FORM 8-K/A
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
March 4, 1997
GERMAN AMERICAN BANCORP
(Exact name of registrant as specified in charter)
Indiana 0-11244 35-1547518
(State or other juris- (Commission File Number)(IRS Employer
diction of incorporation) Identification Number)
711 Main Street, Jasper, Indiana 47546
(Address of Principal Executive Offices)
(812) 482-1314
(Registrant's telephone number, including area code)
NA
(Former Name and Former Address, if changed since last report)
<PAGE>
<PAGE> 2
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
As previously reported in its Current Report on Form 8-K filed
March 6, 1997, which is hereby amended, German American Bancorp (the
"Registrant") on March 4, 1997, completed its acquisition by merger
(the "Merger") of Peoples Bancorp of Washington, an Indiana
corporation ("Peoples") and thereby acquired its banking subsidiary,
The Peoples National Bank and Trust Company of Washington ("Peoples
Bank"), headquartered in Washington, Indiana. In connection with
the Merger, the Registrant issued approximately 615,417 shares of
its common stock to the former shareholders of Peoples.
In connection with the Merger, the Registrant caused its
subsidiary, The Union Bank, Loogootee, Indiana, to merge with and
into Peoples Bank. Peoples Bank will continue its banking business
and that of The Union Bank as a wholly-owned subsidiary of the
Registrant.
The amount of the Merger consideration was determined by arms-
length negotiations between the Registrant and Peoples. Peoples
reported net income for the year ended December 31, 1996 of
$829,000, and reported total assets of $91,937,000 and total
shareholders' equity of $9,452,000 at December 31, 1996.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements of business acquired. The
consolidated balance sheets of Peoples Bancorp of Washington as of
December 31, 1996 and 1995, and the related consolidated statements
of income, changes in shareholders' equity, and cash flows for each
of the years in the three years ended December 31, 1996, together
with the accompanying notes, and the report of independent
accountants with respect to those financial statements, immediately
follow this page and are filed as part of this Report.
<PAGE>
<PAGE> 3
PEOPLES BANCORP OF WASHINGTON
Washington, Indiana
CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1996 and 1995
CONTENTS
REPORT OF INDEPENDENT AUDITORS . . . . . . . . . . . . . . . . 4
FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS . . . . . . . . . . . . . . . . . 5
CONSOLIDATED STATEMENTS OF INCOME . . . . . . . . . . . . . . 6
CONSOLIDATED STATEMENTS OF CHANGES IN
SHAREHOLDERS' EQUITY . . . . . . . . . . . . . . . . . . . 7
CONSOLIDATED STATEMENTS OF CASH FLOWS . . . . . . . . . . . . 8
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS . . . . . . . . . 9
<PAGE>
<PAGE> 4
REPORT OF INDEPENDENT AUDITORS
Board of Directors and Shareholders
Peoples Bancorp of Washington
Washington, Indiana
We have audited the accompanying consolidated balance sheets of
Peoples Bancorp of Washington as of December 31, 1996 and 1995, and
the related consolidated statements of income, changes in
shareholders' equity and cash flows for each of the years in the three
year period ended December 31, 1996. These financial statements are
the responsibility of the Company's management. Our responsibility is
to express an opinion on these financial statements based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial position
of Peoples Bancorp of Washington as of December 31, 1996 and 1995, and
the results of its operations and its cash flows for each of the years
in the three year period ended December 31, 1996 in conformity with
generally accepted accounting principles.
/s/ Crowe, Chizek and Company LLP
Crowe, Chizek and Company LLP
Indianapolis, Indiana
January 21, 1997
<PAGE>
<PAGE> 5
PEOPLES BANCORP OF WASHINGTON
CONSOLIDATED BALANCE SHEETS
December 31, 1996 and 1995
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
ASSETS
Cash and cash equivalents (Note 11) $ 4,025,246 $ 4,629,741
Interest-bearing deposits in other financial
institutions - 100,000
Securities available for sale (Note 2) 12,849,081 13,978,960
Securities held to maturity (fair value of $7,159,294
and $10,989,141 in 1996 and 1995) (Note 2) 7,165,072 11,075,302
Loans (Note 3) 65,671,003 58,759,678
Less: Allowance for loan losses (Note 4) (912,180) (959,510)
----------- -----------
Loans, net 64,758,823 57,800,168
Non-marketable equity securities (at cost) 430,700 381,000
Premises, furniture and equipment (Note 5) 1,512,604 1,675,199
Accrued interest receivable 891,993 928,341
Other assets 303,391 272,869
----------- -----------
$91,936,910 $90,841,580
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Noninterest-bearing deposits $10,820,079 $ 8,754,730
Interest-bearing demand and savings deposits 30,512,821 28,400,354
Time deposits (Note 6) 28,823,978 30,818,485
----------- -----------
Total deposits 70,156,878 67,973,569
Repurchase agreements (Note 7) 8,400,423 8,254,360
Short-term borrowing (Note 7) 2,000,000 4,150,000
Long-term debt (Note 8) 1,000,000 1,000,000
Accrued interest payable 232,076 237,103
Other liabilities 695,692 394,107
----------- -----------
Total liabilities 82,485,069 82,009,139
Commitments and contingent liabilities (Note 12)
Shareholders' equity
Common stock, $1.00 stated value, 1,200,000 shares
authorized, 593,334 shares issued and outstanding 593,334 593,334
Paid-in capital 1,109,599 1,109,599
Retained earnings (Note 10) 7,828,996 7,166,536
Unrealized loss on securities available for sale,
net of tax benefit of $52,531 and $19,075 (80,088) (37,028)
----------- -----------
Total shareholders' equity 9,451,841 8,832,441
----------- -----------
$91,936,910 $90,841,580
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
<PAGE> 6
PEOPLES BANCORP OF WASHINGTON
CONSOLIDATED STATEMENTS OF INCOME
Years ended December 31, 1996, 1995 and 1994
<TABLE>
<CAPTION>
1996 1995 1994
Interest income ---- ---- ----
<S> <C> <C> <C>
Loans, including related fees $ 5,875,907 $ 4,987,439 $ 4,196,979
Securities
Taxable 841,166 1,171,246 1,286,276
Tax exempt 287,338 310,275 329,054
Other 36,872 50,051 40,282
------------- ------------- ------------
7,041,283 6,519,011 5,852,591
Interest expense
Deposits 2,811,633 2,756,769 2,297,651
Repurchase agreements and
other short-term borrowings 126,859 247,507 140,182
Long-term debt 99,614 127,126 53,950
------------- ------------- ------------
3,038,106 3,131,402 2,491,783
------------- ------------- ------------
Net interest income 4,003,177 3,387,609 3,360,808
Provision for loan losses (Note 4) 50,400 67,500 120,000
------------- ------------- ------------
