Acquisition

12 Months Ended

Dec. 31, 2012

Business Combinations [Abstract]

Acquisition

Note 2: Acquisition

On November 9, 2012, the Company completed its acquisition of Dupont State Bank, an Indiana commercial bank wholly owned by Citizens Union Bancorp of Shelbyville, Inc. In conjunction with the acquisition, River Valley Financial Bank (Bank) merged with and into Dupont State Bank, which changed its name to River Valley Financial Bank, effecting the conversion of the Bank from a federally chartered thrift to a state chartered commercial bank. Under the terms of the acquisition, the Bank paid $5,700,000 for the stock of Dupont State Bank with a resulting bargain purchase gain, after application of purchase accounting adjustments, of $988,000. The bargain gain was recorded as other income in the three-month period ended December 31, 2012. For the twelve-month period ended December 31, 2012, the Company had approximately $382,000 in costs relative to the acquisition. Acquisition expense for the same period ended December 31, 2011 was approximately $212,000. As a result of the acquisition, and the addition of two market areas, the Company will have an opportunity to expand both lending and deposit services. Cost savings are expected through economies of scale, and consolidation of operating centers.

Under the purchase method of accounting for purchases, the total purchase price is allocated to the net tangible and intangible assets based on their current estimated fair values as of the date of acquisition. Based on independent, third party valuation of the fair value of those assets acquired, and liabilities assumed, the purchase price for the Dupont State Bank acquisition was allocated as follows:

Consideration:  Cash paid	$	5,700
Fair value of assets acquired:
Cash and cash equivalents		14,893
Investment securities available-for-sale		12,139
Loans		52,125
Property and equipment		3,160
Federal Home Loan Bank Stock		369
Real estate, held for sale		334
Core deposit intangible		514
Interest receivable		364
Other assets		1,243
Total assets acquired		85,141
Fair value of liabilities assumed:
Deposits		78,300
Interest payable		69
Other liabilities		84
Total liabilities assumed		78,453
Bargain purchase gain	$	(988	)

The fair value of the assets acquired includes loans with a fair value of $52,125,000. The gross principal and contractual interest due under the contracts is $53,982,000, of which $2,960,000 is expected to be uncollectible.

The contributed revenues and net income of the acquired business for the period from November 9, 2012 to December 31, 2012 is not available as separate financial information was not maintained.

The following unaudited pro forma summary presents consolidated information of the Company as if the business combination had occurred on January 1, 2012 and 2011:

	Pro Forma Year Ended December 31, 2012		Pro Forma Year Ended December 31, 2011
Revenue (interest income and other income)	$	25,863	$	25,279
Net income		3,657		2,409

The pro forma revenue and net income for the year ended December 31, 2012, excludes the bargain purchase gain of $988,000 recognized in 2012.  In addition, the pro forma net income for the years ended December 31, 2012 and 2011, excludes acquisition expenses of $382,000 and $212,000, respectively.