Table of Contents

As filed with the Securities and Exchange Commission on May 14, 2013

Registration No. 333-187317

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

PRE-EFFECTIVE AMENDMENT NO. 2 TO THE

FORM S-1

REGISTRATION STATEMENT UNDER

THE SECURITIES ACT OF 1933

Sunnyside Bancorp, Inc.

(Exact Name of Registrant as Specified in Its Charter)

56 Main Street

Irvington, NY 10533
(914) 591-8000

(Address, Including Zip Code, and Telephone Number, Including Area Code, of

Registrant’s Principal Executive Offices)

Mr. Timothy D. Sullivan

President and Chief Executive Officer

56 Main Street

Irvington, NY 10533

(914) 591-8000

(Address, Including Zip Code, and Telephone Number, Including Area Code, of

Agent for Service)

Copies to:

Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box:  x

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

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

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

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

CALCULATION OF REGISTRATION FEE

(1)         Estimated solely for the purpose of calculating the registration fee.

(2)         Previously paid.

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

Table of Contents

PROSPECTUS

(Proposed Holding Company for Sunnyside Federal Savings and Loan Association of Irvington)

Up to 690,000 shares of Common Stock

(Subject to Increase to up to 793,500 shares)

Sunnyside Bancorp, Inc., a Maryland corporation and the proposed holding company for Sunnyside Federal Savings and Loan Association of Irvington, is offering shares of common stock for sale in connection with the conversion of Sunnyside Federal Savings and Loan Association of Irvington from the mutual to the stock form of organization. There is currently no established market for our common stock.  We expect that our common stock will be quoted on the OTC Bulletin Board upon conclusion of the stock offering. We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012.

We are offering up to 690,000 shares of common stock for sale at a price of $10.00 per share on a best efforts basis. We may sell up to 793,500 shares of common stock because of demand for the shares of common stock or changes in market conditions, without resoliciting subscribers.  We must sell a minimum of 510,000 shares in order to complete the offering.

We are offering the shares of common stock in a “subscription offering” to eligible current and former depositors of, and certain borrower members of, Sunnyside Federal Savings and Loan Association of Irvington.  Shares of common stock not purchased in the subscription offering may be offered for sale to the public in a “community offering,” with a preference given to residents of our local community.  We also may offer for sale shares of common stock not purchased in the subscription offering or community offering to the general public through a “syndicated community offering” managed by Keefe, Bruyette & Woods, Inc.

The minimum number of shares of common stock you may order is 25 shares. The maximum number of shares of common stock that can be ordered by any person in the offering is 7,500 shares ($75,000), and no person, together with an associate or group of persons acting in concert, may purchase more than 15,000 shares ($150,000) in the offering.

The offering is expected to expire at 2:00 p.m., Eastern Time, on [expiration date].  We may extend this expiration date without notice to you until [extension date].  The Office of the Comptroller of the Currency may approve a later date, which may not be beyond [final date].  Once submitted, orders are irrevocable unless the offering is terminated or is extended beyond [extension date], or the number of shares of common stock to be sold is increased to more than 793,500 shares or decreased to less than 510,000 shares.  If the offering is extended past [extension date], we will resolicit subscribers.  You will have the opportunity to confirm, change or cancel your order within a specified period of time. If you do not respond during that period, your stock order will be cancelled and your deposit account withdrawal authorizations will be cancelled or your funds submitted will be returned promptly with interest at 0.10% per annum. If the number of shares to be sold is increased to more than 793,500 shares or decreased to less than 510,000 shares, all funds submitted for the purchase of shares of common stock in the offering will be returned promptly with interest at 0.10% per annum.  All subscribers will be resolicited and given an opportunity to place a new order within a specified period of time.  Funds received in the subscription and the community offerings will be held in a segregated account at Sunnyside Federal Savings and Loan Association of Irvington and will earn interest at 0.10% per annum until completion or termination of the offering.

Keefe, Bruyette & Woods, Inc. will assist us in selling our shares of common stock on a best efforts basis. Keefe, Bruyette & Woods, Inc. is not required to purchase any of the shares of common stock that are being offered for sale.

OFFERING SUMMARY

Price: $10.00 per Share

(1)   Selling agent commissions shown assume that all shares are sold in the subscription and community offerings.  The amounts shown include: (i) fees and selling commissions payable by us to Keefe, Bruyette & Woods, Inc. in connection with the subscription and community offerings equal to $150,000; and (ii) other expenses of the offering payable to Keefe, Bruyette & Woods, Inc. in the subscription and community offerings of up to $90,000.  See “The Conversion and Offering — Marketing and Distribution; Compensation” for information regarding compensation to be received by Keefe, Bruyette & Woods, Inc. and the other broker-dealers that may participate in a syndicated community offering.  If all shares of common stock (except for shares purchased by our directors, officers, employees and their family members and our employee stock ownership plan) were sold in a syndicated community offering, the maximum selling agent commissions would be approximately $258,000, $308,000, $359,000 and $416,000 at the minimum, midpoint, maximum, and adjusted maximum levels of the offering, respectively.

This investment involves a degree of risk, including the possible loss of principal.

Please read “Risk Factors” beginning on page 16.

These securities are not deposits or accounts and are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.  None of the Securities and Exchange Commission, the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System or any state securities regulator has approved or disapproved of these securities or determined if this prospectus is accurate or complete. Any representation to the contrary is a criminal offense.

For assistance, please contact the Stock Information Center, toll-free, at (877)                   .

The date of this prospectus is                   , 2013.

Table of Contents

Table of Contents

TABLE OF CONTENTS

ii

Table of Contents

SUMMARY

The following summary explains the significant aspects of Sunnyside Federal Savings and Loan Association of Irvington’s mutual-to-stock conversion and the related offering of Sunnyside Bancorp, Inc. common stock.  It may not contain all of the information that is important to you. For additional information before making an investment decision, you should read this entire document carefully, including the financial statements and the notes to the financial statements, and the section entitled “Risk Factors.”

In this prospectus, the terms “we,” “our,” and “us” refer to Sunnyside Bancorp, Inc. and Sunnyside Federal Savings and Loan Association of Irvington, unless the context indicates another meaning. In addition, we sometimes refer to Sunnyside Bancorp, Inc. as “Sunnyside Bancorp,” and to Sunnyside Federal Savings and Loan Association of Irvington as “Sunnyside Federal” or the “Association.”

Sunnyside Federal Savings and Loan Association of Irvington

Sunnyside Federal Savings and Loan Association of Irvington is a federal mutual savings association that was founded in 1930.   Sunnyside Federal conducts business from its full-service banking office located in Irvington, New York which is located in Westchester County, New York approximately 25 miles north of New York City. We consider our deposit market area to be the Westchester County, New York towns of Irvington, Tarrytown, Sleepy Hollow, Hastings, Dobbs Ferry and Ardley-on-Hudson, and consider our lending area to be Westchester, Putnam and Rockland Counties, New York.

Our business consists primarily of taking deposits from the general public and investing those deposits, together with funds generated from operations, in one- to four-family residential real estate loans and commercial and multi-family real estate loans, and, to a much more limited extent, home equity lines of credit and other loans (consisting primarily of loans secured by deposits and marketable securities).  At December 31, 2012, $34.7 million, or 86.4%, of our total loan portfolio was comprised of owner-occupied, one- to four-family residential real estate loans.

We also invest in securities, which consist primarily of U.S. government agency obligations and mortgage-backed securities and to a lesser extent, securities of states, counties and political subdivisions.

We offer a variety of deposit accounts, including certificate of deposit accounts, money market accounts, savings accounts, NOW accounts and individual retirement accounts.  We historically have not used borrowings to fund our operations and had no borrowings at December 31, 2012.

For the year ended December 31, 2012, we experienced a net loss of $320,000, compared to net income of $125,000 for the year ended December 31, 2011.  Our current business strategy includes increasing the Bank’s asset size, diversifying our loan portfolio to increase our non-residential lending, including commercial and multi-family real estate lending and commercial lending and increasing our non-interest income, as ways to improve our profitability in future periods.

All of the members of our current executive management team joined Sunnyside Federal since 2008.   In 2008, we hired Mr. Timothy D. Sullivan as our President and Chief Executive Officer to replace our former president who was retiring. Mr. Sullivan had significant banking experience and specifically commercial lending experience which the board of directors thought was necessary as Sunnyside Federal wished to begin to broaden its focus into non-residential lending areas.  Prior to Mr. Sullivan joining Sunnyside Federal, in September 2007, Sunnyside Federal had entered into a cease and desist order with the former Office of Thrift Supervision.  The order required, among other items, that

Table of Contents

Sunnyside Federal implement and file an updated business plan to help the Bank achieve core profitability. Mr. Sullivan’s initial focus was to oversee the Bank’s compliance with this order which was lifted in December 2010.   In 2010, Sunnyside Federal hired Ms. Gerardina Mirtuono to serve as senior vice president and chief operating officer. Ms. Mirtuono has over 27 years of financial institutions experience, including significant experience in the areas of compliance, and this experience provides Sunnyside Federal with broad financial industry knowledge and experience. Finally, in 2012, Sunnyside Federal hired Mr. Gerard A. Iervolino, a banking executive with over 37 years of financial institution experience, as vice president and chief financial officer.

During the time since the hiring of Mr. Sullivan, and in particular since the lifting of the cease and desist order in December 2010,  we have begun to shift Sunnyside Federal’s strategy to diversify our traditional thrift focus into a more commercial bank style of operation with a broadened base of financial products and services while emphasizing superior customer service.  While residential real estate lending has been, and will remain, the most important part of our operations, we intend to diversify our focus on non-residential lending, including commercial and multi-family real estate lending and commercial lending, including Small Business Administration (SBA) lending.  We were approved as an SBA lender in December 2012.

Sunnyside Federal is subject to comprehensive regulation and examination by the Office of the Comptroller of the Currency. Our executive and administrative office is located at 56 Main Street, Irvington, New York 10533, and our telephone number at this address is (914) 591-8000.  Our website address is www.sunnysidefederal.com.  Information on our website is not incorporated into this prospectus and should not be considered part of this prospectus.

Sunnyside Bancorp, Inc.

The shares being offered will be issued by Sunnyside Bancorp, a newly formed Maryland corporation that will own all of the outstanding shares of common stock of Sunnyside Federal upon completion of the Association’s mutual-to-stock conversion.  Sunnyside Bancorp has not engaged in any business to date.  Upon completion of the conversion, Sunnyside Bancorp will register as a savings and loan holding company and will be subject to comprehensive regulation and examination by the Board of Governors of the Federal Reserve System.  Sunnyside Bancorp’s executive and administrative office is located at 56 Main Street, Irvington, New York 10533, and our telephone number at this address is (914) 591-8000.

Market Area

We conduct our operations from our full-service banking office located in Irvington, Westchester County, New York, which is located approximately 25 miles north of New York City. Our primary deposit market area includes Irvington and the contiguous towns of Tarrytown, Sleepy Hollow, Hastings, Dobbs Ferry and Ardley-on-Hudson, all of which are located in Westchester County, New York.  Our primary lending market area includes Westchester, Putnam and Rockland counties, New York.   We will, on occasion, make loans secured by properties located outside of our primary lending market, especially to borrowers with whom we have an existing relationship and who have a presence within our primary lending area.