Net interest income after provision for
loan losses 3,952,777 3,320,109 3,240,808
Noninterest income
Trust department income 28,588 21,878 21,010
Service charges on deposit accounts 200,988 146,102 152,872
Net realized gain on securities 73,420 19,336 9,543
Commission income 90,214 - -
Other 61,839 116,740 60,687
------------- ------------- ------------
455,049 304,056 244,112
Noninterest expense
Salaries and benefits (Note 10) 1,426,914 1,255,108 1,225,029
Occupancy, net 244,332 228,193 204,173
Equipment 273,240 207,089 222,978
Deposit insurance 2,000 78,292 156,885
Other 997,338 571,098 491,899
------------- ------------- ------------
2,943,824 2,339,780 2,300,964
------------- ------------- ------------
Income before income taxes 1,464,002 1,284,385 1,183,956
Income taxes (Note 9) 635,408 460,413 376,390
------------- ------------- ------------
Net income $ 828,594 $ 823,972 $ 807,566
============= ============= ============
Per share data:
Net income per share (Note 13) $ 1.40 $ 1.39 $ 1.36
============= ============= ============
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
<PAGE> 7
PEOPLES BANCORP OF WASHINGTON
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
Years ended December 31, 1996, 1995 and 1994
<TABLE>
<CAPTION>
Net
Unrealized
Loss on
Securities Total
Paid-in Retained Available Shareholders'
Common Stock Capital Earnings for Sale Equity
------------ ------- -------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Balance, January 1, 1994 $ 197,778 $ 1,109,599 $ 6,231,177 $ - $ 7,538,554
Net income - - 807,566 - 807,566
Cash dividends ($.23
per share) - - (138,445) - (138,445)
Net unrealized gain upon
adoption of SFAS 115 on
January 1, 1994 16,256 16,256
Change in net unrealized
loss on securities
available for sale - - - (370,428) (370,428)
------------- ------------- ------------- ------------- -------------
Balance December 31, 1994 197,778 1,109,599 6,900,298 (354,172) 7,853,503
3-for-1 stock split
(Note 13) 395,556 (395,556)
Net income 823,972 823,972
Cash dividends ($ .27
per share) (162,178) (162,178)
Change in net unrealized
loss on securities
available for sale - - - 317,144 317,144
------------- ------------- ------------- ------------- -------------
Balance, December 31, 1995 593,334 1,109,599 7,166,536 (37,028) 8,832,441
Net income 828,594 828,594
Cash dividends
($ .28 per share) (166,134) (166,134)
Change in net unrealized
loss on securities
available for sale - - - (43,060) (43,060)
------------- ------------- ------------- ------------- -------------
Balance, December 31, 1996 $ 593,334 $ 1,109,599 $ 7,828,996 $ (80,088) $ 9,451,841
============= ============= ============= ============= =============
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
<PAGE> 8
PEOPLES BANCORP OF WASHINGTON
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended December 31, 1996, 1995 and 1994
<TABLE>
<CAPTION>
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Cash flows from operating activities
Net income $ 828,594 $ 823,972 $ 807,566
Adjustments to reconcile net income to net
cash from operating activities
Depreciation 229,365 196,888 200,600
Provision for loan losses 50,400 67,500 120,000
Net amortization on securities 19,397 31,573 71,754
Net realized gain of securities (73,420) (19,336) (9,543)
Change in assets and liabilities
Accrued interest receivable 36,348 (166,493) (17,004)
Other assets (46,765) (187,158) 149,884
Accrued interest payable (5,027) 44,451 (23,328)
Other liabilities 301,585 126,363 (67,784)
------------- ------------- -------------
Net cash from operating activities 1,340,477 917,760 1,232,145
Cash flows from investing activities
Net change in interest-bearing deposits in
other financial institutions 100,000 - 1,798,000
Purchases of securities available for sale (3,298,594) (2,824,397) (2,493,593)
Proceeds from sales of securities available
for sale 1,079,762 2,515,279 3,931,984
Proceeds from maturities and repayments of
securities available for sale 3,348,680 993,577 1,573,824
Purchases of securities held to maturity - - (3,452,611)
Proceeds from maturities and repayments of
securities held to maturity 3,887,767 2,345,151 4,044,214
Loans made to customers, net of payments collected (7,009,055) (5,027,234) (5,659,726)
Purchases of premises and equipment (66,770) (486,570) (251,686)
------------- ------------- -------------
Net cash from investing activities (1,958,210) (2,484,194) (509,594)
Cash flows from financing activities
Net change in deposit accounts 2,183,309 1,083,920 (4,656,535)
Advances from Federal Home Loan Bank 2,000,000 1,500,000 -
Repayment of Federal Home Loan Bank advances (2,000,000) (1,500,000) -
Dividends paid (166,134) (162,178) (138,445)
Net change in federal funds purchased (2,150,000) 1,950,000 1,300,000
Net change in repurchase agreements 146,063 244,540 621,634
------------- ------------- -------------
Net cash from financing activities 13,238 3,116,282 (2,873,346)
------------- ------------- -------------
Net change in cash and cash equivalents (604,495) 1,549,848 (2,150,795)
Cash and cash equivalents at beginning of year 4,629,741 3,079,893 5,230,688
------------- ------------- -------------
Cash and cash equivalents at end of year $ 4,025,246 $ 4,629,741 $ 3,079,893
============= ============= =============
Supplemental disclosures of cash flow information
Cash paid during the year for:
Interest $ 3,042,266 $ 3,086,951 $ 2,515,111
Income taxes 613,230 451,079 236,100
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
<PAGE> 9
PEOPLES BANCORP OF WASHINGTON
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1996, 1995 and 1994
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Description of Business: The consolidated financial statements include
the accounts of Peoples Bancorp of Washington ("Bancorp") and its
wholly-owned subsidiary, Peoples National Bank and Trust Company
("Bank") and the Bank's wholly-owned subsidiary, Peoples Investment
Center (PIC). Upon consolidation, all significant intercompany accounts
and transactions have been eliminated. The Bank is engaged in the
business of commercial and retail banking and trust services, with
operations conducted through its main office and 3 branches located in
Daviess County, Indiana. The majority of the Bancorp s income is
derived from commercial and retail business lending activities and
investments. Although the overall loan portfolio is diversified, the
repayment of existing borrower obligations is highly dependent on the
economy of Daviess County and on the agricultural industry. The
majority of the Bancorp's loans are secured by specific items of
collateral including business assets, real property and consumer assets.
