Filed Pursuant to Rule 424(b)(3)

Registration No. 333-123928

TARPON COAST BANCORP, INC.

1490 TAMIAMI TRAIL

PORT CHARLOTTE, FLORIDA 33948

Merger Proposed — Your Vote Is

Very Important

May 6, 2005

Tarpon Shareholders:

      The Board of Directors of Tarpon Coast Bancorp, Inc. has agreed to a merger of Tarpon with a wholly owned subsidiary of First Busey Corporation, at which time Tarpon would become a wholly owned subsidiary of First Busey. Before we can complete this merger, the merger agreement must be approved by Tarpon’s shareholders. We are sending you this proxy statement-prospectus to ask you to vote in favor of the merger.

      If the merger is consummated, each share of your Tarpon common stock will be converted into the right to receive $27.00 in a combination of cash and First Busey common stock equal to $12.15 cash and $14.85 in First Busey common stock. The calculation of the number of shares of First Busey common stock to which you are entitled upon the consummation of the merger is described more fully in the accompanying document. You should be aware that this conversion may be adjusted as described in the accompanying document. For a discussion of limitations on your ability to receive cash or First Busey common stock in the merger, see “The Merger — Merger Consideration” on page 20. Shares of First Busey common stock are quoted on The Nasdaq Stock Market under the symbol “BUSE.”

      Your vote is very important. The merger cannot be completed unless holders of at least a majority of Tarpon’s common stock approve it. We have scheduled a special shareholder meeting for you to vote on the merger. Whether or not you plan to attend our special shareholder meeting, please take the time to vote by completing and mailing the enclosed proxy card. If you sign, date and mail your proxy card without indicating how you want to vote, we will vote your proxy in favor of the merger.

      The date, time and place of the special meeting is:

      This proxy statement-prospectus provides you with detailed information about the proposed merger. You can also get information about First Busey from documents First Busey has filed with the Securities and Exchange Commission. We encourage you to read this entire document carefully.

      In particular, please see the section entitled “Risk Factors” beginning on page 14.

      We are very enthusiastic about this merger and the strength and capabilities we expect to achieve from it.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy of this proxy statement-prospectus. Any

representation to the contrary is a criminal offense. These securities are not savings or deposit accounts or other obligations of any bank or non-bank subsidiary of any of the parties, and they are not insured by the Federal Deposit Insurance Corporation, the Bank Insurance Fund or any other governmental agency.

      This proxy statement-prospectus is dated May 6, 2005 and was first mailed to shareholders on or about May 9, 2005.

      We have not been authorized to give any information or make any representation about the merger or Tarpon or First Busey that differs from, or adds to, the information in this proxy statement-prospectus or in documents that are publicly filed with the Securities and Exchange Commission. Therefore, if anyone does give you different or additional information, you should not rely on it.

References to Additional Information

      This proxy statement-prospectus incorporates important business and financial information about First Busey and Tarpon that is not in this document. Documents incorporated by reference that provide information regarding Tarpon are being delivered with this proxy statement-prospectus. In case of both First Busey and Tarpon, information incorporated by reference is available to you without charge upon your written or oral request.

      You can obtain documents related to First Busey and Tarpon that are incorporated by reference in this document through the Securities and Exchange Commission website at “http://www.sec.gov” or by requesting them in writing or by telephone from First Busey: First Busey Corporation, 201 West Main Street, Urbana, Illinois 61801, phone: (217) 365-4512, attention: Chairman and Chief Executive Officer, and, in the case of Tarpon: Tarpon Coast Bancorp, Inc., 1490 Tamiami Trail, Port Charlotte, Florida 33948, phone: (941) 626-8111, attention: Chairman and Chief Executive Officer. If you would like to request documents, please do so by May 31, 2005 to receive them before the special meeting. Instructions regarding how to obtain this information are contained on page 51 under the caption “Where You Can Find More Information.”

Tarpon Coast Bancorp, Inc.

Notice of Special Meeting of Shareholders

To be held on June 20, 2005

      Tarpon will hold a special meeting of shareholders at Tarpon Coast National Bank, 1490 Tamiami Trail, Port Charlotte, Florida 33948, at 5:00 p.m. local time on Monday, June 20, 2005 to vote on:

      Record holders of Tarpon common stock at the close of business on April 29, 2005, will receive notice of and may vote at the special meeting, including any adjournments or postponements. The Bylaws of Tarpon require approval by at least a majority of the outstanding shares of Tarpon to approve the merger agreement. A holder of Tarpon common stock who complies with the provisions of Sections 607.1301 through 1333 of the Florida Business Corporation Act relating to dissenters’ rights applicable to the merger will be entitled to receive payment in cash of the fair value of only those shares held (1) which are voted against approval of the merger agreement at the special meeting (either in person or by proxy), or (2) with respect to which the holder thereof has given written notice to Tarpon at or prior to the special meeting that the holder dissents from the merger agreement. We have attached a copy of the dissenters’ rights law as Appendix B to this document.

      You are cordially invited to attend the special meeting in person, but regardless of whether you plan to attend, please return the enclosed proxy card.

May 6, 2005

      Please mark, sign, date and return your proxy promptly, whether or not you plan to attend the special meeting.

      Your Board of Directors unanimously recommends that you vote FOR approval of the merger agreement.

Table of Contents

Questions and Answers About the Merger

Tarpon Coast Bancorp, Inc.

1490 Tamiami Trail

Port Charlotte, Florida 33948

(941) 629-8111

Attn: Lewis S. Albert

Chairman and Chief Executive Officer

	•	held in the treasury of Tarpon;
	•	held by any of Tarpon’s subsidiaries, other than in a fiduciary capacity;
	•	available for plan share awards or subject to existing unvested plan share awards under Tarpon’s stock option plan;
	•	reserved for issuance under a Tarpon stock purchase warrant agreement;
	•	owned by First Busey, Acquisition Corp. or any other subsidiary of First Busey, other than in a fiduciary capacity; and
	•	for which Tarpon shareholders have validly demanded and perfected dissenters’ rights under Sections 607.1301 through 1333 of the Florida Business Corporation Act;

	•	require Tarpon to conduct its business in accordance with certain guidelines (see “The Merger Agreement — Business Pending the Merger and Other Covenants”);
	•	require that certain conditions, in addition to the regulatory approval and shareholder approval already discussed, be satisfied or waived before the merger may be consummated (see “The Merger Agreement — Conditions to the Merger”);
	•	regulate the ability of the parties to waive or amend certain provisions of the merger agreement (see “The Merger Agreement — Waiver and Amendment; Termination”); and
	•	regulate the ability of the parties to terminate the agreement (see “The Merger Agreement — Waiver and Amendment; Termination”).

	•	the merger agreement is not approved by Tarpon shareholders, or the Federal Reserve or the Comptroller of the Currency;
	•	the other party breaches the merger agreement in a material way and does not, or cannot, correct the breach in 30 days; or
	•	the merger has not been completed by August 30, 2005.

		First Busey				Tarpon
		Common Stock(1)				Common Stock(2)
February 23, 2005		$	20.10			$	20.35
May 4, 2005		$	19.76			$	24.91

(1)	Closing price as reported on The Nasdaq Stock Market for each particular date.
(2)	Last sales price as reported on the over the counter bulletin board for each particular date.

			At December 31,
			2004				2003				2002				2001				2000
			(Dollars in thousands, except per share data)
Balance Sheet Items
	Securities available for sale		$	352,256			$	224,733			$	233,830			$	210,869			$	228,597
	Loans			1,475,900				1,192,396				1,101,043				978,106				984,369
	Allowance for loan losses			19,217				16,228				15,460				13,688				12,268
	Total assets			1,964,441				1,522,084				1,435,578				1,300,689				1,355,044
	Total deposits			1,558,822				1,256,595				1,213,605				1,105,999				1,148,787
	Long-term debt			165,374				92,853				71,759				47,021				55,259
	Junior subordinated debt owed to unconsolidated trusts			40,000				25,000				25,000				25,000				—
	Stockholders’ equity			138,872				125,177				115,163				105,790				92,325
Results of Operations
	Interest and dividend income		$	85,919			$	73,849			$	76,085			$	89,985			$	93,242
	Interest expense			30,041				25,618				30,494				46,435				50,476
	Net interest income			55,878				48,231				45,591				43,550				42,766
	Provision for loan losses			2,905				3,058				3,125				2,020				2,515
	Net income(1)			22,454				19,864				17,904				15,653				14,053
Per Share Data(2)
	Diluted earnings		$	1.09			$	0.97			$	0.87			$	0.77			$	0.69
	Cash dividends			0.51				0.45				0.40				0.35				0.32
	Book value(3)			6.74				6.10				5.66				5.16				4.58
	Closing price			20.87				18.00				15.37				14.32				13.29
Other Information
	Return on average assets			1.28	%			1.35	%			1.33	%			1.19	%			1.12	%
	Return on average equity			17.23	%			16.34	%			16.31	%			15.80	%			16.56	%
	Net interest margin(4)			3.49	%			3.60	%			3.74	%			3.64	%			3.74	%
	Stockholders’ equity to assets			7.07	%			8.22	%			8.02	%			8.13	%			6.81	%

(1)	Effective January 1, 2002, First Busey adopted Statement of Financial Accounting Standards (SFAS) No. 142 “Goodwill and Other Intangible Assets.” SFAS No. 142 changed the accounting for goodwill from a model that required amortization of goodwill, supplemented by impairment tests, to an accounting model that is based solely upon impairment tests.
(2)	Per share data have been retroactively adjusted to effect a three-for-two common stock split effective August 3, 2004, as if it had occurred on January 1, 2000.
(3)	Total capital divided by shares outstanding as of period end.
(4)	Calculated as a percent of average earning assets.

			At December 31,
			2004				2003				2002				2001				2000
			(Dollars in thousands, except per share data)
Balance Sheet Items
	Securities available for sale		$	29,135			$	20,437			$	13,638			$	18,655			$	10,118
	Loans			104,157				83,708				72,020				55,667				44,225
	Allowance for loan losses			1,148				1,007				916				803				546
	Total assets			145,633				122,557				98,764				95,374				63,769
	Total deposits			132,005				111,952				88,424				84,817				51,100
	Long-term debt			0				0				0				0				0
	Stockholders’ equity			10,481				9,898				8,955				8,618				8,885
Results of Operations
	Interest and dividend income		$	6,688			$	6,067			$	5,823			$	5,398			$	3,727
	Interest expense			1,153				1,598				2,019				2,570				1,742
	Net interest income			5,535				4,469				3,804				2,828				1,985
	Provision for loan losses			130				213				225				384				155
	Net income (loss)			651				1,172				263				(348	)			(419	)
Per Share Data
	Diluted earnings		$	0.53			$	0.97			$	0.22			$	(0.29	)		$	(0.35	)
	Cash dividends			—				—				—				—				—
	Book value(1)			8.87				8.37				7.57				7.29				7.52
	Closing price			19.50				14.50				10.00				7.25				7.69
Other Information
	Return on average assets			0.49	%			1.03	%			0.27	%			(0.43	)%			(0.79	)%
	Return on average equity			6.27	%			12.42	%			2.96	%			(3.88	)%			(4.66	)%
	Net interest margin(2)			4.68	%			4.44	%			4.34	%			3.96	%			4.25	%
	Stockholders’ equity to assets			7.85	%			8.28	%			9.02	%			11.16	%			16.86	%

(1)	Total capital divided by shares outstanding as of period end.
(2)	Calculated as a percent of average earning assets.

			Year Ended
			December 31, 2004
First Busey Common Stock(1)
Basic earnings per common share:
	Historical		$	1.10
	Pro forma combined			1.09
Diluted earnings per common share:
	Historical		$	1.09
	Pro forma combined			1.08
Dividends per common share:
	Historical		$	0.51
	Pro forma combined			0.51
Book value per common share at period end:
	Historical		$	6.74
	Pro forma combined			7.27

			Year Ended
			December 31, 2004
Tarpon Common Stock
Basic earnings per share:
	Historical		$	0.55
	Pro forma equivalent(2)			0.77
Diluted earnings per share:
	Historical		$	0.53
	Pro forma equivalent(2)			0.76
Dividends per share:
	Historical			—
	Pro forma equivalent(2)		$	0.36
Book value per share at period end:
	Historical		$	8.87
	Pro forma equivalent(2)			5.14

(1)	All information has been restated for a 3-for-2 stock split effected in the form of 50% stock dividend in August 2004.
(2)	Tarpon pro forma equivalent amounts are computed by multiplying the First Busey pro forma combined amounts by the calculated exchange ratio resulting from the assumed issuance by First Busey of 835,950 shares of common stock in exchange for all of the issued and outstanding Tarpon common stock, aggregating 1,182,151 shares, which would result in the issuance of approximately .71 shares of First Busey common stock in exchange for each share of Tarpon common stock.

			First Busey								Tarpon
			High				Low				High				Low
2005 Calendar Year
	First Quarter		$	21.00			$	19.01			$	26.00			$	19.15
	Second Quarter (through May 4, 2005)		$	19.97			$	18.25			$	25.48			$	24.70
2004 Calendar Year
	First Quarter		$	18.67			$	17.83			$	18.00			$	13.85
	Second Quarter			19.60				17.97				18.20				17.00
	Third Quarter			20.00				18.50				19.25				17.00
	Fourth Quarter			21.53				18.28				19.75				18.30
2003 Calendar Year
	First Quarter		$	16.25			$	14.93			$	10.50			$	10.00
	Second Quarter			17.68				15.39				10.65				10.20
	Third Quarter			18.57				16.31				14.00				10.25
	Fourth Quarter			19.23				17.33				14.50				12.75

			First Busey
			Dividends Per Share
Fiscal 2005:
	First Quarter		$	.1400
Fiscal 2004:
	First Quarter		$	.1267
	Second Quarter			.1267
	Third Quarter			.1267
	Fourth Quarter			.1300
Fiscal 2003:
	First Quarter		$	.1133
	Second Quarter			.1133
	Third Quarter			.1133
	Fourth Quarter			.1133
Fiscal 2002:
	First Quarter		$	.1000
	Second Quarter			.1000
	Third Quarter			.1000
	Fourth Quarter			.1000
Fiscal 2001:
	First Quarter		$	.0867
	Second Quarter			.0867
	Third Quarter			.0867
	Fourth Quarter			.0867
Fiscal 2000:
	First Quarter		$	.0800
	Second Quarter			.0800
	Third Quarter			.0800
	Fourth Quarter			.0800

Risk Factors

      In addition to the other information included in this proxy statement-prospectus, shareholders of Tarpon are urged to consider carefully the following factors in determining whether to approve the merger agreement:

Combining our two companies may be more difficult, costly or time-consuming than we expect.

      First Busey and Tarpon have operated, and, until the completion of the merger, will continue to operate, independently. It is possible that the integration process could result in the loss of key employees, the disruption of each company’s ongoing business or inconsistencies in standards, controls, procedures and policies that adversely affect our ability to maintain relationships with clients and employees or to achieve the anticipated benefits of the merger. As with any merger of banking institutions, there also may be disruptions that cause us to lose customers or cause customers to take their deposits out of our banks.

Certain directors and officers of First Busey and Tarpon have interests in the transaction that differ from your interests.

      Certain of the directors and officers of First Busey and Tarpon (and certain of their family members and related interests) have personal interests in the merger that may present them with conflicts of interest in connection with the merger. The Boards of Directors of First Busey and Tarpon are aware of this and have considered the personal interests disclosed in this proxy statement-prospectus in their evaluation of the merger. Reference should be made to “The Merger — Background of and Reasons for the Merger” at page 21 and “The Merger Agreement — Interests of Certain Persons in the Merger” at page 36, for a description of such potential conflicts of interest.

First Busey cannot guarantee that it will pay dividends to shareholders in the future.

      The principal business operations of First Busey are conducted through its subsidiary banks. Cash available to pay dividends to shareholders of First Busey is derived primarily, if not entirely, from dividends paid by the banks. After the merger, the ability of the banks to pay dividends to First Busey as well as First Busey’s ability to pay dividends to its shareholders will continue to be subject to and limited by certain legal and regulatory restrictions. Further, any lenders making loans to First Busey may impose financial covenants that may be more restrictive than regulatory requirements with respect to the payment of dividends by First Busey. There can be no assurance of whether or when First Busey may pay dividends after the merger.

First Busey faces intense competition in all phases of its business from other banks and financial institutions.

      First Busey competes for deposits with a large number of depository institutions including commercial banks, savings and loan associations, credit unions, money market funds and other financial institutions and financial intermediaries serving Champaign, McLean, Peoria, Tazewell and Ford Counties in Illinois, Hamilton County in Indiana and Lee County in Florida. Principal competitive factors with respect to deposits include interest rates paid on deposits, customer service, convenience and location.

      First Busey competes for loans with other banks headquartered in Illinois, Indiana and Florida, with loan production offices of large money center banks headquartered in other states, as well as with savings and loan associations, credit unions, finance companies, mortgage bankers, leasing companies and other institutions. Competitive factors with respect to loans include interest rates charged, customer service and responsiveness in tailoring financial products to the needs of customers. First Busey competes for loans primarily by designing products for, and directing marketing efforts to, businesses in the markets it serves and that are locally owned, well-capitalized and well-managed.

      Many of the entities with which First Busey competes are substantially larger in size, and many non-bank financial intermediaries are not subject to the regulatory restrictions applicable to First Busey’s bank subsidiaries.