At December 31, 2012, $34.7 million, or 86.4%, of our total loan portfolio was comprised of owner-occupied, one-to four family residential real estate loans.  Accordingly, a downturn in the residential real estate market in Westchester, Putnam, or Rockland Counties could significantly affect Sunnyside Federal’s net income.

2

Table of Contents

Westchester County is primarily a suburban community and is the second wealthiest county in the State of New York. Due to the above average wealth of Westchester’s population and the proximity to the economy of New York City, Sunnyside Federal has been relatively shielded from the economic downturn of 2008 and 2009. As an example, some key statistics, according to the US Census Bureau, on Westchester County for the period of 2007 through 2011 are provided below:

·                                          The homeownership rate in Westchester County was 62.1%, compared to 54.8% in the State of New York;

·                                          The median home value was $547,000, compared to $301,000 in the State of New York.

·                                          The median household income in Westchester County was $80,725, compared to $56,951 in the State of New York;

·                                          Approximately 44.5% of the population of Westchester County held a bachelor’s degree or higher, compared to 32.5% of the State of New York; and

·                                          Approximately 8.9% of the population of Westchester County had incomes below poverty level, compared to 14.5% of the State of New York.

Sunnyside Federal also makes loans on a regular basis to residents of Putnam and Rockland Counties, New York. Below are some key statistics, according to the US Census Bureau, on the economic outlook of Putnam and Rockland Counties for the period of 2007 through 2011:

·                                          The homeownership rate in Putnam County and Rockland County was 83.4% and 70.6%, respectively, compared to 54.8% in the State of New York;

·                                          The median home value in Putnam County and Rockland County was $406,000 and $465,100, respectively, compared to $301,000 in the State of New York;

·                                          The median household income in Putnam County and Rockland County was $92,711 and $84,661, respectively, compared to $56,951 in the State of New York;

·                                          Approximately 38.1% and 40.8% of the population of Putnam County and Rockland County, respectively, held a bachelor’s degree or higher, compared to 32.5% of the State of New York; and

·                                          Approximately 5.4% and 11.6% of the population of Putnam County and Rockland County, respectively, had incomes below poverty level, compared to 14.5% of the State of New York.

For additional information regarding our market area, see “Business of Sunnyside Federal — Market Area.”

The Conversion and Our Organizational Structure

Pursuant to the terms of the plan of conversion, Sunnyside Federal will convert from a mutual (meaning no stockholders) savings association to a stock savings association. As part of the conversion,

3

Table of Contents

Sunnyside Bancorp, the newly formed proposed holding company for Sunnyside Federal, will offer for sale shares of its common stock in a subscription offering, and, if necessary, a community offering and a syndicated community offering. Upon the completion of the conversion and stock offering, Sunnyside Bancorp will be 100% owned by stockholders and Sunnyside Federal will be a wholly owned subsidiary of Sunnyside Bancorp. A full description of the conversion begins on page 101 of this prospectus under the heading “The Conversion and Offering.”

Business Strategy

Our current business strategy is to operate as a community bank dedicated to serving the needs of our consumer and business customers and emphasizing personalized and efficient customer service. Highlights of our current business strategy include:

·                                          growing our assets and liabilities by increasing our presence in the communities we serve and expanding our service delivery channels;

·                                          utilizing our management’s commercial banking experience by diversifying our lending operations to increase our emphasis on commercial and multi-family real estate lending and commercial lending, and implementing a Small Business Administration (SBA) lending program;

·                                          maintaining our strong asset quality profile through conservative loan underwriting;

·                                          increasing our non-interest income through the origination and sale of one-to four-family residential real estate loans and the guaranteed-portion of SBA loans;

·                                          managing interest rate risk by emphasizing the origination of shorter-term loans for retention in our portfolio and considering the sale of certain newly originated longer-term one- to four-family residential real estate loans;

·                                          continuing to attract and retain customers in our market area and build our “core” deposits consisting of demand, NOW, savings and money market accounts; and

·                                          expanding our banking franchise as opportunities arise through de novo branching or a branch acquisition although we do not currently have any understandings or agreements to establish or acquire any new branch offices.

Reasons for the Conversion and Offering

Consistent with our business strategy, our primary reasons for converting and raising additional capital through the offering are:

·                                          to increase capital to support future growth and profitability;

·                                          to retain and attract qualified personnel by establishing stock-based benefit plans for management and employees;

·                                          to have greater flexibility to structure and finance the opportunistic expansion of our operations; and

·                                          to offer our depositors and employees an opportunity to purchase our stock.

4

Table of Contents

As of December 31, 2012, Sunnyside Federal was considered “well capitalized” for regulatory purposes.  As a result of the conversion, the proceeds from the stock offering will further improve our capital position during a period of significant economic, regulatory and political uncertainty.

See “The Conversion and Offering” for a more complete discussion of our reasons for conducting the conversion and offering.

Terms of the Offering

We are offering between 510,000 shares and 690,000 shares of common stock to eligible depositors and borrowers of Sunnyside Federal and to our tax-qualified employee benefit plans in a subscription offering.  To the extent shares remain available, we may offer shares for sale in a community offering, with a preference given to residents of Westchester, Putnam and Rockland Counties, New York.  We may also offer for sale shares of common stock not purchased in the subscription offering or the community offering to the general public in a syndicated community offering.  The number of shares of common stock to be sold may be increased to up to 793,500 shares as a result of demand for the shares of common stock in the offering or changes in market conditions.  Unless the number of shares of common stock offered is increased to more than 793,500 shares or decreased to fewer than 510,000 shares, or the offering is extended beyond [extension date], subscribers will not have the opportunity to change or cancel their stock orders once submitted.  If the offering is extended past [extension date], we will resolicit subscribers.  You will have the opportunity to confirm, change or cancel your order within a specified period of time. If you do not respond during that period of time, your stock order will be cancelled and your deposit account withdrawal authorizations will be cancelled or your funds submitted will be returned promptly with interest at 0.10% per annum.  If the number of shares to be sold is increased to more than 793,500 shares or decreased to less than 510,000 shares, all subscribers’ stock orders will be cancelled, their deposit account withdrawal authorizations will be cancelled and funds delivered for the purchase of shares of common stock in the offering will be returned promptly with interest at 0.10% per annum.  We will give these subscribers an opportunity to place new orders for a specified period of time.

The purchase price of each share of common stock to be offered for sale in the offering is $10.00.  All investors will pay the same purchase price per share.  Investors will not be charged a commission to purchase shares of common stock in the offering.  Keefe, Bruyette & Woods, Inc., our marketing agent in the offering, will use its best efforts to assist us in selling shares of our common stock but is not obligated to purchase any shares of common stock in the offering.

How We Determined the Offering Range and the $10.00 Per Share Stock Price

The amount of common stock we are offering for sale is based on an independent appraisal of the estimated market value of Sunnyside Bancorp, assuming the conversion and offering are completed.  Keller & Company, Inc., our independent appraiser, has estimated that, as of March 5, 2013, this market value was $6,000,000.  Based on regulations of the Office of the Comptroller of the Currency, this market value forms the midpoint of a valuation range with a minimum of $5,100,000 and a maximum of $6,900,000.  Based on this valuation and a $10.00 per share price, the number of shares of common stock being offered for sale by us will range from 510,000 shares to 690,000 shares. We may sell up to 793,500 shares of common stock because of demand for the shares or changes in market conditions without resoliciting subscribers.  The $10.00 per share price was selected primarily because it is the price most commonly used in mutual-to-stock conversions of financial institutions.

5

Table of Contents

The appraisal is based in part on Sunnyside Federal’s financial condition and results of operations, the pro forma effect of the additional capital raised by the sale of shares of common stock in the offering, and an analysis of a peer group of ten publicly traded thrift holding companies with assets between $214 million and $714 million as of December 31, 2012 that Keller & Company, Inc. considers comparable to Sunnyside Bancorp. See, “The Conversion; Plan of Distribution — Determination of Share Price and Number of Shares to be Issued” on page 97.

The following table presents a summary of selected pricing ratios for Sunnyside Bancorp (on a pro forma basis) and the peer group companies used by Keller & Company, Inc., our independent appraiser, in its appraisal. These ratios are based on Sunnyside Federal’s book value, tangible book value and core earnings as of and for the twelve months ended December 31, 2012 and the latest date for which complete financial data are publicly available for the peer group. Compared to the average pricing of the peer group, our pro forma pricing ratios at the midpoint of the offering range indicated a discount of 29.15% on a price-to-book value basis and a discount of 31.70% on a price-to-tangible book value basis.

(n/m)            Not meaningful.

The independent appraisal does not indicate trading market value.  Do not assume or expect that our valuation as indicated in the appraisal means that after the conversion and offering the shares of our common stock will trade at or above the $10.00 per share purchase price.  Furthermore, the pricing ratios presented in the appraisal were utilized by Keller & Company, Inc. to estimate our pro forma appraised value for regulatory purposes and not to compare the relative value of shares of our common stock with the value of the capital stock of the peer group.  The value of the capital stock of a particular company may be affected by a number of factors such as financial performance, asset size and market location.

For a more complete discussion of the amount of common stock we are offering for sale and the independent appraisal, see “The Conversion and Offering — Determination of Share Price and Number of Shares to be Issued.”

After-Market Stock Price Performance

The following table presents stock price performance information for all standard mutual-to-stock conversions completed between January 1, 2012 and March 5, 2013.  These companies did not constitute the group of ten comparable public companies utilized in Keller & Company, Inc.’s valuation analysis.

6

Table of Contents

Mutual-to-Stock Conversion Offerings with Closing Dates
between January 1, 2012 and March 5, 2013

Stock price performance is affected by many factors, including, but not limited to: general market and economic conditions; the interest rate environment; the amount of proceeds a company raises in its offering; and numerous factors relating to the specific company, including the experience and ability of management, historical and anticipated operating results, the nature and quality of the company’s assets, and the company’s market area.  None of the companies listed in the table above are exactly similar to Sunnyside Bancorp, the pricing ratios for their stock offerings may have been different from the pricing ratios for Sunnyside Bancorp shares of common stock and the market conditions in which these offerings were completed may have been different from current market conditions.  Furthermore, this table presents only short-term performance with respect to companies that recently completed their mutual-to-stock conversions and may not be indicative of the longer-term stock price performance of these companies.  The performance of these stocks may not be indicative of how our stock will perform.

Our stock price may trade below $10.00 per share, as the stock prices of certain mutual-to-stock conversions have decreased below the initial offering price.  Before you make an investment decision, we urge you to carefully read this prospectus, including, but not limited to, the section entitled “Risk Factors” beginning on page 16.

How We Intend to Use the Proceeds From the Stock Offering

We intend that Sunnyside Bancorp will invest, at the minimum of the offering range, approximately $3.9 million, and at the midpoint, maximum and adjusted maximum of the offering range, approximately $4.72 million, of the net proceeds from the stock offering in Sunnyside Federal, loan funds to our employee stock ownership plan to fund the plan’s purchase of shares of common stock in the stock offering, and retain the remainder of the net proceeds from the offering.  Assuming we sell 600,000 shares of common stock in the stock offering and have net proceeds of $5.24 million, we intend that Sunnyside Bancorp will invest $4.72 million in Sunnyside Federal, loan $420,000 to our employee stock ownership plan to fund its purchase of shares of common stock, and retain the remaining $104,000 of the net proceeds.