PIC receives commission income from the sale of non- deposit investment
products.
Use of Estimates: Management must make estimates and assumptions in
preparing financial statements that affect the amounts reported therein
and the disclosures provided. These estimates and assumptions may
change in the future and future results could differ. Estimates that
are more susceptible to change in the near term include the allowance
for loan losses and fair values of certain securities.
Securities: The Bancorp classifies securities into held to maturity and
available for sale categories. Held to maturity securities are those
which the Bancorp has the positive intent and ability to hold to
maturity, and are reported at amortized cost. Available for sale
securities are those which the Bancorp may decide to sell if needed for
liquidity, asset-liability management, or other reasons. Available for
sale securities are reported at fair value, with unrealized gains or
losses included as a separate component of equity, net of tax.
Realized gains or losses are determined based on the amortized cost of
the specific security sold. Interest and dividend income, adjusted by
amortization of purchase premium or discount, is included in earnings.
Loans: Interest on real estate, commercial and consumer loans is
accrued over the term of the loans based on the principal outstanding.
The recognition of interest income is discontinued when, in management's
judgment, the interest will not be collectible in the normal course of
business. The Bancorp defers loan fees net of certain direct loan
origination costs. The net amount deferred is reported in the balance
sheet as part of loans and is recognized into interest income over the
term of the loan using a method which approximates a level yield.
(Continued)
<PAGE>
<PAGE> 10
PEOPLES BANCORP OF WASHINGTON
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1996, 1995 and 1994
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Allowance for Loan Losses: The balance in the allowance and the amount
of the annual provision charged to expense are judgmentally determined
based upon a number of factors. Estimating the risk of loss and the
amount of loss on any loan is necessarily subjective. Accordingly, the
allowance is maintained by management at a level considered adequate to
cover losses that are currently anticipated based on past loss
experience, general economic conditions, information about specific
borrower situations, including their financial position and collateral
values, and other factors and estimates which are subject to change over
time. While management may periodically allocate portions of the
allowance for specific problem loan situations, including impaired loans
discussed below, the whole allowance is available for any loan losses
that occur. Increases to the allowance are recorded by a provision for
possible loan losses charged to expense. A loan is charged off by
management as a loss when deemed uncollectible, although collection
efforts continue and future recoveries may occur.
Loans are considered impaired if full principal or interest payments are
not anticipated. Impaired loans are carried at the present value of
expected cash flows discounted at the loan's effective interest rate or
at the fair value of the collateral if the loan is collateral dependent.
A portion of the allowance for loan losses is allocated to impaired
loans. The carrying value of impaired loans is periodically adjusted to
reflect cash payments, revised estimates of future cash flows, and
increases in the present value of expected cash flows due to the passage
of time. Cash payments representing interest income are reported as
such and other cash payments are reported as reductions in carrying
value. Increases or decreases in carrying value due to changes in
estimates of future payments or the passage of time are reported as
reductions or increases in the provision for loan losses. In general,
loans classified as doubtful or loss are considered impaired while loans
classified as substandard are individually evaluated for impairment.
Depending on the relative size of the credit relationship, late or
insufficient payments of 30 to 90 days will cause management to
reevaluate the credit under its normal evaluation procedures.
Premises, Furniture and Equipment: Premises, furniture and equipment
are stated at cost less accumulated depreciation. Depreciation is
computed, principally, using the straight line method for premises and
the declining-balance method for furniture and equipment based on the
estimated useful lives of the assets.
(Continued)
<PAGE>
<PAGE> 11
PEOPLES BANCORP OF WASHINGTON
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1996, 1995 and 1994
(Table Dollar Amounts in Thousands)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Other Real Estate: Real estate acquired through foreclosure or
acceptance of a deed in lieu of foreclosure is recorded at the lower of
cost (fair value at date of foreclosure) or fair value less estimated
selling costs. Expenses incurred in carrying other real estate are
charged to operations as incurred.
Income Taxes: Income tax expense is the sum of the current year income
tax due or refundable and the change in deferred tax assets and
liabilities. Deferred tax assets and liabilities are the expected
future tax consequences of temporary differences between the carrying
amounts and tax bases of assets and liabilities, computed using enacted
tax rates. A valuation allowance, if needed, reduces deferred tax
assets to the amount expected to be realized.
Statement of Cash Flows: For purposes of this statement, cash and cash
equivalents is defined to include cash on hand and amounts due from
other banks. The Bancorp reports net cash flows for customer loan
transactions, deposit transactions, deposits made with other financial
institutions and short-term borrowings.
Financial Statement Presentation: Certain items in the 1995 financial
statements have been reclassified to correspond with the 1996
presentations.
