SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 11-K
Annual Report Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
(Mark One)
<PAGE>
[X] Annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934
For the year ending December 31, 1998
[ ] Transitional report pursuant to Section 15(d) of the Securities Exchange
Act of 1934
Commission file number: 0-11244
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
German American Bancorp
Employees' Profit Sharing Plan(1)
(1) This Initial Form 11-K filing is being filed concurrently with the Form S-8
Registration Statement for the "German American Bancorp Employees' Profit
Sharing
Plan."
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
German American Bancorp
711 Main Street, Box 810
Jasper, Indiana 47546-3042
<PAGE>
REQUIRED INFORMATION
A. Financial Statements and Schedules:
Report of Independent Auditors
Statements of Net Assets Available for Benefits
Statement of Changes in Net Assets Available for Benefits with
Fund Information
Notes to Financial Statements
Schedule of Assets Held for Investment Purposes
Schedule of Reportable Transactions
B. Exhibits
Consent of Independent Auditors
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustee (or other persons who administer the employee benefit plan) has duly
caused this annual report to be signed on its behalf by the undersigned hereto
duly authorized.
German American Bancorp
Employees' Profit Sharing Plan
(Name of Plan)
Date June 29, 1999 German American Bank, Trustee
By: /s/ Norman E. Kempf
------------------------------------
Norman E. Kempf, Vice President and
Trust Officer
<PAGE>
GERMAN AMERICAN BANCORP
EMPLOYEES' PROFIT SHARING PLAN
FINANCIAL STATEMENTS
December 31, 1998 and 1997
<PAGE>
GERMAN AMERICAN BANCORP
EMPLOYEES' PROFIT SHARING PLAN
Jasper, Indiana
FINANCIAL STATEMENTS
December 31, 1998 and 1997
CONTENTS
REPORT OF INDEPENDENT AUDITORS............................................ 1
FINANCIAL STATEMENTS
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
(MODIFIED CASH BASIS)............................................... 3
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
WITH FUND INFORMATION (MODIFIED CASH BASIS)......................... 4
NOTES TO FINANCIAL STATEMENTS......................................... 6
SUPPLEMENTAL SCHEDULES
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES............ 11
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS........................ 12
<PAGE>
REPORT OF INDEPENDENT AUDITORS
German American Bancorp
Employees' Profit Sharing Plan
Jasper, Indiana
We have audited the statements of net assets available for benefits (modified
cash basis) of German American Bancorp Employees' Profit Sharing Plan as of
December 31, 1998 and 1997, and the related statement of changes in net assets
available for benefits (modified cash basis) for the year ended December 31,
1998. These financial statements are the responsibility of the Plan'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.
As described in Note 1, these financial statements and supplemental schedules
were prepared on a modified cash basis of accounting, which is a comprehensive
basis of accounting other than generally accepted accounting principles.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 1998 and 1997 and the changes in net assets available for benefits
for the year ended December 31, 1998 on the basis of accounting described in
Note 1.
<PAGE>
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules (modified cash
basis) of assets held for investment purposes and reportable transactions are
presented for the purpose of additional analysis and are not a required part of
the basic financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. The fund information in the
statement of changes in net assets available for benefits is presented for the
purpose of additional analysis rather than to present changes in net assets
available for plan benefits of each fund. The supplemental schedules and fund
information have been subjected to the auditing procedures applied in the audits
of the basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
Crowe, Chizek and Company LLP
Indianapolis, Indiana
April 21, 1999
<PAGE>
<TABLE>
<CAPTION>
GERMAN AMERICAN BANCORP
EMPLOYEES' PROFIT SHARING PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
(MODIFIED CASH BASIS)
December 31, 1998 and 1997
<S> <C> <C>
1998 1997
---- ----
Investments, at fair value
SEI Stable Asset Fund $ 2,459,320 $ 2,130,359
SEI Diversified Conservative Fund 710,107 581,272
