Estate
|
$ | 400 | $ | — | $ | — | $ | 400 | ||||||||
Residential
|
$ | 60 | $ | — | $ | — | $ | 60 |
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 with Specific Allocations
|
$ | 3,908 | $ | — | $ | — | $ | 3,908 | ||||||||
Other Real Estate
|
$ | 507 | $ | — | $ | — | $ | 507 |
Notes to the Consolidated Financial Statements
|
Dollars in thousands, except per share data
|
December 31, 2010
|
December 31, 2009
|
|||||||||||||||
Carrying
|
Fair
|
Carrying
|
Fair
|
|||||||||||||
Value
|
Value
|
Value
|
Value
|
|||||||||||||
Financial Assets:
|
||||||||||||||||
Cash and Short-term Investments
|
$ | 19,271 | $ | 19,271 | $ | 28,054 | $ | 28,054 | ||||||||
Securities Held-to-Maturity
|
1,604 | 1,613 | 2,774 | 2,801 | ||||||||||||
FHLB Stock and Other Restricted Stock
|
9,207 | N/A | 10,621 | N/A | ||||||||||||
Loans, Net
|
894,600 | 894,463 | 862,898 | 870,463 | ||||||||||||
Accrued Interest Receivable
|
6,687 | 6,687 | 6,605 | 6,605 | ||||||||||||
Financial Liabilities:
|
||||||||||||||||
Demand, Savings, and Money Market Deposits
|
(725,736 | ) | (725,736 | ) | (639,967 | ) | (639,967 | ) | ||||||||
Time Deposits
|
(361,550 | ) | (363,274 | ) | (329,676 | ) | (330,628 | ) | ||||||||
Short-term Borrowings
|
(72,701 | ) | (72,701 | ) | (34,801 | ) | (34,801 | ) | ||||||||
Long-term Debt
|
(81,016 | ) | (86,714 | ) | (113,320 | ) | (114,742 | ) | ||||||||
Accrued Interest Payable
|
(2,281 | ) | (2,281 | ) | (2,292 | ) | (2,292 | ) | ||||||||
Unrecognized Financial Instruments:
|
||||||||||||||||
Commitments to Extend Credit
|
— | — | — | — | ||||||||||||
Standby Letters of Credit
|
— | — | — | — | ||||||||||||
Commitments to Sell Loans
|
— | — | — | — |
Notes to the Consolidated Financial Statements
|
Dollars in thousands, except per share data
|
Year ended December 31, 2010
|
||||||||||||||||||||
Trust and
|
||||||||||||||||||||
Investment
|
||||||||||||||||||||
Core
|
Advisory
|
Consolidated
|
||||||||||||||||||
Banking
|
Services
|
Insurance
|
Other
|
Totals
|
||||||||||||||||
Net Interest Income
|
$ | 50,460 | $ | 8 | $ | 27 | $ | (1,824 | ) | $ | 48,671 | |||||||||
Net Gains on Sales of Loans
|
2,160 | — | — | — | 2,160 | |||||||||||||||
Net Gain (Loss) on Securities
|
— | — | — | — | — | |||||||||||||||
Trust and Investment Product Fees
|
2 | 1,585 | — | (5 | ) | 1,582 | ||||||||||||||
Insurance Revenues
|
61 | 26 | 5,282 | (22 | ) | 5,347 | ||||||||||||||
Noncash Items:
|
||||||||||||||||||||
Provision for Loan Losses
|
5,225 | — | — | — | 5,225 | |||||||||||||||
Depreciation and Amortization
|
2,865 | 29 | 826 | — | 3,720 | |||||||||||||||
Income Tax Expense
|
7,181 | (259 | ) | (56 | ) | (1,243 | ) | 5,623 | ||||||||||||
Segment Profit (Loss)
|
15,325 | (385 | ) | (130 | ) | (1,405 | ) | 13,405 | ||||||||||||
Segment Assets
|
1,368,348 | 2,193 | 8,426 | (3,079 | ) | 1,375,888 |
Year ended December 31, 2009
|
||||||||||||||||||||
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
|
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 |
Notes to the Consolidated Financial Statements
|
Dollars in thousands, except per share data
|
Year ended December 31, 2008
|
||||||||||||||||||||
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
|
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 |
Notes to the Consolidated Financial Statements
|
Dollars in thousands, except per share data
|
December 31,
|
||||||||
2010
|
2009
|
|||||||
ASSETS
|
||||||||
Cash
|
$ | 8,381 | $ | 4,848 | ||||
Securities Available-for-Sale, at Fair Value
|
3,503 | 2,340 | ||||||
Investment in Subsidiary Bank
|
135,879 | 135,491 | ||||||
Investment in Non-banking Subsidiaries
|
3,488 | 2,783 | ||||||
Other Assets
|
7,019 | 5,422 | ||||||
Total Assets
|
$ | 158,270 | $ | 150,884 | ||||
LIABILITIES
|
||||||||
Borrowings
|
$ | 33,750 | $ | 35,250 | ||||
Other Liabilities
|
2,986 | 2,085 | ||||||
Total Liabilities
|
36,736 | 37,335 | ||||||
SHAREHOLDERS’ EQUITY
|
||||||||
Common Stock
|
11,105 | 11,077 | ||||||
Additional Paid-in Capital
|
69,297 | 68,816 | ||||||
Retained Earnings
|
36,232 | 29,041 | ||||||
Accumulated Other Comprehensive Income
|
4,900 | 4,615 | ||||||
Total Shareholders’ Equity
|
121,534 | 113,549 | ||||||
Total Liabilities and Shareholders’ Equity
|
$ | 158,270 | $ | 150,884 |
Years Ended December 31,
|
||||||||||||
|
2010
|
2009
|
2008
|
|||||||||
INCOME
|
||||||||||||
Dividends from Subsidiaries
|
||||||||||||
Bank
|
$ | 14,000 | $ | 8,000 | $ | 13,000 | ||||||
Non-bank
|
— | — | — | |||||||||
Interest Income
|
30 | 57 | 57 | |||||||||
Net Loss on Securities
|
— | (423 | ) | (937 | ) | |||||||
Other Income
|
76 | 119 | 39 | |||||||||
Total Income
|
14,106 | 7,753 | 12,159 | |||||||||
EXPENSES
|
||||||||||||
Salaries and Employee Benefits
|
420 | 364 | 163 | |||||||||
Professional Fees
|
842 | 342 | 245 | |||||||||
Occupancy and Equipment Expense
|
8 | 7 | 8 | |||||||||
Interest Expense
|
1,878 | 1,459 | 981 | |||||||||
Other Expenses
|
281 | 292 | 324 | |||||||||
Total Expenses
|
3,429 | 2,464 | 1,721 | |||||||||
INCOME BEFORE INCOME TAXES AND EQUITY IN UNDISTRIBUTED INCOME OF SUBSIDIARIES
|
10,677 | 5,289 | 10,438 | |||||||||
Income Tax Benefit
|
1,178 | 1,237 | 1,212 | |||||||||
INCOME BEFORE EQUITY IN UNDISTRIBUTED INCOME OF SUBSIDIARIES
|
11,855 | 6,526 | 11,650 | |||||||||
Equity in Undistributed Income of Subsidiaries
|
1,550 | 5,692 | 1,153 | |||||||||
NET INCOME
|
13,405 | 12,218 | 12,803 | |||||||||
Other Comprehensive Income:
|
||||||||||||
Unrealized Gain on Securities, Net
|
474 | 1,908 | 1,612 | |||||||||
Changes in Unrecognized Amounts in Pension
|
(13 | ) | (47 | ) | — | |||||||
Changes in Unrecognized Loss on Postretirement Benefit Obligation
|
(176 | ) | — | 144 | ||||||||
TOTAL COMPREHENSIVE INCOME
|
$ | 13,690 | $ | 14,079 | $ | 14,559 |
Notes to the Consolidated Financial Statements
|
Dollars in thousands, except per share data
|
Years Ended December 31,
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
||||||||||||
Net Income
|
$ | 13,405 | $ | 12,218 | $ | 12,803 | ||||||
Adjustments to Reconcile Net Income to Net Cash from Operations
|
||||||||||||
Loss on Securities, net
|
— | 423 | 937 | |||||||||
Change in Other Assets
|
(1,995 | ) | (963 | ) | (39 | ) | ||||||
Change in Other Liabilities
|
612 | 325 | (493 | ) | ||||||||
Equity Based Compensation
|
405 | 485 | 10 | |||||||||
Excess Tax Benefit from Restricted Share Grant
|
(99 | ) | — | — | ||||||||
Equity in Undistributed Income of Subsidiaries
|
(1,550 | ) | (5,692 | ) | (1,153 | ) | ||||||
Net Cash from Operating Activities
|
10,778 | 6,796 | 12,065 | |||||||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
||||||||||||
Capital Contribution to Subsidiaries
|
— | (15,000 | ) | (250 | ) | |||||||
Proceeds from Sales, Redemptions of Securities Available-for-Sale
|
400 | 379 | — | |||||||||
Net Cash from Investing Activities
|
400 | (14,621 | ) | (250 | ) | |||||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
||||||||||||
Change in Short-term Borrowings
|
— | — | (3,250 | ) | ||||||||
Advances in Long-term Debt
|
— | 19,250 | — | |||||||||
Repayment of Long-term Debt
|
(1,500 | ) | (1,500 | ) | (1,500 | ) | ||||||
Income Tax Benefit from Restricted Share Grant
|
99 | — | — | |||||||||
Employee Stock Purchase Plan
|
(30 | ) | (2 | ) | (46 | ) | ||||||
Dividends Paid
|
(6,214 | ) | (6,196 | ) | (6,177 | ) | ||||||
Net Cash from Financing Activities
|
(7,645 | ) | 11,552 | (10,973 | ) | |||||||