First Busey’s continued pace of growth may require it to raise additional capital in the future, but that capital may not be available when it is needed.

      First Busey is required by federal and state regulatory authorities to maintain adequate levels of capital to support its operations. To the extent First Busey continues to expand its asset base, primarily through loan growth, it will be required to support such growth by increasing its capital to acceptable regulatory levels. Accordingly, First Busey may need to raise capital in the future to support continued asset growth.

      First Busey’s ability to raise capital, if needed to support loan growth, will depend on conditions in the capital markets, which are outside of its control, and on First Busey’s financial performance. Accordingly, First Busey cannot assure you of its ability to raise capital when needed or on favorable terms. If First Busey cannot raise additional capital when needed, it will be subject to increased regulatory supervision and the imposition of restrictions on its growth and business. These could negatively impact First Busey’s ability to further expand its operations through acquisitions or the establishment of additional branches and result in increases in operating expenses and reductions in revenues that would harm its operating results.

First Busey relies heavily on its management team, and the unexpected loss of key managers may adversely affect its operations.

      Much of First Busey’s success to date has been influenced strongly by its ability to attract and to retain senior management experienced in banking and financial services. First Busey’s ability to retain executive officers, the current management team and loan officers of its operating subsidiaries will continue to be important to the successful implementation of First Busey’s strategies. First Busey does not have any existing employment agreements with its executive officers.

      It is also critical, as First Busey grows, to be able to attract and retain qualified additional management and loan officers. The unexpected loss of services of any key management personnel, or the inability to recruit and retain qualified personnel in the future, could have an adverse effect on First Busey’s business, financial condition and results of operations.

First Busey may not be able to implement successfully its strategy to enter new markets.

      Among other matters, First Busey’s strategic plan includes expansion into new markets by acquisition or by establishing new offices. Expansion requires a significant expenditure of capital in order to prepare the facilities for operation and additional expense in order to staff these new facilities. As new offices mature and grow, First Busey is able to spread its overhead costs over a broader asset base. While First Busey’s recently established offices are generating loan activity consistent with its projections, First Busey may encounter unanticipated difficulties that could adversely affect future profitability. In addition, First Busey cannot assure you that it will be able to successfully operate and manage its operations in new markets or recover its initial capital investment in such operations. To the extent that First Busey expands, it may experience the effects of higher operating expenses relative to operating income from the new offices.

First Busey’s allowance for loan losses may prove to be insufficient to absorb potential losses in its loan portfolio.

      First Busey establishes allowance for loan losses in consultation with management of its bank subsidiaries and maintains it at a level considered adequate by management to absorb loan losses that are inherent in the portfolio. The amount of future loan losses is susceptible to changes in economic, operating and other conditions, including changes in interest rates, that may be beyond First Busey’s control, and such losses may exceed current estimates. At December 31, 2004, allowance for loan losses as a percentage of total loans was 1.3% and as a percentage of total non-performing loans was 243.28%. Although management believes that the allowance for loan losses is adequate to absorb losses on any existing loans that may become uncollectible, First Busey cannot predict loan losses with certainty, and First Busey cannot assure you that its allowance for loan losses will prove sufficient to cover actual loan losses in the future. Loan losses in excess of First Busey’s reserves may adversely affect its business, financial condition and results of operations.

First Busey loan portfolio is concentrated heavily in real estate loans, which involve risks specific to real estate value.

      At December 31, 2004, 79.31% of First Busey’s loans were comprised of real estate loans. Although a significant portion of such loans are secured by real estate as a secondary form of collateral, adverse developments affecting real estate values in one or more of First Busey’s markets could increase the credit risk associated with its loan portfolio. Additionally, if the loans are not repaid according to their terms, the real estate securing the loans, in those cases where real estate serves as the primary collateral, may not have a value equal to the amounts owed under the loan. Declines in the local economies of Champaign-Urbana, Bloomington-Normal and Peoria, Illinois, Indianapolis, Indiana, and Ft. Myers and Naples, Florida could have an adverse impact on First Busey’s financial condition.

Changes in the policies of monetary authorities could adversely affect First Busey’s profitability.

      The results of operations of First Busey are affected by credit policies of monetary authorities, particularly the Federal Reserve. The instruments of monetary policy employed by the Federal Reserve include open market operations in U.S. government securities, changes in the discount rate on bank borrowings and changes in reserve requirements against bank deposits. In view of changing conditions in the national economy and in the money markets, no prediction can be made as to possible future changes in interest rates, deposit levels, loan demand or the business and earnings of First Busey.

A Warning about Forward-Looking Statements

      This presentation includes forward-looking statements that are intended to be covered by the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include but are not limited to comments with respect to the objectives and strategies, financial condition, results of operations and business of the combined company after the merger.

      These forward-looking statements involve numerous assumptions, inherent risks and uncertainties, both general and specific, and the risk that predictions and other forward-looking statements will not be achieved. We caution you not to place undue reliance on these forward-looking statements as a number of important factors could cause actual future results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements.

      These risks, uncertainties and other factors include the following:

General Information

Meeting, Record Dates and Votes Required

      A special meeting of the shareholders of Tarpon will be held at 5:00 p.m. local time, on Monday, June 20, 2005, at Tarpon Coast National Bank, 1490 Tamiami Trail, Port Charlotte, Florida 33948. The purpose of the meeting is to consider and vote upon a proposal to approve the merger agreement, dated February 24, 2005 between Tarpon and First Busey, which provides for, among other things, the merger of Tarpon with Acquisition Corp. Following the merger, Tarpon will be merged into First Busey and the Bank will become a wholly owned subsidiary of First Busey. Only holders of record of Tarpon common stock at the close of business on April 29, 2005, will be entitled to notice of and to vote at the special meeting. As of the record date, there were 1,182,151 shares of Tarpon common stock issued, outstanding and entitled to be voted. There were approximately 615 Tarpon shareholders of record on the record date. Each share of Tarpon common stock will be entitled to one vote at the special meeting.

      The presence, in person or by proxy, of holders of a majority of the issued and outstanding shares of Tarpon common stock entitled to vote at the special meeting is necessary to constitute a quorum at such meeting. A quorum must be present before a vote on the merger agreement can be taken at the special meeting. For these purposes, shares of Tarpon common stock that are present, or represented by proxy, at the special meeting will be counted for quorum purposes regardless of whether the holder of the shares or proxy fails to vote on the merger Agreement for any reason, including broker nonvotes. Generally, a broker who holds shares of Tarpon common stock in “street” name on behalf of a beneficial owner lacks authority to vote such shares in the absence of specific voting instructions from the beneficial owner.

      Approval of the merger agreement on behalf of Tarpon will require the affirmative vote of a majority of the outstanding shares of Tarpon common stock entitled to be voted thereon. Failures to return proxy cards, broker nonvotes and abstentions will not be counted, and, as a result, such nonvotes will have the same effect as votes cast against the merger agreement. However, nonvotes will not be deemed to be votes against the merger agreement for purposes of determining a shareholder’s dissenters’ rights. See “— Dissenters’ Rights” on page 18.

      In order to vote for the merger agreement, Tarpon’s shareholders must vote for their approval on the enclosed proxy or attend the special meeting and vote in person. As of the record date, 133,216 shares of Tarpon common stock, or 11.3% of the total shares of Tarpon common stock outstanding, were beneficially owned and entitled to be voted by directors and executive officers of Tarpon. These individuals have indicated that they intend to vote their shares in favor of the merger agreement. Accordingly, if these individuals vote as they have indicated, then the merger agreement will be approved if holders of 457,860 of the remaining shares of common stock (38.7% of the total outstanding) also vote to approve it. Dissenters’ rights may be demanded by Tarpon’s shareholders who follow the specified procedures set forth in Section 607.1301 through 1333 of the Florida Business Corporation Act. See “— Dissenters’ Rights” below.

Proxies and Other Matters

      The enclosed proxy is solicited on behalf of the Board of Directors of Tarpon for use in connection with the Special Meeting and any adjournment or adjournments thereof. Holders of Tarpon common stock are requested to complete, date and sign the accompanying proxy and return it promptly to Tarpon in the enclosed envelope. Tarpon’s shareholders should not forward any stock certificates with their proxies.

      A Tarpon shareholder who has executed and delivered a proxy may revoke it at any time before such proxy is voted (a) by giving a later written proxy, (b) by giving written revocation to the Secretary of Tarpon, provided such later proxy or revocation is actually received by Tarpon before the vote of the shareholders, or (c) by voting in person at the special meeting. Any shareholder attending the special meeting may vote in person whether or not a proxy has been previously filed. The shares represented by all properly executed proxies received in time for the special meeting, unless said proxies are revoked, will be voted in accordance with the instructions therein. If instructions are not given, properly executed proxies received will be voted FOR approval of the merger agreement.

      Tarpon will bear the costs of solicitation of proxies for the special meeting. Such solicitation will be made by mail but also may be made by telephone, facsimile or in person by the directors, officers and employees of Tarpon.

      If a quorum is not obtained, or if fewer shares of Tarpon common stock are voted in favor of approval of the merger agreement than the number required for approval, it is expected that the special meeting will be postponed or adjourned for the purpose of allowing additional time for obtaining additional proxies or votes. At any subsequent reconvening of such special meeting, all proxies will be voted in the same manner as such proxies would have been voted at the original convening of the meeting (except for any proxies which have theretofore effectively been revoked), even though they might have been effectively voted on the same or any other matter at a previous meeting.

      The management of Tarpon is not aware of any business to be acted upon at the special meeting other than the proposal to approve the merger agreement. If other matters are properly brought before the special meeting or any adjournment thereof, the enclosed proxy, if properly signed, dated and returned, will be voted in accordance with the recommendation of Tarpon’s management or, if there is no such recommendation, in the discretion of the individuals named as proxies therein.

Dissenters’ Rights

      The following discussion is not a complete description of the law relating to dissenters rights available under Florida law. This description is qualified by the full text of the relevant provisions the Florida Business Corporation Act, which are reprinted in entirety as Appendix B to this proxy statement/ prospectus. If you desire to exercise dissenters’ rights, you should review carefully the Florida Business Corporation Act and are urged to consult a legal advisor before electing or attempting to exercise these rights.

      Under the Florida Business Corporation Act (“FBCA”), shareholders of Tarpon entitled to vote have the right to dissent from the merger, and obtain payment of the “fair value” of their shares. If the merger is completed, holders of Tarpon common stock as of April 29, 2005 who follow the procedures specified by Florida law will be entitled to receive in cash the fair value of their shares as of the day before the special meeting. Such value is exclusive of any appreciation or depreciation in anticipation of the merger, unless such exclusion would be inequitable, but includes “a fair and equitable” rate of interest thereon. Shareholders who elect to follow such procedures are called “dissenting shareholders” in this document.

      To perfect dissenters’ rights, a holder of Tarpon common stock must not vote in favor of the merger agreement and must provide written notice to us before the vote is taken at the special meeting indicating that such shareholder intends to demand payment if the merger is effectuated. Such written notification should be delivered either in person or by mail (certified mail, return receipt requested, being the recommended form of transmittal) to Tarpon Coast Bancorp, Inc., 1490 Tamiami Trail, Port Charlotte, Florida 33948, Attention: Chairman and Chief Executive Officer. All such notices must be signed in the same manner as the shares are registered on the books of Tarpon. If a shareholder has not provided written notice of intent to demand fair value before the vote is taken at the special meeting, the shareholder will be deemed to have waived his or her dissenters’ rights.

      Within 10 days after the date the merger becomes effective, First Busey will provide each former common shareholder who has properly provided a notice of intent to demand payment of fair value a written appraisal notice and form, which will indicate First Busey’s estimate of the fair value of the common stock, as well as a copy of our financial statements and a copy of sections 607.1301-607.1333 of the FBCA.

      A shareholder asserting dissenters’ rights must execute and return the form to us and deposit the shareholder’s certificates in accordance with the terms of the notice, before the date specified in the appraisal notice, which will not be fewer than 40 or more than 60 days after the appraisal notice and form were sent to the shareholder. A shareholder who deposits shares in accordance with the assertion of dissenters’ rights has no further rights as a shareholder, but only has the right to receive “fair value” for the shares in accordance with the dissenters’ procedures, unless the appraisal demand is withdrawn.

      A shareholder who does not execute and return the form and deposit his or her certificates by the date set forth in the appraisal notice, will no longer be entitled to dissenters’ rights, will be bound by the terms of the merger, and will receive the merger consideration. A shareholder who complies with the requirements and wishes to withdraw from the appraisal process may do so by notifying us in writing before the date set forth in the appraisal notice as the due date to execute and return the form. A shareholder who fails to withdraw from the appraisal process may not thereafter withdraw without our written consent.

      A shareholder must demand dissenters’ rights with respect to all of the shares registered in his or her name, except that a record shareholder may assert dissenters’ rights as to fewer than all of the shares registered in the record shareholder’s name but which are owned by a beneficial shareholder, if the record shareholder objects with respect to all shares owned by the beneficial shareholder. A record shareholder must notify us in writing of the name and address of each beneficial shareholder on whose behalf dissenters’ rights are being asserted. A beneficial shareholder may assert dissenters’ rights as to any shares held on behalf of the shareholder only if the shareholder submits to us the record shareholder’s written consent to the assertion of such rights before the date specified in the appraisal notice, and does so with respect to all shares that are beneficially owned by the beneficial shareholder.

      If a shareholder timely accepts the offer to pay the fair value of the shares as set forth in the appraisal notice, payment will be made within 90 days after First Busey receives the form from the shareholder. A shareholder who is dissatisfied with the offer must include in his or her returned form a demand for payment of that shareholder’s estimate of the fair value of the shares plus interest, otherwise the shareholder will be entitled to payment of only the amount offered. Interest is to be calculated at the interest rate on judgments in Florida on the effective date of the merger. Once First Busey has made payment of an agreed upon value, the shareholders will cease to have any interest in the shares.

      If a shareholder makes demand for payment which remains unsettled, First Busey shall commence a proceeding within 60 days after receiving the payment demand and petition the court to determine the fair value of the shares and accrued interest. If First Busey fails to file such proceedings, any dissenting shareholder may do so in Tarpon’s name. All dissenting shareholders, except for those that have agreed upon a value with First Busey, are deemed to be parties to the proceeding. In such proceeding, the court may, if it so elects, appoint one or more persons as appraisers to receive evidence and recommend a decision on the question of fair value. First Busey shall pay each dissenting shareholder the amount found to be due within 10 days after final determination of the proceedings. Upon payment of such judgment, the dissenting shareholder will cease to have any interest with respect to his or her shares.

      The court in any appraisal proceeding will determine the cost and expense of any appraisal proceeding and such costs and expenses will be assessed against First Busey. However, all or any part of such cost and expense may be apportioned and assessed against all or some of the dissenting shareholders, in such amount as the court deems equitable, if the court determines that such shareholders acted arbitrarily, vexatiously or not in good faith with respect to their dissenters’ rights. The court may also assess the fees and expenses of counsel and experts for the respective parties in the amounts the court finds equitable against First Busey if the court finds that First Busey did not substantially comply with its requirements under Sections 607.1320 and 607.1322 of the FBCA, or, against any party which the court finds acted arbitrarily, vexatiously, or not in good faith with respect to the dissenters’ rights provided by the FBCA. In the event First Busey fails to make any required payments, the shareholders may sue directly for the amount owed, and to the extent successful, will be entitled to recover all costs and expenses of the suit, including attorney’s fees.

      The foregoing does not purport to be a complete statement of the provisions of the FBCA relating to statutory dissenters’ rights and is qualified in its entirety by reference to the dissenters’ rights provisions, which are reproduced in full in Appendix B to this proxy statement and which are incorporated herein by reference.

Recommendation of Board of Directors

      The Board of Directors of Tarpon recommends that the shareholders of Tarpon vote FOR the proposal to approve the merger agreement. See “The Merger — Background of and Reasons for the Merger.”

The Merger

      The information in this proxy statement-prospectus concerning the terms of the merger is qualified in its entirety by the full text of the merger agreement, which, excluding the schedules, is attached as Appendix A and incorporated by reference, and the other information contained elsewhere in this proxy statement, including the appendices and the documents incorporated by reference. All shareholders are urged to read carefully this entire proxy statement prospectus, including the appendices and any document incorporated by reference.

General

      Under the merger agreement, Acquisition Corp. will be merged with and into Tarpon, with Tarpon being the surviving corporation. Following the merger, Tarpon will merge into First Busey, and the Bank will become a wholly owned subsidiary of First Busey. After the conditions to consummation of the merger described below have been satisfied or waived, and unless the merger agreement has been terminated as provided below, articles of merger will be filed with the Florida Department of State regarding the merger. The merger will become effective at the date and time set forth in the articles of merger. See “— Effective Time; Closing Date,” “The Merger Agreement — Conditions to the Merger” and “The Merger Agreement — Waiver and Amendment; Termination.”

      Upon consummation of the merger, Tarpon shareholders will be entitled to receive the per share merger consideration for their common stock and will no longer be shareholders of Tarpon.

Merger Consideration

      In accordance with the merger agreement, each share of common stock issued and outstanding immediately before the merger, except shares:

will be converted at the effective time of the merger into the right to receive $27.00 in a combination of cash and First Busey common stock equal to $12.15 cash and a whole number of First Busey shares equal to $14.85 divided by the First Busey Share Price, plus cash instead of any fractional share. The First Busey Share Price will be calculated as the average (weighted according to reported trading volume on Nasdaq and rounded to the nearest $.01) of the closing prices of First Busey shares on the 10 trading days immediately prior to the fourth day preceding the closing date that First Busey shares are traded on Nasdaq. See “— Manner of Conversion of Tarpon Shares” below.

