Edgar Filing: 1ST INDEPENDENCE FINANCIAL GROUP, INC.

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )

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Filed by a Party other than the Registrant |_|

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|_| Preliminary Proxy Statement
|_| Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to Section 240.14a-12

1ST INDEPENDENCE FINANCIAL GROUP, INC.
(Name of Registrant as Specified In Its Charter)

Not Applicable
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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[1st Independence Financial Group, Inc. Letterhead]

April 11, 2007

Dear Stockholder:

On behalf of the Board of Directors and management of 1st Independence Financial
Group, Inc. (the "Company"), I cordially invite you to attend the Annual Meeting
of Stockholders to be held at 3801 Charlestown Road, New Albany, Indiana, on
Thursday, May 17, 2007, at 5:30 p.m., Eastern Daylight Time.

The attached Notice of Annual Meeting and Proxy Statement describe the business
to be transacted at the Annual Meeting. During the Annual Meeting, we will
report on the operations of the Company during the year ended December 31, 2006.

You will be asked to elect three directors and to ratify the appointment of BKD,
LLP as the Company's independent registered public accounting firm for the year
ending December 31, 2007. The Board of Directors has unanimously approved each
of these proposals and recommends that you vote FOR them.

Your vote is important, regardless of the number of shares you own and
regardless of whether you plan to attend the Annual Meeting. I encourage you to
read the enclosed proxy statement carefully and sign and return your enclosed
proxy card as promptly as possible because a failure to do so could cause a
delay in the Annual Meeting and additional expense to the Company. Returning the
enclosed proxy card will not prevent you from voting in person, but it will
assure that your vote will be counted if you are unable to attend the Annual
Meeting. If you do decide to attend the Annual Meeting and feel for whatever
reason that you want to change your vote at that time, you will be able to do
so.

Sincerely,

/s/ N. William White
--------------------
N. William White
President and Chief Executive Officer

1ST INDEPENDENCE FINANCIAL GROUP, INC.
8620 BIGGIN HILL LANE
LOUISVILLE, KENTUCKY 40220-4117

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 17, 2007

NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the "Meeting")
of 1st Independence Financial Group, Inc. (the "Company"), will be held at the
3801 Charlestown Road, New Albany, Indiana, on Thursday, May 17, 2007, at 5:30
p.m., Eastern Daylight Time, for the following purposes:

1. To elect three directors for a term of three years;

2. To ratify the appointment of BKD, LLP as the Company's independent
registered public accounting firm for the year ending December 31, 2007;

all as set forth in the Proxy Statement accompanying this notice, and to
transact such other business as may properly come before the Meeting and any
adjournments or postponements thereof. The Board of Directors is not aware of
any other business to come before the Meeting. Stockholders of record at the
close of business on March 30, 2007 (the "Record Date") are entitled to vote at
the Meeting and any adjournments or postponements thereof.

A copy of the Company's Annual Report for the year ended December 31, 2006 is
enclosed.

YOUR VOTE IS VERY IMPORTANT, REGARDLESS OF THE NUMBER OF SHARES YOU OWN. WE
ENCOURAGE YOU TO VOTE BY PROXY SO THAT YOUR SHARES WILL BE REPRESENTED AND VOTED
AT THE MEETING EVEN IF YOU CANNOT ATTEND. ALL STOCKHOLDERS OF RECORD AS OF THE
RECORD DATE CAN VOTE BY WRITTEN PROXY CARD. HOWEVER, IF YOU ARE A STOCKHOLDER
WHOSE SHARES ARE NOT REGISTERED IN YOUR OWN NAME, YOU WILL NEED ADDITIONAL
DOCUMENTATION FROM YOUR RECORD HOLDER TO VOTE PERSONALLY AT THE MEETING.

BY ORDER OF THE BOARD OF DIRECTORS

/s/ Teresa W. Noel
------------------
Teresa W. Noel
Secretary

Louisville, Kentucky
April 11, 2007

IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES IN ORDER TO INSURE THAT A QUORUM IS PRESENT AT THE
MEETING.

PROXY STATEMENT
OF
1ST INDEPENDENCE FINANCIAL GROUP, INC.

8620 BIGGIN HILL LANE
LOUISVILLE, KENTUCKY 40220-4117

ANNUAL MEETING OF STOCKHOLDERS
MAY 17, 2007

GENERAL

This Proxy Statement is furnished in connection with the solicitation of proxies
by the Board of Directors of 1st Independence Financial Group, Inc. (the
"Company") to be used at the Annual Meeting of Stockholders of the Company which
will be held at 3801 Charlestown Road, New Albany, Indiana, on Thursday, May 17,
2007, at 5:30 p.m., Eastern Daylight Time (the "Meeting"). The accompanying
Notice of Annual Meeting of Stockholders, this Proxy Statement and the form of
proxy are being first mailed to stockholders on or about April 11, 2007.

During the Annual Meeting, we will report on the operations of the Company
during the year ended December 31, 2006.

All properly executed written proxies that are delivered pursuant to this Proxy
Statement will be voted on all matters that properly come before the Meeting for
a vote. If your signed proxy specifies instructions with respect to matters
being voted upon, your shares will be voted in accordance with your
instructions. If no instructions are specified, your shares will be voted

o FOR the election of the persons named below as directors for a three
year term:

Jack L. Coleman, Jr.
Thomas Les Letton
Charles L. Moore II

o FOR the ratification of the appointment of BKD, LLP as the Company's
independent registered public accounting firm for the year ending December 31,
2007; and

o in the discretion of the proxy holders, as to any other matters that
may properly come before the Meeting.

Revocability of Proxy

Your proxy may be revoked at any time prior to being voted by: (i) filing a
written notice of such revocation with the Secretary of the Company at 8620
Biggin Hill Lane, Louisville, Kentucky, 40220-4117, (ii) submitting a duly
executed proxy bearing a later date, or (iii) attending the Meeting and giving
the Secretary notice of your intention to vote in person.

Stockholder Proposals

In order to be considered for inclusion in the Company's Proxy Statement for the
Annual Meeting of Stockholders to be held in 2008, all stockholder proposals
must be submitted to the Secretary at the Company's office, 8620 Biggin Hill
Lane, Louisville, Kentucky 40220-4117, on or before December 13, 2007. Under the
Company's bylaws, in order to be considered for possible action by stockholders
at the 2008 Annual Meeting of Stockholders, stockholder proposals not included
in the Company's Proxy Statement must be submitted to the Secretary of the
Company, at the address set forth above, no later than February 26, 2008.

Other Matters

The Board of Directors does not know of any matters other than Proposal 1 and
Proposal 2 that are likely to be brought before the Meeting. If any other
matters, not now known, properly come before the Meeting or any adjournments or
postponements, the persons named in the enclosed proxy card, or their
substitutes, will vote the proxy in accordance with their judgment on such
matters.

The cost of soliciting proxies will be borne by the Company. The Company will
reimburse brokerage firms and other custodians, nominees and fiduciaries for
reasonable expenses incurred by them in sending proxy materials to the
beneficial owners of Common Stock. In addition to solicitations by mail,
directors, officers, and regular employees of the Company may solicit proxies
personally or by telegraph or telephone without additional compensation.

VOTING STOCK AND VOTE REQUIRED

The Board of Directors has fixed the close of business on March 30, 2007 as the
record date for the determination of stockholders who are entitled to notice of,
and to vote at, the Meeting. On the record date, there were 1,995,594 shares of
the Company's common stock outstanding (the "Common Stock"). Each stockholder of
record on the record date is entitled to one vote for each share held.

