Subsequent Events

9 Months Ended

Sep. 30, 2016

Subsequent Events [Abstract]

Subsequent Events

SUBSEQUENT EVENTS

On September 20, 2016, the Corporation entered into a Stock Purchase Agreement (the"Purchase Agreement") with Leland Boren and certain shareholders affiliated with Mr. Boren (collectively, the "Sellers") pursuant to which the Corporation will acquire approximately 12.11 percent of the issued and outstanding shares of common stock (the "Shares") of Independent Alliance Banks, Inc., an Indiana corporation ("IAB"). IAB is a financial holding company and the parent of iAB Financial Bank, an Indiana commercial bank. The purchase price per share will be $40.00, and the aggregate purchase price for the Shares to be paid to the Sellers will be $19,804,480. The Federal Reserve Bank of Chicago has approved the transaction under delegated authority which is expected to close in November 2016.

The policy of the Federal Reserve Board (FRB), who examines the Corporation, is that bank holding companies are expected to act as a source of financial and managerial strength to their subsidiary banks, including committing capital to support such subsidiary banks. This is often referred to as the Source of Strength doctrine. Failure to adequately support a subsidiary bank in the event of financial distress can lead to the bank holding company itself being found to operate in a safe and unsound manner. Once the Corporation acquires 12.11 percent of the outstanding stock of IAB, the FRB is likely to consider IAB and its wholly-owned subsidiary bank, iAB Financial Bank, as covered under the Corporation's Source of Strength. As a result, in the event IAB or its subsidiary bank become financially distressed in the future, the Corporation may be called upon by the FRB to provide capital to it or them. Based on a review of IAB’s current regulatory capital position, the Corporation does not anticipate any capital support will be necessary.