We may use the funds we retain to pay cash dividends, to repurchase shares of common stock (subject to compliance with regulatory requirements), for investments, to expand our banking franchise through de novo branching or branch acquisitions, or for other general corporate purposes.  Sunnyside Federal may use the proceeds it receives from us to support increased lending, enhance its talent (including the addition of loan officers, including a loan officer with small business administration (SBA) expertise), other enhanced products and services, expand its franchise through de novo branching or a branch acquisition, although Sunnyside Federal currently has no understandings or agreements to acquire or establish any new branch offices.

7

Table of Contents

For more information on the proposed use of the proceeds from the offering, see “How We Intend to Use the Proceeds from the Offering.”

Persons Who May Order Shares of Common Stock in the Offering

We are offering the shares of common stock in a subscription offering in the following descending order of priority:

(i)                                     First, to depositors with accounts at Sunnyside Federal with aggregate balances of at least $50 at the close of business on January 31, 2012.

(ii)                                  Second, to our tax-qualified employee benefit plans (including Sunnyside Federal’s employee stock ownership plan), which will receive, without payment therefor, nontransferable subscription rights to purchase in the aggregate up to 10% of the shares of common stock sold in the offering.  We expect our employee stock ownership plan to purchase 7% of the shares of common stock sold in the offering.

(iii)                               Third, to depositors with accounts at Sunnyside Federal with aggregate balances of at least $50 at the close of business on March 31, 2013.

(iv)                              Fourth, to depositors and borrowers of Sunnyside Federal at the close of business on April 30, 2013.

Shares of common stock not purchased in the subscription offering may be offered for sale in a community offering, with a preference given to natural persons and trusts of natural persons residing in Westchester, Putnam and Rockland Counties, New York.  The community offering may begin concurrently with, during or after the subscription offering.  We also may offer for sale shares of common stock not purchased in the subscription offering or the community offering to the general public through a syndicated community offering, which will be managed by Keefe, Bruyette & Woods, Inc.  We have the right to accept or reject, in our sole discretion, orders received in the community offering or syndicated community offering.  Any determination to accept or reject stock orders in the community offering or the syndicated community offering will be based on the facts and circumstances available to management at the time of the determination.

If we receive orders for more shares than we are offering, we may not be able to fully or partially fill your order.  Shares will be allocated first to categories in the subscription offering.  A detailed description of the subscription offering, the community offering and the syndicated community offering, as well as a discussion regarding allocation procedures, can be found in the section of this prospectus entitled “The Conversion and Offering.”

Limits on How Much Common Stock You May Purchase

The minimum number of shares of common stock that may be purchased is 25.

Generally, no individual may purchase more than 7,500 shares ($75,000) of common stock.  If any of the following purchase shares of common stock, their purchases, in all categories of the offering combined, when combined with your purchases, cannot exceed 15,000 shares ($150,000) of common stock:

·                                          your spouse or relatives of you or your spouse who reside with you;

8

Table of Contents

·                                          most companies, trusts or other entities in which you are a trustee, have a substantial beneficial interest or hold a senior position; or

·                                          other persons who may be your associates or persons acting in concert with you.

Unless we determine otherwise, persons having the same address and persons exercising subscription rights through qualifying accounts registered to the same address will be subject to the overall purchase limitation of 15,000 shares ($150,000).  See the detailed descriptions of “acting in concert” and “associate” in the section of this prospectus headed “The Conversion and Offering — Limitations on Common Stock Purchases.”

Subject to Office of the Comptroller of the Currency approval, we may increase or decrease the purchase limitations at any time.  See the detailed description of the purchase limitations in the section of this prospectus headed “The Conversion and Offering — Limitations on Common Stock Purchases.”

How You May Purchase Shares of Common Stock in the Subscription Offering and the Community Offering

In the subscription offering and community offering, you may pay for your shares only by:

·                                          personal check, bank check or money order made payable directly to Sunnyside Bancorp, Inc.; or

·                                          authorizing us to withdraw available funds from the types of Sunnyside Federal deposit accounts identified on the stock order form.

Please do not submit cash or wire transfers.  Sunnyside Federal is not permitted to lend funds to anyone for the purpose of purchasing shares of common stock in the offering.  Additionally, you may not use a Sunnyside Federal line of credit check or any type of third-party check to pay for shares of common stock.  On the stock order form, you may not designate withdrawal from Sunnyside Federal accounts with check-writing privileges; instead, please submit a check.  If you request that we directly withdraw the funds from an account with check writing privileges, we reserve the right to interpret that as your authorization to treat those funds as if we had received a check for the designated amount, and we will immediately withdraw the amount from your checking account.  You may not authorize direct withdrawal from a Sunnyside Federal retirement account.  See “ — Using Retirement Account Funds to Purchase Shares of Common Stock in the Subscription and Community Offerings.”

You may subscribe for shares of common stock in the offering by delivering a signed and completed stock order form, together with full payment payable to Sunnyside Bancorp, Inc. or authorization to withdraw funds from one or more of your Sunnyside Federal deposit accounts, provided that the stock order form is received before 2:00 p.m., Eastern Time, on [expiration date].  You may submit your stock order form and payment by mail using the stock order reply envelope provided, by overnight delivery to our Stock Information Center at the address noted on the stock order form or by hand-delivery to Sunnyside Federal’s office, located at 56 Main Street, Irvington, New York.  Please do not mail stock order forms to Sunnyside Federal.  Once submitted, your order will be irrevocable unless the offering is terminated or is extended beyond [extension date], or the number of shares of common stock to be sold is increased to more than 793,500 shares or decreased to less than 510,000 shares.

For a complete description of how to purchase shares in the stock offering, see “The Conversion and Offering — Procedure for Purchasing Shares in the Subscription and Community Offerings.”

9

Table of Contents

Using Retirement Account Funds to Purchase Shares of Common Stock in the Subscription and Community Offerings

You may be able to subscribe for shares of common stock using funds in your individual retirement account (“IRA”), or other retirement account.  If you wish to use some or all of the funds in your IRA or other retirement account held at Sunnyside Federal, the applicable funds must be transferred to a self-directed account maintained by an independent custodian or trustee, such as a brokerage firm, before you place your stock order. If you do not have such an account, you will need to establish one. An annual administrative fee may be payable to the independent custodian or trustee. Because individual circumstances differ and the processing of retirement fund orders takes additional time, we recommend that you contact our Stock Information Center promptly, preferably at least two weeks before the [expiration date] offering deadline, for assistance with purchases using funds in your IRA or other retirement account held at Sunnyside Federal or elsewhere.  Whether you may use such funds for the purchase of shares in the stock offering may depend on timing constraints and, possibly, limitations imposed by the institution where the funds are held.

For a complete description of how to use IRA funds to purchase shares in the stock offering, see “The Conversion and Offering — Procedure for Purchasing Shares in the Subscription and Community Offerings — Using Retirement Account Funds.”

You May Not Sell or Transfer Your Subscription Rights

Federal regulations prohibit you from transferring your subscription rights.  If you order shares of common stock in the subscription offering, you will be required to state that you are purchasing the common stock for yourself and that you have no agreement or understanding to sell or transfer your subscription rights.  We intend to take legal action against anyone who we believe has sold or transferred his or her subscription rights.  In addition, we intend to advise the appropriate federal agencies of any person who we believe has sold or transferred his or her subscription rights.  We will not accept your order if we have reason to believe that you have sold or transferred your subscription rights.  On the stock order form, you may not add the names of others for joint stock registration who do not have subscription rights or who qualify only in a lower subscription offering priority than you do.  You may add only those who were eligible to purchase shares of common stock in the subscription offering at your date of eligibility.  In addition, the stock order form requires that you list all qualifying accounts, giving all names on each account and the account number at the applicable eligibility date.  Failure to provide this information, or providing incomplete or incorrect information, may result in a loss of part or all of your share allocation if there is an oversubscription.

Purchases by Senior Officers and Directors

We expect our directors and senior officers, together with their associates, to subscribe for 44,000 shares ($440,000) of common stock in the offering, representing 8.6% of shares to be sold at the minimum of the offering range.  However, there can be no assurance that any individual director or senior officer, or the directors and senior officers as a group, will purchase any specific number of shares of our common stock.  The purchase price paid by them will be the same $10.00 per share price paid by all other persons who purchase shares of common stock in the offering.

Purchases by our directors, senior officers and their associates will be included in determining whether the required minimum number of shares has been subscribed for in the offering.  Any purchases made by our directors or senior officers, or their associates, for the explicit purpose of meeting the minimum number of shares of common stock required to be sold in order to complete the offering shall be made for investment purposes only and not with a view toward redistribution.

10

Table of Contents

For more information on the proposed purchases of shares of common stock by our directors and senior officers, see “Subscriptions by Directors and Executive Officers.”

Deadline for Orders of Shares of Common Stock in the Subscription and Community Offerings

The deadline for submitting orders for shares of common stock in the subscription and community offerings is 2:00 p.m., Eastern Time, on [expiration date], unless we extend the subscription offering and/or the community offering.  If you wish to purchase shares of common stock, a properly completed and signed original stock order form, together with full payment, must be received (not postmarked) by this time.

Although we will make reasonable attempts to provide this prospectus and offering materials to holders of subscription rights, the subscription offering and all subscription rights will expire at 2:00 p.m., Eastern Time, on [expiration date], whether or not we have been able to locate each person entitled to subscription rights.

For a complete description of the deadline for purchasing shares in the stock offering, see “The Conversion and Offering — Procedure for Purchasing Shares in the Subscription and Community Offerings — Expiration Date.”

Steps We May Take if We Do Not Receive Orders for the Minimum Number of Shares

If we do not receive orders for at least 510,000 shares of common stock, we may take additional steps in order to issue the minimum number of shares of common stock in the offering range.  Specifically, we may:

·                                          increase the purchase limitations; and/or

·                                          seek regulatory approval to extend the offering beyond [extension date].

If we extend the offering past [extension date], we will resolicit subscribers.  You will have the opportunity to confirm, change or cancel your order within a specified period of time. If you do not respond during that period of time, your stock order will be cancelled and your deposit account withdrawal authorizations will be cancelled or your funds submitted will be returned promptly with interest at 0.10% per annum from the date the stock order was processed.  If one or more purchase limitations are increased, subscribers in the subscription offering who ordered the maximum amount and who indicated a desire to be resolicited on the stock order form will be and, in our sole discretion, some other large subscribers may be, given the opportunity to increase their subscriptions up to the newly applicable limit.

Conditions to Completion of the Conversion

The board of directors of Sunnyside Federal has approved the plan of conversion.  In addition, on                   , the Federal Reserve Board issued the approval required in connection with the conversion and on                     , the Office of the Comptroller of the Currency has conditionally approved the plan of conversion.  We cannot complete the conversion unless:

·                                          The plan of conversion is approved by a majority of votes eligible to be cast by members of Sunnyside Federal (depositors and borrowers of Sunnyside Federal) as of April 30, 2013;

11

Table of Contents

·                                          We have received orders for at least the minimum number of shares of common stock offered; and

·                                          We receive the final approval required from the Office of the Comptroller of the Currency and the Federal Reserve Board to complete the conversion and offering.

Any approval by the Office of the Comptroller of the Currency or the Federal Reserve Board does not constitute a recommendation or endorsement of the plan of conversion.

