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As filed with the Securities and Exchange Commission on February 27, 2013

Registration No. 333-                    

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



FORM S-4
REGISTRATION STATEMENT
Under
The Securities Act of 1933



S.Y. BANCORP, INC.
(Exact name of Registrant as specified in its charter)

Kentucky
(State or other jurisdiction of
incorporation or organization)

 

6022
(Primary Standard Industrial
Classification Code Number)

 

61-1137529
(I.R.S. Employer
Identification No.)

P.O. Box 32890
Louisville, Kentucky 40232-2890
(502) 582-2571

(Address, including zip code, and telephone number, including area code, of Registrant's principal executive offices)



Nancy B. Davis
Executive Vice President, Treasurer and Chief Financial Officer
P.O. Box 32890
Louisville, Kentucky 40232-2890
(502) 582-2571

(Name, address, including zip code, and telephone number, including area code, of agent for service)



Copies to:

C. Craig Bradley, Jr.
Scott R. Townsend
Stites & Harbison, PLLC
400 West Market Street, Suite 1800
Louisville, Kentucky 40202-3352
(502) 587-3400

 

Alan K. MacDonald
Nathan L. Berger
Frost Brown Todd LLC
400 West Market Street, Suite 3200
Louisville, Kentucky 40202-3363
(502) 589-5400



Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable after this Registration Statement becomes effective and upon the effective time of the merger described in the proxy statement/prospectus included in Part I of this Registration Statement.

            If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.    o

            If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) of the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

            If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

            Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer o   Accelerated filer ý   Non-accelerated filer o
(Do not check if a
smaller reporting company)
  Smaller reporting company o

            If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

 
   
   
   
   

Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer)

  o            

Exchange Act Rule 14d-1(d) (Cross-Border Third Party Tender Offer)

 

o

           



CALCULATION OF REGISTRATION FEE

               
 
Title of each class of securities
to be registered

  Amount to be
registered

  Proposed maximum
offering price per
share

  Proposed maximum
aggregate offering
price

  Amount of
registration fee

 

Common Stock, no par value

  534,885 shares(1)   N/A   $11,482,995(2)   $1,567(3)
 

Preferred Share Purchase Rights(4)

  None   None   None   None

 

(1)
Represents the maximum number of shares of common stock of the Registrant, S.Y. Bancorp, Inc., that are expected to be issued upon completion of the merger described herein of THE BANCorp, Inc. and the Registrant.

(2)
This Registration Statement relates to common stock of the Registrant issuable to holders of common stock of THE BANCorp, Inc. in the proposed acquisition of THE BANCorp, Inc. by the Registrant. Pursuant to Rule 457(f)(2) and Rule 457(f)(3), the registration fee was computed on the basis of the product of (i) $459.65, the book value per share of common stock of THE BANCorp, Inc. as of December 31, 2012, and (ii) 41,933, the maximum number of shares of THE BANCorp, Inc. common stock that may be exchanged for merger consideration, less the estimated aggregate amount of cash to be paid by the Registrant in exchange for shares of THE BANCorp, Inc. common stock, which equals $7,791,571. The maximum amount of cash that may be paid as merger consideration is calculated as the product of (i) $185.81, which is the amount of the cash portion of the merger consideration, and (ii) 41,933, the maximum number of shares of THE BANCorp, Inc. common stock that may be exchanged for merger consideration.

(3)
Computed pursuant to Rules 457(f)(2) and 457(f)(3) of the Securities Act, based on a rate of $136.40 per $1,000,000 of the proposed maximum aggregate offering price.

(4)
Any value attributable to the Preferred Share Purchase Rights is reflected in the value of the Common Stock. Because no separate consideration is paid for the Preferred Share Purchase Rights, the registration fee for such securities is included in the fee for the Common Stock.

            The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

   


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THE INFORMATION IN THIS PROXY STATEMENT/PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROXY STATEMENT/PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.

PRELIMINARY PROXY STATEMENT/PROSPECTUS
SUBJECT TO COMPLETION, DATED FEBRUARY 27, 2013



LOGO
 

LOGO

PROXY STATEMENT FOR SPECIAL MEETING OF
SHAREHOLDERS OF THE BANCORP, INC.

and

PROSPECTUS OF
S.Y. BANCORP, INC.

MERGER PROPOSED—YOUR VOTE IS VERY IMPORTANT

Dear Shareholder of THE BANCorp, Inc.:

        The boards of directors of THE BANCorp, Inc. ("TBI") and S.Y. Bancorp, Inc. ("SYB") have each unanimously approved an Agreement and Plan of Merger, dated as of December 19, 2012 (which we refer to as the "merger agreement"), which provides for the acquisition of TBI by SYB (which we refer to as the "merger"). If the merger is completed, each outstanding share of TBI common stock will be converted into the right to receive (i) 12.7557 shares of common stock of SYB, plus (ii) subject to certain potential adjustments, $185.81 in cash. The value of the merger consideration will fluctuate with the market price of SYB common stock and will not be known at the time you vote on the merger. SYB common stock trades on the NASDAQ Global Select Market under the symbol "SYBT." On February 25, 2013, the last practicable trading day before the date of this proxy statement/prospectus, the merger consideration of $185.81 in cash and 12.7557 shares of SYB common stock represented approximately $467.71 in value for each share of TBI common stock. We urge you to obtain current market quotations for SYB common stock.

        TBI will hold a special meeting of shareholders to consider the proposed merger and certain related matters. We cannot complete the merger unless the shareholders of TBI approve the proposals related to the merger. This document is a proxy statement which TBI is using to solicit proxies for use at its special meeting of shareholders to be held on [                        ], 2013 to vote on the merger as well as a prospectus relating to the shares of SYB common stock to be issued in the merger. This proxy statement/prospectus describes the special meeting, the merger proposal, the SYB shares to be issued in the merger, and other related matters. A copy of the merger agreement is attached as Annex A to the accompanying proxy statement/prospectus, and you are encouraged to read it in its entirety.

        Your vote is very important, regardless of the number of shares that you own. TBI's board of directors recommends that you vote "FOR" the proposal to approve the merger agreement and urges you to sign and date the enclosed proxy card and return it promptly in the enclosed postage-paid return envelope to make sure that your vote is counted.

        We look forward to the successful combination of TBI and SYB.


GRAPHIC
 
GRAPHIC
STEPHEN M. NORTON
President and Chief Executive Officer
THE BANCorp, Inc.
  DAVID P. HEINTZMAN
Chairman and Chief Executive Officer
S.Y. Bancorp, Inc.

        The obligations of TBI and SYB are subject to the satisfaction or waiver of several conditions set forth in the merger agreement. You should carefully read this entire proxy statement/prospectus and the documents incorporated by reference in the proxy statement/prospectus because they contain important information about the merger. Please see "Risk Factors" beginning on page 18 for a discussion of certain risks relating to the merger.

        The securities to be issued in connection with the merger are not savings or deposit accounts or other obligations of any bank or nonbank subsidiary of any of the parties, and they are not insured by the Federal Deposit Insurance Corporation, the Deposit Insurance Fund or any other governmental agency.

        Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the securities to be issued under this proxy statement/prospectus or determined if this proxy statement/prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

        This proxy statement/prospectus is dated [                        ], 2013 and is first being mailed to TBI's shareholders on or about [                        ], 2013.


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WHERE YOU CAN FIND MORE INFORMATION

        SYB files annual, quarterly and current reports, proxy statements and other information with the Securities and Exchange Commission (the "SEC"). You may read and copy any reports, statements or other information that SYB files with the SEC at the SEC's public reference room at 100 F Street, N.E., Room 1580, Washington, D.C. 20549, at prescribed rates. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference room. SYB's public filings also are available to the public from commercial document retrieval services and on the World Wide Web site maintained by the SEC at www.sec.gov.

        SYB has filed with the SEC a registration statement on Form S-4 under the Securities Act of 1933 with respect to the common stock of SYB being offered in the merger. This proxy statement/prospectus, which constitutes part of the registration statement, does not contain all of the information set forth in the registration statement or in the exhibits to the registration statement. Parts of the registration statement are omitted from the proxy statement/prospectus in accordance with the rules and regulations of the SEC. For further information regarding SYB and the SYB common stock, your attention is directed to the registration statement, including the attached exhibits. Statements made in this proxy statement/prospectus concerning the contents of any documents are not necessarily complete, and in each case are qualified in all respects by reference to the copy of the document filed with the SEC.

        As permitted by SEC rules, this document incorporates by reference certain important business and financial information about SYB from documents that SYB has previously filed with the SEC and documents that SYB may file with the SEC after the date of this proxy statement/prospectus and prior to the date of the TBI special meeting. See "Incorporation of Certain Documents By Reference" on page 86. These documents are available to you without charge upon your written or oral request. Your requests for these documents should be directed to the following address or telephone number:

S.Y. Bancorp, Inc.
P.O. Box 32890
Louisville, Kentucky 40232-2890
Attn: Nancy B. Davis
Executive Vice President, Treasurer and Chief Financial Officer
(502) 625-9176

        You should make any request for information from SYB no later than five business days before the date of the TBI shareholders' meeting (which means no later than [                  ], 2013) in order to ensure delivery prior to the TBI shareholders' special meeting. You can also obtain documents incorporated by reference in this document through the SEC's website at www.sec.gov. You may also obtain certain of these documents at SYB's website—www.syb.com—by selecting the link to "Investor Relations" and then selecting the link to "SEC Filings." Other information contained on SYB's website is expressly not incorporated by reference into this proxy statement/prospectus.


IMPORTANT NOTICE FOR TBI'S SHAREHOLDERS

        You should rely only on the information contained or incorporated by reference in this proxy statement/prospectus to vote on the proposals to TBI's shareholders in connection with the merger. We have not authorized anyone to provide you with information that is different from, or in addition to, what is contained in this proxy statement/prospectus or any document incorporated by reference in this document. Therefore, if anyone does provide you with information of this sort, you should not rely on it. The information in this proxy statement/prospectus is current as of the date on which it is mailed to TBI shareholders, and not necessarily as of any later date. If any material change occurs during the period that this proxy statement/prospectus is required to be delivered, this proxy statement/prospectus will be supplemented or amended.

        This proxy statement/prospectus does not constitute an offer to sell, or a solicitation of an offer to purchase, the securities offered by this proxy statement/prospectus, or the solicitation of a proxy, in any


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jurisdiction in which or to or from any person to whom or from whom it is unlawful to make such offer, solicitation of an offer, or proxy solicitation.

        This document constitutes a prospectus of SYB under the Securities Act of 1933 with respect to the SYB common stock to be issued to TBI shareholders pursuant to the merger agreement. This document also constitutes a proxy statement of TBI in connection with the solicitation of proxies by TBI's board of directors for use at the special meeting of TBI shareholders.

        All information regarding SYB in this proxy statement/prospectus has been provided by SYB, and all information regarding TBI in this proxy statement/prospectus has been provided by TBI.

        TBI generally makes a copy of its financial statements available to its shareholders on an annual basis. Copies of the financial statements can be obtained, without charge, by contacting Stephen M. Norton, TBI's President and Chief Executive Officer, at (502) 222-2100.

        If you have any questions or need any assistance in completing and returning your proxy, you may contact TBI at the following address and telephone number:

THE BANCorp, Inc.
515 S. First Street
P.O. Box 500
La Grange, Kentucky 40031
Attn: Stephen M. Norton
President and Chief Executive Officer
(502) 222-2100


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THE BANCORP, INC.
515 S. First Street
P.O. Box 500
La Grange, Kentucky 40031

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON [            ], 2013

To the Shareholders of THE BANCorp, Inc.:

        NOTICE IS HEREBY GIVEN that a special meeting (the "special meeting") of the shareholders of THE BANCorp, Inc. ("TBI") will be held on [            ], 2013, at [    ] a.m./p.m., local time, at the Crestwood branch of THE BANK—Oldham County located at 6317 West Hwy 146, Crestwood, Kentucky. At the special meeting, you will be asked to consider and vote upon the following matters:

        The board of directors of TBI has fixed the close of business on [            ], 2013 as the record date for the special meeting. Only TBI shareholders of record at the close of business on [            ], 2013 are entitled to notice of, and to vote at, the special meeting or any adjournment of the special meeting.

        Under Kentucky law, if the merger is completed, TBI's shareholders of record who do not vote to approve the merger proposal will be entitled to exercise dissenters' rights and obtain payment in cash of the fair value of their shares of TBI common stock if they comply with the procedures set forth in the applicable Kentucky statutory provisions, which are included as Annex D to the accompanying proxy statement/prospectus.

        The enclosed proxy statement/prospectus describes the merger agreement and the proposed merger in detail and includes, as Annex A, the complete text of the merger agreement. We urge you to read these materials carefully as they contain important information related to the proposed merger.

        The affirmative vote of a majority of the shares of TBI common stock outstanding on the record date is required for the approval of the merger proposal. The adjournment proposal will be approved if more votes are cast in favor of that proposal than are cast against it at the special meeting.

        The board of directors of TBI has unanimously approved the merger agreement and recommends that TBI shareholders vote "FOR" each of the proposals described in the accompanying materials.

        Your vote is very important.    The merger agreement must be approved by the affirmative vote of holders of a majority of the issued and outstanding shares of TBI common stock in order for the proposed merger to be consummated. If you do not return your proxy card and do not vote in person at the special meeting, then the effect will be a vote against the proposed merger. Whether or not you plan to attend the special meeting in person, we urge you to date, sign and return promptly the


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enclosed proxy card in the accompanying postage-paid return envelope. You may revoke your proxy at any time before the special meeting or by attending the special meeting and voting in person.


 

 

By Order of the Board of Directors

GRAPHIC

Stephen M. Norton
President and Chief Executive Officer

La Grange, Kentucky
[            ], 2013

IMPORTANT—PLEASE VOTE YOUR PROXY PROMPTLY.

        WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, PLEASE MARK, DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED POSTAGE-PAID RETURN ENVELOPE. IF YOU ARE ABLE TO ATTEND THE SPECIAL MEETING AND WISH TO VOTE YOUR SHARES PERSONALLY, YOU MAY DO SO AT ANY TIME BEFORE THE PROXY IS EXERCISED.


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TABLE OF CONTENTS

 
  Page  

QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETING

    1  

SUMMARY

    7  

The Companies

    7  

Special Meeting of Shareholders; Required Vote

    8  

The Merger and the Merger Agreement

    8  

What TBI Shareholders Will Receive in the Merger

    8  

What Holders of TBI Stock Options Will Receive

    9  

Risk Factors

    9  

Recommendation of TBI Board of Directors

    9  

TBI Reasons for the Merger

    9  

Dissenters' Rights

    9  

Opinion of TBI's Financial Advisor

    9  

TBI's Directors and Executive Officers Have Interests in the Merger

    10  

Regulatory Approvals

    10  

New SYB Shares Are Expected to be Eligible for Trading

    11  

Conditions to the Merger

    11  

Termination

    12  

Termination Fee

    13  

Accounting Treatment of the Merger

    14  

Rights of TBI Shareholders After the Merger

    14  

Material Federal Income Tax Consequences of the Merger

    14  

SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF S.Y. BANCORP,  INC. 

    15  

SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF THE BANCORP,  INC. 

    16  

MARKET PRICES AND DIVIDENDS OF SYB COMMON STOCK

    17  

RISK FACTORS

    18  

CAUTIONARY NOTE ABOUT FORWARD-LOOKING STATEMENTS

    23  

SPECIAL MEETING OF TBI'S SHAREHOLDERS

    25  

INFORMATION ABOUT THE COMPANIES

    28  

S.Y. Bancorp, Inc. 

    28  

Sanders Merger Sub, LLC

    28  

THE BANCorp, Inc. 

    28  

Market for TBI's Common Stock and Related Shareholder Matters

    29  

Management of TBI

    29  

Securities Ownership of TBI's Management

    29  

PROPOSAL 1—THE MERGER

    31  

Terms of the Merger

    31  

Background of the Merger

    31  

TBI's Reasons for the Merger and Board Recommendation

    34  

SYB's Reasons for the Merger

    35  

Opinion of Financial Advisor to TBI

    35  

Interests of TBI Directors and Officers in the Merger

    48  

Treatment of TBI's 401(k) Plan

    49  

Regulatory Approvals Required for the Merger

    49  

Voting and Support Agreements

    50  

Accounting Treatment of the Merger

    50  

NASDAQ Global Select Market Listing

    50  

THE MERGER AGREEMENT

    51  

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  Page  

Explanatory Note Regarding the Merger

    51  

The Merger

    51  

Consideration to be Received in the Merger

    51  

Treatment of TBI Stock Options

    53  

Holding Company Merger and Bank Merger

    53  

Exchange and Payment Procedures

    53  

Dissenters' Rights

    54  

Dividends and Distributions

    54  

Representations and Warranties

    54  

Conduct of Business Prior to Completion of the Merger

    56  

Covenants and Agreements

    58  

Shareholder Approval; TBI Board Recommendation; Change in Recommendation

    59  

No Solicitation

    59  

Acquisition Proposals by Third Parties

    59  

Conditions to the Merger

    61  

Termination

    62  

Termination Fee

    64  

Effect of Termination

    65  

Fees and Expenses

    65  

Management and Operations after the Merger

    65  

Effective Time of the Merger

    65  

DISSENTERS' RIGHTS

    66  

PROPOSAL 2—ADJOURNMENT OF THE SPECIAL MEETING

    69  

MATERIAL FEDERAL INCOME TAX CONSEQUENCES

    71  

DESCRIPTION OF SYB CAPITAL STOCK

    74  

COMPARISON OF SHAREHOLDERS' RIGHTS

    78  

EXPERTS

    85  

LEGAL MATTERS

    85  

SHAREHOLDER PROPOSALS FOR SYB ANNUAL MEETINGS

    85  

OTHER MATTERS

    86  

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

    86  

ANNEXES

       

Annex A—Agreement and Plan of Merger

    A-1  

Annex B—Opinion of Sandler O'Neill & Partners

    B-1  

Annex C—Form of Voting and Support Agreement

    C-1  

Annex D—Subtitle 13 of the Kentucky Business Corporation Act—Dissenters' Rights

    D-1  

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QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETING

        The following questions and answers are included for your convenience and to briefly address some commonly asked questions about the proposed merger transaction, the merger agreement, and the TBI special meeting. We urge you to read carefully the remainder of this document because the information in this section may not address all of the questions or provide all of the information that might be important to you in determining how to vote. Additional important information is also contained in the annexes to, and the documents incorporated by reference into, this document.

Q:    What am I being asked to vote on?

A:
S.Y. Bancorp, Inc. ("SYB") is proposing to acquire THE BANCorp, Inc. ("TBI") in accordance with the terms of the merger agreement dated December 19, 2012 (which we refer to as the "merger agreement") entered into by SYB, TBI, and Sanders Merger Sub, LLC, a wholly-owned subsdiary of SYB ("Merger Sub"). The merger agreement is described in this proxy statement/prospectus. As a shareholder of TBI, you are being asked to vote on the following two proposals:

to approve the merger agreement and the merger (as defined below), which we refer to collectively as the "merger proposal"; and

to approve one or more adjournments of the special meeting, if necessary or appropriate, including adjournments to permit further solicitation of proxies in favor of the merger proposal, which we refer to as the "adjournment proposal."

Q:    Why am I receiving this document?

A:
TBI is sending these materials to its shareholders to help them decide how to vote their shares of TBI common stock with respect to matters to be considered at the special meeting of TBI shareholders.

Q:    What is the merger?

A:
SYB, TBI, and Merger Sub have entered into the merger agreement, pursuant to which SYB will acquire TBI through the merger of TBI with and into Merger Sub, with Merger Sub continuing as the surviving company. Following the merger, TBI would no longer be a separate company. This transaction is referred to as the "merger." A copy of the merger agreement is attached as Annex A to this document.

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Q:    Why is TBI merging with SYB?

A:
TBI's board of directors believes that:

the merger presents an opportunity to receive an attractive return on investment, compared to the less certain prospects for enhancing long-term shareholder value if TBI remains independent in a challenging operating environment for community banks of its size;

the merger provides TBI shareholders the opportunity to exchange their shares for stock of a financial institution that offers a strong balance sheet, strong financial performance, diversified sources of revenue and less dependence on net interest income; and

holders of SYB common stock currently receive a regular quarterly dividend and enjoy meaningful liquidity if they desire to sell their shares.

Q:    What will I receive in the merger?

A:
If the merger is completed, each share of TBI common stock will be converted into the right to receive merger consideration comprised of 12.7557 shares of SYB common stock plus, subject to certain potential adjustments, $185.81 in cash (which we refer to collectively as the "merger consideration").

Q:    Will the value of the merger consideration change between the date of this proxy statement/prospectus and the completion of the merger?

A:
The value of the merger consideration may fluctuate between the date of this proxy statement/prospectus and the completion of the merger based upon the market value of SYB common stock and changes in the number of shares of TBI common stock outstanding. In the merger, TBI shareholders will receive a fixed amount of cash and a fixed number of shares of SYB common stock for each share of TBI common stock they hold. Although the number of shares of SYB stock to be exchanged in the merger will not change, any fluctuation in the market price of SYB stock after the special meeting will change the value of the shares of SYB common stock that TBI shareholders will receive. In addition, if the number of outstanding shares of TBI common stock increases as a result of the exercise of TBI stock options after the execution of the merger agreement, then the total merger consideration payable by SYB will increase, but it will not affect the merger consideration applicable to each share of TBI common stock.

Q:    What happens if I am eligible to receive a fraction of a share of SYB common stock as part of my merger consideration?

A:
If the aggregate number of shares of SYB common stock that you are eligible to receive as the stock portion of your merger consideration includes a fractional share, then you will instead receive cash in lieu of that fractional share. The amount of that payment will be determined by multiplying the resulting fraction of a share by $21.85.

Q:    When is the merger expected to be completed?

A:
We currently expect to complete the merger early in the second quarter of 2013. However, we cannot assure you when or if the merger will occur. We must, among other things, first obtain the approval of TBI shareholders at the special meeting and the required regulatory approvals

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Q:    What happens if the merger is not completed?

A:
If the merger is not completed, then holders of TBI common stock will not receive any consideration for their shares in connection with the merger. Instead, TBI will remain an independent company and the current TBI shareholders will retain their equity ownership interests in TBI. Under specified circumstances in connection with the termination of the merger agreement, including circumstances involving a change in recommendation by the board of directors of TBI or failure to receive the required approval of TBI shareholders for the merger, TBI may be required to pay SYB a termination fee of $750,000 or $250,000, respectively. For further discussion of the termination rights under the merger agreement and the related termination fees, see "The Merger Agreement—Termination; Termination Fee" beginning on page 62.

Q:    What risks should I consider before I vote on the merger proposal?

A:
You should review the risk factors set forth in the section of this proxy statement/prospectus entitled "Risk Factors" beginning on page 18. You also should read and carefully consider the risk factors relating to SYB's business which are contained in the reports and other documents that SYB files with the SEC and are incorporated by reference into this proxy statement/prospectus. See "Where You Can Find More Information" in the forepart of this document and "Incorporation of Certain Documents by Reference" beginning on page 86.

Q:    Will SYB shareholders receive any shares or cash as a result of the merger?

A:
No. SYB shareholders will continue to own the same number of SYB shares that they owned prior to the effective time of the merger (which we refer to as the "effective time.")

Q:    How many votes are required to approve the merger proposal and the adjournment proposal?

A:
The merger proposal will be approved if holders of a majority of the issued and outstanding shares of TBI common stock vote in favor of approving it. Approval of the adjournment proposal requires that more votes be cast in favor of that proposal than are cast against it.

Q:    How may I vote my shares at the special meeting?

A:
TBI shareholders may vote by (i) completing, signing, dating and returning the enclosed proxy card in the enclosed postage-paid return envelope or (ii) attending the special meeting and voting in person. We encourage you to submit your proxy as soon as possible to ensure that your shares will be represented and voted at the special meeting. Submitting a proxy will not affect the right of any TBI shareholder to vote in person at the special meeting.

Q:    What happens if I do not vote or I abstain?

A:
Because the required vote of TBI shareholders to approve the merger proposal is based upon the number of outstanding shares of TBI common stock entitled to vote rather than upon the number of shares actually voted, if you fail to vote or abstain from voting on the merger proposal, it will

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Q:    What happens if I return my proxy card without indicating how to vote?

A:
All shares represented by valid proxies that TBI receives through this solicitation, and that are not revoked, will be voted in accordance with your instructions on the proxy card. If you return a properly signed proxy card but do not indicate how you want to vote on any particular proposal, then your proxy will be counted as a vote FOR approval of the merger proposal and FOR approval of the adjournment proposal.

Q:    When and where is the TBI special meeting?

A:
The special meeting of TBI shareholders will be held at the Crestwood branch of THE BANK—Oldham County located at 6317 West Hwy 146, Crestwood, Kentucky, on [        ], 2013, at [    ] local time.

Q:    What are the tax consequences of the merger to me?

A:
We have structured the merger as a tax-free reorganization, so that SYB, TBI, and their respective shareholders will not recognize any gain or loss for federal income tax purposes on the exchange of TBI shares of common stock for shares of SYB common stock in the merger. TBI shareholders generally will be taxed on any gain that they may have with respect to the cash portion of the merger consideration. Additionally, taxable income will result to the extent that a TBI shareholder receives cash in lieu of a fractional share of SYB common stock and that cash received exceeds the TBI shareholder's adjusted basis in the surrendered stock. See "Material Federal Income Tax Consequences" beginning on page 71. Your tax consequences will depend on your personal situation. You should consult your tax advisor for a full understanding of the tax consequences of the merger to you.

Q:    Will I have dissenters' rights?