Net Change in Cash and Cash Equivalents
|
3,533 | 3,727 | 842 | |||||||||
Cash and Cash Equivalents at Beginning of Year
|
4,848 | 1,121 | 279 | |||||||||
Cash and Cash Equivalents at End of Year
|
$ | 8,381 | $ | 4,848 | $ | 1,121 |
Notes to the Consolidated Financial Statements
|
Dollars in thousands, except per share data
|
2010
|
2009
|
2008
|
||||||||||
Beginning of Year
|
$ | 9,655 | $ | 9,655 | $ | 9,655 | ||||||
Acquired Goodwill
|
180 | — | — | |||||||||
Impairment
|
— | — | — | |||||||||
End of Year
|
$ | 9,835 | $ | 9,655 | $ | 9,655 |
Acquired intangible assets were as follows as of year end:
|
2010
|
|||||||
Gross
|
Accumulated
|
|||||||
Amount
|
Amortization
|
|||||||
Core Banking
|
||||||||
Core Deposit Intangible
|
$ | 3,275 | $ | 1,727 | ||||
Unidentified Branch Acquisition Intangible
|
257 | 257 | ||||||
Insurance
|
||||||||
Customer List
|
5,199 | 4,123 | ||||||
Total
|
$ | 8,731 | $ | 6,107 |
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 |
Notes to the Consolidated Financial Statements
|
Dollars in thousands, except per share data
|
2011
|
$ | 671 | ||
2012
|
654 | |||
2013
|
565 | |||
2014
|
337 | |||
2015
|
198 |
2010
|
2009
|
2008
|
||||||||||
Unrealized Holding Gains on
Securities Available-for-Sale
|
$ | 891 | $ | 2,437 | $ | 2,506 | ||||||
Reclassification Adjustments for (Gains) Losses
Later Realized in Income
|
— | 423 | (94 | ) | ||||||||
Net Unrealized Gains
|
891 | 2,860 | 2,412 | |||||||||
Amortization of Amounts Included in Net Periodic
Pension Costs
|
22 | 13 | 11 | |||||||||
Unrecognized Loss on Pension
|
(43 | ) | (91 | ) | (11 | ) | ||||||
Unrecognized Gain (Loss) on Postretirement Benefits
|
(293 | ) | — | 238 | ||||||||
Tax Effect
|
(292 | ) | (921 | ) | (894 | ) | ||||||
Other Comprehensive Income
|
$ | 285 | $ | 1,861 | $ | 1,756 |
Balance
|
Current
|
Balance
|
||||||||||
At
|
Period
|
at
|
||||||||||
12/31/2009
|
Change
|
12/31/2010
|
||||||||||
Unrealized Gains on Securities
Available-for-Sale
|
$ | 4,616 | $ | 474 | $ | 5,090 | ||||||
Unrecognized Loss on Pension Benefits
|
(175 | ) | (13 | ) | (188 | ) | ||||||
Unrecognized Gain (Loss) on Postretirement Benefits
|
174 | (176 | ) | (2 | ) | |||||||
Total
|
$ | 4,615 | $ | 285 | $ | 4,900 |
Interest
|
Net Interest
|
Net
|
Earnings per Share
|
|||||||||||||||||
Income
|
Income
|
Income
|
Basic
|
Diluted
|
||||||||||||||||
2010
|
||||||||||||||||||||
First Quarter
|
$ | 15,583 | $ | 11,649 | $ | 3,251 | $ | 0.29 | $ | 0.29 | ||||||||||
Second Quarter
|
15,941 | 11,915 | 3,408 | 0.31 | 0.31 | |||||||||||||||
Third Quarter
|
16,355 | 12,477 | 3,594 | 0.32 | 0.32 | |||||||||||||||
Fourth Quarter
|
16,314 | 12,630 | 3,152 | 0.28 | 0.28 | |||||||||||||||
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 |
Notes to the Consolidated Financial Statements
|
Dollars in thousands, except per share data
|
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
|
136,051 | (a) | $ | 16.86 | 957,737 | (b) | ||||||
Equity compensation plans not approved by security holders
|
— | — | — | |||||||||
Total
|
136,051 | $ | 16.86 | 957,737 |
(a)
|
Does not include any shares that employees may have the right to purchase under the Employee Stock Purchase Plan in August 2011 in respect of employee payroll deductions of participating employees that had accumulated as of December 31, 2010 during the plan year that commenced in August 2010. Although these employees have the right under this Plan to have their accumulated payroll deductions applied to the purchase of Common Shares at a discounted price in August 2011, the price at which such shares may be purchased and the number of shares that may be purchased under that Plan at that time is not presently determinable.
|
(b)
|
Represents 482,240 shares that the Company may in the future issue to employees under the Employee Stock Purchase Plan (although the Company typically purchases the shares needed for sale to participating employees on the open market rather than issuing new issue shares to such employees) and 475,497 shares that were available for grant or issuance at December 31, 2010 under the 2009 Long-Term Equity Incentive Plan. Under the Long-Term Equity Incentive Plan, the aggregate number of Common Shares available for the grant of awards (subject to customary anti-dilution adjustment provisions) cumulatively following the adoption of the Plan in 2009 through the expiration of the Plan in 2019 may not exceed the sum of the following: (a) 500,000 shares, plus (b) any shares exchanged by a participant as full or partial payment to the Company of the exercise price of an
option granted to the participant under the Plan; plus (c) at the beginning of each calendar year, an additional number of shares (if any) equal to the number of shares that would result in the number of shares available for awards as of such date being equal to one percent (1%) of the total number of the Company's shares outstanding as of the immediately preceding December 31, on a fully-diluted basis.
|
Page #
|
|||
German American Bancorp, Inc. and Subsidiaries:
|
|||
Report of Independent Registered Public Accounting Firm
|
37 | ||
Consolidated Balance Sheets at December 31,
2010 and 2009
|
38 | ||
Consolidated Statements of Income, years
ended December 31, 2010, 2009, and 2008
|
39 | ||
Consolidated Statements of Changes in
Shareholders’ Equity, years ended December 31, 2010, 2009, and 2008
|
40 | ||
Consolidated Statements of Cash Flows, years
ended December 31, 2010, 2009, and 2008
|
41 | ||
Notes to the Consolidated Financial
Statements
|
42-74 |
GERMAN AMERICAN BANCORP, INC.
|
||||
(Registrant)
|
||||
Date:
|
March 9, 2011
|
By/s/Mark A. Schroeder
|
||
Mark A. Schroeder, Chairman and
|
||||
Chief Executive Officer
|
Date:
|
March 9, 2011
|
By/s/Mark A. Schroeder
|
||
Mark A. Schroeder, Chairman and Chief Executive
|
||||
Officer (principal executive officer), Director
|
||||
Date:
|
March 9, 2011
|
By/s/Douglas A. Bawel
|
||
Douglas A. Bawel, Director
|
||||
Date:
|
March 9, 2011
|
By/s/Christina M. Ernst
|
||
Christina M. Ernst, Director
|
||||
Date:
|
March 9, 2011
|
By/s/Marc D. Fine
|
||
Marc D. Fine, Director
|
||||
Date:
|
March 9, 2011
|
By/s/Richard E. Forbes
|
||
Richard E. Forbes, Director
|
||||
Date:
|
March 9, 2011
|
By/s/U. Butch Klem
|
||
U. Butch Klem, Director
|
||||
Date:
|
March 9, 2011
|
By/s/J. David Lett
|
||
J. David Lett, Director
|
||||
Date:
|
March 9, 2011
|
By/s/Gene C. Mehne
|
||
Gene C. Mehne, Director
|
||||
Date:
|
March 9, 2011
|
By/s/Chris A. Ramsey
|
||
Chris A. Ramsey, Director
|
||||
Date:
|
March 9, 2011
|
By/s/Thomas W. Seger
|
||
Thomas W. Seger, Director
|
||||
Date:
|
March 9, 2011
|
By/s/Michael J. Voyles
|
||
Michael J. Voyles, Director
|
||||
Date:
|
March 9, 2011
|
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
|
|
2.1
|
Branch Purchase Agreement between German American Bancorp, as Buyer, Farmers State Bank of Alto Pass, Ill., as Seller, and Farmers State Holding Corp., as the Seller Affiliate, dated February 17, 2010. The copy of this exhibit filed as Exhibit 2 to the Registrant’s quarterly report on Form 10-Q for the quarter ended March 31, 2010 is incorporated herein by reference. Schedules identified in the list of Schedules to this Agreement are not filed as part of this Exhibit, but the Registrant agrees to furnish to the Commission supplementally any omitted schedule upon request.
