Stock Yards Bancorp Inc.
Annual Report 2014

Plain-text annual report

2 0 1 4 S U M M A R Y A N N U A L R E P OR T 2014 Financial Highlights FOR THE YEAR Net income Cash dividends declared PER COMMON SHARE Net income per share, basic Net income per share, 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 average assets Return on average equity Efficiency $ 125.0 112.5 100.0 87.5 75.0 62.5 50.0 37.5 25.0 12.5 0.0 TOTAL REVENUE (in millions of dollars) $ 35.0 NET INCOME (in millions of dollars) 31.5 28.0 24.5 21.0 17.5 14.0 10.5 7.0 3.5 0.0 05 06 07 08 09 10 11 12 13 14 05 06 07 08 09 10 11 12 13 14 2014 2013 Change 27,170 11,670 % 28.2 10.7 $ $ 34,822 12,924 2.39 2.36 0.88 17.63 33.34 $ 2,398,430 1,773,011 2,010,823 245,425 $ 2,563,868 1,868,550 2,123,627 259,895 $ $ 1.91 1.89 0.81 15.71 31.92 $ 2,232,868 1,656,777 1,843,426 220,107 $ 2,389,262 1,721,350 1,980,937 229,444 % % % 25.1 24.9 8.6 12.2 4.4 7.4 7.0 9.1 11.5 7.3 8.6 7.2 13.3 % 1.45 14.19 59.09 % 1.22 12.34 60.82 bp 23 185 (173 ) bp = basis point = 1/100 of a percent $ 2600 2340 2080 1820 1560 1300 1040 780 520 260 0 TOTAL ASSETS (in millions of dollars) 05 06 07 08 09 10 11 12 13 14 $ 2.5 DILUTED EPS $ 1.0 DIVIDENDS PER SHARE 34.0 $ STOCK PRICE 2.0 1.5 1.0 0.5 0.0 05 06 07 08 09 10 11 12 13 14 PAGE 1 STOCK YARDS BANCORP, INC. 2014 SUMMARY ANNUAL REPORT 0.8 0.6 0.4 0.2 0.0 05 06 07 08 09 10 11 12 13 14 30.6 27.2 23.8 20.4 17.0 13.6 10.2 6.8 3.4 0.0 05 06 07 08 09 10 11 12 13 14 Note: Per share information has been adjusted as necessary for stock splits and stock dividends. “We believe Stock Yards Bancorp – as a leading community bank in economically strong markets – remains poised for growth.”There may be another edit on page 4 – “Well established” – waiting for Pat to weigh in. 2014 BY THE NUMBERS Net income for 2014 rose 28% to $34.8 million from $27.2 million for 2013. Earnings per diluted share rose 25% to $2.36 compared with $1.89 for 2013. Returns on average equity and assets both improved significantly for 2014, rising to 14.19% and 1.45%, respectively, from 12.34% and 1.22%, respectively, for 2013. Our results for 2014 translated in a very tangible way for investors in terms of enhanced stockholder value. During 2014, we raised our cash dividends to you on two occasions, resulting in a cumulative increase of 9%. With the increases in 2014, we now have raised our dividend six times over the past four years for a cumulative increase of more than 35%. Totaling $0.88 per share for the year, cash dividends to stockholders represented a payout of approximately 37% of earnings for 2014. The most recent increase in November resulted in a forward dividend yield of 2.8% as of December 31, 2014. Additionally, our strong capital position during and through the financial crisis, along with a solid earnings track record, has enabled Stock Yards Bancorp to pursue a consistent and dependable dividend strategy as a way of enhancing total return. Since our very first dividend payment to stockholders, we have never reduced or suspended dividend payments. Many banks that experienced difficult times during the crisis are now eager to overlook how their returns fared then, intent rather on highlighting recent performance during more forgiving industry conditions. In our opinion, a recent run-up in stock price is not a reliable proxy for true performance. Instead, we think it is measured over a meaningful timeframe, one that takes into account both up and down market cycles. For the 10-year period ended with 2014, Stock Yards Bancorp total return increased 92% compared with a 6% decline for a commonly used NASDAQ bank index. We believe most investors, particularly those that take a long-term view of the market, appreciate consistency in earnings growth coupled with steadily increasing dividends, as delivered by PAGE 2 STOCK YARDS BANCORP, INC. 2014 SUMMARY ANNUAL REPORT David P. Heintzman Chairman and Chief Executive Officer To Our Stockholders I am pleased to write you about the continued growth of Stock Yards Bancorp. We began 2014 with a sense of optimism against the backdrop of ongoing economic recovery, an improving credit climate, and the fundamental strength of our banking footprint across our three markets. Looking back on 2014, the momentum we saw building early in the year continued to accelerate, translating into net growth in our loan portfolio of almost 9% and the strongest credit metrics we have experienced in several years. This success, together with 12% growth in our enviable investment management and trust revenue, helped drive earnings per share to a record level for the