The certificate of incorporation of the Company ("Certificate of Incorporation")
provides that in no event shall any record owner of any outstanding Common Stock
which is beneficially owned, directly or indirectly, by a person who
beneficially owns in excess of 10% of the then outstanding shares of Common
Stock (the "Limit") be entitled or permitted to any vote with respect to the
shares held in excess of the Limit.

Beneficial ownership is determined pursuant to the definition in the Certificate
of Incorporation and includes shares beneficially owned by such person or any of
his or her affiliates or associates (as such terms are defined in the
Certificate of Incorporation), shares which such person or his or her affiliates
or associates have the right to acquire upon the exercise of conversion rights
or options, and shares as to which such person and his or her affiliates or
associates have or share investment or voting power, but shall not include
shares beneficially owned by any employee stock ownership plan or similar plan
of the issuer or any subsidiary.

The presence in person or by proxy of at least a majority of the outstanding
shares of Common Stock entitled to vote (after subtracting any shares held in
excess of the Limit) is necessary to constitute a quorum at the Meeting. With
respect to any matter, any shares for which a broker indicates on the proxy that
it does not have discretionary authority as to such shares to vote on such
matter (the "Broker Non- Votes") will not be considered present for purposes of
determining whether a quorum is present. In the event there are not sufficient
votes for a quorum or to ratify any proposals at the time of the Meeting, the
Meeting may be adjourned in order to permit the further solicitation of proxies.

Tellers will be appointed at the annual meeting to count the votes cast in
person or by proxy. The results of the vote will be announced at the meeting and
in our quarterly report on Form 10-Q for the second quarter of 2007.

As to the election of directors, the proxy being provided by the Board enables a
stockholder to vote for the election of the nominees proposed by the Board of
Directors, as submitted as Proposal 1, or to withhold authority to vote for the
nominees being proposed. Directors are elected by a plurality of votes of the
shares present in person or represented by proxy at a meeting and entitled to
vote in the election of directors.

As to the ratification of the appointment of BKD, LLP as the Company's
independent registered public accounting firm, which is submitted as Proposal 2,
a stockholder may: (i) vote "FOR" the ratification; (ii) vote "AGAINST" the
ratification; or (iii) "ABSTAIN" with respect to the ratification. Unless
otherwise required by law, Proposal 2 shall be determined by the affirmative
vote of a majority of shares present in person or represented by proxy and
entitled to vote without regard to Broker Non-Votes, or proxies marked "ABSTAIN"
as to that matter.

All other matters that properly come before the Meeting shall be determined by
the affirmative vote of a majority of shares present in person or represented by
proxy and entitled to vote without regard to Broker Non-Votes, or proxies marked
"ABSTAIN" as to that matter.

PROPOSAL 1 - ELECTION OF DIRECTORS

The Board of Directors of the Corporation is currently composed of nine members.
The Corporation's Certificate of Incorporation divides the Board of Directors
into three classes, as nearly equal in size as possible, with one class of
Directors elected each year for a three-year term.

The persons named below (the "Nominees"), each of whom is currently a director
of the Company, have been nominated as a director of the Company for a
three-year term.

Jack L. Coleman, Jr.
Thomas Les Letton
Charles L. Moore II

A description of each director's business experience is described on page 6.

The persons named as proxies on the enclosed proxy card intend to vote for the
election of the Nominees, unless the proxy card is marked to indicate that such
authorization is expressly withheld. Should the Nominees withdraw or be unable
to serve (which the Board of Directors does not expect) or should any other
vacancy occur in the Board of Directors, it is the intention of the persons
named on the enclosed proxy card to vote for the election of such person as may
be recommended to the Board of Directors by the Nominating Committee of the
Board. If there are no substitute nominees, the size of the Board of Directors
may be reduced.

The Board of Directors of the Company recommends that you vote "FOR" the
election of the persons named above as directors of the Company for a term of
three years.

PROPOSAL 2 - RATIFICATION OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM

The Audit Committee selected BKD, LLP, as the Company's independent registered
public accounting firm for the year ending December 31, 2007. At the Meeting,
stockholders will consider and vote upon the ratification of the appointment of
BKD, LLP as the Company's independent registered public accounting firm for the
year ending December 31, 2007. Your ratification of the Audit Committee's
appointment of BKD, LLP is not necessary because the Audit Committee has sole
authority for appointment of our independent registered public accounting firm.
However, the Audit Committee will take your vote on this proposal into
consideration when selecting our independent registered public accounting firm
in the future.

BKD, LLP was the Company's independent registered public accounting firm for the
year ended December 31, 2006.

A representative of BKD, LLP is expected to be present at the Meeting to respond
to stockholders' questions and will have the opportunity to make a statement if
he or she so desires.

The Board of Directors recommends that stockholders vote "FOR" the ratification
of the appointment of BKD, LLP as the Company's independent registered public
accounting firm for the year ending December 31, 2007.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

The following table sets forth, as of March 14, 2007 certain information
regarding the beneficial ownership of the Company's Common Stock by each person
or group who own more than 5% of the Common Stock. Other than as noted below,
management knows of no person or group that owns more than 5% of the outstanding
shares of Common Stock as of that date.

Amount and Percent of
nature of shares of
beneficial common stock
Name and address of beneficial owner ownership outstanding
------------------------------------ ---------- -----------
Tontine Financial Partners, L.P. (1)
Tontine Management, L.L.C.
Jeffrey L. Gendell
55 Railroad Avenue
Greenwich, Connecticut 06830 178,405 8.9%

1st Independence Employee Stock Ownership
& 401K Plan (2)
8620 Biggin Hill Lane
Louisville, Kentucky 40220-4117 158,587 7.9%

(1) Based solely upon information provided in a Schedule 13G/A filed with the
United States Securities and Exchange Commission by such persons on
February 13, 2007.

(2) The Employee Stock Ownership & 401K Plan ("KSOP") purchased such shares
for the exclusive benefit of plan participants with funds borrowed from
the Company. These shares are held in a suspense account and will be
allocated among ESOP participants annually on the basis of compensation as
the ESOP debt is repaid. The Bank's Board of Directors has appointed a
committee consisting Mr. N. William White - President and Chief Executive
Officer of the Company, Mr. R. Michael Wilbourn - Executive Vice President
and Chief Financial Officer of the Company and Ms. Terry L. Batson -
Senior Vice President Human Resources of the Company to serve as the KSOP
administrative committee ("KSOP Committee") and First Bankers Trust
Services, Inc. to serve as the KSOP trustees ("KSOP Trustee"). The KSOP
Committee instructs the KSOP Trustee regarding investment of KSOP plan
assets. The KSOP Trustee must vote all shares allocated to participant
accounts under the KSOP as directed by participants. Unallocated shares
and shares for which no timely voting direction is received, will be voted
by the KSOP Trustee as directed by the KSOP Committee. As of December 31,
2006, 129,477 shares have been allocated under the ESOP to participant
accounts.

SECURITY OWNERSHIP OF MANAGEMENT

The following table sets forth, as of March 14, 2007 certain information
regarding beneficial ownership of the Company's common stock by: (i) each of the
Company's directors, nominees and named executive officers; and (ii) all current
directors and executive officers as a group.

Amount and Nature of
Beneficial Percent of Shares of
Name of Beneficial Owner Ownership (1) Common Stock Outstanding (2)
------------------------ ------------- ----------------------------
Matthew C. Chalfant 58,188 2.9%
Jack L. Coleman, Jr. 15,365 *
Thomas Les Letton 23,600 1.2
Stephen R. Manecke 21,750 1.1
Charles L. Moore II 81,571 4.1
Ronald L. Receveur 43,343 2.2
W.Dudley Shryock 7,127 *
H. Lowell Wainwright, Jr. 10,500 *
N. William White 38,384 1.9
All directors and executive
officers of the Company as
a group (14 persons) (1) (2) (3) 355,886 17.5
----------------

(1) The share amounts also include shares of common stock that the following
persons may acquire through the exercise of stock options within 60 days of
March 14, 2007: Stephen R. Manecke - 5,000; Charles L. Moore II - 3,400;
Ronald L. Receveur - 3,400; N. William White - 11,125.