|
|
2.2
|
Bill of Sale and Assignment between German American Bancorp, as Buyer, and Farmers State Bank of Alto Pass, Ill., as Seller, dated May 7, 2010. The copy of this exhibit filed as Exhibit 2.2 to Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2010 is incorporated herein by reference.
|
|
2.3
|
Assignment and Assumption Agreement between German American Bancorp, as Assignee, and Farmers State Bank of Alto Pass, Ill., as Assignor, dated May 7, 2010. The copy of this exhibit filed as Exhibit 2.3 to Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2010 is incorporated herein by reference.
|
|
2.4
|
Limited Warranty Deed granted by Farmers State Bank of Alto Pass, Ill., to German American Bancorp, dated May 7, 2010. The copy of this exhibit filed as Exhibit 2.4 to Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2010 is incorporated herein by reference.
|
|
2.5
|
Agreement and Plan of Reorganization by and among the Registrant, American Community Bancorp, Inc., Bank of Evansville, and German American Bancorp, dated October 4, 2010, as amended by First Amendment of Agreement and Plan of Reorganization dated October 27, 2010. The copy of this exhibit included as Annex A to the proxy statement/prospectus included in Amendment No. 1 to the Registrant’s Registration Statement on Form S-4, filed November 15, 2010 (File No. 333-170068) is incorporated herein by reference. Schedules identified in the list of Schedules to this Agreement are not filed as part of this Exhibit, but the Registrant agrees to furnish to the Commission supplementally any omitted schedule upon request.
|
|
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
|
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.
|
|
4.2
|
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.
|
4.3
|
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.
|
|
4.4
|
Specimen stock certificate for Common Shares of the Registrant is incorporated by reference from Exhibit 99.1 to the Registrant’s Current Report on Form 8-K filed October 21, 2010.
|
|
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.
|
|
10.6*+
|
Adoption Agreement for the Registrant’s Nonqualified Savings Plan dated August 17, 2004.
|
|
10.7*+
|
First Amendment to the Registrant’s Nonqualified Savings Plan dated August 17, 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.
|
|
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).
|
|
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).
|
|
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)
.
|
10.12*
|
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.
|
|
10.13*
|
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.
|
|
10.14*
|
Description of Director Compensation Arrangements for
the
12 month period ending at 2011 Annual Meeting of Shareholders is incorporated by reference from the description included as Exhibit 99.1 to the Registrant’s Current Report on Form 8-K filed January 4, 2011.
|
|
10.15*
|
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,
and by reference to the description contained in Item 5.02 of the Registrant's Current Report on Form 8-K filed February 28, 2009.
|
|
10.16*
|
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, and by reference to the description contained in Item 5.02 of the Registrant's Current Report on Form 8-K filed March 5, 2010 (as amended by Registrant’s Current Report on Form 8-K filed March 31, 2010).
|
|
10.17*
|
Description of Executive Management Incentive Plan for 2010 (awards payable in 2011) is incorporated by reference from the description contained in Item 5.02 of the Registrant's Current Report on Form 8-K filed March 5, 2010.
|
|
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, is incorporated by reference to Exhibit 10.18 to the Registrant’s Annual Report for the year ended December 31, 2009.
|
|
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
|
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.
|
|
10.22
|
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.
|
10.23
|
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.
|
|
10.24
|
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.
|
|
10.25
|
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.
|
|
10.26
|
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.
|
|
10.27
|
Fifth Amendment to Second Amended and Restated Loan and Subordinated Debenture Purchase Agreement dated as of November 23, 2010, 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 November 29, 2010.
|
|
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.
|
|
10.30*
|
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.
|
|
10.31
|
Branch Purchase Agreement between German American Bancorp, as Buyer, Farmers State Bank of Alto Pass, Ill., as Seller and Farmers State Holding Corp., as the Seller Affiliate, dated February 17, 2010. The copy of this exhibit filed as Exhibit 2 to the Registrant’s quarterly report on Form 10-Q for the quarter ended March 31, 2010 is incorporated herein by reference.
|
|
10.32
|
Agreement and Plan of Reorganization by and among the Registrant, American Community Bancorp, Inc., Bank of Evansville, and German American Bancorp, dated October 4, 2010, as amended by First Amendment of Agreement and Plan of Reorganization dated October 27, 2010. The copy of this exhibit is included as Annex A to the proxy statement/prospectus included in Amendment No. 1 to the Registrant’s Registration Statement on Form S-4, filed November 15, 2010 (File No. 333-170068) is incorporated herein by reference.
|
|
21+
|
Subsidiaries of the Registrant
|
|
23+
|
Consent of Crowe Horwath LLP
|
|
31.1+
|
Sarbanes-Oxley Act of 2002, Section 302 Certification for President 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 President and Chief Executive Officer.
|
|
32.2+
|
|
Sarbanes-Oxley Act of 2002, Section 906 Certification for Executive Vice President (Principal Financial Officer).
|
Page
|
||
ARTICLE 1
|
ADOPTION AGREEMENT
|
1
|
ARTICLE 2
|
DEFINITIONS
|
1
|
2.01
|
Definitions
|
1
|
ARTICLE 3
|
PARTICIPATION
|
5
|
3.01
|
Date of Participation
|
5
|
3.02
|
Resumption of Participation Following Reemployment
|
5
|
3.03
|
Cessation or Resumption of Participation Following a Change in Status
|
5
|
ARTICLE 4
|
CONTRIBUTIONS
|
5
|
4.01
|
Deferral Contributions
|
5
|
4.02
|
Matching Contributions
|
6
|
4.03
|
Employer Contributions
|
6
|
4.04
|
Time of Making Contributions
|
6
|
ARTICLE 5
|
PARTICIPANTS' ACCOUNTS
|
7
|
5.01
|
Individual Accounts
|
7
|
ARTICLE 6
|
INVESTMENT OF CONTRIBUTIONS
|
7
|
6.01
|
Manner of Investment
|
7
|
6.02
|
Investment Decisions
|
7
|
ARTICLE 7
|
RIGHT TO BENEFITS
|
7
|
7.01
|
Normal or Early Retirement
|
7
|
7.02
|
Death
|
8
|
7.03
|
Other Termination of Employment
|
8
|
7.04
|
Separate Account
|
8
|
7.05
|
Forfeitures
|
9
|
7.06
|
Adjustment for Investment Experience
|
9
|
7.07
|
Unforeseeable Emergency Withdrawals
|
9
|
7.08
|
Change in Control
|
9
|
ARTICLE 8
|
DISTRIBUTION OF BENEFITS
|
9
|
8.01
|
Form of Distribution of Benefits to Participants and Beneficiaries
|
9
|
8.02
|
Events Requiring Distribution of Benefits to Participants and Beneficiaries
|
9
|
8.03
|
Determination of Method of Distribution
|
10
|
8.04
|
Notice to Trustee
|
10
|
8.05
|
Time of Distribution
|
10
|
Page
|
||
ARTICLE 9
|
AMENDMENT AND TERMINATION
|
11
|
9.01
|
Amendment by Employer
|
11
|
9.02
|
Retroactive Amendments
|
11
|
9.03
|
Termination. The Employer has adopted the Plan with the intention and expectation that
contributions will be continued indefinitely
|
11
|
9.04
|
Distribution upon Termination of the Plan
|
11
|
ARTICLE 10
|
MISCELLANEOUS
|
11
|
10.01
|
Communication to Participants
|
11
|
10.02
|
Limitation of Rights
|
11
|
10.03
|
Nonalienability of Benefits
|
12
|
10.04
|
Facility of Payment
|
12
|
10.05
|
Information between Employer and Trustee
|
12
|
10.06
|
Notices
|
12
|
10.07
|
Governing Law
|
12
|
ARTICLE 11
|
PLAN ADMINISTRATION
|
12
|
11.01
|
Powers and Responsibilities of the Administrator
|
12
|
11.02
|
Nondiscriminatory Exercise of Authority
|
13
|
11.03
|
Claims and Review Procedures
|
13
|
11.04
|
Costs of Administration
|
15
|
(a)
|
Name of Plan
.
