EXHIBIT 4.3

             {LETTERHEAD OF COMMUNITY BANK SHARES OF INDIANA, INC.}

                               December 28, 2005

Dear Stockholder:

      We are pleased to announce the continuation of the Community Bank Shares
of Indiana, Inc. Dividend Reinvestment Plan. This Plan enables you to apply your
dividends on common stock toward the purchase of additional shares of Company
common stock.

      The Company will pay all brokerage commissions and administrative fees
connected with your participation in the Plan. This will ensure that the full
amount of your reinvested dividends will be applied to the purchase of
additional shares. However, if a Participant directs the Plan administrator to
sell his or her shares, or terminates his or her interest in the Plan, the
Participant will be charged an administrative fee incurred in connection with
the sale of such shares by the Plan administrator or the termination of a
Participant's interest in the Plan.

      The Plan is a convenient and economical way for you to increase your
ownership of Community Bank Shares common stock. Participation in the Plan is
entirely voluntary, and you may enroll or withdraw at any time. If you do not
enroll in the Plan, you will continue to receive your regular dividend checks in
the mail.

      The enclosed Prospectus and brochure include important details about your
Dividend Reinvestment Plan. Please read this information carefully to see if the
Plan is right for you. If you have already enrolled in the Plan, you need do
nothing as your participation will continue.

      The Plan is administered by Registrar and Transfer Company, the Company's
stock transfer agent. You may enroll in the Plan by having all registered owners
sign the enclosed Authorization Card and mailing it to Registrar and Transfer
Company in the enclosed prepaid envelope.

                                           Sincerely,


                                           James D. Rickard
                                           President and Chief Executive Officer

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                     Community Bank Shares of Indiana, Inc.
                           Dividend Reinvestment Plan

THE COMPANY

      Community Bank Shares of Indiana, Inc. (the "Company") is an Indiana
corporation and the bank holding company for Your Community Bank. (f/k/a
Community Bank of Southern Indiana) (the "Bank"). The Bank is a state-chartered
stock commercial bank headquartered in New Albany, Indiana. The Bank is
regulated by the Indiana Department of Financial Institutions and the Federal
Deposit of Insurance Corporation (the "FDIC").

      The offices of the Company are located at 101 West Spring Street New
Albany, Indiana 47150. The telephone number of the Company is (812) 944-2224.

      The Company publishes Annual Reports, Proxy Statements and other periodic
reports which are made available to its shareholders. All such reports are
hereby incorporated by reference into the description of the Company in this
Dividend Reinvestment Plan (the "Plan"). The Company will provide, without
charge, to each person to whom a copy of the Plan is delivered, on the oral or
written request of any such person, a copy of any or all of the foregoing
documents. Written requests for such copies should be made to 101 West Spring
Street New Albany, Indiana 47150.

THE PLAN

      The Plan described in this brochure offers you the opportunity to increase
your investment in the Company's common stock, par value $.10 per share (the
"Common Stock"), with no brokerage commissions or administrative fees of any
kind. The Plan permits you to use all or a portion of your cash dividends to
purchase additional whole and fractional shares of Common Stock. The Plan is
administered by the Company's stock transfer agent, Registrar and Transfer
Company, 10 Commerce Drive, Cranford, New Jersey 07016 ("R&T").

INVESTMENT CONSIDERATIONS

      The purchase price of stock purchased under the Plan is based upon the
market price of the Common Stock.

      Shares of Common Stock purchased under the Plan are NOT deposit accounts
of the Banks and are NOT insured by Federal Deposit Insurance Corporation or any
other governmental organization. Shares of Common Stock are subject to market
risk and possible loss of investment.

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      The Plan permits you to invest your Company cash dividends in additional
shares of Common Stock. Instead of sending all or a portion of your regular
dividend check to you, R&T will use your dividend to purchase whole and
fractional shares of Common Stock and credit them to your account. Dividends on
the shares credited to your account under the Plan will also be reinvested for
you, thereby compounding your investment. All shares purchased pursuant to this
Plan will be purchased either directly from the Company, in which case they will
be issued by the Company out of treasury shares or its legally authorized but
unissued shares of Common Stock, or on the open market at then current market
prices. The choice of whether shares will be purchased from the Company or on
the open market will be determined by the Company in its discretion, based on
the best interests on the Company.