(2) Excludes 158,587 shares of Common Stock held by the KSOP for which such
individuals serve as a member of the KSOP Committee and has shared voting
power. Such individuals disclaim beneficial ownership with respect to such
shares held in a fiduciary capacity.

(3) The share amount also includes 10,811 shares of common stock that may be
acquired through the exercise of stock options within 60 days of March 14,
2007 by other executive officers.

* Represents less than 1% of the Company's outstanding common stock.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the 1934 Act requires the Company's directors, executive
officers and stockholders who own more than 10% of the Company's stock to file
reports of ownership and changes in ownership of their equity securities of the
Company with the Securities and Exchange Commission and to furnish the Company
with copies of such reports. Based solely upon a review of such reports, the
Company believes that all of the filings by the Company's directors, executive
officers and stockholders who own more than 10% of the Company's stock were made
on a timely basis during 2006 except that Mr. Moore did not timely file a Form 4
reflecting the shares owned by Mr. Moore's wife at the time of Mr. Moore's
marriage. A Form 4 was subsequently filed reflecting these shares.

DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY

Directors
The directors of the Company, some of whom are also Nominees, are listed in the
table below along with their age, period they have served as a director and
their business experience over the past five years. Each director serves for a
term of three years and until the election and qualification of his successor.
The following directors have been determined by the Company to be independent
under the applicable NASDAQ listing standards: Matthew C. Chalfant, Jack L.
Coleman, Jr., Thomas Les Letton, Stephen R. Manecke, Charles L. Moore II, Dr.
Ronald L. Receveur, W. Dudley Shryock and H. Lowell Wainwright, Jr. The age of
each director is as of March 14, 2007. Each director has listed when his term
will expire.

NAME AGE OFFICE AND BUSINESS EXPERIENCE
---- --- ------------------------------
Matthew C. Chalfant.......43 A director since 2004. Mr. Chalfant's term will
expire at the 2008 Annual Meeting. Mr. Chalfant
is the President of Forms America and Chalfant
Industries, Inc.

Jack L. Coleman, Jr.......53 A director since 1991. Mr. Coleman's term will
expire at the 2007 Annual Meeting. Mr. Coleman is
a partner and majority stockholder of Coleman's
Lumber Yard and owner of Coleman's Home Center all
located in Harrodsburg, Kentucky. He is a former
member of the Kentucky House of Representatives
and is a current member of the Mercer County
Chamber of Commerce.

Thomas Les Letton.........54 A director since 1985. Mr. Letton's term will
expire at the 2007 Annual Meeting. Mr. Letton is
the President of The Letton Company,Inc., a real
estate investment company and Old Bridge, Inc., a
golf course and development company, all located
in Danville, Kentucky. He is also an owner of
WFL Group which owns thirteen Papa Johns Pizza
franchises.

Stephen R. Manecke........51 A director since 2004. Mr. Manecke's term will
expire at the 2009 Annual Meeting. Mr. Manecke is
a certified public accountant and owner of
Business Advisory Services, a business management
consulting company.

Charles L. Moore II.......44 A director since 2004. Mr. Moore's term will
expire at the 2007 Annual Meeting. Mr. Moore is a
real estate investor and owner of Riverside
Properties, a property management company. He is
also a councilman on the Clark County Indiana
Council.

Dr. Ronald L. Receveur....51 A director since 2004. Dr. Receveur's term will
expire at the 2009 Annual Meeting. Dr. Receveur's
principal occupation is as a dentist. Dr. Receveur
is owner and managing partner of The Center for
Advanced Dentistry, LLC. Dr. Receveur also is
owner or has partial interest in various real
estate development companies including Janus
Partners, L. P., Janus Development, Inc., The
Artisan Co., LLC and Luxury Views, LLC.

W. Dudley Shryock.........50 A director since 1998. Mr. Shryock's term will
expire at the 2009 Annual Meeting. Mr. Shryock is
a certified public accountant, practicing in
Lawrenceburg, Kentucky. Mr. Shryock is treasurer
for the Anderson County Fiscal Court.

H. Lowell Wainwright, Jr..50 A director since 2005. Mr. Wainwright's term will
expire at the 2009 Annual Meeting. Mr. Wainwright
is a Managing Director with Sterne, Agee & Leach
Inc. an Investment Firm.

N. William White..........41 A director since 2004. Mr. White's term will
expire at the 2008 Annual Meeting. Mr. White is
the President and Chief Executive Officer of the
Company and the Bank. Prior to the merger of
Harrodsburg First Financial Bancorp, Inc. and
Independence Bancorp (the "Merger"), Mr. White
served as President and Chief Executive Officer of
Independence Bancorp and Independence Bank.

Executive Officers Who Are Not Directors
The executive officers of the Company, who are not also directors of the
Company, are listed in the table below. The age of each executive officer is as
of March 14, 2007.

NAME AGE OFFICE AND BUSINESS EXPERIENCE
---- --- ------------------------------
Kathy L. Beach............43 Ms. Beach joined the Company and the Bank in May
2004. Ms. Beach is Executive Vice President and
Chief Operations Officer of the Company and the
Bank. Previously, Ms. Beach was Chief Operations
Officer at Porter Bancorp, Inc., Shepherdsville,
Kentucky.

Gregory A. DeMuth.........43 Mr. DeMuth joined the Company and the Bank in
March 2006. Mr. DeMuth is Executive Vice
President and Chief Lending Officer of the Company
and the Bank. Previously, Mr. DeMuth was Senior
Vice President - Commercial Lending for Stock
Yards Bank & Trust Company in Louisville,
Kentucky.

David M. Hall.............50 Mr. Hall joined the Company and the Bank in
February 2005. Mr. Hall is Executive Vice
President - Retail Banking of the Company and the
Bank. Previously, Mr. Hall was a Regional
President for U. S. Bank in Lexington, Kentucky.

Alan D. Shepard...........45 Mr. Shepard rejoined the Company and the Bank in
September 2006 as Executive Vice President and
Chief Credit Officer of the Company and the Bank.
From April 2005 until August 2006 Mr. Shepard was
involved in real estate developing. Previously,
Mr. Shepard served as Executive Vice President and
Senior Lending Officer of the Company and the Bank
from the date of the Merger until March 2005.
Prior to the Merger, Mr. Shepard served in the
same capacity with Independence Bancorp and
Independence Bank. Previous to his employment at
Independence Bancorp and Independence Bank, Mr.
Shepard served as a Senior Vice President in
Commercial Lending at Commonwealth Bank & Trust
Company in Louisville, Kentucky.

R. Michael Wilbourn.......45 Mr. Wilbourn is Executive Vice President and Chief
Financial Officer of the Company and the Bank.
Prior to the Merger, Mr. Wilbourn served in the
same capacity to Independence Bancorp and
Independence Bank. Previous to his employment at
Independence Bancorp and Independence Bank, Mr.
Wilbourn served as Vice President-Senior
Consultant and Analyst of Commercial Finance of
Bank One, Kentucky.