A:
Yes. Under Kentucky law, you have the right to dissent from the merger and receive, in lieu of the consideration you would otherwise be entitled to receive as a result of the merger, payment in cash for the fair value of your shares of TBI common stock if the merger is completed. The fair value of your shares may be more or less than the merger consideration that you would receive in the merger if you do not dissent. This cash payment would be taxable to you. To exercise dissenters' rights, you must strictly follow the procedures prescribed by the Kentucky Business Corporation Act ("KBCA"). To review these procedures in more detail, see "Dissenters' Rights" beginning on page 66 of this proxy statement/prospectus and Annex D.

Q:    Are SYB shareholders required to vote on the merger agreement?

A:
No. A vote of SYB shareholders is not required to approve the merger agreement.

Q:    How does the TBI board of directors recommend that I vote?

A:
The TBI board of directors unanimously recommends that you vote "FOR" approval of the merger proposal and "FOR" approval of the adjournment proposal.

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Q:    What do I need to do now?

A:
After carefully reading this proxy statement/prospectus, indicate on your proxy card how you want your shares to be voted. Then sign, date, and mail your proxy card in the enclosed postage-paid return envelope as soon as possible so that your shares can be voted at the special meeting.

Q:    If my shares are held in "street name" by my broker, will my broker vote my shares for me?

A:
If your shares are held in the name of a broker, bank, or other nominee, then you are considered the "beneficial holder" of the shares held for you in what is known as "street name." In this case, you are not the record holder of the shares. As the beneficial holder, you generally have the right to instruct the broker or other nominee as to how to vote the shares. Your broker will vote your shares on the merger proposal only if you provide instructions on how to vote. You should contact your broker and ask what directions your broker will need from you. If you do not provide instructions to your broker on how to vote on the merger proposal, then your broker will not be able to vote your shares on that proposal, which will have the same effect as voting against the merger proposal.

Q:    Can I attend the special meeting and vote my shares in person?

A:
Yes. All TBI shareholders are invited to attend the special meeting. Only those persons who are holders of record of TBI common stock on [        ], 2013, the record date established by the TBI board of directors for the special meeting, may vote in person at the meeting. If you are not a shareholder of record, then you must obtain a proxy, executed in your favor, from the recordholder of your shares, such as a broker, bank or other nominee, to be able to vote your shares in person at the special meeting.

Q:    Can I change my vote after I have mailed my signed proxy card?

A:
Yes. You can change your vote at any time before your proxy is voted at the special meeting. You can do this in one of three ways:

First, you can send a written notice stating that you revoke your proxy.

Second, you can complete and submit a new proxy card, dated as of a date later than the first proxy card.

Third, you can attend the special meeting and vote in person.

Q:    What if some or all of my TBI shares are held in the TBI 401(k) plan?

A:
If you are a participant in the THE BANK—Oldham County Profit Sharing Plan, which we refer to as the "401(k) plan," then you may be receiving this material because of the TBI common stock held in your account in the 401(k) plan. In that case, the new trustee of the 401(k) plan will distribute to participants a voting instruction card prior to the special meeting. If you properly complete and execute the voting instruction card and return it as directed, then the trustee will vote the shares allocated to your 401(k) plan account in accordance with your instructions, subject

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Q:    Should I send in my stock certificates now?

A:
No. You should not send your stock certificates with your proxy card. As soon as practicable after the completion of the merger, you will receive written instructions and a letter of transmittal describing how you may exchange your shares for your merger consideration. At that time, you must send your completed letter of transmittal to Registrar and Transfer Company, which will serve as the exchange agent, in order to receive your merger consideration. You should not send your share certificate until you receive the letter of transmittal.

Q:    What if I cannot find my stock certificates?

A:
There will be a procedure for you to receive your merger consideration, even if you have lost one or more of your TBI stock certificates. This procedure, however, may take time to complete and could involve an additional expense to you. In order to ensure that you will be able to receive your merger consideration promptly after the merger is completed, we urge you to confirm that you either hold stock certificates for your shares of TBI common stock or that your shares are held by a broker, depository or another financial institution. If you cannot locate your TBI stock certificates, then we urge you to contact Stephen M. Norton, President and Chief Executive Officer of TBI, as soon as possible to arrange for replacement stock certificates. Mr. Norton can be reached at the address and telephone number listed below.

Q:    Where can I find more information about SYB?

A:
You can find more information about SYB from the sources described under the section entitled "Where You Can Find More Information" in the forepart of this document.

Q:    Whom should I contact if I have other questions about the merger proposal or the procedures for voting my shares at the special meeting?

A:
If you have more questions about the merger proposal or the procedures for voting your shares at the special meeting, or if you need additional copies of this document or a replacement proxy card, then you should contact:

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SUMMARY

        This summary highlights selected information in this proxy statement/prospectus and may not contain all of the information that is important to you. To understand the merger more fully, you should read this entire document carefully, including the annexes and the documents referred to in this proxy statement/prospectus. A list of the documents incorporated by reference appears under the caption "Incorporation of Certain Documents by Reference" beginning on page 86. Each item in this summary includes a page reference directing you to a more complete description of that item.

        Except where the context indicates otherwise, references to "SYB" refer to S.Y. Bancorp, Inc. and its consolidated subsidiaries, and references to "TBI" refer to THE BANCorp, Inc. and its consolidated subsidiaries. References to "SYB Bank" refer to Stock Yards Bank & Trust Company, SYB's wholly-owned subsidiary bank, and references to "Merger Sub" refer to Sanders Merger Sub, LLC, a wholly-owned subsidiary of SYB. References to "TBI Bank" refer to THE BANK—Oldham County, TBI's wholly-owned subsidiary bank. References to "we," "us," or "our" refer to both SYB and TBI.


The Companies (page 28)

        S.Y. Bancorp, Inc. (or SYB, as it is referred to in this document) is a bank holding company which was incorporated in Kentucky in 1988 and is headquartered in Louisville, Kentucky. SYB provides a broad range of banking services in the Louisville, Kentucky, Indianapolis, Indiana, and Cincinnati, Ohio markets through its bank subsidiary, Stock Yards Bank & Trust Company, which operates 31 full service offices, 25 of which are located in and around metropolitan Louisville. As of September 30, 2012, Stock Yards Bank & Trust Company (or SYB Bank, as it is referred to in this document) had total assets of $2.103 billion, total loans of $1.578 billion, total deposits of $1.690 billion, and total shareholders' equity of $201 million. SYB's common stock is listed on the NASDAQ Global Select Market under the trading symbol "SYBT."

        Sanders Merger Sub, LLC (or Merger Sub, as it is referred to in this document) is a Kentucky limited liability company and a wholly-owned subsidiary of SYB. Merger Sub was formed as a Kentucky corporation in December 2012 and was converted to a limited liability company in February 2013. Merger Sub was formed solely for the purpose of entering into the merger agreement with TBI and completing the merger and has not conducted any activities other than those incidental to its formation and the matters contemplated by the merger agreement.

        THE BANCorp, Inc. (or TBI, as it is referred to in this document) is a Kentucky corporation headquartered in La Grange, Kentucky and a registered bank holding company. THE BANK—Oldham County (or TBI Bank, as it is referred to in this document) is its wholly-owned bank subsidiary. THE

 

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BANK—Oldham County was established in 1993 in La Grange, Kentucky and operates four full-service banking facilities in the area of Oldham County, Kentucky. As of September 30, 2012, THE BANK—Oldham County had total assets of $135.6 million, total loans of $46.8 million, total deposits of $115.2 million, and total shareholders' equity of $17.0 million. TBI's common stock is not traded on any securities exchange, nor is there an established trading market for TBI's common stock.


Special Meeting of Shareholders; Required Vote (page 25)

        The special meeting of TBI shareholders is scheduled to be held on [          ], 2013, at [      ] a.m./p.m. local time, at the Crestwood branch of THE BANK—Oldham County located at 6317 West Hwy 146, Crestwood, Kentucky. At the TBI special meeting, you will be asked to vote to approve the merger proposal and the adjournment proposal. Only TBI shareholders of record as of the close of business on [          ], 2013 are entitled to notice of, and to vote at, the TBI special meeting. As of the record date, there were [          ] shares of TBI common stock issued and outstanding.

        In connection with signing the merger agreement, TBI's directors, who then collectively owned approximately 20% of the outstanding shares of TBI stock, signed Voting and Support Agreements that, among other things, require them to vote all of their shares of TBI stock in favor of the merger proposal. A copy of the form of Voting and Support Agreement signed by these TBI shareholders is attached to this proxy statement/prospectus as Annex C.

        The affirmative vote of a majority of the shares of TBI common stock outstanding is required for the approval of the merger proposal. Approval of the adjournment proposal requires that more votes be cast in favor of that proposal than are cast against it. No approval by SYB shareholders is required on any of the proposals.


The Merger and the Merger Agreement (page 51)

        SYB's acquisition of TBI is governed by the merger agreement. The merger agreement provides that, if all of the conditions are satisfied or waived, TBI will be merged with and into Merger Sub, with Merger Sub surviving. We encourage you to read the merger agreement, which is included as Annex A to this proxy statement/prospectus and is incorporated by reference into this proxy statement/prospectus, as it is the primary legal document governing the merger.


What TBI Shareholders Will Receive in the Merger (page 51)

        If the merger is completed, then each share of TBI common stock will be converted into the right to receive the "merger consideration," which is comprised of 12.7557 shares of SYB common stock (which we refer to as the "stock portion" of the merger consideration) plus, subject to certain potential adjustments described below, $185.81 in cash (which we refer to as the "cash portion" of the merger consideration.) The stock portion of the merger consideration is fixed. The aggregate cash portion of the merger consideration will be decreased on a dollar for dollar basis if, and to the extent by which, TBI shareholders' equity is less than $17,860,000. For purposes of determining whether there will be such a decrease in the aggregate cash portion of the merger consideration, TBI shareholders' equity will be calculated not more than three business days prior to the closing date of the merger in accordance with the formula set forth in the merger agreement. As of December 31, 2012, TBI's shareholders' equity, net of accumulated other comprehensive income or loss and estimated transaction expenses (which are both excluded under the formula), would have exceeded $17,860,000. The aggregate merger consideration to be paid by SYB will increase if the number of shares of TBI common stock outstanding at the effective time of the merger exceeds the number of shares outstanding as of the date of the merger agreement as a result of the exercise of TBI stock options. As a result, the merger consideration applicable to each share of TBI common stock will not be changed by the exercise of TBI stock options prior to the closing date. SYB will not issue any fractional shares

 

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of SYB common stock as part of the merger consideration. Instead, SYB will pay to each former TBI shareholder who otherwise would have received a fraction of a share an amount of cash (rounded to the nearest cent) determined by multiplying the fraction of a share to which such holder would otherwise be entitled by $21.85.


What Holders of TBI Stock Options Will Receive (page 53)

        If the merger is completed, each holder of a TBI stock option will be entitled to receive an amount in cash equal to the excess, if any, of the per share merger consideration minus the exercise price of the option and less applicable withholding taxes.


Risk Factors (page 18)

        TBI shareholders should carefully consider the risks identified in the "Risk Factors" section beginning on page 18 in evaluating whether to approve the proposals. These risks should be considered along with the information incorporated by reference into this proxy statement/prospectus, including risk factors, from the reports of SYB filed with the SEC and any other information included in this proxy statement/prospectus, including the matters addressed in the section entitled "Cautionary Note About Forward-Looking Statements" on page 23.


Recommendation of TBI Board of Directors (page 34)

        The TBI board of directors approved the merger agreement and the proposed merger. The TBI board believes that the merger is advisable and fair to, and in the best interests of, TBI and its shareholders, and therefore recommends that TBI shareholders vote "FOR" the merger proposal. The TBI board also recommends that you vote "FOR" the adjournment proposal.


TBI Reasons for the Merger (page 34)

        TBI's board, with the assistance of outside financial and legal advisors, has evaluated the financial, legal, and market considerations bearing on its decision to approve and recommend the merger agreement. In reaching its conclusion that the merger agreement is in the best interests of TBI and the TBI shareholders, the TBI board carefully considered several material factors, which are discussed under the section captioned "Proposal 1—The Merger—TBI's Reasons for the Merger and Board Recommendation" beginning on page 34. Because of the wide variety of factors considered, the TBI board of directors did not believe it practicable, nor did it attempt, to quantify or otherwise assign relative weight to the specific factors it considered in reaching its decision.


Dissenters' Rights (page 66)

        Dissenters' rights are statutory rights that, if available under law, enable shareholders to demand that the corporation pay the fair value for their shares instead of receiving the consideration offered to shareholders in connection with an extraordinary transaction such as a merger. Under Kentucky law, you have the right to exercise dissenters' rights in connection with the merger. To exercise dissenters' rights of appraisal, or appraisal rights, you must strictly follow the procedures prescribed by the KBCA. To review these procedures in more detail, see "Dissenters' Rights" beginning on page 66 and Annex D.


Opinion of TBI's Financial Advisor (page 35)

        In deciding to approve the merger agreement, the board of directors of TBI considered, among other things, the opinion of its financial advisor, Sandler O'Neill & Partners, L.P. ("Sandler O'Neill"), an investment banking and financial advisory firm specializing in advising financial institutions, that the merger consideration provided in the merger agreement is fair, from a financial point of view, to the

 

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TBI shareholders. The opinion is based on and subject to procedures, matters, and limitations described in the opinion and other matters that Sandler O'Neill deemed relevant. The opinion is attached to this proxy statement/prospectus as Annex B. We urge all TBI shareholders to read the entire opinion, which describes the procedures followed, matters considered, and limitations on the review undertaken by Sandler O'Neill in providing its opinion. The opinion of Sandler O'Neill is directed to the TBI board of directors and does not constitute a recommendation to any TBI shareholder as to how to vote at the TBI special meeting or any other matter relating to the proposed merger.


TBI's Directors and Executive Officers Have Interests in the Merger (page 48)

        When you consider the TBI board of directors' recommendation that you vote in favor of the merger proposal, you should be aware that the executive officers of TBI and the members of TBI's board of directors have interests in the merger that may be different from, or in addition to, the interests of TBI shareholders generally that may present actual or apparent conflicts of interest. TBI's board of directors was aware of these interests when it approved the merger agreement. Such material interests are as follows:

        Alexander Babey and Stephen Norton each have Change in Control Security Agreements in place with TBI which, subject to the closing of the merger and to agreements by Babey and Norton, respectively, to sign release and waiver agreements acceptable to TBI and SYB, entitle each of them to receive lump sum cash severance payments from SYB within 30 days after their employment ends, if it ends within certain time windows and for certain reasons after the effective time of the merger. Each of these severance payments would be in an amount equal to a multiple of each officer's average total taxable compensation from TBI for the five calendar years prior to the Effective time of the merger. Babey's multiple is 1.5, and Norton's multiple is 2.99. Also, as a condition to SYB's obligations under the merger agreement, TBI must amend these two Change in Control Security Agreements principally to include covenants that restrict each of Mr. Babey and Mr. Norton from engaging in activities that would be competitive with SYB.

        SYB and Stephen M. Norton, current President and Chief Executive Officer of TBI, have agreed in principle on an arrangement pursuant to which Mr. Norton's employment would continue with SYB for 30 days after the effective time of the merger at his existing base salary compensation, after which time Mr. Norton would be available to provide SYB with consulting services for an additional four months following the effective time at an hourly rate of $100.

        Each present and former director, officer and employee of TBI and TBI Bank will be indemnified to the fullest extent permitted by law for any acts arising out of or pertaining to matters existing or occurring at or prior to the closing. Additionally, prior to the closing of the merger, TBI will purchase an extended reporting period or "tail" endorsement under TBI's existing directors' and officers' liability insurance policy for TBI's directors and officers that will provide insurance coverage for a period of six years following the completion of the merger.


Regulatory Approvals (page 49)

        Under the terms of the merger agreement, the merger cannot be completed until SYB receives all necessary regulatory approvals or waivers, including approvals or waivers from the FDIC, the KDFI

 

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and the Federal Reserve Board. SYB and TBI have filed applications with each of these governmental authorities to obtain the required regulatory approvals and waivers.


New SYB Shares Are Expected to Be Eligible for Trading (page 50)

        The shares of SYB common stock to be issued in the merger are expected to be eligible for trading on the NASDAQ Global Select Market upon issuance.


Conditions to the Merger (page 61)

        The obligation of SYB and TBI to consummate the merger is subject to the satisfaction or waiver of a number of conditions, on or before the completion of the merger, including the following material conditions:

 

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We cannot be certain when, or if, the conditions to the merger will be satisfied or waived, or that the merger will be completed.


Termination (page 62)

        The merger agreement may be terminated by TBI and/or SYB under a number of circumstances, including:

TBI may also terminate the merger agreement if SYB's stock price falls below thresholds set forth in the merger agreement and described below in the section entitled "The Merger Agreement—Termination," and SYB elects not to increase the stock portion of the merger consideration pursuant to a prescribed formula. Please note that approval of the merger proposal by TBI shareholders authorizes the TBI board of directors to terminate the merger agreement under certain circumstances or proceed with the merger at its sole discretion if the board of directors believes such action to be in the best interests of its shareholders, regardless of the then-current value of the merger consideration to be received by the TBI shareholders.

 

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Termination Fee (page 64)

        In general, all fees and expenses incurred by SYB and TBI in connection with the merger agreement and the transactions contemplated by the merger agreement will be paid by the party incurring such fees or expenses.

        However, upon termination of the merger agreement under specified circumstances, SYB or TBI may be required to pay the other a termination fee of $750,000 or reimburse the other for its reasonable, documented out-of-pocket expenses (up to a maximum of $250,000) incurred in connection with the merger agreement.

        TBI will be required to pay SYB a termination fee of $750,000 in the following circumstances:

        TBI will be required to reimburse SYB for up to $250,000 in out-of-pocket expenses if SYB terminates the merger agreement as a result of the TBI shareholders failing to approve the merger agreement at a meeting called for that purpose.

        SYB will be required to pay TBI the termination fee of $750,000 if the merger agreement is terminated by TBI due to an uncured breach by SYB of one of its covenants, agreements, representations, or warranties under the merger agreement that would result in the failure of the closing conditions described in the section entitled "The Merger Agreement—Conditions to the Merger."

        SYB will be required to reimburse TBI for up to $250,000 in out-of-pocket expenses if SYB terminates the merger agreement because a governmental entity imposes a restriction, requirement, or condition on SYB which the SYB board of directors reasonably determines in good faith would materially reduce the benefits of the transactions contemplated by the merger agreement or would restrict or burden the business or operations of SYB or any of its subsidiaries to such a degree that, had they been known, SYB would not have entered into the merger agreement.

        See the section entitled "The Merger Agreement—Termination Fee" beginning on page 64 for a discussion of the circumstances under which the termination fee will be required to be paid.

 

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Accounting Treatment of the Merger (page 50)

        The merger will be accounted for as a "purchase," as that term is used under generally accepted accounting principles, for accounting and financial reporting purposes. Under purchase accounting, the assets (including identifiable intangible assets) and liabilities (including executor contracts and other commitments) of TBI as of the effective time will be recorded at their respective fair values and added to those of SYB. Any excess of purchase price over the fair values will be recorded as goodwill. Consolidated financial statements of SYB issued after the merger would reflect these fair values and would not be restated retroactively to reflect the historical consolidated financial position or results of operations of TBI.


Rights of TBI Shareholders after the Merger (page 78)

        If the merger is completed, TBI shareholders (other than those who exercise dissenters' rights) will become SYB shareholders, and their rights would then be governed by SYB's articles of incorporation and bylaws and by applicable law. Both SYB and TBI are organized under Kentucky law. To review the differences in the rights of shareholders under each company's governing documents, see "Comparison of Shareholders' Rights" beginning on page 78.


Material Federal Income Tax Consequences of the Merger (page 71)

        SYB and TBI expect the merger to qualify as a "reorganization" for U.S. federal income tax purposes. If the merger qualifies as a reorganization, then, in general, for U.S. federal income tax purposes:

        To review the tax consequences of the merger to TBI shareholders in greater detail, please see the section "Material Federal Income Tax Consequences" beginning on page 71.

 

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SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF S. Y. BANCORP, INC.

        The following table presents selected historical consolidated financial information of SYB. The selected balance sheet and statement of income data, insofar as they relate to the years ended December 31, 2011, 2010, and 2009, are derived from SYB's audited consolidated financial statements. The selected historical consolidated financial data as of and for the nine-month periods ended September 30, 2012 and 2011 are derived from SYB's unaudited consolidated financial statements. In SYB's opinion, all adjustments, consisting solely of normal recurring adjustments, necessary for a fair presentation of results as of and for the nine-month periods ended September 30, 2012 and 2011 have been included. This information should be read together with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and SYB's consolidated financial statements and the related notes incorporated by reference into this proxy statement/prospectus from SYB's Annual Report on Form 10-K for the year ended December 31, 2011 and SYB's Quarterly Reports on Form 10-Q for the quarters ended March 31, 2012, June 30, 2012 and September 30, 2012. See "Where You Can Find More Information" in the forepart of this document for a description of where you can find this information. Results for past periods are not necessarily indicative of results that may be expected for any future period, and results for the nine-month period ended September 30, 2012, are not necessarily indicative of results that may be expected for the full year ending December 31, 2012.

 
  As of and for the
nine months ended
September 30
  As of and for the year ended December 31  
 
  2012   2011   2011   2010   2009  
 
  (In thousands, except per share data)
 

Income Statement Data

                               

Interest income

  $ 64,867   $ 64,470   $ 86,039   $ 86,146   $ 83,856  

Interest expense

    9,227     11,754     15,307     19,267     25,181  

Net interest income

    55,640     52,716     70,732     66,879     58,675  

Provision for loan losses

    9,025     9,500     12,600     11,469     12,775  

Non-interest income

    28,330     24,015     33,244     33,739     30,036  

Non-interest expenses

    48,289     42,854     59,581     57,131     52,695  

Income before income taxes

    26,656     24,377     31,795     32,018     23,241  

Net income

    19,287     17,262     23,604     22,953     16,308  

Per Common Share Data

                               

Diluted earnings per share

  $ 1.38   $ 1.25   $ 1.71   $ 1.67   $ 1.19  

Dividends per share

    .57     .54     .72     .69     .68  

Book value per share

    14.50     13.30     13.58     12.37     11.29  

Weighted average common and common equivalent shares—diluted

    13,929     13,844     13,834     13,779     13,689  

Balance Sheet Data

                               

Total assets

  $ 2,102,589   $ 1,987,954   $ 2,053,097   $ 1,902,945   $ 1,791,479  

Loans

    1,578,290     1,539,055     1,544,845     1,508,425     1,435,462  

Allowance for loan losses

    31,245     29,066     29,745     25,543     20,000  

Securities

    360,946     286,985     352,185     245,352     228,260  

Deposits

    1,690,030     1,576,560     1,617,739     1,493,468     1,418,184  

Federal Home Loan Bank advances

    60,423     60,434     60,431     60,442     60,453  

Subordinated debentures

    30,900     40,900     40,900     40,900     40,930  

Stockholders' equity

    201,422     183,553     187,686     169,861     153,614  

 

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SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF THE BANCORP, INC.

        The following table presents selected historical consolidated financial information of TBI. The selected balance sheet and statement of income data, insofar as they relate to the years ended December 31, 2011, 2010, and 2009, are derived from TBI's audited consolidated financial statements. The selected historical consolidated financial data as of and for the nine-month periods ended September 30, 2012 and 2011 are derived from TBI's unaudited consolidated financial statements. In TBI's opinion, all adjustments, consisting solely of normal recurring adjustments, necessary for a fair presentation of results as of and for the nine-month periods ended September 30, 2012 and 2011 have been included. See "Where You Can Find More Information" in the forepart of this document for a description of how you can obtain copies of these financial statements. Results for past periods are not necessarily indicative of results that may be expected for any future period, and results for the nine-month period ended September 30, 2012, are not necessarily indicative of results that may be expected for the full year ending December 31, 2012.

 
  As of and for the
nine months ended
September 30
  As of and for the year ended December 31  
 
  2012   2011   2011   2010   2009  
 
  (In thousands, except per share data)
 

Income Statement Data

                               

Interest income

  $ 2,960     3,468     4,527     5,130     6,023  

Interest expense

    137     256     316     562     873  

Net interest income

    2,823     3,212     4,211     4,568     5,150  

Provision for loan losses

        60     60     285     335  

Non-interest income

    1,163     1,094     1,460     1,507     1,413  

Non-interest expenses

    3,570     3,785     4,963     5,005     4,974  

Income before income taxes

    416     461     648     785     1,254  

Net income

    366     403     563     666     1,014  

Per Common Share Data

                               

Diluted earnings per share

  $ 8.75     9.49     13.33     15.76     23.82  

Dividends per share

                     

Book value per share

    464.85     452.31     455.64     423.76     418.61  

Weighted average common and common equivalent shares—diluted

    41,825     42,243     42,221     42,258     42,562  

Balance Sheet Data

                               

Total assets

  $ 137,945     141,977     144,444     146,962     140,249  

Loans

    46,762     49,828     49,946     59,446     64,755  

Allowance for loan losses

    (1,152 )   (862 )   (859 )   (1,391 )   (1,299 )

Securities

    70,132     70,863     70,396     68,377     53,395  

Deposits

    114,847     116,930     120,617     125,135     116,928  

Federal Home Loan Bank advances

                               

Subordinated debentures

                               

Stockholders' equity

    19,395     19,023     18,926     17,757     17,402  

 

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MARKET PRICES AND DIVIDENDS OF SYB COMMON STOCK

        SYB common stock is traded on the NASDAQ Global Select Market under the ticker symbol "SYBT." The following table sets forth, for the periods indicated, the high and low market closing prices of shares of SYB common stock as reported on the NASDAQ Global Select Market and the quarterly cash dividends declared per share of SYB common stock.