NOTE 2 - SECURITIES
The amortized cost and fair values of securities are as follows at
December 31:
<TABLE>
<CAPTION>
1 9 9 6
-------
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
--------- ---------- ---------- -----
<S> <C> <C> <C> <C>
Available for Sale
U.S. Treasury and government
agency securities $ 7,999 $ 9 $ (32) $ 7,977
Obligations of states
and political subdivisions 2,204 7 (46) 2,165
Mortgage-backed securities 2,777 6 (83) 2,700
Other securities 1 6 - 7
------------- ------------- ------------ -------------
$ 12,981 $ 28 $ (160) $ 12,849
============= ============= ============ =============
</TABLE>
(Continued)
<PAGE>
<PAGE> 12
PEOPLES BANCORP OF WASHINGTON
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1996, 1995 and 1994
(Table Dollar Amounts in Thousands)
NOTE 2 - SECURITIES (Continued)
<TABLE>
<CAPTION>
1 9 9 6
-------
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
--------- ---------- ---------- -----
<S> <C> <C> <C>
Held to Maturity
----------------
U.S. Treasury and government
agency securities $ 2,519 $ - $ (21) $ 2,498
Obligations of states
and political subdivisions 3,600 35 (10) 3,625
Mortgage-backed securities 881 11 (22) 870
Other asset-backed securities 118 1 - 119
Corporate bonds 47 - - 47
------------- ------------- ------------ -------------
$ 7,165 $ 47 $ (53) $ 7,159
============= ============= ============ =============
1 9 9 5
-------
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
--------- ---------- ---------- -----
Available for Sale
------------------
U.S. Treasury and government
agency securities $ 7,990 $ - $ (58) $ 7,932
Obligations of states
and political subdivisions 2,171 1 - 2,172
Mortgage-backed securities 3,858 - (70) 3,788
Other securities 16 71 - 87
------------- ------------- ------------ -------------
$ 14,035 $ 72 $ (128) $ 13,979
============= ============= ============ =============
Held to Maturity
----------------
U.S. Treasury and government
agency securities $ 5,037 $ - $ (86) $ 4,951
Obligations of states
and political subdivisions 4,603 14 - 4,617
Mortgage-backed securities 1,115 6 (21) 1,100
Other asset-backed securities 320 1 - 321
------------- ------------- ------------ -------------
$ 11,075 $ 21 $ (107) $ 10,989
============= ============= ============ =============
</TABLE>
(Continued)
<PAGE>
<PAGE> 13
PEOPLES BANCORP OF WASHINGTON
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1996, 1995 and 1994
(Table Dollar Amounts in Thousands)
NOTE 2 - SECURITIES (Continued)
The following were realized on sales of securities available for sale:
1996 1995 1994
---- ---- ----
Gross gains $ 76 $ 22 $ 12
Gross losses 3 3 3
During December 1995, securities with an amortized cost of $4,336,047
and a net unrealized loss of $24,811 were transferred from held to
maturity to available for sale in accordance with the Financial
Accounting Standards Board Special Report on Implementation of SFAS 115.
The amortized cost and fair value of securities at December 31, 1996, by
contractual maturity, are shown below. Expected maturities may differ
from contractual maturities because borrowers may have the right to call
or prepay obligations with or without call or prepayment penalties.
<TABLE>
<CAPTION>
Available for Sale Held to Maturity
------------------ ----------------
Amortized Fair Amortized Fair
Cost Value Cost Value
---- ----- ---- -----
<S> <C> <C> <C> <C>
Due in one year or less $ 1,740 $ 1,726 $ 2,437 $ 2,412
Due after one year through
five years 5,787 5,857 3,229 3,255
Due after five years through
ten years 2,676 2,559 453 456
Due after ten years - - - -
----------- ----------- ----------- -----------
Subtotal 10,203 10,142 6,119 6123
Mortgage-backed securities 2,777 2,700 881 870
Other asset-backed securities - - 118 119
Other securities 1 7 47 47
----------- ----------- ----------- -----------
$ 12,981 $ 12,849 $ 7,165 $ 7,159
=========== =========== =========== ===========
</TABLE>
Securities with a carrying value of $9,400,000 and $9,261,000 at
December 31, 1996 and 1995 were pledged to secure repurchase agreements,
public deposits and for other purposes required or permitted by law.
(Continued)
<PAGE>
<PAGE> 14
PEOPLES BANCORP OF WASHINGTON
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1996, 1995 and 1994
(Table Dollar Amounts in Thousands)
NOTE 3 - LOANS
Loans are comprised of the following:
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Commercial loans $ 11,138 $ 10,062
Agricultural production 4,480 3,277
Real estate loans ($5,874 and $6,880 secured
by farm land) 41,034 37,486
Consumer loans 8,459 7,259
Lease financing 560 676
----------- -----------
Total loans $ 65,671 $ 58,760
=========== ===========
Lease financing consists of the following:
1996 1995
---- ----
Minimum lease payments receivable $ 552 $ 718
Unguaranteed residual value 147 147
Less: Unearned lease income (139) (189)
----------- -----------
Total lease financing $ 560 $ 676
=========== ===========
</TABLE>
Minimum lease payments are receivable as follows at December 31, 1996:
1997 $ 113
1998 76
1999 76
2000 76
2001 and thereafter 211
-----------
Total $ 552
===========
Nonperforming loans at December 31:
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Nonaccruing loans $ 258 $ 290
Accruing loans past due 90 days or more 4 6
Restructured loans other than nonaccrual 0 122
----------- -----------
Total $ 262 $ 418
=========== ===========
</TABLE>
(Continued)
<PAGE>
<PAGE> 15
PEOPLES BANCORP OF WASHINGTON
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1996, 1995 and 1994
(Table Dollar Amounts in Thousands)
NOTE 3 - LOANS (Continued)
The Bancorp has entered into loan transactions with its executive
officers, certain directors and principal shareholders. A schedule of
aggregate activity in those loans, when total customer borrowings exceed
$60,000, follows:
1996
----
Balance, January 1, 1996 $1,140
Change in persons included (1)
Additions 1,692
Collected (1,247)
------
Balance, December 31, 1996 $1,584
======
Total loans serviced for the Federal Home Loan Mortgage Corporation were
$4,439,882 at December 31, 1996 and $3,793,494 at December 31, 1995.
These loans are not reflected on the consolidated balance sheet.
NOTE 4 - ALLOWANCE FOR LOAN LOSSES
Activity in the allowance for loan losses is as follows:
<TABLE>
<CAPTION>
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Balance, January 1 $ 960 $ 933 $ 810
Provision charged to operations 50 68 120
Loans charged off (102) (56) (10)
Recoveries on loans previously charged off 4 15 13
----------- ----------- -----------
Balance, December 31 $ 912 $ 960 $ 933
=========== =========== ===========
</TABLE>
Impaired loans were as follows:
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Year-end loans with no allowance for loan losses allocated $ - $ -
Year-end loans with allowance for loans losses allocated 366 391
Amount of the allowance allocated 106 142
Average of impaired loans during the year 441 410
Interest income recognized during the year 57 7
Cash-basis interest income recognized 57 7
</TABLE>
(Continued)
<PAGE>
<PAGE> 16
PEOPLES BANCORP OF WASHINGTON
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1996, 1995 and 1994
(Table Dollar Amounts in Thousands)
NOTE 5 - PREMISES, FURNITURE AND EQUIPMENT
A summary of premises, furniture and equipment by major category
follows:
1996 1995
---- ----
Land and buildings $ 2,552 $ 2,506
Furniture and equipment 1,505 1,501
----------- -----------
4,057 4,007
Accumulated depreciation (2,544) (2,332)
$ 1,513 $ 1,675
=========== ===========
NOTE 6 - INTEREST-BEARING DEPOSITS
Interest-bearing deposits issued in denominations of $100,000 or greater
totaled $4,657,348 and $5,876,741 at December 31, 1996 and 1995.