      The purchase price for shares of Common Stock purchased through the Plan
directly from the Company will be equal to the average market price of shares of
the Common Stock for the ten business days preceding the dividend payment date.
The purchase price for shares of Common Stock purchased through the Plan on the
open market will be R&T's actual purchase price.

      The Company will pay all brokerage commissions and administrative fees
connected with your participation in the Plan. The only cost will be a
termination fee if you decide to withdraw from the Plan.

ACCOUNT STATEMENTS

      You will receive an account statement from R&T each time that shares are
purchased for you under the Plan. The statement will show the total number of
whole and fractional shares in your account to date, as well as the amount of
the most recent dividend, the number of shares purchased and the price per
share. You should retain all account statements for your personal accounting and
record keeping purposes.

ELIGIBILITY

      Participation in the Plan is limited to registered shareholders of record
of the Common Stock. Any shareholder whose common shares are registered in names
other than their own (i.e., the name of a brokerage firm, bank or nominee) must
become a shareholder of record by having their shares transferred into their own
name in order to participate in the Plan. Once you have become a registered
shareholder of record, you will be eligible to participate in the Plan and may
do so by completing an authorization card.

ENROLLMENT

To enroll in the Plan, just complete the enclosed authorization card and return
it to R&T in the enclosed envelope. On the card, you will indicate whether you
want all of your dividends reinvested in Common Stock or 25%, 50% or 75% of such
dividends reinvested. If your signed authorization card is received at least 10
business days before

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a dividend payment date, the Plan will go into effect for you with that
dividend. Otherwise, your participation will be deferred until the next
dividend. Your participation in the Plan will apply to all shares that are
registered to you at time of enrollment, plus all shares that you acquire while
your authorization remains in effect. If you sell all of your shares for which
you have a certificate, but your participation in the Plan is not terminated,
dividends on the shares held in your account under the Plan will continue to be
reinvested.

TAXATION OF DIVIDENDS

      You will be taxed on the dividends that are reinvested on your behalf,
just the same as you would have been if they had been paid directly to you. In
addition, the amount of any brokerage commissions and administrative fees paid
for you by the Company in connection with the purchase of shares, will be taxed
as income to you. At year-end R&T will send all applicable tax information to
you and to the Internal Revenue Service. If you have any remaining tax
questions, you should consult your personal tax advisor.

CERTIFICATES

      Shares purchased for your account under the Plan will normally be held by
R&T, without charge. If you wish, however, a certificate or certificates for
whole shares credited to your account will be delivered to you upon your written
request to R&T. R&T will impose a certificate fee of $15 per request.

VOTING OF SHARES

      You will be given the right to direct R&T to vote any whole shares (but
not fractional shares) held for you under the Plan on the record date for a
vote. Shares for which no voting directions are received will not be voted.

FRACTIONAL SHARES

      While you are a participant in the Plan, the entire amount of your
dividend payment will be used to purchase shares of Common Stock. If the amount
is not equal to an exact number of whole shares, your account will be credited
with a fractional share (calculated to four decimal places). A fractional share
will earn dividends for you, in proportion to the size of the fraction just as
full shares do.

WITHDRAWAL FROM PLAN

      You may terminate or change your level of participation in the Plan at any
time and for any reason. To withdraw from the Plan, simply give written notice
to R&T at least 10 business days before a dividend payment date. Your notice
should include a termination fee of $25. Upon termination, you will receive a
certificate for the number of

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whole shares credited to your account under the Plan, plus a check for any
fraction of a share, valued at the then current market price of Common Stock.

QUESTIONS AND CORRESPONDENCE

      Please direct all questions and correspondence regarding the Plan to:

Registrar and Transfer Company
Dividend Reinvestment Plan
10 Commerce Drive
Cranford, NJ 07016
Telephone: 1-800-368-5948

      Be sure to refer to Community Bank Shares of Indiana, Inc. or enclose the
top portion of your account statement with all correspondence.

                              Terms and Conditions
                     Community Bank Shares of Indiana, Inc.
                           Dividend Reinvestment Plan

      (a) Participation; Agent: The Plan is available to shareholders of record
of the Common Stock. R&T, acting as agent for each participant in the Plan, will
apply cash dividends which become payable to such participant on shares of
Common Stock (including shares held in the participant's name and shares
accumulated under the Plan), to the purchase of additional whole and fractional
shares of stock for such participant. Each participant shall direct whether all
or a specified percentage (25%, 50% or 75%) of his or her dividends will be
reinvested.