 
  SYB Common Stock  
 
  High   Low   Dividend  

2011

                   

First Quarter

  $ 25.16   $ 23.71   $ 0.18  

Second Quarter

    25.76     22.50     0.18  

Third Quarter

    23.97     18.06     0.18  

Fourth Quarter

    21.24     18.25     0.18  

2012

                   

First Quarter

  $ 23.65   $ 20.60   $ 0.19  

Second Quarter

    23.95     21.96     0.19  

Third Quarter

    24.98     22.45     0.19  

Fourth Quarter

    24.12     21.08     0.20  

2013

                   

First Quarter (through February 25, 2013)

  $ 23.29   $ 22.10   $ 0.20  

        On December 18, 2012, the last trading day before the announcement of the merger agreement, the high and low sales prices of shares of SYB common stock as reported on the NASDAQ Global Select Market were $22.06 and $21.82, respectively. On February 25, 2013, the latest practicable date before the date of this document, the high and low sales prices of shares of SYB common stock as reported on the NASDAQ Global Select Market were $22.87 and $22.10, respectively.

        As of February 18, 2013, the last date prior to printing this document for which it was practicable to obtain this information, there were approximately 1,494 registered holders of SYB common stock.

        Under the terms of the merger agreement, the transaction is currently valued at $467.71 per TBI common share, based on the closing price per share of SYB's common stock on February 25, 2013. In the merger, each share of TBI common stock owned by a TBI shareholder (except for dissenting shares) will be converted into the right to receive 12.7557 shares of SYB common stock and $185.81 in cash.

        TBI shareholders are advised to obtain current market quotations for SYB common stock before voting. Although the exchange ratio is fixed, the market price of SYB common stock will fluctuate between the date of this document and the effective date. As a result, the value of the stock portion of the merger consideration that TBI shareholders will receive upon completion of the merger will depend on the market price of SYB common stock at the time of the merger. No assurance can be given concerning the market price of SYB common stock before or after the effective date.

 

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RISK FACTORS

        In addition to the other information contained in or incorporated by reference into this proxy statement/prospectus (see "Where You Can Find More Information" in the forepart of this document and "Incorporation of Certain Documents By Reference" on page 86), including the risk factors included in the reports filed by SYB with the SEC, you should consider carefully the risk factors described below in deciding whether to vote for approval of the merger agreement, as we believe these risk factors to be material to a decision on how to vote your shares. You should keep these risk factors in mind when you read forward-looking statements in this document and in the documents incorporated by reference into this document. If any of the following risks and uncertainties develops into actual events, the combined company, its results of operations or its financial condition could be adversely impacted. Please also refer to the section of this proxy statement/prospectus entitled "Cautionary Note About Forward-Looking Statements" on page 23.


Risks Related to the Merger

TBI shareholders cannot be certain of the market value of the merger consideration that they will receive because the market price of SYB common stock will fluctuate and the cash portion of the merger consideration is subject to adjustment as a result of certain factors.

        Upon completion of the merger, each share of TBI common stock will be converted into merger consideration consisting of 12.7557 shares of SYB common stock and, subject to certain potential adjustments, $185.81 in cash. The stock portion of the merger consideration is subject to a fixed exchange ratio of 12.7557 shares of SYB common stock for each share of TBI common stock. The market value of the stock portion of the merger consideration may vary after the date on which we announced the merger, on the date on which this document was mailed to TBI shareholders, on the date of the special meeting of the TBI shareholders, and on the date on which the merger is completed. Any change in the market price of SYB common stock prior to completion of the merger will affect the market value of the stock portion of the merger consideration that TBI shareholders will receive upon completion of the merger. In addition, the aggregate amount of the cash portion of the merger consideration to be paid by SYB will be decreased on a dollar for dollar basis to the extent by which TBI shareholders' equity is less than $17,860,000, as calculated not more than three business days prior to the closing date of the merger in accordance with the formula set forth in the merger agreement and described under the section entitled "The Merger Agreement—Consideration to be Received in the Merger." Accordingly, at the time of the special meeting, TBI shareholders will not know or be able to calculate the value of the merger consideration they would receive upon completion of the merger. Stock price changes may result from a variety of factors, including general market and economic conditions, changes in our respective businesses, operations and prospects, and regulatory considerations. Many of these factors are beyond our control. We urge you to obtain current market quotations for shares of SYB common stock before you vote your shares at the TBI special meeting.

The merger agreement may be terminated in accordance with its terms and the merger may not be completed, which could have a negative impact on TBI.

        The merger agreement is subject to a number of conditions that must be fulfilled in order to close the merger. These conditions include, among others: approval by TBI's shareholders; regulatory approval of the merger; continued accuracy of certain representations and warranties by each of TBI and SYB; performance by TBI and SYB of certain covenants and agreements; and TBI Bank having "Core Deposits" (as defined in the merger agreement) of not less than $80,000,000, pursuant to calculations called for under the merger agreement.

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        In addition, certain circumstances exist in which SYB and/or TBI may terminate the merger, including if:

        In addition, the TBI board may terminate the merger agreement if the following two conditions have not been met and SYB has elected not to increase the stock portion of the merger consideration pursuant to a prescribed formula:

        There can be no assurance that the conditions to closing the merger will be fulfilled or that the merger will be completed. If the merger agreement is terminated, there may be various consequences to TBI, including that TBI may have incurred substantial expenses in connection with the merger and/or had its business adversely impacted by the failure to pursue other beneficial opportunities due to the focus of management on the merger, in each case without realizing any of the anticipated benefits of completing the merger. A termination of the merger agreement may also damage the reputation and franchise value of TBI. If the merger agreement is terminated and TBI's board of directors seeks another merger or business combination, TBI shareholders cannot be certain that TBI will be able to find a party willing to pay the equivalent or greater consideration than that which SYB has agreed to pay in the merger. In addition, in certain circumstances, TBI may be required to reimburse SYB for expenses incurred by SYB up to a maximum of $250,000 or to pay a termination fee of $750,000.

TBI shareholders will have a reduced ownership and voting interest after the merger and will exercise less influence over management.

        TBI's shareholders currently have the right to vote in the election of the TBI directors and on other significant matters affecting TBI, such as the proposed merger with SYB. If the merger occurs, then each TBI shareholder (other than shareholders exercising dissenters' rights) will become a shareholder of SYB with a percentage ownership of the combined organization that is much smaller than the shareholder's percentage ownership of TBI. Based on the anticipated number of SYB common shares to be issued in the merger, it is anticipated that the TBI shareholders will only own approximately 3.70% of all of the outstanding shares of SYB's common stock. As a result, TBI's shareholders will have less influence on the management and policies of SYB than they now have on the management and policies of TBI. Furthermore, shareholders of SYB do not have pre-emptive or similar rights, and therefore, SYB can sell additional voting securities in the future without offering them to the prior TBI shareholders, which will further reduce their ownership percentage in, and voting control over, SYB.

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The termination fee and the restrictions on solicitation contained in the merger agreement may discourage other companies from trying to acquire TBI.

        Until the completion of the merger, with some exceptions, TBI is prohibited from soliciting, initiating, encouraging, or participating in any discussion of, or otherwise considering, any inquiries or proposals that may lead to an acquisition by any person or entity other than SYB. In addition, TBI has agreed that in certain circumstances, the termination of the merger agreement will require TBI to reimburse SYB for up to $250,000 of expenses incurred by SYB or to pay a termination fee of $750,000 to TBI. These provisions could discourage other companies from trying to acquire TBI even though such other companies might be willing to offer greater value to TBI's shareholders than SYB has offered in the merger agreement. The reimbursement of SYB's expenses and the payment of the termination fee could have a material adverse effect on TBI's financial condition.

Certain of TBI's officers and directors have interests that are different from, or in addition to, the interests of TBI's shareholders generally.

        Certain of TBI's directors and executive officers have interests in the merger that are different from, or in addition to, your interest as a shareholder that may present actual or apparent conflicts of interest. These include payments to be made to two executive officers under existing change in control agreements, a proposed consulting agreement involving TBI's current President and Chief Executive Officer, Stephen M. Norton, and the continuation of director and officer indemnification and liability insurance protections. See "Proposal 1—The Merger—Interests of Certain Directors and Executive Officers of TBI in the Merger" beginning on page 48.

The merger may fail to qualify as a reorganization for federal tax purposes, resulting in your recognition of taxable gain or loss in respect of your TBI shares.

        SYB and TBI intend for the merger to qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code (the "Code"). The Internal Revenue Service (the "IRS") will not provide a ruling on this matter, and it is possible that the IRS could adopt a contrary position. If the merger fails to qualify as a reorganization, then you generally would recognize gain or loss on each share of TBI common stock exchanged for SYB common stock in the merger in an amount equal to the difference between your adjusted tax basis in that share and the fair market value of the SYB common stock received in exchange for that share upon completion of the merger.

The shares of SYB common stock to be received by TBI shareholders as a result of the merger will have different rights from the shares of TBI common stock.

        The rights associated with TBI common stock are different from the rights associated with SYB common stock. See the section entitled "Comparison of the Rights of Shareholders" beginning on page 78 for a discussion of the different rights associated with SYB common stock.

The merger cannot be completed unless regulatory approvals are received and conditions of those approvals are met. The need for regulatory approvals may delay the date of completion of the merger or may diminish the benefits of the merger.

        We cannot complete the merger unless SYB receives the necessary regulatory approvals, and we may not receive all required regulatory approvals. SYB and TBI have filed applications with the FDIC and KDFI seeking approval of the merger. In addition, either of these regulators may impose conditions on the completion of the merger or require changes in the terms of the merger. These conditions or changes could have the effect of delaying completion of the merger or imposing additional costs or limiting the possible revenues of the combined company.

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        In addition, you should be aware that, as in any transaction, it is possible that, among other things, restrictions on the combined operations of the two companies, including divestitures, may be sought by governmental agencies as a condition to obtaining the required regulatory approvals. This may diminish the benefits of, or have an adverse effect on, the combined company following the merger. SYB has the right to terminate the merger agreement if a governmental entity, in connection with the grant of a required regulatory approval, imposes any restriction, requirement, or condition that the SYB board of directors reasonably determines would materially reduce the benefits of the merger or restrict or burden SYB's business or operations to such a degree that SYB would not have, knowing such, entered into the merger agreement.

If the merger is not completed, then TBI will have incurred substantial expenses without its shareholders realizing the expected benefits of the merger.

        TBI has incurred substantial expenses in connection with the transactions described in this proxy statement/prospectus. The merger may not be completed, and if the merger is not completed, TBI expects that it will have incurred approximately $550,000 in expenses related to the merger. These expenses would likely have a material adverse impact on the operating results of TBI because it would not have realized the expected benefits of the merger.

The fairness opinion obtained by TBI will not reflect changes in circumstances that may occur before the closing date of the merger.

        TBI has not obtained an updated fairness opinion as of the date of this proxy statement/prospectus from its financial adviser. Changes in the operations and prospects of TBI, general market and economic conditions, and other factors that may be beyond the control of TBI, and on which the fairness opinion was based, may alter the value of TBI and/or SYB or the prices of shares of TBI common stock and shares of SYB common stock by the time the merger is completed. The fairness opinion does not speak as of the time the merger will be completed or as of any date other than the date of such opinion. For a description of the opinion that TBI received from its financial adviser, please refer to "Proposal 1—The Merger—Opinion of Financial Advisor to TBI" on page 35.


Risks Related to the Business of SYB upon Completion of the Merger

SYB may be unable to successfully integrate TBI Bank's operations and retain TBI Bank's employees.

        Simultaneous with the closing of the merger, TBI Bank will be merged with and into SYB Bank, and these two companies have previously operated independently of each other. The possible difficulties and challenges of merging the operations of TBI Bank with SYB Bank include:

        The process of integrating operations may also be time consuming and costly and could cause an interruption of, or loss of momentum in, the activities of one or more of SYB, SYB Bank, TBI, or TBI Bank, and the loss of key personnel. The diversion of management's attention and any delays or difficulties encountered in connection with the merger of TBI Bank into SYB Bank could have an adverse effect on the business and results of operations of SYB or SYB Bank and, therefore, the stock price of SYB.

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SYB may be unable to retain TBI customers or grow the TBI business.

        TBI operates in geographic markets, and with customers primarily located, in and around Oldham County, Kentucky, while SYB's markets and customers are located primarily in Louisville, Kentucky, Cincinnati, Ohio, and Indianapolis, Indiana. Although SYB is not anticipating major differences between the preferences of TBI's customers compared to SYB's customers, any time there is a change in products, services, ownership, or management of a bank, there is a risk that customers may choose to obtain some or all of their banking products and services from other banks. SYB believes that the desire of TBI's customers to seek products or services elsewhere as a result of the merger will be lessened because the shareholders of TBI will continue to own a portion of the combined operations after the merger and TBI's geographic market is in close proximity to SYB's geographic market. However, the TBI operations and customers are in a new geographic region for SYB, so there can be no assurances or guarantees that SYB will be able to retain all of TBI's customers or grow the customer base in Oldham County, Kentucky.


Risks Related to SYB's Business

        You should read and consider risk factors specific to SYB's business that will also affect the combined company after the merger, described in Part I, Item 1A of SYB's Annual Report on Form 10-K for the year ended December 31, 2011, as updated by subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, all of which are filed by SYB with the SEC and incorporated by reference into this document. See "Incorporation of Certain Documents By Reference" on page 86 for the location of information incorporated by reference into this proxy statement/prospectus.

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CAUTIONARY NOTE ABOUT FORWARD-LOOKING STATEMENTS

        This document contains or incorporates by reference "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about SYB's financial condition, results of operations, earnings outlook, asset quality trends and profitability, and may include statements that relate to the period following the completion of the merger. Forward-looking statements express management's current expectations or forecasts of future events and, by their nature, are subject to assumptions, risks and uncertainties. Certain statements contained in this document that are not statements of historical fact constitute forward-looking statements, notwithstanding that such statements are not specifically identified.

        In addition, certain statements may be contained in the future filings of SYB with the SEC, in press releases and in oral and written statements made by or with the approval of SYB that are not statements of historical fact and constitute forward-looking statements. Examples of forward-looking statements include, but are not limited to:

        Words such as "believes," "plans," "anticipates," "expects," "intends," "targeted," "continue," "remain," "will," "should," "may" and other similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements.

        Forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. Factors that could cause actual results to differ from those discussed in the forward-looking statements include those set forth under "Risk Factors" beginning on page 18, as well as, among others, the following:

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        Additional factors that could cause SYB's results to differ materially from those described in the forward-looking statements can be found in SYB's Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with the SEC. All subsequent written and oral forward-looking statements concerning the proposed transaction or other matters and attributable to SYB or TBI or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements referenced above. Forward-looking statements speak only as of the date on which such statements are made. SYB and TBI undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made, or to reflect the occurrence of unanticipated events.

        We caution you not to place undue reliance on the forward-looking statements.

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SPECIAL MEETING OF TBI'S SHAREHOLDERS

        This proxy statement/prospectus is being furnished to you in connection with the solicitation of proxies by the TBI board of directors for the special meeting of TBI shareholders. This section contains information about the special meeting and matters related to voting of shares at the meeting.


Date, Time and Place

        The special meeting will be held on[              ], [                        ], 2013, at [          ] [p].m., local time, at the Crestwood branch of THE BANK—Oldham County located at 6317 West Hwy 146, Crestwood, Kentucky.


Purpose of the Special Meeting

        At the special meeting, the TBI board of directors will ask you to vote on proposals to:


Record Date and Voting Rights

        TBI has set the close of business on [                    ], 2013, as the record date for the special meeting. Only TBI shareholders at the close of business on the record date are entitled to notice of and to vote at the special meeting. As of the record date, there were [        ] shares of TBI common stock outstanding and entitled to vote at the special meeting. Holders of record of shares of TBI common stock on the record date are entitled to one vote per share at the special meeting on all matters to be considered at that meeting.


Quorum

        A quorum of shareholders is necessary to hold a valid shareholders' meeting. A majority of TBI's issued and outstanding shares on the record date must be present in person or by proxy at the special meeting before any action may be taken at the special meeting. If a quorum is not present at the special meeting, it is expected that the special meeting will be adjourned or postponed.


Required Vote

        Approval of the merger proposal will require the affirmative vote of at least a majority of TBI's issued and outstanding shares. Brokers holding shares in street name will not have authority to vote on either the merger proposal or the adjournment proposal unless they receive voting instructions from their customer account holders. Broker non-votes and abstentions from voting will have the same effect as a vote against the merger proposal.

        The adjournment proposal requires that more votes cast be in favor of it than are cast against it. Abstentions and broker non-votes will, therefore, have no effect on the adjournment proposal.


Shares of TBI Subject to Voting Agreements

        TBI's directors, who collectively as of the signing date of the merger agreement, owned approximately 20% of the outstanding shares of TBI common stock, executed Voting and Support Agreements pursuant to which they agreed to vote all of their TBI stock in favor of the merger. A copy of the form of the Voting and Support Agreement is attached to this proxy statement/prospectus as Annex C.

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Recommendation of TBI's Board of Directors

        After careful consideration, the board of directors of TBI unanimously voted in favor of the merger agreement and the merger. The TBI board of directors believes that these items and the transactions that they contemplate are in the best interests of TBI and its shareholders and therefore recommends that TBI shareholders vote "FOR" approval of the merger agreement and the transactions contemplated thereby. The TBI board also recommends a vote "FOR" the approval of adjournment of the special meeting, if it becomes necessary or appropriate.

        See "Proposal 1—The Merger—Background of the Merger" and "TBI's Reasons for the Merger and Board Recommendation" beginning on pages 31 and 34, respectively, for a more detailed discussion of the TBI board of directors' recommendation with regard to the merger proposal.


Voting of Proxies

        You may vote in person at the special meeting or by proxy. To ensure your representation at the special meeting, we recommend you vote by proxy even if you plan to attend the special meeting. You may change your vote at the special meeting by revoking your proxy and voting in person.

        TBI shareholders whose shares are held in "street name" by their broker, bank, or other nominee must follow the instructions provided by their broker, bank, or other nominee to vote their shares. If a shareholder does not provide his or her broker with voting instructions, then the broker will not be authorized to vote on either proposal. Broker non-votes will have the same effect as a vote against the merger proposal but will have no effect on the adjournment proposal.

        Voting instructions are included on your proxy form. If you properly complete and timely submit your proxy, your shares will be voted as you have directed. You may vote for, against, or abstain with respect to the approval of the merger proposal and the adjournment proposal. If you are the record holder of your shares and submit your proxy without specifying a voting instruction, your shares will be voted "FOR" approval of the merger proposal and, if necessary, "FOR" the adjournment proposal. If a shareholder marks the "abstain" box on the proxy card, then that submission will have the same effect as a vote against the merger proposal but will have no effect on the adjournment proposal.


Revocation of Proxies

        You may revoke your proxy before it is voted by (i) filing with the Secretary of TBI a duly executed revocation of proxy prior to the vote being taken stating that the proxy is revoked, (ii) submitting a new proxy with a later date, or (iii) voting in person at the special meeting.

        Attendance at the special meeting will not, in and of itself, constitute a revocation of a proxy. All written notices of revocation and other communication with respect to the revocation of proxies should be addressed to: THE BANCorp, Inc., 515 S. First Street, P.O. Box 500, La Grange, Kentucky 40031, Attention: Secretary.


401(k) Plan Voting Instructions

        TBI maintains the THE BANK—Oldham County Profit Sharing Plan, originally effective April 1, 1995, and the trust related thereto (referred to as the "401(k) plan") which holds approximately [      ]% of TBI common stock as of the record date for the special meeting. Each participant in the 401(k) plan may instruct the designated fiduciary on how to vote the shares of TBI common stock allocated to his or her account under the 401(k) plan. If a participant properly executes the voting instruction card distributed by the designated fiduciary, the designated fiduciary will vote such participant's shares in accordance with the participant's instructions, subject to the fiduciary's obligations under the Employee Retirement Income Security Act of 1974. Where incomplete voting

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instruction cards are returned to the designated fiduciary or no card is timely returned, the designated fiduciary will vote the 401(k) plan shares in that participant's account in its discretion.


Solicitation of Proxies

        TBI will bear the costs of the distribution of this proxy statement/prospectus. In addition to soliciting proxies by mail, directors, officers, and employees of TBI may solicit proxies personally and by telephone. None of these persons will receive additional or special compensation for soliciting proxies. TBI will, upon request, reimburse brokers, banks and other nominees for their expenses in sending proxy materials to their customers who are beneficial owners and obtaining their voting instructions.

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INFORMATION ABOUT THE COMPANIES

S.Y. Bancorp, Inc.

        S.Y. Bancorp, Inc. (or SYB, as it is referred to in this document) is a bank holding company incorporated in Kentucky and headquartered in Louisville, Kentucky. SYB provides a broad range of banking services in the Louisville, Kentucky, Indianapolis, Indiana, and Cincinnati, Ohio markets through its bank subsidiary, Stock Yards Bank & Trust Company (or SYB Bank, as it is referred to in this document), which operates 31 full service banking offices. In addition to its banking operations, SYB Bank has an investment management and trust department operating under the name Stock Yards Trust Company offering a wide range of trust administration, investment management, employee benefit plan services, estate administration, and financial planning services. SYB Bank also originates and sells single-family residential mortgages through Stock Yards Mortgage Company. Additionally, SYB Bank offers securities brokerage services in the name of Stock Yards Financial Services through an arrangement with a third party broker-dealer. As of September 30, 2012, SYB had total assets of $2.10 billion, total loans of $1.58 billion, total deposits of $1.69 billion, and total shareholders' equity of $201 million. SYB's common stock trades on the NASDAQ Global Select Market under the ticker symbol "SYBT."

        Additional information about SYB and SYB Bank is included in documents incorporated by reference into this document. For more information, please see the section entitled "Incorporation of Certain Documents By Reference" beginning on page 86.


Sanders Merger Sub, LLC

        Sanders Merger Sub, LLC (or Merger Sub, as it is referred to in this document) is a Kentucky limited liability company and a wholly-owned subsidiary of SYB. Merger Sub was formed as a Kentucky corporation in December 2012 and was converted to a limited liability company in February 2013. Merger Sub was formed solely for the purpose of entering into the merger agreement with TBI and completing the merger and has not conducted any activities other than those incidental to its formation and the matters contemplated by the merger agreement.


THE BANCorp, Inc.

        THE BANCorp, Inc. (or TBI, as it is referred to in this document), is a Kentucky corporation and a registered bank holding company headquartered in La Grange, Kentucky. THE BANK—Oldham County (or TBI Bank, as it is referred to in this document) is its wholly-owned bank subsidiary. THE BANK—Oldham County was established in 1993 in La Grange, Kentucky and operates four full-service

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banking offices that offer a wide range of commercial and consumer banking services to its customers in and adjacent to Oldham County, Kentucky. As of September 30, 2012, THE BANK—Oldham County had total assets of $135.6 million, total loans of $46.8 million, total deposits of $115.2 million and total shareholders' equity of $17.0 million. As of February 15, 2013, TBI had 41 full-time equivalent employees.


Market for TBI's Common Stock and Related Shareholder Matters

        TBI common stock is not traded on any securities exchange, nor is there an established trading market for TBI common stock. TBI has not declared or paid any cash dividends on its common shares at any time. As of February 15, 2013, there were 41,933 shares of TBI common stock outstanding and held of record by approximately 155 holders.


Management of TBI

        The following table sets forth information about the current directors and executive officers of TBI:

Name
  Age   Positions

Gregory J. Esposito

    70   Director

William G. Howard

    65   Director

William L. S. Landes III

    63   Director

Arvel J. "Jerry" McMahan

    66   Director

Stephen M. Norton

    61   President and Chief Executive Officer, Director

R. Alex Rankin

    57   Chairman of the Board

Jonathan P. Westbrook

    62   Director and Secretary/Treasurer

Alexander Babey

    44   Executive Vice President of THE BANK—Oldham County


Securities Ownership of TBI's Management

        The following table shows the number of shares of common stock beneficially owned by each director and executive officer of TBI and by all of TBI's directors and executive officers as a group. The table shows beneficial ownership as of February 15, 2013. To the best of TBI's knowledge, there

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are no five percent or greater beneficial owners of TBI common stock other than as included in the table below.

 
  Shares of TBI
Common Stock
Beneficially Owned(1)
 
Name of Beneficial Owner
  Number of
Shares
  Percentage
of class
 

Gregory J. Esposito(2)

    1,300     3.1 %

William G. Howard(3)

    1,500     3.6  

William L. S. Landes III(4)

    935     2.2  

Arvel J. "Jerry" McMahan(5)

    1,300     3.1  

Stephen M. Norton(6)

    1,400     3.3  

R. Alex Rankin(7)

    2,500     5.9  

Jonathan P. Westbrook(8)

    1,300     3.1  

Alexander Babey(9)

    1,000     2.3  

All executive officers and directors as a group (8 persons)(10)

    11,235     25.1 %

(1)
Unless otherwise indicated, each of the listed shareholders has sole voting and investment power with respect to the shares. Under SEC rules, a person is considered to be the beneficial owner of shares that the person may acquire within 60 days through the exercise of options. Shares underlying exercisable options are included in the total number of outstanding shares when computing the percentage beneficially owned by the person or a group. The shares are not included in the total number of outstanding shares when computing the percentage of shares beneficially owned by any other person or group.

(2)
Includes exercisable options to purchase 135 shares, 960 shares Mr. Esposito holds jointly with his wife, and 20 shares held solely by his wife.

(3)
Includes exercisable options to purchase 135 shares.

(4)
Includes exercisable options to purchase 135 shares and 150 shares held by Mr. Landes' wife.

(5)
Includes exercisable options to purchase 135 shares and 980 shares held by Mr. McMahan's wife.

(6)
Includes exercisable options to purchase 1,000 shares and 200 shares Mr. Norton holds jointly with his wife.

(7)
Includes exercisable options to purchase 135 shares and 20 shares held by Mr. Rankin's wife.

(8)
Includes exercisable options to purchase 135 shares and 380 shares Mr. Westbrook holds jointly with his wife, and 300 shares held solely by his wife.

(9)
Represents exercisable options to purchase 1,000 shares.

(10)
Includes exercisable options to purchase 2,810 shares.

