Unassociated Document
| |
Issuer
Free Writing Prospectus
Filed
Pursuant to Rule 433
Registration
Statement No.
333-157665
|
GERMAN
AMERICAN BANCORP, INC.
NEWS
RELEASE
For
additional information, contact:
Mark A Schroeder, President/CEO of German American
Bancorp, Inc.
Bradley M Rust, Executive Vice President/CFO of
German American Bancorp, Inc.
(812)
482-1314
Page 1 of
5
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March
4, 2009
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German
American Bancorp, Inc. Announces Plan to Offer $15 Million of 8%
Subordinated Debentures due 2019 to Shareholders in a Rights Offering, and
Its Decision To Decline to Participate in Treasury Department Capital
Purchase Program
|
German American Bancorp, Inc. (NASDAQ:
GABC) announced today that it plans to offer directly to its shareholders the
opportunity to participate in a proposed new offering of $15 million principal
amount of a new issue of subordinated debt securities. The Company
also announced that it has declined to participate in the U.S. Treasury
Department's Capital Purchase Program.
The Rights
Offering
The
Company proposes to offer to its shareholders $15 million in principal amount of
subordinated debt securities, at a price of 100% of their principal amount, in
the form of subordinated debentures. The debentures will bear
interest at 8% per annum and will have a maturity date of approximately 10 years
from the date of issuance. The debentures, however, will be
redeemable by the Company, at its option, approximately 3 years after
issuance. The Company expects that these debentures, upon issuance,
will qualify for treatment as Tier 2 regulatory capital for purposes of
demonstrating the Company's compliance with regulatory capital requirements
applicable to bank holding companies.
The
Company plans to make the offering of the debentures pursuant to
non-transferable subscription rights that the Company plans to issue exclusively
to its shareholders of record as of March 16, 2009, the record date for the
rights offering. Pursuant to these rights, shareholders will be
eligible to purchase their pro rata portion of the debentures in denominations
of a minimum principal amount of $10,000 amount (or in denominations that are
multiples of $10,000). The Company has filed a registration statement
relating to this rights offering with the Securities and Exchange Commission,
but the Company cannot proceed to commence the rights offering unless and until
the Commission declares the registration statement
effective. The Company anticipates commencing the rights
offering within the next 15 to 60 days, and that the rights offering will be
completed approximately 35 days from the date that it is
commenced.
GERMAN
AMERICAN BANCORP, INC.
NEWS
RELEASE
For
additional information, contact:
Mark A Schroeder, President/CEO of German American
Bancorp, Inc.
Bradley M Rust, Executive Vice President/CFO of
German American Bancorp, Inc.
(812)
482-1314
Page 2 of
5
The amount of subordinated debentures
that will ultimately be issued and sold pursuant to the rights offering will
depend upon shareholder interest in the offering, which in turn will depend in
part upon future financial market conditions, interest rates, and other factors
that prevail during the offering period. The Company therefore cannot predict
whether all or substantially all of the $15 million of the contemplated offering
will be issued and sold. The Company has reserved the right to
terminate the offering in its discretion for any reason, which it might do if
there were insufficient interest in the offering, and also has reserved the
right, at its sole option, to increase the offering (but not to exceed a total
principal amount of $30 million) in the event that demand for the subordinated
debentures exceeds the stated $15 million offering.
Commenting on the proposed rights
offering, Mark Schroeder, President & Chief Executive Officer, said, "German
American has no immediate need for additional capital, as we achieved record net
income in 2008, and our Company continues to be well-capitalized under all
applicable banking agency regulatory standards. Raising additional
regulatory capital now, however, will further strengthen our capital base, and
serve as additional protection from any impact of the current economic
downturn. Additionally, we believe our markets will present
additional loan opportunities to us in the future, and that additional capital
will provide us with the ability to make these additional loans while remaining
a well-capitalized institution for bank regulatory purposes.”
The Company plans to schedule a series
of shareholder informational meetings in the coming weeks to explain the
shareholder rights offering and to respond to shareholders’ questions regarding
how to participate in the offering. Details of these informational
meetings will be included in the prospectus mailing that shareholders will be
receiving in connection with the rights offering.
The Capital Purchase Program
Declination
The Company also announced that it has
declined to participate in the United States Treasury Department’s Capital
Purchase Program (CPP). Under the CPP, participating banking institutions sell
preferred stock and issue common stock warrants to the U.S.
Treasury. The CPP was created by the U.S. Treasury under authority
provided in the Emergency Economic Stabilization Act of 2008. On
Monday, October 20, 2008, former U.S. Treasury Secretary Paulson stated: "This
program is designed to attract broad participation by healthy institutions and
to do so in a way that attracts private capital to them as well." In
November 2008, the Company applied to participate in the CPP, and in late
January, 2009, the Company received preliminary Treasury Department approval for
the purchase by the Treasury Department of approximately $25 million of
preferred stock of the Company plus warrants to purchase shares of the Company's
common stock.
GERMAN
AMERICAN BANCORP, INC.
