New Albany-based Community Bank Shares of Indiana Inc. (Nasdaq: CBIN) has reached an acquisition agreement with a Kentucky bank. The deal for First Financial Service Corp. (Nasdaq: FFKY) is valued at close to $18 million. April 22, 2014

News Release

NEW ALBANY, Ind. & ELIZABETHTOWN, Ky. – Community Bank Shares of Indiana, Inc. (NASDAQ GM: CBIN), the holding company for Your Community Bank and The Scott County State Bank, and First Financial Service Corporation (NASDAQ GM: FFKY), the holding company for First Federal Savings Bank of Elizabethtown, jointly announced today they have entered into an agreement and plan of share exchange (the “Agreement”). Under the terms of the Agreement, Community Bank Shares of Indiana, Inc. will exchange all of the issued and outstanding common shares of First Financial Service Corporation for 0.153 shares of CBIN's common stock, subject to potential adjustments at closing. Based on CBIN's 20 trading day average common stock price of $22.33 per share, as of April 17, 2014, assuming no exchange ratio adjustments, the transaction is valued at approximately $17.9 million. As part of the transaction, FFKY's outstanding preferred stock, all of which was issued in the Troubled Assets Relief Program, will be redeemed at or promptly following closing of the acquisition for approximately $12.3 million, plus accrued but unpaid interest. In addition, CBIN has entered into subscription agreements with investors to purchase approximately $25.0 million of CBIN common stock immediately prior to the consummation of the share exchange transaction at a price of $22.33 per share. The transaction is subject to receipt of FFKY shareholder approval, CBIN shareholder approval and customary regulatory approvals. We expect the transaction to close in the late third or fourth quarter of 2014.

Upon the consummation of the transaction, First Federal Savings Bank of Elizabethtown will be merged with and into Your Community Bank. At that time, First Federal Savings Bank of Elizabethtown offices will become branches of Your Community Bank. CBIN estimates it will have approximately $1.6 billion in assets and 41 branch offices throughout southeastern Indiana and Kentucky after the transaction closes. CBIN expects the transaction to be accretive to earnings per share in the first full year of operations, excluding any one-time restructuring charges, and that all subsidiary banks will exceed “well-capitalized” thresholds under all regulatory definitions.

James D. Rickard, President and CEO of Community Bank Shares of Indiana, stated, “We are excited to add to our presence in the Louisville and Bardstown markets, while expanding into Elizabethtown and neighboring communities. We believe this transaction creates a dynamic community banking franchise across the entire Louisville MSA. Community Bank Shares enjoys strong market share in the northern counties of Louisville and the addition of FFKY adds a strong presence in Louisville's southern counties. The acquisition of FFKY is the second transaction we have undertaken in the last twelve months. These activities are part of an integrated strategy to drive shareholder returns through both organic and acquisition related growth.”

Gregory Schreacke, First Financial Service Corporation's President, commented, “We are excited to partner with a strong and reputable firm, such as Community Bank Shares. Our shared values and synergies will create a tremendous new opportunity for our associates, shareholders, customers and community. Our combined financial institution will offer a wider array of products and services while continuing our long-standing personal commitment to our customers and community.”


Community Bank Shares of Indiana, Inc. is a bank holding company with $846 million in total assets as of March 31, 2014 and includes two wholly owned, state-chartered subsidiary banks include Your Community Bank and The Scott County State Bank. The Company's stock trades on the NASDAQ Global Select Market under the symbol “CBIN.” The Company may be contacted at (812) 944-2224 or 101 West Spring Street, New Albany, Indiana 47150. To learn more about the Company, please visit and


Established in 1923, FFKY, through its wholly owned subsidiary, First Federal Savings Bank of Elizabethtown (“First Federal Savings Bank”), operates 17 offices in Kentucky including seven offices in the Louisville metro area, seven offices in the Elizabethtown metro area, and two offices in Bardstown. At December 31, 2013, FFKY had approximately $859 million in total assets, $467 million in loans and $783 million in deposits.

Sterne, Agee & Leach, Inc. is serving as financial advisor to CBIN on the transaction and as placement agent on the offering. Stoll Keenon Ogden PLLC is serving as legal counsel to CBIN on the transaction and the offering. FFKY is represented by the investment banking firms of Keefe, Bruyette & Woods and Professional Bank Services, Inc. and the law firm of Frost Brown Todd LLC.

Source: Community Bank Shares of Indiana Inc.

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