For immediate release

The Federal Reserve Board today announced its approval of the application of Indiana United Bancorp, Greensburg, Indiana, to merge with P.T.C. Bancorp and thereby acquire Peoples Trust Company, both of Brookville, Indiana. Attached is the Board's Order relating to this action.

Indiana United Bancorp Greensburg, Indiana Order Approving the Acquisition of a Bank Holding Company

Indiana United Bancorp ("Indiana United"), a bank holding company within the meaning of the Bank Holding Company Act ("BHC Act"), has requested the Board's approval under section 3 of the BHC Act (12 U.S.C. § 1842) to acquire by merger P.T.C. Bancorp ("PTC"), and thereby indirectly acquire its subsidiary bank, Peoples Trust Company, Brookville, Indiana. Notice of the proposal, affording interested persons an opportunity to submit comments, has been published (63 Federal Register 228 (1998)). The time for filing comments has expired, and the Board has considered the proposal and all comments received in light of the factors set forth in section 3 of the BHC Act. Indiana United is the 43d largest commercial banking organization in Indiana, and controls one subsidiary bank with approximately $273 million in deposits, representing less than 1 percent of total deposits in commercial banking organizations in the state ("state deposits").1 PTC is the 48th largest commercial banking organization in Indiana, controlling approximately $251 million in deposits. On consummation of the proposal, Indiana United would become the 27th largest commercial banking organization in Indiana, controlling deposits of approximately $524 million, representing less than 1 percent of state deposits. Competitive Considerations The BHC Act prohibits the Board from approving a proposal submitted under section 3 of the BHC Act if the proposal would result in a monopoly or if the effect of the proposal may be substantially to lessen competition in any relevant market unless the Board finds that the anticompetitive effects of the proposed transaction are clearly outweighed in the public interest by the probable effect of the transaction in meeting the convenience and needs of the community to be served. Indiana United and PTC compete directly in the Greensburg, Indiana, banking market.2 Indiana United is the largest depository institution in the market,3 controlling deposits of approximately $105 million, representing 42.5 percent of the total deposits in depository institutions in the market ("market deposits").4 PTC is the fifth largest depository institution in the market, controlling deposits of approximately $2 million, representing less than 1 percent of market deposits. On consummation of the proposal, Indiana United would control deposits of approximately $107 million, representing 43.4 percent of market deposits. Concentration in the market, as measured by the Herfindahl-Hirschman Index ("HHI"), would increase by 74 points to 3627.5 In evaluating the competitive effects of the proposal in the Greensburg banking market, the Board has considered several factors that tend to mitigate the concentration of banking resources in the market. The Greensburg banking market is a relatively small rural market in central Indiana that, upon consummation of the proposal, would continue to be served by four bank holding companies and a thrift organization, including a large multistate bank holding company with more than $20 billion of assets. In addition, the market appears to be relatively attractive for entry by new competitors. Since 1995, two banks and one thrift institution have entered the market by each establishing a de novo branch, and the population and deposits per banking office in the market continue to exceed the average for rural Indiana banking markets. As in other cases, the Board has sought comments from the Department of Justice and the Federal Deposit Insurance Corporation ("FDIC") on the competitive effects of the proposal. The Department of Justice has reviewed the proposal and advised the Board that consummation of the proposal would not likely have any significantly adverse competitive effects in the Greensburg banking market or any other relevant banking market. The FDIC did not object to consummation of the proposal or indicate it would have any significantly adverse competitive effects in the Greensburg banking market or any other relevant banking market. Based on all the facts of record, and for the reasons discussed in this order, the Board concludes that consummation of the proposal is not likely to result in any significantly adverse effects on competition or on the concentration of banking resources in the Greensburg banking market or any other relevant banking market. Other Factors The BHC Act also requires the Board to consider the financial and managerial resources and future prospects of the companies and banks involved in the proposal, the convenience and needs of the communities to be served, and certain supervisory factors. The Board has reviewed these factors in light of the record, including supervisory reports of examination assessing the financial and managerial resources of the organizations and financial information provided by Indiana United. Based on all the facts of record, the Board concludes that the financial and managerial resources and the future prospects of Indiana United, PTC, and their respective subsidiary banks are consistent with approval, as are the other supervisory factors the Board must consider under section 3 of the BHC Act. In addition, considerations related to the convenience and needs of the communities to be served are consistent with approval of this proposal. Conclusion Based on the foregoing, and in light of all the facts of record, the Board has determined that the application should be, and hereby is, approved. The Board's approval is specifically conditioned on compliance by Indiana United with all the commitments made in connection with this application. For the purpose of this action, the commitments and conditions relied on by the Board in reaching its decisions are deemed to be conditions imposed in writing by the Board in connection with its findings and decision and, as such, may be enforced in proceedings under applicable law. The acquisition of PTC shall not be consummated before the thirtieth calendar day following the effective date of this order, or later than three months after the effective date of this order, unless such period is extended for good cause by the Board or by the Federal Reserve Bank of Chicago, acting pursuant to delegated authority.

By order of the Board of Governors,6 effective February 17, 1998. (signed) Jennifer J. Johnson Jennifer J. Johnson Deputy Secretary of the Board

Footnotes 1 State deposit data are as of June 30, 1997. 2 The Greensburg banking market consists of Adams, Clinton, Fugit, Clay, and Washington townships in Decatur County, Indiana. 3 In this context, depository institutions include commercial banks, savings banks, and savings associations. 4 Market share data are as of June 30, 1997. These data are based on calculations in which the deposits of thrift institutions are included at 50 percent. The Board previously has indicated that thrift institutions have become, or have the potential to become, significant competitors of commercial banks. See Midwest Financial Group, 75 Federal Reserve Bulletin 386 (1989); National City Corporation, 70 Federal Reserve Bulletin 743 (1984). 5 Under the revised Merger Guidelines, 49 Federal Register 26,823 (June 29, 1984), a market in which the post-merger HHI is above 1800 is considered highly concentrated. The Department of Justice has informed the Board that a bank merger or acquisition generally will not be challenged (in the absence of other factors indicating anticompetitive effects) unless the post-merger HHI is at least 1800 and the merger increases the HHI by more than 200 points. The Department of Justice has stated that the higher than normal HHI thresholds for screening bank mergers for anticompetitive effects implicitly recognize the competitive effect of limited-purpose lenders and other non-depository financial entities. 6 Voting for this action: Chairman Greenspan and Governors Kelley, Phillips, Meyer, Ferguson, and Gramlich. Absent and not voting: Vice Chair Rivlin.

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1998 Orders on banking applications