German American Bancorp, Inc. (NasdaqGS:GABC) agreed to acquire Citizens Union Bancorp of Shelbyville, Inc. for approximately $160 million on September 20, 2021. Upon completion of the transaction, CUB's subsidiary bank, Citizens Union Bank of Shelbyville, Inc., will be merged into German American's subsidiary bank, German American Bank. Under terms of the definitive agreement, CUB common shareholders will receive a fixed exchange ratio of 0.7739 shares of German American common stock for each share of CUB in a tax-free exchange, and a cash payment of $13.44 per CUB share. Based on the number of CUB common shares expected to be outstanding at closing, German American would issue approximately 2.9 million shares of its common stock, and pay approximately $49.8 million cash, for all of the issued and outstanding common shares of CUB. German American has also agreed, upon completion of the merger, to make a cash payment in cancellation of CUB's unexercised stock options, which payment is currently estimated to total approximately $0.9 million, if none of the outstanding options were to be exercised before closing. Based upon the $35.99 per share volume-weighted average price of German American's common shares over the 10-day trading period ended September 17, 2021, the transaction has an aggregate indicated value of approximately $154.0 million, with the total merger consideration being split between stock and cash on an approximate 67:33 basis. Upon consummation of the transaction, German American and CUB will have combined assets of approximately $6.4 billion, based upon June 30, 2021 financials. At June 30, 2021, CUB reported total assets of approximately $1.074 billion. Giving effect to the merger today, the combined company would have 83 banking offices in 19 counties in Indiana and 15 counties in Kentucky. Transaction will be materially accretive to German American's earnings per share during the twelve months following completion of the transaction and will have a relatively quick tangible book value earn back period of less than three years. Under certain circumstances, termination of the Merger Agreement may result in the payment of a termination fee of $6.5 million by CUB to German American, as more fully described in the Merger Agreement.

Completion of the transaction is subject to approval by regulatory authorities and by holders of a majority of the issued and outstanding common shares of CUB, as well as certain other closing conditions. In connection with the definitive agreement, German American entered into a voting agreement with each of the members of the CUB board of directors and with certain other CUB shareholders, who collectively hold approximately 60% of the outstanding shares of CUB common stock. Subject to the terms and conditions of the voting agreement, the shareholders who are parties to the agreement have agreed to vote their shares in favor of the transactions contemplated by the definitive agreement. The transaction also requires dissenting shares must not represent 10% or more of the outstanding shares of CUB common stock, receipt of an opinion of Dentons Bingham Greenebaum LLP that the transaction will be treated as a “reorganization” within the meaning of Section 368(a) of the Code, among others. The transaction has been unanimously approved by Board of Citizens Union Bancorp and recommends the shareholders to vote in favor of the deal. Board of German American Bancorp also approved the deal. During November 2021, German American received (i) the approvals of the Federal Deposit Insurance Corporation and the Kentucky Department of Financial Institutions in connection with the Merger, and (ii) a waiver from the Federal Reserve Board of Governors as to its right to receive an application in connection with Merger. As of December 22, 2021, German American Bancorp, Inc received the required approval from the Indiana Department of Financial Institutions. As a result, all regulatory approvals relating to the Merger have been received. With the shareholders of CUB having approved the Merger at a special meeting held on December 17, 2021. The transaction is expected to close in the first quarter of 2022.

Piper Sandler & Co. served as financial advisor to German American Bancorp. Jeremy E. Hill from Dentons Bingham Greenebaum LLP served as legal counsel to German American Bancorp, Inc. Nathan L. Berger from Frost Brown Todd LLC served as legal advisor for CUB. ProBank Austin served as financial advisor on the transaction to CUB. American Stock Transfer acted as proxy agent for Citizens Union Bancorp. Computershare, Inc. acted as German American's registrar. Investment Bank Services, Inc. also acted as financial advisor and provided fairness opinion for Citizens Union Bancorp. Pursuant to the terms of the CUB engagement agreement, ProBank Austin and its unit, Investment Bank Services, Inc. will receive a $75,000 fee upon the signing of a merger agreement and delivery of the fairness opinion and a fee equal to 1.20% of the aggregate merger consideration at the closing of the transaction. MCM CPAs & Advisors LLP provided auditor's report in financials of Citizens Union Bancorp.

German American Bancorp, Inc. (NasdaqGS:GABC) completed the acquisition of Citizens Union Bancorp of Shelbyville, Inc. on January 1, 2022. Immediately following completion of the holding company transaction, Citizens Union Bank merged with and into German American's banking subsidiary, German American Bank. German American Bancorp, Inc. expect that this strategic transaction will be accretive to German American's earnings per share during the 12 months following completion of the transaction, and will have a quick tangible book value earn back. David Bowling, CEO of Citizens Union, and Darryl Traylor, President of Citizens Union, will assume regional roles in a senior advisory capacity as Regional Chairman and Vice Chairman.