COMMITTEES OF THE BOARD OF DIRECTORS

The Company's Board of Directors conducts its business through meetings of the
Board and through activities of its committees. All committees act for both the
Company and the Bank. During the year ended December 31, 2006, the Board of
Directors held twelve regular meetings and two special meetings. All directors
attended at least 75% of the meetings of the Board and the committees to which
they belonged. It is the Company's policy to encourage the directors to attend
the Company's Annual Meeting of Stockholders. All of the directors attended the
Annual Meeting of Stockholders held in 2006.

In addition to other committees, as of December 31, 2006, the Company had a
standing Compensation Committee and Audit Committee.

NAME COMPENSATION AUDIT
---- ------------ -----
Matthew C. Chalfant................
Jack L. Coleman, Jr................
Thomas Les Letton.................. X
Stephen R. Manecke................. *
Charles L. Moore II................ X
Ronald L. Receveur................. *
W. Dudley Shryock.................. X X
H. Lowell Wainwright, Jr........... X X
N. William White...................
------------
X Member
* Chairman

Nominating Committee
The Board of Directors had no standing nominating committee or any committee
performing similar functions during 2006. Because such functions are performed
by the independent (as such is defined under the NASDAQ listing standards)
members of the Board of Directors, the Board of Directors believes that it is
appropriate not to have a standing nominating committee. In the nomination
process, the independent members of the Board of Directors identify director
nominees through a combination of referrals, including by management, existing
board members and stockholders. The Company does not have a formal policy with
respect to the consideration of any nominees recommended by a stockholder,
however, the Board of Directors will consider written recommendations from
stockholders of the Company regarding potential nominees for election as
directors. To be considered for inclusion in the slate of nominees proposed by
the Board of Directors at the next Annual Meeting of Stockholders of the
Company, such recommendations must be received in writing by the Secretary of
the Company not less than 60 or more than 90 days prior to the date of the
meeting. Once a candidate has been identified, the independent members of the
Board of Directors review the individual's experience and background and may
discuss the proposed nominee with the source of the recommendation. If
determined to be appropriate, certain independent Directors may meet with the
proposed nominee before making a final determination. The independent members of
the Board of Directors consider all factors they deem relevant regarding a
possible director nominee, including his or her business experience, civic
involvement, and general reputation in the community. In this respect, the
Company has not identified any specific minimum qualifications which must be met
to be considered as a nominee.

The Company received no security holder recommendations for nomination to the
Board of Directors in connection with the 2007 Annual Meeting of Stockholders.
The three director nominees are incumbent directors standing for re-election.

Compensation Committee
The Board of Directors appoints the members of the Compensation Committee. The
Compensation Committee is currently composed of four non-employee directors,
each of whom meets the criteria for independence under the NASDAQ listing
standards. The Compensation Committee met three times during the year ended
December 31, 2006.

The Compensation Committee has retained an independent compensation consulting
firm, Mercer Human Resource Consulting, to advise it and the Company on
executive compensation matters in the past but did not utilize their services in
2006.

The Compensation Committee is responsible for approving and evaluating the
Company's employee compensation and benefit programs, ensuring the
competitiveness of those programs, and advising the Board of Directors regarding
the development of key executives. The Compensation Committee is responsible for
annually reviewing, approving, and recommending to the Board of Directors for
its approval all elements of the compensation of the Chief Executive Officer and
other executive officers. The Compensation Committee is also responsible for
determining awards to employees of restricted stock or stock options pursuant to
the Company's incentive plans.

Compensation Committee Interlocks and Insider Participation
No member of the Compensation Committee is or was formerly an officer or
employee of the Company. No executive officer of the Company currently serves or
in the past year has served as a member of the compensation committee or board
of directors of another company of which an executive officer serves on the
Compensation Committee. Nor does any executive officer of the Company serve or
has in the past year served as a member of the compensation committee of another
company of which an executive officer serves as a director of the Company.

The report of the Compensation Committee is included in the "Executive
Compensation" section of this Proxy Statement under the caption "Compensation
Committee Report."

The Board of Directors has adopted a Compensation Committee Charter which
details all the duties and responsibilities of the Committee. A copy of the
Compensation Committee Charter can be found on the Company's website at
www.1stindependence.com under the investor relations section.

Audit Committee
The Audit Committee of the Company is comprised of four independent directors as
that term for audit committee members is defined by the NASDAQ listing standards
and Rule 10A-3 of the Securities and Exchange Act of 1934. W. Dudley Shryock and
Stephen R. Manecke have been determined by the Board of Directors to be "audit
committee financial experts" (as defined by the SEC) for purposes of fulfilling
the duties of the Committee. The Audit Committee met six times during the year
ended December 31, 2006.

Among other duties, the Audit Committee is responsible for:

o overseeing that management has maintained the reliability and
integrity of the accounting policies and financial reporting and disclosure
practices of the Company;

o overseeing that management has established and maintained processes
to assure that an adequate system of internal control over key business risks is
functioning within the Company; and

o overseeing that management has established processes to assure
compliance by the Company with all applicable laws, regulations and Company
policies.

The Board of Directors has adopted an Audit Committee Charter which details all
the duties and responsibilities of the Committee. A copy of the Audit Committee
Charter can be found on the Company's website at www.1stindependence.com under
the investor relations section.

REPORT OF THE AUDIT COMMITTEE

Review of Audited Financial Statements with Management.

The Audit Committee reviewed and discussed the audited financial statements for
the year ended December 31, 2006 with the management of the Company.

Review of Financial Statements and Other Matters with Independent Registered
Public Accounting Firm.

The Audit Committee discussed with BKD, LLP, the Company's independent
registered public accounting firm, the matters required to be discussed by the
Statement on Auditing Standards No. 61 ("Communications with Audit Committees"),
as may be modified or supplemented. The Audit Committee has received the written
disclosures and the letter from BKD, LLP required by Independence Standards
Board Standard No. 1 ("Independence Discussions with Audit Committees"), as may
be modified or supplemented, and has discussed with BKD, LLP its independence.

Recommendation that Financial Statements be Included in Annual Report.

Based on the reviews and discussions referred to above, the Audit Committee
recommended to the Board of Directors that the audited financial statements be
included in the Company's Annual Report on Form 10-K for the year ended December
31, 2006, for filing with the United States Securities and Exchange Commission.

Submitted by the Audit Committee:

Stephen R. Manecke, Chairman
Charles L. Moore II
W. Dudley Shryock
H. Lowell Wainwright, Jr.

AUDIT FEES

The following table sets forth fees for professional audit services rendered by
BKD, LLP, the Company's independent registered public accounting firm, for the
audits of the Company's annual financial statements for the years ended December
31, 2006 and December 31, 2005, and fees for other services rendered by BKD, LLP
during those periods:

Year ended Year ended
December 31, 2006 December 31, 2005
----------------- -----------------
Audit fees (1) $118,534 $101,932
Audit-related fees (2) 11,268 10,688
Tax fees (3) 8,811 55,745
All other fees (4) - 7,623
-------- --------
Total fees $138,613 $175,988
======== ========
-------------
(1) Audit fees consist of fees for professional services rendered for the
annual audit and review of Form 10-K as well as fees for the reviews of
quarterly financial information filed with the SEC on Form 10-Q.

(2) Audit-related fees are fees for assurance and related services that are
reasonably related to the performance of the audit or review of the
Company's financial statements including due diligence services.

(3) Tax fees consist of compliance fees for the preparation of state and
federal tax returns and consulting on various tax matters including issues
relating to the change in the Company's fiscal year end. During 2005, the
Company engaged another accounting firm to begin providing tax compliance
and consulting services. Fees for 2006 were assistance relating to an IRS
audit of prior year federal tax returns.

(4) All other fees consist of other services not included in the first three
categories above. Fees for 2005 were for assistance in the filing of
certain bank regulatory filings.