Our Dividend Policy

Following completion of the stock offering, our board of directors will have the authority to declare dividends on our common stock, subject to statutory and regulatory requirements.  However, no decision has been made with respect to the amount, if any, and timing of any dividend payments.  The payment and amount of any dividend payments will depend upon a number of factors, including the following: regulatory capital requirements; our financial condition and results of operations; our other uses of funds for the long-term value of stockholders; tax considerations; statutory and regulatory limitations; and general economic conditions.  See “Our Dividend Policy” in this prospectus for additional information regarding our dividend policy.

Market for Common Stock

We anticipate that the common stock sold in the offering will be quoted on the OTC Bulletin Board.  Keefe, Bruyette & Woods, Inc. currently intends to make a market in the shares of our common stock, but is under no obligation to do so. See “Market for the Common Stock.”

Delivery of Stock Certificates

Certificates representing shares of common stock sold in the subscription offering and community offering will be mailed to purchasers at the certificate registration address noted by them on the stock order form.  Shares of common stock sold in the syndicated community offering may be delivered electronically through the services of The Depository Trust Company.  Stock certificates will be sent to purchasers by first-class mail as soon as practicable after the completion of the conversion and stock offering, which is expected to occur as soon as practicable following satisfaction of the conditions described above in “ — Conditions to Completion of the Conversion.”  We expect trading in the stock to begin on the business day of or on the business day immediately following the completion of the conversion and stock offering.  It is possible that until certificates for the common stock are delivered, purchasers might not be able to sell the shares of common stock that they ordered, even though the common stock will have begun trading.  Your ability to sell the shares of common stock before receiving your stock certificate will depend on arrangements you may make with a brokerage firm.

Possible Change in the Offering Range

Keller & Company, Inc. will update its appraisal before we complete the offering.  If, as a result of demand for the shares or changes in market conditions, Keller & Company, Inc. determines that our pro forma market value has increased, we may sell up to 793,500 shares in the offering without further notice to you.  If our pro forma market value at that time is either below $5,100,000 or above $7,935,000, then, after consulting with the Office of the Comptroller of the Currency, we may:

12

Table of Contents

·                                          terminate the stock offering, cancel deposit account withdrawal authorizations and promptly return all funds received in the offering with interest at 0.10% per annum;

·                                          set a new offering range; or

·                                          take such other actions as may be permitted by the Office of the Comptroller of the Currency, the Federal Reserve Board, the Financial Industry Regulatory Authority (FINRA) and the Securities and Exchange Commission.

If we set a new offering range, we will promptly return funds, with interest at 0.10% per annum for funds received in the offering, cancel deposit account withdrawal authorizations and commence a resolicitation.  In connection with the resolicitation, we will notify subscribers of their right to place a new stock order for a specified period of time.

Possible Termination of the Offering

We may terminate the offering at any time prior to the special meeting of members of Sunnyside Federal that is being called to vote on the conversion, and at any time after member approval with the concurrence of the Office of the Comptroller of the Currency.  If we terminate the offering, we will promptly return funds, as described above.

Benefits to Management and Potential Dilution to Stockholders Resulting from the Conversion

We expect our employee stock ownership plan, which is a tax-qualified retirement plan for the benefit of all of our employees being established in connection with the conversion and stock offering, to purchase 7% of the shares of common stock that we sell in the offering.  If we receive orders for more shares of common stock than the maximum of the offering range, the employee stock ownership plan will have first priority to purchase shares over this maximum, up to a total of 7% of the shares of common stock that we sell in the offering.  This would reduce the number of shares available for allocation to eligible depositors.  For further information, see “Management — Benefit Plans — Employee Stock Ownership Plan.”

Purchases by the employee stock ownership plan in the offering will be included in determining whether the required minimum number of shares have been sold in the offering. Subject to market conditions and receipt of regulatory approval, the employee stock ownership plan may instead elect to purchase shares of common stock in the open market following the completion of the offering in order to fill all or a portion of the employee stock ownership plan’s intended subscription.

We also intend to implement one or more stock-based benefit plans no earlier than six months after completion of the conversion.  Stockholder approval of these plans will be required, and the stock-based benefit plans cannot be implemented until at least six months after the completion of the conversion pursuant to applicable Office of the Comptroller of the Currency regulations.  If adopted within 12 months following the completion of the conversion, and provided that upon completion of the offering Sunnyside Federal has at least a 10% tangible capital to assets ratio, the Office of the Comptroller of the Currency regulations conversion would allow for the stock-based benefit plans to reserve a number of shares of common stock equal to not more than 4% of the shares sold in the offering, or up to 27,600 shares of common stock at the maximum of the offering range, for restricted stock awards to key employees and directors, at no cost to the recipients; however, it is expected that the stock-based benefit plan will reserve 3% of the shares sold in the offering, or 20,700 shares at the maximum of the offering range, for restricted stock awards to key employees and directors, at no cost to the recipients.  If adopted

13

Table of Contents

within 12 months following the completion of the conversion, the stock-based benefit plans will also reserve a number of shares equal to not more than 10% of the shares of common stock sold in the offering, or up to 69,000 shares of common stock at the maximum of the offering range, for the exercise of stock options granted to key employees and directors. If the stock-based benefit plans are adopted after one year from the date of the completion of the conversion, the 4% and 10% limitations described above will no longer apply, and we may adopt stock-based benefit plans encompassing more than 96,600 shares of our common stock assuming the maximum of the offering range.  We have not yet determined whether we will present these plans for stockholder approval within 12 months following the completion of the conversion or whether we will present these plans for stockholder approval more than 12 months after the completion of the conversion.

The following table summarizes the number of shares of common stock and aggregate dollar value of grants (valuing each share granted at the offering price of $10.00) that would be available under one or more stock-based benefit plans if such plans are adopted within one year following the completion of the conversion and the offering.  The table shows the dilution to stockholders if all these shares are issued from authorized but unissued shares, instead of shares purchased in the open market.  The table also sets forth the number of shares of common stock to be acquired by the employee stock ownership plan for allocation to all employees.  A portion of the stock grants shown in the table below may be made to non-management employees.

(1)         The stock-based benefit plans may award a greater number of options and shares, respectively, if the plans are adopted more than 12 months after the completion of the conversion.

(2)         The actual value of restricted stock grants will be determined based on their fair value as of the date grants are made.  For purposes of this table, fair value is assumed to be the same as the offering price of $10.00 per share.  The fair value of stock options has been estimated at $2.78 per option using the Black-Scholes option pricing model with the following assumptions: a grant-date share price and option exercise price of $10.00; dividend yield of 0%; an expected option life of 10 years; a risk-free interest rate of 1.85%; and a volatility rate of 15.88%.  The actual expense of stock options granted under a stock-based benefit plan will be determined by the grant-date fair value of the options, which will depend on a number of factors, including the valuation assumptions used in the option pricing model ultimately adopted, which may or may not be the Black-Scholes model.

(3)         Represents the dilution of stock ownership interest. No dilution is reflected for the employee stock ownership plan because these shares are assumed to be purchased in the offering.

In addition to the stock-based benefit plans that we may adopt, Sunnyside Bancorp and Sunnyside Federal each intend to enter into employment agreements with Timothy D. Sullivan, our President and Chief Executive Officer and Gerardina Mirtuono, our Senior Vice President and Chief Operating Officer. See “Management — Executive Compensation” in this prospectus for a further discussion of these agreements, including their terms and potential costs, as well as a description of other benefits arrangements.

Tax Consequences

Sunnyside Federal and Sunnyside Bancorp have received an opinion of counsel, Luse Gorman Pomerenk & Schick, P.C., regarding the material federal income tax consequences of the conversion, and have received an opinion of Fontanella and Babitts regarding the material New York state tax consequences of the conversion.  As a general matter, the conversion will not be a taxable transaction for

14

Table of Contents

purposes of federal or state income taxes to Sunnyside Federal, Sunnyside Bancorp or persons eligible to subscribe in the subscription offering.  See the section of this prospectus entitled “Taxation” for additional information regarding taxes.

How You Can Obtain Additional Information — Stock Information Center

Our banking personnel may not, by law, assist with investment-related questions about the offering.  If you have questions regarding the conversion or offering, please call our Stock Information Center.  The toll-free telephone number is (877)                     .  The Stock Information Center is open Monday through Friday, between 10:00 a.m. and 4:00 p.m., Eastern Time.  The Stock Information Center will be closed on weekends and bank holidays.

15

Table of Contents

RISK FACTORS

You should consider carefully the following risk factors in evaluating an investment in the shares of common stock.

Risks Related to Our Business

Historically low interest rates may adversely affect our net interest income and profitability.

In recent years it has been the policy of the Board of Governors of the Federal Reserve System to maintain interest rates at historically low levels through its targeted federal funds rate and the purchase of mortgage-backed securities.  As a result, interest rates on the loans we have originated and the yields on securities we have purchased have been at historically low levels.  As a general matter, our interest-bearing liabilities reprice or mature more quickly than our interest-earning assets, which has resulted in increases in net interest income in the short term.  However, our ability to reduce our interest expense is limited at these interest rate levels while the average yield on our interest-earning assets may continue to decrease.  The Board of Governors of the Federal Reserve System has indicated its intention to maintain low interest rates in the near future.  Accordingly, our net interest income (the difference between interest income earned on assets and interest expense paid on liabilities) may decrease, which may have an adverse affect on our profitability.  For information with respect to changes in interest rates, see “ — Changes in interest rates could adversely affect our results of operations and financial condition.”

We incurred a net loss for the year ended December 31, 2012 and may not achieve profitability from our business strategies.

During the year ended December 31, 2012, we had a net loss of $320,000, compared to net income of $125,000 for the year ended December 31, 2011. Our ability to achieve profitability depends upon a number of factors, including general economic conditions, competition with other financial institutions, changes to the interest rate environment that may reduce our profit margins or impair our business strategy, adverse changes in the securities markets, changes in laws or government regulations, changes in consumer spending, borrowing, or saving, and changes in accounting policies. If we fail to generate additional revenue or reduce our expenses, we may continue to incur losses in 2013 and in future years and we may never generate net income. Over time, continued net losses and negative cash flow could drain our capital and endanger the safety and soundness of the Bank.

Our small size makes it more difficult for us to compete.

Our small asset size makes it more difficult to compete with other financial institutions which are generally larger and can more easily afford to invest in the marketing and technologies needed to attract and retain customers.  Because our principal source of income is the net interest income we earn on our loans and investments after deducting interest paid on deposits and other sources of funds, our ability to generate the revenues needed to cover our expenses and finance such investments is limited by the size of our loan and investment portfolios.  Accordingly, we are not always able to offer new products and services as quickly as our competitors. Our lower earnings also make it more difficult to offer competitive salaries and benefits.  In addition, our smaller customer base makes it difficult to generate meaningful non-interest income from such activities as securities and insurance brokerage.  Finally, as a smaller institution, we are disproportionately affected by the continually increasing costs of compliance with new banking and other regulations.

16

Table of Contents

We participate in a defined benefit pension plan for the benefit of certain of our employees. If we were to terminate this plan, we expect to incur a substantial expense in connection with the termination.

We participate in a defined benefit pension plan for the benefit of employees of Sunnyside Federal who were employees prior to January 1, 2008 and who were vested in their benefits in the plan as of April 15, 2008, the date on which we froze the future accrual of benefits under this plan. Based on the plan’s assets at December 31, 2012, the unfunded portion of the plan is approximately $425,000. In the future we may choose to terminate or withdraw from the plan, and the expense that would be incurred in connection with such a termination would be primarily dependent upon the value of the plan’s assets at the time of termination, general market interest rates and any additional expense imposed on termination. Based on the value of the plan’s assets and market interest rates at December 31, 2012, the approximate cost to terminate or withdraw from the plan would be $3.4 million.  If we choose to terminate the plan in the future, we would likely incur a substantial expense.