      As of the effective time of the merger, each outstanding and unexercised Tarpon stock option and warrant which is exercisable at such date under Tarpon’s stock option plan and warrant agreement will be converted into the right to receive $27.00 in cash, less the exercise price of the stock option or warrant.

Manner of Conversion of Tarpon Shares

      Within five business days of the special meeting, unless the effective time of the merger has not yet occurred, in which case as soon thereafter as practicable, First Busey will cause the exchange agent to make allocations to the holders of Tarpon shares as follows.

      Share Minimum. If the First Busey shares to be received in exchange for shares of Tarpon common stock are less than an aggregate value of 50% or more of the total value of the consideration to be received by the shareholders of Tarpon (the “Share Minimum”) then the exchange agent shall select from each Tarpon shareholder, proportionately, a sufficient number of shares of the Tarpon common stock to be converted into the right to receive solely First Busey common stock that will, together with all other First Busey common stock to be issued, equal as closely as practicable (but in no event be less than) the Share Minimum.

      Share Maximum. Notwithstanding the foregoing procedure, if the number of shares of First Busey common stock to be issued in exchange for Tarpon common stock is greater than 850,000 shares of First Busey common stock (the “Share Maximum”), then the exchange agent shall select from each of the holders of Tarpon common stock, proportionately, a sufficient number of shares of the Tarpon common stock, which if converted solely to cash would result in the First Busey common stock to be issued in the merger to equal as closely as practicable (but in no event be greater than) the Share Maximum, and all such shares of Tarpon common stock held by such holders shall be converted into the right to receive cash.

      If the First Busey shares to be received in exchange for shares of Tarpon common stock is equal to or greater than the Share Minimum and less than the Share Maximum, then each Tarpon shareholder will be entitled to receive the consideration as set forth above in “— Merger Consideration.”

Background of and Reasons for the Merger

      In connection with its normal strategic planning process, Tarpon continuously reviews its strategic business alternatives, including devoting attention to the continuing consolidation and increasing competition in the banking and financial services industry in Florida. From time to time over the past several years, directors of Tarpon also had discussions regarding the prospects of Tarpon, conditions in the community banking market in Florida, and the merger activity among financial institutions in the state and the impact of such factors in determining whether Tarpon should remain independent.

      Keefe Ventures, LLC and Tarpon’s management first met in August 2003 to discuss the possibility of Tarpon raising capital for further expansion and growth. It was decided that Tarpon needed additional time to analyze the advantage and disadvantages of the various capital alternatives, as well as to assess different business models.

      During April 2004, Keefe introduced a Florida-based bank to Tarpon. After the meeting and several telephone discussions, the parties decided it was not in their interests to pursue a possible merger transaction with Tarpon. While these discussions were ongoing, and while Tarpon was assessing capital raising alternatives, Keefe had discussions with members of senior management of First Busey, whom Keefe had met at a meeting the prior year. The First Busey representatives discussed how First Busey had an interest in expanding its Florida presence. Keefe determined after this meeting that First Busey should be introduced to Tarpon.

      The first meeting between First Busey and Tarpon’s management occurred on August 5, 2004 at Tarpon’s main office. The purpose of the meeting was to discuss each party’s banking philosophies and the Florida banking markets.

      Thereafter, Keefe followed up with telephone calls to First Busey and Tarpon to determine if there was a basis to continue further discussion. It was decided that a second meeting would be scheduled to explore further discussion of the earlier issues. That second meeting was held at First Busey’s Florida bank located in Fort Myers on October 8, 2004, where Lewis Albert (Chairman and Chief Executive Officer of Tarpon) and Todd Katz (Vice Chairman and President of Tarpon) met with Douglas Mills (Chairman and Chief Executive Officer of First Busey), David Mills (President and Chief Operating Officer of Busey Bank),

Barbara Kuhl (President and Chief Operating Officer of First Busey), Michael Geml (President of Busey Bank Florida) and a representative of Keefe. The parties discussed the philosophies and background of the companies, and their possible interest in pursuing a strategic combination of First Busey and Tarpon. The parties agreed to meet again to further explore the opportunity.

      On October 21, 2004, Tarpon’s management discussed with the Tarpon board the meeting with the First Busey representatives. The Tarpon board approved retaining Keefe to serve as its financial advisor in connection with a proposed transaction with First Busey. Tarpon’s board also instructed Keefe to contact First Busey to determine its level of interest in pursuing a transaction with Tarpon.

      On October 27, 2004, Messrs. Albert and Katz met with Mr. Geml in Fort Myers, to further discuss the corporate culture and philosophies of the two companies, as well as their strategic direction and other issues.

      On November 22, 2004, Messrs. Albert and Katz met with Messrs. Douglas and David Mills, Mr. Geml, Mr. Robert Scharlau (Vice President of Busey Bank Florida) and a Keefe representative. Mr. Douglas Mills discussed generally issues relating to the integration of First Busey and Tarpon. The parties also discussed parameters relating to any possible combination transaction between the two parties, including the form of consideration, the range of value, and the desire for a tax free transaction to the extent of stock received. The parties also discussed issues relating to the retention of Tarpon’s brand for marketing purposes, the possibility of merging the Florida charters into Tarpon’s national charter, employment and personnel issues relating to Tarpon’s employees, the conversion of outstanding Tarpon stock purchase warrants and stock options, and other issues.

      Over the next 30 days, the parties had numerous telephone discussions concerning the form of a possible transaction between First Busey and Tarpon, and the consideration to be received by Tarpon shareholders in the transaction.

      On December 28, 2004, Tarpon received a non-binding proposal from First Busey discussing certain parameters relating to a proposed transaction. Tarpon concluded that the proposal was not comprehensive enough for action by the Tarpon board.

      On January 6, 2005, Tarpon received a revised non-binding proposal from First Busey. On January 10, 2005, at its regular meeting, the Tarpon board reviewed the terms of the proposal from First Busey. Also in attendance was Tarpon’s counsel as well as a representative of Keefe. The Keefe representative presented and discussed information relating to First Busey and Tarpon, strategic alternatives available to Tarpon, merger and acquisition activity in Florida and the Southeast, and other information. After additional discussion, the board accepted in principle the proposed terms as set forth in the proposal letter.

      From January 18, 2005 through February 2, 2005, representatives of First Busey and Tarpon had numerous telephone conferences to discuss further the terms and structure of a proposed transaction, as well as to coordinate due diligence efforts.

      On January 19, 2005, the parties entered into a confidentiality agreement.

      On January 28, 2005, a representative of Keefe met with First Busey representatives in Urbana, Illinois, to conduct a due diligence review of First Busey.

      On January 28, 2005, Tarpon received a draft of a proposed agreement relating to a transaction with First Busey.

      On February 7, 2005, representatives of First Busey conducted a due diligence review of Tarpon, and representatives of First Busey and Tarpon discussed the terms and issues relating to the draft definitive agreement.

      On February 14, 2005, the board of directors of Tarpon met to review the terms of the proposed agreement, as well as the results of the due diligence review.

      On February 23, 2005, the board of directors of Tarpon met to consider the terms of the proposed transaction with First Busey. Management reported on negotiations with First Busey. In addition, the board of

directors heard a financial presentation from a representative of Keefe. The representative advised the board that it was the opinion of Keefe that the consideration to be received by Tarpon’s shareholders under the merger agreement is fair from a financial perspective. During this meeting, legal counsel reviewed generally for the Tarpon board of directors the fiduciary duties of directors, including such duties in relation to the merger of financial institutions, and commented on the form of merger agreement, the voting and employment agreements to be entered into with First Busey, and related issues. Following discussion and review by Tarpon’s board of directors of the terms and conditions of the merger agreement, and related information and issues, the board of directors unanimously approved the merger agreement and the transactions contemplated by the merger agreement. Following such approval, Tarpon and First Busey signed the merger agreement on February 24, 2005.

Recommendation of the Board of Directors

      The Tarpon board of directors evaluated the financial, legal and market considerations bearing on the decision to recommend the merger. The terms of the merger, including the exchange ratio, are a result of arm’s-length negotiations between the representatives of Tarpon and First Busey. In reaching its conclusion that the merger agreement is in the best interest of Tarpon and its shareholders, the Tarpon board of directors carefully considered the following material factors among others:

      The Tarpon board of directors believes that by becoming part of a larger organization with greater resources, Tarpon will be able to expand more rapidly, serve its customers and communities better and provide a broad array of services that will be competitive in Charlotte County and southwest Florida. In addition, First Busey will be able to provide greater career opportunities for Tarpon’s employees.

      While each member of the Tarpon board of directors individually considered the foregoing and other factors, the board did not collectively assign any specific or relative weights to the factors considered and did not make any determination with respect to any individual factor. The Tarpon board of directors collectively

made its determination with respect to the merger based on the conclusion reached by its members, in light of the factors that each of them considered appropriate, that the merger is in the best interests of Tarpon’s shareholders.

      The board has unanimously approved and adopted the merger agreement and the transactions contemplated thereby and has determined that the merger is in the best interests of Tarpon and its shareholders. The Board unanimously recommends that shareholders of Tarpon vote for the proposal to approve the merger agreement.

Opinion of Financial Advisor

      Tarpon engaged Keefe Ventures, LLC to render financial advisory and investment banking services to Tarpon and at Tarpon’s request Keefe agreed to assist Tarpon in analyzing, structuring, negotiating, and effecting a transaction. Tarpon selected Keefe because Keefe is a well respected investment banking firm with substantial experience in transactions similar to the merger and is familiar with Tarpon’s business. As part of its investment banking business, Keefe is continually engaged in the valuation of financial businesses and their securities in connection with mergers and acquisitions.

      As part of its engagement, a representative of Keefe attended the meeting of Tarpon’s board of directors held on February 23, 2005, at which Tarpon’s board of directors evaluated the proposed merger with First Busey. At this meeting, Keefe reviewed the financial aspects of the proposed merger and rendered an opinion that, as of such date, the consideration to be received in the merger by Tarpon was fair to Tarpon’s shareholders from a financial point of view. Tarpon’s board of directors approved the merger agreement at this meeting. Keefe updated such opinion as of May 6, 2005.

      The full text of Keefe’s updated written opinion is included as Appendix C to this proxy statement-prospectus and is incorporated herein by reference. You are urged to read the opinion in its entirety for a description of the procedures followed, assumptions made, matters considered, and qualifications and limitations on the review undertaken by Keefe. The description of the opinion set forth herein is qualified in its entirety by reference to the full text of such opinion.

      Keefe’s opinion speaks only as of the date of the opinion. The opinion is directed to Tarpon’s board of directors and addresses only the fairness, from a financial point of view, of the consideration offered to Tarpon’s shareholders. It does not address the underlying business decision to proceed with the merger and does not constitute a recommendation to any Tarpon shareholder as to how the shareholder should vote at Tarpon’s special meeting on the merger proposal or any related matter.

      In rendering its opinion, Keefe

      In conducting its review and arriving at its opinion, Keefe relied upon and assumed the accuracy and completeness of all of the financial and other information provided to or otherwise made available to Keefe or that was discussed with, or reviewed by Keefe, or that was publicly available. Keefe did not attempt or assume any responsibility to verify such information independently. Keefe relied upon the management of First Busey, and Tarpon as to the reasonableness and achievability of the financial and operating forecasts (and assumptions and bases therefore) provided to Keefe. Keefe assumed, without independent verification, that the aggregate allowances for loan and lease losses for First Busey and Tarpon are adequate to cover those losses. Keefe did not make or obtain any evaluations or appraisals of any assets or liabilities of First Busey or Tarpon, nor did it examine or review any individual credit files.

      The financial information and data furnished to Keefe and used by it in certain of its analysis were prepared by First Busey’s and Tarpon’s senior management. First Busey and Tarpon do not publicly disclose internal management forecasts of the type provided to Keefe in connection with its review of the merger. As a result, such forecasts were not prepared with a view towards public disclosure, but the data is reflected in Keefe’s analysis. The forecasts were based on numerous variables and assumptions, which are inherently uncertain, including factors relating to general economic and competitive conditions. Accordingly, actual results could vary significantly from those set forth in the forecasts.

      For purposes of rendering its opinion, Keefe assumed that, in all respects material to its analyses:

      Keefe further assumed that the merger will be accounted for as a purchase under generally accepted accounting principles, and that the conversion of Tarpon’s common stock into First Busey’s common stock will be tax-free for Tarpon. Keefe’s opinion is not an expression of an opinion as to the prices as to which shares of First Busey’s common stock will trade following the announcement of the merger or the actual value of the shares of common stock of the combined company when issued pursuant to the merger, or the prices at which the shares of common stock of the combined company will trade following the completion of the merger.

      In performing its analyses, Keefe made numerous assumptions with respect to industry performance, general business, economic, market and financial conditions and other matters that are beyond the control of Keefe, First Busey and Tarpon. Any estimates contained in the analyses performed by Keefe are not necessarily indicative of actual values or future results, which may be significantly more or less favorable than suggested by these analyses. Additionally, estimates of the value of businesses or securities do not purport to be appraisals or to reflect the prices at which businesses or securities might actually be sold. Accordingly, these analyses and estimates are inherently subject to substantial uncertainty. In addition, the Keefe opinion was among several factors taken into consideration by Tarpon’s board of directors in making its determination to approve the merger agreement and the merger. Consequently, the analyses described below should not be

viewed as determinative of the decision of Tarpon’s board of directors with respect to the fairness of merger consideration.

      The following summary reviews the material analyses presented by Keefe to Tarpon’s board of directors on February 23, 2005 in connection with its original February 23, 2005 opinion. The summary is not a complete description of the analyses underlying the Keefe opinion or the presentation made by Keefe to Tarpon’s board of directors, but summarizes the material analyses performed and presented in connection with such opinion. The preparation of a fairness opinion is a complex analytic process involving various determinations as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances. Therefore, a fairness opinion is not readily susceptible to partial analysis or summary description. In arriving at its opinion, Keefe did not attribute any particular weight to any analysis or factor that it considered, but rather made qualitative judgments as to the significance and relevance of each analysis and factor. The financial analyses summarized below include information presented in tabular format. Accordingly, Keefe believes that its analyses and the summary of its analyses must be considered as a whole and that selecting portions of its analyses and factors or focusing on the information presented below in tabular format, without considering all analyses and factors or the full narrative description of the financial analyses, including the methodologies and assumptions underlying its analyses and opinion. The tables alone do not constitute a complete description of the financial analyses.

      Summary of Proposal. Tarpon’s shareholders will receive $27.00 per share of common stock, in a combination of $12.15 cash and $14.85 of First Busey common stock.

      Selected Peer Group Analysis. Keefe compared the financial performance and market performance of First Busey to those of a group of comparable companies in the Midwest with assets between $1.4 billion and $2.25 billion. Companies included in First Busey’s peer group were:

      Keefe compared the financial performance and market performance of Tarpon to those of a group of comparable companies in Florida with assets between $79 million and $887 million. Companies included in Tarpon’s peer group were:

      To perform this analysis, Keefe used the financial information as of December 31, 2004 or September 30, 2004 if December 31, information was not available. Market price information was as of February 16, 2005.

      Keefe’s analysis showed the following concerning First Busey’s (BUSE) and Tarpon’s financial performance:

      Keefe’s analysis showed the following concerning First Busey’s and Tarpon’s financial condition:

      Keefe’s analysis showed the following concerning First Busey’s and Tarpon market performance:

      Comparable Transaction Analysis. Keefe reviewed certain financial data related to selected comparably sized Florida acquisitions announced after January 1, 2004.

      Transaction multiples for the merger were derived from $27 per share for Tarpon. Keefe compared these results with announced multiples. The results of the analysis are set forth in the following table:

      No company or transaction used as a comparison in the above analysis is identical to First Busey, Tarpon, or the merger. Accordingly, an analysis of these results is not mathematical. Rather, it involves complex considerations and judgments concerning differences in financial and operating characteristics of the companies.

      Financial Impact Analysis. Keefe performed pro forma merger analyses that combined projected income statement and balance sheet information of First Busey and Tarpon. Assumptions regarding the accounting treatment, acquisition adjustments and cost savings were used to calculate the financial impact that the merger would have on certain projected financial results of First Busey. In the course of this analysis, Keefe used First Busey and Tarpon street estimates. This analysis indicated that the merger is expected to be accretive to estimated earnings per share in 2006. The analysis also indicated that the merger is expected to be accretive to First Busey’s book value per share in 2006. For all of the above analyses, the actual results achieved by First Busey following the merger may vary from the projected results, and the variations may be material.

      Discounted Future Earnings Analysis. Keefe estimated the present value of Tarpon’s common stock based on a continued independence scenario using current peer trading and current acquisition multiples. Keefe used Tarpon management’s estimates for 2005-2008 to value Tarpon’s common stock as of December 31, 2008. These values ranged from $26.20 to $28.91 per share.

      Other Analyses. Keefe reviewed the relative financial and market performance of First Busey and Tarpon to a variety of relevant industry peer groups and indices. Keefe also reviewed earnings estimates, balance sheet composition, historical stock performance and other financial data for First Busey.