|
This is the
German American Bancorp Nonqualified Savings Plan
(the "Plan").
|
(b)
|
Name of Plan Administrator, if not the Employer:
.
|
Address:
|
||
Phone Number:
|
The Plan Administrator is the agent for service of legal process for the Plan.
|
(c)
|
Plan Year End
is December 31.
|
(d)
|
Plan Status
(check one):.
|
(1)
|
x
|
Effective Date of new Plan:
10/1/2004
|
(2)
|
¨
|
Amendment Effective Date: _____________
The original effective date of the Plan: _____________
|
(a)
|
The Employer is:
|
German American Bancorp
|
|
Address:
|
711 Main Street P.O. Box 810
|
||
Jasper, IN 47547-0810 | |||
Contact's Name:
|
Lisa Matheis
|
||
Telephone Number:
|
(800) 482-1314, ext. 795
|
(1)
|
Employer's Tax identification Number: 35-1547518
|
|
(2)
|
Business form of Employer (check one):
|
(A)
|
x
|
Corporation (Other than a Subchapter S corporation)
|
||
(B)
|
¨
|
Other (e.g., Subchapter S corporation, partnership, sole proprietor)
|
(3)
|
Employer's fiscal year end: 12/31
|
(b)
|
The tern "Employer" includes the following Related Employer(s) (as defined in Section 2.01(a)(21)):
|
First State Bank, Southwest Indiana
|
|
Peoples Bank
|
|
Citizens State Bank
|
|
First Title Insurance Co., Inc.
|
|
The Doty Agency, Inc.
|
|
German American Financial Advisors & Trust Co.
|
|
The German American Bank
|
|
First American Bank
|
For purposes of determining Contributions under the Plan, Compensation shall be as defined (check (a) or (b) below, as appropriate):
|
|||||
(a)
|
x
|
in Section 2.01(a)(6),
(check (1) or (2) below, if and as appropriate):
|
|||
(1)
|
x
|
but excluding (check the appropriate box(es)):
|
|||
(A)
|
¨
|
Overtime Pay.
|
|||
(B)
|
¨
|
Bonuses.
|
|||
(C)
|
¨
|
Commissions.
|
|||
(D)
|
x
|
The value of a qualified or a non-qualified stock option granted to an Employee by the Employer to the extent such value is includable in the Employee's taxable income.
|
|||
(E)
|
x
|
The following:
severance pay
|
|||
(2)
|
except as otherwise provided below:
|
||||
(b)
|
in the
Plan maintained by the Employer to the extent it is in excess of the limit Imposed under Code Section 401(a)(17).
|
(a)
|
Employee contributions (Complete all that apply)
|
(1)
|
x
|
Deferral Contributions. The Employer shall make a Deferral Contribution in accordance with, and subject to, Section 4.01 on behalf of each Participant who has an executed salary reduction agreement in effect with the Employer for the calendar year (or portion of the calendar year) in question, not to exceed till 60% of Compensation for that calendar year, subject, however, to any election regarding bonuses, as set out in Subsection 1.05(a)(2).
|
|
(2)
|
¨
|
Bonus Contributions. The Employer may allow Participants upon proper notice and approval to enter into a special salary reduction agreement to make Deferral Contributions in an amount up to 100% of any Employer paid cash bonuses designated by the Employer that are made for such Participants during the calendar year. The Compensation definition elected by the Employer in Section 1.04 must include bonuses if bonus contributions are permitted.
|
Distribution from a Participant's Account pursuant to Section 8.02 shall begin upon the following date(s) (check either (a) or (b); check (c), if desired):
|
|||||
(a)
|
x
|
Non-Class Year Accounting (complete (1) and (2)).
|
|||
(1)
|
The earliest of termination of employment with the Employer and the following event(s) (check appropriate box(es); if none selected, all distributions will be upon termination of employment):
|
||||
(A)
|
x
|
Attainment of Normal Retirement Age (as defined in Section 1.07(f)).
|
(c)
|
x
|
As soon as administratively feasible following a Change of Control (as defined in Section 1.12).
|
Vesting Schedule
|
|||||||||||||||||||
Years of
Service for
Vesting
|
C
|
D
|
E
|
F
|
G
|
||||||||||||||
0 | 0 | % | 0 | % | 0 | % | 0 | % | |||||||||||
1 | 0 | % | 0 | % | 0 | % | 0 | % | |||||||||||
2 | 0 | % | 0 | % | 20 | % | 0 | % | |||||||||||
3 | 100 | % | 0 | % | 40 | % | 20 | % | |||||||||||
4 | 100 | % | 0 | % | 60 | % | 40 | % | |||||||||||
5 | 100 | % | 100 | % | 80 | % | 60 | % | |||||||||||
6 | 100 | % | 100 | % | 100 | % | 80 | % | |||||||||||
7 | 100 | % | 100 | % | 100 | % | 100 | % |
100
%
|
(4)
|
¨
|
5 year cliff (see D below)
|
|
(5)
|
¨
|
6 year graduated (see E below)
|
|
(6)
|
¨
|
7 year graduated (see F below)
|
|
(7)
|
¨
|
G below
|
|
(8)
|
¨
|
Other (Attachment "B")
|
Vesting Schedule
|
|||||||||||||||||||
Years of
Service for
Vesting
|
C
|
D
|
E
|
F
|
G
|
||||||||||||||
0 | 0 | % | 0 | % | 0 | % | 0 | % | |||||||||||
1 | 0 | % | 0 | % | 0 | % | 0 | % | |||||||||||
2 | 0 | % | 0 | % | 20 | % | 0 | % | |||||||||||
3 | 100 | % | 0 | % | 40 | % | 20 | % | |||||||||||
4 | 100 | % | 0 | % | 60 | % | 40 | % | |||||||||||
5 | 100 | % | 100 | % | 80 | % | 60 | % | |||||||||||
6 | 100 | % | 100 | % | 100 | % | 80 | % | |||||||||||
7 | 100 | % | 100 | % | 100 | % | 100 | % |
100
%
|
(c)
|
¨
|
Years of Service for Vesting shall exclude (check one):
|
|
(1)
|
for new plans, service prior to the Effective Date as defined in Section 1.01(d)(1).
|
||
(2)
|
for existing plans converting from another plan document, service prior the original Effective Date as defined in Section 1.01(d)(2).
|
||
(d)
|
x
|
Participant will forfeit his Matching Contributions and Employer Contributions upon the occurrence of the following event(s):
(i) a Participant's willful breach of any applicable confidentiality or non-competition agreement with the Employer, (ii) a Participant's willful (a) dishonesty, (b) fraud or (c) misconduct with respect to the business or affairs of the Employer or an affiliate which materially and adversely affects the operations or reputation of the Employer or a Related Employer (monetarily or otherwise); or (iii) a Participant's conviction of a felony crime involving moral turpitude or a crime involving property of the Employer or a Related Employer, or entry of a plea of nolo contender thereof.
|
¨
|
Service for purposes of vesting in Section 1.07(a) and (b) shall include service with the following employer(s):
|
Participant withdrawals for unforeseeable emergency prior to termination of employment (check one; (b) must be selected if 1.06(b) has been selected):
|
|||
(a)
|
x
|
will be allowed in accordance with Section 7.07, subject to a $1,000) minimum amount. (Must beat least $1,000)
|
|
(b)
|
¨
|
will not be allowed
|
Subject to Articles 7 and 8 distributions under the Plan are always available as a lump sum. Check below to allow distributions in installment payments:
|
||
x
|
under a systematic withdrawal plan (installments) not to exceed 10 years.
|
Note:
|
The-method and frequency for change of investments will be determined under the rules applicable to the selected funds, Information will be provided regarding expenses, if any, for changes in investment options.
|
If Section 1.06(c) is selected, then, pursuant to Section 7.08 and notwithstanding any other provision of the Plan to the contrary, the Account Balances of all Participants shall then become immediately nonforfeitable and shall become payable to the Participants as sown as practicable upon a change in the control of the Employer, as defined below:
For purposes of this Section 1.12, a "Change in Control" means the occurrence of any of the following events, as determined by the Plan Administrator, in its sole discretion:
(1) German American Bancorp becomes a party to an agreement of merger, consolidation or other reorganization (i) pursuant to which German American Bancorp will be merged or consolidated with another company (other than an Employer or the Related Employer), and German American Bancorp will not be the surviving or resulting corporation, or (ii) which will result in less than 51% of the outstanding voting securities of the surviving or resulting entity being beneficially owned (within the meaning of Rule 13(d)(3) under the Exchange Act), directly or indirectly, by the former shareholders (determined immediately prior to such merger, consolidation or other reorganization) of German American Bancorp;
(2) German American Bancorp becomes a party to an agreement providing for the sale or other disposition by German American Bancorp of all or substantially all of the assets of German American Bancorp to any individual, partnership, joint venture, association, trust, corporation, or other entity that is not a Related Employer;
(3) the acquisition by any individual, entity, or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act), of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act), directly or indirectly, of an aggregate of 50% or more of the combined voting power of the then outstanding common stock of German American Bancorp; or
(4) incumbent Directors cease to be a majority of German American Bancorp's Board.