We intend to increase our emphasis on commercial and multi-family real estate and commercial lending, including implementing small business administration (SBA) lending thus increasing our credit risk.

Our business strategy is to become less reliant upon one- to four-family residential real estate lending and increase our commercial and multi-family real estate lending and commercial lending, including small business administration (SBA) lending.  At December 31, 2012, commercial and multi-family real estate comprised 10.4% of our loan portfolio.  These loans generally have more credit risk than one- to four-family residential real estate loans. Because the repayment of these loans depends on the successful management and operation of the borrower’s properties and/or related businesses, repayment of such loans can be affected by adverse conditions in the local real estate market and/or economy.

Additionally, we intend to evaluate opportunities as they arise to purchase commercial real estate and multi-family loans which would be originated by other institutions.  Historically we have enjoyed excellent asset quality and at December 31, 2012, we had $0 of non-performing loans and $246,000 of delinquent loans. However, delinquencies and loan losses related to our commercial and multi-family real estate and commercial loans could increase more than we have provided for in our allowance for loan losses as we begin to emphasize these types of loans.

If our allowance for loan losses is not sufficient to cover actual loan losses, our earnings could decrease.

We make various assumptions and judgments about the collectability of our loan portfolio, including the creditworthiness of our borrowers and the value of the real estate and other assets serving as collateral for the repayment of many of our loans.  In determining the amount of the allowance for loan losses, we review our loans and our loss and delinquency experience, and we evaluate economic conditions.  If our assumptions are incorrect, our allowance for loan losses may not be sufficient to cover probable incurred losses in our loan portfolio, resulting in additions to our allowance for loan losses.  Additions to the allowance for loan losses are established through the provision for losses on loans which is charged against income.

17

Table of Contents

Additionally, as we increase the amount of our commercial and multi-family real estate loans and commercial loans, pursuant to our business strategy to reduce our emphasis on one-to four-family residential real estate lending, the unseasoned nature of these loans will increase the risk that our allowance may be insufficient to absorb losses without significant additional provisions.  Material additions to our allowance could materially decrease our net income.  In addition, bank regulators periodically review our allowance for loan losses and may require us to increase our provision for loan losses or recognize further loan charge-offs.  Any increase in our allowance for loan losses or loan charge-offs as required by these regulatory authorities might have a material adverse effect on our financial condition and results of operations.

Changes in interest rates could adversely affect our results of operations and financial condition.

Our profitability depends substantially on our net interest income, which is the difference between the interest income earned on our interest-earning assets and the interest expense paid on our interest-bearing liabilities. Increases in interest rates may decrease loan demand and make it more difficult for borrowers to repay adjustable-rate loans. In addition, as market interest rates rise, we will have competitive pressures to increase the rates we pay on deposits.  Because interest rates we pay on our deposits would be expected to increase more quickly than the increase in the yields we earn on our interest-earning assets, our net interest income would be adversely affected.

We also are subject to reinvestment risk associated with changes in interest rates. Changes in interest rates may affect the average life of loans and mortgage-related securities. Decreases in interest rates can result in increased prepayments of loans and mortgage-related securities, as borrowers refinance to reduce borrowing costs. Under these circumstances, we are subject to reinvestment risk to the extent that we are unable to reinvest the cash received from such prepayments at rates that are comparable to the interest rates on existing loans and securities.

Strong competition within our market areas may limit our growth and profitability.

Competition in the banking and financial services industry within our market area is intense.  In our market area we compete with commercial banks, savings institutions, mortgage brokerage firms, credit unions, finance companies, mutual funds, insurance companies, and brokerage and investment banking firms operating locally and elsewhere.  Most of these competitors have substantially greater resources and lending limits than we have and offer certain services that we do not or cannot provide.  Our profitability depends upon our continued ability to successfully compete in our market area.  The greater resources and broader range of deposit and loan products offered by our competition may limit our ability to increase our interest-earning assets and profitability.  We expect competition to remain intense in the future as a result of legislative, regulatory and technological changes and the continuing trend of consolidation in the financial services industry. Technological advances, for example, have lowered barriers to entry, allowed banks to expand their geographic reach by providing services over the Internet and made it possible for non-depository institutions to offer products and services that traditionally have been provided by banks. Competition for deposits and the origination of loans could limit our ability to successfully implement our business plan, and could adversely affect our results of operations in the future.

A downturn in the local economy or a decline in real estate values could hurt our profits.

Our local economy may affect our future growth possibilities and operations in our primary market area.  Our future growth opportunities depend on the growth and stability of our regional economy and our ability to expand our market area.  In addition, nearly all of our loans are to customers in Westchester, Putnam and Rockland Counties, New York.  A downturn in our local economy may limit

18

Table of Contents

funds available for deposit and may negatively affect our borrowers’ ability to repay their loans on a timely basis, both of which could have an impact on our profitability.  Also, a decline in real estate valuations in this market would lower the value of the collateral securing our loans.

We rely on our management team for the successful implementation of our business strategy.

Our future success will be largely due to the efforts of our senior management team consisting of Timothy D. Sullivan, our President and Chief Executive Officer, Gerardina Mirtuono, our Senior Vice President and Chief Operating Officer and Gerard A. Iervolino, our Vice President and Chief Financial Officer.  The loss of services of one or more of these individuals may have a material adverse effect on our ability to implement our business plan.

Government responses to economic conditions may adversely affect our operations, financial condition and earnings.

The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) has changed the bank regulatory framework.  For example, it has created an independent Consumer Financial Protection Bureau that has assumed the consumer protection responsibilities of the various federal banking agencies, established more stringent capital standards for banks and bank holding companies and gives the Board of Governors of the Federal Reserve System exclusive authority to regulate savings and loan holding companies.  The legislation has also resulted in new regulations affecting the lending, funding, trading and investment activities of banks and bank holding companies.  The Consumer Financial Protection Bureau has broad rule-making authority for a wide range of consumer protection laws that apply to all banks and savings institutions such as Sunnyside Federal, including the authority to prohibit “unfair, deceptive or abusive” acts and practices.  Banks and savings institutions with $10.0 billion or less in assets will continue to be examined by their applicable bank regulators.  The new legislation also weakens the federal preemption available for national banks and federal savings associations, and gives state attorneys general the ability to enforce applicable federal consumer protection laws.  The Dodd-Frank Act also requires the federal banking agencies to promulgate rules requiring mortgage lenders to retain a portion of the credit risk related to loans that are securitized and sold to investors.  We expect that such rules would make it more difficult for us to sell loans into the secondary market.  Bank regulatory agencies also have been responding aggressively to concerns and adverse trends identified in examinations.  Ongoing uncertainty and adverse developments in the financial services industry and in the domestic and international credit markets, and the effect of new legislation and regulatory actions in response to these conditions, may adversely affect our operations by restricting our business activities, including our ability to originate or sell loans, modify loan terms, or foreclose on property securing loans.

The full impact of the Dodd-Frank Act on our business will not be known until all of the regulations implementing the statute are adopted and implemented. As a result, we cannot at this time predict the extent to which the Dodd-Frank Act will impact our business, operations or financial condition. However, compliance with these new laws and regulations may require us to make changes to our business and operations and will likely result in additional costs and divert management’s time from other business activities, any of which may adversely impact our results of operations, liquidity or financial condition.

Furthermore, the Board of Governors of the Federal Reserve System, in an attempt to help the overall economy, has, among other things, adopted a low interest rate policy through its targeted federal funds rate and the purchase of mortgage-backed securities.  If the Board of Governors of the Federal Reserve System increases the federal funds rate, market interest rates would likely rise, which may negatively affect the housing markets and the U.S. economic recovery.

19

Table of Contents

We operate in a highly regulated environment and may be adversely affected by changes in laws and regulations.

We are subject to extensive regulation, supervision and examination by the Office of the Comptroller of the Currency, our chartering authority, and by the Federal Deposit Insurance Corporation, as the insurer of our deposits.  As a savings and loan holding company, Sunnyside Bancorp also will be subject to regulation and oversight by the Board of Governors of the Federal Reserve System.  Such regulation and supervision govern the activities in which an institution and its holding companies may engage and are intended primarily for the protection of the insurance fund and depositors.  Regulatory authorities have extensive discretion in connection with their supervisory and enforcement activities, including the imposition of restrictions on the operation of an institution, the classification of assets by the institution and the adequacy of an institution’s allowance for loan losses.  Any change in such regulation and oversight, whether in the form of regulatory policy, regulations, or legislation, including changes in the regulations governing savings and loan holding companies, could have a material impact on Sunnyside Federal, Sunnyside Bancorp, and our operations.

The short-term and long-term impact of the changing regulatory capital requirements and anticipated new capital rules is uncertain.

On June 7, 2012, the Federal Reserve Board approved proposed rules that would substantially amend the regulatory risk-based capital rules applicable to us. The OCC subsequently approved these proposed rules on June 12, 2012. The proposed rules implement the “Basel III” regulatory capital reforms and changes required by the Dodd-Frank Act.

Various provisions of the Dodd-Frank Act increase the capital requirements of financial institutions. The proposed rules include new minimum risk-based capital and leverage ratios, which would be phased in during 2013 and 2014, and would refine the definition of what constitutes “capital” for purposes of calculating those ratios. The proposed new minimum capital level requirements applicable to Sunnyside Federal under the proposals would be: (i) a new common equity Tier 1 capital ratio of 4.5%; (ii) a Tier 1 capital ratio of 6% (increased from 4%); (iii) a total capital ratio of 8% (unchanged from current rules); and (iv) a Tier 1 leverage ratio of 4% for all institutions. The proposed rules would also establish a “capital conservation buffer” of 2.5% above the new regulatory minimum capital ratios, and would result in the following minimum ratios: (i) a common equity Tier 1 capital ratio of 7.0%, (ii) a Tier 1 capital ratio of 8.5%, and (iii) a total capital ratio of 10.5%. The new capital conservation buffer requirement would be phased in beginning in January 2016 at 0.625% of risk-weighted assets and would increase each year until fully implemented in January 2019. An institution would be subject to limitations on paying dividends, engaging in share repurchases, and paying discretionary bonuses if its capital level falls below the buffer amount. These limitations would establish a maximum percentage of eligible retained income that could be utilized for such actions. While the proposed Basel III changes and other regulatory capital requirements will likely result in generally higher regulatory capital standards, it is difficult at this time to predict when or how any new standards will ultimately be applied to Sunnyside Federal.

In addition, in the current economic and regulatory environment, bank regulators have become more likely to impose capital requirements that are more stringent than those required by applicable existing regulations.

The application of more stringent capital requirements for Sunnyside Federal could, among other things, result in lower returns on invested capital, require the raising of additional capital, and result in regulatory actions if we were to be unable to comply with such requirements.  Furthermore, the imposition of liquidity requirements in connection with the implementation of Basel III could result in our

20

Table of Contents

having to lengthen the term of our funding, restructure our business models, and/or increase our holdings of liquid assets. Implementation of changes to asset risk weightings for risk based capital calculations, items included or deducted in calculating regulatory capital and/or additional capital conservation buffers could result in management modifying its business strategy, and could limit our ability to make distributions, including paying out dividends or buying back shares.