      Tarpon’s board of directors has retained Keefe as an independent contractor to act as financial advisor to us regarding the merger. As part of its investment banking business, Keefe is continually engaged in the valuation of banking businesses and their securities in connection with mergers and acquisitions, secondary distributions of listed and unlisted securities, and private placements. As specialists in the securities of banking companies, Keefe has experience in, and knowledge of, the valuation of banking enterprises.

      Tarpon and Keefe have entered into an agreement relating to the services to be provided by Keefe in connection with the merger. Tarpon agreed to pay Keefe a cash fee equal to 1% of the market value of the aggregate consideration offered in exchange for the outstanding shares of common stock of Tarpon in the transaction, $100,000 of which was payable at the time the merger agreement was executed and the balance of which is payable at closing. Pursuant to the Keefe engagement agreement, Tarpon also agreed to reimburse Keefe for reasonable out-of-pocket expenses and disbursements incurred in connection with its retention and to indemnify Keefe against certain liabilities, including liabilities under the federal securities laws.

Effective Time; Closing Date

      In order to consummate the merger, the articles of merger must be filed with the Florida Department of State. This filing will occur only after the receipt of all regulatory approvals and the approval and adoption of the merger agreement by Tarpon’s shareholders and the satisfaction or waiver of all other conditions to the merger. See “The Merger Agreement — Conditions to the Merger.” The effective time of the merger will be as of the date and time set forth in the articles of merger. The closing of the merger will take place on a date mutually agreed upon by Tarpon, First Busey and Acquisition Corp.

Regulatory Approvals

      The merger, which involves First Busey, a bank holding company, is subject to the prior approval of the Federal Reserve Board under the Bank Holding Company Act of 1956. First Busey intends to submit an application for approval by the Federal Reserve Board on May 9, 2005.

      In general, the Federal Reserve Board considers the financial and managerial resources and future prospects of the institutions involved in the transaction and the convenience and needs of the communities to be served. The Federal Reserve Board cannot approve a merger if it would:

unless the Federal Reserve Board finds that the anti-competitive effects of a merger are clearly outweighed in the public interest by the probable effect of it meeting the convenience and needs of the communities to be served. The Federal Reserve Board has the authority to deny an application if it concludes that the combined organization would have an inadequate capital position. Also, the Federal Reserve Board must assess the records of the depository subsidiaries of the merger participants under the Community Reinvestment Act of 1977, which requires that the Federal Reserve Board analyze and consider when evaluating an application each depository institution’s record of meeting the credit needs of its local communities, including low and moderate income neighborhoods, consistent with safe and sound operation.

Surrender of Certificates

      Promptly after the effective time, the exchange agent will mail to each former holder of record of Tarpon common stock a form letter of transmittal, together with instructions and a return mailing envelope (collectively, the “exchange materials”), for the exchange of such holders’ Tarpon common stock certificates for certificates representing shares of First Busey common stock and the cash payable in the merger and in lieu of fractional shares. You should not send in your certificates until you receive the exchange materials from the exchange agent.

      Upon receipt of the exchange materials, former holders of Tarpon common stock should complete the letter of transmittal in accordance with the instructions and mail the letter of transmittal together with all stock certificates representing shares of Tarpon common stock to the exchange agent in the return envelope provided. Upon receipt of the certificates and related documentation, First Busey will issue, and the exchange agent will mail, to such holder of Tarpon common stock a check in the amount of cash consideration payable to such shareholder and any cash payment in respect of fractional shares of Tarpon common stock payable to the surrendering shareholder and, a certificate representing the number of shares of First Busey common stock to which such holder is entitled, all pursuant to the merger agreement. No certificate of First Busey common stock and no cash payment will be delivered to a holder of Tarpon common stock unless and until such holder has delivered to the exchange agent certificates representing the shares of Tarpon common stock owned by such holder and in respect of which such holder claims payment is due, or such documentation and security in respect of lost or stolen certificates as may be required by the exchange agent.

      Former shareholders of record of Tarpon will be entitled to vote after the effective time at any meeting of First Busey shareholders the number of whole shares of First Busey common stock into which such holders’ respective shares of Tarpon common stock are converted, regardless of whether such holders have exchanged their certificates representing Tarpon common stock for certificates representing First Busey common stock.

      Beginning six months after the effective time, no dividend or other distribution payable after the effective time with respect to First Busey common stock issued to replace Tarpon common stock will be paid to the holder of an unsurrendered Tarpon common stock certificate until the holder surrenders such certificate, at which time such holder will be entitled to receive all previously withheld dividends and distributions, without interest.

      After the effective time, there will be no transfers on Tarpon’s stock transfer books of shares of Tarpon common stock issued and outstanding at the effective time. If certificates representing shares of Tarpon common stock are presented for transfer after the effective time, they will be returned to the presenter together with a form of letter of transmittal and exchange instructions.

      Neither First Busey nor the exchange agent will be liable to a holder of Tarpon common stock for any amounts paid or properly delivered in good faith to a public official pursuant to any applicable abandoned property law.

      No fractional shares of First Busey common stock will be issued in respect to Tarpon common stock, and cash will be paid by First Busey in lieu of issuance of such fractional shares. The amount paid in lieu of fractional shares will be calculated by multiplying such fractional part of a share of First Busey common stock by the First Busey Share Price. No holder of Tarpon common stock who would otherwise have been entitled to a fractional share of First Busey common stock will be entitled to dividends, voting rights or any right as holder with respect to such fractional shares.

      Holders of Tarpon common stock will have the right to dissent from the merger agreement and receive, in lieu of the consideration provided for in the merger agreement, a cash payment equal to the fair value of their shares, all in conformity with Section 607.1301 through 1333 of the Florida Business Corporation Act. See “General Information-Dissenters’ Rights” on page 18.

The Merger Agreement

      The merger agreement has been included as Appendix A of this document to provide you with information regarding its terms. It is not intended to provide any other factual information about us. Such information can be found elsewhere in this proxy statement-prospectus and in the other public filings each of us makes with the Commission, which are available without charge at www.sec.gov.

Representations and Warranties

      The merger agreement contains representations and warranties we made to each other. The assertions embodied in those representations and warranties are qualified by information in confidential disclosure schedules that we have exchanged in connection with signing the merger agreement. While we do not believe that they contain information securities laws require us to publicly disclose other than information that has already been so disclosed, the disclosure schedules do contain information that modifies, qualifies and creates exceptions to the representations and warranties set forth in the attached merger agreement. Accordingly, you should not rely on the representations and warranties as characterizations of the actual state of facts, since they are modified in important part by the underlying disclosure schedules. These disclosure schedules contain information that has been included in Tarpon’s general prior public disclosures, as well as potential additional non-public information. Moreover, information concerning the subject matter of the representations and warranties may have changed since the date of the agreement, which subsequent information may or may not be fully reflected in the companies’ public disclosures. Further, the representations and warranties made by the parties in the merger agreement will not survive the closing of the merger.

      It is a condition of the closing that each party’s representations and warranties in the merger agreement or in any related documents be true and correct as of the closing date, as though made on and as of the closing date, subject to conditions in the merger agreement. See “— Conditions to the Merger” below. As of the date of this proxy statement-prospectus, neither Tarpon, First Busey nor Acquisition Corp. have any knowledge that this condition will not be satisfied as of the closing date.

Business Pending the Merger and Other Covenants

      Tarpon has agreed to conduct its business in accordance with guidelines in the merger agreement.

      Tarpon has agreed that, pending the closing date, and without the prior written consent of First Busey, which will not be unreasonably withheld, Tarpon will and will cause Bank to:

      Also, Tarpon will:

      In the merger agreement, Tarpon agreed that it will not, during the term of the merger agreement:

      Tarpon will promptly notify First Busey and keep First Busey informed of all relevant details of all inquiries or proposals that it may receive about any proposed disposition of its business or assets, acquisition of its capital stock, or the merger of it or its subsidiaries with any entity other than as provided by the merger agreement.

      Tarpon may disclose to its shareholders a position contemplated by Rule 14e-2(a) under the Securities Exchange Act of 1934 relating to a tender offer for its common stock.

      Under the terms of the merger agreement, Tarpon will also:

      Pending the closing date of the merger, the parties agree to and to cause their subsidiaries to conduct their businesses in the usual and ordinary course consistent in all material respects with prudent banking practices.

      The parties also agreed to use reasonable efforts in good faith to satisfy the conditions to closing and to consummate the merger as soon as practicable. The merger agreement provides that none of the parties will intentionally take or permit to be taken any action that would be in breach of the merger agreement or that would cause any representation and warranty to be or become untrue.

      During the term of the merger agreement, each party must immediately give detailed written notice to any other party of any facts or the occurrence or impending occurrence of any event that would cause any representation or warranty to be or become untrue as of the closing date.

      Tarpon has furnished First Busey with both real property and environmental documents. First Busey has neither notified Tarpon of any title defects in these documents, nor requested any additional environmental investigation within the requisite time periods in the merger agreement.

Conditions to the Merger

      The obligations of the parties under the merger agreement are subject to the satisfaction or waiver of the following conditions before or at closing, among others, that:

      The obligations of First Busey and Acquisition Corp. under the merger agreement are also subject to the satisfaction or waiver of the following conditions that:

      As of the date of this proxy statement-prospectus, no party has any knowledge that any of the foregoing closing conditions will not be satisfied by closing. For purposes of the merger agreement, a material adverse effect means any material adverse effect on the business, assets, properties, results of operations, financial condition or, as can be reasonably foreseen, prospects of the party and its subsidiaries, taken as a whole, or on the consummation of the merger.

Waiver and Amendment; Termination

      Before the effective time of the merger, by action of the Tarpon, First Busey and Acquisition Corp. boards:

provided that after Tarpon’s shareholder approve and adopt the merger agreement, there may not be any extension or waiver of any part of the merger agreement which reduces the amount or changes the form of merger consideration other than as contemplated by the merger agreement without additional Tarpon shareholder approval. Any agreement by a party to any extension or waiver must be in a written instrument signed on behalf of that party.

      The merger agreement may be terminated before the effective time of the merger:

At the time of termination for one of the foregoing circumstances, First Busey will pay to Tarpon no later than three business days after receiving notice from Tarpon of all documented out-of-pocket expenses and fees incurred by Tarpon up to $750,000 in cash, provided that if the merger agreement is terminated by Tarpon due to a willful breach by First Busey, Tarpon may pursue remedies and may be entitled to recover amounts at law or in equity in addition to the foregoing expenses and fees without limitation;

At the time of termination for one of the foregoing circumstances, Tarpon will pay to First Busey no later than three business days after receiving notice from First Busey of all documented out-of-pocket expenses and fees incurred by Tarpon up to $750,000 in cash, provided that if the merger agreement is terminated by First Busey due to a willful breach by Tarpon, First Busey may pursue remedies and may be entitled to recover amounts at law or in equity in addition to the foregoing fees and expenses without limitation; or

      The parties agree that the provisions in the merger agreement regarding termination fee and expenses constitute liquidated damages and do not constitute a penalty. If a party fails to promptly pay any other party any termination fee, the defaulting party will pay the costs and expenses in connection with any action, together with interest on the amount of any unpaid fee at the publicly announced prime rate published in the Midwest Edition of The Wall Street Journal from the date this fee was required to be paid.

      In the event of termination of the merger agreement by Tarpon or First Busey as described above, there will be no liability on the part of either of these parties or their officers or directors under the merger

agreement, except that provisions regarding confidentiality in due diligence, title to real property, effect of termination and termination fee and expenses will survive the termination.

Interests of Certain Persons in the Merger

      Certain members of Tarpon’s management, including all of its directors, have interests in the merger in addition to the interests they may have as Tarpon’s shareholders generally. These interests are as follows:

Management and Operations After the Merger

      From and after the effective time, the First Busey Board of Directors will consist of the then current directors of First Busey. Upon the consummation of the merger, the Bank will be a wholly owned subsidiary of First Busey.

      All current First Busey officers will continue to serve First Busey in accordance with the bylaws of First Busey after the effective time. All directors and officers of each of the subsidiaries of First Busey after the effective time will continue to serve in accordance with the terms of the bylaws of each such subsidiary.

Tarpon Employee Benefit and Incentive Plans

      At the effective time, each employee of Tarpon and the Bank will become eligible to participate in all employee benefit plans offered and maintained by First Busey on the same terms and conditions that First Busey and its subsidiaries make available to their officers and employees. The period of employment and compensation of each employee of Tarpon and the Bank before the effective time will be counted for all purposes under the First Busey benefit plans, including, without limitation, for purposes of service credit, eligibility and vesting.

Federal Income Tax Consequences

      Neither First Busey nor Tarpon has requested or will receive an advance ruling from the Internal Revenue Service as to the tax consequences of the merger. Crowe Chizek and Company LLC has delivered an opinion to Tarpon regarding the federal income tax consequences of the merger. In rendering its opinion, Crowe Chizek made certain assumptions, including the following: (1) that the merger will take place as described in the merger agreement, (2) that certain factual matters represented by First Busey and Tarpon are true and correct at the time of consummation of the merger, (3) that the merger will qualify as a statutory merger under the applicable laws of the State of Florida, and (4) that the merger will be reported by First Busey and Tarpon on their respective federal income tax returns in a manner consistent with such opinion.

      Based on these assumptions, in the opinion of Crowe Chizek, the following will be the material federal income tax consequences of the merger:

      In addition, Tarpon shareholders who receive cash either pursuant to a cash election, in connection with the exercise of dissenters’ rights or instead of fractional shares should be aware of the following consequences:

      Cash Election and Exercise of Dissenters’ Rights. With respect to a Tarpon shareholder who receives only cash in exchange for his or her shares of Tarpon common stock pursuant to a cash election or in connection with the exercise of dissenters’ rights under the Florida Business Corporation Act, the cash received will be treated as a distribution in redemption of the Tarpon common stock held by such shareholder, subject to the deemed dividend provisions of Section 302 of the Internal Revenue Code. If a shareholder has no further connection with Tarpon or First Busey after the transaction, the distribution would generally not be treated as a dividend. If the distribution is treated as a dividend, the shareholder will recognize ordinary income on the distribution. The distribution may be eligible for a reduced tax rate or qualified dividend income if the shareholder meets certain holding period requirements. If the distribution is not recharacterized as a dividend pursuant to Section 302, the shareholder will recognize gain or loss measured by the difference between the amount of cash received and the adjusted basis of the Tarpon common stock surrendered. Such gain or loss will be capital in nature if the Tarpon common stock was held by the shareholder as a capital asset pursuant to Section 1221 of the Internal Revenue Code.

      Cash Instead of Fractional Shares. The payment of cash to Tarpon’s shareholders instead of fractional shares of First Busey common stock will be treated for federal income tax purposes as if the fractional shares of First Busey stock were issued in the merger and then were redeemed by First Busey. Tarpon’s shareholders will, in general, recognize capital gain equal to the difference between the tax basis of the fractional share and the cash received.

      The discussion set forth above is based upon the opinion of Crowe Chizek and Company LLC, and applies only to Tarpon’s shareholders who hold Tarpon common stock as a capital asset. This discussion may not apply to special situations, such as Tarpon’s shareholders, if any, who received their Tarpon common stock upon exercise of employee stock options or otherwise as compensation and Tarpon’s shareholders that are insurance companies, securities dealers, financial institutions or foreign persons. It does not address the state, local or foreign tax aspects of the merger or any tax consequences of a subsequent transaction involving First Busey common stock, including any redemption or transfer of First Busey common stock. This discussion is based on currently existing provisions of the Internal Revenue Code, existing and proposed treasury regulations thereunder, and current administrative rulings and court decisions. All of the foregoing are subject to change and any such change could affect the continuing validity of this discussion. Each Tarpon shareholder should consult his own tax advisor with respect to the specific tax consequences of the merger, including the application and effect of state, local and foreign tax laws.

Accounting Treatment

      First Busey intends to treat the merger as a purchase by First Busey of Tarpon under generally accepted accounting principles. Under the purchase method of accounting, the assets and liabilities of the company not surviving a merger are, as of completion of the merger, recorded at their respective fair values and added to those of the surviving company. Financial statements of the surviving company issued after consummation of the merger reflect these values, but are not restated retroactively to reflect the historical financial position or results of operations of the company not surviving.

Expenses and Fees

      The merger agreement provides that each of the parties will bear and pay all costs and expenses incurred by it in connection with the transactions contemplated by the merger agreement, including filing, registration and application fees, printing and mailing fees and expenses, and fees and expenses of their respective accountants and counsel.

Resales of First Busey Common Stock

      The shares of First Busey common stock issued pursuant to the merger agreement will be freely transferable under the Securities Act, except for shares issued to any shareholder who may be deemed to be an “affiliate” (generally including, without limitation, directors, certain executive officers and beneficial owners of 10% or more of stock) of Tarpon for purposes of Rule 145 under the Securities Act as of the date of the special meeting. Affiliates may not sell their shares of First Busey common stock acquired in connection with the merger except pursuant to an effective registration statement under the Securities Act covering such shares or in compliance with Rule 145 promulgated under the Securities Act or another applicable exemption from the registration requirements of the Securities Act. First Busey may place restrictive legends on certificates representing First Busey common stock issued to all persons who are deemed “affiliates” of Tarpon under Rule 145. This proxy statement-prospectus does not cover resales of First Busey common stock received by any person who may be deemed to be an affiliate of Tarpon.