NEWS
RELEASE
For
additional information, contact:
Mark A Schroeder, President/CEO of German American
Bancorp, Inc.
Bradley M Rust, Executive Vice President/CFO of
German American Bancorp, Inc.
(812)
482-1314
Page 3 of
5
Regarding
the Company’s decision to not participate in the CPP, Mr. Schroeder stated,
“Although we are gratified to have been approved for the CPP, we believe the
proposed subordinated debt offering is a better option for our shareholders, and
that it is therefore in the best interests of our shareholders to decline
participation in the CPP. The CPP's restrictions on possible future
dividend increases, the dilution that could result from the associated warrants,
and the uncertainty surrounding some details of the program, represented, in the
view of our Board of Directors, unnecessary burdens and risks for the Company
and its shareholders. Additionally, the interest that will be payable
on the subordinated debentures will be tax-deductible to the Company, resulting
in an effective after-tax financing rate to us that is comparable to the
initial, non-deductible dividend rate that would have been applicable if the
Company had elected to sell preferred shares under the CPP. Under our
proposed rights offering, it is our own shareholders who will have the
opportunity to provide us with additional regulatory capital, not the federal
government."
About German American
Bancorp, Inc.
German
American Bancorp, Inc. is a financial services holding company based in Jasper,
Indiana. The Company’s Common Stock is traded on the NASDAQ Global Select Market
under the symbol GABC. The principal subsidiary of German American
Bancorp, Inc. is its banking subsidiary, German American Bancorp which operates
through six community banking affiliates with 28 retail banking offices in the
ten contiguous Southern Indiana counties of Daviess, Dubois, Gibson, Knox,
Lawrence, Martin, Monroe, Perry, Pike, and Spencer. German American Bancorp owns
a trust, brokerage and financial planning subsidiary which operates from its
banking offices and a full line property and casualty insurance agency with
seven branch offices throughout its market area.
*****
German
American Bancorp, Inc., has filed a registration statement (including a
prospectus) with the SEC for the offering to which this communication relates.
Before you invest, you should read the prospectus in that registration statement
(and any updates thereto) and other documents German American Bancorp, Inc., has
filed with the SEC for more complete information about German American Bancorp,
Inc., and this offering. You may get these documents for free by visiting EDGAR
on the SEC's web site at www.sec.gov. Alternatively, German American Bancorp,
Inc., will arrange to send to you the prospectus if you request it by calling
German American Bancorp Inc.’s Shareholder Relations office toll-free at
1-800-482-1314.
GERMAN
AMERICAN BANCORP, INC.
NEWS
RELEASE
For
additional information, contact:
Mark A Schroeder, President/CEO of German American
Bancorp, Inc.
Bradley M Rust, Executive Vice President/CFO of
German American Bancorp, Inc.
(812)
482-1314
Page 4 of
5
The
subordinated debentures are not deposits at, or other obligations of, a bank or
savings association and are not insured or guaranteed by the Federal Deposit
Insurance Company (FDIC).
*****
GERMAN
AMERICAN BANCORP, INC.
NEWS
RELEASE
For
additional information, contact:
Mark A Schroeder, President/CEO of German American
Bancorp, Inc.
Bradley M Rust, Executive Vice President/CFO of
German American Bancorp, Inc.
(812)
482-1314
Page 5 of
5
Forward
Looking Statements
German
American’s statements in this press release regarding its plans to raise $15
million of additional capital through a rights offering to its shareholders; its
expectation that the new debentures (when and if issued) will constitute Tier 2
regulatory capital; and its expectations concerning future opportunities in its
market area for additional loans and its expectation that additional capital
will position it to make additional loans, are all "forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act of 1995.
Readers are cautioned that, by their nature, forward-looking statements are
based on assumptions and are subject to risks, uncertainties, and other factors.
Actual results and experience could differ materially from the anticipated
results or other expectations expressed or implied by these forward-looking
statements as a result of a number of factors, including but not limited to,
those discussed in the press release. As disclosed in this press release, the
making of the rights offering is subject to the registration statement being
declared effective on a timely basis by the Commission under the Securities Act
of 1933, and (assuming the Commission does timely declare the Registration
Statement to be effective and the offer is timely made) the amount of debentures
that might ultimately be issued and sold pursuant to the rights offering will be
a function of shareholder demand for the debentures; it is possible
that substantially more, or substantially less, than the stated offering of $15
million of debentures will ultimately be issued pursuant to the rights
offering. Other factors which could cause actual results and
experience to differ from the other results and expectations implied in this
press release include 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 or repurchases or redemptions by the Company of debt or equity
securities; actions of the Federal Reserve Board; changes in accounting
principles and interpretations; and actions of the Department of the Treasury
and the Federal Deposit Insurance Corporation under the Emergency Economic
Stabilization Act of 2008 and the Federal Deposit Insurance Act and other
legislative and regulatory actions and reforms. These forward-looking statements
speak only as of the date of this press release and German American undertakes
no obligation to update any such forward-looking statement to reflect events or
circumstances that occur after the date hereof.