Risks associated with system failures, interruptions, or breaches of security could negatively affect our earnings.

Information technology systems are critical to our business. We use various technology systems to manage our customer relationships, general ledger, securities, deposits, and loans. We have established policies and procedures to prevent or limit the impact of system failures, interruptions, and security breaches, but such events may still occur and may not be adequately addressed if they do occur. In addition any compromise of our systems could deter customers from using our products and services. Although we rely on security systems to provide security and authentication necessary to effect the secure transmission of data, these precautions may not protect our systems from compromises or breaches of security.

In addition, we outsource a majority of our data processing to certain third-party providers. If these third-party providers encounter difficulties, or if we have difficulty communicating with them, our ability to adequately process and account for transactions could be affected, and our business operations could be adversely affected. Threats to information security also exist in the processing of customer information through various other vendors and their personnel.

The occurrence of any system failures, interruption, or breach of security could damage our reputation and result in a loss of customers and business, subject us to additional regulatory scrutiny or expose us to litigation and possible financial liability.  Any of these events could have a material adverse effect on our financial condition and results of operations.

Risks Related to the Offering

The future price of our common stock may be less than the purchase price in the stock offering.

If you purchase shares of common stock in the stock offering, you may not be able to sell them at or above the purchase price in the stock offering.  The purchase price in the offering is based upon an independent third-party appraisal of our pro forma market value and is subject to review and approval by the Office of the Comptroller of the Currency.  The appraisal is not intended, and should not be construed, as a recommendation of any kind as to the advisability of purchasing shares of our common stock.  Our aggregate pro forma market value as reflected in the final independent appraisal may exceed the market price of our shares of common stock after the completion of the offering, which may result in our stock trading below the initial offering price of $10.00 per share.

We have never issued capital stock and there is no guarantee that a liquid market for our common stock will develop.

We have never issued capital stock and there is no established market for our common stock.  We expect that our common stock will be quoted on the OTC Bulletin Board, subject to completion of the offering and compliance with certain conditions.  Keefe, Bruyette & Woods, Inc. has advised us that it intends to make a market in shares of our common stock following the offering, but it is under no obligation to do so or to continue to do so once it begins. The development of an active trading market depends on the existence of willing buyers and sellers, the presence of which is not within our control, or

21

Table of Contents

that of any market maker.  The number of active buyers and sellers of the shares of common stock at any particular time may be limited.  Under such circumstances, you could have difficulty selling your shares of common stock on short notice, and, therefore, you should not view the shares of common stock as a short-term investment.  In addition, our public “float,” which is the total number of our outstanding shares less the shares held by our employee stock ownership plan and our directors and executive officers, is likely to be quite limited.  As a result, it is unlikely that an active trading market for the common stock will develop, or that if an active market develops, it will not continue.  Purchasers of common stock in this stock offering should have long-term investment intent and should recognize that there will be a limited trading market in the common stock.  This may make it difficult to sell the common stock after the stock offering and may have an adverse impact on the price at which the common stock can be sold.

The capital we raise in the stock offering will reduce our return on equity.  This could negatively affect the trading price of our shares of common stock.

Net income divided by average equity, known as “return on equity,” is a ratio many investors use to compare the performance of a financial institution to its peers.  For the years ended December 31, 2012 and 2011, our return (loss) on average equity was (4.97)% and 1.97%.  Following the stock offering, we expect our consolidated equity to be between $10.0 million at the minimum of the offering range and $12.6 million at the adjusted maximum of the offering range.  Based upon our loss for the year ended December 31, 2012, and these pro forma equity levels, our return on equity would be (3.46)% and (2.91)% at the minimum and adjusted maximum of the offering range, respectively. We expect our return on equity to remain low until we are able to leverage the additional capital we receive from the stock offering.  Although we will be able to increase net interest income using proceeds of the stock offering, our return on equity will be reduced by the capital raised in the stock offering, higher expenses from the costs of being a public company, and added expenses associated with our employee stock ownership plan and the stock-based benefit plan which we intend to adopt.  Until we can increase our net interest income through investment of the proceeds of the offering in higher yielding longer term assets and noninterest income, we expect our return on equity to remain relatively low compared to our peer group, which may reduce the value of our shares of common stock.

Our failure to effectively deploy the net proceeds may have an adverse effect on our financial performance and the value of our common stock.

We intend to invest between $2.2 million and $3.1 million of the net proceeds of the offering (or $3.6 million at the adjusted maximum of the offering range) in Sunnyside Federal.  We also expect to use a portion of the net proceeds we retain to fund a loan for the purchase of shares of common stock in the offering by the employee stock ownership plan.  We may use the remaining net proceeds to invest in short-term investments, repurchase shares of common stock (subject to applicable regulatory requirements), pay dividends, finance the acquisition of financial institutions (although we do not currently have any agreements or understandings regarding any specific acquisition transaction), or for other general corporate purposes.  Sunnyside Federal may use the net proceeds it receives to fund new loans, enhance its talent (including the addition of loan personnel), expand and enhance its retail banking franchise by opening or acquiring a new branch or by acquiring other financial institutions as opportunities arise, or for other general corporate purposes.  However, with the exception of the loan to the employee stock ownership plan, we have not allocated specific amounts of the net proceeds for any of these purposes, and we will have significant flexibility in determining the amount of the net proceeds we apply to different uses and the timing of such applications.  Also, certain of these uses, such as opening or acquiring new branches or acquiring other financial institutions, may require the approval of the Office of the Comptroller of the Currency and/or the Board of Governors of the Federal Reserve System.  We have not established a timetable for reinvesting the net proceeds, and we cannot predict how long it will take to reinvest the net proceeds.

22

Table of Contents

Our stock-based benefit plans will increase our costs, which will reduce our income.

We anticipate that our employee stock ownership plan will purchase 7% of the total shares of common stock sold in the stock offering, with funds borrowed from Sunnyside Bancorp. The cost of acquiring the shares of common stock for the employee stock ownership plan will be between $357,000 at the minimum of the offering range and $555,000 at the adjusted maximum of the offering range.  We will record annual employee stock ownership plan expense in an amount equal to the fair value of shares of common stock committed to be released to employees.  If shares of common stock appreciate in value over time, compensation expense relating to the employee stock ownership plan will increase.

We also intend to adopt one or more stock-based benefit plans after the stock offering that would award participants (at no cost to them) shares of our common stock and/or options to purchase shares of our common stock.  The number of shares reserved for awards of restricted stock or grants of stock options under any initial stock-based benefit plan may not exceed 4% and 10%, respectively, of the total shares sold in the offering, if these plans are adopted within 12 months after the completion of the conversion.  We may reserve shares of common stock for stock awards and stock options in excess of these amounts, provided the stock-based benefit plan is adopted more than one year following the stock offering.

Assuming the market price of the common stock is $10.00 per share; the options are granted with an exercise price of $10.00 per share; the dividend yield on the stock is 0%; the expected option life is ten years; the risk free interest rate is 1.85% (based on the ten-year Treasury rate) and the volatility rate on the shares of common stock is 15.88% (based on an index of publicly traded thrift institutions), the estimated grant-date fair value of the options using a Black-Scholes option pricing analysis is $2.78 per option granted.  Assuming this value is amortized over a five-year vesting period, the corresponding annual pre-tax expense associated with all the stock options would be $44,000 at the adjusted maximum of the offering range.  In addition, assuming that all shares of restricted stock are awarded at a price of $10.00 per share, and that the awards vest over a five-year period, the corresponding annual pre-tax expense associated with restricted stock awarded under the stock-based benefit plan would be $48,000 at the adjusted maximum of the offering range.  Moreover, if we grant shares of common stock or options in excess of these amounts, such grants would increase our costs further.

The fair value of the shares of restricted stock on the date granted under the stock-based benefit plan will be expensed by us over the vesting period of the shares.  If the shares of restricted stock to be granted under the plan are repurchased in the open market (rather than issued directly from authorized but unissued shares by Sunnyside Bancorp) and cost the same as the purchase price in the stock offering, the reduction to stockholders’ equity due to the stock-based benefit plan would be between $153,000 at the minimum of the offering range and $238,000 at the adjusted maximum of the offering range.  To the extent we repurchase shares of common stock in the open market to fund the grants of shares under the plan, and the price of such shares exceeds the offering price of $10.00 per share, the reduction to stockholders’ equity would exceed the range described above.  Conversely, to the extent the price of such shares is below the offering price of $10.00 per share, the reduction to stockholders’ equity would be less than the range described above.

The implementation of stock-based benefit plans may dilute your ownership interest.

We intend to adopt one or more stock-based benefit plans, which will allow participants to be awarded shares of common stock (at no cost to them) and/or options to purchase shares of our common stock, following the stock offering.  These stock-based benefit plans will be funded either through open market purchases of shares of common stock, if permitted, or from the issuance of authorized but

23

Table of Contents

unissued shares of common stock.  Stockholders would experience a reduction in ownership interest totaling 12.0% in the event newly issued shares are used to fund stock options and awards of shares of common stock under these plans in an amount equal to 10% and 3%, respectively, of the shares sold in the stock offering.  We may grant shares of common stock and stock options in excess of these amounts provided the stock-based benefit plan is adopted more than one year following the stock offering.  The implementation of the stock-based benefit plan will be subject to stockholder approval.  Historically, the overwhelming majority of stock-based benefit plans adopted by savings institutions and their holding companies following mutual-to-stock conversions have been approved by stockholders.

The corporate governance provisions in our articles of incorporation and bylaws and the federal stock charter of Sunnyside Federal, and the corporate governance provisions under Maryland law, may prevent or impede the holders of our common stock from obtaining representation on our board of directors and may impede takeovers of Sunnyside Bancorp that our board of directors might conclude are not in the best interest of Sunnyside Bancorp or its stockholders.

Provisions in our articles of incorporation and bylaws, as well as the federal stock charter of Sunnyside Federal, may prevent or impede holders of our common stock from obtaining representation on our board of directors and may make takeovers of Sunnyside Bancorp more difficult. For example, our board of directors is divided into three classes, only one of which will stand for election annually.  A classified board makes it more difficult for stockholders to change a majority of the directors because it generally takes at least two annual elections of directors for this to occur. In addition, our articles of incorporation include a provision that no person will be entitled to vote any shares of our common stock in excess of 10% of our outstanding shares of common stock.  This limitation does not apply to the purchase of shares by a tax-qualified employee stock benefit plan established by us. Sunnyside Federal’s federal stock charter will contain a provision that for a period of five years from the closing of the conversion, no person other than Sunnyside Bancorp may offer directly or indirectly to acquire the beneficial ownership of more than 10% of any class of equity security of Sunnyside Federal.  This limitation does not apply to the purchase or voting of shares by a tax-qualified employee stock benefit plan established by us, as well as other acquisitions specified in the federal stock charter.   In addition, our articles of incorporation and bylaws restrict who may call special meetings of stockholders and how directors may be removed from office.  Additionally, in certain instances, the Maryland General Corporation Law and our bylaws could require a supermajority vote of our stockholders to approve a merger or other business combination with a large stockholder, if the proposed transaction is not approved by a majority of our directors.  See “Restrictions on Acquisition of Sunnyside Bancorp, Inc.”