Interest expense on such deposits for 1996, 1995 and 1994 was $366,000,
$320,000 and $204,000 respectively.
At year-end 1996, stated maturities of time deposits were:
1997 $ 19,512
1998 5,578
1999 1,382
2000 1,204
2001 1,146
Thereafter 2
--------
$ 28,824
========
(Continued)
<PAGE>
<PAGE> 17
PEOPLES BANCORP OF WASHINGTON
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1996, 1995 and 1994
(Table Dollar Amounts in Thousands)
NOTE 7 - REPURCHASE AGREEMENTS AND SHORT-TERM BORROWINGS
The Bancorp uses repurchase agreements and short-term borrowings,
primarily federal funds purchased, as funding sources. Repurchase
agreements are essentially borrowings from customers secured by a pledge
of securities. The Bancorp retains possession of and control over such
securities. Information regarding repurchase agreements and short-term
borrowings at and for the years ended December 31, 1996 and 1995 is as
follows:
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Average balance during the year
Repurchase agreements $ 6,343 $ 7,273
Short-term borrowings 1,303 1,717
Average rate paid during the year
Repurchase agreements 4.44% 5.23%
Short-term borrowings 5.57 6.21
Maximum month end balance
Repurchase agreements $ 10,450 $ 10,353
Short-term borrowings 4,250 4,600
Weighted average interest rate at year end
Repurchase agreements 4.29% 4.56%
Short-term borrowings 6.05 5.74
</TABLE>
NOTE 8 - LONG-TERM DEBT
Long-term debt outstanding consists of the following at December 31:
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Federal Home Loan Bank advances: interest payable monthly
at 5.20%; principal due at maturity on January 13, 1997. $ 1,000 $ -
Federal Home Loan Bank advances: interest payable monthly
at 4.51%; principal due at maturity on October 15, 1996. - 500
Federal Home Loan Bank advances: interest payable monthly
at 6.28%; principal due at maturity on August 8, 2000. - 500
------- -------
Total long-term debt $ 1,000 $ 1,000
======= =======
</TABLE>
These advances are secured by a blanket pledge of the mortgage loans
and securities.
(Continued)
<PAGE>
<PAGE> 18
PEOPLES BANCORP OF WASHINGTON
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1996, 1995 and 1994
(Table Dollar Amounts in Thousands)
NOTE 9 - INCOME TAXES
Income taxes consist of the following:
1996 1995 1994
---- ---- ----
Current payable $ 541 $ 468 $ 409
Deferred expense/(benefit) 94 (8) (33)
------ ------ ------
Total income taxes $ 635 $ 460 $ 376
====== ====== ======
The following is a reconciliation of income taxes and the amount
computed by applying the statutory federal income tax rates of 34% to
income before income taxes:
<TABLE>
<CAPTION>
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Statutory rate applied to income before income taxes $ 498 $ 436 $ 402
Add (deduct)
Tax exempt interest income (78) (79) (86)
State income tax, net 105 76 69
Non deductible merger expenses 101 - -
Other 9 27 (9)
----------- ----------- -----------
Total income taxes $ 635 $ 460 $ 376
=========== =========== ===========
</TABLE>
The net deferred tax asset is composed of the following:
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Deferred tax assets for:
Loan loss provision $ 248 $ 267
Pension expense 6 36
Unrealized loss on securities available for sale 53 19
Nonaccrual loan interest - 14
Accrued expenses 4 25
Other - 27
----------- -----------
311 388
Deferred tax liabilities for:
Depreciation expense (42) (58)
Leases (131) (146)
Other (23) (9)
----------- -----------
(196) (213)
Valuation allowance for deferred tax assets - -
----------- -----------
$ 115 $ 175
=========== ===========
</TABLE>
(Continued)
<PAGE>
<PAGE> 19
PEOPLES BANCORP OF WASHINGTON
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1996, 1995 and 1994
(Table Dollar Amounts in Thousands)
NOTE 10 - EMPLOYEE BENEFIT PLANS
The Bank has a noncontributory defined benefit pension plan covering
substantially all employees with benefits based on years of service and
compensation prior to retirement. The Bank's funding policy is to
contribute the minimum amount required by applicable IRS regulations.
Plan assets consist primarily of U.S. Treasury bonds, corporate bonds
and other various marketable equity securities.
The following sets forth the Plan's funded status and amount recognized
in the balance sheet at December 31 (amounts computed as of November
30th for 1996 and 1995):
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Actuarial present value of obligations:
Accumulated benefit obligation, including vested benefits
of $548 and $494 $ 551 $ 496
=========== ===========
Plan assets at fair value $ 956 $ 809
Projected benefit obligation for
service rendered to date (838) (749)
Unrecognized loss 77 89
Prior service cost not yet recognized (13) (14)
Unrecognized transition asset (154) (176)
----------- -----------
Accrued pension liability $ (28) $ (41)
=========== ===========
</TABLE>
<TABLE>
<CAPTION>
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Net pension expense included the following:
Service cost-benefits earned $ 36 $ 32 $ 45
Interest cost on projected benefit obligation 61 57 51
Actual return on plan assets (97) (135) 11
Net amortization and deferral 6 65 (62)
----------- ----------- -----------
Net pension expense $ 6 $ 19 $ 45
=========== =========== ===========
</TABLE>
The computation of pension liability and expense is based upon several
key assumptions. The weighted-average discount rate, the rate of
increase in future compensation and expected long-term rate of return on
plan assets were 8.25%, 5.0% and 8.25% for all years presented.
The Bank has a 401(k) defined contribution retirement plan in which
substantially all employees may participate. The Bank matches
employees' contributions at the rate of 50 percent on the first 8
percent of participant's salary contributions. The Bank's total 401(k)
contributions were $25,210, $20,168 and $21,266 for 1996, 1995 and 1994.