Supervision and Regulation of First Busey

and Tarpon

      First Busey, its subsidiary banks, and Tarpon and the Bank are subject to state and federal banking laws and regulations which impose specific requirements and restrictions on, and provide for general regulatory oversight with respect to, virtually all aspects of operations. These laws and regulations are generally intended to protect depositors, not shareholders. To the extent that the following summary describes statutory or regulatory provisions, it is qualified in its entirety by reference to the particular statutory and regulatory provisions. Any change in applicable laws or regulations may have a material effect on the business and prospects of First Busey and/or Tarpon.

      First Busey is a financial holding company subject to supervision and regulation by the Board of Governors of the Federal Reserve System (“Federal Reserve”) under the Bank Holding Company Act (“BHCA”), and by the Illinois Bank Holding Company Act (“IBHCA”). Tarpon is a bank holding company registered with the Federal Reserve under the BHCA. First Busey’s state-chartered bank is subject to regulation and examination primarily by the State of Illinois Office of Banks and Real Estate (“SIOBRE”) and, secondarily, by the Federal Deposit Insurance Corporation (“FDIC”). First Busey’s federally chartered capital stock savings association is subject to regulation and examination primarily by the Office of Thrift Supervision (“OTS”) and, secondarily, by the FDIC. Numerous other federal and state laws, as well as regulations promulgated by the Federal Reserve, SIOBRE, FDIC and OTS govern almost all aspects of the operations of the Banks. Various federal and state bodies regulate and supervise First Busey’s non-banking subsidiaries including its brokerage, investment advisory and insurance agency operations. These include, but are not limited to, SIOBRE, Federal Reserve, Securities and Exchange Commission, National Association of Securities Dealers, Inc., Illinois Department of Insurance, federal and state banking regulators and various state regulators of insurance and brokerage activities.

      The Bank is chartered under the National Banking Act. The Bank’s deposits are insured by the FDIC to the extent provided by law. The Bank is subject to comprehensive regulation, examination and supervision by the Comptroller of the Currency (“OCC”) to whom the Bank submits periodic reports regarding its financial condition and other matters. The Bank is also subject to other laws and regulations applicable to national banks. Such regulations include limitations on loans to a single borrower and to its directors, officers and employees; restrictions on the opening and closing of branch offices; the maintenance of required capital and liquidity ratios; the granting of credit under equal and fair conditions; and the disclosure of the costs and terms of such credit. The OCC has a broad range of powers to enforce regulations under its jurisdiction, and to take discretionary actions determined to be for the protection and safety and soundness of banks, including the institution of cease and desist orders and the removal of directors and officers. The OCC also has the authority to approve or disapprove mergers, consolidations, and similar corporate actions.

      Under the Gramm-Leach-Bliley Act (the “Act”), a bank holding company that elects to become a financial holding company may engage in any activity that the Federal Reserve, in consultation with the Secretary of the Treasury, determines by regulation or order is: (1) financial in nature; (2) incidental to any such financial activity; or (3) complementary to any such financial activity and does not pose a substantial risk to the safety or soundness of depository institutions or the financial system generally. This Act makes significant changes in U.S. banking law, principally by repealing certain restrictive provisions of the 1933 Glass-Steagall Act. The Act specifies certain activities that are deemed to be financial in nature, including lending, exchanging, transferring, investing for others, or safeguarding money or securities; underwriting and selling insurance; providing financial, investment, or economic advisory services; underwriting, dealing in, or making a market in, securities; and any activity currently permitted for bank holding companies by the Federal Reserve under Section 4(c)(8) of the BHCA. The Act does not authorize banks or their affiliates to engage in commercial activities that are not financial in nature as determined by the Federal Reserve. A bank holding company may elect to be treated as a financial holding company only if all depository institution subsidiaries of the holding company are well-capitalized, well-managed and have at least a satisfactory rating under the Community Reinvestment Act.

      In addition to the Act, there have been a number of legislative and regulatory proposals that would have an impact on bank/financial holding companies and their bank and non-bank subsidiaries. It is impossible to predict whether or in what form these proposals may be adopted in the future and if adopted, what their effect will be on First Busey or Tarpon.

      The Federal Reserve has issued a policy statement on the payment of cash dividends by financial holding companies. In the policy statement, the Federal Reserve expressed its view that a bank holding company experiencing weak earnings should not pay cash dividends in excess of its net income or which could only be funded in ways that would weaken its financial health, such as by borrowing. First Busey is also subject to certain contractual and regulatory capital restrictions that limit the amount of cash dividends that First Busey may pay. The Federal Reserve also may impose limitations on the payment of dividends as a condition to its approval of certain applications, including applications for approval of mergers and acquisitions.

      The primary sources of funds for First Busey’s payment of dividends to its shareholders are dividends and fees to First Busey from its banking and nonbanking affiliates. Various federal and state statutory provisions and regulations limit the amount of dividends that the subsidiary banks of First Busey may pay. Under provisions of the Illinois Banking Act (“IBA”), dividends may not be declared by banking subsidiaries except out of the bank’s net profit (as defined), and unless the bank has transferred to surplus at least one-tenth of its net profits since the date of the declaration of the last preceding dividend, until the amount of its surplus is at least equal to its capital.

      Dividends from Bank constitute the primary source of funds for dividends to be paid by Tarpon. There also are various statutory and contractual limitations on the ability of Bank to pay dividends, extend credit, or otherwise supply funds to Tarpon. As a national bank, Bank may not pay dividends from its paid-in surplus. All dividends must be paid out of undivided profits then on hand, after deducting expenses, including reserves for losses and bad debts. In addition, a national bank is prohibited from declaring a dividend on its shares of common stock until its surplus equals its stated capital, unless there has been transferred to surplus no less

than one-tenth of the bank’s net profits of the preceding two consecutive half-year periods (in the case of an annual dividend). The approval of the OCC is required if the total of all dividends declared by a national bank in any calendar year exceeds the total of its net profits for that year combined with its retained net profits for the preceding two years, less any required transfers to surplus. Florida law applicable to companies (including Tarpon) provides that dividends may be declared and paid only if, after giving it effect, (i) the company is able to pay its debts as they become due in the usual course of business, and (ii) the company’s total assets would be greater than the sum of its total liabilities plus the amount that would be needed if the company were to be dissolved at the time of the dividend to satisfy the preferential rights upon dissolution of shareholders whose preferential rights are superior to those receiving the dividend.

      Federal and state banking regulations applicable to First Busey, Tarpon and its banking subsidiaries require maintenance of minimum levels of capital, which limit the amounts available for payment of dividends.

      First Busey and Tarpon are required to comply with the capital adequacy standards established by the Federal Reserve, and their banking subsidiaries must comply with similar capital adequacy standards established by the OCC, OTS, FDIC, and SIOBRE, as applicable. There are two basic measures of capital adequacy for bank holding companies and their banking subsidiaries that have been promulgated by the Federal Reserve and the FDIC: a risk-based measure and a leverage measure. All applicable capital standards must be satisfied for a bank holding company or a bank to be considered in compliance.

      Failure to meet capital guidelines could subject a bank to a variety of enforcement remedies, including issuance of a capital directive, the termination of deposit insurance by the FDIC, a prohibition on the taking of brokered deposits, and certain other restrictions on its business. As described below, substantial additional restrictions can be imposed upon FDIC insured depository institutions that fail to meet applicable capital requirements.

      The Federal Deposit Insurance Corporation Improvement Act of 1991 (“FDICIA”) establishes a system of prompt corrective action to resolve the problems of undercapitalized institutions. Under this system the federal banking regulators are required to rate supervised institutions on the basis of five capital categories (well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized) and to take certain mandatory supervisory actions, and are authorized to take other discretionary actions, with respect to institutions in the three undercapitalized categories, the severity of which will depend upon the capital category in which the institution is placed. Generally, subject to a narrow exception, FDICIA requires the banking regulator to appoint a receiver or conservator for an institution that is critically undercapitalized. The federal banking agencies have specified by regulation the relevant capital level for each category.

      Pursuant to FDICIA, the Federal Reserve, the FDIC, and the OTS have adopted regulations setting forth a five-tier scheme for measuring the capital adequacy of the financial institutions they supervise. Under the regulations, an institution would be placed in one of the following capital categories: (i) well capitalized (an institution that has a Total Capital ratio of at least 10%, a Tier 1 Capital ratio of at least 6% and a Tier 1 Leverage Ratio of at least 5%); (ii) adequately capitalized (an institution that has a Total Capital ratio of at least 8%, a Tier 1 Capital ratio of at least 4% and a Tier 1 Leverage Ratio of at least 4%); (iii) undercapitalized (an institution that has a Total Capital ratio of under 8%, a Tier 1 Capital ratio of under 4% or a Tier 1 Leverage Ratio of under 4%); (iv) significantly undercapitalized (an institution that has a Total Capital ratio of under 6%, a Tier 1 Capital ratio of under 3% or a Tier 1 Leverage Ratio of under 3%); and (v) critically undercapitalized (an institution whose tangible equity is not greater than 2% of total tangible assets). The regulations permit the appropriate federal banking regulator to downgrade an institution to the next lower category if the regulator determines (i) after notice and opportunity for hearing or response, that the institution is in an unsafe or unsound condition or (ii) that the institution has received (and not corrected) a less-than-satisfactory rating for any of the categories of asset quality, management, earnings or liquidity in its most recent examination. Supervisory actions by the appropriate federal banking regulator depend upon an institution’s classification within the five categories. First Busey’s management believes that First Busey and

its significant bank subsidiaries have the requisite capital levels to qualify as well capitalized institutions under the FDICIA regulations.

      FDICIA generally prohibits a depository institution from making any capital distribution (including payment of a dividend) or paying any management fee to its holding company if the depository institution would thereafter be undercapitalized. Undercapitalized depository institutions are subject to restrictions on borrowing from the Federal Reserve System. In addition, undercapitalized depository institutions are subject to growth limitations and are required to submit capital restoration plans. A depository institution’s holding company must guarantee the capital plan, up to an amount equal to the lesser of 5% of the depository institution’s assets at the time it becomes undercapitalized or the amount of the capital deficiency when the institution fails to comply with the plan. Federal banking agencies may not accept a capital plan without determining, among other things, that the plan is based on realistic assumptions and is likely to succeed in restoring the depository institution’s capital. If a depository institution fails to submit an acceptable plan, it is treated as if it is significantly undercapitalized.

      Significantly undercapitalized depository institutions may be subject to a number of requirements and restrictions, including orders to sell sufficient voting stock to become adequately capitalized, requirements to reduce total assets and cessation of receipt of deposits from correspondent banks. Critically undercapitalized depository institutions are subject to appointment of a receiver or conservator.

      Federal law restricts the amount of voting stock of a bank holding company and a bank that a person may acquire without the prior approval of banking regulators. The overall effect of such laws is to make it more difficult to acquire a bank holding company and a bank by tender offer or similar means than it might be to acquire control of another type of corporation. Consequently, shareholders of First Busey and Tarpon may be less likely to benefit from the rapid increases in stock prices that may result from tender offers or similar efforts to acquire control of other companies. Federal law also imposes restrictions on acquisitions of stock in a bank holding company and a state bank. Under the federal Change in Bank Control Act and the regulations thereunder, a person or group must give advance notice to the Federal Reserve before acquiring control of any bank holding company (such as Tarpon) and the OCC before acquiring control of any national bank (such as the Bank). Upon receipt of such notice, the Federal Reserve or the OCC, as the case may be, may approve or disapprove the acquisition. The Change in Bank Control Act creates a rebuttable presumption of control if a member or group acquires a certain percentage or more of a bank holding company’s or state bank’s voting stock, or if one or more other control factors set forth in the Act are present.

      The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 provides for nationwide interstate banking and branching. Under the law, interstate acquisitions of banks or bank holding companies in any state by bank holding companies in any other state are permissible subject to certain limitations. Florida also has a law that allows out-of-state bank holding companies (located in states that allow Florida bank holding companies to acquire banks and bank holding companies in that state) to acquire Florida banks and Florida bank holding companies. The law essentially provides for out-of-state entry by acquisition only (and not by interstate branching) and requires the acquired Florida bank to have been in existence for at least three years. Interstate branching and consolidation of existing bank subsidiaries in different states is permissible. A Florida bank also may establish, maintain, and operate one or more branches in a state other than Florida pursuant to an interstate merger transaction in which the Florida bank is the resulting bank. An interstate merger transaction resulting in the acquisition by an out-of-state bank of a Florida bank is not permitted unless the Florida bank has been in existence and continuously operating, on the date of the acquisition, for more than three years.

Effect of Merger on Rights of Shareholders

      Upon consummation of the merger, holders of Tarpon common stock will become holders of First Busey common stock and the rights of former Tarpon shareholders will be governed by First Busey’s Articles of Incorporation, Bylaws and Nevada General Corporation Law (the “Nevada Act”).

      Shareholders should note the following summary of certain material provisions of, and the material differences between, the Nevada Act and the Florida Business Corporation Act (the “FBCA”) as they affect the rights of shareholders of Tarpon. The following comparison of the Nevada Act and First Busey’s Articles of Incorporation and Bylaws, on the one hand, and the FBCA and Tarpon’s Articles of Incorporation and Bylaws, on the other, is not intended to be complete and is qualified in its entirety by reference to First Busey’s Articles of Incorporation and Bylaws and Tarpon’s Articles of Incorporation and Bylaws. Copies of the First Busey Articles of Incorporation and Bylaws are available for inspection at the offices of First Busey and copies will be sent to the holders of Tarpon common stock upon request. Copies of Tarpon’s Articles of Incorporation and Bylaws are available for inspection at the offices of Tarpon and copies will be sent to the holders of Tarpon common stock upon request.

Distributions to Shareholders

      Under the Nevada Act and the FBCA, a corporation may make distributions to shareholders as long as, after giving effect to such distribution, the corporation will be able to pay its debts as they become due in the usual course of business and the corporation’s total assets will not be less than the sum of its total liabilities plus (unless the articles of incorporation permit otherwise) the amount that would be needed, if the corporation were to be dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of shareholders whose preferential rights are superior to those receiving the distribution.

Dissenters’ Rights

      A stockholder of a Nevada corporation, with certain exceptions, has the right to dissent from, and obtain payment for the fair value of his shares in the event of (1) a merger or consolidation to which the corporation is a party, (2) consummation of a plan of exchange to which the corporation is a party as the corporation whose shares will be acquired, if the stockholder is entitled to vote on the plan, and (3) any corporate action taken pursuant to a vote of the stockholders to the extent that the articles of incorporation, bylaws or a resolution of the board of directors provides that voting or non-voting stockholders are entitled to dissent and obtain payment for their shares. The Nevada Act provides that unless the articles of incorporation of the corporation issuing shares provide otherwise (which First Busey’s Articles of Incorporation do not), a stockholder does not have dissenters’ rights with respect to a plan of merger or share exchange if the shares held by the stockholder are either listed on a national securities exchange, or included in the national market system by the National Association of Securities Dealers, Inc., or held of record by 2,000 or more stockholders and shareholders are permitted by the terms of the plan of merger or share exchange to accept in the exchange for their shares:

      A stockholder of record of a Nevada corporation may dissent as to less than all the shares registered in his name only if he dissents with respect to all shares beneficially owned by any one person and notifies the corporation in writing of the name and address of each person on whose behalf he asserts dissenters’ rights. In such event, the stockholder’s rights will be determined as if the shares to which he dissents and his other shares were registered in the names of different stockholders.

      The FBCA provides dissenters’ rights in connection with (i) a merger or share exchange, except that such rights are not provided when (a) no vote of the shareholders is required for the merger or (b) shares of the corporation are listed on a national securities exchange, traded on Nasdaq, or held of record by at least 2,000 shareholders (and the outstanding shares of such class or series has a market value of at least $10 million held by unaffiliated shareholders); (ii) a sale of substantially all the assets of a corporation; (iii) amendments to the articles of incorporation that may adversely affect the rights or preferences of shareholders; and (iv) a “Control Share Acquisition” (as described below).

      While dissenters’ rights provisions under the Nevada Act and the FBCA are essentially similar, situations could theoretically arise in which dissenters’ rights, which would be available under the FBCA, are not available under the Nevada Act. For a description of the procedures to perfect dissenters’ rights under the FBCA, see “General Information–Dissenters’ Rights” on page 18.

State Takeover Laws

      First Busey may be subject to the provisions of Nevada’s anti-takeover laws known respectively as the “Combination with Interested Stockholders Statute” and the “Control Share Acquisition Statute.”

      The Combination with Interested Stockholders Statute prevents “interested stockholders” and an applicable Nevada corporation from entering into a “combination” unless certain conditions are met. A combination means any merger or consolidation with an “interested stockholder,” or any sale, lease, exchange, mortgage, pledge, transfer or other disposition, in one transaction or a series of transactions, with an “interested stockholder” having: (i) an aggregate market value equal to 5% or more of the aggregate market value of the assets of the corporation; (ii) an aggregate market value equal to 5% or more of the aggregate market value of all outstanding shares of the corporation; or (iii) representing 10% or more of the earning power or net income of the corporation. An “interested stockholder” means the beneficial owner of 10% or more of the voting shares of a corporation, or an affiliate or associate thereof. A corporation may not engage in a “combination” within three years after the interested stockholder acquires his shares unless the combination or purchase is approved by the board of directors or a majority of the voting power held by disinterested stockholders, or outside three years after the interested shareholder acquires his shares if the consideration to be paid by the interested stockholder is at least equal to the highest of: (i) the highest price per share paid by the interested stockholder within the three years immediately preceding the date of the announcement of the combination or in the transaction in which he became an interested stockholder, whichever is higher, (ii) the market value per common share on the date of announcement of the combination or the date the interested stockholder acquired the shares, whichever is higher, or (iii) if higher for the holders of preferred stock, the highest liquidation value of the preferred stock.