Our stock value may be negatively affected by federal regulations that restrict takeovers.

For three years following the stock offering, Office of the Comptroller of the Currency regulations prohibit any person from acquiring or offering to acquire more than 10% of our common stock without the prior written approval of the Office of the Comptroller of the Currency, or successor regulator.  See “Restrictions on Acquisition of Sunnyside Bancorp, Inc.” for a discussion of applicable Office of the Comptroller of the Currency regulations regarding acquisitions.  Certain prospective investors may choose to purchase shares of a company if they believe that the company will be acquired, thereby potentially increasing its stock value. Because federal regulations will restrict any such acquisition of us or Sunnyside Federal for at least three years after the completion of the conversion, these regulations may negatively affect our stock value.

24

Table of Contents

We are an emerging growth company within the meaning of the Securities Act, and if we decide to take advantage of certain exemptions from reporting requirements that are available to emerging growth companies, our common stock could be less attractive to investors.

We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 ( the “JOBS Act”). We are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to, reduced disclosure about our executive compensation and omission of compensation discussion and analysis, and an exemption from the requirement of holding a non-binding advisory vote on executive compensation.  We also will not be subject to certain requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes Oxley Act”), including the additional level of review of our internal control over financial reporting as may occur when outside auditors attest as to our internal control over financial reporting.  As a result, our stockholders may not have access to certain information they may deem important.  In addition, we are eligible to delay adoption of new or revised accounting standards applicable to public companies and we intend to take advantage of the benefits of this extended transition period.  Accordingly, our financial statements may not be comparable to companies that comply with such new or revised accounting standards.   If we take advantage of any of these exemptions, some investors may find our common stock less attractive, which could hurt our stock price.

We may remain an emerging growth company until the earlier of: (i) the last day of the fiscal year in which we have total annual gross revenues of $1.0 billion or more; (ii) the last day of the fiscal year following the fifth anniversary of the date of the first sale of common equity securities in the stock offering; (iii) the date on which such company has, during the previous three-year period, issued more than $1.0 billion in non-convertible debt; or (iv) the date on which we are deemed to be a “large accelerated filer” under Securities and Exchange Commission regulations (generally, at least $700 million of voting and non-voting equity held by non-affiliates).

25

Table of Contents

SELECTED FINANCIAL AND OTHER DATA
OF SUNNYSIDE FEDERAL SAVINGS AND LOAN ASSOCIATION OF IRVINGTON

The following tables set forth selected historical financial and other data of Sunnyside Federal Savings and Loan Association of Irvington for the periods and at the dates indicated.  The following is only a summary and you should read it in conjunction with the financial statements of Sunnyside Federal Savings and Loan Association of Irvington and notes beginning on page F-1 of this prospectus.  The information at December 31, 2012 and 2011 and for the years then ended is derived in part from the audited financial statements that appear in this prospectus.

26

Table of Contents

(1)                   The interest rate spread represents the difference between the weighted-average yield on interest-earning assets and the weighted-average cost of interest-bearing liabilities for the period.

(2)                   The net interest margin represents net interest income as a percent of average interest-earning assets for the period.

(3)                   The efficiency ratio represents noninterest expense divided by the sum of net interest income and noninterest income.

27

Table of Contents

RECENT DEVELOPMENTS

The following tables set forth selected historical financial and other data of Sunnyside Federal Savings and Loan Association of Irvington for the periods and at the dates indicated.  The information at December 31, 2012 is derived in part from, and should be read together with, the audited financial statements and notes thereto of Sunnyside Federal Savings and Loan Association of Irvington beginning at page F-1 of this prospectus.  The information at March 31, 2013 and for the three months ended March 31, 2013 and 2012 is unaudited, but reflects all normal recurring adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented.  The results of operations for the three months ended March 31, 2013 are not necessarily indicative of the results to be achieved for the remainder of 2013 or any other period.

(1)         Includes other assets, accrued interest receivable and deferred income taxes.

28

Table of Contents

(1)                   Ratios for the three months ended March 31, 2013 and 2012 are annualized.

(2)                   The interest rate spread represents the difference between the weighted-average yield on interest-earning assets and the weighted-average cost of interest-bearing liabilities for the period.

(3)                   The net interest margin represents net interest income as a percent of average interest-earning assets for the period.

(4)                   The efficiency ratio represents noninterest expense divided by the sum of net interest income and noninterest income.

Comparison of Financial Condition at March 31, 2013 and December 31, 2012

Total assets decreased $3.46 million, or 3.7%, to $90.6 million at March 31, 2013 from $94.1 million at December 31, 2012.  The decrease was primarily the result of decreases in cash and cash equivalents, securities available for sale and securities held to maturity, offset in part by increases in net loans.

Cash and cash equivalents decreased $2.16 million, or 39.7%, to $3.3 million at March 31, 2013 from $5.4 million at December 31, 2012, as management decided to reduce the balance sheet to improve the Association’s Tier 1 capital level. Securities available for sale decreased $2.46 million, or 7.4%, to $30.8 million at March 31, 2013 from $33.2 million at December 31, 2012 and securities held to maturity decreased $532,000, or 5.2%, to $9.6 million at March 31, 2013 from $10.2 million at December 31, 2012 reflecting a monthly call of a callable security and principal and interest payments on mortgage-backed securities.

Net loans receivable increased $1.5 million, or 3.8%, to $41.4 million at March 31, 2013 from $39.9 million at December 31, 2012.  The increase in loans receivable during the quarter was due to an increase of $1.6 million, or 4.6%, in one- to four-family residential real estate loans, offset in part by a decrease of $100,000 in other loans during the period.

29

Table of Contents

At March 31, 2013, our investment in bank-owned life insurance was $1.96 million, an increase of $16,000, from $1.94 million at December 31, 2012.  We invest in bank-owned life insurance to provide us with a funding offset for our benefit plan obligations.  Bank-owned life insurance also generally provides us noninterest income that is non-taxable.  Federal regulations generally limit our investment in bank-owned life insurance to 25% of our Tier 1 capital plus our allowance for loan losses, and we have not made any additional contributions to our bank-owned life insurance since 2002.

Other assets, consisting primarily of deferred income taxes, accrued interest receivable, prepaid FDIC insurance premiums, refundable income taxes and an annuity contract for a former director, increased $175,000, or 10.0%, to $1.9 million at March 31, 2013 from approximately $1.8 million at December 31, 2012.

Total deposits decreased $3.2 million, or 3.7%, to $83.0 million at March 31, 2013 from $86.2 million at December 31, 2012. The decrease resulted primarily from a decrease in NOW accounts of $1.5 million, or 1.3%.  Savings and club accounts decreased $497,000, or 1.7% and money market accounts decreased $140,000, or 3.7%. Additionally, certificates of deposit decreased $1.1 million, or 2.9%.  These decreases were offset in part by increases of $77,000, or 2.4%, in non-interest bearing DDA accounts.  As part of our efforts to reduce our reliance on certificates of deposit, we continued to allow higher costing certificates of deposit to run off at maturity during the first quarter of 2013, as we increased our emphasis on increasing core deposits.

We had no borrowings outstanding at March 31, 2013 or at December 31, 2012.  At March 31, 2013, we had the ability to borrow approximately $27 million from the Federal Home Loan Bank of New York, subject to our pledging sufficient assets.  Additionally, at March 31, 2013, we had the ability to borrow up to $1.0 million on a Fed Funds line of credit with Atlantic Central Bankers Bank.

Total equity decreased to $6.1 million at March 31, 2013 from $6.2 million at December 31, 2012 resulting from a net loss of $18,000 and an increase in other comprehensive loss of $106,000 during the quarter ended March 31, 2013.

Comparison of Results of Operations for the Quarters Ended March 31, 2013 and March 31, 2012

General.  We had a net loss of $18,000 for the quarter ended March 31, 2013 compared to a net loss of $30,000 for the quarter ended March 31, 2012.  The decrease in our net loss resulted primarily from a decrease in non-interest expense, which was partially offset by a decline in net interest income and non-interest income, when comparing the 2013 quarter to the 2012 quarter.

Net Interest Income.  Net interest income decreased $23,000, or 4.2%, to $531,000 for the quarter ended March 31, 2013 from $554,000 for the quarter ended March 31, 2012.  The decrease resulted from a decrease of $35,000 in interest and dividend income, partially offset by a decrease of $12,000 in interest expense on deposits quarter to quarter.  The decrease in interest and dividend income was primarily driven by declining market interest rates during the quarter ended March 31, 2013.  The average yield on our loans decreased 55 basis points and the average yield on our investment and mortgage-backed securities decreased 76 basis points during the quarter ended March 31, 2013. Our net interest rate spread decreased 29 basis points to 2.47% for the quarter ended March 31, 2013 from 2.76% for the quarter ended March 31, 2012 and our net interest margin decreased 38 basis points to 2.50% for the 2013 quarter from 2.78% for the 2012 period. Average interest-earning assets to average interest-bearing liabilities increased to 104.7% for the quarter ended March 31, 2013 from 102.1% for the prior year quarter.

30

Table of Contents

Interest and Dividend Income.  Interest and dividend income decreased $35,000 to $683,000 for the quarter ended March 31, 2013 from $718,000 for the quarter ended March 31, 2012.  The decrease resulted primarily from a $26,000 decrease in interest income on loans and a $6,000 decrease in other interest income.

Interest income on loans decreased $26,000, or 4.9%, to $505,000 for the quarter ended March 31, 2013 from $531,000 for the quarter ended March 31, 2012.  The decrease resulted primarily from a decrease of 55 basis points in the average yield on loans to 4.93% for the 2013 quarter from 5.48% for the 2012 quarter, reflecting lower market interest rates year to year, partially offset by an increase in the average balance of loans outstanding of $2.2 million, or 5.8%, to $41.0 million for the quarter ended March 31, 2013 from $38.8 million for the quarter ended March 31, 2012.

Interest and dividend income on investment and mortgage-backed securities decreased $3,000 to $176,000 for the quarter ended March 31, 2013 from $179,000 for the quarter ended March 31, 2012 due to a decrease in the average yield on securities to 1.60% during the 2013 quarter from 2.36% during the 2012 quarter, offset in part by an increase in the average balance of securities to $43.9 million for the 2013 quarter from $30.4 million for the 2012 quarter.

Interest Expense.  Interest expense, consisting entirely of the cost of interest-bearing deposits, decreased $12,000, or 7.3%, to $152,000 for the quarter ended March 31, 2013 from $164,000 for the quarter ended March 31, 2012.  The decrease in the cost of interest-bearing deposits was due to a decrease of 9 basis points in the average rate paid on interest-bearing deposits to 0.75% for the quarter ended March 31, 2013 from 0.84% for the quarter ended March 31, 2012, as we experienced decreases in the cost of all categories of interest-bearing deposits period to period (except for the cost of our NOW accounts which remained unchanged), reflecting lower market interest rates.  Although interest-bearing liabilities increased to $81.1 million at March 31, 2013 from $78.0 million at March 31, 2012, higher cost interest-bearing certificates of deposits decreased and lower-cost NOW, money market and savings accounts increased.  The change in the composition of our interest-bearing deposits, coupled with a greater effect of non-interest bearing deposits, helped reduced the cost of funds from 0.84% for the quarter ended March 31, 2012 to 0.75% for the quarter ended March 31, 2013.

