Note 11 – Subsequent Event

German American Bancorp, Inc. completed its previously announced merger transaction with United Commerce Bancorp, the parent company of United Commerce Bank, of Bloomington, Indiana, effective October 1, 2013. United Commerce Bancorp merged into German American Bancorp, Inc. effective prior to the opening of business on October 1, 2013, followed immediately by the merger of United Commerce Bank with and into German American Bancorp, Inc.'s banking subsidiary. United Commerce Bank operated two banking offices in Bloomington, Indiana. United Commerce had consolidated total assets of approximately $120.2 million, total loans of approximately $83.5 million, total deposits of approximately $106.5 million, and total shareholder's equity of approximately $13.6 million as of September 30, 2013. The acquired assets and liabilities will be recorded at fair value at the date of acquisition and will be reflected in the December 31, 2013 financial statements as such; however, at the time of these financial statements, the appraisals and valuations are incomplete. The Company expects to record goodwill and a core deposit intangible in regards to this transaction based on earlier estimates, but the amount is not known as the initial fair value accounting is incomplete. The goodwill will not be deductible for tax purposes.

Under the terms of the merger, United Commerce shareholders received a combination of approximately $12.7 million in GABC stock (502,560 shares) and $1.4 million in cash consideration representing a total transaction value of approximately $14.1 million. The basic transaction value excludes the indicated value of the approximately 4.6% interest that German American owned in United Commerce's outstanding stock prior to the completion of the merger and the approximately $640 thousand in cash payments made in cancellation of dilutive stock options that had been issued by United Commerce.

Each United Commerce common shareholder of record at the effective time of the merger became entitled to receive (a) 0.5456 shares of German American common stock plus (b) a cash payment of $1.51 for each of their former shares of United Commerce common stock and a cash settlement for any fractional shares of German American otherwise issuable to them.

This acquisition was consistent with the Company’s strategy to build a regional presence in Southern Indiana. The acquisition offers the Company the opportunity to increase profitability by introducing existing products and services to the acquired customer base as well as add new customers in the expanded region.