      The Control Share Acquisition Statute prohibits an acquiror, under certain circumstances, from voting shares of a target corporation’s stock after crossing certain threshold ownership percentages, unless the acquiror obtains the approval of the target corporation’s stockholders. The Control Share Acquisition Statute specifies three thresholds: one-fifth or more but less than one-third, one-third or more but less than a majority and a majority or more, of the voting power of the corporation in the election of directors. Once an acquiror crosses one of the above thresholds, those shares acquired in such offer or acquisition and those shares acquired within the preceding ninety days become Control Shares and such Control Shares are deprived of the right to vote until disinterested stockholders restore the right. The Control Shares Acquisition Statute also provides that in the event Control Shares are accorded full voting rights and the acquiring person has acquired a majority or more of all voting power, all other stockholders who do not vote in favor of authorizing voting rights to the Control Shares are entitled to demand payment for the fair value of their shares. The board of directors is to notify the stockholders after such an event has occurred that they have the right to receive the fair value of their shares in accordance with statutory procedures established generally for dissenters’ rights. The Control Share Acquisition Statute currently does not apply to First Busey because First Busey does not have 100 or more stockholders who are residents of the State of Nevada.

      Section 607.0901 of the FBCA, informally known as the “Fair Price Statute,” provides that the approval of the holders of two-thirds of the voting shares of a company, other than the shares owned by an Interested Shareholder (as hereinafter defined) would be required in order to effectuate certain transactions, including without limitation a merger, sale of assets, sale of shares and reclassification of securities involving a corporation and an Interested Shareholder (an “Affiliated Transaction”). An “Interested Shareholder” is defined under the FBCA as beneficial owner of more than 10% of the voting shares outstanding. The foregoing special voting requirement is in addition to the vote required by any other provision of the FBCA or a corporation’s articles of incorporation.

      The special voting requirement does not apply in any of the following circumstances: (i) the Affiliated Transaction is approved by a majority of the corporation’s disinterested directors; (ii) the Interested Shareholder has beneficially owned 80% of the corporation’s voting shares for five years; (iii) the corporation has not had more than 300 shareholders of record at any time during the previous three years; (iv) the Interested Shareholder beneficially owns 90% of the corporation’s voting shares; or (v) all of the following conditions are met: (A) the cash and fair value of other consideration to be paid per share to all holders of voting shares equals the highest per share price calculated pursuant to various methods set forth in Section 607.0901 of the FBCA, (B) the consideration to be paid in the Affiliated Transaction is in cash or in the same form as previously paid by the Interested Shareholder, and (C) during the portion of the three years preceding the announcement date that the Interested Shareholder has been an Interested Shareholder, except as approved by a majority of the disinterested directors, there shall have been no default in payment of preferred stock dividends, no decrease in common stock dividends, no increase in the voting shares owned by the Interested Shareholder, and no benefit to the Interested Shareholder from loans, guaranties or other financial assistance or tax advantages provided by the corporation.

      A corporation may “opt out” of the provisions of Section 607.0901 by electing to do so in its original articles of incorporation or by adopting an amendment to its articles of incorporation or bylaws opting out and having such amendment approved by the holders of a majority of the voting shares not held by the Interested Shareholder, its affiliates or associates. The amendment will not be effective until 18 months after such vote, and will not apply to any Affiliated Transaction with someone who is an Interested Shareholder on or prior to the effective date of the amendment. Tarpon has not opted out of the provisions of Section 607.0901.

      A person who inadvertently becomes an Interested Shareholder (for example, as a result of a corporation’s repurchase of some of its shares) may promptly divest himself of enough stock to fall below the 10% threshold so that no special vote would apply to a transaction with that shareholder, so long as such person has not otherwise been an Interested Shareholder within the five years preceding the first public announcement of the transaction.

      Section 607.0902 of the FBCA, informally known as the “Florida Acquisition Statute,” provides that the voting rights to be accorded Control Shares (as defined below) of a Florida corporation that has (i) 100 or more shareholders, (ii) its principal place of business, its principal office, or substantial assets in Florida, and (iii) either (A) more than 10% of its shareholders residing in Florida, (B) more than 10% of its shares owned by Florida residents, or (C) 1,000 shareholders residing in Florida, must be approved by a majority of each class of voting securities of the corporation, excluding those shares held by interested persons, before the Control Shares will be granted any voting rights.

      “Control Shares” are defined in the FBCA to be shares acquired in a Control Share Acquisition (as defined below) that, when added to all other shares of the issuing corporation owned by such person, would entitle such person to exercise, either directly or indirectly, voting power within any of the following ranges: (a) 20% or more but less than 33¹/3% of all voting power of the corporation’s voting securities, (b) 33¹/3% or more but less than a majority of all voting power of the corporation’s voting securities, or (c) a majority or more of all of the voting power or the corporation’s voting securities. A “Control Share Acquisition” is defined in the FBCA as an acquisition, either directly or indirectly, by any person of ownership of, or the power to direct the exercise of voting power with respect to, outstanding Control Shares. Section 607.0902 also states that, if provided in the articles of incorporation or bylaws of a corporation prior to their acquisition, Control Shares may be redeemed by the corporation for fair value in certain circumstances. Finally, unless otherwise provided in a corporation’s articles of incorporation or bylaws prior to a Control Share Acquisition, in the event Control Shares are accorded full voting rights and the acquiring person has acquired Control Shares with a majority or more of all voting power, all shareholders shall have dissenters’ rights.

      Section 607.0902 further provides that, in certain circumstances, an acquisition of shares that otherwise would be governed by its provisions does not constitute a Control Share Acquisition. Among such circumstances are acquisitions of shares approved by the corporation’s board of directors and mergers effected in compliance with the applicable provisions of the FBCA, if the corporation is a party to the agreement of merger.

Limitation on Director’s Liability

      The Nevada Act allows a corporation to provide in its articles of incorporation that a director or officer will not be personally liable for monetary damages to the corporation or its stockholders for breach of fiduciary duty as a director or officer, except that such provision must not eliminate or limit the liability of a director or officer for (i) acts or omissions which involve intentional misconduct, fraud or a knowing violation of the law; or (ii) the payment of distributions to stockholders. The Articles of Incorporation of First Busey limit a director’s and officer’s liability to the events specified in the Nevada Act.

      The FBCA provides that a director of a corporation will not be personally liable for monetary damages for breach of his fiduciary duty as a director, unless the director’s breach of duty involves: (i) a violation of the criminal law; (ii) a transaction from which the director derived an improper personal benefit; (iii) an unlawful payment of a dividend or unlawful stock repurchase or redemption; (iv) in a derivative proceeding or one by or in the right of a shareholder, conscious disregard for the best interest of the corporation or willful misconduct; or (v) in a proceeding by or in the right of someone other than the corporation or a shareholder, recklessness or an act or omission that was committed in bad faith, with malicious purpose or in a manner exhibiting wanton and willful disregard of human rights, safety or property. Consequently, situations may arise in which an existing Tarpon shareholder, following the merger, would have less ability to bring an action against an officer or director of First Busey.

Calling a Special Meeting of Shareholders

      The FBCA provides that a special meeting of shareholders can be called by (i) a corporation’s board of directors; (ii) the persons authorized by the articles of incorporation or bylaws; or (iii) the holders of not less than 10% of all votes entitled to be cast on any issue to be considered at the proposed special meeting. A corporation’s articles of incorporation can require a higher percentage of votes, up to a maximum of 50%, to call a special meeting of shareholders. Tarpon’s Bylaws provide that special meetings of shareholders shall be held only when called by the Chairman of the Board, the President, the Board of Directors or by the holders of not less than one–third of all the votes entitled to cast on any issue proposed to be considered at the special meeting.

      The Nevada Act contains no similar provision for the calling of a special meeting of stockholders. First Busey’s Bylaws provide that special meetings of shareholders may be called by the Chairman of the Board or President at the request in writing by a majority of the Board of Directors or at the request in writing of stockholders owning 50% of the entire stock of the corporation issued and outstanding and entitled to vote.

Amendments to Bylaws

      The Nevada Act permits the directors of a Nevada corporation to amend the bylaws of the corporation, subject to the bylaws, if any, adopted by the stockholders. First Busey’s Bylaws provide that the Board of Directors has the power to make, alter, amend or repeal its Bylaws, subject to the power of the stockholders to alter or repeal the Bylaws. Under the FBCA, a corporation’s board of directors may amend or repeal the bylaws unless such power is expressly reserved to the shareholders in the articles of incorporation or the FBCA or the shareholders expressly provide, in amending or repealing all or any part of the bylaws, that the board of directors may not amend or repeal the affected bylaws.

Amendment to Articles of Incorporation

      Under the Nevada Act, the board of directors must adopt a resolution setting forth any proposed amendment to the articles of incorporation and declaring its advisability, and must call a meeting of the stockholders entitled to vote for the consideration thereof. A majority of the stockholders entitled to vote must approve the amendment. If any proposed amendment would alter any preference or any right given to any class or series of outstanding shares, then the amendment must be approved by the vote, in addition to the affirmative vote otherwise required, of the holders of shares representing a majority of the voting power of each class or series affected by the amendment, regardless of limitations or restrictions on the voting power thereof.

      Under the FBCA, unless the articles of incorporation provide otherwise, the board of directors of a corporation may, without shareholder action, adopt certain amendments to the articles of incorporation, including, but not limited to, amendments (i) to delete the names and addresses of the initial directors; (ii) to delete the name and address of the initial registered agent or registered office, if a statement of change is filed with the Florida Department of State; (iii) to delete the authorization for a class or series of shares authorized in the articles if no shares of such series or class are issued; (iv) to change the par value for a class or series of shares; (v) to make certain changes to the corporation’s name; or (vi) to make any other change expressly permitted by the FBCA to be made without shareholder approval. All other amendments to the articles of incorporation of a Florida corporation must be approved by the majority of all the votes entitled to be cast by that voting group, unless the articles require a greater or lesser vote. Tarpon’s Articles of Incorporation may be amended or repealed in the manner prescribed by the FBCA.

Merger with Subsidiary

      The Nevada Act permits a parent corporation owning at least 90% of the outstanding shares of each class of a subsidiary corporation to merge the subsidiary into itself without the approval of the stockholders of such parent corporation. The FBCA permits the merger of a subsidiary into its parent without shareholder approval if 80% of each class of stock of the subsidiary is owned by the parent corporation.

Indemnification

      Under the Nevada Act and the FBCA, a corporation may generally indemnify its officers, directors, employees and agents against expenses incurred in any proceeding (other than derivative actions), if they acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe their conduct was unlawful. A similar standard is applicable in derivative actions, except that indemnification may be made only for (i) expenses and certain amounts paid in settlement and (ii) in the event the person seeking indemnification has been adjudicated liable, amounts are deemed proper, fair and reasonable by the appropriate court upon application thereto. The Nevada Act and the FBCA both provide that to the extent such persons have been successful in the defense of any proceeding, they must be indemnified by the corporation against expenses. Both the Nevada Act and the FBCA also provide that it a corporation does not so indemnify such persons, they may seek, and a court may order, indemnification under certain circumstances even if the board of directors or stockholders of the corporation have determined that the persons are not entitled to indemnification.

      In addition, under both the Nevada Act and the FBCA, expenses incurred by an officer or director in connection with a proceeding may be paid by the corporation in advance of the final disposition, upon receipt of an undertaking by such director or officer to repay such amount if such director or officer is ultimately found not to be entitled to indemnification by the corporation.

      The Articles of Incorporation of First Busey and the Bylaws of Tarpon provide that directors and officers and former directors and officers will be indemnified to the fullest extent permitted by law.

Derivative Actions

      Under the Nevada Rules of Civil Procedure (the “Nevada Rules”) and the FBCA, a person may not bring a derivative action unless the person was a stockholder of the corporation at the time of the challenged transaction or unless the person acquired the shares by operation of law from a person who was a stockholder at such time. Both the Nevada Rules and the FBCA provide that a complaint in a derivative proceeding must be verified and must allege with particularity the efforts, if any, made by the plaintiff to obtain the desired action, and the reasons for his failure to obtain the action he desires.

      The Nevada Rules also provide that a derivative action may not be maintained if it appears that the plaintiff does not fairly and adequately represent the interests of stockholders. The FBCA provides that a court may dismiss a derivative proceeding if it determines that any of the following groups made a determination in good faith after conducting a reasonable investigation, that the maintenance of the derivative suit is not in the

best interests of the corporation: (i) a majority vote of independent directors present at a meeting of the board of directors, if the independent directors constitute a quorum; (ii) a majority vote of a committee consisting of two or more independent directors appointed by a majority vote of independent directors present at a meeting of the board of directors, whether or not such independent directors constitute a quorum; or (iii) a panel of one or more independent persons appointed by the court upon motion by the corporation. Under both the Nevada Rules and the FBCA, an action will not be dismissed, compromised or settled without court approval.

      The FBCA provides further that, upon termination of the proceeding, a court may require the plaintiff to pay the defendant’s reasonable expenses (including attorneys’ fees) incurred in defending the proceeding if it finds that the proceeding was commenced without reasonable cause. Further, the FBCA permits a court to award reasonable expenses for maintaining the proceeding (including attorneys’ fees) to a successful plaintiff or to the person commencing the proceeding who receives any relief, whether by judgment, compromise or settlement.

Stockholder Inspection of Books and Records

      Under the Nevada Act a stockholder who has been a stockholder of record of a Nevada corporation for at least six months preceding his demand or who owns 5% or more of the issued and outstanding shares of stock of the corporation (or who has been authorized in writing by such holders) is entitled to inspect and copy a list of the names of the corporation’s stockholders during regular business hours if the stockholder gives at least five business days’ prior written demand to the corporation. A stockholder of a Nevada corporation must hold, or be authorized by the holders of, 15% of the outstanding shares in order to review the books and records of the corporation. The Nevada Act provides further that a corporation may deny any demand for inspection if the stockholder refuses to furnish the corporation an affidavit that such inspection is not desired for a purpose not related to his interest in the corporation as a stockholder.

      The FBCA provides that a shareholder is entitled to inspect and copy, during regular business hours at the corporation’s principal office, any of the general corporate records if the shareholder gives the corporation written notice of his or her demand at least five business days before the date on which he or she wishes to inspect and copy. A shareholder acting in good faith and with a proper purpose is entitled to inspect and copy, during regular business hours at a reasonable location specified by the corporation, accounting records of the corporation if the shareholder gives the corporation written notice of his or her demand at least five business days before the date on which he or she wishes to inspect and copy. Consequently, unless a Tarpon shareholder will, following the merger, own 15% or greater of the issued and outstanding shares of First Busey common stock, such shareholder will have more limited rights of inspection under the Nevada Act than such shareholder had as a Tarpon shareholder.

Quorum for Stockholder Meetings

      Under the Nevada Act, unless otherwise provided in a corporation’s articles of incorporation or bylaws, a majority of shares entitled to vote on a matter constitutes a quorum at a meeting of stockholders. Similarly, under the FBCA, majority of shares entitled to vote constitutes a quorum unless the corporation’s articles of incorporation provide otherwise. Under the Nevada Act, the articles of incorporation or bylaws may provide for a greater or lesser quorum requirement. The FBCA provides that the articles of incorporation may increase or decrease the quorum requirement, except that the quorum may not be less than one-third of the shares entitled to vote.

      The Bylaws of both First Busey and Tarpon provide that the presence in person or by proxy of a majority of the shares entitled to vote will constitute a quorum.

Board Vacancies

      Both the Nevada Act and FBCA provide that a vacancy on the board of directors may be filled by the affirmative vote of a majority of the remaining directors, although less than a quorum of the board of directors, unless the articles of incorporation provide otherwise. The FBCA also provides that a vacancy on the board of directors may be filled by the affirmative vote of a majority of the shareholders.

      First Busey’s Articles of Incorporation provides that vacancies created by newly created directorships will be filled by a majority of directors then in office, provided that a quorum is present. All other vacancies will be filled by a majority of directors then in office, even if less than a quorum.

      Tarpon’s Bylaws provide that all vacancies will be filled by a majority vote of directors then in office (though less than a quorum) and any such directors will hold office until the next election of directors by shareholders.

Removal of Directors

      Under the Nevada Act, any director may be removed from office by the vote of stockholders representing not less than two-thirds of the voting power of the issued and outstanding stock entitled to voting power unless the articles of incorporation require the concurrence of a lesser percentage of the stock entitled to voting power in order to remove a director.

      Under the FBCA, shareholders may remove one or more directors with or without cause, unless the articles of incorporation provide that directors may be removed only for cause, at a meeting of the shareholders called expressly for that purpose. If a director is elected by a voting group of shareholders, only the shareholders of that voting group may participate in the vote to remove such director.

Classified Board of Directors

      The Nevada Act provides that a corporation’s board of directors may be divided into various classes with staggered terms of office. The Bylaws of Tarpon (but not First Busey) provide that the Board of Directors of Tarpon shall be divided into three classes of directors, as nearly equal in number as reasonably possible. One class of directors may be elected each year for a three-year term.