(Continued)
<PAGE>
<PAGE> 20
PEOPLES BANCORP OF WASHINGTON
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1996, 1995 and 1994
(Table Dollar Amounts in Thousands)
NOTE 11 - REGULATORY MATTERS
The Bank is subject to regulatory capital requirements administered by
federal banking agencies. Capital adequacy guidelines and prompt
corrective action regulations involve quantitative measures of assets,
liabilities and certain off-balance-sheet items calculated under
regulatory accounting practices. Capital amounts and classifications
are also subject to qualitative judgments by regulators about
components, risk weightings, and other factors, and the regulators can
lower classifications in certain cases. Failure to meet various capital
requirements can initiate regulatory action that could have a direct
material effect on the financial statements.
The prompt corrective action regulations provide five classifications,
including well capitalized, adequately capitalized, undercapitalized,
significantly undercapitalized, and critically undercapitalized,
although these terms are not used to represent overall financial
condition. If adequately capitalized, regulatory approval is required
to accept brokered deposits. If undercapitalized, capital distributions
are limited, as is asset growth and expansion, and plans for capital
restoration are required. The minimum requirements are:
Capital to Risk-
Weighted Assets
--------------- Tier 1 Capital
Total Tier 1 to Average Assets
----- ------ -----------------
Well capitalized 10% 6% 5%
Adequately capitalized 8% 4% 4%
Undercapitalized 6% 3% 3%
At December 31, 1996, the Bank's actual capital levels and minimum
required levels were:
<TABLE>
<CAPTION>
Minimum Required
To Be Well
Minimum Required Capitalized Under
For Capital Prompt Corrective
Actual Adequacy Purposes Action Regulations
------ ----------------- ------------------
Amount Ratio Amount Ratio Amount Ratio
------ ----- ------ ----- ------ -----
<S> <C> <C> <C> <C> <C> <C>
Total Capital (to Risk
Weighted Assets)
Bank $ 10,502 16.25% $ 5,167 8.0% $ 6,460 10.0%
Tier I Capital (to Risk
Weighted Assets)
Bank $ 9,693 15.01% $ 2,584 4.0% $ 3,876 6.0%
Tier 1 Capital (to
Average Assets)
Bank $ 9,693 10.48% $ 3,970 4.0% $ 4,621 5.0%
</TABLE>
At year-end 1996 the Bank was categorized as well capitalized.
(Continued)
<PAGE>
<PAGE> 21
PEOPLES BANCORP OF WASHINGTON
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1996, 1995 and 1994
(Table Dollar Amounts in Thousands)
NOTE 12 - COMMITMENTS AND CONTINGENT LIABILITIES
There are various contingent liabilities that are not reflected in the
financial statements, including claims and legal actions arising in the
ordinary course of business. In the opinion of management, after
consultation with legal counsel, the ultimate disposition of these
matters is not expected to have a material effect on financial condition
or results of operations.
In the ordinary course of business, the Bancorp has loans, commitments
and contingent liabilities, such as guarantees and commitments to extend
credit, which are not reflected in the consolidated balance sheets.
Exposure to credit loss in the event of nonperformance by the other
party to the financial instrument for commitments to make loans and
standby letters of credit is represented by the contractual amount of
those instruments. The Bancorp uses the same credit policy to make such
commitments as it uses for on-balance sheet items.
At December 31, off-balance sheet financial instruments whose contract
amount represents credit risk are summarized as follows:
1996 1995
---- ----
Commitments to extend credit $5,994 $8,435
Standby letters of credit 338 268
The commitments to extend credit are predominantly variable rate
agreements, the majority of which are available balances on commercial
and consumer lines of credit. Since many commitments to make loans
expire without being used, the amount does not necessarily represent
future cash commitments. Collateral obtained upon exercise of the
commitment is determined using management's credit evaluation of the
borrower, and may include accounts receivable, inventory, property, land
and other items.
The Bancorp leases branch facilities and equipment under operating
leases expiring in various years through 1999. Lease rental expense was
$21,073, $20,773, and $19,132 for 1996, 1995 and 1994.
The cash balance required to be maintained on hand or on deposit with
the Federal Reserve was $558,000 and $474,000 at December 31, 1996 and
1995. These reserves do not earn interest.
(Continued)
<PAGE>
<PAGE> 22
PEOPLES BANCORP OF WASHINGTON
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1996, 1995 and 1994
(Table Dollar Amounts in Thousands)
NOTE 13 - PER SHARE DATA
In June 1995, the shareholders approved an increase in authorized common
stock from 400,000 shares to 1,200,000 shares. Also, in June 1995, the
Board of Directors authorized a 3-for-1 stock split effected in the form
of a stock dividend. Earnings and dividend per share amounts have been
retroactively restated for the stock split. The weighted-average number
of shares used in calculating earnings and dividends per share amounts
was 593,334 for 1996, 1995 and 1994.
NOTE 14- PARENT COMPANY FINANCIAL STATEMENTS
Presented below are the condensed balance sheets and statements of
income and cash flows for the parent company:
CONDENSED BALANCE SHEETS
December 31, 1996 and 1995
1996 1995
---- ----
ASSETS
Cash on deposit with subsidiary $ 105 $ 61
Securities available for sale 8 87
Investment in bank subsidiary 9,628 8,764
Other assets 1 4
------ ------
$9,742 $8,916
====== ======
LIABILITIES AND SHAREHOLDERS EQUITY
Liabilities $ 290 $ 84
Shareholders equity 9,452 8832
------ ------
$9,742 $8,916
====== ======
CONDENSED STATEMENTS OF INCOME
Years ended December 31, 1996, 1995 and 1994
1996 1995 1994
---- ---- ----
Operating income
Dividend income $ 280 $ 154 $ 115
Other income 80 5 5
------ ------ ------
Total operating income 360 159 120
Operating expenses 395 4 2
------ ------ ------
Income loss before equity in
undistributed earnings of subsidiary (35) 155 118
Equity of undistributed earnings of
subsidiary 864 669 690
------ ------ ------
Net income $ 829 $ 824 $ 808
====== ====== ======
(Continued)
<PAGE>
<PAGE> 23
PEOPLES BANCORP OF WASHINGTON
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1996, 1995 and 1994
(Table Dollar Amounts in Thousands)
NOTE 14 - PARENT COMPANY FINANCIAL STATEMENTS (Continued)
CONDENSED STATEMENTS OF CASH FLOWS
Years ended December 31, 1996, 1995 and 1994
<TABLE>
<CAPTION>
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Cash flows from operating activities
Net income $ 829 $ 824 $ 808
Adjustments to reconcile net income to
net cash from operating activities
Equity in undistributed earnings of
subsidiary (864) (669) (690)
Net realized gain on sales of securities (74) - -
Changes in:
Other assets 3 2 3
Other liabilities 228 11 9
----------- ----------- -----------
Net cash provided by operating activity 122 168 130
Cash flows from investing activities
Proceeds from sales of securities available
for sale 88 - -
Cash flows from financing activities
Dividends paid (166) (162) (138)
----------- ----------- -----------
Net change in cash and cash equivalents 44 6 (8)
Cash and cash equivalents at beginning of year 61 55 63
----------- ----------- -----------
Cash and cash equivalents at end of year $ 105 $ 61 $ 55
=========== =========== ===========
</TABLE>
NOTE 15 - PENDING ACCOUNTING CHANGE
Financial Accounting Standard No. 125, (Accounting for Transfers and
Servicing of Financial Assets and Extinguishment of Liabilities), was
issued by the Financial Accounting Standards Board in 1996. It revises
the accounting for transfers of financial assets, such as loans and
securities, and for distinguishing between sales and secured borrowings.