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PROPOSAL 1—THE MERGER

Terms of the Merger

        Each of SYB's and TBI's respective boards of directors has approved the merger agreement. The merger agreement provides for the merger of TBI with and into Merger Sub, a wholly-owned subsidiary of SYB, with Merger Sub continuing as the surviving entity. In the merger, each share of TBI common stock issued and outstanding immediately prior to the completion of the merger will be converted into the right to receive merger consideration consisting of 12.7557 shares of SYB common stock and $185.81 in cash. The cash portion of the merger consideration is subject to possible reduction under certain circumstances specified in the merger agreement. No fractional shares of SYB common stock will be issued in connection with the merger, and holders of TBI common stock will be entitled to receive cash in lieu of fractional shares of SYB common stock.

        TBI shareholders are being asked to approve the merger agreement. See the section entitled "The Merger Agreement" included elsewhere in this proxy statement/prospectus for additional and more detailed information regarding the legal documents that govern the merger, including information about the conditions to the completion of the merger and the provisions for terminating and amending the merger agreement.


Background of the Merger

        In August 2009, the board of directors of TBI concluded that it was an appropriate time to undertake an evaluation of TBI's long-term strategic alternatives. The environment for community banks operating in the midst of a severe recession was becoming more and more challenging. Economic conditions had begun to adversely affect loan customers. Regulatory directives to preserve capital and liquidity regarding community banks also limited opportunities for earnings growth and risk tolerance. Increased regulation that would increase operating expenses appeared inevitable, particularly with the adoption of the Dodd-Frank Act, with a disproportionate impact on smaller banks that lacked the scale to absorb higher compliance costs. In addition, TBI faced succession issues, with several members of senior management anticipating retirement within five years.

        The board of directors of TBI initially identified three potential long-term strategies for consideration beyond weathering the recession:

        Although the TBI board initially favored a strategy focused on growth, the pressures facing TBI and other community banks had not significantly subsided by July 2010. While generally preferring that TBI remain independent, the board of directors of TBI was also concerned about enhancing shareholder value in a difficult operating environment that presented numerous obstacles. Remaining independent was likely to require safely growing TBI to substantially more than its present $140 million in total assets in a relatively short time frame to increase market share and absorb higher technology and compliance costs. However, such growth would require raising a substantial amount of additional capital, and conditions in the capital markets were not favorable for community banks. The board of directors of TBI concluded at its July 2010 meeting that TBI should explore the option of a sale to a larger financial institution and begin to position TBI for such an eventuality.

        At the October 2010 meeting of the TBI board of directors, Chairman Alex Rankin and Chief Executive Officer Stephen Norton reported that they had met with two banking executives and two

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financial advisory firms experienced in bank merger activities. At the meeting, the board of directors of TBI directed Messrs. Rankin and Norton to gather additional information with a view to engaging a financial advisor.

        Representatives of Sandler O'Neill made a presentation to the board of directors of TBI at its February 22, 2011 meeting. The representatives provided background information on their firm, explained the acquisition process and timeline, and discussed the current banking environment and hurdles facing community banks, particularly institutions with total assets of less than $1 billion. After the Sandler O'Neill representatives left the meeting, a representative of Frost Brown Todd LLC ("Frost Brown Todd"), TBI's legal counsel, discussed a number of factors the TBI board should consider in engaging a financial advisor and evaluating the possible sale of the TBI Bank. After further discussion, the board of directors of TBI directed Messrs. Rankin and Norton to negotiate the terms of an engagement letter with Sandler O'Neill. An engagement letter was executed on April 7, 2011.

        At the June 2011 meeting of the board of directors of TBI, representatives of Sandler O'Neill reported on the responses of prospective acquirers they had identified and contacted on behalf of TBI Bank. Of the thirteen prospects contacted, seven had signed confidentiality agreements and conducted preliminary due diligence, and of those seven, three had submitted indications of interest. One submitting an indication was SYB. The representatives of Sandler O'Neill provided background on each of the three prospects and a preliminary pro forma analysis of the financial and other terms of each preliminary proposal. The board of directors of TBI authorized Sandler O'Neill to continue discussions with two of the prospects, one of which was SYB.

        On August 16, 2011, representatives of Sandler O'Neill reported on their discussions with the two prospects since the June meeting of the board of directors of TBI. One prospect expressed continuing interest but would not commit to a timetable for a transaction. The board of directors of TBI advised Sandler O'Neill that it would only consider an offer at or above a certain minimum purchase price. Discussions with SYB continued, but the parties were not able to reach an agreement.

        After these discussions ended, the board of directors and management of TBI focused for several months on strategic initiatives intended to improve TBI's operations and profitability.

        At its July 23, 2012 meeting, the board of directors of TBI revisited the viability of TBI remaining an independent community bank. Representatives of Sandler O'Neill attended a portion of the meeting to provide updates on the banking industry and the market for mergers and acquisitions. The board of directors of TBI then discussed the uncertainty of the current community bank business model, noting that future earnings depended upon success in attracting sustainable loan growth and gaining scale to offset rising regulatory expenses. Agreeing that their primary goal was to protect shareholder interests, the board of directors of TBI determined to again explore the identification of parties who might be interested in acquiring the Bank. Alex Rankin, Jon Westbrook, and Stephen Norton were appointed to a special committee to oversee this project. TBI signed a new engagement letter with Sandler O'Neill on August 23, 2012.

        Following the July 2012 meeting of the board of directors of TBI, Sandler O'Neill contacted the three bidders and one other party contacted in 2011, plus two additional prospects, to explore their continued interest in considering a potential acquisition of TBI. In response to these discussions, SYB and one other potential acquirer expressed an interest in proceeding to the next step of conducting a preliminary due diligence review of TBI.

        On September 25, 2012, Messrs. Norton and Rankin met with David P. Heintzman, the Chairman and Chief Executive Officer of SYB, to further discuss a potential acquisition of TBI by SYB.

        In early October 2012, SYB and the other potential acquirer each executed a new confidentiality agreement with TBI. TBI then provided certain books and records to allow SYB and the other potential acquirer to conduct a preliminary due diligence review of TBI.

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        In late October 2012, TBI received written, non-binding indications of interest from SYB and the other potential acquirer that outlined the basic financial and other terms of a merger transaction. Each proposal was contingent upon completion of the due diligence process and subject to the negotiation of a mutually agreeable definitive merger agreement and related agreements. SYB's non-binding indication of interest was also contingent upon TBI agreeing to negotiate a potential merger transaction exclusively with SYB for a period of 45 days. After submitting their non-binding indications of interest, SYB and the other potential acquirer conducted extensive due diligence on TBI, including on-site reviews of TBI's loan portfolio. Following this round of due diligence, each of the bidders revised its bid. The TBI board believed that the revised SYB proposal was superior and directed management and TBI's advisors to initiate preliminary discussions with SYB toward negotiating the terms of a transaction.

        During the first two weeks of November 2012, SYB and TBI, together with their respective outside legal and financial advisors, negotiated certain material terms of a potential transaction that were set forth in SYB's non-binding indication of interest. On November 14, 2012, SYB delivered a revised non-binding written indication of interest to TBI which reflected these preliminary negotiations and discussions.

        Later in the day on November 14, 2012, the board of directors of TBI met with representatives of Sandler O'Neill to review, discuss, and analyze the recent solicitation process and the terms of the revised proposals submitted by each of SYB and the other potential acquirer. SYB's non-binding indication of interest proposed a price that was significantly higher than that proposed by the other potential acquirer. SYB's proposed price also met the threshold price established by the board of directors of TBI. During this discussion, the representatives of Sandler O'Neill also noted other advantages and potential issues relating to SYB's non-binding indication of interest. After discussing SYB's non-binding indication of interest at length with their financial and legal advisors, and noting several issues to be addressed, the board of directors of TBI voted to move forward with negotiations with SYB.

        On November 19, 2012, TBI and SYB entered into an exclusivity agreement, pursuant to which TBI agreed to exclusively negotiate a potential transaction with SYB until December 24, 2012.

        On November 21, 2012, Stites & Harbison, PLLC, SYB's outside legal counsel, distributed a proposed draft of the definitive merger agreement to TBI's outside legal counsel. Over the following weeks, TBI and SYB, together with their respective outside legal counsel, negotiated the terms of the definitive merger agreement and a number of ancillary documents, including the form of support agreement to be executed by the directors and executive officers of TBI who are also shareholders of TBI. During this time, SYB also continued its due diligence review of TBI, and TBI conducted reverse due diligence on SYB.

        On December 17, 2012 and December 18, 2012, the board of directors of TBI met and received an update on the discussions with SYB. Representatives of Frost Brown Todd reviewed the terms of the proposed definitive merger agreement. Representatives of Sandler O'Neill reviewed their analysis of the financial fairness of the proposed merger to TBI's shareholders and orally delivered the opinion of Sandler O'Neill that the financial terms of the proposed merger were fair from a financial point of view to TBI and its shareholders. The board of directors of TBI met again at a regularly scheduled meeting the following day, at which time Sandler O'Neill confirmed its fairness opinion in writing. After reviewing Sandler O'Neill's opinion and further discussion of the terms of the merger agreement, the TBI board of directors unanimously (a) determined that the merger agreement and the transactions contemplated thereby were in the best interests of TBI and its shareholders, (b) voted to approve the merger agreement, and (c) recommended that TBI's shareholders approve the merger agreement.

        Later in the day on December 19, 2012, SYB and TBI executed the merger agreement. In addition, the directors and executive officers of TBI who are also shareholders of TBI executed Voting

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and Support Agreements with respect to the proposed merger. The proposed merger was announced on the evening of December 19, 2012 in a press release issued jointly by SYB and TBI.


TBI's Reasons for the Merger and Board Recommendation

        The board of directors of TBI considered several factors in determining that the merger with SYB is fair to, and in the best interests of, TBI and its shareholders. The board of directors of TBI did not assign any specific or relative weight to the factors in its consideration. The material factors considered by the board of directors of TBI included the following:

        The financial terms of the merger, including the purchase price per TBI share and the exchange ratio. The merger consideration of $464.52 per share of TBI common stock (based on the market value of SYB's common stock on December 19, 2012) is approximately equal to the TBI's book value per share as of September 30, 2012, and represents a multiple of 35.4 times TBI's earnings per share of $13.14 for the twelve months ended September 30, 2012. The board of directors of TBI believed these multiples compared favorably to recent comparable transactions. A purchase price comprised of 40% cash and 60% in publicly traded shares of a strong financial institution offers shareholders an immediate cash return on their investment and an opportunity for longer-term appreciation while also providing the liquidity of SYB's publicly traded shares.


        An assessment of the current banking environment and TBI's strategic alternatives to the merger.     As described under the section titled "Background," the board of directors of TBI believes the merger presents an opportunity to receive an attractive return on investment, compared to the less certain prospects for enhancing shareholder value if TBI remains independent in a challenging operating environment for community banks of its size. Remaining independent would require safely growing TBI substantially above its present $140 million in total assets in a relatively short time frame to increase market share and absorb higher technology and compliance costs. The board of directors of TBI does not believe conditions in the capital markets are likely to be favorable in the near future for small community banks with illiquid stock to raise the capital needed to support such growth.


        SYB's financial performance, asset quality, and prospects.     The merger provides TBI shareholders the opportunity to exchange their shares for stock of a financial institution that offers a strong balance sheet, strong financial performance, diversified sources of revenue, and less dependence on interest margin. With total assets of $2.1 billion, SYB has sufficient scale to compete effectively and absorb the fixed costs of regulatory compliance. In addition, SYB will be able to enhance the financial products and services available to residents of Oldham County by providing trust and other services not offered by TBI.


        Greater liquidity.     Unlike TBI shares, SYB common stock is traded on the NASDAQ Global Select Market. With an average trading volume of more than 30,000 shares per day, SYB common stock offers meaningful liquidity to shareholders who need or desire to sell their shares.


        SYB's current policy to pay a quarterly dividend.     SYB's current quarterly dividend of $.20 per share represents a yield of approximately 3.6% on the $22.00 closing price per share of SYB stock on December 18, 2012. In contrast, TBI has not paid a dividend on its shares.


        Opinion of the financial advisor to TBI.     Sandler O'Neill has delivered to the board of directors of TBI its opinion that, as of December 19, 2012 and based upon and subject to the factors and assumptions set forth therein, the merger consideration of $464.52 per TBI share, comprised of $185.81 (40%) in cash and 12.7557 SYB shares (60%), was fair from a financial point of view to the TBI's shareholders. The full text of the written opinion of Sandler O'Neill, dated December 19, 2012, which sets forth assumptions made, procedures followed, matters considered, and limitations on the review undertaken in connection with the opinion, is attached as Annex B. Sandler O'Neill provided its opinion for the information and assistance of the TBI board of directors in connection with the board

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of directors of TBI's consideration of the merger. Sandler O'Neill's opinion does not constitute a recommendation as to whether or not any holder of TBI shares should vote with respect to the merger or any other matter. Pursuant to an engagement letter between TBI and Sandler O'Neill, TBI has agreed to pay Sandler O'Neill a transaction fee of approximately $300,000, the principal portion of which is contingent upon consummation of the merger. See the section below titled "Opinion of Financial Advisor to TBI."

        Based on its consideration of the preceding factors, and in light of any other factors that other individual directors considered as appropriate, the board of directors of TBI approved the merger, determined the merger consideration is fair to TBI's shareholders, and recommended that TBI shareholders approve the merger. In view of the variety of factors considered in connection with their evaluation of the merger, the board of directors of TBI did not find it practicable to, and therefore did not, quantify or otherwise assign relative weight to specific factors or methodologies in reaching its conclusions. In addition, individual directors may have given different weight to different factors.


SYB's Reasons for the Merger

        SYB's board of directors concluded that the merger agreement is in the best interests of SYB and its shareholders. In deciding to approve the merger agreement, SYB's board of directors considered a number of factors, including, without limitation, the following:

        The foregoing discussion of the information and factors considered by the SYB board of directors is not intended to be exhaustive, but includes all material factors they considered. In arriving at its determination to approve the definitive merger agreement and the transactions it contemplates, the SYB board of directors did not assign any relative or specific weights to the above factors, and individual directors may have given different weights to different factors.


Opinion of Financial Advisor to TBI

        By letter dated August 23, 2012, TBI retained Sandler O'Neill to act as its financial advisor in connection with a sale of TBI to SYB. Sandler O'Neill is a nationally recognized investment banking

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firm whose principal business specialty is financial institutions. In the ordinary course of its investment banking business, Sandler O'Neill is regularly engaged in the valuation of financial institutions and their securities in connection with mergers and acquisitions and other corporate transactions.

        Sandler O'Neill acted as financial advisor to TBI in connection with the proposed transaction and participated in certain of the negotiations leading to the execution of the merger agreement. At a meeting of the TBI board of directors on December 18, 2012, Sandler O'Neill delivered to the TBI board of directors its oral opinion, followed by delivery of its written opinion, that, as of such date, the merger consideration was fair to the holders of TBI common stock from a financial point of view. The full text of Sandler O'Neill's written opinion dated December 19, 2012 is attached as Annex B to this proxy statement. The opinion outlines the procedures followed, assumptions made, matters considered and qualifications and limitations on the review undertaken by Sandler O'Neill in rendering its opinion. The description of the opinion set forth below is qualified in its entirety by reference to the opinion. TBI stockholders are urged to read the entire opinion carefully in connection with their consideration of the merger proposal.

        Sandler O'Neill's opinion speaks only as of the date of the opinion. The opinion was directed to the TBI board of directors and is directed only to the fairness of the common stock consideration to be paid to the holders of TBI common stock from a financial point of view. It does not address the underlying business decision of TBI to engage in the merger or any other aspect of the merger and is not a recommendation to any TBI stockholder as to how such stockholder should vote at the special meeting with respect to the merger or any other matter.

        In connection with its opinion on December 19, 2012, Sandler O'Neill reviewed and considered, among other things:

        Sandler O'Neill also discussed with certain members of senior management of TBI the business, financial condition, results of operations and prospects of TBI and held similar discussions with certain members of senior management of SYB regarding the business, financial condition, results of operations and prospects of SYB.

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        In performing its review, Sandler O'Neill has relied upon the accuracy and completeness of all of the financial and other information that was available to it from public sources, that was provided to it by TBI and SYB or their respective representatives or that was otherwise reviewed by it and has assumed such accuracy and completeness for purposes of rendering its opinion. Sandler O'Neill has further relied on the assurances of the respective managements of TBI and SYB that they are not aware of any facts or circumstances that would make any of such information inaccurate or misleading. Sandler O'Neill has not been asked to and has not undertaken an independent verification of any of such information and does not assume any responsibility or liability for the accuracy or completeness thereof. Sandler O'Neill did not make an independent evaluation or appraisal of the specific assets, the collateral securing assets or the liabilities (contingent or otherwise) of TBI and SYB or any of their respective subsidiaries. Sandler O'Neill renders no opinion or evaluation on the collectability of any assets or the future performance of any loans of TBI and SYB. Sandler O'Neill did not make an independent evaluation of the adequacy of the allowance for loan losses of TBI and SYB, or the combined entity after the merger and has not reviewed any individual credit files relating to TBI and SYB. Sandler O'Neill has assumed, with TBI's consent, that the respective allowances for loan losses for both TBI and SYB are adequate to cover such losses and will be adequate on a pro forma basis for the combined entity.

        In preparing its analyses, Sandler O'Neill used internal financial projections for TBI as provided by senior management of TBI and the management of TBI confirmed those projections reflected the best currently available estimates and judgments of management of the future performance of TBI. For SYB, Sandler O'Neill used the median publicly available earnings estimates and estimated long-term growth rate for SYB. Sandler O'Neill also received and used in its analyses certain projections of transaction costs, purchase accounting adjustments, expected cost savings and other synergies which were prepared by and/or reviewed with the senior management of SYB and senior management of SYB confirmed those projections represented the best projections available at such time with respect to the future financial performance of SYB. Sandler O'Neill expresses no opinion as to such estimates or the assumptions on which they are based. Sandler O'Neill has also assumed that there has been no material change in TBI'S and SYB's assets, financial condition, results of operations, business or prospects since the date of the most recent financial statements made available to it. Sandler O'Neill has assumed in all respects material to its analysis that TBI and SYB will remain as going concerns for all periods relevant to its analyses, that all of the representations and warranties contained in the merger agreement and all related agreements are true and correct, that each party to the agreements will perform all of the covenants required to be performed by such party under the agreements, that the conditions precedent in the merger agreement are not waived and that the merger will qualify as a tax-free reorganization for federal income tax purposes. Finally, with TBI's consent, Sandler O'Neill has relied upon the advice TBI has received from its legal, accounting and tax advisors as to all legal, accounting and tax matters relating to the merger and the other transactions contemplated by the merger agreement.

        Sandler O'Neill's opinion is necessarily based on financial, economic, market and other conditions as in effect on, and the information made available to it as of, the date hereof. Events occurring after the date hereof could materially affect its opinion. Sandler O'Neill has not undertaken to update, revise, reaffirm or withdraw its opinion or otherwise comment upon events occurring after the date hereof. Sandler O'Neill has acted as TBI's financial advisor in connection with the merger and will receive a fee for its services, a substantial portion of which is contingent upon consummation of the merger. TBI has also agreed to indemnify Sandler O'Neill against certain liabilities arising out of its engagement. In the ordinary course of Sandler O'Neill's business as a broker-dealer, it may purchase securities from and sell securities to TBI and SYB and their affiliates.

        Sandler O'Neill's opinion is directed to the board of directors of TBI in connection with its consideration of the merger and does not constitute a recommendation to any shareholder of TBI as to

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how any such shareholder should vote at any meeting of TBI shareholders called to consider and vote upon the merger. Sandler O'Neill's opinion is directed only to the fairness, from a financial point of view, of the merger consideration to the holders of TBI common stock and does not address the underlying business decision of TBI to engage in the merger, the relative merits of the merger as compared to any other alternative business strategies that might exist for TBI or the effect of any other transaction in which TBI might engage. Sandler O'Neill's opinion shall not be reproduced or used for any other purposes, without Sandler O'Neill's prior written consent. The opinion has been approved by Sandler O'Neill's fairness opinion committee. Sandler O'Neill does not express any opinion as to the fairness of the amount or nature of the compensation to be received in the merger by any officer, director, or employees, or class of such persons, relative to the compensation to be received in the merger by any other shareholder.

        In rendering its December 19, 2012 opinion, Sandler O'Neill performed a variety of financial analyses. The following is a summary of the material analyses performed by Sandler O'Neill, but is not a complete description of all the analyses underlying Sandler O'Neill's opinion. The summary includes information presented in tabular format. In order to fully understand the financial analyses, these tables must be read together with the accompanying text. The tables alone do not constitute a complete description of the financial analyses. The preparation of a fairness opinion is a complex process involving subjective judgments as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances. In arriving at its opinion, Sandler O'Neill did not attribute any particular weight to any analysis or factor that it considered. Rather Sandler O'Neill made qualitative judgments as to the significance and relevance of each analysis and factor. Sandler O'Neill did not form an opinion as to whether any individual analysis or factor (positive or negative) considered in isolation supported or failed to support its opinion; rather Sandler O'Neill made its determination as to the fairness of the common stock consideration on the basis of its experience and professional judgment after considering the results of all its analyses taken as a whole. The process, therefore, is not necessarily susceptible to a partial analysis or summary description. Sandler O'Neill believes that its analyses must be considered as a whole and that selecting portions of the factors and analyses to be considered without considering all factors and analyses, or attempting to ascribe relative weights to some or all such factors and analyses, could create an incomplete view of the evaluation process underlying its opinion. Also, no company included in Sandler O'Neill's comparative analyses described below is identical to TBI or SYB and no transaction is identical to the merger. Accordingly, an analysis of comparable companies or transactions involves complex considerations and judgments concerning differences in financial and operating characteristics of the companies and other factors that could affect the public trading values or merger transaction values, as the case may be, of TBI or SYB and the companies to which they are being compared.

        In performing its analyses, Sandler O'Neill also made numerous assumptions with respect to industry performance, business and economic conditions and various other matters, many of which cannot be predicted and are beyond the control of TBI, SYB, and Sandler O'Neill. The analysis performed by Sandler O'Neill is not necessarily indicative of actual values or future results, both of which may be significantly more or less favorable than suggested by such analyses. Sandler O'Neill prepared its analyses solely for purposes of rendering its opinion and provided such analyses to the TBI board of directors at the December 18, 2012 meeting. Estimates on the values of companies do not purport to be appraisals or necessarily reflect the prices at which companies or their securities may actually be sold. Such estimates are inherently subject to uncertainty and actual values may be materially different. Accordingly, Sandler O'Neill's analyses do not necessarily reflect the value of TBI's common stock or the prices at which TBI's common stock may be sold at any time. The analysis and opinion of Sandler O'Neill was among a number of factors taken into consideration by the TBI board of directors in making its determination to approve the plan of merger contained in the merger agreement and the analyses described below should not be viewed as determinative of the decision the TBI board of directors with respect to the fairness of the merger.

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        At the December 18, 2012 meeting of the TBI board of directors, Sandler O'Neill presented certain financial analyses of the merger. The summary below is not a complete description of the analyses underlying the opinions of Sandler O'Neill or the presentation made by Sandler O'Neill to the TBI board of directors, but is instead a summary of the material analyses performed and presented in connection with the opinion.

Summary of Proposal

        Sandler O'Neill reviewed the financial terms of the proposed transaction. Shares of TBI common stock issued and outstanding immediately prior to the merger will be converted into the right to receive (i) 12.7557 shares of SYB common stock and (ii) $185.81 in cash. The aggregate transaction value of approximately $19.9 million includes $0.4 million of deal value for 3,180 shares subject to stock options exercisable at a weighted average stock price of $337.78. Based upon financial information as or for the quarter ended September 30, 2012, Sandler O'Neill calculated the following transaction ratios:

Transaction Value / Book Value:

    100 %

Transaction Value / Tangible Book Value:

    100 %

Transaction Value / Last Twelve Months Earnings Per Share:

    35.4x  

Core Deposit Premium:

    0.4 %

TBI—Comparable Company Analysis

        Sandler O'Neill also used publicly available information to compare selected financial and market trading information for TBI and a group of financial institutions selected by Sandler O'Neill.

        The TBI peer group was selected by Sandler O'Neill and consisted of the following publicly-traded Midwest commercial banks with total assets between $100 million and $250 million, nonperforming assets to total assets less than 5.0%, tangible common equity to tangible assets greater than 9.0% and last-twelve-month return on average assets less than 0.75%:

BNB Bancorp, Inc.

  First Citizens National Bank of Upper Sandusky

Capital Directions, Inc.

  FNB, Inc.

Community First Bank of Indiana

  Lafayette Community Bancorp

Farmers & Merchants Bancshares, Inc.

  Peoples National Bancshares, Inc.

        The analysis compared publicly available financial information for TBI and the median financial and market trading data for the TBI peer group as of and for the last twelve months ended September 30, 2012. The table below sets forth the data for TBI and the median data for the TBI peer

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group as of and for the last twelve months ended September 30, 2012, with pricing data as of December 18, 2012.