SEI Diversified Conservative Income Fund 800,923 508,632
SEI Diversified Global Growth Fund 1,460,497 1,651,861
SEI Diversified Moderate Growth Fund 5,671,320 4,716,578
SEI Diversified U.S. Stock Fund 4,574,798 3,535,543
Participant notes receivable 190,641 236,238
German American Bancorp Common Stock 299,709 -
Cash and cash equivalents 1,342 350
--------------- ----------------
Net assets available for benefits $ 16,168,657 $ 13,360,833
=============== ================
<FN>
See accompanying notes.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GERMAN AMERICAN BANCORP
EMPLOYEES' PROFIT SHARING PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
WITH FUND INFORMATION (MODIFIED CASH BASIS)
Year ended December 31, 1998
<S> <C> <C> <C> <C> <C>
Participant Directed
Diversified Diversified Diversified
Stable Diversified Conservative Global Moderate
Asset Conservative Income Growth Growth
Fund Fund Fund Fund Fund
Additions to net assets
Attributed to:
Investment income
Interest and dividends $ 136,851 $ 45,765 $ 50,189 $ 90,479 $ 399,455
Net appreciation (depreciation) - 53,688 26,341 72,385 433,372
in fair value ------------- ------------ ------------- -------------- -------------
136,851 99,453 76,530 162,864 832,827
Contributions
Fund transfers from other plan 11,709 15,388 15,068 40,111 57,217
Rollovers 12,582 22,879 25,283 12,287 65,839
Participants' 27,597 21,509 12,397 49,733 78,400
Employer's 78,763 40,934 24,765 101,190 152,365
------------- ------------ ------------- -------------- -------------
130,651 100,710 77,513 203,321 353,821
------------- ------------ ------------- -------------- -------------
Total additions 267,502 200,163 154,043 366,185 1,186,648
Deduction from net assets
Attributed to:
Benefits paid to participants 32,613 12,277 28,410 68,990 118,674
Administrative fee 2,149 665 632 1,520 5,206
------------- ------------ ------------- -------------- -------------
Total deductions 34,762 12,942 29,042 70,510 123,880
------------- ------------ ------------- -------------- -------------
Net increase prior to interfund
transfers 232,740 187,221 125,001 295,675 1,062,768
Interfund transfers 96,221 (58,386) 167,290 (487,039) (108,026)
------------- ------------ ------------- -------------- -------------
Net increase/(decrease) 328,961 128,835 292,291 (191,364) 954,742
Net assets available for benefits
Beginning of year 2,130,359 581,272 508,632 1,651,861 4,716,578
------------- ------------ ------------- -------------- -------------
End of year $ 2,459,320 $ 710,107 $ 800,923 $ 1,460,497 $ 5,671,320
============== ============ ============= ============== =============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GERMAN AMERICAN BANCORP
EMPLOYEES' PROFIT SHARING PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
WITH FUND INFORMATION (MODIFIED CASH BASIS)
Year ended December 31, 1998
<S> <C> <C> <C> <C> <C>
Participant Directed
Diversified
U.S. Participant
Stock Note GAB
Fund Receivable Stock Cash Total
Additions to net assets
Attributed to:
Investment income
Interest and dividends $ 371,692 $ 20,233 $ 2,188 $ 848 $ 1,117,700
Net appreciation (depreciation) 354,646 - (51,334) - 889,098
in fair value ------------- ------------ ----------- ----------- -------------
726,338 20,233 (49,146) 848 2,006,798
Contributions
Fund transfers from other plan 11,715 - 11,533 - 162,741
Rollovers 10,563 - - - 149,433
Participants' 87,469 - 3,231 - 280,336
Employer's 167,309 - 3,231 833 569,390
------------- ------------ ----------- ----------- -------------
277,056 - 17,995 833 1,161,900
------------- ------------ ----------- ----------- -------------
Total additions 1,003,394 20,233 (31,151) 1,681 3,168,698
Deduction from net assets
Attributed to:
Benefits paid to participants 129,685 (44,412) 71 - 346,308
Administrative fee 4,203 - 191 - 14,566
------------- ------------ ----------- ----------- -------------
Total deductions 133,888 (44,412) 262 - 360,874
------------- ------------ ----------- ----------- -------------
Net increase prior to interfund
transfers 869,506 64,645 (31,413) 1,681 2,807,824
Interfund transfers 169,749 (110,242) 331,122 (689) -
------------- ------------ ----------- ----------- -------------
Net increase/(decrease) 1,039,255 (45,597) 299,709 992 2,807,824
Net assets available for benefits
Beginning of year 3,535,543 236,238 - 350 13,360,833
------------- ------------ ----------- ----------- -------------
End of year $ 4,574,798 $ 190,641 $ 299,709 $ 1,342 $ 16,168,657
============= ============ =========== =========== =============
<FN>
See accompanying notes.