It is effective for some transactions in 1997 and others in 1998.
Management does not believe the effect of adopting this standard will
have a material effect on the Bancorp's financial position or results of
operations.
(Continued)
<PAGE>
<PAGE> 24
PEOPLES BANCORP OF WASHINGTON
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1996, 1995 and 1994
NOTE 16 - PROPOSED ACQUISITION OF THE BANCORP
On September 27, 1996 the Bancorp entered into a definitive agreement to
merge with German American Bancorp. Pursuant to the agreement, each
shareholder of the Bancorp's common stock would exchange their stock in
the Bancorp for a specified number of shares of German American Bancorp
common stock. The exchange ratio will be determined based upon the
average price of German American Bancorp's common stock during the
period prior to the effective date of the merger. Consummation of the
merger requires the approval of Bancorp shareholders and various
regulatory agencies. Regulatory approval has been received and a
shareholders meeting will take place in February, 1997 to solicit
shareholder approval.
<PAGE>
<PAGE> 25
(b) Pro forma financial information.
PRO FORMA FINANCIAL DATA
------------------------
GERMAN AMERICAN BANCORP AND PEOPLES BANCORP OF WASHINGTON
---------------------------------------------------------
The following unaudited pro forma condensed consolidated balance
sheet as of December 31, 1996, and the pro forma condensed consolidated
statements of income for each of the years in the three-year period
ended December 31, 1996, give effect to the Merger based on the
historical consolidated financial statements of German American Bancorp,
Peoples Bancorp of Washington and their subsidiaries under the
assumptions and adjustments set forth below and in the accompanying
notes to the pro forma financial statements.
The Peoples Bancorp of Washington Merger will be accounted for as a
pooling of interests and, therefore, is included in the pro forma
condensed consolidated balance sheet as of December 31, 1996, as if the
transaction had become effective on such date, giving effect to the pro
forma adjustments described therein. The pro forma condensed
consolidated statements of income for each of the years in the
three-year period ended December 31, 1996 also include the historical
statements of income of German American Bancorp and Peoples Bancorp of
Washington as if the transaction had become effective at the beginning
of the periods presented, giving effect to the pro forma adjustments
described therein.
The pro forma financial statements have been prepared by management
based upon the historical consolidated financial statements of German
American Bancorp, Peoples Bancorp of Washington and their subsidiaries.
These pro forma statements may not be indicative of the results that
actually would have occurred if the Merger had been in effect on the
dates indicated or which may be obtained in the future.
<PAGE>
<PAGE> 26
GERMAN AMERICAN BANCORP
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
December 31, 1996
(Dollar amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
German American Peoples Bancorp Pro Forma Pro Forma
ASSETS Bancorp of Washington Adjustments Consolidated
- ------------------------------------- --------------- --------------- ----------- -----------
<S> <C> <C> <C> <C>
Cash and cash equivalents $33,709 $4,025 $37,734
Interest bearing deposits with banks 597 0 597
Other short-term investments 979 0 979
Investment in subsidiary 0 0 $9,452 (A) 0
(9,452) (B)
Securities available for sale 85,708 12,849 98,557
Securities held to maturity 15,667 7,165 22,832
Loans 247,611 65,671 313,282
Allowance for loan and lease losses (5,616) (912) (6,528)
Premises and equipment 10,072 1,513 11,585
Other real estate 203 0 203
Intangibles 1,774 (C) 0 1,774
Accrued interest receivable and
other assets 6,802 1,626 8,428
--------------- --------------- ----------- ------------
Total assets $397,506 $91,937 $0 $489,443
=============== =============== =========== ============
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
LIABILITIES
Deposits $352,749 $70,157 $422,906
Short-term borrowings 2,127 10,400 12,527
FHLB advances 0 1,000 1,000
Other liabilities 3,289 928 4,217
--------------- --------------- ------------
Total liabilities 358,165 82,485 440,650
--------------- --------------- ------------
SHAREHOLDERS' EQUITY
Common stock 19,238 593 $6,154 (A) 25,392
(593) (B)
Surplus 8,098 1,110 (4,451) (A) 3,647
(1,110) (B)
Retained earnings 11,430 7,829 7,829 (A) 19,259
(7,829) (B)
Net unrealized gain/(loss) on securities
available for sale 575 (80) (80) (A) 495
80 (B)
--------------- --------------- ----------- ------------
Total shareholders' equity 39,341 9,452 0 48,793
--------------- --------------- ----------- ------------
Total liabilities and
shareholders' equity $397,506 $91,937 $0 $489,443
=============== =============== =========== ============
</TABLE>
ADJUSTMENTS:
- ------------
(A) Issuance of 615,417 common shares of German American Bancorp in
exchange for the 593,334 shares of Peoples Bancorp of Washington.
(B) To eliminate the investment in Peoples Bancorp of Washington.
(C) Includes goodwill of $1,441 being amortized over 15 years and core
deposit intangibles of $333 being amortized over 10 years.