(Dollars in millions)
  TBI   Comparable
Group Median
  Comparable
Group High
  Comparable
Group Low
 

Total Assets

  $ 137   $ 159   $ 219   $ 106  

Tangible Common Equity / Tangible Assets

    14.11 %   10.24 %   17.96 %   9.09 %

Tier 1 Risk Based Capital Ratio

    25.28 %   15.16 %   31.32 %   12.66 %

Total Risk Based Capital Ratio

    26.54 %   16.37 %   32.57 %   13.93 %

Return on Average Assets

    0.39 %   0.50 %   0.62 %   0.27 %

Return on Average Equity

    3.28 %   3.83 %   6.72 %   2.61 %

Net Interest Margin

    2.80 %   3.64 %   4.42 %   2.60 %

Efficiency Ratio

    86.4 %   77.0 %   84.5 %   56.0 %

Loan Loss Reserve / Gross Loans

    2.46 %   1.67 %   3.28 %   0.48 %

Non-performing Assets / Assets

    0.76 %   1.27 %   4.94 %   0.00 %

Net Charge-Offs / Average Loans

    (0.60 )%   0.31 %   2.59 %   0.00 %

Price / Tangible Book Value

    NA     84 %   159 %   23 %

Price / LTM EPS

    NA     22.2x     37.8x     6.1x  

Current Dividend Yield

    NA     0.1 %   4.3 %   0.0 %

Last-Twelve-Month Dividend Payout Ratio

    NA     14.1 %   60.4 %   0.0 %

Market Capitalization

    NA   $ 14   $ 26   $ 4  


Financial Data as of or for the Period Ending September 30, 2012
Pricing data as of December 18, 2012
Dollar Values in Millions

 
   
   
   
  Capital Position   LTM Profitability   Asset Quality   Valuation  
 
   
   
   
   
   
   
   
   
   
   
   
   
   
  Price/    
   
   
 
Company
  City, State   Ticker   Total
Assets
($)
  TCE/
TA
(%)
  Tier 1
RBC
Ratio
(%)
  Total
RBC
Ratio
(%)
  ROAA
(%)
  ROAE
(%)
  Net
Interest
Margin
(%)
  Efficiency
Ratio
(%)
  LLR/
Gross
Loans
(%)
  NPAs(1)/
Total
Assets
(%)
  NCOs/
Avg.
Loans
(%)
  Tang.
Book
Value
(%)
  LTM
EPS
(x)
  Current
Dividend
Yield
(%)
  LTM
Dividend
Ratio
(%)
  Market
Value
($)
 

First Citizens National Bank of Upper Sandusky

  Upper Sandusky, OH   FSDK     219     17.96     31.32     32.57     0.61     3.53     3.56     80.9     1.40     0.00     0.11     67     19.0     2.6     24.6     26  

FNB, Inc.(2)

  Dennison, OH   FIDS     203     9.09     15.82     17.07     0.62     6.72     3.47     75.3     1.94     0.15     0.10     84     12.7     4.3     60.4     16  

Farmers & Merchants Bancshares, Inc.(2)

  Burlington, IA   FMBN     196     9.39     12.66     13.93     0.36     3.83     3.72     83.6     2.87     4.94     0.59     23     6.1     0.0     0.0     4  

Community First Bank of Indiana

  Kokomo, IN   CFHW     175     10.96     12.68     13.95     0.28     2.61     4.23     56.0     3.28     3.42     0.50     60     23.8     0.0     13.6     12  

Lafayette Community Bancorp

  Lafayette, IN   LFYC     143     11.35     14.41     15.67     0.43     3.83     4.07     69.0     2.25     2.80     2.59     84     22.6     0.0     0.0     14  

Capital Directions, Inc.(2)

  Mason, MI   CTDN     119     10.87     18.77     19.46     0.58     5.35     3.15     77.6     0.48     1.37     0.10     159     29.2     0.0     0.0     21  

Peoples National Bancshares, Inc. 

  New Lexington, OH   PBLX     110     9.60     14.50     15.52     0.58     5.58     4.42     76.4     0.88     1.18     0.75     133     21.8     0.2     14.6     14  

BNB Bancorp, Inc.(2)

  Brookville, OH   BNBK     106     9.58     21.67     25.56     0.27     2.90     2.60     84.5     1.06     0.00     0.00     108     37.8     1.6     55.1     11  

     

High

   
219
   
17.96
   
31.32
   
32.57
   
0.62
   
6.72
   
4.42
   
84.5
   
3.28
   
4.94
   
2.59
   
159
   
37.8
   
4.3
   
60.4
   
26
 

      Low     106     9.09     12.66     13.93     0.27     2.61     2.60     56.0     0.48     0.00     0.00     23     6.1     0.0     0.0     4  

      Mean     159     11.10     17.73     19.22     0.47     4.29     3.65     75.4     1.77     1.73     0.59     90     21.6     1.1     21.0     15  

      Median     159     10.24     15.16     16.37     0.50     3.83     3.64     77.0     1.67     1.27     0.31     84     22.2     0.1     14.1     14  

Bancorp

           
137
   
14.11
   
25.28
   
26.54
   
0.39
   
3.28
   
2.80
   
86.4
   
2.46
   
0.76
   
(0.60

)
                             

(1)
Nonperforming assets defined as nonaccrual loans and leases, renegotiated loans and leases, and real estate owned.

(2)
Financial data as of June 30, 2012.


Sandler O'Neill noted that TBI had similar financial and performance metrics to the TBI peer group selected by Sandler O'Neill.

SYB—Comparable Company Analysis

        Sandler O'Neill also used publicly available information to compare selected financial and market trading information for SYB and a group of financial institutions selected by Sandler O'Neill.

        The SYB peer group as selected by Sandler O'Neill consisted of the following high performing publicly traded commercial banks with total assets between $1.0 billion and $4.0 billion, nonperforming assets to total assets less than 3.0%, tangible common equity to tangible assets greater than 7.0%,

40


Table of Contents

last-twelve-month return on average assets greater than 1.0% and last-twelve-month return on average equity greater than 11.5%.

Arrow Financial Corporation   Community Trust Bancorp, Inc.
Bank of Marin Bancorp   German American Bancorp, Inc.
Bank of the Ozarks, Inc.   Home BancShares, Inc.
Center Bancorp, Inc.   Lakeland Financial Corporation
Citizens & Northern Corporation   National Bankshares, Inc.
City Holding Company   Southside Bancshares, Inc.
CNB Financial Corporation   Washington Trust Bancorp, Inc.
CoBiz Financial Inc.   West Bancorporation, Inc.

        The analysis compared publicly available financial information for SYB and the median financial and market trading data for the SYB peer group as of and for the last twelve months ended September 30, 2012. The table below sets forth the data for SYB and the median data for the SYB peer group as of and for the last twelve months ended September 30, 2012, with pricing data as of December 18, 2012.

(Dollars in millions)
  SYB   Comparable
Group Median
  Comparable
Group High
  Comparable
Group Low
 

Total Assets

  $ 2,103   $ 2,300   $ 3,888   $ 1,081  

Tangible Common Equity / Tangible Assets

    9.55 %   9.26 %   13.14 %   7.45 %

Tier 1 Risk Based Capital Ratio

    13.09 %   14.97 %   21.85 %   11.40 %

Total Risk Based Capital Ratio

    14.35 %   16.29 %   23.11 %   12.25 %

Return on Average Assets

    1.25 %   1.21 %   1.95 %   1.02 %

Return on Average Equity

    13.27 %   12.48 %   17.01 %   11.61 %

Net Interest Margin

    3.97 %   3.85 %   5.97 %   3.27 %

Efficiency Ratio

    55.5 %   53.2 %   72.8 %   40.0 %

Loan Loss Reserve / Gross Loans

    1.96 %   1.37 %   2.56 %   0.91 %

Non-performing Assets / Assets

    1.75 %   1.38 %   2.65 %   0.36 %

Net Charge-Offs / Average Loans

    0.77 %   0.30 %   0.94 %   (0.02 )%

Price / Tangible Book Value

    152 %   154 %   245 %   130 %

Price / LTM EPS

    11.9x     12.2x     15.6x     7.7x  

Current Dividend Yield

    3.6 %   3.7 %   5.2 %   1.1 %

Last-Twelve-Month Dividend Payout Ratio

    41.6 %   39.4 %   53.5 %   7.4 %

Market Capitalization

  $ 306   $ 296   $ 1,148   $ 182  

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Table of Contents


Financial Data as of or for the Period Ending September 30, 2012
Pricing data as of December 18, 2012
Dollar Values in Millions

 
   
   
   
  Capital Position   LTM Profitability   Asset Quality   Valuation  
 
   
   
   
   
   
   
   
   
   
   
   
   
   
   
  Price/    
   
   
 
Company
  City, State   Ticker   Total
Assets
($)
  TCE/
TA
(%)
  Tier 1
RBC
Ratio
(%)
  Total
RBC
Ratio
(%)
  ROAA
(%)
  ROAE
(%)
  Net
Interest
Margin
(%)
  NII
Operating
Revenue
(%)
  Efficiency
Ratio
(%)
  LLR/
Gross
Loans
(%)
  NPAs(1)/
Total
Assets
(%)
  NCOs/
Avg.
Loans
(%)
  Tang.
Book
Value
(%)
  LTM
EPS
(x)
  Current
Dividend
Yield
(%)
  LTM
Dividend
Ratio
(%)
  Market
Value
($)
 

Home BancShares, Inc. 

  Conway, AR   HOMB     3,888     11.13     15.61     16.86     1.56     12.48     4.67     21.6     46.7     2.19     2.42     0.50     221     15.6     1.6     21.1     929  

Bank of the Ozarks, Inc. 

  Little Rock, AR   OZRK     3,823     12.25     17.82     19.07     1.95     16.64     5.97     24.3     45.2     1.44     0.59     0.32     245     15.5     1.7     23.5     1,148  

Community Trust Bancorp, Inc. 

  Pikeville, KY   CTBI     3,642     9.22     14.86     16.12     1.22     11.61     3.98     25.3     53.9     1.30     2.65     0.45     155     11.5     3.8     43.7     513  

Southside Bancshares, Inc. 

  Tyler, TX   SBSI     3,221     7.95     21.85     23.11     1.08     13.51     3.36     13.7     62.7     1.71     0.49     0.87     143     10.0     3.8     52.9     363  

Washington Trust Bancorp, Inc. 

  Westerly, RI   WASH     3,049     7.84     11.93     13.18     1.12     11.69     3.27     40.3     64.4     1.34     1.24     0.05     185     12.9     3.6     34.1     433  

Lakeland Financial Corporation

  Warsaw, IN   LKFN     2,952     9.84     13.33     14.59     1.19     12.47     3.35     21.8     48.6     2.35     2.03     (0.02 )   147     12.3     2.6     39.2     425  

City Holding Company

  Cross Lanes, WV   CHCO     2,899     9.29     12.90     13.81     1.35     11.78     3.94     35.7     52.8     0.91     1.81     0.28     198     13.9     4.0     41.5     520  

CoBiz Financial Inc. 

  Denver, CO   COBZ     2,560     7.45     15.08     17.35     1.58     17.01     4.08     27.8     72.8     2.56     2.65     0.48     153     7.7     1.1     7.4     292  

Arrow Financial Corporation

  Glens Falls, NY   AROW     2,041     7.47     15.20     16.45     1.12     12.97     3.29     30.8     58.7     1.32     0.36     0.04     201     13.6     4.0     53.5     300  

German American Bancorp, Inc. 

  Jasper, IN   GABC     1,962     8.30     11.44     14.21     1.22     13.56     3.77     22.1     55.6     1.34     0.72     0.14     176     12.1     2.5     30.3     284  

CNB Financial Corporation

  Clearfield, PA   CCNE     1,741     7.67     14.10     15.36     1.02     12.50     3.45     17.9     54.0     1.49     1.60     0.54     161     12.3     3.9     47.5     213  

Center Bancorp, Inc. 

  Union, NJ   CNBC     1,612     8.09     11.40     12.25     1.12     11.61     3.36     8.9     50.2     1.18     0.73     0.10     151     12.2     1.8     19.9     195  

Bank of Marin Bancorp

  Novato, CA   BMRC     1,435     10.27     12.80     14.00     1.16     11.76     4.86     9.7     53.6     1.30     2.43     0.94     130     11.7     2.0     23.0     191  

Citizens & Northern Corporation

  Wellsboro, PA   CZNC     1,310     12.95     21.74     22.98     1.75     13.39     4.29     24.2     48.7     1.11     0.69     0.06     134     9.8     5.2     44.7     225  

West Bancorporation, Inc. 

  West Des Moines, IA   WTBA     1,268     10.46     15.33     16.59     1.21     12.49     3.47     19.3     51.9     1.82     1.52     0.02     138     11.5     3.8     39.6     182  

National Bankshares, Inc. 

  Blacksburg, VA   NKSH     1,081     13.14     20.80     22.01     1.68     12.35     4.42     17.7     40.0     1.39     0.93     0.47     147     11.6     3.8     42.6     208  

     

High

   
3,888
   
13.14
   
21.85
   
23.11
   
1.95
   
17.01
   
5.97
   
40.3
   
72.8
   
2.56
   
2.65
   
0.94
   
245
   
15.6
   
5.2
   
53.5
   
1,148
 

      Low     1,081     7.45     11.40     12.25     1.02     11.61     3.27     8.9     40.0     0.91     0.36     (0.02 )   130     7.7     1.1     7.4     182  

      Mean     2,405     9.58     15.39     16.75     1.33     12.99     3.97     22.6     53.7     1.55     1.43     0.33     168     12.1     3.1     35.3     401  

      Median     2,300     9.26     14.97     16.29     1.21     12.48     3.85     21.9     53.2     1.37     1.38     0.30     154     12.2     3.7     39.4     296  

S.Y. Bancorp, Inc. 

      SYBT     2,103     9.55     13.09     14.35     1.25     13.27     3.97     33.8     55.5     1.96     1.75     0.77     152     11.9     3.6     41.6     306  


Sandler O'Neill noted that SYB had similar financial and performance metrics to the SYB peer group as selected by Sandler O'Neill.

SYB—Stock Price Performance

        Sandler O'Neill reviewed the history of the publicly reported trading prices of SYB's common stock for the one-year period ended December 18, 2012. Sandler O'Neill also reviewed the history of the publicly reported trading prices of SYB's common stock for the three-year period ended December 18, 2012. Sandler O'Neill then compared the relationship between the movements in the price of SYB's common stock against the movements in the prices of its peer group, the S&P 500 Index and the NASDAQ Bank Index.


SYB One Year Stock Performance

 
  Beginning Index Value
December 18, 2011
  Ending Index Value
December 18, 2012
 

SYB

    100 %   108 %

NASDAQ Bank Index

    100 %   120 %

SYB Peer Group

    100 %   116 %

S&P 500 Index

    100 %   119 %

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Table of Contents


SYB Three Year Stock Performance

 
  Beginning Index Value
December 18, 2009
  Ending Index Value
December 18, 2012
 

SYB

    100 %   102 %

NASDAQ Bank Index

    100 %   115 %

SYB Peer Group

    100 %   143 %

S&P 500 Index

    100 %   131 %


Sandler O'Neill noted that the above analysis showed that SYB stock underperformed the indices to which it was compared for the one year period and for the three year period.

TBI—Net Present Value Analysis

        Sandler O'Neill performed an analysis that estimated the present value of TBI through December 31, 2016.

        Sandler O'Neill based the analysis on TBI's projected earnings stream as derived from the internal financial projections provided by TBI management for the years ending December 31, 2012 through 2016. To approximate the terminal value of TBI's common stock at December 31, 2016, Sandler O'Neill applied price to forward earnings multiples of 8.0x to 18.0x and multiples of tangible book value ranging from 50% to 150%. The income streams and terminal values were then discounted to present values using different discount rates ranging from 12.0% to 15.0%, which were assumed deviations, both up and down, as selected by Sandler O'Neill based on the TBI discount rate of 13.6% as determined by Sandler O'Neill. The discount rate is determined by adding the 10 year Treasury Bond rate (1.78%), the published Ibbotson 60 year equity risk premium (5.70%), the published Ibbotson size premium (3.89%) and the published Ibbotson Industry Premium (2.20%).


Earnings Per Share Multiples
(dollars in millions)

Discount
Rate
  8.0x   10.0x   12.0x   14.0x   16.0x   18.0x  
  12.0 % $ 3.2   $ 4.1   $ 4.9   $ 5.7   $ 6.5   $ 7.3  
  13.0 % $ 3.1   $ 3.9   $ 4.7   $ 5.5   $ 6.3   $ 7.0  
  13.6 % $ 3.1   $ 3.8   $ 4.6   $ 5.3   $ 6.1   $ 6.9  
  14.0 % $ 3.0   $ 3.8   $ 4.5   $ 5.3   $ 6.0   $ 6.8  
  15.0 % $ 2.9   $ 3.6   $ 4.4   $ 5.1   $ 5.8   $ 6.5  


Tangible Book Value Per Share Multiples
(dollars in millions)

Discount
Rate
  50%   70%   90%   110%   130%   150%  
  12.0 % $ 6.8   $ 9.5   $ 12.2   $ 14.9   $ 17.6   $ 20.4  
  13.0 % $ 6.5   $ 9.1   $ 11.8   $ 14.4   $ 17.0   $ 19.6  
  13.6 % $ 6.4   $ 8.9   $ 11.5   $ 14.0   $ 16.6   $ 19.1  
  14.0 % $ 6.3   $ 8.8   $ 11.3   $ 13.8   $ 16.4   $ 18.9  
  15.0 % $ 6.1   $ 8.5   $ 10.9   $ 13.3   $ 15.8   $ 18.2  

        Sandler O'Neill also considered and discussed with the TBI board of directors how this analysis would be affected by changes in the underlying assumptions, including variations with respect to net income. To illustrate this impact, Sandler O'Neill performed a similar analysis assuming TBI's net

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Table of Contents

income varied from 30% above projections to 30% below projections. This analysis resulted in the following reference ranges of indicated aggregate values for TBI's common stock, using a discount rate of 13.6%:


Earnings Per Share Multiples
(dollars in millions)

Annual Budget
Variance
  8.0x   10.0x   12.0x   14.0x   16.0x   18.0x  
  (30.0) % $ 2.1   $ 2.7   $ 3.2   $ 3.7   $ 4.3   $ 4.8  
  (20.0) % $ 2.4   $ 3.1   $ 3.7   $ 4.3   $ 4.9   $ 5.5  
  (10.0) % $ 2.7   $ 3.4   $ 4.1   $ 4.8   $ 5.5   $ 6.2  
  0.0 % $ 3.1   $ 3.8   $ 4.6   $ 5.3   $ 6.1   $ 6.9  
  10.0 % $ 3.4   $ 4.2   $ 5.0   $ 5.9   $ 6.7   $ 7.6  
  20.0 % $ 3.7   $ 4.6   $ 5.5   $ 6.4   $ 7.3   $ 8.2  
  30.0 % $ 4.0   $ 5.0   $ 6.0   $ 6.9   $ 7.9   $ 8.9  

SYB—Net Present Value Analysis

        Sandler O'Neill performed an analysis that estimated the present value of SYB through December 31, 2016. Sandler O'Neill based the analysis on SYB's median publicly available analyst estimates for December 31, 2012 and 2013 and a long term earnings growth rate for the years thereafter.

        To approximate the terminal value of SYB's common stock at December 31, 2016, Sandler O'Neill applied price to forward earnings multiples of 10.0x to 16.0x and multiples of tangible book value ranging from 120% to 200%. The income streams and terminal values were then discounted to present values using different discount rates ranging from 12.0% to 15.0%. Dollar amounts in the following tables represent SYB per share amounts.


Earnings Per Share Multiples

Discount
Rate
  10.0x   12.0x   14.0x   16.0x  
  12.0 % $ 17.92   $ 20.97   $ 24.02   $ 27.06  
  13.0 % $ 17.30   $ 20.23   $ 23.17   $ 26.10  
  13.6 % $ 16.92   $ 19.78   $ 22.65   $ 25.51  
  14.0 % $ 16.70   $ 19.53   $ 22.35   $ 25.18  
  15.0 % $ 16.13   $ 18.86   $ 21.58   $ 24.30  


Tangible Book Value Per Share Multiples

Discount
Rate
  120%   140%   160%   180%   200%  
  12.0 % $ 17.48   $ 19.94   $ 22.40   $ 24.86   $ 27.32  
  13.0 % $ 16.87   $ 19.24   $ 21.61   $ 23.98   $ 26.35  
  13.6 % $ 16.50   $ 18.82   $ 21.13   $ 23.44   $ 25.76  
  14.0 % $ 16.29   $ 18.57   $ 20.86   $ 23.14   $ 25.42  
  15.0 % $ 15.74   $ 17.94   $ 20.13   $ 22.33   $ 24.53  

        Sandler O'Neill also considered and discussed with the TBI board of directors how this analysis would be affected by changes in the underlying assumptions, including variations with respect to net income. To illustrate this impact, Sandler O'Neill performed a similar analysis assuming SYB's net

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Table of Contents

income varied from 30% above projections to 30% below projections. This analysis resulted in the following reference ranges of indicated per share values for SYB's common stock, using a discount rate of 13.6%:


Earnings Per Share Multiples

Annual Budget
Variance
  10.0x   12.0x   14.0x   16.0x  
  (30.0 )% $ 12.62   $ 14.63   $ 16.63   $ 18.64  
  (20.0 )% $ 14.05   $ 16.35   $ 18.64   $ 20.93  
  (10.0 )% $ 15.49   $ 18.06   $ 20.64   $ 23.22  
  0.0 % $ 16.92   $ 19.78   $ 22.65   $ 25.51  
  10.0 % $ 18.35   $ 21.50   $ 24.65   $ 27.80  
  20.0 % $ 19.78   $ 23.22   $ 26.66   $ 30.10  
  30.0 % $ 21.22   $ 24.94   $ 28.66   $ 32.39  

 

(Dollar amounts represent SYB per share amounts.)

 

 

 

 

Analysis of Selected Merger Transactions

        Sandler O'Neill reviewed two sets of comparable mergers and acquisitions.

        The first set of mergers and acquisitions included 7 transactions announced from December 1, 2011 through December 18, 2012 in which the targets were Midwest commercial banks having nonperforming assets to total assets less than 5%, tangible common equity to tangible assets greater than 9%, last-twelve-month return on average assets less than 0.75% and announced transaction values between $5 and $50 million. Sandler O'Neill deemed these transactions to be reflective of the proposed TBI and SYB combination. Sandler O'Neill reviewed the following multiples: transaction price to book value, transaction price to tangible book value, transaction price to last twelve months' earnings per share and core deposit premium. As illustrated in the following table, Sandler O'Neill compared the proposed merger multiples to the median multiples of these comparable transactions.

 
  SYB/TBI   Comparable
Transactions
Median
  Comparable
Transactions
High
  Comparable
Transactions
Low
 

Transaction Value / Book Value

    100 %   100 %   141 %   71 %

Transaction Value / Tangible Book Value

    100 %   100 %   155 %   71 %

Transaction Value / Last Twelve Months Earnings Per Share

    35.4x     18.6x     34.7x     9.9x  

Core Deposit Premium

    0.4 %   0.0 %   5.1 %   (3.8 )%

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Table of Contents


Transactions Announced with a Midwest Bank Target with Target NPAs/Assets < 5.0%, TCE/TA > 9.0% and LTM ROAA < 0.75%
Announced Deal Value $5MM—$50MM
Dollars in millions

Recent Midwest Precedent Bank Transactions

Announce
Date
  Buyer / Target   Target
Headquarters
  Target
Assets
  Deal
Value
  Target
TCE/TA
  LTM
Target
ROAA
  Target
NPAs /
Assets
  Price /
LTM EPS
  Price /
Book
  Price /
TBV
  Core Dep.
Prem.
 
 

10/9/2012

 

LCNB Corp. / First Capital Bancshares Inc. 

  Chillicothe, OH   $ 152.7   $ 19.6     9.33 %   0.61 %   0.65 %   21.6x     1.41x     1.55x     5.1 %
 

9/28/2012

 

Pontiac Bancorp / Bluestem Financial Corp. 

  Fairbury, IL     93.2     16.4     15.54     0.59     1.09     29.8     1.13     1.13     2.5  
 

7/31/2012

 

Heartland Financial USA Inc. / First Shares Inc. 

  Platteville, WI     130.0     11.0     11.00     0.26     1.96     34.7     0.85     0.85     (1.8 )
 

5/24/2012

 

Investor group / First Bancshares Inc. 

  Kansas City, KS     78.2     7.5     10.35     0.62     3.34     NM     1.33     1.33     4.3  
 

3/15/2012

 

PSB Holdings Inc. / Marathon State Bank

  Marathon, WI     108.4     5.6     18.42     0.54     0.00     9.9     1.00     1.00     0.0  
 

3/12/2012

 

National Australia Bank / North Central Bancshares Inc. 

  Fort Dodge, IA     433.0     41.5     9.62     0.59     3.61     15.7     0.99     1.00     (0.0 )
 

12/5/2011

 

River Valley Bancorp / Dupont State Bank

  Dupont, IN     81.2     5.7     9.87     0.56     3.44     11.1     0.71     0.71     (3.8 )
 

           

High

   
18.42

%
 
0.62

%
 
3.61

%
 
34.7x
   
1.41x
   
1.55x
   
5.1

%
 

            Low     9.33     0.26     0.00     9.9     0.71     0.71     (3.8 )
 

            Mean     12.02     0.54     2.01     20.5     1.06     1.08     0.9  
 

            Median     10.35     0.59     1.96     18.6     1.00     1.00     0.0  

        The second set of mergers and acquisitions included 20 transactions announced from December 1, 2011 through December 18, 2012 in which the targets were commercial banks having nonperforming assets to total assets less than 5%, tangible common equity to tangible assets greater than 9%, last-twelve-month return on average assets less than 0.75% and announced transaction values between $5 and $50 million. Sandler O'Neill deemed these transactions to be reflective of the proposed TBI and SYB combination. Sandler O'Neill reviewed the following multiples: transaction price to book value, transaction price to tangible book value, transaction price to last twelve months' earnings per share and core deposit premium. As illustrated in the following table, Sandler O'Neill compared the proposed merger multiples to the median multiples of these comparable transactions.

