iooSHg ATRUSTED PARTNER, SinCC I 9 O 4. S.Y. B A N C O R P, I N C. 2011 SUMMARY ANNUAL REPORT FOR THE YEAR Net income Cash dividends declared ^ K m ^ m ^ ^^ % 23,604 9,930 2011 Financial Highlights "Net income for 2011 increased almost 3% to $23,604,000 or $1.71 per diluted share from $22,953,000 or $1.67 per diluted share in 2010. Total assets increased 8% during 2011, reaching more than $2 billion at year's end - another milestone for our company." PER COMMON SHARE Net income per share, basic Net income per sliare, diluted Cash dividends declared Book value at year end Market price at year end AVERAGES FOR THE YEAR Total assets Loans Deposits Stockholders' equity AT YEAR END Total assets Loans Deposits Stockholders' equity RATIOS Return on avg. assets Return on avg. stockholders' equity Efficiency $110 TOTAL REVENUE (in millions of dollars) 2011 2010 Change I^^HH "T^lf^" •««««AM&« • • •m $ 1.68 1.67 0.69 12.37 24.55 —^ 2.8 % M S ^ M W ai • • •H 1.8 % 2.4 4.3 9.8 ( 1 6 . 4 |i $ 1.71 1.71 0.72 13.58 20.53 $ 1,959,609 1,529,556 1,549,708 179,638 : $ 1,847,452 1,469,116 1,454,239 163,572 ; : $ 2,053,097 1,544,845 1,617,739 187,686 $ 1,902,945 1,508,425 1,493,468 169,861 6.1 ^ 6.6 9.8,^1 ^m 7.9 % 2.4 8.3 10.5 1.20% 13.14 56.47 1.24% ( 4 )" 14.03 56.01 ^89) -1 4 6 || bp = basis point = 1/100 of a percent DILUTED EPS $1,75 1.40 0.35 99 88 77 66 55 44 33 22 11 0 $ 2 2 00 1980 1760 1540 1320 1100 880 660 440 220 0 02 03 04 05 06 07 08 09 10 11 0 0 0 '" 02 03 04 05 06 07 08 09 10 11 TOTAL ASSETS (in millions of dollars) ; 0 7 5r D I V I D E N DS PER S H A RE 0.60 0.30 0.15 0.00 ll 02 03 04 05 06 07 08 09 10 11 02 03 04 05 06 07 08 09 10 11 PAGE1 Note: Per share information has been adjusted as necessary for stock splits and stock dividends. To Our Stockholders It seems the pace of change in all things economic and geopolitical has sped out of control during the past year. We've learned that our world is more interconnected than ever before, and we now give serious consideration to the ebb and flow of commerce on the other side of the world. We worry about the weather overseas and how it will affect international energy supplies. We have newfound concern for supply chain disruptions at multinational corporations and their impact on our own imports and exports. The world seems substantially more complex than ever before, with growing uncertainty and unpredictability. For sure, the past several years have been a wild ride for banks and other financial institutions. While growing up, I heard many stories from my grandparents about experiences from the Great Depression, and I realize that we will have similar tales to pass along to coming generations regarding the "Great Recession." We'll have to concede that the real estate bubble of the early 21st century was more damaging than most could have predicted, and when real estate enters into the kind of freefall it did after peaking in 2007, no one is immune. And there's plenty of blame to go around, including a share for the government, the banking industry. Wall Street and even consumers. Fortunately, even in these tumultuous times, some things have remained solid and steady, like the performance of your company Earnings for 2011 were strong on a relative basis, reaching a record level despite the economic headwinds we continued to face and which clearly have limited our upside growth potential over the past few years. Net income for 2011 increased almost 3% to $23,604,000 or $1.71 per diluted share from $22,953,000 or $1.67 per diluted share in 2010. Total assets increased 8% during 2011, reaching more than $2 billion at year's end - another milestone for our company Wavering economic news throughout 2011, along with continued political wrangling on how to reign in deficit spending both here and abroad, provided fertile ground for a topsy-turvy stock market last year - especially for financial stocks. In this environment, our track record for steady, stable and prudent growth did not translate into favorable returns to our stockholders during 2011 as it has in years past. During 2011, PAGE 2 David P. Heintzman Chairman and Chief Executive Officer "Fortunately, even in these tumultuous times, some things have remained solid and steady, like the performance