      Classification of directors may have the effect of making it more difficult for stockholders to change the composition of a corporation’s board of directors. At least two annual meetings of stockholders, instead of one, will generally be required to effect a change in the majority of the board of directors. Such a delay may help ensure that current directors, if confronted by a stockholder attempting to force a proxy contest, a tender or exchange offer or other extraordinary corporate transaction, would have sufficient time to review the proposal as well as any available alternatives to the proposal and to act in what they believe to be the best interests of the stockholders.

      Classification provisions could also have the effect of discouraging a third party from initiating a proxy contest, making a tender offer or otherwise attempting to obtain control of a corporation, even though such a transaction could be beneficial to the corporation and its stockholders. The classification of a board of directors might also increase the likelihood that incumbent directors will retain their positions.

Number of Directors

      Tarpon’s Articles of Incorporation provide that the number of directors shall be nine persons. First Busey’s Bylaws provide that the number of directors shall not be less than five nor more than 20 persons.

Loans to and Guarantees of Obligations of Officers and Employees

      Under the FBCA, a loan to, guarantee of an obligation of, or other assistance to an officer, director, or employee of the corporation, requires the determination of the board of directors of the corporation that the loan, guarantee or assistance may reasonably be expected to benefit the corporation. The Nevada Act contains no comparable provision, although it provides that directors exercising their powers may consider, among other things, the interests of the employees and the long-term as well as the short-term interests of the corporation and its stockholders. Consequently, an existing Tarpon shareholder may, following the merger, have less ability to challenge any such loans as a First Busey stockholder.

      Under the FBCA, any contract or transaction (including a loan or guarantee) between the corporation and any of its directors, or between the corporation and any other organization in which the corporation’s

directors are also directors of officers, or have a financial interest, is voidable unless approved by a majority of the disinterested directors or the shareholders after the fact of such relationship is disclosed to such directors or shareholders, or unless the transaction is fair to the corporation at the time it is approved. The Nevada Act has a similar requirement except that such transactions may be approved by the majority vote of stockholders holding a majority of the voting power, and such transactions are also permissible if the fact of the common directorship, office or financial interest is not disclosed or known to the director or officer when the transaction is brought before the board for action. Consequently, transactions including interested persons may be more difficult to challenge as shareholder of First Busey than as a shareholder of Tarpon.

Certain Information Concerning Tarpon

      General. Tarpon is a registered bank holding company under the BHCA, and owns 100% of the outstanding capital stock of the Bank. Tarpon serves as a mechanism to enhance the Bank’s ability to serve its customers’ requirements for financial services. The holding company structure provides flexibility for the provision of additional banking-related services, which the traditional commercial bank may not provide under present laws.

      The Bank is full service commercial bank, without trust powers. The Bank offers a full range of interest bearing and non-interest bearing accounts, including commercial and retail checking accounts, negotiable order of withdrawal (“NOW”) accounts, public funds accounts, money market accounts, individual retirement accounts, regular interest bearing statement savings accounts, certificates of deposit, daily repurchase agreements, business accounts (offering account analysis on all commercial relationships), commercial loans, real estate loans and consumer loans. In addition, the Bank provides such consumer services as notary services, photocopying, signature guarantees, incoming and outgoing collections, travelers checks, U.S. Bonds, cashiers checks, wire transfer services, coupon collection, foreign exchange, utility bill payments and credit references. Moreover, safe deposit boxes, custodial services, ACH processing and account reconciliation, overdraft checking, commercial account analysis, night depository service, courier service and automatic teller services are available.

      Market Area and Competition. The Southwest Florida area has experienced considerable growth over the past decade. Competition among financial institutions in the Bank’s market areas is intense, with other financial institutions having far greater financial resources than those available to Tarpon.

      The primary service area for the Bank encompasses the Punta Gorda Municipal Statistical Area, including the community of Port Charlotte in Charlotte County, the City of North Port in Sarasota County and the community of Englewood representing both Charlotte and Sarasota Counties. Most of the banking offices in the Bank’s market area are branches of or are affiliated with major holding companies in North Carolina, Georgia, Alabama and other areas of Florida and the nation.

      The Bank competes with existing area financial institutions other than commercial banks and savings and loan associations, including insurance companies, consumer finance companies, brokerage houses, credit unions and other business entities that have recently been expanding to serve the traditional banking markets. Due to the rapid growth of Southwest Florida, it is anticipated that additional competition will continue from new entrants to the market.

      Loan Portfolio. The Bank engages in a full complement of lending activities, including commercial, consumer/installment and real estate loans.

      Tarpon’s commercial lending is directed principally towards businesses whose demands for funds fall within the Bank’s legal lending limit and are potential deposit customers. This category of loans includes loans made to individual, partnership or corporate borrowers, and obtained for a variety of business purposes. Particular emphasis is placed on loans to small and medium-sized businesses. A majority of the commercial loans are secured by real estate mortgages. Tarpon’s real estate loans consist of residential and commercial first mortgage loans, second mortgage financing and construction loans.

      Tarpon’s consumer loans consist primarily of installment loans to individuals for personal, family and household purposes, including automobile loans to individuals and pre-approved lines of credit. This category of loans also includes loans secured by second mortgages on the residences of borrowers for a variety of purposes including home improvements, education and other personal expenditures.

      Investments. Tarpon invests primarily in obligations of the United States or obligations guaranteed as to principal and interest by the United States and other taxable securities. The Bank enters into Federal Funds transactions with its principal correspondent banks, and primarily acts as a net seller of such funds. The sale of Federal Funds amounts to a short-term loan from the Bank to other banks.

      Deposits. The Banks offer a full range of interest bearing and non-interest bearing accounts, including commercial and retail checking accounts, NOW accounts, public funds accounts, money market accounts with limited transactions, individual retirement accounts, including Keogh plans with stated maturities, regular interest bearing statement savings accounts and certificates of deposit with fixed and variable rates and a range of maturity date options. The sources of deposits are residents, businesses and employees of businesses within the Bank’s market areas, obtained through the personal solicitation of the Bank’s officers and directors, direct mail solicitation and advertisements published in the local media. The Bank pays competitive interest rates on time and savings deposits. In addition, the Bank has implemented a service charge fee schedule competitive with other financial institutions in the Bank’s market areas, covering such matters as maintenance fees on checking accounts, per item processing fees on checking accounts and returned check charges.

Additional Information

      Information relating to executive compensation, various benefit plans, voting securities and the principal holders of voting securities, relationships and related transactions and other related matters as to Tarpon Coast is incorporated by reference or set forth in Tarpon’s Annual Report on Form 10-KSB for the year ended December 31, 2004, a copy of which is enclosed with this proxy statement-prospectus. See “Where You Can Find More Information.”

Other Matters

      The Board of Directors of Tarpon is not aware of any business to come before the special meeting other than those matters described above in this proxy statement-prospectus. If, however, any other matters not now known should properly come before the special meeting, the proxy holders named in the accompanying proxy will vote such proxy on such matters as determined by a majority of the Board of Directors of Tarpon.

Submission of Tarpon Shareholder Proposals for Special Meeting

      Tarpon has not yet scheduled its annual meeting of shareholders for 2005. If the merger agreement is terminated and the merger is not consummated, then Tarpon will schedule its 2005 annual meeting as soon as practicable after such termination. Shareholder proposals for consideration at such annual meeting must be submitted, in writing, to Tarpon within 30 days following the public announcement by Tarpon that the merger agreement has been terminated.

Experts

      The consolidated financial statements of First Busey as of December 31, 2004 and 2003 and for each of the three years ended December 31, 2004, December 31, 2003, and December 31, 2002, respectively, have been incorporated by reference in this proxy statement-prospectus, in reliance on the report of McGladrey & Pullen, LLP, an independent registered public accounting firm, given on the authority of that firm as experts in accounting and auditing.

      The consolidated financial statements of Tarpon as of December 31, 2004 and 2003 and for each of the two years ended December 31, 2004 and December 31, 2003, have been incorporated by reference in this proxy statement-prospectus, in reliance on the report of Crowe Chizek and Company LLC, independent

registered public accounting firm given on the authority of that firm as experts in accounting and auditing. The consolidated financial statements of Tarpon for the year ended December 31, 2002 have been incorporated by reference in this proxy statement-prospectus in reliance on the report of Hill, Barth & King LLC, independent accountants, given on the authority of that firm as experts in accounting and auditing.

Legal Matters

      The validity of the shares of First Busey common stock to be issued in connection with the merger will be passed upon for First Busey by Chapman and Cutler LLP, Chicago, Illinois.

Where You Can Find More Information

      First Busey and Tarpon file annual, quarterly and special reports, proxy statements and other information with the Commission. You may read and copy any reports, statements or other information that these companies file with the Commission at its public reference room in Washington, D.C. Please call the Commission at 1-800-SEC-0330 for further information on the public reference rooms. These Commission filings are also available to the public from commercial document retrieval services and at the Internet worldwide web site maintained by the Commission at http://www.sec.gov.

      First Busey filed a Registration Statement on Form S-4 (the “Registration Statement”) to register with the Commission the First Busey common stock to be issued to Tarpon’s shareholders in the merger. This proxy statement-prospectus is a part of that Registration Statement and constitutes a prospectus of First Busey. As allowed by Commission rules, this proxy statement-prospectus does not contain all the information you can find in the Registration Statement.

Information Incorporated by Reference

      The Commission allows First Busey and Tarpon to “incorporate by reference” information into this proxy statement-prospectus, which means that the companies can disclose important information to you by referring you to another document filed separately with the Commission. The information incorporated by reference is considered part of this proxy statement-prospectus, except for any information superseded by information contained directly in this proxy statement-prospectus or in later filed documents incorporated by reference in this proxy statement-prospectus.

      This proxy statement-prospectus incorporates by reference the documents set forth below that First Busey has previously filed with the Commission. These documents contain important information about First Busey. Some of these filings have been amended by later filings, which are also listed.

      This proxy statement-prospectus incorporates by reference the documents set forth below that Tarpon has previously filed with the Commission. These documents contain important information about Tarpon. Some of these filings have been amended by later filings, which are also listed.

      A copy of the foregoing Tarpon documents is enclosed with this proxy statement-prospectus.

      You may request a copy of these filings at no cost by writing or telephoning First Busey at the following address:

First Busey Corporation

201 West Main Street

Urbana, Illinois 61801

(217) 365-4513

Attn: Barbara J. Kuhl

President and Chief Operating Officer

      With respect to the offering of First Busey common stock, you should rely only on the information incorporated by reference or provided in this proxy statement-prospectus. First Busey has not authorized anyone else to provide you with different information. First Busey is not making an offer of the common stock in any state where the offer is not permitted. You should not assume that the information in this proxy statement-prospectus is accurate as of any date other than the date on the front of this proxy statement-prospectus. With respect to your consideration of the merger agreement, you may also review the selected financial data that Tarpon provides to its shareholders on an annual basis following the end of each calendar year.

Appendix A

Agreement and Plan of Merger

by and among

First Busey Corporation,

FBC Acquisition III Corp.

and

Tarpon Coast Bancorp, Inc.

Dated as of February 24, 2005

Table of Contents

Agreement and Plan of Merger

      This Agreement and Plan of Merger (this “Agreement”) is made and entered into as of the 24th day of February, 2005, by and among First Busey Corporation, a Nevada corporation (“Buyer”), FBC Acquisition III Corp., a Florida corporation and wholly-owned subsidiary of Buyer (“Acquisition Corp.”), and Tarpon Coast Bancorp, Inc., a Florida corporation (“Tarpon”).

      Whereas, the respective Boards of Directors of the parties hereto deem it advisable and in the best interests of the parties hereto and their respective shareholders to consummate the Merger (as defined in Section 1.1), upon the terms and subject to the conditions of this Agreement;

      Whereas, as a further material inducement and condition to Buyer’s and Acquisition Corp.’s willingness to enter into this Agreement, each of Lewis S. Albert and Todd H. Katz have concurrently entered into an Employment Agreement with Buyer, in the form attached hereto as Exhibit A hereto and hereby made part hereof, which shall become effective at the Effective Time (as defined in Section 1.2) (collectively referred to herein as the “Employment Agreements”);

      Whereas, the parties hereto desire to make certain representations, warranties, covenants and agreements in connection with this Agreement and the Merger;

      Now Therefore, in consideration of the premises and the mutual representations, warranties, covenants, agreements and conditions herein contained, the parties hereto covenant and agree as follows.

Article I

The Merger

      Section 1.1.     The Merger. At the Effective Time (as hereinafter defined) and subject to and upon the terms and conditions of this Agreement and the Florida Business Corporation Act (“Florida Law”), Acquisition Corp. shall merge with and into Tarpon, the separate corporate existence of Acquisition Corp. shall cease, and Tarpon shall continue as the surviving corporation (as such, the “Surviving Corporation”), which shall be a wholly owned subsidiary of Buyer. Pursuant to the Merger:

      Section 1.2.     Effective Time. As promptly as practicable on the Closing Date (as hereinafter defined), the parties shall cause the Merger to be consummated by filing the Articles of Merger (the “Articles of Merger”) with the Florida Department of State with respect to the Merger, in such form as required by, and executed in accordance with, the relevant provisions of Florida Law. The Merger shall become effective at such time as the Articles of Merger are duly filed with the Florida Department of State, or at such later date or time as may be set forth in the Articles of Merger (such time as the Merger becomes effective being hereinafter referred to as the “Effective Time”).

      Section 1.3.     Effects of the Merger. At the Effective Time, the effect of the Merger shall be as provided in the applicable provisions of Florida Law. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time all the property, rights, privileges, powers and franchises of Tarpon and Acquisition Corp. shall continue with, or vest in, as the case may be, Tarpon as the Surviving Corporation, and all debts, liabilities and duties of Tarpon and Acquisition Corp. shall continue to be, or become, as the case may be, the debts, liabilities and duties of Tarpon as the Surviving Corporation. At the Effective Time, the Surviving Corporation shall be a direct wholly owned subsidiary of Buyer.

      Section 1.4.     Effect on Capital Stock. (a) At the Effective Time, subject to Section 1.6, Section 1.7 and Section 2.2 hereof, by virtue of the Merger and without any action on the part of Tarpon, or the holder of any securities of Tarpon, each share of common stock, $.01 par value per share, of Tarpon (the “Tarpon Common Stock”) issued and outstanding immediately before the Effective Time, other than Dissenting Shares (as hereinafter defined), shall be converted into the right to receive $27.00 in a combination of shares of common stock, no par value of Buyer (the “Buyer Common Stock”) and cash, without interest in a proportion of 55% Buyer Common Stock (or $14.85 divided by the “Buyer Share Price”) and 45% cash (or $12.15) per share of Tarpon Common Stock (the “Per Share Consideration”). As used herein, the “Buyer Share Price” shall mean the average (rounded to the nearest $.01) of the closing prices of Buyer Common Stock on the ten (10) trading days immediately prior to the fourth (4th) calendar day preceding the Closing Date that shares of Buyer Common Stock are traded on the Nasdaq National Market (“Nasdaq”).

      (b) Each outstanding share of Tarpon Common Stock as to which a written demand for payment is filed in accordance with Sections 607.1301 through 1333 of Florida Law (the “Dissent Provisions”) at or prior to the Shareholders’ Meeting (as such term is defined in Section 5.4 hereof) and not withdrawn at or prior to the Shareholders’ Meeting and which is not voted in favor of the Merger shall not be converted into or represent a right to receive Buyer Common Stock or cash hereunder unless and until the holder thereof shall have failed to perfect, or shall have effectively withdrawn or lost his or her right to dissent and obtain payment for his or her Tarpon Common Stock under the Dissent Provisions, at which time his or her shares shall either be converted into Buyer Common Stock or cash as set forth in Section 1.8 hereof. All such shares of Tarpon Common Stock as to which such a written demand for payment is so filed and not withdrawn at or prior to the Shareholders’ Meeting and which are not voted in favor of the Merger, except any such shares of Tarpon Common Stock the holder of which, prior to the Effective Time, shall have effectively withdrawn or lost his or her right to dissent and obtain payment for his or her shares of Tarpon Common Stock under the Dissent Provisions, are hereinafter referred to as “Dissenting Shares.” Tarpon shall give Buyer prompt notice upon receipt by Tarpon of any written demands for payment, withdrawal of such demands, and any other written communications delivered to Tarpon pursuant to the Dissent Provisions and Tarpon shall give Buyer the opportunity to direct all negotiations and proceedings with respect to such demands. Tarpon shall not voluntarily make any payment with respect to any demands for payment and shall not, except with the prior written consent of Buyer, settle or offer to settle any such demands. Each holder of Tarpon Common Stock who becomes entitled, pursuant to the provisions of the Dissent Provisions, to payment for his or her shares of Tarpon Common Stock under the Dissent Provisions shall receive payment therefor from the Surviving Corporation and such shares of Tarpon Common Stock shall be cancelled.

      (c) Each of the shares of Tarpon Common Stock (i) held in the treasury of Tarpon or (ii) held by Buyer or any of its wholly-owned subsidiaries or by Tarpon or any of its wholly-owned subsidiaries, other than shares held by Buyer or any of its wholly owned subsidiaries or by Tarpon or any of its wholly-owned subsidiaries in a fiduciary capacity or as a result of debts previously contracted, shall be cancelled and retired at the Effective Time and no consideration shall be issued in exchange therefor.