 
  SYB/TBI   Comparable
Transactions
Median
  Comparable
Transactions
High
  Comparable
Transactions
Low
 

Transaction Value / Book Value

    100 %   109 %   234 %   66 %

Transaction Value / Tangible Book Value

    100 %   114 %   234 %   66 %

Transaction Value / Last Twelve Months Earnings Per Share

    35.4x     28.5x     38.3x     9.9x  

Core Deposit Premium

    0.4 %   1.8 %   16.6 %   (8.0 )%

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Transactions Announced with a Bank Target with NPAs/Assets < 5.0%, TCE/TA > 9.0% and LTM ROAA < 0.75%
Announced Deal Value $5MM—$50MM
Dollars in millions

Recent Nationwide Precedent Bank Transactions

Announce
Date
  Buyer / Target   Target
Headquarters
  Target
Assets
  Deal
Value
  Target
TCE/TA
  LTM
Target
ROAA
  Target
NPAs /
Assets
  Price /
LTM EPS
  Price /
Book
  Price /
TBV
  Core Dep.
Prem.
 
 

11/27/2012

 

Coronado First Bank / San Diego Private Bank

  La Jolla, CA   $ 129.2   $ 15.5     10.11 %   8.43 %   8.28 %   NMx     1.18x     1.19x     2.4 %
 

10/9/2012

 

LCNB Corp. / First Capital Bancshares Inc. 

  Chillicothe, OH     152.7     19.6     9.33     8.61     8.65     21.6     1.41     1.55     5.1  
 

9/28/2012

 

Pontiac Bancorp / Bluestem Financial Corp. 

  Fairbury, IL     93.2     16.4     15.54     8.59     1.09     29.8     1.13     1.13     2.5  
 

9/20/2012

 

CapStone Bank / Patriot State Bk

  Fuquay-Varina, NC     138.7     10.6     11.51     0.59     3.30     NM     0.66     0.66     (5.3 )
 

8/3/2012

 

Midsouth Bancorp Inc. / PSB Financial Corporation

  Many, LA     495.1     40.0     9.57     0.60     1.59     13.7     1.04     1.14     1.2  
 

8/1/2012

 

New Hampshire Thrift Bncshrs / Nashua Bank

  Nashua, NH     118.3     19.1     11.43     0.35     1.27     NM     1.16     1.16     2.9  
 

7/31/2012

 

Heartland Financial USA Inc. / First Shares Inc. 

  Platteville, WI     130.0     11.0     11.0     0.26     1.96     34.7     0.85     0.85     (1.8 )
 

5/24/2012

 

Investor group / First Bancshares Inc. 

  Kansas City, KS     78.2     7.5     10.35     0.62     3.34     NM     1.33     1.33     4.3  
 

5/2/2012

 

Community Bancshares of MS / Community Holding Co. of FL

  Miramar Beach, FL     87.1     22.1     10.76     0.32     0.91     NM     2.34     2.34     16.6  
 

4/26/2012

 

Prosperity Bancshares Inc. / Community National Bank

  Bellaire, TX     182.8     25.7     9.54     0.44     2.51     38.3     1.42     1.42     6.2  
 

3/29/2012

 

S&T Bancorp Inc. / Gateway Bank of Pennsylvania

  McMurray, PA     120.3     21.3     12.62     0.51     0.00     34.2     1.40     1.40     10.2  
 

3/28/2012

 

Green Bancorp Inc. / Opportunity Bancshares Inc. 

  Richardson, TX     51.9     10.0     14.62     (1.28 )   1.39     NM     0.96     1.03     0.8  
 

3/25/2012

 

FNB Bancorp / Oceanic Bank Holding Inc. 

  San Francisco, CA     169.4     27.8     18.94     0.73     2.75     27.4     0.86     0.86     (8.0 )
 

3/15/2012

 

PSB Holdings Inc. / Marathon State Bank

  Marathon, WI     108.4     5.6     18.42     0.54     0.00     9.9     1.00     1.00     0.0  
 

3/12/2012

 

National Australia Bank / North Central Bancshares Inc. 

  Fort Dodge, IA     433.0     41.5     9.62     0.59     3.61     15.7     0.99     1.00     (0.0 )
 

3/1/2012

 

First Community Bancshares Inc / Peoples Bank of Virginia

  Richmond, VA     285.9     40.6     13.68     0.71     2.14     19.4     1.00     1.00     0.09  
 

1/19/2012

 

Prosperity Bancshares Inc. / Bank Arlington

  Arlington, TX     37.3     5.8     11.86     0.49     2.42     29.5     1.31     1.31     4.3  
 

1/19/2012

 

Grandpoint Capital Inc. / California Community Bank

  Escondido, CA     243.8     30.0     10.58     0.37     3.37     34.7     1.16     1.16     2.5  
 

12/8/2011

 

California United Bank / Premier Commercial Bancorp

  Anaheim, CA     449.8     38.1     9.18     0.29     0.80     34.6     0.92     0.92     (1.1 )
 

12/5/2011

 

River Valley Bancorp / Dupont State Bank

  Dupont, IN     81.2     5.7     9.87     0.56     3.44     11.1     0.71     0.71     (3.8 )
 

           

High

   
18.94

%
 
0.73

%
 
3.61

%
 
38.3x
   
2.34x
   
2.34x
   
16.6

%
 

            Low     9.18     (1.28 )   0.00     9.9     0.66     0.66     (8.0 )
 

            Mean     11.93     0.42     1.84     25.3     1.14     1.16     2.0  
 

            Median     10.88     0.53     1.78     28.5     1.09     1.14     1.8  

Pro Forma Merger Analysis

        Sandler O'Neill analyzed certain potential pro forma effects of the merger, assuming the following: (1) the merger is completed in the second quarter of 2013; (2) the deal value per share is equal to $464.52 per TBI share, given an exchange ratio of 12.7557 shares of SYB common stock for each share

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of TBI common stock and $185.81 in cash per share is received by holders of TBI common stock ; (3) 41% cost savings of TBI projected operating expense, fully phased-in in 2014; (4) approximately $2.5 million in pre-tax transaction costs and expenses; (5) TBI's performance was calculated in accordance with TBI management's prepared earnings projections; (6) SYB's performance was calculated in accordance with SYB's public earnings projections and guidance; (7) certain other assumptions pertaining to costs and expenses associated with the transaction, intangible amortization, opportunity cost of cash and other items. The analyses indicated that, for the full years 2013 and 2014, the merger (excluding transaction expenses) would be accretive to SYB's projected earnings per share and tangible book value per share. The actual results achieved by the combined company may vary from projected results and the variations may be material.

Sandler O'Neill's Compensation and Other Relationships with TBI

        Sandler O'Neill has acted as financial advisor to the TBI board of directors and senior management of TBI and its subsidiaries in connection with the merger. The TBI board of directors and senior management of TBI and its subsidiaries agreed to pay Sandler O'Neill a transaction fee based on aggregate consideration received of which $49,704 was paid upon signing of the definitive merger agreement, $50,000 was paid upon delivery of Sandler O'Neill's opinion, and the remainder of which is contingent upon completion of the merger. TBI has also agreed to indemnify Sandler O'Neill against certain liabilities arising out of its engagement and to reimburse Sandler O'Neill for certain of its reasonable out-of-pocket expenses.

        In the ordinary course of their respective broker and dealer businesses, Sandler O'Neill may purchase securities from and sell securities to TBI and SYB and their affiliates. Sandler O'Neill may also actively trade the debt and/or equity securities of TBI and SYB or their affiliates for their own accounts and for the accounts of their customers and, accordingly, may at any time hold a long or short position in such securities.


Interests of TBI Directors and Executive Officers in the Merger

        When you consider the recommendation of the TBI board of directors to approve the merger proposal, you should be aware that certain of TBI's directors and executive officers have interests in the merger that are different from, or in addition to, your interests as a shareholder generally, which may present actual or apparent conflicts of interest. The members of the TBI board of directors were aware of and considered these interests, among other matters, when they approved the merger agreement and recommended that TBI shareholders approve the merger proposal.

        Stephen M. Norton, TBI's President and Chief Executive Officer, and Alexander Babey, Executive Vice President of THE BANK—Oldham County, have each entered into a change of control security agreement with TBI. Subject to the closing of the merger, termination of their employment within a certain window of time thereafter, and to each executive's execution of an irrevocable release and waiver agreement in form acceptable to TBI and SYB, Messrs. Norton and Babey would each receive a lump sum cash severance payment from SYB within 30 days following their termination. Mr. Norton's severance payment would equal approximately $489,169, or 2.99 times his average total taxable compensation from TBI for the five calendar years prior to the effective date. Mr. Babey's severance payment would equal approximately $173,288, or 1.5 times his average total taxable compensation from TBI for the five calendar years prior to the effective date. The severance payments would be subject to certain limitations imposed by federal income tax laws, as required by the agreements, and to tax withholding requirements. In addition, as a condition to SYB's obligations under the merger agreement, TBI must deliver executed amendments to the change of control security agreements with

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Messrs. Norton and Babey that would restrict the two executives from engaging in activities that would be competitive with SYB.

        SYB and Stephen M. Norton have agreed in principle on an arrangement pursuant to which Mr. Norton's employment would continue with SYB for 30 days after the effective time at his existing base salary compensation, after which time Mr. Norton would be available to provide SYB with consulting services for an additional four months following the effective time at an hourly rate of $100.

        Each present and former director, officer and employee of TBI and TBI Bank (when acting in such capacity) will be indemnified to the fullest extent permitted by law for any acts arising out of or pertaining to matters existing or occurring at or prior to the closing. Additionally, prior to the closing of the merger, TBI will purchase an extended reporting period or "tail" endorsement under TBI's existing directors' and officers' liability insurance policy for TBI's directors and officers that will provide insurance coverage for a period of six years following the completion of the merger and will contain at least the same coverage and amounts, and contains terms and conditions no less advantageous to the insured persons than the coverage currently provided by TBI, at an aggregate cost not to exceed 250% of the annual premiums currently paid by TBI for such insurance.


Treatment of TBI's 401(k) Plan

        Prior to the execution date of the merger agreement, SYB Bank served as trustee of the TBI 401(k) plan. Upon execution of the merger agreement, SYB Bank resigned as trustee of the 401(k) plan, and TBI will be required to appoint a successor trustee for the Plan. Additionally, TBI and TBI Bank will freeze the TBI stock fund under the TBI 401(k) Plan to prevent new contributions or assets from being deposited in or transferred to the TBI stock fund and will prevent any further sale or issuance of TBI common stock to the TBI 401(k) Plan. TBI and TBI Bank will also direct, or allow participants and beneficiaries to direct, that any assets previously accumulated for purchase of TBI common stock be reinvested in other available investment options under the TBI 401(k) Plan. TBI will also amend the TBI 401(k) Plan to enable the TBI common stock currently held by the Plan to be voted by the Plan's new trustee at the special shareholder meeting in accordance with directions provided by each participant or beneficiary. TBI or the new trustee will also obtain an opinion of a qualified financial advisor as to whether the merger consideration is at least equal to "fair market value" (as defined in Proposed Department of Labor Regulation Section 2510.3-18) and the merger is fair to the Plan's participants and beneficiaries from a financial point of view.


Regulatory Approvals Required for the Merger

        Under the terms of the merger agreement, the merger cannot be completed until all regulatory approvals or waivers required to consummate the transactions contemplated by the merger agreement have been obtained and all related statutory waiting periods have expired (with such approvals remaining in full force and effect). These include approvals from the FDIC, the KDFI, and the Federal Reserve Board. SYB and TBI have filed applications with each of these governmental authorities to obtain the required regulatory approvals and waivers.

        SYB and TBI believe that we will be able to obtain all required regulatory approvals on a timely basis without the imposition of any condition or requirement that would have a material adverse effect on SYB or TBI.

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Voting and Support Agreements

        TBI's directors have executed Voting and Support Agreements, in the form attached as Annex C to this proxy statement/prospectus, pursuant to which they agreed to vote all of their shares of TBI stock in favor of the merger proposal. The TBI directors together owned approximately 20% of the outstanding shares of TBI stock as of the date of the merger agreement.


Accounting Treatment of the Merger

        The merger will be accounted for as a "purchase," as that term is used under generally accepted accounting principles, for accounting and financial reporting purposes. Under purchase accounting, the assets (including identifiable intangible assets) and liabilities (including executor contracts and other commitments) of TBI as of the effective time will be recorded at their respective fair values and added to those of SYB. Any excess of purchase price over the fair values is recorded as goodwill. Consolidated financial statements of SYB issued after the merger would reflect these fair values and would not be restated retroactively to reflect the historical consolidated financial position or results of operations of TBI.


NASDAQ Global Select Market Listing

        SYB's common stock is listed on the NASDAQ Global Select Market under the symbol "SYBT." The shares of SYB common stock to be issued to the TBI shareholders in the merger are expected to be eligible for trading on the NASDAQ Global Select Market upon issuance.

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THE MERGER AGREEMENT

        The following summary describes the material provisions of the merger agreement. This summary may not contain all of the information about the merger agreement that is important to you. This description is qualified in its entirety by reference to the merger agreement, which is attached as Annex A to this proxy statement/prospectus and is incorporated by reference into this proxy statement/prospectus. We urge you to read the merger agreement carefully and in its entirety, as it is the legal document governing the merger.

        On February 26, 2013, we amended the merger agreement to reflect the conversion of Merger Sub from a Kentucky corporation to a Kentucky limited liability company. All references in this document to the merger agreement are to the merger agreement as so amended. The amendment is included as part of Annex A to this proxy statement/prospectus.


Explanatory Note Regarding the Merger Agreement

        The merger agreement and this summary are included solely to provide you with information regarding the terms of the merger agreement. Factual disclosures about TBI and SYB contained in this proxy statement/prospectus or in SYB's public reports filed with the SEC, as applicable, may supplement, update or modify the factual disclosures about TBI or SYB contained in the merger agreement. The representations, warranties, and covenants made in the merger agreement by TBI, SYB, and Merger Sub were made solely for the purposes of the merger agreement and as of specific dates and were qualified and subject to important limitations agreed to by TBI, SYB, and Merger Sub in connection with negotiating the terms of the merger agreement. In particular, in your review of the representations and warranties contained in the merger agreement and described in this summary, it is important to bear in mind that the representations and warranties were negotiated with the principal purposes of establishing the circumstances in which a party to the merger agreement may have the right not to consummate the merger if the representations and warranties of the other party prove to be untrue due to a change in circumstance or otherwise, and allocating risk between the parties to the merger agreement, rather than establishing matters as facts. The representations and warranties may also be subject to a contractual standard of materiality different from those generally applicable to shareholders and reports and documents filed with the SEC, and in some cases were qualified by the matters contained in the disclosure schedules that TBI delivered to SYB in connection with the merger agreement, which disclosures were not included in the merger agreement attached to this proxy statement/prospectus as Annex A. Moreover, information concerning the subject matter of the representations and warranties may have changed since the date of the merger agreement. Accordingly, the representations and warranties and other provisions of the merger agreement should not be read alone, but instead should be read together with the information provided elsewhere in this proxy statement/prospectus, the documents incorporated by reference into this proxy statement/prospectus, and reports, statements and filings that SYB files with the SEC from time to time. See the sections entitled "Where You Can Find More Information" in the forepart of this document and "Incorporation of Certain Documents By Reference" beginning on page 86.


The Merger

        The merger agreement provides for the merger of TBI with and into Merger Sub, with Merger Sub as the surviving entity. The separate existence of TBI will terminate, and Merger Sub shall continue its existence under the laws of Kentucky. The shares of SYB common stock will continue to be listed on the NASDAQ Global Select Market under the symbol "SYBT."


Consideration to be Received in the Merger

        If the merger is completed, then each share of TBI common stock will be converted, into the right to receive merger consideration consisting of 12.7557 shares of SYB common stock and, subject to

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certain potential adjustments described below, $185.81 in cash. The aggregate cash portion of the merger consideration will be decreased on a dollar for dollar basis if, and to the extent by which, TBI shareholders' equity is less than $17,860,000. For purposes of determining whether there will be such a decrease in the aggregate cash portion of the merger consideration, TBI shareholders' equity will be calculated not more than three business days prior to the closing date of the merger in accordance with the formula set forth in the merger agreement. The merger agreement provides that for this purpose TBI shareholders' equity will be calculated in a manner consistent with the TBI's balance sheet, reflecting accrual of expenses through the closing date of the merger, including all expenses related to the merger. However, the calculation will not include:

        As of September 30, 2012, TBI's total shareholders' equity, net of accumulated other comprehensive income or loss and estimated transaction expenses of $550,000, was approximately $17,900,000.

        The aggregate merger consideration to be paid by SYB will increase if the number of shares of TBI common stock outstanding at the effective time exceeds the number of shares outstanding as of the date of the merger agreement as a result of the exercise of TBI stock options. As a result, the merger consideration per share of TBI common stock will not be impacted by the exercise of TBI stock options prior to the closing date of the merger.

        SYB will not issue fractional shares of SYB common stock as part of the merger consideration. Instead, SYB will pay to each former TBI shareholder who otherwise would have received a fraction of a share of SYB common stock an amount of cash (rounded to the nearest cent) determined by multiplying the fraction of a share to which such holder would otherwise be entitled by $21.85.

        It is possible that the stock portion of the merger consideration may be adjusted prior to the effective date. The merger agreement provides that:

then TBI may elect to terminate the merger agreement. However, TBI may not terminate the merger agreement if SYB elects to increase the stock portion of the merger consideration pursuant to a prescribed formula to offset any reduction in the value of the merger consideration that exceeds the 15% decline permitted by the merger agreement, as is discussed in greater detail below in the section entitled "Termination."

        Please note that approval of the merger agreement by TBI shareholders also authorizes TBI's board of directors to terminate the merger agreement in the circumstances described below under "Termination" or to proceed with the merger at its sole discretion, if the board of directors believes such action to be in the best interests of its shareholders, regardless of the-then current value of the consideration to be received by the TBI shareholders.

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Treatment of TBI Stock Options

        Prior to the closing date of the merger, TBI is required to obtain the agreement of each holder of an option to purchase shares of TBI common stock (the "TBI stock options") outstanding immediately prior to the effective time under the TBI's 1995 Amended and Restated Stock Option Plan, as restated in the 1999 and 2005 Stock Option Plans, that such TBI stock option will either (a) terminate if not exercised by the effective time or (b) whether vested or unvested, be cancelled at the effective time. Pursuant to such agreements, if the merger is completed, then each holder of a TBI stock option will be entitled to receive an amount in cash equal to the excess, if any, of the aggregate merger consideration per share (calculated as a dollar figure in accordance with the merger agreement) minus the exercise price payable upon the exercise in full of such TBI stock option, less required withholding taxes.


Holding Company Merger and Bank Merger

        Immediately following the merger, SYB will cause Merger Sub to merge with and into SYB (the "holding company merger"), with SYB surviving the holding company merger and continuing to exist as in effect immediately prior to such holding company merger. Immediately following the holding company merger, SYB will cause TBI Bank to merge with and into SYB Bank (the "bank merger"), with SYB Bank surviving the bank merger and continuing to exist as in effect immediately prior to such bank merger.


Exchange and Payment Procedures

        At and after the effective time, each certificate representing shares of TBI common stock will represent only the right to receive the merger consideration per share in accordance with the terms of the merger agreement. SYB will deposit or cause to be deposited with Registrar and Transfer Company (the "exchange agent") a sufficient number of shares of SYB common stock for payment of the aggregate stock portion of the merger consideration, cash representing the aggregate cash portion of the merger consideration, and to the extent then determinable, any cash payable in lieu of fractional shares (collectively, the "exchange fund"). Within five business days of the effective time, the exchange agent will mail to each holder of record of TBI stock certificates as of the effective time a letter of transmittal specifying that delivery will be effected and risk of loss and title to TBI stock certificates will pass only upon delivery of TBI stock certificates (or lost security affidavits in lieu of such TBI stock certificates) to the exchange agent and instructions for use in surrendering TBI stock certificates (or lost security affidavits in lieu of such TBI stock certificates).

        Upon surrender to the exchange agent of its TBI stock certificates (or lost security affidavits) along with a properly completed letter of transmittal, a holder of TBI common stock will be entitled to receive within ten business days of such surrender the applicable merger consideration and any cash in lieu of fractional shares of SYB common stock in respect of the shares of TBI common stock represented by its certificates (or lost security affidavits). Until such surrender, each TBI stock certificate will represent, after the effective time, only the right to receive, without interest, the applicable merger consideration per share and any cash in lieu of fractional shares to be issued in consideration for those shares of TBI common stock.

        No interest will be paid on any merger consideration that any such holder shall be entitled to receive. No dividends or other distributions on SYB common stock with a record date occurring after the effective time will be paid to the holder of any non-surrendered old certificate representing shares of TBI common stock converted into the right to receive shares of SYB common stock until the holder surrenders such old certificate in accordance with the merger agreement.

        The stock transfer books of TBI will be closed immediately at the effective time, and after the effective time, there will be no transfers on the stock transfer records of TBI of any shares of TBI

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common stock other than to settle transfers of TBI common stock occurring prior to the effective time. Any TBI stock certificates presented to the exchange agent for transfer after the effective time will be cancelled and exchanged for the applicable merger consideration and any cash in lieu of fractional shares in accordance with the merger agreement.

        Any portion of the exchange fund remaining unclaimed by the TBI shareholders as of the one-year anniversary of the effective time will be transferred to SYB, after which any former TBI shareholders who have not previously surrendered their shares for merger consideration will look only to SYB for the merger consideration, any cash in lieu of fractional shares, and unpaid dividends and distributions on the SYB common stock, in each case, without interest. None of SYB, Merger Sub, nor the exchange agent will be liable to any former TBI shareholder for any amount delivered to a public official in good faith pursuant to applicable abandoned property, escheat, or similar laws.

        Regarding any TBI stock certificate that has been lost, stolen, or destroyed, upon completion of an affidavit of such fact by the person making such claim, and if reasonably required by SYB or the exchange agent, the posting by such person of a bond in such amount as SYB may determine is reasonably necessary as indemnity against any claim that may be made against it with respect to such certificate, the exchange agent will issue in exchange for those submittals the applicable merger consideration.


Dissenters' Rights

        Shares of common stock of held by TBI shareholders who have properly exercised and preserved dissenters' rights pursuant to the KBCA will not be converted or represent a right to receive shares of SYB. Instead, these shares will be entitled to appraisal rights. See the section entitled "Dissenters' Rights" beginning on page 66.


Dividends and Distributions

        Until TBI common stock certificates are surrendered for exchange, any dividends or other distributions declared after the effective time with respect to SYB common shares into which shares of TBI common stock may have been converted will accrue but will not be paid. When such certificates have been duly surrendered, SYB will pay any unpaid dividends or other distributions, without interest. After the effective time, there will be no transfers on the stock transfer books of TBI of any shares of TBI common stock. When certificates representing shares of TBI common stock are presented for transfer after the completion of the merger, they will be cancelled and exchanged for the merger consideration.


Representations and Warranties

        The merger agreement contains customary representations and warranties that TBI, SYB, and Merger Sub made to, and solely for the benefit of, each other. The assertions embodied in those representations and warranties are qualified by information in confidential disclosure schedules that TBI, SYB, and Merger Sub have exchanged in connection with signing the merger agreement. None of the representations and warranties of the parties will survive the consummation of the merger.

        The merger agreement contains representations and warranties of TBI, on the one hand, and SYB and Merger Sub, on the other hand, to each other, as to, among other things:

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        In addition, the merger agreement contains representations and warranties of TBI to SYB and Merger Sub as to:

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        In addition, the merger agreement contains representations and warranties of SYB to TBI as to:


Conduct of Business Prior to Completion of the Merger

        Under the merger agreement, TBI has agreed to certain restrictions on its activities until the merger is completed or terminated. In general, until the effective time and except with the prior written consent of SYB or as otherwise provided in the merger agreement, TBI shall, and shall cause TBI Bank to:

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        The following is a summary of the more significant restrictions imposed on TBI and TBI Bank, subject to the exceptions set forth in the merger agreement. Specifically, until the effective time and except with the prior written consent of SYB or as otherwise provided in the merger agreement, TBI shall not, and shall not permit TBI Bank to:

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Covenants and Agreements

        SYB and TBI have agreed to cooperate with each other and use their respective reasonable best efforts to promptly prepare and file all necessary documentation, to effect all applications, notices, petitions, and filings, to obtain as practicable all permits, consents, approvals, and authorizations of all third parties and governmental entities that are necessary or advisable to consummate the transactions contemplated by the merger agreement as soon as practicable.

        Following the effective time, SYB has agreed to offer to any employee of TBI or TBI Bank who does not continue in employment with SYB and who was not offered employment by SYB the opportunity to enter into a severance agreement. SYB has agreed to pay each such employee a severance payment equal to two weeks' pay for each full year of service of such employee with TBI or TBI Bank, which shall be payable upon the termination of employment and execution by the employee of SYB Bank's standard 18-month non-solicitation agreement.

        TBI has agreed to purchase an extended reporting period or "tail" endorsement under TBI's existing directors' and officers' liability insurance coverage for TBI's directors and officers that provides insurance coverage for a period of six-years following the closing of the merger or, if such term of coverage is not available, such other maximum period of coverage that is available (we refer to the period for which such coverage is purchased as the "tail-coverage period"). Such insurance coverage must contain at least the same coverage and amounts and contain terms and conditions no less advantageous to insured persons than TBI's current directors' and officers' insurance policy, and the cost of purchasing such coverage may not exceed 250% of the annual premiums paid by TBI for such insurance. During the tail-coverage period, SYB has agreed to indemnify each present and former director, officer, and employee of TBI and TBI Bank against any costs or expenses arising out of matters existing or occurring at or prior to the closing of the merger.

        The merger agreement also contains additional covenants, including, among other things, covenants relating to:

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Shareholder Approval; TBI Board Recommendation; Change in Recommendation

        TBI has agreed to hold a meeting of its shareholders as soon as is reasonably practicable following the effectiveness of this Form S-4 registration statement and the receipt of all required regulatory approvals, for the purpose of obtaining shareholder approval of the merger proposal.

