Stock Yards Bancorp, Inc. (NasdaqGS:SYBT) entered into a definitive agreement to acquire Kentucky Bancshares, Inc. (OTCPK:KTYB) for approximately $190 million on January 27, 2021. Pursuant to the agreement, Kentucky Bancshares' shareholders will have the right to receive 0.64 shares of Stock Yards Bancorp's common stock and $4.75 in cash for each share of common stock of Kentucky Bancshares with total consideration to consist of approximately 85% stock and 15% cash. Kentucky Bancshares employees stock will convert to Stock Yards Bancorp stock. All employees will receive service credit for their years of service with Kentucky Bank. Upon completion of the merger, the Stock Yards Bancorp shareholders immediately before the effective time of the merger will own approximately 85.6% of the combined company and the Kentucky Bancshares shareholders immediately before the effective time of the merger will own approximately 14.4% of the combined company. Stock Yards Bancorp will fund the cash payment portion of the acquisition through existing resources on-hand. The name of the bank will change from Kentucky Bank to Stock Yards Bank & Trust. Upon completion, Louis Prichard, President and Chief Executive Officer of Kentucky Bancshares will serve as Stock Yards's new Central Kentucky Market President and will serve on the bank's management committees including operations, lending, strategic planning, interest rates and human resources. Upon completion, Kentucky Bancshares employee's will join Stock Yards team and Shannon B. Arvin, President and Chief Executive Officer of Keeneland; and Edwin Saunier, President of Saunier North American, Inc. will join Stock Yards Board. For many employees, the organizational structure will remain the same. Prior to the date that is twelve (12) months after the date of the termination of this Agreement, KTYB enters into a definitive agreement or consummates a transaction with respect to an Acquisition Proposal then KTYB shall, on the earlier of the date it enters into the definitive agreement and the date of consummation of the transaction, pay SYBT, by wire transfer of same day funds a fee equal to $7.25 million.


The great people in the branches will remain in place and there's no branch overlap, no plan to close any branches and the branch locations will not change. Stock Yards Bank & Trust plans to maintain all of the existing Kentucky Bank locations. The transaction closing is subject to approval of Kentucky Bancshares shareholders, tax opinion, completion of customary regulatory approval, the S-4 shall have become effective under the Securities Act, SYBT shall have received from KTYB a certified list of those holders of KTYB Common Stock who are holders of Dissenting Shares and the number of shares of KTYB Common Stock as which each of them are holding Dissenting Shares. The Dissenting Shares shall represent no more than 5% of the outstanding shares of KTYB Common Stock and other closing conditions. The Merger Agreement was unanimously approved by the Board of Directors of each of Stock Yards Bancorp and Kentucky Bancshares. Kentucky Bancshares shareholder will hold a special meeting on May 13, 2021 to approve the transaction. The transaction is expected to close during the second quarter of 2021, hopefully, in May, end of May. The system conversion will take place in 3rd quarter 2021. This transaction is very attractive financially, with approximately 12% earnings per share accretion in the first full year of 2022 when conservative cost savings are fully phased in. Patrick Koster, Eric Kalinowski, Charlie Martin, Will Park, Jack Rouse of Keefe, Bruyette, & Woods, Inc. acted as financial advisors and R. James Straus and Nathan L. Berger of Frost Brown Todd LLC acted as legal advisors to Stock Yards Bancorp, Inc. Raymond James acted as financial advisor and Walter J. Byrne and Allison J. Donovan of Stoll Keenon Ogden PLLC acted as legal advisors to Kentucky Bancshares. Computershare Investor Services LLC acting as the transfer agent and registrar for the Stock Yards Bancorp common stock. Kentucky Bancshares paid Raymond James a fee of $250,000 upon delivery of its opinion. Kentucky Bancshares will also pay Raymond James a fee for advisory services in connection with the merger equal to approximately $2.4 million (less the fee paid upon the delivery of the opinion, the amount of which shall be deducted).

Stock Yards Bancorp, Inc. (NasdaqGS:SYBT) completed the acquisition of Kentucky Bancshares, Inc. (OTCPK:KTYB) for approximately 230 million on May 31, 2021.