Notwithstanding the preceding provisions, in no event shall the acquisition of shares of stock of German American Bancorp by an "employee benefit plan" (within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974) sponsored by German American Bancorp or a Related Employer be considered a Change in Control.
|
The following terms in the definition of "Change in Control" have the following meanings:
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Incumbent Director" means a director serving on German American Bancorp's Board of Directors who (i) was a director on the effective date of this Plan or (ii) was later elected as a director (except a director whose initial assumption of office was in connection with an actual or threatened election contest, including but not limited to a consent solicitation, related to the election of directors) and whose appointment, election, or nomination for election was approved or recommended by a vote of at least two-thirds of the directors then still in office who either were directors on the effective date of this plan or whose appointment, election, or nomination for election was previously so approved or recommended.
|
Note: Internal Revenue Code Section 280G could impose certain, adverse tax consequences on both Participants and the Employer as a result of the application of Section 11.12. The Employer should consult with its attorney prior to selecting to apply Section 1.06(c).
|
An adopting Employer may not rely solely on this Plan to ensure that the Plan is "unfunded and maintained primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees" with respect to the Employer's particular situation. This Agreement must be reviewed by the Employer's attorney before it is executed.
This Adoption Agreement may be used only in conjunction with the CORPORATEplan for Retirement Executive Plan Basic Plan Document.
|
Employer GERMAN AMERICAN BANCORP
|
|
By /s/ Mark A. Schroeder
|
|
Title President/CEO
|
|
Employer GERMAN AMERICAN BANCORP
|
|
By /s/ Lisa A. Matheis
|
|
Title Vice President
|
Employer GERMAN AMERICAN BANCORP
|
|
By /s/ Mark A. Schroeder
|
|
Title President/CEO
|
|
Employer GERMAN AMERICAN BANCORP
|
|
By /s/ Lisa A. Matheis
|
|
Title Vice President
|
Employer GERMAN AMERICAN BANCORP
|
|
By /s/ Mark A. Schroeder
|
|
Title President/CEO
|
|
Date August 17, 2004
|
Note:
|
The Employer must revise Attachment A to add Employees as they become eligible or delete Employees who are no longer eligible. Attachment A should be signed and dated every time a change is made.
|
(a)
|
¨
|
The Participant's vested percentage in Matching Contributions elected in Section 1.05(b) shall be based upon the following schedule:
|
|
(b)
|
¨
|
The Participant's vested percentage in Employer Contributions elected in Section 1.05(c) shall be based upon the following schedule:
|
|
/s/ Mark A. Schroeder
|
|
Name
|
|
President/CEO
|
|
Title
|
1.
|
Terms of Award
. The following terms used in this Agreement shall have the meanings set forth in this paragraph 1:
|
The “
Participant
” is ______________.
|
The “
Grant Date
” is ___________.
|
The number of “
Covered Shares
” shall be ___ shares of Stock.
|
The “
Stock
” is the Company’s Common Shares, no par value.
|
The “
Exercise Price
” is $______ per share.
|
Other terms used in this Agreement are defined elsewhere in this Agreement.
|
2.
|
Award and Exercise Price
. This Agreement specifies the terms of the option (the “Option”) granted to the Participant to purchase the number of Covered Shares of Stock at the Exercise Price per share as set forth in paragraph 1, subject to adjustment from time to time in accordance with Section 4.02 of the Plan. The Option is intended to constitute an “incentive stock option” as that term is used in Internal Revenue Code Section 422 to the maximum extent permissible thereunder.
|
3.
|
Exercise Period
. The Option is not immediately exercisable as to any of the Covered Shares. Subject to the limitations of this Agreement and of the Plan (including the provisions of Article VII of the Plan that would limit the period of exercisability in the event of termination, retirement, disability and death, and the provisions of Section 5.03(g) of the Plan concerning the Committee’s rights to cancel the Option prior to its being exercised), the Option shall become exercisable with respect to 20% of the Covered Shares on each of the first five anniversary dates of the Grant Date, assuming continued employment and subject to the other terms and conditions of the Plan. Accordingly, the Option shall be exercisable as to 100%
of the Covered Shares for only one day, the fifth anniversary of the Grant Date, which shall also be the Expiration Date as specified by paragraph 4. Notwithstanding the foregoing, the Option shall become fully exercisable as to all Covered Shares under the circumstances specified by Article VIII of the Plan, subject to the terms and conditions of Article VIII.
|
4.
|
Expiration
. The Option shall not be exercisable after 5:00 p.m., Eastern Standard Time, on [Fifth Anniversary of Date of Grant] (the “Expiration Date”).
|
5.
|
Method of Option Exercise
. Subject to the Agreement and the Plan, the Option may be exercised (as to the number of Covered Shares as to which it is then exercisable) in whole or in part by filing a written notice with the President of the Company at its corporate headquarters on any business day during business hours prior to 5:00 p.m., Eastern Standard Time, on the Expiration Date. Such notice shall specify the number of shares of Stock that the Participant elects to purchase, and shall be accompanied by payment of the Exercise Price for such shares of Stock indicated by the Participant’s election. The Option shall not be exercisable if and to the extent the Company determines that such exercise would violate applicable
state or Federal securities laws or the rules and regulations of any securities exchange on which the Stock is traded. If the Company makes such a determination, it shall use all reasonable efforts to obtain compliance with such laws, rules or regulations. In making any determination hereunder, the Company may rely on the opinion of counsel for the Company.
|
6.
|
Funding of Exercise Price; Replacement Options
. Cash payments shall be made in immediately available funds. All or a portion of the Exercise Price may be paid by the Participant by delivery of shares of Stock that have been beneficially owned at least six months and that have an aggregate Fair Market Value on the date of exercise of the Option (determined in accordance with Section 11.01(m) of the Plan) that is equal to the amount of cash that would otherwise be required. In the event that the Participant tenders Stock in payment (in whole or in part) of the Exercise Price of Covered Shares that the Participant has elected to purchase under the Option, the Company shall issue to the Participant a replacement option of the same type
(incentive stock option or other) (a “Replacement Option”) as the Option exercised (the “Exercised Option”) and with the same expiration date as the Exercised Option. Such Replacement Option shall entitle the Participant to purchase a number of shares of Stock equal to the number of shares tendered to the Company in payment of the Exercise Price under the Exercised Option, and shall specify a new Exercise Price equal to the Fair Market Value of the Stock on the date of exercise of the Exercised Option, determined in accordance with Section 11.01(m) of the Plan. A Replacement Option shall not be exercisable during the period ending at the close of business of the day preceding the first anniversary of the date of exercise of the related Exercised Option and shall never become exercisable and shall be cancelled if, during such period, the Participant sells any Stock of the Company other than in payment of the exercise price of another option granted to the
Participant by the Company, or pursuant to a corporate transaction in which all holders of Stock are obligated to sell or otherwise dispose of their Stock. Replacement Options shall be issuable upon exercise of other Replacement Options granted under this paragraph if all conditions for such issuance are satisfied.
|
7.
|
Withholding
. All deliveries and distributions under this Agreement are subject to withholding of all applicable taxes. At the election of the Participant, and subject to such rules and limitations as may be established by the Committee from time to time, withholding obligations as to each Option exercise may be satisfied through the surrender of shares of Stock that the Participant already owns or through the Company’s withholding of shares of Stock that the Participant is purchasing as part of the Option exercise.
|
8.
|
Transferability
. The Option is not transferable other than as designated by the Participant by will or by the laws of descent and distribution or pursuant to a qualified domestic relations order, and during the Participant’s life, may be exercised only by the Participant.
|
9.
|
Definitions
. Except where the context clearly implies or indicates the contrary, a word, term, or phrase used in the Plan is similarly used in this Agreement.
|
10.
