ACQUISITION	3 Months Ended
Mar. 31, 2016
ACQUISITION
ACQUISITION	NOTE 12 – ACQUISITION On November 23, 2015, the Company entered into an Agreement and Plan of Merger with Cheviot Financial Corp., a Maryland corporation (“Cheviot”), pursuant to which Cheviot will merge with and into the Company, whereupon the separate corporate existence of Cheviot will cease and MainSource will survive. It is anticipated that immediately after the Merger, Cheviot Savings Bank, an Ohio-chartered savings and loan association and a wholly-owned subsidiary of Cheviot, will merge with and into MainSource Bank, an Indiana chartered commercial bank and wholly-owned subsidiary of the Company, with MainSource Bank as the surviving bank. Subject to the approval of Cheviot’s stockholders of the merger and other customary closing conditions, the parties anticipate completing the merger on May 20, 2016. At the effective time of the merger, stockholders of Cheviot will have the right to elect to receive either 0.6916 shares of the Company’s common stock or $15.00 in cash for each share of Cheviot common stock owned, subject to proration provisions specified in the Merger Agreement that provide for a targeted aggregate split of total consideration of 50% common stock and 50% cash. Based upon the November 20, 2015 closing price of $23.56 per share of the Company’s common stock, the transaction is valued at approximately $107.4 million. Cheviot Financial Corp is the holding company of Cheviot Savings Bank. Cheviot Savings Bank was founded in 1911 as an Ohio-chartered savings and loan association and reorganized into a two-tier mutual holding company in 2004. Cheviot now operates 12 full service offices spanning across Hamilton County. As of December 31, 2015, Cheviot had $572,000 of total assets, $376,171 of loans, $454,885 of deposits and total equity of $96,469. Two putative class action lawsuits were filed in the Court of Common Pleas, Hamilton, Ohio, Civil Division, challenging the proposed merger and naming as defendants Cheviot, its directors, and MainSource (collectively, the “defendants”). These actions are captioned: (1) Raymond J. Neiheisel v. Cheviot Financial Corp., et al., Case No. A1600359 (filed January 15, 2016); and (2) Stephen Bushansky v. Steven Hausfeld, et al., Case No. A1600936 (filed February 16, 2016) (together, the “Actions”). On February 29, 2016, each plaintiff filed an amended complaint. On March 24, 2016, the court consolidated the actions under Raymond J. Neiheisel v. Cheviot Financial Corp., et al., Case No. A1600359 (collectively, the “Actions”). The amended consolidated complaint alleges, among other things, that the directors of Cheviot breached their fiduciary duties of due care, independence, good faith and fair dealing to the stockholders of Cheviot, that the consideration to be received by the stockholders is inadequate and undervalues Cheviot, that the Merger Agreement includes improper deal-protection devices that purportedly lock up the Merger and may operate to prevent other bidders from making successful competing offers for Cheviot, that the deal protection devices unreasonably inhibit the ability of the directors of Cheviot to act with respect to investigating and pursuing superior proposals and alternatives and that the Merger Agreement involves conflicts of interest. The complaint further alleges that Cheviot and MainSource aided and abetted the alleged breaches of fiduciary duty by the directors of Cheviot. The amended consolidated complaint also alleges that the registration statement on Form S-4, initially filed with the Securities and Exchange Commission (the “SEC”) on February 11, 2016 in connection with the Merger, provides materially misleading and incomplete information rendering the stockholders of Cheviot unable to make an informed decision with respect to the Merger. On April 21, 2016, defendants and lead plaintiffs entered into a memorandum of understanding (“MOU”), which provides for the settlement of the Actions. The settlement contemplated by the MOU is subject to confirmatory discovery and customary conditions, including court approval following notice to Cheviot’s stockholders. If the settlement is finally approved by the court, it will resolve and release all claims by stockholders of Cheviot challenging any aspect of the merger, the merger agreement, and any disclosure made in connection therewith, pursuant to terms that will be disclosed to stockholders prior to final approval of the settlement. The Company does not anticipate a material financial impact as a result of the actions or MOU.