        Pursuant to the merger agreement and except in the circumstances described below in "Acquisition Proposals by Third Parties", the TBI board of directors must recommend that TBI shareholders approve the merger proposal, include its recommendation in the joint prospectus/proxy statement, and use its reasonable best efforts to obtain approval of the merger proposal by the TBI shareholders. The TBI board of directors may not withdraw, modify or qualify, in a manner adverse to SYB, such recommendation or take any other action or make any other public statement, filing or release inconsistent with such recommendation, except in the circumstances described below in "Acquisition Proposals by Third Parties."


No Solicitation

        TBI has agreed that neither TBI nor TBI Bank nor any of their respective directors, officers, employees, and representatives will, directly or indirectly:

        TBI has also agreed to immediately terminate any and all existing discussions or negotiations with any third parties conducted prior to the date of the merger agreement with respect to any acquisition proposal. TBI is required to promptly notify SYB if any inquiries, proposals, or offers with respect to an acquisition proposal are received by TBI or any of its representatives and thereafter keep SYB informed of the status and terms of any such proposals, offers, discussions, or negotiations.


Acquisition Proposals by Third Parties

        If prior to the TBI shareholder approval, the TBI board of directors (i) receives a bona fide written acquisition proposal that was not solicited in violation of the merger agreement, (ii) determines in good faith after consultation with its outside legal counsel such action is necessary in order for the board of directors of TBI to comply with its fiduciary duties under applicable law, and (iii) determines in good faith after consultation with outside legal and financial advisors that such acquisition proposal either constitutes a superior proposal (as defined below) or could reasonably be expected to result in a superior proposal, then the board of directors of TBI may:

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        In general, the board of directors of TBI may not (i) withhold, withdraw, modify or qualify, in a manner adverse to SYB, its recommendation that TBI shareholders approve the merger agreement or (ii) approve or permit TBI to enter into any agreement relating to an acquisition proposal.

        However, if TBI receives a superior proposal, the board of directors of TBI may (i) effect of change in its recommendation or (ii) authorize TBI to terminate the merger agreement to enter into an alternative acquisition agreement (as defined below), each with respect to the superior proposal, if and only if:

        As used in the merger agreement, "acquisition proposal" means any proposal or offer with respect to (i) a merger, joint venture, partnership, consolidation, dissolution, liquidation, tender offer, exchange offer, recapitalization, reorganization, share exchange, business combination or similar transaction or series of related transactions involving TBI or any of its subsidiaries; or (ii) any other direct or indirect acquisition involving 40% or more of the total voting power of any class of equity securities of TBI or those of any of its subsidiaries, or 40% or more of the fair market value of the consolidated total assets (including, without limitation, equity securities of its subsidiaries) of TBI.

        As used in the merger agreement, "alternative acquisition agreement" means any letter of intent, memorandum of understanding, agreement in principle, acquisition agreement, merger agreement or other agreement relating to any acquisition proposal.

        As used in the merger agreement, "superior proposal" means an unsolicited bona fide written acquisition proposal involving 100% of the assets (on a consolidated basis) or total voting power of the equity securities of TBI that the board of directors of TBI has determined in its good faith judgment is reasonably likely to be consummated in accordance with its terms, taking into account all legal, financial and regulatory aspects of the proposal and the person making the proposal, and if consummated, would result in a transaction more favorable to TBI's shareholders from a financial point of view than the merger and the other transactions contemplated by the merger agreement, (A) after receiving the advice of its financial advisors, (B) after taking into account the likelihood of consummation of such transaction on the terms set forth therein and (C) after taking into account all legal, financial (including the financing terms of any such proposal), regulatory and other aspects of such proposal (including any expense reimbursement provisions and conditions to closing) and any other relevant factors permitted under applicable law, and after taking into account any amendment or modification to the merger agreement agreed to by SYB.

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Conditions to the Merger

        The respective obligations of SYB, Merger Sub, and TBI to effect the merger are subject to the satisfaction at or prior to the effective time of a number of conditions, including but not limited to:

        The obligations of Merger Sub and SYB to effect the merger are also subject to the satisfaction, or waiver by SYB, at or prior to the effective time, of a number of conditions, including but not limited to:

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The obligation of TBI to effect the merger is also subject to the satisfaction, or waiver by TBI, at or prior to the effective time, of a number of conditions, including but not limited to:


Termination

        The merger agreement may be terminated at any time prior to the effective time, whether before or after approval of the matters presented in connection with the merger by the TBI shareholders:

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        In addition, TBI may terminate the merger agreement during the three business days commencing on the first date on which all regulatory approvals (and waivers, if applicable) have been received and the TBI shareholders have approved the merger agreement (the "determination date"), if both of the following conditions are satisfied:

        If TBI elects to exercise its termination right described above, it must give prompt written thereof to SYB. During the three business days commencing with its receipt of such notice, SYB will have the option, exercisable in its sole discretion, to increase the stock portion of the merger consideration to the lesser of: (i) a quotient, the numerator of which is equal to the product of the initial SYB market value, the stock portion of the merger consideration (as then in effect), and the index ratio, and the denominator of which is equal to the determination date SYB market value; or (ii) the quotient determined by dividing the initial SYB market value by the determination date SYB market value, and multiplying the quotient by the product of the stock portion of the merger consideration (as then in effect) and 0.85. If SYB so elects, it shall give, within such three business day period, written notice to TBI of such election, and as a result no termination shall be deemed to have occurred and the merger agreement shall remain in full force and effect, except as the stock portion of the merger consideration shall have been so modified.

        Because the formula is dependent on the future price of SYB's common stock and that of the Index, it is not possible presently to determine what the adjusted merger consideration would be at this time, but, in general, more shares of SYB common stock would be issued to either (a) take into

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account the extent by which a decline in the 20-day volume weighted average price per share of SYB's common stock between the date of the merger agreement and the determination date exceeded the decline in the average price of the common stock of the Index between the date of the merger agreement and the determination date or (b) cap the decline in the value of the stock portion of the merger consideration that the TBI shareholders would be required to accept at 15%.


Termination Fee

        TBI is required to pay SYB a termination fee of $750,000 if:

        TBI is required to reimburse SYB for its reasonable, documented out-of-pocket expenses (up to a maximum of $250,000) incurred in connection with the merger agreement if SYB terminates the merger agreement as a result of the TBI shareholders failing to approve the merger agreement and the merger at a meeting called for such purpose.

        SYB is required to pay TBI a termination fee of $750,000 if the merger agreement is terminated either (i) by TBI due to an uncured breach by SYB of one of its covenants, agreements, representations or warranties under the merger agreement that would result in the failure of the closing conditions described above in the section entitled "Conditions to the Merger," or (ii) by either party after the outside date at a time when TBI could also have terminated the merger agreement due to an uncured breach by SYB.

        SYB is required to reimburse TBI for its reasonable, documented out-of-pocket expenses (up to a maximum of $250,000) incurred in connection with the merger agreement if SYB terminates the merger agreement as the result of any governmental entity taking any action with results in the imposition of a restriction, requirement, or condition on SYB which the SYB board of directors reasonably determines in good faith would materially reduce the benefits of the transactions contemplated by the merger agreement or restrict or burden the business or operations of SYB or any

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of its subsidiaries to such a degree that SYB would not have entered into the merger agreement if such conditions, restrictions or requirements been known at that the merger agreement was executed.


Effect of Termination

        If the merger agreement is terminated, it will become void and have no effect, except that (i) each of SYB and TBI will remain liable for any knowing, willful or intentional breach of the merger agreement and (ii) designated provisions of the merger agreement will survive the termination, including those relating to payments of fees and expenses and the confidential treatment of information.


Fees and Expenses

        All fees and expenses incurred in connection with the merger agreement and the transactions contemplated by the merger agreement will be paid by the party incurring such fees or expenses, except with respect to the termination fees above.


Management and Operations after the Merger

        SYB's officers and directors serving at the effective time shall continue to serve as SYB's officers and directors until such time as their successors have been duly elected and qualified or until their earlier resignation, death, or removal from office. SYB's articles of incorporation and bylaws in existence as of the effective time shall remain SYB's articles and bylaws following the effective time, until such articles of incorporation and bylaws are further amended as provided by applicable law.


Effective Time of the Merger

        The effective time will occur upon the date and at the time when the articles of merger are executed, delivered to, and filed with the Secretary of State of Kentucky or such later time as may be specified as the effective time in such articles of merger.

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DISSENTERS' RIGHTS

        Kentucky law entitles you to dissent from consummation of the merger and, in lieu of the consideration you would otherwise be entitled to receive pursuant to the merger agreement, receive payment in cash for the fair value of your shares of TBI common stock following completion of the merger. To exercise your dissenters' rights, you must strictly comply with the procedures specified in Subtitle 13 of the KBCA. The following discussion is intended as a brief summary of the material provisions of the Kentucky statutory procedures required to be followed by a shareholder in order to dissent from the merger and perfect dissenters' rights. This summary, however, is not a complete statement regarding your dissenters' rights under Kentucky law and is qualified in its entirety by reference to the text of the relevant provisions of Kentucky law, which are attached to this proxy statement/prospectus as Annex D. Shareholders intending to exercise dissenters' rights should carefully review Annex D. Failure to follow precisely any of the statutory procedures set forth in Annex D may result in a termination or waiver of these rights.

        If you are contemplating the possibility of exercising your right to dissent in connection with the merger, you should carefully review the text of the dissenters' rights statute attached as Annex D, particularly the procedural steps required to perfect dissenters' rights, which are complex. We also encourage you to consult your legal counsel, at your expense, before attempting to exercise your right to dissent. If you do not fully and precisely satisfy the procedural requirements of Kentucky law, you may lose your right to dissent. If you demand dissenters' rights under Kentucky law and withdraw or lose (through failure to perfect or otherwise) the right to dissent, then your shares will no longer be dissenting shares and will automatically be converted into the right to receive the applicable merger consideration, without interest and less any applicable withholding taxes, at the effective time of the merger. We will not give you any notice of your right to dissent from consummation of the merger other than as described in this document.


Requirements for Exercising Dissenters' Rights

        To preserve your right to dissent from the merger:

        If you do not satisfy each of the requirements, you cannot exercise your right to dissent and, if the merger agreement is approved by the TBI shareholders and the merger occurs, your shares of TBI common stock will be converted into the right to receive the merger consideration pursuant to the terms of the merger agreement.

        The right to dissent may be asserted either by a shareholder of record or a beneficial owner. A record holder may assert the right to dissent as to fewer than all shares registered in his name only if he dissents as to all shares beneficially owned by any one person and notifies TBI in writing of the name and address of each person on whose behalf he or she asserts dissenters' rights. For purposes of determining the rights of such record holder, he will be treated as if the shares to which he dissents

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and his other shares are registered in the names of different shareholders. A beneficial owner may assert the right to dissent as to shares held on his behalf only if he submits to us the record holder's written consent before or at the time he asserts the right to dissent and he does so for all shares that he beneficially owns or over which he has the power to direct the vote.


        Vote.     Your shares must either not be voted at the special meeting (including a decision to abstain from voting) or must be voted against the approval of the merger agreement. Submitting a properly signed proxy card that is received prior to the vote at the special meeting that does not direct how the shares of TBI common stock represented by that proxy are to be voted will constitute a vote in favor of the merger and a waiver of your statutory right to dissent. A vote in favor of the approval of the merger agreement, either by proxy or in person at the special meeting, will constitute a waiver of your right to dissent and will nullify any previously filed written notice of your intent to exercise your right to dissent.


        Notice.     Written notice of your intent to exercise dissenters' rights must be filed with TBI at:

        TBI must receive all written notices before the vote is taken with respect to the merger proposal at the special meeting. Your written notice to demand payment should specify your name and mailing address, the number of shares of TBI common stock you own, and that you intend to demand cash payment for your shares of TBI common stock if the merger agreement is approved.


        Termination of Dissenters' Rights.     Your right to dissent and obtain payment of the fair value of your shares of TBI common stock under Subtitle 13 of the KBCA will terminate if:


Payment Procedures

        If the merger agreement is approved by the TBI shareholders, within ten days after the approval, we will send written notice regarding the proper procedures for dissenting to all shareholders who have given written notice under the dissenters' rights provisions and have not voted in favor of the merger as described above. The notice will contain:

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        If you wish to assert your right to dissent, you must demand payment, certify whether you acquired beneficial ownership of your shares before December 19, 2012, and deposit your stock certificates representing shares of TBI common stock within the specified number of days after the notice is given. If you fail to make demand for payment and deposit your stock certificates within the time period set forth in the written notice, you will lose the right to demand payment for your shares under the dissenters' rights provisions, even if you filed a timely notice of intent to demand payment.

        If we do not consummate the merger within 60 days after the date set for demanding payment, we will return all deposited certificates and release transfer restrictions imposed on uncertificated shares. If after returning the deposited certificates and release transfer restrictions, we wish to consummate the merger, we must send a new dissenters' notice and repeat the payment demand procedure. If we do not consummate the merger and do not return the deposited certificates or release the transfer restrictions on uncertificated shares within 60 days after the date which we had set for demanding payment, you may notify us in writing of your estimate of the fair value of your TBI common stock plus the amount of interest due and demand payment of your estimated amount.

        Except as provided below, as soon as the proposed corporate action is taken or upon receipt by us of your valid demand for payment, we will remit to you, if you complied with the requirements of Kentucky law, the amount we estimate to be the fair value of your common stock, plus accrued interest, and will include the following information with the payment:

        For dissenting shareholders who were not the beneficial owners of their shares of TBI common stock before December 19, 2012, we may withhold payment and instead send a statement setting forth our estimate of the fair value of their shares and offering to pay such amount, with interest, as a final settlement of such dissenting shareholders' demands for payment. Payment of the fair value of these after-acquired shares may be conditional upon a dissenting shareholder's waiver of other rights under Subtitle 13 of the KBCA. We will also include in such statement an explanation of how we estimated the fair value of the shares and how the interest was calculated and a notice of the dissenter's right to demand payment of the dissenter's estimate of the fair value of the shares and the amount of interest due if such dissenting shareholder believes that the amount offered is less than the fair value of the shares, or that the interest is incorrectly calculated, or under certain other circumstances enumerated in the statute and described below.


Judicial Appraisal of Shares

        If you believe the payment we make, or offer to make, is less than the fair value of your shares or believe that the interest due is incorrectly calculated, you may, within 30 days of the payment or offer for payment, notify us in writing, and demand payment of, your estimate of the fair value of your shares and the amount of interest due. You may also demand payment of your estimate of the fair value of the shares if we fail to make payment for your shares within 60 days after the date set for demanding payment or do not consummate the merger and do not return the deposited certificates or

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release the transfer restrictions imposed on uncertificated shares within 60 days after the date set for demanding payment. If your demand for payment of your own estimate of the fair value of the shares is not settled within 60 days after we receive your demand, Kentucky law requires us to commence a proceeding in Jefferson County Circuit Court and petition the court to determine the fair value of the shares and accrued interest, naming all the dissenting shareholders whose demands remain unsettled as parties to the proceeding. If we do not commence the proceeding within the 60-day period, we will pay each dissenter whose demand remains unsettled the amount demanded.

        The court may appoint one or more appraisers to receive evidence and make recommendations to the court as to the amount of the fair value of the shares. The fair value of the shares as determined by the court is binding on all dissenting shareholders whose demands remain unsettled and may be less than, equal to or greater than the value of the merger consideration to be issued to non-dissenting shareholders for their TBI common stock under the terms of the merger agreement if the merger is consummated. Shareholders should be aware that investment banking opinions as to the fairness, from a financial point of view, of the consideration payable in a merger are not opinions as to fair value under the KBCA. The fair value of your shares as determined under the dissenters' rights provisions of the KBCA could be greater than, the same as, or less than the value of the merger consideration. If the court determines that the fair value of the shares plus interest is in excess of any amount remitted by us, then the court will enter a judgment for cash in favor of such dissenting shareholders in an amount by which the value determined by the court, plus interest, exceeds the amount previously remitted. For dissenting shareholders who were not the beneficial owners of their shares of our common stock before December 19, 2012, and for which we withheld payment pursuant to Section 271B.13-270 of the KBCA, the court may enter judgment for the fair value, plus accrued interest, of the dissenting shareholders' after-acquired shares.

        The court will also determine the costs and expenses of the court proceeding and assess them against us, except that the court may assess the costs against all or some of the dissenters whose actions in demanding payment of their own estimates of value are found by the court to be arbitrary, vexatious, or not in good faith. If the court finds that we did not substantially comply with the relevant provisions of Sections 271B.13-200 through 271B.13-280 of the KBCA, the court may also assess against us any fees and expenses of attorneys or experts that the court deems equitable. The court may also assess those fees and expenses against any party if the court finds that the party has acted arbitrarily, vexatiously, or not in good faith with respect to dissenters' rights. If the court finds that the services of counsel for any dissenter were of substantial benefit to other dissenters similarly situated, and that the fees for those services should not be assessed against us, the court may award to counsel reasonable fees to be paid out of the amounts awarded the dissenters who were benefited.

        For purposes of Kentucky law, fair value means the value of TBI common stock immediately before the effective time, excluding any appreciation or depreciation in anticipation of the merger, unless that exclusion would be inequitable. Under Section 271B.13-020 of the KBCA, you do not have a right, at law or in equity, to challenge the approval of the merger agreement or the consummation of the merger unless the merger is unlawful or fraudulent to the shareholders or to us.

        If you elect to exercise your dissenters' rights, the payment in cash of the fair value of your shares of TBI common stock will be a taxable transaction to you as described in the section of this proxy statement/prospectus entitled "Material Federal Income Tax Consequences" beginning on page 71. Shareholders considering exercising dissenters' rights should consult with their own tax advisors with regard to the tax consequences of such actions.


PROPOSAL 2—ADJOURNMENT OF THE SPECIAL MEETING

        In addition to the proposal to approve the merger agreement, the shareholders of TBI also are being asked to approve a proposal to adjourn or postpone the special meeting to a later date or dates

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to permit further solicitation of proxies if an insufficient number of shares is present in person or by proxy to constitute a quorum or approve the merger agreement.

        The KBCA and the articles of incorporation of TBI require the affirmative vote of the holders of a majority of the outstanding shares of TBI common stock to approve the merger. However, to have a quorum necessary to conduct business at the special meeting, only a majority of the holders of the outstanding shares of TBI common stock need be present in person or by proxy at the meeting. Therefore, if shareholder participation at the special meeting is lower than expected, we could find that although a majority of the shares present at the special meeting favor the merger, the number of shares actually present and voting in favor of the merger is still less than the majority of all of the outstanding shares required for approval. If that were to happen, the TBI board of directors (which unanimously recommends the merger) would like to have the flexibility to postpone or adjourn the meeting in order to attempt to solicit broader shareholder participation and support for the merger. If TBI elects to adjourn the special meeting, the chair of the meeting will request a motion that the special meeting be adjourned and the vote on the proposal to approve the merger agreement be delayed until the special meeting can be reconvened. If TBI adjourns the special meeting for 30 days or less, TBI will not set a new record date and will announce the date, time and location at which the special meeting will be reconvened prior to adjournment. No other notice will be provided. If a new record date is fixed for the adjourned meeting, TBI will give notice of the adjourned meeting as in the case of an original meeting. Unless revoked, any proxy solicited for the special meeting will continue to be valid for the adjourned and reconvened special meeting and will be voted in accordance with your instructions or, if no contrary instructions are given, for the proposal to approve the merger agreement.

        In order to permit proxies that have been received by TBI at the time of the special meeting to be voted for an adjournment, if necessary, TBI has submitted this proposal as a separate matter for consideration by TBI shareholders. We refer to this proposal as the adjournment proposal. If approved, the adjournment proposal will authorize the holder of any proxy solicited by the TBI board of directors to vote in favor of adjourning the special meeting and any later adjournments. If the TBI shareholders approve the adjournment proposal, TBI could adjourn the special meeting and use the additional time to solicit additional proxies to gain a quorum for the special meeting or approve the merger agreement, including the solicitation of proxies from TBI shareholders who have previously voted against the merger agreement. Among other things, approval of the adjournment proposal could mean that, even if proxies representing a number of votes sufficient to defeat the merger proposal have been received at the time of the special meeting, TBI could adjourn the special meeting without a vote on the merger proposal and seek to convince the holders of those shares to change their votes to votes in favor of the merger proposal.


Vote Required

        Approval of the adjournment proposal (Proposal 2 on your proxy card) requires more votes to be cast in favor of the proposal than are cast against it. Accordingly, if you fail to submit a proxy or if you abstain, then the shares of TBI common stock not voted or abstaining will have no effect on the adjournment proposal. If you return a proxy and do not indicate how you wish to vote on any proposal, or if you indicate how you wish your shares to be voted on the merger proposal (including a choice that your shares be voted against the merger proposal) but do not indicate a choice on the adjournment proposal, your shares will be voted in favor of the adjournment proposal.

        TBI's board of directors unanimously recommends that shareholders vote "FOR" the adjournment proposal.

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MATERIAL FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER

        Frost Brown Todd LLC has delivered an opinion as to the material anticipated United States federal income tax consequences generally applicable to a "U.S. holder" (as defined below) of TBI common stock with respect to the exchange of TBI common stock for SYB common stock and cash pursuant to the merger. Those material consequences are described in the following discussion, which assumes that U.S. holders hold their TBI common stock as capital assets within the meaning of Section 1221 of the Code. The opinion is based on the Code, administrative pronouncements, judicial decisions and Treasury Regulations, each as in effect as of the date of this proxy statement/prospectus. All of the foregoing are subject to change at any time, possibly with retroactive effect, and all are subject to differing interpretation. No advance ruling has been sought or obtained from the Internal Revenue Service regarding the United States federal income tax consequences of the merger. As a result, no assurance can be given that the Internal Revenue Service would not assert, or that a court would not sustain, a position contrary to any of the tax consequences set forth below. A copy of the tax opinion is included as an exhibit to the registration statement on Form S-4 of which this proxy statement/prospectus is a part, filed by SYB with the SEC.

        The opinion does not address any tax consequences arising under United States federal tax laws other than United States federal income tax laws, nor does it address the income tax consequences applicable to participants in the TBI 401(k) plan or with respect to employee benefits generally, nor the laws of any state, local, foreign or other taxing jurisdiction, nor does it address any aspect of income tax that may be applicable to non-U.S. holders of TBI common stock. In addition, the opinion does not address all aspects of United States federal income taxation that may apply to U.S. holders of TBI common stock in light of their particular circumstances or U.S. holders that are subject to special rules under the Code, such as holders of TBI common stock that are partnerships or other pass-through entities (and persons holding their TBI common stock through a partnership or other pass-through entity), persons who acquired shares of TBI common stock as a result of the exercise of employee stock options or otherwise as compensation or through a tax-qualified retirement plan, persons subject to the alternative minimum tax, tax-exempt organizations, financial institutions, broker-dealers, traders in securities that have elected to apply a mark to market method of accounting, insurance companies, persons having a "functional currency" other than the U.S. dollar and persons holding their TBI common stock as part of a straddle, hedging, constructive sale or conversion transaction.

        For purposes of the opinion and this summary, a "U.S. holder" is a beneficial owner of TBI common stock that is for United States federal income tax purposes:

        If a partnership (including an entity treated as a partnership for United States federal income tax purposes) holds TBI common stock, the tax treatment of a partner in the partnership will generally depend on the status of such partner and the activities of the partnership.

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        SYB and TBI have structured the merger to qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code. SYB and TBI have not requested and do not intend to request any ruling from the Internal Revenue Service as to the United States federal income tax consequences of the merger. Accordingly, each TBI shareholder should consult his or her own tax advisors as to the specific tax consequences resulting from the merger, including tax return reporting requirements, the applicability and effect of federal, state, local and other applicable tax laws and the effect of any proposed changes in the tax laws.


Federal Income Tax Consequences of the Merger

        Provided the merger qualifies as a "reorganization" within the meaning of Section 368(a) of the Code, upon exchanging your TBI common stock for SYB common stock and cash (other than cash received in lieu of a fractional share), you generally will recognize gain (but not loss) in an amount equal to the lesser of (1) the amount of gain realized (i.e., the excess of the sum of the amount of cash and the fair market value of the SYB common stock received pursuant to the merger over that holder's adjusted tax basis in its shares of TBI common stock surrendered) or (2) the amount of cash received pursuant to the merger (excluding any cash received in lieu of a fractional share). Unless the redemption is treated as a dividend under the Internal Revenue Code, any recognized gain generally will be long-term capital gain if, as the effective date, your holding period with respect to the TBI common stock surrendered exceeds one year.

        The aggregate tax basis in the shares of SYB common stock that you receive in the merger, including any fractional share interests deemed received and sold as described below, generally will equal your aggregate adjusted tax basis in the TBI common stock you surrender, reduced by the amount of cash received (excluding any cash received in lieu of a fractional share) and increased by the amount of gain, if any, recognized by you (excluding any gain recognized with respect to cash received in lieu of a fractional share) on the exchange. Your holding period for the shares of SYB common stock that you receive in the merger (including a fractional share interest deemed received and sold as described below) will include your holding period for the shares of TBI common stock that you surrender in the exchange.


Cash Received Instead of a Fractional Share of SYB Common Stock

        A U.S. holder of TBI common stock who receives cash will be treated as having received the fractional share pursuant to the merger and then as having exchanged the fractional share for cash in a redemption by SYB of the fractional share. As a result, such U.S. holder will generally recognize gain or loss equal to the difference between the amount of cash received and the basis in the U.S. holder's fractional share interest as set forth above. Subject to the provisions and limitations of Section 302 of the Internal Revenue Code, this gain or loss will generally be capital gain or loss, and will be long-term capital gain or loss if, as of the effective date, the holding period for such shares is greater than one year.