Provision for Loan Losses.  We establish provisions for loan losses that are charged to operations in order to maintain the allowance for loan losses at a level believed, to the best of management’s knowledge, to cover all known and inherent losses in the portfolio both probable and reasonable to estimate at each reporting date.  There was no provision for loan losses recorded for the quarters ended March 31, 2013 and March 31, 2012.  The allowance for loan losses was $316,000 at March 31, 2013 compared to $314,000 at March 31, 2012. We had no non-performing loans at either March 31, 2013 or at March 31, 2012. During the quarter ended March 31, 2013, there was a $2,000 recovery and during the same period in 2012 there was a recovery of $1,000.

Noninterest Income.  Noninterest income decreased $10,000 to $43,000 for the quarter ended March 31, 2013 from $53,000 for the quarter ended March 31, 2012.  The decrease was primarily due to a decrease in loan fees received from brokering loans to other financial institutions, partially offset by an increase in gains on the sale of securities.

Noninterest Expense.  Noninterest expense decreased $48,000, or 7.4%, to $600,000 for the quarter ended March 31, 2013 from $648,000 for the quarter ended March 31, 2012.  Compensation and benefits increased $11,000 to $343,000 for first quarter of 2013 from

31

Table of Contents

$332,000 for the first quarter of 2012, resulting from timing differences on staff replacements.  Occupancy and equipment decreased $14,000, or 12.1%, to $101,000 for the quarter ended March 31, 2013 from $115,000 for the quarter ended March 31, 2012, as a result of a decrease in office building maintenance and expenses.  Other non-interest expenses decreased by $45,000, or 22.4%, to $156,000 for the quarter ended March 31, 2013 from $201,000 for the quarter ended March 31, 2012. The decrease was due primarily to a decrease in professional fees resulting from higher fees in the 2012 period as we engaged a consulting firm to assist with the preparation of monthly financial statements prior to the hiring of our current chief financial officer.

Income Tax Expense.  We recorded an $8,000 income tax benefit for the quarter ended March 31, 2013 and an $11,000 income tax benefit for the quarter ended March 31, 2012.  Income tax expense (benefit) is calculated based on pre-tax income or (loss).

32

Table of Contents

FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements, which can be identified by the use of words such as “estimate,” “project,” “believe,” “intend,” “anticipate,” “plan,” “seek,” “expect” and words of similar meaning. These forward-looking statements include, but are not limited to:

·                                          statements of our goals, intentions and expectations;

·                                          statements regarding our business plans, prospects, growth and operating strategies;

·                                          statements regarding the quality of our loan and investment portfolios; and

·                                          estimates of our risks and future costs and benefits.

These forward-looking statements are based on current beliefs and expectations of our management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change.

The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements:

·                                          general economic conditions, either nationally or in our market areas, that are worse than expected;

·                                          competition among depository and other financial institutions;

·                                          inflation and changes in the interest rate environment that reduce our margins or reduce the fair value of financial instruments;

·                                          adverse changes in the securities markets;

·                                          changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees and capital requirements;

·                                          our ability to enter new markets successfully and capitalize on growth opportunities;

·                                          our ability to successfully integrate de novo or acquired branches, if any;

·                                          our ability to execute on our business strategy to increase commercial real estate and multi-family lending, including implementing an SBA lending program;

·                                          changes in consumer spending, borrowing and savings habits;

·                                          changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission and the Public Company Accounting Oversight Board;

·                                          changes in our organization, compensation and benefit plans; and

33

Table of Contents

·                                          changes in the financial condition, results of operations or future prospects of issuers of securities that we own.

Because of these and other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements.  Please see “Risk Factors” beginning on page 16.

34

Table of Contents

HOW WE INTEND TO USE THE PROCEEDS FROM THE OFFERING

Although we cannot determine what the actual net proceeds from the sale of the shares of common stock in the offering will be until the offering is completed, we anticipate that the net proceeds will be between $4.3 million and $6.1 million, or $7.2 million if the offering range is increased by 15%.

We intend to distribute the net proceeds as follows:

(1)      As adjusted to give effect to an increase in the number of shares, which could occur due to a 15% increase in the offering range to reflect demand for the shares or changes in market conditions following the commencement of the offering.

(2)      Assumes that all shares of common stock are sold in the subscription and community offerings.

Payments for shares of common stock made through withdrawals from existing deposit accounts will not result in the receipt of new funds for investment but will result in a reduction of Sunnyside Federal’s deposits.  The net proceeds may vary because total expenses relating to the offering may be more or less than our estimates.  For example, our expenses would increase if a syndicated community offering were used to sell shares of common stock not purchased in the subscription and community offerings.

Sunnyside Bancorp may use the proceeds it retains from the offering:

·              to invest in securities;

·              to pay cash dividends to our stockholders;

·              to repurchase shares of our common stock subject to compliance with applicable regulatory requirements; and

·              for other general corporate purposes.

Initially, we intend to invest a substantial portion of the net proceeds in investment grade securities, including securities issued by U.S. Government agencies and mortgage-backed securities issued by U.S. Government agencies and U.S. Government-sponsored enterprises.

See “Our Dividend Policy” for a discussion of our expected dividend policy following the completion of the conversion.  Under applicable federal regulations, we may not repurchase shares of our common stock during the first year following the completion of the conversion, except when extraordinary circumstances exist and with prior regulatory approval, or except to fund management

35

Table of Contents

recognition plans (which would require notification to the Board of Governors of the Federal Reserve System) or tax qualified employee stock benefit plans.

Sunnyside Federal may use the net proceeds it receives from the offering:

·                                          to fund new loans;

·                                          to enhance existing products and services and to support the development of new products and services;

·                                          to invest in securities issued by U.S. Government agencies and mortgage-backed securities issued by U.S. Government agencies and U.S. Government-sponsored enterprises;

·                                          to fund the costs associated with the termination of our defined benefit plan;

·                                          to expand our retail banking franchise by establishing or acquiring a new branch as opportunities arise, although we do not currently have any understandings or agreements to establish or acquire any new branch offices; and

·                                          for other general corporate purposes.

Initially, a substantial portion of the net proceeds will be invested in securities issued by U.S. Government agencies and mortgage-backed securities issued by U.S. Government agencies and U.S. Government-sponsored enterprises.  We have not determined specific amounts of the net proceeds that would be used for the purposes described above.  The use of the proceeds outlined above may change based on many factors, including, but not limited to, changes in interest rates, equity markets, laws and regulations affecting the financial services industry, our relative position in the financial services industry, the attractiveness of opportunities to expand our operations through establishing or acquiring new branches, our ability to receive regulatory approval for any such expansion activities, and overall market conditions.

We expect our return on equity to decrease as compared to our performance in recent years, until we are able to reinvest effectively the additional capital raised in the stock offering.  See “Risk Factors — Risks Related to the Offering — Our failure to effectively deploy the net proceeds may have an adverse effect on our financial performance and the value of our common stock.”

36

Table of Contents

OUR DIVIDEND POLICY

Following completion of the stock offering, our board of directors will have the authority to declare dividends on our shares of common stock, subject to statutory and regulatory requirements.  However, no decision has been made with respect to the payment of dividends. In determining whether to pay a cash dividend and the amount of such cash dividend, the board of directors is expected to take into account a number of factors, including capital requirements, our financial condition and results of operations, other uses of funds for the long-term value of stockholders, tax considerations, statutory and regulatory limitations and general economic conditions.  No assurances can be given that any dividends will be paid or that, if paid, will not be reduced or eliminated in the future.  Special cash dividends, stock dividends or returns of capital, to the extent permitted by regulations and policies of the Board of Governors of the Federal Reserve System and the Office of the Comptroller of the Currency, may be paid in addition to, or in lieu of, regular cash dividends.

We will file a consolidated federal tax return with Sunnyside Federal.  Accordingly, it is anticipated that any cash distributions that we make to our stockholders would be treated as cash dividends and not as a non-taxable return of capital for federal and state tax purposes.  Additionally, pursuant to regulations of the Board of Governors of the Federal Reserve System, during the three-year period following the stock offering, we will not take any action to declare an extraordinary dividend to stockholders that would be treated by recipients as a tax-free return of capital for federal income tax purposes.

Pursuant to our articles of incorporation, we are authorized to issue preferred stock.  If we issue preferred stock, the holders thereof may have a priority over the holders of our shares of common stock with respect to the payment of dividends.  For a further discussion concerning the payment of dividends on our shares of common stock, see “Description of Capital Stock of Sunnyside Bancorp, Inc. — Common Stock.”  Dividends we can declare and pay will depend, in part, upon receipt of dividends from Sunnyside Federal, because initially we will have no source of income other than dividends from Sunnyside Federal and earnings from the investment of the net proceeds from the sale of shares of common stock retained by Sunnyside Bancorp and interest payments received in connection with the loan to the employee stock ownership plan.  Regulations of the Office of the Comptroller of the Currency impose limitations on “capital distributions” by savings institutions.  See “Regulation and Supervision — Federal Banking Regulation — Capital Distributions.”

Any payment of dividends by Sunnyside Federal to us that would be deemed to be drawn out of Sunnyside Federal’s bad debt reserves, if any, would require a payment of taxes at the then-current tax rate by Sunnyside Federal on the amount of earnings deemed to be removed from the reserves for such distribution. Sunnyside Federal does not intend to make any distribution to us that would create such a federal tax liability.  See “Taxation.”

MARKET FOR THE COMMON STOCK

Sunnyside Bancorp is a newly formed company and has never issued capital stock.  Sunnyside Federal as a mutual institution, has never issued capital stock.  Sunnyside Bancorp expects that that its common stock will be quoted on the OTC Bulletin Board.  Keefe, Bruyette & Woods, Inc. has advised us that it intends to make a market in our common stock following the conversion and stock offering, but it is under no obligation to do so.

The development of an active trading market depends on the existence of willing buyers and sellers, the presence of which is not within our control, or that of any market maker.  The number of

37

Table of Contents

active buyers and sellers of the shares of common stock at any particular time may be limited.  Under such circumstances, you could have difficulty selling your shares of common stock on short notice, and, therefore, you should not view the shares of common stock as a short-term investment.  In addition, our public “float,” which is the total number of our outstanding shares less the shares held by our employee stock ownership plan and our directors and executive officers, is likely to be quite limited.  As a result, it is unlikely that an active trading market for the common stock will develop or that, if it develops, it will continue.  Furthermore, we cannot assure you that, if you purchase shares of common stock, you will be able to sell them at or above $10.00 per share.  Purchasers of common stock in this stock offering should have long-term investment intent and should recognize that there will be a limited trading market in the common stock.  This may make it difficult to sell the common stock after the stock offering and may have an adverse impact on the price at which the common stock can be sold.

38

Table of Contents

HISTORICAL AND PRO FORMA REGULATORY CAPITAL COMPLIANCE

At December 31, 2012, Sunnyside Federal exceeded all of the applicable regulatory capital requirements and was considered “well capitalized.” The table below sets forth the historical equity capital and regulatory capital of Sunnyside Federal at December 31, 2012, and the pro forma equity capital and regulatory capital of Sunnyside Federal after giving effect to the sale of shares of common stock at $10.00 per share.  The table assumes the receipt by Sunnyside Federal of $3.89 million at the minimum of the offering proceeds at the minimum of the offering range and $4.72 million at the midpoint, maximum and adjusted maximum of the offering range.  See “How We Intend to Use the Proceeds from the Offering.”