Pre-Approval Policies and Procedures
The Audit Committee has adopted a policy that requires advance approval of all
audit, audit-related, tax services, and other services performed by the
independent registered public accounting firm. The policy provides for
pre-approval by the Audit Committee of specified audit and non-audit services.
Unless the specific service has been previously pre-approved with respect to
that year, the Audit Committee must approve the permitted service before the
independent registered public accounting firm is engaged to perform it. The
Audit Committee has delegated to the Chairman of the Audit Committee authority
to approve permitted services provided that the Chairman reports any decisions
to the full Audit Committee at its next scheduled meeting.

DIRECTOR COMPENSATION TABLE
Director Compensation in 2006

------------------------------ ------------ ------------ ------------- -------------- ---------------- ---------------
Name (1) Fees Restricted Option Non-Equity All Other Total
Earned Stock Awards Incentive Compensation
or Paid Awards (4) Plan (4)
in Cash (3) (4)
(2)
------------------------------ ------------ ------------ ------------- -------------- ---------------- ---------------

Matthew C. Chalfant $9,000 $582 $ - $ - $ - $9,582
Jack L. Coleman, Jr. $9,000 $582 $ - $ - $ - $9,582
James W. Dunn (5) $4,500 $ - $ - $ - $ - $4,500
Thomas Les Letton $9,000 $582 $ - $ - $ - $9,582
Stephen R. Manecke $15,000 $582 $ - $ - $ - $15,582
Charles L. Moore II $9,000 $582 $ - $ - $ - $9,582
Ronald L. Receveur $9,000 $582 $ - $ - $ - $9,582
W. Dudley Shryock $9,000 $582 $ - $ - $ - $9,582
H. Lowell Wainwright, Jr. $9,000 $582 $ - $ - $ - $9,582
------------------------------ ------------ ------------ ------------- -------------- ---------------- ---------------

(1) N. William White, the Company's President and Chief Executive Officer is not
included in this table as Mr. White is also a Named Executive Officer of the
Company and his compensation for service as a Director is reflected in the
Summary Compensation Table.

(2) Fees earned or paid in cash included $750 per month for each Director with
the exception of the Chairman of the Audit Committee (Mr. Stephen R. Manecke)
who received $1,250 per month. No additional fees are paid for committee
meetings.

(3) Represents the amount of compensation expense recorded during 2006 on 500
shares of the Company's Common Stock awarded on September 20, 2006 (award vests
20% annually beginning with the first anniversary date). The market value of the
500 shares granted on September 20, 2006 was $8,725 (calculated using the
closing stock price of the Company's Common Stock on September 20, 2006 of
$17.45).

(4) No annual stock option grants, non-equity incentive plan compensation
payments or other compensation payments were made as compensation for director
services in 2006 or are contemplated under the Company's current compensation
structure with the exception of possible stock option grants.

(5) Mr. Dunn resigned from the Board effective June 30, 2006.

EXECUTIVE COMPENSATION
COMPENSATION DISCUSSION AND ANALYSIS

Compensation Philosophy and Objectives
The compensation program for executive officers is aimed at attracting and
retaining superior executives in a highly competitive environment and to provide
financial incentives that align our executive officers' interest with those of
our stockholders. The Compensation Committee believes that the primary
components of each executive officer's compensation should include (i) a
competitive base salary; (ii) incentive compensation that rewards the
achievement of annual and longer-term objective performance goals; and (iii)
opportunities for equity compensation.

Responsibility for Executive Compensation Program
The Compensation Committee of the Board is responsible for establishing and
implementing our general executive compensation philosophy. Subject to approval
of the full Board, the Compensation Committee determines the compensation for
all executive officers. Role of Executive Officers in Compensation Decisions The
Compensation Committee reviews, approves, and recommends to the full Board each
element of the compensation for each Named Executive Officer. The President and
Chief Executive Officer annually reviews the compensation of each executive
officer (other than himself) and makes recommendations to the Compensation
Committee regarding the compensation of those officers for the following year.
The Compensation Committee annually reviews the President and Chief Executive
Officer's compensation and makes recommendations to the full Board regarding the
compensation for the following year.

Committee Procedures
The Compensation Committee utilized the data in the 2006 Crowe Chizek Salary
Surveys to assist it in evaluating our executive compensation structure and
expenses. The surveys used for 2006 included a Kentucky group of banks with peer
data for banks in the $200 - $500 million asset range. In addition, survey data
was used from peer groups in communities with a population of greater than
100,000 to ensure adequate comparison of the Louisville metropolitan area. The
market surveys include a broad range of companies and do not provide
company-specific information.

The intent of the executive compensation plan is to further the interests of 1st
Independence Financial Group, Inc., its subsidiaries, and its stockholders by
providing incentives to key employees who contribute materially to the success
and profitability of the Bank. This program enables the Bank to attract and
retain key employees.

Setting Executive Compensation for 2006
In establishing the 2006 compensation for the executive officers, the
Compensation Committee:

o analyzed the compensation levels of comparable executive officers in
peer groups;
o determined a mix of base salary and bonus opportunity, along with an
equity position to align the executive officers' compensation with
our performance;
o assessed the executive officers' performance; and
o assessed the financial and business results compared to other companies
within the banking industry and our financial performance relative
to past performance and financial and business goals.

The principal components of each executive officer's compensation are:

o base salary;
o annual incentive compensation; and
o long-term equity incentive compensation.

The cash components of the Executive Compensation Plan are based on the
following:

o Return on Assets (ROA)
o Growth
o Earnings Per Share (EPS)

Key officers are eligible to receive awards based on the achievement of specific
annual goals and performance measures.

The only elements of the executive officers' compensation paid in cash are base
salary and annual incentive compensation.

Base Salary. Base Salary is the component of compensation that is paid to an
employee for a specific position and responsibilities.

Annual Incentive Compensation. Our practice is to award cash bonuses based on
our achievement of pre-established objective performance goals.

Long-Term Incentive Compensation, Stock Options, Restricted Stock.

Retirement Plan. The 1st Independence Employee Stock Ownership & 401(k)
Plan (the "ESOP") is maintained by 1st Independence Financial Group, Inc.
The ESOP consists of the following two components: (i) an employee stock
ownership plan, and (ii) a qualified cash or deferred arrangement 401(k).

The purposes of the Plan are to enable eligible employees to (i) provide for
their future financial security by deferring a portion of their compensation and
having those funds accumulate under the ESOP, (ii) share in the growth and
prosperity of the Company, (iii) accumulate capital for their future economic
security, and (iv) acquire beneficial stock ownership interests in the Company.
The ESOP is also designed to assist the Company in meeting some of its corporate
financial objectives. Subject to Internal Revenue Service limitations, the
Company matches 50% of participant contributions up to 6% of the participant's
compensation. To be eligible to receive a matching contribution, a participant
must be employed on the last day of the year.

Stock Option Plan. The 1st Independence Stock Option Plan was developed to
enable the Company to attract and retain employees and Non-employee Directors by
providing them with appropriate incentives and rewards for superior performance
by granting stock options.

The Plan is intended to encourage stock ownership by recipients by providing for
their proprietary interests in the Company, thereby encouraging them to remain
employed or otherwise in service.

Restricted Stock Plan. 1st Independence Financial Group, Inc. established a
Restricted Stock Plan, approved by stockholders at the 2006 Annual Meeting. This
is an equity-based incentive compensation plan that provides for the award of
restricted stock. The Plan is designed to promote the interests of the Company
and its Subsidiaries by encouraging officers, key employees and Non-employee
Directors, upon whose judgment, initiative and industry the Company and its
Subsidiaries are largely dependent for the successful conduct and growth of
their business, to continue their association with the Company and its
Subsidiaries by providing additional incentive and opportunity for unusual
industry and efficiency through stock ownership, and by increasing their
proprietary interest in the Company and their personal interest in its continued
success and progress. The restricted stock vests in 20% increments over a 5 year
period.