Cash Received Due to Exercise of Dissenters' Rights

        A U.S. holder of TBI common stock who receives cash for TBI common stock because such U.S. holder exercised dissenters' rights pursuant to Subtitle 13 of Chapter 271B of the KBCA will be treated for United States federal income tax purposes as if the SYB common stock had been received and then redeemed for cash by SYB. Such U.S. holder will recognize a capital gain or loss in an amount equal to the difference between the cash received and the tax basis in the SYB common stock, unless such payment, under each such holder's particular facts and circumstances, is deemed to have the effect of a dividend distribution and not a redemption treated as an exchange under the principles of Section 302 of the Internal Revenue Code.

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Backup Withholding and Information Reporting

        Payments of cash to a U.S. holder of TBI common stock instead of a fractional share of SYB common stock may, under certain circumstances, be subject to information reporting and backup withholding at a rate of 28% of the cash payable to the U.S. holder, unless the U.S. holder provides proof of an applicable exemption or furnishes its taxpayer identification number (Form W-9), and otherwise complies with all applicable requirements of the backup withholding rules. Any amounts withheld from payments to a holder under the backup withholding rules are not additional tax and will be allowed as a refund or credit against the U.S. holder's U.S. federal income tax liability to the extent that they exceed such U.S. holder's federal income tax liability, provided the required information is furnished to the Internal Revenue Service.

        The preceding discussion is intended only as a summary of material United States federal income tax consequences of the merger. It is not a complete analysis or discussion of all potential tax effects that may be important to you. Thus, TBI shareholders should consult their own tax advisors as to the specific tax consequences to them resulting from the merger, including tax return reporting requirements, the applicability and effect of federal, state, local, and other applicable tax laws and the effect of any proposed changes in the tax laws.

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DESCRIPTION OF SYB CAPITAL STOCK

        As a result of the merger, TBI shareholders who receive shares of SYB common stock in the merger will become shareholders of SYB. Your rights as shareholders of SYB will be governed by Kentucky law and the amended and restated articles of incorporation of SYB (the "SYB articles") and the amended and restated bylaws of SYB (the "SYB bylaws.") The following description briefly summarizes the material terms of SYB's capital stock that will be in effect if the merger is completed. We refer you to the SYB article and the SYB bylaws for more detail on the terms and provisions of SYB's capital stock that may be important to you. Copies of SYB's governing documents have been filed with the SEC. To learn where copies of these documents can be obtained, see the sections entitled "Where You Can Find More Information" in the forepart of this document and "Incorporation of Certain Documents By Reference" beginning on page 86.


Authorized Capital Stock

        SYB's authorized capital stock consists of 20,000,000 shares of common stock and 1,000,000 shares of preferred stock, all without par value. As of February 18, 2013, approximately 13,920,246 shares of SYB common stock were issued and outstanding and no shares of SYB preferred stock were issued and outstanding. All outstanding shares of common stock are, and the shares of common stock to be issued in the merger will be, when issued in accordance with the terms of the merger agreement, validly issued, fully paid, and non-assessable.


Common Stock

        Voting Rights.     The holders of SYB's common stock have the right to one vote per share on all matters which require their vote and do not have the right to cumulate votes in the election of directors. Directors are elected by a plurality of the shares actually voting on the matter, which means that the nominees for SYB directors that receive the largest numbers of votes cast by the SYB shareholders at a shareholders meeting with a quorum present will be considered elected.


        Dividend Rights.     Holders of SYB common stock are entitled to receive and share equally in dividends, if, as, and when such dividends are declared by the SYB board of directors out of assets legally available for such purpose.


        Redemption, Conversion and Preemptive Rights.     Shares of SYB common stock are not redeemable and do not have subscription, conversion or preemptive rights. There are no redemption or sinking fund provisions available to the common stock.


        Liquidation Rights.     If SYB liquidates, dissolves or winds up its business, subject to the rights of its creditors, SYB will distribute its remaining assets to its common shareholders in proportion to the number of shares that each common shareholder holds.


Preferred Stock

        The SYB board of directors may issue shares of the preferred stock from time to time, in one or more series, without shareholder approval. SYB's board of directors may determine the preferences, limitations, and relative rights, to the extent permitted by the KBCA, of any class, or series within a class, of SYB preferred stock that it designates. The holders of SYB preferred stock may have preferences over holders of SYB common stock in the payment of dividends, upon liquidation of SYB, in respect of voting rights and in the redemption of the capital stock of SYB. Series of preferred stock issued by SYB may also, in the discretion of SYB's board of directors, be made convertible into SYB common stock or other securities and may have sinking fund requirements. SYB has designated 400,000 shares of its authorized preferred stock as Series A Junior Participating Preferred Stock in connection with its shareholder rights plan but has not issued any shares of preferred stock.

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Limitation of Liability and Indemnification of Directors

        SYB's articles of incorporation contain certain provisions permitted under Kentucky law relating to the liability of SYB's directors. These provisions eliminate a director's personal liability to SYB or SYB's shareholders for monetary damages resulting from a breach of fiduciary duty, except in certain circumstances involving certain wrongful acts, including:

        These provisions do not eliminate SYB's right or those of any of SYB's shareholders to seek non-monetary relief, such as an injunction or rescission, in the event of a breach of a director's fiduciary duty. These provisions will not alter a director's liability under federal securities laws. SYB's articles of incorporation and bylaws also contain provisions which obligate SYB to indemnify SYB's directors and officers to the fullest extent permitted by Kentucky law.


Certain Anti-Takeover Matters

        SYB's articles of incorporation and bylaws contain a number of provisions that may be deemed to have an anti-takeover effect and may delay, deter or prevent a tender offer or takeover attempt that a shareholder might consider in its best interest, including those attempts that might result in a premium over the market price for the shareholders' shares. These provisions include:


        Business Combinations.     SYB's articles of incorporation require that, before certain types of business combination transactions involving SYB and a person who beneficially owns 20% or more of the outstanding voting securities of SYB (an "interested shareholder"), may be completed, the proposed transaction must first be recommended by the SYB board of directors and approved by (i) the holders of at least 80% of the voting power of all outstanding voting securities of SYB, voting together as a single class, and (ii) two-thirds of the outstanding voting power of the SYB stock other than the voting securities owned by the interested shareholder who is a party to the transaction, voting together as a single class. A business combination includes, among other things, a merger, asset sale or a transaction resulting in a financial benefit to the interested shareholder. These special voting requirements do not apply to a business combination with an interested shareholder if the transaction is either approved by a majority of the SYB directors who are not affiliated with the interested shareholder or the proposed transaction meets certain minimum price requirements specified in the articles of incorporation. In addition, SYB is prohibited from engaging in a business combination transaction with an interested shareholder for a period of three years after the date of the transaction or event in which the person became an interested shareholder, unless prior to the time the person became an interested shareholder, a majority of the disinterested members of the SYB board of directors approved either the proposed business combination or the transaction that results in the person becoming an interested shareholder. These provisions of SYB's articles of incorporation are intended to deter abusive takeover tactics and to help assure that all shareholders of SYB will be treated equally in a possible acquisition transaction. They may have the effect of encouraging a party or parties interested in acquiring SYB to negotiate in advance with SYB's board of directors because the shareholder approval requirement would be avoided if a majority of the directors then in office approve the proposed business combination transaction.

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        Advance Notice Requirements for Shareholder Proposals and Director Nominations.     SYB's bylaws establish an advance notice procedure with regard to the nomination, other than by or at the direction of the board of directors, of candidates for election as directors and with regard to certain matters to be brought before an annual meeting of SYB shareholders. In general, notice must be received by SYB not less than 90 days prior to the first anniversary of the preceding year's annual meeting and must contain certain specified information concerning the person to be nominated or the matter to be brought before the meeting and concerning the shareholder submitting the proposal.


        Removal of Directors Only for Cause.     SYB's articles of incorporation limit the right of its shareholders to remove directors from office to those circumstances meeting the definition of "cause" under the articles of incorporation. Cause means a director's participation in any transaction in which his or her financial interests conflict with those of SYB or its shareholders; any act or omission not in good faith or which involves intentional misconduct or a knowing violation of law; or the participation by the director in any transaction from which he or she derived an improper personal benefit.


        Authorized But Unissued Shares.     SYB's authorized but unissued shares of common stock and preferred stock are available for future issuance without shareholder approval, subject to limitations imposed by the NASDAQ Stock Market. SYB may use these additional shares for a variety of corporate purposes, including future public offerings to raise additional capital, acquisitions and employee benefit plans. The existence of authorized but unissued and unreserved common stock and preferred stock could render more difficult or discourage an attempt to obtain control of SYB by means of a proxy contest, tender offer, merger or otherwise.


Shareholder Rights Plan

        SYB has 400,000 shares of Series A Junior Participating Preferred Stock, or "Series A preferred stock", authorized and reserved for issuance in connection with SYB's shareholder rights plan set forth in the Rights Agreement (the "SYB rights agreement") dated April 23, 2003, with Wachovia Bank, National Association, as Rights Agent. A copy of the SYB rights agreement has been filed with the SEC and is incorporated by reference in this document. Under the rights plan, each outstanding share of SYB common stock has one right representing the right to purchase 1/100th of a share of Series A preferred stock. The exercise price of the right is $130.00 per right, subject to adjustment as set forth in the SYB rights agreement. The rights will expire on April 24, 2013, unless redeemed or exchanged prior to that date. The SYB board of directors may, in its discretion, extend the expiration date of the rights plan. The shares of SYB common stock issuable to TBI shareholders in the merger will include the associated preferred share purchase rights under the rights plan.

        The rights will not be exercisable until the distribution date described in the plan. The plan distribution date will not occur until the earlier to occur of the following two events (or such later date as may be determined by the SYB board of directors, upon approval by a majority of the "continuing directors" (as defined in the shareholder rights plan):

        Until the plan distribution date, the rights will be evidenced by the certificates representing shares of SYB's common stock. On the plan distribution date, the rights agent will mail separate certificates evidencing the rights to common shareholders of record. Until a right is exercised, the holder has no rights as a preferred shareholder of SYB.

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        If any person or group acquires 10% or more of SYB's common stock, rights holders will be entitled to buy, upon exercise of a preferred share purchase right, the number of shares of SYB common stock that, at the time, have a market value of twice the purchase price of the right. If SYB is acquired in a business combination, rights holders will be entitled to buy, for the purchase price, that number of shares of the acquiring corporation that, at the time, have a market value of twice the purchase price. The board of directors of SYB has the right to redeem the purchase rights in certain circumstances for $0.01 per right, subject to adjustment.

        The rights plan is designed to protect SYB's shareholders in the event of unsolicited offers to acquire SYB and other coercive takeover tactics, which, in the opinion of the SYB board of directors, would impair its ability to represent shareholder interests. The rights plan may make an unsolicited takeover more difficult or less likely to occur or may prevent a takeover, even though it may offer SYB's shareholders the opportunity to sell their stock at a price above the prevailing market rate and may be favored by a majority of SYB's shareholders.


Listing

        SYB common stock is listed on the NASDAQ Global Select Market under the symbol "SYBT."


Transfer Agent

        The transfer agent for SYB common stock is Registrar and Transfer Company, 10 Commerce Drive, Cranford, New Jersey 07016.

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COMPARISON OF SHAREHOLDERS' RIGHTS

        SYB is incorporated under the laws of Kentucky, and the rights of SYB shareholders are governed by the applicable laws of Kentucky (including the KBCA) and the SYB articles and the SYB bylaws. TBI is also a Kentucky corporation, and the rights of TBI shareholders are governed by the laws of Kentucky (including the KBCA) and the TBI articles and the TBI bylaws. Upon consummation of the merger, TBI's shareholders will become SYB shareholders, and the SYB articles, the SYB bylaws, the KBCA, and the rules and regulations applicable to public companies will govern their rights as SYB shareholders.

        The following summary discusses some of the material differences between the current rights of SYB shareholders and TBI shareholders under the SYB articles and SYB bylaws and the TBI articles and TBI bylaws. The statements in this section are qualified in their entirety by reference to, and are subject to, the detailed provisions of the SYB articles and SYB bylaws and the TBI articles and TBI bylaws, as applicable.

Authorized Capital Stock

SYB

 

TBI

SYB is currently authorized to issue up to 21,000,000 shares of capital stock, of which 20,000,000 shares are common stock and 1,000,000 shares are preferred stock.

 

TBI is currently authorized to issue up to 110,000 shares of capital stock, of which 100,000 shares are common stock and 10,000 shares are preferred stock.

Preferred Stock

SYB

 

TBI

SYB is authorized to issue up to 1,000,000 shares of preferred stock. The SYB board is authorized to issue preferred stock in series and to fix and state the voting powers, designations, preferences, and other rights and limitations of each such series. SYB has designated 400,000 shares of preferred stock as Series A Junior Participating Preferred Stock in connection with the SYB shareholder rights agreement. However, SYB has not issued any shares of preferred stock.

 

TBI is authorized to issue up to 10,000 shares of preferred stock. The TBI board is authorized to issue the preferred stock in series and to fix and state the voting powers, designations, preferences, and other rights and limitations of the shares of each such series. However, the TBI Board has not designated any particular series of preferred stock, nor has TBI issued any shares of preferred stock.

Voting Rights

SYB

 

TBI

Voting Rights.    Each holder of SYB common stock generally has the right to cast one vote for each share of SYB common stock held of record on all matters submitted to a vote of shareholders of SYB. SYB has not issued any shares of preferred stock, with or without voting rights.

 

Voting Rights.    Each holder of TBI common stock generally has the right to cast one vote for each share of TBI common stock held of record on all matters submitted to a vote of shareholders of TBI. TBI has not issued any shares of preferred stock, with or without voting rights.

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Special Issues.    Certain types of business combination transactions require special voting approvals, as described in the section titled "Anti-Takeover Laws" beginning on page 84.

 

Special Issues.    Certain actions identified in the TBI articles require a vote of the holders of at least 75% of the number of outstanding shares of each class of TBI's capital stock entitled to vote, unless the action has received the approval of a majority of TBI's board.

Dividends

        As Kentucky corporations, each of SYB and TBI may pay dividends and make other distributions at such times, in such amounts, to such persons, for such consideration, and upon such terms and conditions as their respective board of directors may determine, subject to all statutory restrictions. Neither SYB nor TBI has issued any shares of preferred stock with priority in dividend distributions over the shares of their respective common stock.


Liquidation

        In the event of the liquidation, dissolution, and/or winding-up of SYB or TBI, the holders of shares of their respective common stock are entitled to receive, after the payment or provision of payment for the respective corporation's debts and other liabilities a ratable share of the remaining assets of that corporation.


No Sinking Fund Provisions

        Neither SYB nor TBI has any common or preferred shares that are subject to any mandatory redemption, sinking fund, or other similar provisions.

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Additional Issuances of Stock; Preemptive Rights

SYB

 

TBI

Additional Issuances.    Except in connection with the proposed merger with TBI, SYB has no specific plans for the issuance of additional authorized shares of its common stock or for the issuance of any shares of preferred stock. In the future, the authorized but unissued shares of SYB common and preferred stock will be available for general corporate purposes, including, but not limited to, issuance as stock dividends or in connection with stock splits, issuance in future mergers or acquisitions, issuance under a cash dividend reinvestment and/or stock purchase plan, issuance under a stock incentive plan, or issuance in future underwritten or other public or private offerings. Section 271B.6-210 of the KBCA permits the board of directors of a Kentucky corporation to authorize the issuance of additional shares, unless the corporation's articles of incorporation reserve such a right to the corporation's shareholders. Under the SYB articles, no shareholder approval will be required for the issuance of these shares. As a result, the SYB board may issue preferred stock, without shareholder approval, possessing voting and conversion rights that could adversely affect the voting power of SYB's common shareholders, subject to any restrictions imposed on the issuance of such shares by the NASDAQ Stock Exchange.

Preemptive Rights.    Although preemptive rights are permitted by the KBCA, the SYB articles specify that SYB shareholders shall have no preemptive right to acquire unissued or treasury shares of SYB or securities convertible into such shares or carrying a right to subscribe to or acquire shares.

 

Additional Issuances.    The TBI articles provide that shares of TBI common stock can be issued or sold in such manner and for such amount as determined by the TBI board.

Preemptive Rights.    Although preemptive rights to subscribe for any new or additional common or preferred stock are permitted by the KBCA, the TBI articles do not provide for any such rights.

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Number of and Restrictions Upon Directors

SYB

 

TBI

Number of Directors.    The SYB articles state that the SYB board shall be composed of not less than nine nor more than 20 directors. Within those limits, the number of directors will be fixed by resolution of the board, subject to revision by resolution of the shareholders.

Restrictions on Eligibility.    A director of SYB is not required to be a resident of Kentucky or a shareholder of SYB. Persons having attained the age of 70 years as of the date of the annual meeting of shareholders at which such person would be nominated for election or reelection will not be eligible for election as a director.

 

Number of Directors.    The TBI bylaws provide that the TBI board be composed of not less than five nor more than 20 directors, with the exact number to be fixed from time to time by the TBI board of directors or shareholders.

Restrictions on Eligibility.    The TBI bylaws state that no person will be elected to serve as a director unless such person not attained the age of 72 on the date of the annual shareholders' meeting at which such person would be nominated for election, except that a maximum age of 77 is applicable to persons serving as a director of TBI on December 20, 2005.

Director Elections and Terms

SYB

 

TBI

Elections.    The SYB bylaws provide that a plurality of the votes cast by the shareholders at a SYB shareholders meeting with a quorum present will elect the SYB directors. A plurality is defined to mean that the individuals receiving the largest number of votes are elected as directors up to the maximum number of directors to be chosen at the election. SYB shareholders do not have cumulative voting rights in the election of directors.

Pursuant to the SYB bylaws, nominations for directors may be made at shareholders meeting by or at the direction of the SYB board or by any SYB shareholder of record at the time of giving notice for such meeting. Shareholder notices are to be delivered in writing to the SYB Secretary at least 90 days prior to the first anniversary of the preceding year's annual meeting (for annual meetings) and at least 10 days before the earlier of the day on which notice of the date of the meeting was mailed or public disclosure was made.

Terms.    The SYB articles provide that each of the SYB directors will be elected to serve a term of one year, which each director's term to expire at the annual meeting of the shareholders next following the director's election as a director.

 

Elections.    In the election of TBI directors, the nominees receiving the largest number of votes are elected up to the maximum number of directors to be chosen at the election. TBI shareholders do not have cumulative voting rights in the election of directors.

The TBI bylaws provide that nominations for the election of directors at any annual meeting of shareholders or any special meeting of shareholders called for that purpose may be made by the TBI board of directors or by a shareholder entitled to vote generally in the election of directors. To make a nomination, a shareholder must give notice in writing delivered or mailed to the Secretary of TBI not less than 30 days nor more than 60 days before the meeting; provided, however, that if less than 40 days' notice of the meeting is given the shareholders, then the shareholder's written notice must be delivered or mailed to the Secretary not later than the close of the 10th day following the day on which notice of the meeting was mailed to shareholders.

Terms.    The TBI articles provide that the TBI board of directors is divided into three classes, with each class to be as nearly equal in number as possible. The directors serve staggered three-year terms, with one class of directors to be elected at each annual meeting of TBI shareholders.

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Removal of Directors; Vacancies

        Removal.    Under Kentucky law, directors may be removed with or without cause, unless the corporation's articles of incorporation provide that directors may be removed only for cause. Additionally, the KBCA provides that a director may be removed by the shareholders only at a meeting called for that purpose. The meeting notice must state that removal is the purpose, or one of the purposes, of the meeting.

        Under the SYB articles and the SYB bylaws, at a meeting of SYB shareholders called expressly for that purpose, one or more SYB directors may be removed by a vote of a majority of the SYB shareholders only upon a showing of "cause", which means the participation by a director in any transaction in which his personal financial interests are in conflict with the financial interests of SYB or its shareholders, any act or omission not in good faith or which involves intentional misconduct or which is known to a director to be a violation of law, or the participation by a director in any transaction from which the director derived an improper personal benefit.

        Under the TBI articles, any director, or all of the directors, may be removed, with or without cause, by a vote of the holders of at least 75% of the number of outstanding shares of each class of TBI's capital stock entitled to vote, except that if less than the entire TBI board is to be removed, then no one of the directors may be removed if the votes cast against such director's removal would be sufficient to elect the director under cumulative voting at an election of the entire TBI board. The 75% shareholder vote is also superseded by a majority vote of the TBI board. A TBI director may resign at any time by deliver written notice to the TBI board or Chairman or to TBI.

        Vacancies.    Any vacancy on the SYB board by reason of the death, removal, resignation, disqualification, or inability to act of any director may be filled by an affirmative vote of a majority of the remaining directors (even if less than a quorum). According to the TBI bylaws, a vacancy on the TBI board may be filled by the TBI board or, if the directors remaining in office constitute less than a quorum, by the majority vote of all directors remaining in office.


Meetings of the Shareholders; Quorum

SYB

 

TBI

Annual Meetings.    The SYB bylaws state that annual meetings of the SYB shareholders will be held within 180 days of the SYB fiscal year at such date, time, and place as the SYB board determines for purposes of electing directors and transacting any other business that comes before it.

Special Meetings.    The SYB bylaws state that special shareholders' meetings may be called by the chief executive officer of SYB, by a majority of the members of the SYB board, or by the holders of not less than 331/3% of all the shares entitled to vote on any issued proposed to be considered at such meeting.

Quorum.    A majority of outstanding SYB shares entitled to vote, in person or by proxy, constitutes a quorum for any SYB shareholders meeting.

 

Special Meetings.    The TBI bylaws provide that a special meeting of the TBI shareholders may be called by the President or the TBI board or by TBI shareholders holding at least 331/3% of the votes entitled to be cast at such a meeting. TBI must deliver notice of shareholders meetings not fewer than 10 nor more than 60 days before the meeting date, and the notice must describe the purpose or purposes for which that meeting is called, with the only business to be conducted at that meeting to be that described in the purposes identified in the notice.

Quorum.    A majority of the outstanding TBI shares entitled to vote in person or by proxy constitutes a quorum for any meeting of TBI shareholders.

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Indemnification

        Under the KBCA, a Kentucky corporation may indemnify an individual made a party to a proceeding because the individual is or was a director or officer against liability incurred in the proceeding if (i) the individual's conduct was in good faith, (ii) the individual reasonably believed, in the case of conduct in the individual's official capacity with the corporation, that the individual's conduct was in the best interests of the corporation, and in all other cases, that the individual's conduct was at least not opposed to the corporation's best interests, and (iii) in the case of any criminal proceeding, the individual either had reasonable cause to believe that the individual's conduct was lawful, or the individual had no reasonable cause to believe that the individual's conduct was unlawful.

        Unless limited by its articles of incorporation, a corporation must indemnify a director who was wholly successful, on the merits or otherwise, in the defense of any proceeding to which the director was a party because the director is or was a director of the corporation against reasonable expenses incurred by the director in defense of the proceeding. The SYB bylaws provide that SYB must indemnify, to the fullest extent authorized by the KBCA, any person made party to any proceeding against all liability incurred by such person because he is or was an SYB director or officer under the same conditions as are found in the KBCA (cited above).

        The TBI bylaws provide that TBI must indemnify its executive officers and directors to the extent permitted by the KBCA regarding proceedings in which such persons were named defendant or respondent because they are or were executive officers or directors of TBI where the proceedings arise from conduct in their official capacity with TBI.


Restrictions on Shares

        Neither the SYB articles nor the SYB bylaws impose any transfer or pledge restrictions.

        Transfer of TBI Shares.    Except as provided in the TBI bylaws, TBI shareholders are prohibited from selling, giving away, or otherwise disposing of any TBI common stock shares until that shareholder has delivered to TBI an irrevocable written offer to sell those shares to TBI at a price stated in that offer within 15 days after delivering the offer and TBI has failed to accept the offer. If TBI accepts the offer, then TBI must pay for those shares in cash within 30 days of accepting the offer.

        These restrictions do not apply to the following:

        Pledge of TBI Shares.    No TBI shareholder may pledge or encumber his shares without (a) TBI's prior written consent and (b) the pledgee or mortgagee agreeing in writing to be bound by certain covenants with respect to the pledged TBI shares.

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Amendment of Articles of Incorporation and Bylaws

SYB

 

TBI

Amendments to Articles.    Amendments to Article VIII of the SYB articles regarding SYB directors require an affirmative vote of holders of at least 662/3% of the SYB voting stock then outstanding. Amendments to Article XI of the SYB articles regarding business combinations require an affirmative vote of holders of at least (i) 80% of the SYB voting stock then outstanding or (ii) 2/3 of the SYB voting stock then outstanding which is not beneficially owned by any "interested shareholder", voting together as a single class, with "interested shareholder" being defined to mean any beneficial owner, directly or indirectly, of 20% or more of the voting stock of SYB or any affiliate of SYB that during the three-year period prior to the date in question was the beneficial owner, directly or indirectly, of 20% or more of the voting stock in SYB.

Other than those exceptions, amendments to the SYB articles require recommendation by the SYB board and an affirmative vote by a majority of the votes in a vote of the SYB shareholders, as provided under the KBCA.

Amendments to Bylaws.    The SYB bylaws may be amended by the SYB board by vote of a majority of the entire SYB board, subject to repeal or change by an affirmative vote of a majority of the SYB shares entitled to vote at a shareholders' meeting.

 

Amendment to Articles.    Amendments to the TBI articles must be approved by the holders of at least 75% of the outstanding shares of each class of TBI's voting capital stock, although such shareholder approval is not required if the proposed amendment is approved by a majority of the TBI directors then holding office.

Amendment to Bylaws.    The TBI bylaws may be amended or repealed by the TBI board and by the TBI shareholders, even though the TBI bylaws may also be amended or repealed by the TBI board.

Shareholder Rights Plans

        SYB's shareholder rights plan was adopted on February 18, 2003 and is more particularly described in the section above entitled "Description of SYB Capital Stock—Shareholder Rights Plan." TBI is not party to a shareholder rights plan.


Anti-Takeover Laws

        Sections 271B.12-200 through 271B.12-230 of the KBCA prohibit a Kentucky corporation from engaging in a business combination with a 10% or greater shareholder or its affiliate or associate for five years fol