NOTE 26 — ACQUISITIONS

On October 17, 2014, the Company acquired 100% of the outstanding common shares of MBT Bancorp ("MBT") in exchange for $35.16 in cash or 2.055 shares of common stock of the Company for each share of MBT common stock outstanding. The merger agreement required that 60% of the outstanding shares of MBT common stock be converted into MainSource common stock and 40% of the outstanding shares of MBT common stock be converted into cash. A shareholder election was conducted and completed prior to the closing wherein MBT shareholders were provided the opportunity to select their preferred form of consideration, subject to the allocation and proration procedures contained in the merger agreement. MBT shareholder stock elections were not sufficient to reach the 60% stock requirement established in the merger agreement. Consequently, MBT shareholders who did not make an election received a portion of their merger consideration in MainSource common stock and a portion in cash. In total, the Company issued 1,226,312 shares of common stock and paid $13.9 million in cash to the former shareholders of MBT.

At the time of the acquisition, MBT's wholly-owned bank subsidiary, The Merchant's Bank and Trust Company, was merged into the Bank. With the acquisition, the Company expanded its presence in the southeastern Indiana and greater Cincinnati market areas. The acquisition offers the Company the opportunity to increase profitability by introducing existing products and services to the acquired customer base and to add new customers in the expanded region. MBT results of operations were included in the Company's results beginning October 18, 2014. Acquisition-related costs of $3,119 were included in the Company's income statement for the year ended December 31, 2014. The fair value of the common shares issued as part of the consideration paid for MBT was determined on the basis of the closing price of the Company's common shares on the acquisition date.

Goodwill of $8,550 arising from the acquisition consisted largely of synergies and the cost savings resulting from the combining of the operations of the companies. Goodwill will not be deductible for income tax purposes. The following table summarizes the consideration paid for MBT and the value of the assets acquired and liabilities assumed recognized at the acquisition date:

Consideration
Cash	$	13,992
Equity Instruments		21,534

Fair Value of Total Consideration	$	35,526
Recognized Amounts of Identifiable Assets Acquired and Liabilities Assumed
Cash and cash equivalents	$	3,306
Securities		31,214
Federal Home Loan Bank stock		1,476
Loans		184,716
Premises and equipment		4,863
Core deposit intangibles		1,661
Other assets		3,468

Total assets acquired		230,704
Deposits		183,897
Federal Home Loan Bank advances		16,300
Other liabilities		3,531

Total liabilities assumed		203,728

Total identifiable net assets	$	26,976

Goodwill	$	8,550

The fair value of net assets acquired includes fair value adjustments to certain receivables that were not considered impaired as of the acquisition date. The fair value adjustments were determined using discounted contractual cash flows. However, the Company believes that all contractual cash flows related to these financial instruments will be collected. As such, these receivables were not considered impaired at the acquisition date and were not subject to the guidance relating to purchased credit impaired loans, which have shown evidence of credit deterioration since origination. Receivables acquired that were not subject to these requirements include non-impaired loans and customer receivables with a fair value and gross contractual amounts receivable of $183,485 and $185,400 on the date of acquisition. The Company did acquire a small number of credit impaired loans. These loans had a net carrying amount of less than $1,000. Accordingly, no additional disclosures were made due to their immateriality.

The pro forma financial information is not included as it was considered immaterial to the Company's results.

In December, 2013, the Company purchased a branch in Hope, Indiana. As of the date of acquisition, the Company acquired $3 million in loans and $22 million in deposits. Goodwill of $0.5 million was recorded. $18 million of cash was received at purchase. The goodwill will be deducted for tax purposes over 15 years. No other purchase accounting entries were made at acquisition as the amounts computed were considered immaterial.

In December, 2012, the Company purchased a branch in Shelbyville, Kentucky. As of the date of acquisition, the Company acquired $27 million in loans and $37 million in deposits. Goodwill of $1 million and a core deposit intangible of $0.2 million were also recorded. $7.5 million of cash was received at purchase. The core deposit intangible asset is being amortized over 10 years. Goodwill and the core deposit intangible will be deducted for tax purposes over 15 years. The Company completed its purchase accounting on this acquisition in the first quarter of 2013 and recorded an additional $0.4 million of goodwill and time deposits fair value adjustment. This time deposit premium is being amortized over 4 years.

In September, 2012, the Company purchased a brokerage firm in Seymour, Indiana for a cash payment of $1.6 million and future cash payments to be made of $0.4 million. As of the date of acquisition, the Company acquired a customer relationship intangible asset of $1.0 million, a non-compete intangible asset of $0.1 million, and goodwill of $0.8 million. The customer relationship intangible asset is being amortized over 13 years and the non-compete intangible asset is being amortized over 5 years. Goodwill and the intangible assets will be deducted for tax purposes over 15 years.

In October, 2012, the Company purchased a brokerage firm in Indianapolis, Indiana for a cash payment of $0.4 million and future cash payments to be made of $0.2 million. As of the date of acquisition, the Company acquired a customer relationship intangible asset of $0.3 million, a small non- compete intangible asset, and goodwill of $0.2 million. The customer relationship intangible asset is being amortized over 13 years and the non-compete intangible asset is being amortized over 5 years. Goodwill and the intangible assets will be deducted for tax purposes over 15 years.

The above transactions were considered business combinations. Their results of operations are included in the financial statements after acquisition. Proforma data was not considered material and is not presented.