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Stock Yards Bank & Trust has announced plans to acquire The BANK–Oldham County and its branches in La Grange, Louisville, Crestwood and Prospect.
The combination of the two banks is expected to create the largest locally owned community bank in the Louisville market in terms of deposits relative to the total deposits in the market.
The acquisition is subject to regulatory approval and approval of shareholders. It is expected to be finalized in the spring of 2013.
S.Y. Bancorp, Inc. (NASDAQ: SYBT), is the parent company of Stock Yards Bank '& Trust Company with offices in the Louisville, Indianapolis and Cincinnati markets.
The BANK's parent company is The Bancorp Inc.
As of Sept. 30, Bancorp had about $137.4 million in assets, $46.8 million in loans, $114.9 million in deposits and $19.4 million in tangible common equity.
Under the terms of the agreement, which has been unanimously approved by the boards of directors of both companies, the transaction is valued at $19.9 million.
Certain directors and executive officers of Bancorp that own or control approximately 20 percent of the outstanding shares of Bancorp common stock have entered into agreements with S.Y. Bancorp to vote such shares in favor of the transaction.
According to a press release from Stock Yards Bank, chair and CEO David Heintzman said, "Considering our strong presence in the metropolitan Louisville area, this transaction presents a prudent opportunity to deploy our solid capital base and extend our footprint to the northeast into contiguous Oldham County through the acquisition of a strong franchise with solid asset quality, capital strength and a history of profitability. As the only locally owned community bank based in Oldham County – with substantial market share at approximately 22 percent of total deposits – this transaction is expected to provide a ready source of core deposits to help fund our continued loan growth.
"With population growth of 32 percent over the last 10 years, Oldham County is the second fastest growing county in the Louisville MSA and fourth largest in the state," Heintzman added. "In addition, Oldham County ranks number one in Kentucky in terms of household income. Thus, we believe it will be attractive in terms of banking activities. Moreover, we are excited to bolster and expand the products and services available to customers there, including the addition of investment management and trust services along with private banking and brokerage services."
Stephen Norton, president and CEO of The BANK–Oldham County, said in the press release, "We are pleased to join forces with Stock Yards Bank & Trust Company to provide enhanced and long-term value to our customers and community.
The combination with S.Y. Bancorp will provide greater capital resources and operational scale that will allow us to grow as part of a larger community bank, with more than $2 billion in total assets and the tools and resources to enhance long-term value for our shareholders."
Heintzman also said Stock Yards Bank is excited to expand the company's footprint in Louisville.
"We feel the acquisition is an excellent fit as THE BANK–Oldham County shares a similar tradition with Stock Yards Bank & Trust. Founded in 1993 by local community leaders, business persons and professionals," he said in the release. "THE BANK–Oldham County has earned an excellent reputation through its commitment to a full understanding of the local market and to maintaining strong customer relationships. We look forward to working with our new employees to further build on that heritage."
Stock Yards Bank & Trust Company was established in 1904.