Both the banking companies have reached a definitive agreement to this effect.
As per the agreed terms, River Valley’s subsidiary bank, River Valley Financial Bank, will be merged into German American’s similarly-named subsidiary bank, German American Bancorp.
With this deal, German American’s Southern Indiana footprint will be expanded into Southeast Indiana market area.
Based in Madison, Indiana, River Valley Bancorp operates 14 full service banking offices through its wholly owned subsidiary, River Valley Financial Bank, with retail banking offices in Madison, Hanover, Charlestown, Sellersburg, Floyds Knobs, New Albany, Dupont, North Vernon, Seymour, Osgood, and Jeffersonville, Indiana and in Carrollton, Kentucky.
As of 30 September 2015, River Valley had $514m worth of total assets, total loans of close to $330m and total deposits of approximately $401m.
German American chairman and CEO Mark A. Schroeder said: "We 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.
"Following completion of the merger, German American’s pro forma capital ratios will continue to significantly exceed regulatory well-capitalized levels, enabling us to continue to take advantage of future growth opportunities throughout our market area."
Subject to regulatory approvals and River Valley’s shareholder approval, the merger is expected to be completed in early 2016.