|
Heirs and Successors
. This Agreement shall be binding upon, and inure to the benefit of, the Company and its successors and assigns, and upon any person acquiring, whether by merger, consolidation, purchase of assets or otherwise, all or substantially all of the Company’s assets and business. If any rights exercisable by the Participant or benefits deliverable to the Participant under this Agreement have not been exercised or delivered, respectively, at the time of the Participant’s death, such rights shall be exercisable by the Designated Beneficiary, and such benefits shall be delivered to the Designated Beneficiary, in accordance with the provisions of this Agreement and the Plan. The “Designated
Beneficiary” shall be the beneficiary or beneficiaries designated by the Participant in a writing filed with the Committee in such form and at such time as the Committee shall require. If a deceased Participant fails to designate a beneficiary, or if the Designated Beneficiary does not survive the Participant, any rights that would have been exercisable by the Participant and any benefits distributable to the Participant shall be exercised by or distributed to the legal representative of the estate of the Participant. If a deceased Participant designates a beneficiary but the Designated Beneficiary dies before the Designated Beneficiary’s exercise of all rights under this Agreement or before the complete distribution of benefits to the Designated Beneficiary under this Agreement, then any rights that would have been exercisable by the Designated Beneficiary shall be exercised by the legal representative of the estate of the Designated
Beneficiary, and any benefits distributable to the Designated Beneficiary shall be distributed to the legal representative of the estate of the Designated Beneficiary.
|
11.
|
Administration
. The authority to manage and control the operation and administration of this Agreement shall be vested in the Committee, and the Committee shall have all powers with respect to this Agreement as it has with respect to the Plan. Any interpretation of the Agreement by the Committee and any decision made by it with respect to the Agreement is final and binding on all persons.
|
12.
|
Plan Governs
. The terms of this Agreement shall be subject to the terms of the Plan, a copy of which may be obtained by the Participant from the office of the Secretary of the Company; and this Agreement is subject to all interpretations, amendments, rules and regulations promulgated by the Committee from time to time pursuant to the Plan.
|
13.
|
Not An Employment Contract
. The Option will not confer on the Participant any right with respect to continuance of employment or other service with the Company or any Subsidiary, nor will it interfere in any way with any right the Company or any Subsidiary would otherwise have to terminate or modify the terms of such Participant’s employment or other service at any time.
|
14.
|
Notices
. Any written notices provided for in this Agreement or the Plan shall be in writing and shall be deemed sufficiently given if either hand delivered or if sent by fax or overnight courier, or by postage paid first class mail. Notices sent by mail shall be deemed received three business days after mailed but in no event later than the date of actual receipt. Notices shall be directed, if to the Participant, at the Participant’s address indicated by the Company’s records, or if to the Company, at the Company’s principal executive office.
|
15.
|
Fractional Shares
. In lieu of issuing a fraction of a share upon any exercise of the Option, resulting from an adjustment of the Option pursuant to the Plan or otherwise, the Company will be entitled to pay to the Participant an amount equal to the fair market value of such fractional share.
|
16.
|
No Rights As Shareholder
. The Participant shall not have any rights of a shareholder with respect to the shares subject to the Option, until a stock certificate has been duly issued following exercise of the Option as provided herein.
|
17.
|
Amendment
. This Agreement may be amended by written Agreement of the Participant and the Company, without the consent of any other person.
|
By:
|
|
Mark A. Schroeder, President and
|
Chief Executive Officer
|
PARTICIPANT:
|
|
|
1.
|
Terms of Award
. The following terms used in this Agreement shall have the meanings set forth in this paragraph 1:
|
|
2.
|
Award and Exercise Price
. This Agreement specifies the terms of the option (the “Option”) granted to the Participant to purchase the number of Covered Shares of Stock at the Exercise Price per share as set forth in paragraph 1, subject to adjustment from time to time in accordance with Section 4.02 of the Plan. The Option is intended to constitute an “incentive stock option” as that term is used in Internal Revenue Code Section 422 to the maximum extent permissible thereunder.
|
|
3.
|
Exercise Period
. The Option is not immediately exercisable as to any of the Covered Shares. Except as stated in the last sentence of this Section 3, this Option shall not be exercisable during the period ending at the close of business of the day preceding the date of the first anniversary of the Grant Date and shall never become exercisable and shall be cancelled if, during such period, the Participant sells any Stock of the Company other than in payment of the exercise price of another option granted to the Participant by the Company, or pursuant to a corporate transaction in which all holders of Stock are obligated to sell or otherwise dispose of their Stock. Subject to the limitations of this Agreement and of the Plan (including the
provisions of Article VII of the Plan that would limit the period of exercisability in the event of termination, retirement, disability and death, and the provisions of Section 5.03(g) of the Plan concerning the Committee’s rights to cancel the Option prior to its being exercised), the Option shall become exercisable with respect to 100% of the Covered Shares on the date of the first anniversary of the Grant Date, assuming continued employment and subject to the other terms and conditions of the Plan. Notwithstanding the foregoing, the Option shall become fully exercisable as to all Covered Shares under the circumstances specified by Article VIII of the Plan, subject to the terms and conditions of Article VIII.
|
|
4.
|
Expiration
. The Option shall not be exercisable after 5:00 p.m., Eastern Standard Time, on [expiration date of the Exercised Stock Option Agreement] (the “Expiration Date”).
|
|
5.
|
Method of Option Exercise
. Subject to the Agreement and the Plan, the Option may be exercised (as to the number of Covered Shares as to which it is then exercisable) in whole or in part by filing a written notice with the President of the Company at its corporate headquarters on any business day during business hours prior to 5:00 p.m., Eastern Standard Time, on the Expiration Date. Such notice shall specify the number of shares of Stock that the Participant elects to purchase, and shall be accompanied by payment of the Exercise Price for such shares of Stock indicated by the Participant’s election. The Option shall not be exercisable if and to the extent the Company determines that such exercise would violate applicable state
or Federal securities laws or the rules and regulations of any securities exchange on which the Stock is traded. If the Company makes such a determination, it shall use all reasonable efforts to obtain compliance with such laws, rules or regulations. In making any determination hereunder, the Company may rely on the opinion of counsel for the Company.
|
|
6.
|
Funding of Exercise Price; Replacement Options
. Cash payments shall be made in immediately available funds. All or a portion of the Exercise Price may be paid by the Participant by delivery of shares of Stock that have been beneficially owned at least six months and that have an aggregate Fair Market Value on the date of exercise of the Option (determined in accordance with Section 11.01(m) of the Plan) that is equal to the amount of cash that would otherwise be required. In the event that the Participant tenders Stock in payment (in whole or in part) of the Exercise Price of Covered Shares that the Participant has elected to purchase under the Option, the Company shall issue to the Participant a replacement option of the same type
(incentive stock option or other) (a “Subsequent Replacement Option”) as the Option (the determination of type of option to be made at the time that it is exercised) and with the same expiration date as the Option. Such Subsequent Replacement Option shall entitle the Participant to purchase a number of shares of Stock equal to the number of shares tendered to the Company in payment of the Exercise Price under the Option, and shall specify a new Exercise Price equal to the Fair Market Value of the Stock on the date of exercise of the Option, determined in accordance with Section 11.01(m) of the Plan. The Subsequent Replacement Option shall not be exercisable during the period ending at the close of business of the day preceding the first anniversary of the date of exercise of the Option and shall never become exercisable and shall be cancelled if, during such period, the Participant sells any Stock of the Company other than in payment of the exercise price of another option
granted to the Participant by the Company, or pursuant to a corporate transaction in which all holders of Stock are obligated to sell or otherwise dispose of their Stock. Subsequent Replacement Options shall be issuable upon exercise of any Subsequent Replacement Option granted under this paragraph if all conditions for such issuance are satisfied.
|
|
7.
|
Withholding
. All deliveries and distributions under this Agreement are subject to withholding of all applicable taxes. At the election of the Participant, and subject to such rules and limitations as may be established by the Committee from time to time, withholding obligations as to each Option exercise may be satisfied through the surrender of shares of Stock that the Participant already owns or through the Company’s withholding of shares of Stock that the Participant is purchasing as part of the Option exercise.
|
|
8.
|
Transferability
. The Option is not transferable other than as designated by the Participant by will or by the laws of descent and distribution or pursuant to a qualified domestic relations order, and during the Participant’s life, may be exercised only by the Participant.
|
|
9.
|
Definitions
. Except where the context clearly implies or indicates the contrary, a word, term, or phrase used in the Plan is similarly used in this Agreement.
|
|
10.