Deductibility Cap on Executive Compensation
Under Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), subject to an exception for qualifying performance-based compensation,
we cannot deduct compensation of over $1,000,000 in annual compensation paid to
certain executive officers. We have never paid compensation for which a
deduction was disallowed.

If an executive officer is entitled to deferred compensation under Code Section
409A, and such benefits do not comply with the Code Section 409A, then the
benefits are taxable in the first year they are not subject to a substantial
risk of forfeiture. In such case, the executive is subject to payment of regular
federal income tax, interest and an additional federal income tax of 20 percent
of the amount includible in income. Our compensation program has been structured
to comply with Code Section 409A. Tabular Disclosures Regarding Executive
Officers The following tables provide 2006 compensation information for the
Company's Principal Executive Officer, the Principal Financial Officer and the
Company's other three most highly compensated executive officers (collectively,
the "named executive officers"):

Summary Compensation Table

------------------------------ -------- ------------ ------------ ------------ ------------ ----------------- ------------
Name and Year Salary Bonus Stock Option All Other Total
Principal ($) ($) Awards Awards Compensation ($)
Position ($) ($) ($)
------------------------------ -------- ------------ ------------ ------------ ------------ ----------------- ------------

N. William White, 2006 $154,000 $ - $3,378(2) $4,156(4) $27,529(5) $189,063
President and Chief
Executive Officer

R. Michael Wilbourn, 2006 $105,000 $ - $3,378(2) $4,156(4) $ 6,906(6) $119,440
Executive Vice
President and Chief
Financial Officer

Kathy L. Beach, 2006 $90,000 $ - $3,378(2) $4,156(4) $ 5,832(7) $103,366
Executive Vice
President and Chief
Operations Officer

Gregory A. DeMuth (1), 2006 $100,000 $ - $ - $ - $ 1,703(8) $101,703
Executive Vice
President and Chief
Lending Officer

David M. Hall, 2006 $100,000 $ - $1,479(3) $ - $ 4,926(9) $106,405
Executive Vice
President - Retail
Banking
------------------------------ -------- ------------ ------------ ------------ ------------ ----------------- ------------

(1) Mr. DeMuth began employment with the Company on March 1, 2006.

(2) Represents the amount of compensation expense recorded during 2006 on 500
shares of the Company's Common Stock awarded on February 24, 2005 and 500 shares
of the Company's Common Stock awarded on March 17, 2006 (both awards vest 20%
annually beginning with the first anniversary date). The market value of the 500
shares granted on February 24, 2005 was $9,495 (calculated using the closing
stock price of the Company's Common Stock on February 24, 2005 of $18.99) and
the market value of the 500 shares granted on March 17, 2006 was $8,875
(calculated using the closing stock price of the Company's Common Stock on March
17, 2006 of $17.75).

(3) Represents the amount of compensation expense recorded during 2006 on 500
shares of the Company's Common Stock awarded on March 17, 2006 (award vests 20%
annually beginning with the first anniversary date). The market value of the 500
shares granted on March 17, 2006 was $8,875 (calculated using the closing stock
price of the Company's Common Stock on March 17, 2006 of $17.75).

(4) Represents the amount of compensation expense recorded during 2006 on 2,500
stock options on the Company's Common Stock awarded on February 24, 2005
(options vest 25% annually beginning with the grant date). The market value of
the 2,500 stock options was $6.65 per stock option based upon the Black-Scholes
option-pricing model. See the caption "stock options" in note 1 to the Company's
consolidated financial statements included in the Company's Annual Report on
Form 10-K for the year ended December 31, 2006 for additional information.

(5) Includes 407 shares allocated to Mr. White's account pursuant to the ESOP at
a cost of $10 per share (with an aggregate market value of $16.40 per share at
December 31, 2006 totaling $6,675), a matching contribution to the 401(k)
portion of the ESOP of $6,160, director fees of $9,000, value of personal use of
a Company owned vehicle of $5,339 and premiums paid of $355 for $500,000 of term
life insurance where Mr. White's minor children are the beneficiary.

(6) Includes 229 shares allocated to Mr. Wilbourn's account pursuant to the ESOP
at a cost of $10 per share (with an aggregate market value of $16.40 per share
at December 31, 2006 totaling $3,756) and a matching contribution to the 401(k)
portion of the ESOP of $3,150.

(7) Includes 191 shares allocated to Ms. Beach's account pursuant to the ESOP at
a cost of $10 per share (with an aggregate market value of $16.40 per share at
December 31, 2006 totaling $3,132) and a matching contribution to the 401(k)
portion of the ESOP of $2,700.

(8) Represents a matching contribution to the 401(k) portion of the ESOP.

(9) Includes 90 shares allocated to Mr. Hall's account pursuant to the ESOP at a
cost of $10 per share (with an aggregate market value of $16.40 per share at
December 31, 2006 totaling $1,476) and a matching contribution to the 401(k)
portion of the ESOP of $3,450.

Grants of Plan-Based Awards in 2006

---------------------------- ------------ ----------------- ------------------ ----------------- -------------------
Name Grant All Other All Other Exercise or Grant
Date Stock Awards: Option Awards: Base Price of Date Fair
Number of Number of Option Value of Stock
Shares of Securities Awards and Option
Stock Underlying ($/SH) Awards ($)
(#) Options
(#)
---------------------------- ------------ ----------------- ------------------ ----------------- -------------------

N. William White 3/17/06 500(1) - - $8,875(2)
R. Michael Wilbourn 3/17/06 500(1) - - $8,875(2)
Kathy L. Beach 3/17/06 500(1) - - $8,875(2)
Gregory A. DeMuth - - - - -
David M. Hall 3/17/06 500(1) - - $8,875(2)
---------------------------- ------------ ----------------- ------------------ ----------------- -------------------

(1) Vest at 100 shares per year on vesting dates of March 17, 2007, March 17,
2008, March 17, 2009, March 17, 2010 and March 17, 2011.

(2) Represents the market value of 500 shares of the Company's Common Stock at
the date such awards were granted which was March 17, 2006 (calculated using the
closing stock price of the Company's Common Stock on March 17, 2006 of $17.75)

Outstanding Equity Awards at 2006 Year-End

-------------------------- ---------------------------------------------------------------- ------------------------------
Option Awards Stock Awards
-------------------------- ---------------------------------------------------------------- ------------------------------
Name Number of Number of Option Option Number of Market
Securities Securities Exercise Expiration Shares of Value of
Underlying Underlying Price Date Stock That Shares of
Unexercised Unexercised ($) Have Not Stock That
Options Options Vested Have Not
(#) (#) (#) Vested
(Exercisable) (Unexercisable) ($)
-------------------------- ---------------- ------------------- ------------ -------------- --------------- --------------

N. William White 4,000 - $8.00 1/27/10 400(3) $6,560(5)
1,500 - $10.00 1/28/13 500(4) $8,200(5)
2,500 - $10.00 12/31/13
1,250 - $18.99 2/24/15
- 625(1) $18.99 2/24/15
- 625(2) $18.99 2/24/15

R. Michael Wilbourn 1,000 - $10.00 2/16/11 400(3) $6,560(5)
1,500 - $10.00 1/28/13 500(4) $8,200(5)
2,500 - $10.00 12/31/13
1,250 - $18.99 2/24/15
- 625(1) $18.99 2/24/15
- 625(2) $18.99 2/24/15

Kathy L. Beach 1,250 - $18.99 2/24/15 400(3) $6,560(5)
- 625(1) $18.99 2/24/15 500(4) $8,200(5)
- 625(2) $18.99 2/24/15

Gregory A. DeMuth - - - - - -

David M. Hall - - - - 500(4) $8,200(5)
-------------------------- ---------------- ------------------- ------------ -------------- --------------- --------------

(1) Vesting date of February 24, 2007.