      (d) Notwithstanding any other provisions of this Agreement, each holder of shares of Tarpon Common Stock exchanged pursuant to the Merger who would otherwise have been entitled to receive a fraction of a share of Buyer Common Stock (after taking into account all certificates delivered by such holder) shall receive, in lieu thereof, cash, without interest, in an amount equal to such fractional part of a share of Buyer Common Stock multiplied by the Buyer Share Price. No such holder will be entitled to dividends, voting rights or any other rights as a shareholder in respect of any fractional share.

      (e) At the Effective Time, the share transfer books of Tarpon shall be closed as to the holders of shares of Tarpon Common Stock immediately prior to the Effective Time and no transfer of shares of Tarpon Common Stock by any such holder shall thereafter be made or recognized. Any other provision of this Agreement notwithstanding, neither Buyer, Tarpon, Acquisition Corp., Surviving Corporation nor the exchange agent selected by Buyer (the “Exchange Agent”) shall be liable to a holder of Tarpon Common Stock for any amount paid or property delivered in good faith to a public official pursuant to any applicable abandoned property, escheat or similar law.

      (f) At the Effective Time, the shares of common stock, par value $.01 per share, of Acquisition Corp. issued and outstanding immediately before the Effective Time, and all rights in respect thereof, shall, without any action on the part of Buyer, forthwith cease to exist and be converted into an aggregate of 100 validly issued, fully paid and nonassessable shares of common stock of the Surviving Corporation, par value $.01 per share (the “Surviving Corporation Common Stock”). Immediately after the Effective Time and upon surrender by Buyer of the certificate representing the shares of the common stock of Acquisition Corp., the Surviving Corporation shall deliver to Buyer an appropriate certificate or certificates representing the shares of Surviving Corporation Common Stock created by conversion of the common stock of Acquisition Corp. owned by Buyer.

      Section 1.5.     Reserved.

      Section 1.6.     Manner of Conversion of Tarpon Common Stock. Within five (5) business days after the Shareholders’ Meeting, unless the Effective Time has not yet occurred, in which case as soon thereafter as practicable, Buyer shall cause the Exchange Agent to effect the allocation among the holders of Tarpon Common Stock of rights to receive Buyer Common Stock and cash in the Merger as follows:

      Section 1.7.     Adjustments for Dilution and Other Matters. If prior to the Effective Time, Tarpon shall declare a share dividend or distribution upon or subdivide, split up, reclassify or combine the Tarpon Common Stock, or declare a dividend, or make a distribution, on the Tarpon Common Stock in any security convertible into Tarpon Common Stock (provided that no such action may be taken by Tarpon without Buyer’s prior written consent as so provided in Section 5.2 hereof), appropriate adjustment or adjustments will be made to the Per Share Consideration, the Share Minimum and the Share Maximum. If at the Effective Time Tarpon shall have outstanding more shares of Tarpon Common Stock than are contemplated to be outstanding by the representation and warranty contained in Section 3.2 hereof then, at Buyer’s election and notwithstanding other provisions hereof, and without limiting any of its other rights hereunder, the Per Share Consideration shall be appropriately adjusted downward.

      Section 1.8.     Conversion of Dissenting Tarpon Shares. If prior to the Effective Time any holder of the Tarpon Common Stock shall fail to perfect, or shall effectively withdraw or lose, his or her right to dissent and obtain payment for his or her shares of Dissenting Shares under the Dissent Provisions, the Dissenting Shares of such holder shall be treated for purposes of this Article I like any other shares of outstanding Tarpon Common Stock. If after the Effective Time any holder of Tarpon Common Stock shall fail to perfect, or shall effectively withdraw or lose, his or her right to dissent and obtain payment for his or her Tarpon Common Stock under the Dissent Provisions each share of Tarpon Common Stock of such holder shall be converted into the right to receive the Per Share Consideration in accordance with the procedures, and subject to the conditions, set forth in Article II of this Agreement.

      Section 1.9.     Stock Options and Warrants. Buyer shall, as of the Effective Time, (i) convert any outstanding stock option granted by Tarpon for the purchase of shares of Tarpon Common Stock, exercisable pursuant to the terms of the 1997 Incentive Stock Option Plan (the “Tarpon Option Plan”), as such plan may be amended prior to the Effective Time and (ii) convert any outstanding warrant issued by Tarpon for the purchase of shares of Tarpon Common Stock, pursuant to the Stock Purchase Warrant dated January 28, 1998 (the “Tarpon Warrant Agreement”) into cash in an amount equal to the excess of the Per Share Consideration (or $27.00) over the exercise price of such option or warrant, multiplied by the number of shares of Tarpon Common Stock subject to such option or warrant, as applicable. Such cash, net of any amount that must be withheld for federal, state or local tax purposes, shall be paid to the holder of such option on the Closing Date, whereupon such option or warrant shall terminate. Prior to the Closing Date, Tarpon shall obtain, in form and substance satisfactory to Buyer, any necessary written consent or agreement of the holders of such stock options and warrants required in order to effect the conversion of such stock options and warrants in accordance with the terms hereof.

      Section 1.10.     The Closing. The consummation of the transactions contemplated by this Agreement shall take place at a closing (the “Closing”) to be held upon the satisfaction or waiver of all of the conditions to the Merger set forth herein, which Closing shall take place at 10:00 a.m., local time, at the offices of Chapman and Cutler LLP (or at such other place upon which the parties may agree), on a date mutually agreeable to the parties hereto (hereinafter referred to as the “Closing Date”).

Article II

Exchange of Certificates

      Section 2.1.     Buyer to Make Merger Consideration Available. Upon the latest to occur of the Effective Time and the completion of the allocation procedure set forth in Section 1.4 hereof, Buyer shall issue and pay to the Exchange Agent the number of shares of Buyer Common Stock issuable pursuant to the Merger and the amount of cash payable pursuant to the Merger. The Exchange Agent shall not issue or pay Buyer Common Stock or cash payable with respect to Tarpon Common Stock to any shareholder of Tarpon unless and until share certificates and required transmittal materials pursuant to Article I have been received from such shareholder in proper form by the Exchange Agent. The Exchange Agent shall not be entitled to vote or

exercise any rights of ownership with respect to Buyer Common Stock held by it from time to time hereunder, except that it shall receive and hold all dividends or other distributions paid or distributed with respect to such shares for the account of the persons entitled thereto.

      Section 2.2.     Exchange of Certificates. (a) Promptly after the Effective Time, the Exchange Agent shall mail to each holder of record of a certificate or certificates which immediately prior to the Effective Time represented shares of Tarpon Common Stock, a certificate or certificates representing the number of whole shares of Buyer Common Stock and a check representing the amount of cash into which the Tarpon Common Stock held by such holder was converted pursuant to the terms of Article I of this Agreement. If any certificate for shares of Buyer Common Stock, or any check representing cash and/or declared but unpaid dividends, is to be issued in a name other than that in which a certificate surrendered for exchange is issued, the certificate so surrendered shall be properly endorsed and otherwise in proper form for transfer and the person requesting such exchange shall affix any requisite stock transfer tax stamps to the certificate surrendered or provide funds for their purchase or establish to the satisfaction of the Exchange Agent that such taxes are not payable.

      (b) All Buyer Common Stock issued and cash paid upon the surrender for exchange of certificates for Tarpon Common Stock in accordance with the terms of this Agreement shall be deemed to have been issued and paid in full satisfaction of all rights pertaining to the Tarpon Common Stock theretofore represented by such certificates, subject, however, to the Surviving Corporation’s obligation to pay any dividends or make any other distributions, otherwise permitted under this Agreement, with a record date prior to the Effective Time which may have been declared or made by Tarpon on such Tarpon Common Stock which remains unpaid at the Effective Time. If, after the Effective Time, certificates representing Tarpon Common Stock are presented to the Surviving Corporation or the Exchange Agent for any reason, they shall be canceled and exchanged as provided in this Agreement, except as otherwise provided by law.

      Section 2.3.     Dividends. Subject to the effect of applicable laws, following surrender of any such certificate of Tarpon Common Stock, there shall be paid to the holder of the certificates representing whole shares of Buyer Common Stock issued in exchange therefor, without interest, (a) the amount of any cash payable with respect to a fractional share of Buyer Common Stock to which such holder is entitled pursuant to Section 1.4(d) hereof and the amount of dividends or other distributions with a record date after the Effective Time theretofore paid with respect to such whole shares of Buyer Common Stock and (b) at the appropriate payment date, the amount of dividends or other distributions with a record date after the Effective Time but prior to surrender and a payment date subsequent to surrender payable with respect to such whole shares of Buyer Common Stock.

      Section 2.4.     Withholding Rights. Buyer or the Exchange Agent shall be entitled to deduct and withhold from the consideration otherwise payable pursuant to this Agreement to any holder of shares of Tarpon Common Stock such amounts as Buyer or the Exchange Agent is required to deduct and withhold with respect to the making of such payment under the Internal Revenue Code, as amended (the “Code”), or any provision of state, local or foreign tax law. To the extent that amounts are so withheld by Buyer or the Exchange Agent, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the holder of the shares of Tarpon Common Stock in respect to which such deduction and withholding was made by Buyer or the Exchange Agent.

      Section 2.5.     Tax and Accounting Consequences. It is intended by the parties hereto that the Mergers shall constitute a reorganization within the meaning of Section 368 of the Code. The parties hereto adopted this Agreement as a “plan of reorganization” within the meaning of Sections 1.368-2(g) and 1.368-3(a) of the United States Income Tax Regulations.

Article III

Representations and Warranties of Tarpon

      Tarpon hereby represents and warrants to Buyer as follows:

      Section 3.1.     Corporate Organization. (a) Tarpon is a corporation duly organized and validly existing under the laws of the State of Florida. Tarpon has the corporate power and authority to own or lease all of its properties and assets and to carry on its business as it is now being conducted, and is duly licensed or qualified to do business in each jurisdiction in which the nature of the business conducted by it or the character or location of the properties and assets owned or leased by it makes such licensing or qualification necessary, except where the failure to be so licensed or qualified would not have a Material Adverse Effect (as defined below) on Tarpon. Tarpon is duly registered as a bank holding company under the Bank Holding Company Act of 1956, as amended (the “BHCA”). True and complete copies of the Articles of Incorporation and Bylaws of Tarpon, as in effect as of the date of this Agreement, have previously been made available by Tarpon to Buyer. As used in this Agreement, the term “Material Adverse Effect” means, with respect to Tarpon or Buyer, as the case may be, a material adverse effect (i) on the business, assets, properties, results of operations, financial condition, or (insofar as they can reasonably be foreseen) prospects of such party and its subsidiaries, taken as a whole, or (ii) on the consummation of the Merger. The word “subsidiary” when used with respect to any party means any bank, corporation, partnership, limited liability company, or other organization, whether incorporated or unincorporated, which is consolidated with such party for financial reporting purposes.

      (b) As of the date of this Agreement, Tarpon has, as its sole direct or indirect subsidiaries, Tarpon Coast National Bank, a national banking association (the “Bank”), and Tarpon Coast Financial Services, Inc., a Florida corporation (together with the Bank, the “Tarpon Subsidiaries”). Except as set forth in Schedule 3.1(b) of the disclosure schedules to this Agreement prepared and delivered by Tarpon (the “Tarpon Disclosure Schedules”), Tarpon does not own any voting stock or equity securities of any bank, corporation, partnership, limited liability company, or other organization, whether incorporated or unincorporated, other than the Tarpon Subsidiaries.

      (c) Each Tarpon Subsidiary (i) is duly organized and validly existing as a business corporation or depository institution, as the case may be, under the laws of its jurisdiction of organization, (ii) is duly qualified to do business and in good standing in all jurisdictions (whether federal, state, local or foreign) where its ownership or leasing of property or the conduct of its business requires it to be so qualified and in which the failure to be so qualified would have a Material Adverse Effect on Tarpon, and (iii) has all requisite corporate power and authority to own or lease its properties and assets and to carry on its business as now conducted. Except as set forth in Schedule 3.1(c) of the Tarpon Disclosure Schedules, none of the Tarpon Subsidiaries owns any voting stock or equity securities of any bank, corporation, partnership, limited liability company, or other organization, whether incorporated or unincorporated.

      Section 3.2.     Capitalization. (a) The authorized capital stock of Tarpon consists of 10,000,000 shares of Tarpon Common Stock, $.01 par value per share, of which, as of the date hereof, 1,182,151 shares were issued and outstanding, and 2,000,000 shares of Preferred Stock, of which, as of the date hereof, none were issued and outstanding. As of the date hereof, no shares of Tarpon Common Stock were held in treasury. All of the issued and outstanding shares of Tarpon Common Stock have been duly authorized and validly issued and are fully paid, nonassessable and free of preemptive rights. Except for the Tarpon Option Plan and the Tarpon Warrant Agreement, respectively, Tarpon does not have and is not bound by any outstanding subscriptions, options, warrants, calls, commitments, agreements, preemptive or other rights of any character calling for the purchase or issuance of any shares of Tarpon Common Stock or any other equity securities of Tarpon or any securities representing the right to purchase or otherwise receive any shares of the capital stock of Tarpon, nor are there any securities, debts, obligations or rights outstanding which are convertible into or exchangeable for shares of the capital stock of Tarpon. No shares of Tarpon Common Stock have been reserved for issuance, other than the shares of Tarpon Common Stock reserved for issuance under the Tarpon Option Plan and the Tarpon Warrant Agreement, respectively. Since September 30, 2004, Tarpon has not issued any shares of its capital stock. Schedule 3.2(a) of the Tarpon Disclosure Schedules sets forth as of the

date hereof the number of outstanding stock options and warrants for the purchase of Tarpon Common Stock granted under the Tarpon Option Plan and the Tarpon Warrant, and the dates on which such options and warrants became or become exercisable pursuant to the Tarpon Option Plan and the Tarpon Warrant, as applicable.

      (b) Tarpon owns, directly or indirectly, all of the issued and outstanding shares of capital stock of each of the Tarpon Subsidiaries, free and clear of any liens, pledges, charges, encumbrances and security interests whatsoever (“Liens”). All of the shares of capital stock of each Tarpon Subsidiary are duly authorized and validly issued and are fully paid and nonassessable. No Tarpon Subsidiary has or is bound by any outstanding subscriptions, options, warrants, calls, commitments or agreements of any character calling for the purchase or issuance of any shares of capital stock or any other equity security of such Tarpon Subsidiary or any securities representing the right to purchase or otherwise receive any shares of capital stock or any other equity security of such Tarpon Subsidiary.

      Section 3.3.     Authority. Tarpon has full corporate power and authority to execute and deliver this Agreement and, subject to shareholder and regulatory approvals, to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly approved by the Board of Directors of Tarpon. The Board of Directors of Tarpon has directed that this Agreement and the transactions contemplated hereby be submitted to Tarpon’s shareholders for approval at a meeting of such shareholders and, except for the adoption of this Agreement by the affirmative vote of the holders of a majority of the outstanding shares of Tarpon Common Stock, no other corporate proceedings on the part of Tarpon are necessary to approve this Agreement and to consummate the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by Tarpon and (assuming due authorization, execution and delivery by Buyer) constitutes a valid and binding obligation of Tarpon, enforceable against Tarpon in accordance with its terms.

      Section 3.4.     Consents and Approvals. Except as set forth in Schedule 3.4 of the Tarpon Disclosure Schedules, no consents or approvals of or filings or registrations with any court, administrative agency or commission or other governmental authority or instrumentality (each a “Governmental Entity”) or with any third party are necessary in connection with the execution and delivery by Tarpon of this Agreement and the consummation by Tarpon of the Mergers and the other transactions contemplated hereby except for (a) the filing by Buyer of an application with the Board of Governors of the Federal Reserve System (the “FRB”) and the approval of such application (the “Regulatory Application”), (b) the filing of the Articles of Merger with the Florida Department of State under Florida Law and (c) the approval of this Agreement by the requisite vote of the shareholders of Tarpon and by Buyer, as sole shareholder of Acquisition Corp.

      Section 3.5.     Reports. Tarpon and each of the Tarpon Subsidiaries have timely filed all reports, registrations and statements, together with any amendments required to be made with respect thereto, that they were required to file during the five years preceding the date hereof with (i) the FRB, (ii) the Office of the Comptroller of the Currency, (iii) the Federal Deposit Insurance Corporation, (iv) any state regulatory authority, and (v) any self-regulatory organization with jurisdiction over any of the activities of Tarpon or any of the Tarpon Subsidiaries (collectively “Regulatory Agencies”), and all other reports and statements required to be filed by them during the five years preceding the date hereof, including, without limitation, any report or statement required to be filed pursuant to the laws, rules or regulations of the United States, any state, or any Regulatory Agency, and have paid all fees and assessments due and payable in connection therewith, except where the failure to file such report, registration or statement or to pay such fees and assessments, either individually or in the aggregate, will not have a Material Adverse Effect on Tarpon. Except for normal examinations conducted by a Regulatory Agency in the regular course of the business of Tarpon and the Tarpon Subsidiaries, no Regulatory Agency has initiated any proceeding or, to the best knowledge of Tarpon, investigation into the business or operations of Tarpon or any of the Tarpon Subsidiaries during the five years preceding the date hereof. There is no unresolved written violation, written criticism, or written exception by any Regulatory Agency with respect to any report or statement relating to any examinations of Tarpon or any of the Tarpon Subsidiaries, which is likely, either individually or in the aggregate, to have a Material Adverse Effect on Tarpon.