</FN>
</TABLE>
<PAGE>
GERMAN AMERICAN BANCORP
EMPLOYEES' PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 1998 and 1997
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting: Except for the adjustment of investments from cost to fair
value, the accounting records of the German American Bancorp Employees' Profit
Sharing Plan (Plan) are maintained on the cash basis. Consequently, certain
revenues are recognized when received rather than when earned and certain
expenses are recognized when paid rather than when the obligation is incurred.
Estimates: The preparation of financial statements in conformity with a modified
cash basis of accounting requires the plan administrator to make estimates and
assumptions that affect certain reported amounts and disclosures, and actual
results may differ from those estimates. Estimates susceptible to change in the
near term include estimates of investment valuation.
Investments Valuation and Income Recognition: Investments of the Plan are stated
at aggregate fair value as determined by quoted market prices as of the last
business day of the plan year. Cash and cash equivalents are stated at cost,
which approximates fair value.
In accordance with the policy of stating investments at fair value, the change
in net unrealized appreciation or depreciation for the year is reflected in the
statement of changes in net assets available for benefits. Purchases and sales
of securities are recorded on a trade date basis. Interest income is recorded on
the cash basis. Dividends are recorded on the ex-dividend date.
Investment Contracts with Insurance Company: Before January 1, 1995,
participants had the option to purchase insurance contracts. Participant
contributions were used to purchase insurance for that individual participant.
These contractual arrangements, under which funds are allocated to purchase
insurance for individual participants, are considered allocated funding
arrangements and are excluded from plan assets. The annual premiums on the
outstanding contracts are included with benefits paid to participants in the
Statement of Changes in Net Assets Available for Benefits.
Payment of Benefits: Benefits are recorded when paid.
NOTE 2 - PLAN DESCRIPTION
The following description of the Plan provides only general information.
Participants should refer to the Plan Agreement for a more complete description
of the Plan's provisions.
<PAGE>
NOTE 2 - PLAN DESCRIPTION (Continued)
General: German American Bancorp owns 100% of its subsidiaries, German American
Bank, Peoples National Bank, Citizens State Bank (which includes the subsidiary
formerly known as Community Trust Bank) and First State Bank. All employees of
the subsidiaries and the holding company (the sponsor) are eligible to
participate in the Plan. The Plan is a defined contribution plan covering
virtually all employees who have one year of service. A participant shall enter
the Plan on the January 1 or July 1 following attainment of the eligibility
requirements. The Plan is subject to the provisions of the Employee Retirement
Income Security Act of 1974 (ERISA).
Contributions and Vesting: The Plan provides for salary deferral contributions
by employees of up to 5% of total Plan compensation, not to exceed the maximum
amount allowable by the IRS. The employers will match the employee contribution
100% up to 5% of the participant's compensation. The employers will from time to
time make discretionary contributions which are allocated to each participant's
matching account, as defined, or basic account, as defined. Participants are
fully vested in all salary deferral contributions. Employer matching and
discretionary contributions vest on a gradual schedule, but are fully vested
when the participant has seven years of service. Any amounts forfeited upon
termination of employment are reallocated to the regular accounts of the
remaining participants based on compensation.
Investment Options: Participants may change their investment options daily.
Participants may designate their contributions and any employer contributions
allocated to them may be invested in German American Bancorp common stock and
any of the following investment options managed by SEI Investments:
Stable Asset Fund: Funds are invested in guaranteed investment contracts
(GICs) issued by major life insurance companies and money center banks.
Diversified Conservative Fund: The Fund is allocated 60% to U.S. and
international fixed income funds, and 40% to domestic and
international equity funds.
Diversified Conservative Income Fund: The Fund is allocated 55% to a U.S.
fixed income fund, 25% to domestic equity funds, and 20% to a money market
fund.
Diversified Global Growth Fund: 80% of the Fund is allocated to equity
funds, including a 64% allocation to domestic equity funds and a 16%
allocation to international funds. The remaining 20% of the Fund includes
allocations to domestic and international fixed income funds.