(2) Vesting date of February 24, 2008.

(3) Vest at 100 shares per year on vesting dates of February 24, 2007, February
24, 2008, February 24, 2009 and February 24, 2010.

(4) Vest at 100 shares per year on vesting dates of March 17, 2007, March 17,
2008, March 17, 2009, March 17, 2010 and March 17, 2011.

(5) Valued using December 31, 2006 closing market price of the Company's Common
Stock of $16.40.

Option Exercises and Stock Vested in 2006

------------------------------ ------------------------------------ ----------------------------------
Option Awards Stock Awards
------------------------------ ------------------------------------ ----------------------------------
Name Number of Value Number of Value
Shares Realized Shares Realized
Acquired on Exercise Acquired on Vesting
on Exercise ($) on Vesting ($)
(#) (#)
------------------------------ --------------------- -------------- --------------- ------------------

N. William White 6,000 $49,200(1) 100 $1,791(2)
R. Michael Wilbourn - - 100 $1,791(2)
Kathy L. Beach - - 100 $1,791(2)
Gregory A. DeMuth - - - -
David M. Hall - - - -
------------------------------ --------------------- -------------- --------------- ------------------

(1) The value realized represents the difference between the market price of the
Company's Common Stock on the day exercised and the exercise price of the stock
options.

(2) Valued using the closing market price of $17.91 of the Company's Common
Stock on the vesting date of February 24, 2006.

Potential Payments Upon Termination or Change in Control

Employment Agreements. During 2004, the Company and the Bank entered into three
year employment agreements (the "Employment Agreements") with N. William White,
R. Michael Wilbourn and Kathy L. Beach. Under the Agreements, Mr. White, Mr.
Wilbourn and Ms. Beach's employment may be terminated by the Company or the Bank
for "just cause" as defined below. The executive may also terminate employment
for "good reason" as defined below.

Termination by Company or Bank for "cause", or by executive without "good
reason", or due to death or disability. If an executive is terminated by the
Company or the Bank for "cause", or if an executive terminates employment
without "good reason", death, or disability, he or she will be entitled to all
benefits payable under insurance, health, retirement, bonus and salary programs
through the date of termination, and will be paid amounts due under those
arrangements in accordance with such arrangements.

Termination by Company or Bank without "cause" or by executive for "good
reason". If an executive is terminated by the Company or the Bank without
"cause", or if an executive terminates employment for "good reason", he or she
will be entitled to all benefits payable under insurance, health, retirement,
bonus and salary programs through the date of termination, and will be paid
amounts due under those arrangements in accordance with such arrangements.

If the termination does not occur during the two-year period following a "Change
in Control", the executive will continue to receive his or her salary for the
period of time remaining in the term of the Agreement. Payment will be made in
accordance with the Bank's payroll beginning on the first payroll after the date
of termination.

If the termination occurs during the two-year period following a "Change in
Control", as defined below, the executive will be paid an amount equal to 2.99
or 1.99 the executive's "base amount" (as defined in Code Section 280G(b)(3)
less the value of any benefits or rights accelerated by the Change in Control.
This amount will be paid in a single sum within 30 days of termination of
employment; provided, however, the amount will be reduced in such a way as to
prevent the payment from constituting an "excess parachute payment" in
accordance with Code Section 280G.
In lieu of COBRA coverage, the Company or the Bank shall maintain the welfare
benefit plans in effect for the executive for the remaining term of the
Agreement, unless an equivalent benefit is available for the executive from a
subsequent employer.

During the three-month period following termination by the Company or the Bank
without "cause" or by the executive for "good reason" following a "Change in
Control", the executive may purchase all options, whether or not they are
exercisable or have terminated at the fair market value of the shares as of the
date of termination.

No payment of "deferred compensation" (as defined by Code Section 409A) will be
made to an executive during the six months following termination of employment
for reasons other than death, if he or she is a key employee (as defined by Code
Section 409A).

Confidentiality and Non-Compete/Non-Solicitation Covenants. The executive agrees
to hold confidential all trade secrets and confidential information. The
executive also agrees to not compete with the Company or Bank during the one
year following termination in the geographical areas where the Company and Bank
are actually doing business or intend to do business as evidenced by a formal
proposal for business. The executive agrees to not influence customers for the
one-year period following termination. The executive lastly agrees not to
solicit any employees of the Company or Bank during the one-year period
following termination of employment.

Change of Control Agreements. During 2006, the Company and the Bank entered into
Change of Control agreements (the "Control Agreements") with Gregory A. DeMuth,
and David M. Hall. In the event of the termination of employment in connection
with any change in control of either the Company or the Bank during the term of
their Control Agreements, Mr. DeMuth and Mr. Hall will be paid a lump sum amount
equal to 2.99 times and 1.99 times their base compensation, respectively.

Restricted Stock Plan. In the event of a Change in Control of the Company (i)
the restrictions on the transfer of all shares of Restricted Stock will
immediately lapse, and (ii) all of the shares of Restricted Stock subject to
forfeiture will immediately become fully vested and nonforfeitable.

For purposes of the Agreements, "Cause" is defined as: (i) executive's personal
dishonesty of a material nature affecting executive's ability to perform his or
her duties under the Agreement; (ii) executive's incompetence in the performance
of his or her duties under the Agreement; (iii) executive's willful misconduct
or gross negligence; (iv) executive's breach of fiduciary duty involving
personal profit; (v) executive's intentional failure to perform stated duties;
(vi) executive's conviction of any felony; (vii) any requirement of a
governmental agency or authority having jurisdiction over the Company and the
Bank; or (viii) any material violation by the executive of any material
provision or covenant of the Agreement.

For purposes of the Agreements, "Good Reason" is defined as (i) any action by
the Company's or the Bank's Board of Directors to remove the executive without
the prior written consent of executive, except where the Company's and the
Bank's Board of Directors properly act to remove executive from such office for
"cause"; (ii) any action by the Company's or the Bank's Board of Directors to
materially limit, increase, or modify executive's duties and/or authority
(including his or her authority, subject to corporate controls no more
restrictive than those in effect on the date hereof, to hire and discharge
executives who are not bona fide officers of the Company) without the prior
written consent of executive, except such change in duties as may be required by
any government agency or authority having jurisdiction over the Company or the
Bank, or as may be required for the Board to perform its fiduciary obligations;
(iii) any failure of the Company to obtain the assumption of the obligation to
perform this Agreement by any successor; or (iv) any material violation by the
Company or the Bank of any material provision or covenant of this Agreement. For
purposes of the Agreements, "Change in Control" is defined as (i) any merger,
tender offer, consolidation or sale of substantially all of the assets of the
Company, or related series of such events, as a result of which stockholders of
the Company immediately prior to such event hold less than 50% of the
outstanding voting securities of the Company or its survivor or successor
immediately after such event; persons holding less than 25% of such securities
before such event own more than 50% of such securities after such event; or
persons constituting a majority of the Board of Directors were not directors of
the Company for at least 24 preceding months; (ii) any sale, lease, exchange,
transfer, or other disposition of all or any substantial part of the assets of
the Company; or (iii) any acquisition by any person or entity, directly or
indirectly, of the beneficial ownership of 40% or more of the outstanding voting
stock of the Company, excluding acquisitions by individuals or entities who at
the date of this Agreement were either a Director of the Company or the
beneficial owner (either directly or indirectly) of 10% or more of the voting
securities of the Company.