(D) No adjustments to these pro forma financial statements were
necessary to conform to accounting methods as contemplated by APB
Opinion 16.
<PAGE>
<PAGE> 27
GERMAN AMERICAN BANCORP
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
For the year ended December 31, 1996
(Dollar amounts in thousands except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
-------------------------- 1996 ------------------------
German American Peoples Bancorp Pro Forma
Bancorp of Washington Consolidated
--------------- ---------------- ------------
<S> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans $21,970 $5,876 $27,846
Interest on securities 5,609 1,128 6,737
Other interest income 741 37 778
--------- ------- ---------
Total interest income 28,320 7,041 35,361
--------- ------- ---------
INTEREST EXPENSE
Interest on deposits 13,594 2,812 16,406
Other interest expense 51 226 277
--------- ------- ---------
Total interest expense 13,645 3,038 16,683
--------- ------- ---------
NET INTEREST INCOME 14,675 4,003 18,678
Provision for loan losses 160 50 210
--------- ------- ---------
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 14,515 3,953 18,468
NON-INTEREST INCOME 1,772 455 2,227
NON-INTEREST EXPENSE 10,344 2,944 13,288
--------- ------- ---------
INCOME BEFORE INCOME TAXES 5,943 1,464 7,407
Income taxes 1,878 635 2,513
--------- ------- ---------
NET INCOME $4,065 $829 $4,894
========= ======= =========
EARNINGS PER SHARE
Net income per share $2.12 (A) $1.93 (B)
Weighted average number of
shares outstanding 1,920,053 (A) 2,535,470 (B)
</TABLE>
NOTES:
- ------
(A) Retroactively restated for a 5% stock dividend in October, 1996.
(B) Issuance of 615,417 common shares of German American Bancorp in
exchange for all shares of Peoples Bancorp of Washington at the
beginning of the period.
(C) No adjustments to these pro forma financial statements were
necessary to conform accounting methods as contemplated by APB
Opinion 16.
<PAGE>
<PAGE> 28
GERMAN AMERICAN BANCORP
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
For the year ended December 31, 1995
(Dollar amounts in thousands except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
-------------------------- 1995 ------------------------
German American Peoples Bancorp Pro Forma
Bancorp of Washington Consolidated
--------------- ---------------- ------------
<S> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans $21,210 $4,987 $26,197
Interest on securities 4,620 1,482 6,102
Other interest income 1,467 50 1,517
--------- ------- ---------
Total interest income 27,297 6,519 33,816
--------- ------- ---------
INTEREST EXPENSE
Interest on deposits 12,633 2,757 15,390
Other interest expense 184 374 558
--------- ------- ---------
Total interest expense 12,817 3,131 15,948
--------- ------- ---------
NET INTEREST INCOME 14,480 3,388 17,868
Provision for loan losses (19) 68 49
--------- ------- ---------
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 14,499 3,320 17,819
NON-INTEREST INCOME 1,460 304 1,764
NON-INTEREST EXPENSE 10,078 2,340 12,418
--------- ------- ---------
INCOME BEFORE INCOME TAXES 5,881 1,284 7,165
Income taxes 1,863 460 2,323
--------- ------- ---------
NET INCOME $4,018 $824 $4,842
========= ======= =========
EARNINGS PER SHARE
Net income per share $2.10 (A) $1.91 (B)
Weighted average number of
shares outstanding 1,916,482 (A) 2,531,899 (B)
</TABLE>
NOTES:
- ------
(A) Retroactively restated for a 5% stock dividend in October, 1995 and
a 5% stock dividend in October, 1996.
(B) Issuance of 615,417 common shares of German American Bancorp in
exchange for all shares of Peoples Bancorp of Washington at the
beginning of the period.
(C) No adjustments to these pro forma financial statements were
necessary to conform accounting methods as contemplated by APB
Opinion 16.
<PAGE>
<PAGE> 29
GERMAN AMERICAN BANCORP
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
For the year ended December 31, 1994
(Dollar amounts in thousands except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
-------------------------- 1994 ------------------------
German American Peoples Bancorp Pro Forma
Bancorp of Washington Consolidated
--------------- ---------------- ------------
<S> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans $17,348 $4,197 $21,545
Interest on securities 4,017 1,616 5,633
Other interest income 705 40 745
--------- ------- ---------
Total interest income 22,070 5,853 27,923
--------- ------- ---------
INTEREST EXPENSE
Interest on deposits 9,394 2,298 11,692
Other interest expense 133 194 327
--------- ------- ---------
Total interest expense 9,527 2,492 12,019
--------- ------- ---------
NET INTEREST INCOME 12,543 3,361 15,904
Provision for loan losses 567 120 687
--------- ------- ---------
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 11,976 3,241 15,217
NON-INTEREST INCOME 1,689 244 1,933
NON-INTEREST EXPENSE 8,609 2,301 10,910
--------- ------- ---------
INCOME BEFORE INCOME TAXES 5,056 1,184 6,240
Income taxes 1,582 376 1,958
--------- ------- ---------
NET INCOME $3,474 $808 $4,282
========= ======= =========
EARNINGS PER SHARE
Net income per share $1.81 (A) $1.69 (B)
Weighted average number of
shares outstanding 1,915,900 (A) 2,531,317 (B)
</TABLE>
NOTES:
- ------
(A) Retroactively restated for a 5% stock dividend in October, 1995 and
a 5% stock dividend in October, 1996.
(B) Issuance of 615,417 common shares of German American Bancorp in
exchange for all shares of Peoples Bancorp of Washington at the
beginning of the period.
(C) No adjustments to these pro forma financial statements were
necessary to conform accounting methods as contemplated by APB
Opinion 16.
<PAGE>
<PAGE> 30
(c) Exhibits.
EXHIBIT NO. DESCRIPTION
2 Agreement and Plan of Reorganization by and
among Peoples Bancorp of Washington, the
Registrant, and certain subsidiaries dated
September 27, 1996. The copy of this exhibit
filed as Exhibit 2 to the Registrant's
Quarterly Report on Form 10-Q for the quarter
ended September 30, 1996, is incorporated by
reference.
<PAGE>
<PAGE> 31
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
Date: March 19, 1997 GERMAN AMERICAN BANCORP
By /s/ George W. Astrike
________________________________
George W. Astrike, Chairman of the
Board and Chief Executive Officer