<PAGE>
NOTE 2 - PLAN DESCRIPTION (Continued)
Diversified Moderate Growth Fund: The Fund is allocated 60% to equity
funds, including a 48% allocation to domestic equity funds and a 12%
allocation to an international equity fund. The remaining 40% is allocated
to domestic and international fixed income funds, with approximately 1%
allocated to a fund invested in money market instruments.
Diversified U.S. Stock Fund: The Fund is allocated 99% to domestic equity
funds including funds that invest in small and large-size companies. The
Fund is allocated among managers who focus on small and large companies and
who employ distinct styles of equity portfolio management, including value
and growth.
Participant Accounts: Each participant's account is credited with the
participant's contribution and allocation of (a) the Employer's contribution,
(b) Plan earnings, and (c) forfeitures of terminated participants' nonvested
accounts. Allocations are based on participant earnings or account balances, as
defined. The benefit to which a participant is entitled is the benefit that can
be provided from the participant's account.
Appreciation or depreciation in the value of each investment fund is allocated
to the participating employees on a daily basis. The allocation is based upon
the proportional relationship of the weighted average balance of each employee's
account to the weighted average balance of all employees' accounts during the
period.
Payment of Benefits: Upon termination of service, a participant will receive the
vested value of his or her account in a lump sum. A participant may withdraw all
or a portion of the value of his or her vested interest prior to termination of
employment upon meeting certain requirements as defined in the Plan Agreement.
Retirement and Death: A participant or his beneficiary is entitled to 100% of
his or her account balance upon retirement or death.
Fund Transfers From Other Plans: Upon the acquisition of Citizens State Bank
(CSB) assets from CSB's 401(k) plan were transferred to the German American Bank
Plan.
Participant Notes Receivable: The Plan provides that participants can borrow
funds against their account balances limited to the lesser of $50,000 or 50% of
the vested account balance as of the most recent allocation date at the time of
the loan disbursement. Loan transactions increase or decrease Investments and
Participant Notes Receivable in offsetting amounts. Loan terms range from 1-5
years. The loans are secured by the balance in the participant's account and
bear interest at a rate commensurate with prevailing rates. Principal and
interest is paid ratably through payroll deductions. For these short term
participant notes receivable, the unpaid principal balance is a reasonable
estimate of fair value.
<PAGE>
NOTE 3 - PARTY-IN-INTEREST TRANSACTIONS
Parties-in-interest are defined under DOL regulations as any fiduciary of the
plan, any party rendering service to the plan, the employers, and certain
others. The German American Bank Trust Department acts as Trustee for the Plan,
and Trustee fees are paid by the plan sponsor. Party-in-interest transactions
during the year ended December 31, 1998, included employer contributions and the
holding of the Plan's cash and investments by the German American Bank Trust
Department. Administrative fees of $9,841 paid to McCready and Keene (Plan
Administrator) and audit fees of $4,350 paid to Crowe, Chizek and Company LLP
(auditor for the Plan and independent account for the Plan sponsor) were paid by
the Plan.
The Plan held the following party-in-interest investment (at market value)
1998 1997
---- ----
German American Bancorp
common stock 299,709 -
NOTE 4 - PLAN TERMINATION
Although it has not expressed any intent to do so, the Sponsor has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA and its related regulations. In the
event of plan termination, participants will become 100% vested in their
accounts.
NOTE 5 - TAX STATUS
The Internal Revenue Service has determined and informed the Company by letter
dated February 15, 1996, that the Plan and related trust are designed in
accordance with applicable sections of the Internal Revenue Code (IRC). The Plan
has been amended since receiving the determination letter. However, the Plan
sponsor believes that the Plan is designed and currently being operated in
compliance with the applicable requirements of the IRC.
NOTE 6 - TERMINATED PARTICIPANTS
Included in net assets available for benefits are amounts allocated to
individuals who have withdrawn from the Plan. Vested amounts allocated to these
participants were $305,697 and $26,419 at December 31, 1998 and 1997.