|
Heirs and Successors
. This Agreement shall be binding upon, and inure to the benefit of, the Company and its successors and assigns, and upon any person acquiring, whether by merger, consolidation, purchase of assets or otherwise, all or substantially all of the Company’s assets and business. If any rights exercisable by the Participant or benefits deliverable to the Participant under this Agreement have not been exercised or delivered, respectively, at the time of the Participant’s death, such rights shall be exercisable by the Designated Beneficiary, and such benefits shall be delivered to the Designated Beneficiary, in accordance with the provisions of this Agreement and the Plan. The “Designated
Beneficiary” shall be the beneficiary or beneficiaries designated by the Participant in a writing filed with the Committee in such form and at such time as the Committee shall require. If a deceased Participant fails to designate a beneficiary, or if the Designated Beneficiary does not survive the Participant, any rights that would have been exercisable by the Participant and any benefits distributable to the Participant shall be exercised by or distributed to the legal representative of the estate of the Participant. If a deceased Participant designates a beneficiary but the Designated Beneficiary dies before the Designated Beneficiary’s exercise of all rights under this Agreement or before the complete distribution of benefits to the Designated Beneficiary under this Agreement, then any rights that would have been exercisable by the Designated Beneficiary shall be exercised by the legal representative of the estate of the Designated
Beneficiary, and any benefits distributable to the Designated Beneficiary shall be distributed to the legal representative of the estate of the Designated Beneficiary.
|
|
11.
|
Administration
. The authority to manage and control the operation and administration of this Agreement shall be vested in the Committee, and the Committee shall have all powers with respect to this Agreement as it has with respect to the Plan. Any interpretation of the Agreement by the Committee and any decision made by it with respect to the Agreement is final and binding on all persons.
|
|
12.
|
Plan Governs
. The terms of this Agreement shall be subject to the terms of the Plan, a copy of which may be obtained by the Participant from the office of the Secretary of the Company; and this Agreement is subject to all interpretations, amendments, rules and regulations promulgated by the Committee from time to time pursuant to the Plan.
|
|
13.
|
Not An Employment Contract
. The Option will not confer on the Participant any right with respect to continuance of employment or other service with the Company or any Subsidiary, nor will it interfere in any way with any right the Company or any Subsidiary would otherwise have to terminate or modify the terms of such Participant’s employment or other service at any time.
|
|
14.
|
Notices
. Any written notices provided for in this Agreement or the Plan shall be in writing and shall be deemed sufficiently given if either hand delivered or if sent by fax or overnight courier, or by postage paid first class mail. Notices sent by mail shall be deemed received three business days after mailed but in no event later than the date of actual receipt. Notices shall be directed, if to the Participant, at the Participant’s address indicated by the Company’s records, or if to the Company, at the Company’s principal executive office.
|
|
15.
|
Fractional Shares
. In lieu of issuing a fraction of a share upon any exercise of the Option, resulting from an adjustment of the Option pursuant to the Plan or otherwise, the Company will be entitled to pay to the Participant an amount equal to the fair market value of such fractional share.
|
|
16.
|
No Rights As Shareholder
. The Participant shall not have any rights of a shareholder with respect to the shares subject to the Option, until a stock certificate has been duly issued following exercise of the Option as provided herein.
|
|
17.
|
Amendment
. This Agreement may be amended by written Agreement of the Participant and the Company, without the consent of any other person.
|
GERMAN AMERICAN BANCORP
|
|
By:
|
|
Mark A. Schroeder, President and
|
|
Chief Executive Officer
|
PARTICIPANT:
|
|
|
Terms of Award
. The following terms used in this Agreement shall have the meanings set forth in this paragraph 1:
|
|
Award and Exercise Price
. This Agreement specifies the terms of the option (the “Option”) granted to the Participant to purchase the number of Covered Shares of Stock at the Exercise Price per share as set forth in paragraph 1, subject to adjustment from time to time in accordance with Section 4.02 of the Plan. The Option is not intended to constitute an “incentive stock option” as that term is used in Internal Revenue Code Section 422.
|
|
Exercise Period
. Subject to the limitations of this Agreement and to the Committee’s rights to cancel the Option prior to its being exercised under Section 5.03(g) of the Plan, the Option shall be exercisable immediately as to all Covered Shares. The Option shall remain fully exercisable until the date specified by paragraph 4, regardless of any termination of the Participant’s employment with or service to the Company or any Subsidiary, whether caused by retirement, disability, death or otherwise, and the provisions of Article VII of the Plan that would otherwise limit the period of exercisability in the event of termination, retirement, disability and death are expressly overruled by the Committee in this Agreement; provided, however,
that the Company reserves the right pursuant to Section 7.01 of the Plan to terminate the Option in the event of termination of the Participant’s employment with or service to the Company or any Subsidiary on account of the Participant’s deliberate, willful or gross misconduct.
|
|
Expiration
. The Option shall not be exercisable after the Company’s close of business on the last business day that occurs prior to the Expiration Date. The “Expiration Date” shall be the ten-year anniversary of the Grant Date.
|
|
Method of Option Exercise
. Subject to the Agreement and the Plan, the Option may be exercised in whole or in part by filing a written notice with the Chief Executive Officer of the Company at its corporate headquarters prior to the Company’s close of business on the last business day that occurs prior to the Expiration Date. Such notice shall specify the number of shares of Stock which the Participant elects to purchase, and shall be accompanied by payment of the Exercise Price for such shares of Stock indicated by the Participant’s election. Cash payments shall be made in immediately available funds acceptable to the Committee. Except as otherwise provided by the Committee at or before the time that the Option is exercised, all or a
portion of the Exercise Price may be paid by the Participant by delivery of shares of Stock owned by the Participant and acceptable to the Committee having an aggregate Fair Market Value (valued as of the date of exercise) that is equal to the amount of cash that would otherwise be required. The Option shall not be exercisable if and to the extent the Company determines that such exercise would violate applicable state or Federal securities laws or the rules and regulations of any securities exchange on which the Stock is traded. If the Company makes such a determination, it shall use all reasonable efforts to obtain compliance with such laws, rules or regulations. In making any determination hereunder, the Company may rely on the opinion of counsel for the Company.
|
|
Withholding
. All deliveries and distributions under this Agreement are subject to withholding of all applicable taxes. At the election of the Participant, and subject to such rules and limitations as may be established by the Committee from time to time, withholding obligations as to each Option exercise may be satisfied through the surrender of shares of Stock which the Participant already owns or through the Company’s withholding of shares of Stock that the Participant is purchasing as part of the Option exercise.
|
|
Transferability
. The Option is not transferable other than as designated by the Participant by will or by the laws of descent and distribution or pursuant to a qualified domestic relations order, and during the Participant’s life, may be exercised only by the Participant.
|
|
Definitions
. Except where the context clearly implies or indicates the contrary, a word, term, or phrase used in the Plan is similarly used in this Agreement.
|
|
Heirs and Successors
. This Agreement shall be binding upon, and inure to the benefit of, the Company and its successors and assigns, and upon any person acquiring, whether by merger, consolidation, purchase of assets or otherwise, all or substantially all of the Company’s assets and business. If any rights exercisable by the Participant or benefits deliverable to the Participant under this Agreement have not been exercised or delivered, respectively, at the time of the Participant’s death, such rights shall be exercisable by the Designated Beneficiary, and such benefits shall be delivered to the Designated Beneficiary, in accordance with the provisions of this Agreement and the Plan. The “Designated Beneficiary” shall be the
beneficiary or beneficiaries designated by the Participant in a writing filed with the Committee in such form and at such time as the Committee shall require. If a deceased Participant fails to designate a beneficiary, or if the Designated Beneficiary does not survive the Participant, any rights that would have been exercisable by the Participant and any benefits distributable to the Participant shall be exercised by or distributed to the legal representative of the estate of the Participant. If a deceased Participant designates a beneficiary but the Designated Beneficiary dies before the Designated Beneficiary’s exercise of all rights under this Agreement or before the complete distribution of benefits to the Designated Beneficiary under this Agreement, then any rights that would have been exercisable by the Designated Beneficiary shall be exercised by the legal representative of the estate of the Designated Beneficiary, and any benefits distributable to the Designated
Beneficiary shall be distributed to the legal representative of the estate of the Designated Beneficiary.
|
|
Administration
. The authority to manage and control the operation and administration of this Agreement shall be vested in the Committee, and the Committee shall have all powers with respect to this Agreement as it has with respect to the Plan. Any interpretation of the Agreement by the Committee and any decision made by it with respect to the Agreement is final and binding on all persons.
|
|
Plan Governs
. The terms of this Agreement shall be subject to the terms of the Plan, a copy of which may be obtained by the Participant from the office of the Secretary of the Company; and this Agreement is subject to all interpretations, amendments, rules and regulations promulgated by the Committee from time to time pursuant to the Plan.
|
|
Not An Employment Contract
. The Option will not confer on the Participant any right with respect to continuance of employment or other service with the Company or any Subsidiary, nor will it interfere in any way with any right the Company or any Subsidiary would otherwise have to terminate or modify the terms of such Participant’s employment or other service at any time.