      (b) Stock Purchases: In making purchases for the accounts of participants,
R&T may commingle the funds of one participant with those of other participants
in the Plan. In the case of each purchase, the price per share for each
participant's account for shares purchased with reinvested dividends shall be
the average price of all shares purchased during that dividend period, with the
price of each share determined in accordance with the Dividend Reinvestment
section hereof. At the discretion of the Company, purchases may be made directly
from the Company or on the open market, at such prices and on such terms as R&T
shall determine its discretion. R&T shall have no responsibility with respect to
the market value of the Common Stock acquired for participants under the Plan.

(c) Timing Of Purchases: R&T will make every reasonable effort to invest all
dividends as promptly after receipt as possible. Participant's funds held by R&T
prior to purchase during this period will not bear interest. Investment in the
Common Stock will then be completed as soon as possible.

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(d) Account Statements: Following each purchase of shares, R&T will mail to each
participant an account statement showing the cash dividends and optional cash
payments received, the number of shares purchased, the price per share, and the
participant's total shares accumulated under the Plan.

(e) Expenses: There will be no expenses to participants for the administration
of the Plan. Brokerage commissions and administrative fees associated with the
Plan, if any, will be paid by the Company.

(f) Taxation of Dividends: The reinvestment of dividends does not relieve the
participant of any taxes which may be payable on such dividends. In addition,
brokerage commissions and administrative fees paid by the Company, if any, on
behalf of the participant, may constitute additional income. Dividends paid on
accumulated shares, and the amount of brokerage commissions and administrative
fees paid by the Company on behalf of each participant, will be included in an
annual information return filed with the Internal Revenue Service. A copy of the
return will be sent to the participant, or the information included in the
return will be shown on the participant's final account statement for the year.

(g) Stock Certificates: No share certificates will be issued to a participant
unless the participant so requests or until the participant's account is
terminated. Such requests must be made in writing to R&T, and must be
accompanied by a check or money order in the amount of $15 in payment of the
certificate fee. No certificates for fractional shares will be issued.

(h) Voting of Shares: In connection with any matter requiring the vote of
shareholders of the Company, Plan participants shall be entitled to direct R&T
to vote all whole shares held on their account in the Plan. Fractional shares
will not be voted.

(i) Termination of Participation: A participant may terminate participation in
the Plan at any time by written instructions to R&T. Notice of termination must
be accompanied by a termination fee of $25. To be effective on a dividend
payment date, the Notice of Termination must be received by R&T at least 10
business days before that dividend payment date. Upon receipt of Notice of
Termination from the participant, R&T will send to the participant a certificate
for all whole shares in the participant's account. Fractional shares credited to
the terminated account will be paid in cash at the then prevailing market rate.
R&T may also terminate any participants account at any time in its discretion by
notice in writing mailed to the participant.

(j) Stock Dividends, Stock Splits, Rights: Any stock dividends or stock splits
on the Common Stock applicable to shares belonging to a participant under the
Plan, whether held in the participant's account or in the participant's own
name, will be credited to the participant's account. In the event the Company
makes available to its shareholders rights to purchase additional shares or
securities, participants under the Plan will receive a subscription warrant for
all such rights directly from R&T.

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(k) Limitation of Liability: Neither the Company nor R&T shall have any
responsibility beyond the exercise of ordinary care for any action taken or
omitted pursuant to this agreement; nor shall they have any duties,
responsibilities or liabilities except as are expressly set forth herein; nor
shall they be liable for any act done in good faith or for any good faith
omission to act; nor shall they have any liability in connection with an
inability to purchase shares or with respect to the timing or the price of any
purchase.

(l) Amendment of Plan: This agreement may be amended, supplemented or terminated
by the Company or R&T at any time by the delivery of written notice to each
participant at least 30 days prior to the effective date of the amendment,
supplement or termination. Any amendment or supplement shall be deemed to be
accepted by the participant unless, prior to its effective date, R&T receives
written Notice of Termination of the participant's account.

(m) Governing Law: This agreement and the authorization card signed by the
participant (which is deemed a part of this agreement) and the participant's
account shall be governed by and construed in accordance with the laws of the
State of Indiana. This agreement cannot be changed orally.