of your company." "After we initiated cash dividends, we have never once reduced these payments and, in fact, against the backdrop of one ofthe worst times in history for the banking industry, our Board has increased the dividend four times over the past five years, with the most recent increase occurring in February 2012." our stock price declined 16%, but this compared with an almost 25% drop in KBW Bank Index, a widely followed benchmark for bank stock performance. While we obviously are concerned about our stock performance, our focus always has been fixed on long-term performance, and we believe that most of our stockholders, sharing that sentiment, have invested with us for the long haul. That said, we also know with certainty that current income is important to our stockholders, and in this regard we are pleased that our company has remained steadfast in the payment of dividends - without cuts, suspensions or other disruptions that have characterized so many other financial institutions since the onset of the Great Recession. After we initiated cash dividends, we have never once reduced these payments and, in fact, against the backdrop of one of the worst times in history for the banking industry, our Board has increased the dividend four times over the past five years, with the most recent increase occurring in February 2012. We are gratified to know that the investment community continues to take note of our company's steady progress through difficult times. Again in 2011, S.Y. Bancorp was named to a list of the top 200 community banks in the country, as published by U.S Banker magazine, once again landing in the top 20 of this distinguished group. Recognition of our company also came from KBW, a leading investment bank specializing in the financial services sector, which named S.Y. Bancorp to its Bank Honor Roll for the eighth consecutive year. Lastly, Sandler O'Neill -1- Partners, another prestigious firm specializing in financial stocks, added our company to its Bank and Thrift Sm-AII Stars list for 2011. Tributes of this nature - from professionals who specialize in the banking industry - affirm the strategies we have carefully developed and consistently pursued to grow our business prudently, and with careful consideration given to minimizing the risk we take in doing so. Does this mean we haven't taken some lumps along the way? Of course not, and as I mentioned earlier, no one in this industry has escaped without at least some fallout from the real estate bubble. Our credit quality metrics, while still significantly better than industry statistics for banks of our size, clearly don't compare favorably with historical levels. Accordingly, we intend to maintain a cautious stance toward credit risk until there are convincing signs of a meaningful economic recovery Since we have not become entangled in some of the thorny issues that confront many banks today, we have been able instead to maintain a clear focus on the market dynamics, long-term strategies and growth-drivers that have contributed to our steady, consistent performance through the years. We have successfully transported our community banking model, one that merges an extensive retail branch network with service-oriented lending focused on business owners and affluent individuals, from our hometown of Louisville to Indianapolis and Cincinnati, and we are pleased PAGES by the way these new markets are developing for us. We are fortunate to have strong capital base that allows us to fulfill our corporate mission, pursue these types of new opportunities, all while providing safety and security for our depositors. Importantly, each of our markets has proven to be more resilient and stable compared with many other areas of the country, which has contributed to our ability to avoid the out-sized losses, capital problems, dividend cuts and government intervention that you hear so much about today Of course, our conservative credit culture also has played a key role in our track record for consistent results through up-and-down markets. At the same time, the balance and diversity in our business additionally support our steady performance. Our investment management and trust department, with $1.7 billion of assets under