|
|
Notices
. Any written notices provided for in this Agreement or the Plan shall be in writing and shall be deemed sufficiently given if either hand delivered or if sent by fax or overnight courier, or by postage paid first class mail. Notices sent by mail shall be deemed received three business days after mailed but in no event later than the date of actual receipt. Notices shall be directed, if to the Participant, at the Participant’s address indicated by the Company’s records, or if to the Company, at the Company’s principal executive office.
|
|
Fractional Shares
. In lieu of issuing a fraction of a share upon any exercise of the Option, resulting from an adjustment of the Option pursuant to the Plan or otherwise, the Company will be entitled to pay to the Participant an amount equal to the fair market value of such fractional share.
|
|
No Rights As Shareholder
. The Participant shall not have any rights of a shareholder with respect to the shares subject to the Option, until a stock certificate has been duly issued following exercise of the Option as provided herein.
|
|
Amendment
. This Agreement may be amended by written Agreement of the Participant and the Company, without the consent of any other person.
|
GERMAN AMERICAN BANCORP
|
|
By:
|
|
Mark A. Schroeder
|
|
President & CEO
|
PARTICIPANT:
|
|
|
Terms of Award
. The following terms used in this Agreement shall have the meanings set forth in this paragraph 1:
|
|
Award and Exercise Price
. This Agreement specifies the terms of the option (the “Option”) granted to the Participant to purchase the number of Covered Shares of Stock at the Exercise Price per share as set forth in paragraph 1, subject to adjustment from time to time in accordance with Section 4.02 of the Plan. The Option is intended to constitute an “incentive stock option” as that term is used in Code section 422 to the maximum extent permissible thereunder.
|
|
Exercise Period
. Subject to the limitations of this Agreement and to the Committee’s rights to cancel the Option prior to its being exercised under Section 5.03(g) of the Plan, the Option shall be exercisable immediately as to all Covered Shares. The Option shall remain fully exercisable until the date specified by paragraph 4, subject to the provisions of Article VII of the Plan that would limit the period of exercisability in the event of termination, retirement, disability and death.
|
|
Expiration
. The Option shall not be exercisable after the Company’s close of business on the last business day that occurs prior to the Expiration Date. The “Expiration Date” shall be the ten-year
anniversary of the Grant Date.
|
|
Method of Option Exercise
. Subject to the Agreement and the Plan, the Option may be exercised in whole or in part by filing a written notice with the Chairman of the Company at its corporate headquarters prior to the Company’s close of business on the last business day that occurs prior to the Expiration Date. Such notice shall specify the number of shares of Stock which the Participant elects to purchase, and shall be accompanied by payment of the Exercise Price for such shares of Stock indicated by the Participant’s election. Cash payments shall be made in immediately available funds acceptable to the Committee. Except as otherwise provided by the Committee at or before the time that the Option is exercised, all or a portion of the
Exercise Price may be paid by the Participant by delivery of shares of Stock owned by the Participant and acceptable to the Committee having an aggregate Fair Market Value (valued as of the date of exercise) that is equal to the amount of cash that would otherwise be required. The Option shall not be exercisable if and to the extent the Company determines that such exercise would violate applicable state or Federal securities laws or the rules and regulations of any securities exchange on which the Stock is traded. If the Company makes such a determination, it shall use all reasonable efforts to obtain compliance with such laws, rules or regulations. In making any determination hereunder, the Company may rely on the opinion of counsel for the Company.
|
|
Withholding
. All deliveries and distributions under this Agreement are subject to withholding of all applicable taxes. At the election of the Participant, and subject to such rules and limitations as may be established by the Committee from time to time, withholding obligations as to each Option exercise may be satisfied through the surrender of shares of Stock which the Participant already owns or through the Company’s withholding of shares of Stock that the Participant is purchasing as part of the Option exercise.
|
|
Transferability
. The Option is not transferable other than as designated by the Participant by will or by the laws of descent and distribution or pursuant to a qualified domestic relations order, and during the Participant’s life, may be exercised only by the Participant.
|
|
Definitions
. Except where the context clearly implies or indicates the contrary, a word, term, or phrase used in the Plan is similarly used in this Agreement.
|
|
Heirs and Successors
. This Agreement shall be binding upon, and inure to the benefit of, the Company and its successors and assigns, and upon any person acquiring, whether by merger, consolidation, purchase of assets or otherwise, all or substantially all of the Company’s assets and business. If any rights exercisable by the Participant or benefits deliverable to the Participant under this Agreement have not been exercised or delivered, respectively, at the time of the Participant’s death, such rights shall be exercisable by the Designated Beneficiary, and such benefits shall be delivered to the Designated Beneficiary, in accordance with the provisions of this Agreement and the Plan. The “Designated Beneficiary” shall be the
beneficiary or beneficiaries designated by the Participant in a writing filed with the Committee in such form and at such time as the Committee shall require. If a deceased Participant fails to designate a beneficiary, or if the Designated Beneficiary does not survive the Participant, any rights that would have been exercisable by the Participant and any benefits distributable to the Participant shall be exercised by or distributed to the legal representative of the estate of the Participant. If a deceased Participant designates a beneficiary but the Designated Beneficiary dies before the Designated Beneficiary’s exercise of all rights under this Agreement or before the complete distribution of benefits to the Designated Beneficiary under this Agreement, then any rights that would have been exercisable by the Designated Beneficiary shall be exercised by the legal representative of the estate of the Designated Beneficiary, and any benefits distributable to the Designated
Beneficiary shall be distributed to the legal representative of the estate of the Designated Beneficiary.
|
|
Administration
. The authority to manage and control the operation and administration of this Agreement shall be vested in the Committee, and the Committee shall have all powers with respect to this Agreement as it has with respect to the Plan. Any interpretation of the Agreement by the Committee and any decision made by it with respect to the Agreement is final and binding on all persons.
|
|
Plan Governs
. The terms of this Agreement shall be subject to the terms of the Plan, a copy of which may be obtained by the Participant from the office of the Secretary of the Company; and this Agreement is subject to all interpretations, amendments, rules and regulations promulgated by the Committee from time to time pursuant to the Plan.
|
|
Not An Employment Contract
. The Option will not confer on the Participant any right with respect to continuance of employment or other service with the Company or any Subsidiary, nor will it interfere in any way with any right the Company or any Subsidiary would otherwise have to terminate or modify the terms of such Participant’s employment or other service at any time.
|
|
Notices
. Any written notices provided for in this Agreement or the Plan shall be in writing and shall be deemed sufficiently given if either hand delivered or if sent by fax or overnight courier, or by postage paid first class mail. Notices sent by mail shall be deemed received three business days after mailed but in no event later than the date of actual receipt. Notices shall be directed, if to the Participant, at the Participant’s address indicated by the Company’s records, or if to the Company, at the Company’s principal executive office.
|
|
Fractional Shares
. In lieu of issuing a fraction of a share upon any exercise of the Option, resulting from an adjustment of the Option pursuant to the Plan or otherwise, the Company will be entitled to pay to the Participant an amount equal to the fair market value of such fractional share.
|
|
No Rights As Shareholder
. The Participant shall not have any rights of a shareholder with respect to the shares subject to the Option, until a stock certificate has been duly issued following exercise of the Option as provided herein.
|
|
Amendment
. This Agreement may be amended by written Agreement of the Participant and the Company, without the consent of any other person.
|
GERMAN AMERICAN BANCORP
|
|
BY:
|
|
PARTICIPANT:
|
|
Name of Subsidiary
|
State/Jurisdiction of
Incorporation/Organization
|
Other Names under which
Subsidiary Does Business
|
||
German American Bancorp
|
Indiana
|
Bank of Evansville
|
||
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
|
|||
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
|
|||
ACB Capital Trust I
|
Delaware
|
|||
ACB Capital Trust II
|
Delaware
|
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 9, 2011
|
|
Date
|
|
/s/ Mark A. Schroeder
|
|
Mark A. Schroeder
|
|
Chairman of the Board 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 9, 2011
|
|
Date
|
|
/s/ Bradley M. Rust
|
|
Bradley M. Rust
|
|
Executive Vice President and Chief Financial Officer
|
|
(principal accounting officer and principal financial officer)
|
March 9, 2011
|
|
Date
|
|
/s/ Mark A. Schroeder
|
|
Mark A. Schroeder
|
|
Chairman of the Board and
|
|
Chief Executive Officer
|
March 9, 2011
|
|
Date
|
|
/s/ Bradley M. Rust
|
|
Bradley M. Rust
|
|
Executive Vice President and Chief Financial Officer
|
|
(principal accounting officer and principal financial officer)
|