<PAGE>
GERMAN AMERICAN BANCORP
EMPLOYEES' PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 1998 and 1997
NOTE 7 - RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
A reconciliation of financial statement net assets available for benefits to
total assets on Form 5500 follows:
1998 1997
---- ----
Net assets available for benefits $ 16,168,657 $ 13,360,833
per financial statements
Reconciling items
Individual insurance contracts 96,489 176,202
Employer contribution receivable 327,237 287,612
Participant contribution receivable 26,898 22,975
Loan interest receivable 1,347 1,696
--------------- ---------------
Total assets per Form 5500 $ 16,620,628 $ 13,849,318
=============== ===============
A reconciliation of financial statement net increase in net assets to net income
on Form 5500 for the year ended December 31, 1998 follows:
1998
Net increase in net assets per financial statements $ 2,807,824
Reconciling items
Accrued employer contribution as of December 31, 1997 (287,612)
Accrued participant contribution as of December 31, 1997 (22,975)
Accrued loan interest receivable as of December 31, 1997 (1,696)
Accrued employer contribution as of December 31, 1998 327,237
Accrued participant contribution as of December 31, 1998 26,898
Accrued loan interest receivable as of December 31, 1998 1,347
Net depreciation in insurance contracts (79,713)
-------------
Net income per Form 5500 $ 2,771,310
=============
<PAGE>
SUPPLEMENTAL SCHEDULES
<PAGE>
GERMAN AMERICAN BANCORP
EMPLOYEES' PROFIT SHARING PLAN
ITEM 27a-SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 1998
Name of Plan Sponsor: German American Bancorp
Employer Identification Number: 35-1547518
Three Digit Plan Number: 001
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
(c)
Description of
(b) Investment
(a) Identity of Issue, Including
Borrower, Number of Shares,
Lessor, or Rate of Interest and (d) (e)
Similar Party Maturity Dates Cost Fair Value
SEI Stable Asset Fund 2,459,320 $ 2,459,320 $ 2,459,320
SEI Diversified Conservative Fund 61,058.21 651,565 710,107
SEI Diversified Conservative
Income Fund 68,163.65 780,121 800,923
SEI Diversified Global Growth
Fund 111,148.90 1,427,103 1,460,497
SEI Diversified Moderate Growth
Fund 425,774.80 4,654,208 5,671,320
SEI Diversified U.S. Stock Fund 292,319.37 3,855,194 4,574,798
Participant notes receivable 9.25% to 9.75% 190,641
*German American Bancorp
common stock 13,171.04 365,782 299,709
Cash 1,342 1,342
--------------
Various maturities
$ 16,168,657
<FN>
* Denotes party-in-interest investment
</FN>
</TABLE>
<PAGE>
GERMAN AMERICAN BANCORP
EMPLOYEES' PROFIT SHARING PLAN
ITEM 27d - SCHEDULE OF
REPORTABLE TRANSACTIONS
Year ended December 31, 1998
Name of Plan Sponsor: German American Bancorp
Employer Identification Number: 35-1547518
Three Digit Plan Number: 001
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
(f)
Current
(a) Value of
Identity (b) (c) (d) (e) Asset on (g)
of Party Description Purchase Selling Cost of Transaction Net Gain
Involved of Asset Price Price Asset Date (Loss)
- -------- -------- ----- ----- ----- ---- --------
Series of aggregate
transactions which, in
total, are in excess of
5% of Plan assets:
SEI Stable Asset Fund $1,470,269 $ - $1,470,269 $1,470,269 $ -
SEI Stable Asset Fund - 1,141,308 1,141,308 1,141,308 -
SEI Diversified U.S. Stock Fund 1,161,898 - 1,161,898 1,161,898 -
SEI Diversified U.S. Stock Fund - 848,982 597,862 848,982 251,120
SEI Diversified Global Growth Fund 748,592 - 748,592 748,592 -
SEI Diversified Global Growth Fund - 1,102,821 910,979 1,102,821 191,842
</TABLE>
Consent of Independent Auditors
We consent to the incorporation by reference in this Registration Statement
on Form S-8 of Germaln American Bancorp, relating to the German American Bancorp
Employees' Profit Sharing Plan (the Plan), of our report, dated April 21, 1999,
on the financial statements of the Plan as of December 31, 1998 and 1997 and for
the year ended December 31, 1998, included in the Annual Report on Form 11-K of
the Plan for the year ended December 31, 1998.
Crowe, Chizek and Company LLP
June 29, 1999
Indianapolis, Indiana