management at year's end, represents a distinctive advantage for us in the community bank arena and continues to drive a high level of non-interest income to complement the revenue stream we receive from banking and lending activities, This department continues to rank in the top 100 of bank-owned trust departments, based on revenues, and contributed 20% of our net income this past year. So how does our future look? Because we have seen some signs of an improving economy, especially in Louisville, our confidence in a recovery is growing. However, we are still not out of the woods, as the real estate market is still stalled and many businesses continue to struggle. Clearly it will take time for a strengthening environment to gain traction and become truly sustainable, so until that time comes, we intend to remain in a conservative posture regarding potential risk in our portfolio and our efforts to maintain strong credit quality As a side note, I recently completed my first year on the Board of Directors of the Louisville Branch of the Federal Reserve Bank of St. Louis. Two bankers serve on this Board, and I am honored to have been one of those selected. This appointment has broadened my views of the economy and the knowledge gained has benefited me at the Bank. Also, I would like to take this opportunity to recognize the long service of James E. Carrico, who, after having reached the mandatory retirement age of 70, will retire from our Board of Directors at the 2012 annual meeting of stockholders in April. A director since 1978, Jim brought an experienced, practical and constructive perspective to our board, and we have benefited from his untiring support and wise advice through the years. Well done, Jim! In closing, and on behalf of our Directors and employees, I would like to thank you for your ongoing commitment to our company as a stockholder We acknowledge the trust you have placed in management and this Company In that regard, we believe there are several considerations that support your confidence in S.Y. Bancorp. First, we have a time-proven track record, delivered with straight-forward financial reporting. Our cash dividend has remained consistent and is growing, and still we have a strong capital position to fuel growth and provide stability We have a diversified business model with new business opportunities, the ability to continue to leverage our investment management and trust business, and an expanding presence in new markets. In summary, I believe we are positioned for sustainable, profitable growth, I look forward to updating you throughout and 2012 on how these fundamentals play out to benefit our stockholders. David P. Heintzman Chairman and Chief Executive Officer PAGE 4 S.Y. BANCORP, INC. Selected Consolidated Financial Data (Dollars in thousands, except per share data) jn-i -i 2010 2009 2008 2007 As of and for the year ended December 31, INCOME STATEMENT Net interest income Provision for Loan Loses Non-interest income Non-interest expenses Net income PER SHARE Basic EPS Diluted EPS Cash dividends declared Book value Market value BALANCE SHEET Total loans Allowance for loan losses Total assets Total deposits Stockholders'equity AVERAGE BALANCE SHEET Total loans Total assets Total deposits Stockholders'equity EARNINGS PERFORMANCE Return on average assets Return on average equity Net interest margin, full tax equivalent KEY RATIOS Non-performing loans to total loans Non-performing assets to total assets Net loan charge-offs to total assets Allowance for loan losses to avg. loans Avg. stockholders' equity to avg. assets Tier 1 risk-based capital Total risk-based capital Leverage $ $ 70,732 12,600 33,244 59,581 23,604 1.71 1.71 0.72 13.58 20.53 $ 1,544,845 29,745 2,053,097 1,617,739 187,686 $ 1,529,556 1,959,609 1,549,708 179,638 65,879 11,469 33,739 57,131 22,953 1.68 1.67 0.69 12.37 24.55 1,508,425 25,543 1,902,945 1,493,468 169,861 1,469,116 1,847,452 1,454,239 163,572 58,675 12,775 30,036 52,695 16,308 1.20 1.19 0.68 11.29 21.35 1,435,462 20,000 1,791,479 1,418,184 153,614 1,391,644 1,717,474 1,331,936 150,721 1.20 % 13.14 3.99 1.24% 14.03 3.99 0.95% 10.82 3,74 1.51% 1.51 0.55 1.94 9.17 12.77 14.63 10.53 1,28% 1.30 0.40 1.74 8.85 12.06 13.93 10.31 0.84' 0.77 0,59 1.44 8,78 11.66 13.55 10,16 56,858 4,050 28,243 49,319 21,676 1.61 1.59 0.68 10.72 27.50 1,349,637 15,381 1,628,763 1,270,925 144,500 1,295,711 1,567,967 1,216,833 136,112. 