The following table sets forth information concerning potential payments and
benefits for the named executive officers under the Employment Agreements and
Control Agreements discussed above assuming a change in control event had
occurred on December 31, 2006.

N. William R. Michael Kathy L. Gregory A. David M.
White Wilbourn Beach DeMuth Hall
----------------------------------------- -------------- --------------- -------------- -------------- ---------------

Termination in connection with
a Change in Control (assumed
date of December 31, 2006):

Lump sum severance payment (1) $460,460 $313,950 $269,100 $358,800 $199,000
Lump sum welfare benefits (2) 14,640 - 7,560 24,240 24,240
Acceleration of restricted
stock awards (3) 14,760 14,760 14,760 - 8,200
Acceleration of vesting of
stock option awards (4) - - - - -
-------- -------- -------- -------- --------
Total $489,860 $328,710 $291,420 $383,040 $231,440
======== ======== ======== ======== ========

(1) Determined based upon 2.99 times his or her base compensation for Mr. White,
Mr. Wilbourn, Ms. Beach and Mr. DeMuth and 1.99 times his base compensation for
Mr. Hall.

(2) Estimated based upon welfare benefits for a period of two years.

(3) Reflects the assumed fair value of $16.40 per share which was the closing
stock price per share of the Company's Common Stock on December 29, 2006 (the
last trading day of the year) times the unvested restricted stock awards that
would vest due to the change in control.

(4) Reflects the excess of the assumed fair value of $16.40 per share which was
the closing stock price per share of the Company's Common Stock on December 29,
2006 (the last trading day of the year) over the exercise price for those stock
options becoming vested due to the change in control. There was no excess based
upon the assumed fair value of $16.40.

Compensation Committee Report
The Compensation Committee has reviewed and discussed the Compensation
Discussion and Analysis with management, and based on its review and discussion,
recommended to the Board of Directors that the Compensation Discussion and
Analysis be included in this Proxy Statement and, through incorporation by
reference, also in the Company's Annual Report on Form 10-K.

Submitted by the Compensation Committee:

Dr. Ronald L. Receveur, Chairman
Thomas Les Letton
W. Dudley Schryock
H. Lowell Wainwright, Jr.

RELATIONSHIPS AND RELATED TRANSACTIONS

The Bank, like many financial institutions, has followed a policy of granting
various types of loans to officers, directors, and employees. Applicable laws
and regulations require the loans to be made in the ordinary course of business
and on substantially the same terms, including interest rates and collateral, as
those prevailing at the time for comparable transactions with the Bank's other
customers, and do not involve more than the normal risk of collectibility, or
present other unfavorable features.

In addition, Federal Reserve Board Regulation O governs the extension of credit
to insiders, including executive officers, directors, and principal
stockholders. All extensions of credit to insiders are approved by the Company's
Board of Directors.

Management is responsible for reviewing and approving any transaction between
the Company and any director or officer of the Company or members of their
immediate family or entities with which they are affiliated. In addition, on an
annual basis, each director and executive officer is obligated to complete a
"Director and Officer Questionnaire" which requires the director or executive to
disclose any related party transactions or business relationships involving the
Company or its subsidiaries which are required to be disclosed pursuant to Item
404 of SEC Regulation S-K.

The following table illustrates the expenses of products and services provided
to the Company in 2006 from businesses with ownership interests by directors or
executive officers.

Director or Director or Executive Expense Paid by the Service or Product
Executive Officer Officer Related Entity Company Provided
----------------- ------------------------- ------------------- -------------------

Matthew C. Chalfant Chalfant Industries, Inc. $133,650 Leased office space
Jack L. Coleman, Jr. Patterson - Coleman LLC 6,000 Land lease for ATM

STOCKHOLDER COMMUNICATION WITH THE BOARD OF DIRECTORS

Any stockholder who desires to contact the Board of Directors or any member of
the Board of Directors may do so in writing. Communications should be addressed
to the "Board of Directors", Attn: Secretary, 1st Independence Financial Group,
Inc., 8620 Biggin Hill Lane, Louisville, Kentucky 40220-4117. Communications
received are distributed to the Chairman of the Board or the other members of
the Board as appropriate, depending on the facts and circumstances outlined in
the communications.

FORM 10-K

A copy of the Company's annual report on form 10-K for the year ended
December 31, 2006 is being provided with this Proxy Statement.

BY ORDER OF THE BOARD OF DIRECTORS

/s/ Teresa W. Noel
------------------
Teresa W. Noel
Secretary

April 11, 2007

1ST INDEPENDENCE FINANCIAL GROUP, INC.
8620 BIGGIN HILL LANE
LOUISVILLE, KENTUCKY 40220-4117
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ANNUAL MEETING OF STOCKHOLDERS - MAY 17, 2007
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The undersigned hereby appoints N. William White and Matthew C. Chalfant, or
either of them, with full power of substitution, to act as attorneys and proxies
for the undersigned, to vote all shares of Common Stock of 1st Independence
Financial Group, Inc. (the "Company") which the undersigned is entitled to vote
at the Annual Meeting of Stockholders (the "Meeting"), to be held at 3801
Charlestown Road, New Albany, Indiana, on Thursday, May 17, 2007, at 5:30 p.m.,
Eastern Daylight Time, and at any and all adjournments thereof, in the following
manner:

1. The election as directors of the nominees listed below for a three-year term:

|_|FOR |_|WITHHELD
Jack L. Coleman, Jr.
Thomas Les Letton
Charles L. Moore II

INSTRUCTIONS: To withhold your vote for any individual nominee, insert the
nominee's name on the line provided here.
___________________________________________________________________________

_________________________________________________________________

2. The ratification of the appointment of BKD, LLP as the Company's
independent registered public accounting firm for the year ending December
31, 2007.

|_|FOR |_|AGAINST |_|ABSTAIN

In their discretion, on such other business as may properly come before the
Meeting or any adjournments thereof.

The Board of Directors recommends a vote "FOR" all of the above listed
propositions.

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THIS SIGNED PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE
SPECIFIED, THIS SIGNED PROXY WILL BE VOTED FOR EACH OF THE PROPOSITIONS STATED.
ADDITIONALLY, IF ANY OTHER BUSINESS IS PRESENTED AT SUCH MEETING, THIS SIGNED
PROXY WILL BE VOTED BY THOSE NAMED IN THIS PROXY IN THEIR BEST JUDGMENT. AT THE
PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE PRESENTED
AT THE MEETING.
--------------------------------------------------------------------------------
(Continued and to be signed on other side)

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THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
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Should the undersigned be present and elect to vote at the Meeting, or at any
adjournment thereof, and after notification to the Secretary of the Company at
the Meeting of the stockholder's decision to terminate this Proxy, the power of
said attorneys and proxies shall be deemed terminated and of no further force
and effect. The undersigned may also revoke this Proxy by filing a subsequently
dated Proxy or by written notification to the Secretary of the Company of his or
her decision to terminate this Proxy.

The undersigned acknowledges
receipt from the Company prior to the
execution of this Proxy of a Notice of
Annual Meeting of Stockholders and a
Proxy Statement.

Date: _________________________________

_______________________________________
SIGNATURE OF STOCKHOLDER

Please sign exactly as your name appears on this Proxy. When signing as
attorney, executor, administrator, trustee, or guardian, please give your full
title. If shares are held jointly, each holder should sign.
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PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
POSTAGE-PREPAID ENVELOPE.
--------------------------------------------------------------------------------