NOTE 12 – ACQUISITION

On November 23, 2015, the Company entered into an Agreement and Plan of Merger with Cheviot Financial Corp., a Maryland corporation (“Cheviot”), pursuant to which Cheviot will merge with and into the Company, whereupon the separate corporate existence of Cheviot will cease and MainSource will survive. It is anticipated that immediately after the Merger, Cheviot Savings Bank, an Ohio-chartered savings and loan association and a wholly-owned subsidiary of Cheviot, will merge with and into MainSource Bank, an Indiana chartered commercial bank and wholly-owned subsidiary of the Company, with MainSource Bank as the surviving bank.

Subject to the approval of Cheviot’s stockholders of the merger and other customary closing conditions, the parties anticipate completing the merger on May 20, 2016.

At the effective time of the merger, stockholders of Cheviot will have the right to elect to receive either 0.6916 shares of the Company’s common stock or $15.00 in cash for each share of Cheviot common stock owned, subject to proration provisions specified in the Merger Agreement that provide for a targeted aggregate split of total consideration of 50% common stock and 50% cash. Based upon the November 20, 2015 closing price of $23.56 per share of the Company’s common stock, the transaction is valued at approximately $107.4 million.

Cheviot Financial Corp is the holding company of Cheviot Savings Bank. Cheviot Savings Bank was founded in 1911 as an Ohio-chartered savings and loan association and reorganized into a two-tier mutual holding company in 2004. Cheviot now operates 12 full service offices spanning across Hamilton County. As of December 31, 2015, Cheviot had $572,000 of total assets, $376,171 of loans, $454,885 of deposits and total equity of $96,469.

Two putative class action lawsuits were filed in the Court of Common Pleas, Hamilton, Ohio, Civil Division, challenging the proposed merger and naming as defendants Cheviot, its directors, and MainSource (collectively, the “defendants”). These actions are captioned: (1) Raymond J. Neiheisel v. Cheviot Financial Corp., et al., Case No. A1600359 (filed January 15, 2016); and (2) Stephen Bushansky v. Steven Hausfeld, et al., Case No. A1600936 (filed February 16, 2016) (together, the “Actions”). On February 29, 2016, each plaintiff filed an amended complaint. On March 24, 2016, the court consolidated the actions under Raymond J. Neiheisel v. Cheviot Financial Corp., et al., Case No. A1600359 (collectively, the “Actions”). The amended consolidated complaint alleges, among other things, that the directors of Cheviot breached their fiduciary duties of due care, independence, good faith and fair dealing to the stockholders of Cheviot, that the consideration to be received by the stockholders is inadequate and undervalues Cheviot, that the Merger Agreement includes improper deal-protection devices that purportedly lock up the Merger and may operate to prevent other bidders from making successful competing offers for Cheviot, that the deal protection devices unreasonably inhibit the ability of the directors of Cheviot to act with respect to investigating and pursuing superior proposals and alternatives and that the Merger Agreement involves conflicts of interest. The complaint further alleges that Cheviot and MainSource aided and abetted the alleged breaches of fiduciary duty by the directors of Cheviot. The amended consolidated complaint also alleges that the registration statement on Form S-4, initially filed with the Securities and Exchange Commission (the “SEC”) on February 11, 2016 in connection with the Merger, provides materially misleading and incomplete information rendering the stockholders of Cheviot unable to make an informed decision with respect to the Merger.

On April 21, 2016, defendants and lead plaintiffs entered into a memorandum of understanding (“MOU”), which provides for the settlement of the Actions. The settlement contemplated by the MOU is subject to confirmatory discovery and customary conditions, including court approval following notice to Cheviot’s stockholders. If the settlement is finally approved by the court, it will resolve and release all claims by stockholders of Cheviot challenging any aspect of the merger, the merger agreement, and any disclosure made in connection therewith, pursuant to terms that will be disclosed to stockholders prior to final approval of the settlement.

The Company does not anticipate a material financial impact as a result of the actions or MOU.