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Subsequent Events
9 Months Ended
Sep. 30, 2015
Subsequent Events [Abstract]  
Subsequent Events
Subsequent Events

On October 26, 2015 the Company entered into a definitive agreement to acquire River Valley Bancorp (“RIVR”), through the merger of RIVR with and into the Company, and the merger of RIVR’s sole banking subsidiary, River Valley Financial Bank, into the Company’s subsidiary bank, German American Bancorp. River Valley Bank operates 14 banking offices in Southeast Indiana. RIVR’s assets and equity (unaudited) as of September 30, 2015 totaled $513.7 million and $55.6 million, respectively. Net income (unaudited) totaled $4.3 million for the nine month period ended September 30, 2015.

Under the terms of the proposed merger, the shareholders of RIVR would receive 0.770 shares of common stock of the Company and $9.90 of cash for each of their RIVR shares. Based upon the $30.02 per share 20-day volume weighted average price of the Company’s common shares on October 22, 2015 (the valuation upon which the exchange ratio was established) the transaction had a present indicated value of approximately $33.00 per RIVR common share. Because the value of the transaction to holders of RIVR common shares as of any future date will in large part be a function of the then-current market price of the Company’s common stock, the transaction value is expected to vary over the period of time prior to and at closing in the same direction as the market price of the Company’s common shares varies over that same time period.

Based on RIVR’s number of common shares outstanding at the time of entering into the definitive agreement, the Company expects to issue approximately 1.94 million shares of its common stock, and pay approximately $25 million in cash, in exchange for all of the issued and outstanding common shares of RIVR. On this basis, the basic transaction has an aggregate indicated value (valuing the German American’s common shares at the 20-day volume weighted average price ending on October 22, 2015, NASDAQ closing price) of approximately $83.5 million. The basic transaction value also includes approximately $500,000 in cash payments to be made in cancellation of stock options.

The proposed merger is subject to the approval by shareholders of RIVR, approval of the appropriate bank regulatory agencies and other conditions customary for transactions of this nature. It is contemplated that the merger will be consummated in the first quarter of 2016.