1.38% 15.93 3.99 0.35% 0.39 0,16 1,19 8,68 11,90 13,67 10,62 PAGES S.Y. BANCORP, INC. 2011 SUMMARY ANNUAL REPORT 1,201,938 13,450 1,482,219 1,106,707 1 3 3 , 0 2 4| 1,159,101 1,413,614 1,081,483 139,357 m 1.70% 17.26 4.25 0,28% 0,49 0,20 1,16 9,86 9,82 10,82 9.21 •HBII ^n 1 I DIRECTORS David H. Brooks Retired; Former Chairman and Chief Executive Officer, S.Y, Bancorp, Inc. and Stock Yards Bank & Trust Company James E. Carrico Retired; Former Managing Director, Wells Fargo Insurance Services Charles R. Edinger, III President, J, Edinger & Son, Inc, David P. Heintzman Chairman and Chief Executive Officer, S.Y. Bancorp, Inc. and Stock Yards Bank & Trust Company Carl G. Herde Vice President of Finance and Chief Financial Officer, Baptist Healthcare System, Inc, James A. Hillebrand President, S.Y, Bancorp, Inc, and Stock Yards Bank & Trust Company EXECUTIVE OFFICERS David R Heintzman Chairman and Chief Executive Officer James A. Hillebrand President Kathy C. Thompson Senior Executive Vice President Wealth Management Group Nancy B. Davis Executive Vice President Chief Financial Officer William M. Dishman, III Executive Vice President Chief Risk Officer Gregory A. Hoeck Executive Vice President Retail Banking Group Philip S. Poindexter Executive Vice President Chief Credit Officer T. Clay Stinnett Executive Vice President Chief Strategic Officer Richard A. Lechleiter Executive Vice President and Chief Financial Officer, Kindred Healthcare, Inc. Bruce P. Madison Chief Executive Officer, Plumbers Supply Company, Inc, Richard Northern Partner, Wyatt, Tarrant & Combs LLP Nicholas X. Simon President and Chief Executive Officer, Publishers Printing Company Norman Tasman President, Tasman Industries, Inc, and Tasman Hide Processing, Inc, Kathy C. Thompson Senior Executive Vice President, S.Y, Bancorp, Inc, and Stock Yards Bank & Trust Company W t ^ ^ ^ ^ ^ C t t S t r ^ ^ r V ^ S , ^ ^^ LOUISVILLE - Corporate Center 1048 East Main street Louisville, Kentucky 40206 (502) 582-2571 INDIANAPOLIS - Regional Center 136 East Market Street Indianapolis, Indiana 46204 (317) 238-2800 CINCINNATI - Regional Center ,101 West Fou rth Street Cincinnati, Ohio 45202 (513) 824-6100 The Bourbon Stock Exchange Building, located at 1048 E. IVIain Street, was built adjacent to our original corporate headquarters in 1916. Stock Yards Bank purchased the building in 1997 and our Operations Group occupied the building for many years. In 2011, we began an extensive remodel - expansion project to repurpose this grand building to be the new home of our Executive Corporate Center and Commercial Banking and Business Banking Groups. PAGE 6 S.Y. B A N C O R P, I N C. STOCKHOLDER INFORMATION Common Stock S.Y. Bancorp, Inc.'s common stock trades on the NASDAQ Global Select Market under the symbol SYBT. Trust Preferred Securities S.Y. Bancorp, Inc.'s trust preferred securities trade on the NASDAQ Global Select Market under the symbol SYBTP, Forms 10-K And 10-Q S.Y, Bancorp, Inc's annual report on Form 10-K and quarterly reports on Form 10-Q, as filed with the Securities and Exchange Commission, can be found at www,syb.com (see "Investor Relations") or by writing or calling Nancy B. Davis, Executive Vice President, S,Y, Bancorp, Inc., nancydavis@syb.com, (502) 625-9176, Transfer Agent The transfer agent for the common stock of S.Y. Bancorp, Inc, is: Registrar and Transfer Company 10 Commerce Drive Cranford, NJ 07016-3572 (800) 368-5948 Automatic Dividend Reinvestment Service The Company's automatic dividend reinvestment service enables stockholders to reinvest cash dividends in additional shares of S,Y. Bancorp, Inc. stock. For additional information, contact the Transfer Agent. Mailing And Street Addresses The mailing address for S.Y. Bancorp, Inc, is: RO, Box 32890, Louisville, Kentucky 40232-2890. The street address is: 1040 E. Main Street, Louisville, Kentucky 40206, Internet Address The Internet address for S,Y, Bancorp, Inc. is www,syb,com. Stockholders can find share prices, trading volume, insider trading information, and other pertinent information (see "Investor Relations"),