fourth consecutive year. The foregoing comments also provide a positive framework for our view ahead and point to opportunities yet to be realized. Looking forward to 2015, Stock Yards Bank remains well positioned as a premier community bank in Louisville, Indianapolis and Cincinnati and well prepared to extend its long-term record of growth, profitability and attractive shareholder returns. Stock Yards Bancorp over the past decade. We are proud that our resources for our growing loan portfolio. total return to our investors remains an enviable benchmark for many other community banks. LOAN AND DEPOSITS As a premier community bank and a trusted partner to businesses and consumers for more than 110 years, Stock Yards Bank & Trust Company is well positioned as an attractive alternative to super-regional and national banks that dominate our market. Known for a responsive, As we look ahead to 2015, we remain confident and excited about the opportunities for our company to grow market share. Already this year, we have opened one new branch location on the south side of Indianapolis and plan to open two additional branches by midyear in northern Kentucky, a part of the Cincinnati metropolitan area. This strategic expansion extends our footprint in both of these attractive markets and helps us capitalize on local conditions that mesh well with our style of community banking. Equally important, it ensures that we remain at the industry forefront by addressing all the banking channels that our customers use, balancing the desire for emerging technology alongside traditional, face-to-face service from knowledgeable representatives. FEE REVENUE customer-driven approach to service, our bank offers an unmatched combination of service excellence, capabilities and products that continues to maintain the loyalty of existing customers and gain new customers in Louisville, Indianapolis and Cincinnati. During 2014, we were pleased to see ongoing expansion of our non-interest income, which increased to approximately $39.2 million and represented about 32% of total revenue. Leading the way in this growth was revenue from our investment management and trust During 2014, our lenders achieved a 10% increase in loan production, department, branded as our Wealth Management Group, which marking the second consecutive year of record loan production for operates in all three of our markets. It has continued to expand the Bank. Driven by continued expansion of our commercial loan beyond traditional investment management and trust services to portfolio, this growth resulted in a net increase in our portfolio of provide comprehensive almost 9% for 2014. Notably, each of our markets participated in financial services that now that success. Like 2013, early repayments of loans continued to exert include financial and some pressure on overall loan growth in 2014. retirement planning, life and disability insurance, and business succession planning. Of course, a growing loan portfolio is only part of the equation in delivering solid, long-term financial performance, as is the case with Stock Yards Bancorp. Throughout 2014, we experienced steady and ongoing improvements in credit quality and, in turn, reductions in Our Wealth Management credit costs. Last year, many of the measures we use to assess the Group, which had assets strength and stability of our portfolio returned to their strongest under management levels since 2008, enabling us to reduce our provision for loan losses totaling $2.3 billion at the as well as our allowance for loan losses. end of 2014, produced a Supporting our growth during 2014, we were pleased to see our deposit base expand in lockstep with our lending activities. These deposits, increasing 7% to $2.12 billion, supply ample funding record $18.2 million in revenue for 2014, representing an increase of 12% from 2013 fee revenue. Accounting for almost half of our total fee revenue for the year, our Wealth Management Group delivers tangible value to you, our stockholders. Ranking among the top 150 trust departments in the country based on revenue, it distinguishes CONCLUSION Stock Yards Bank & Trust from most community banks in terms of With another year of record results, we enter 2015 with solid both size and capabilities and provides us with a significant source of momentum and a sense of optimism about growth opportunities for recurring revenue. Most other community banks do not possess our company in the coming year. Our lending pipeline remains solid, these capabilities and, thus, are now experiencing considerable and we expect to increase our visibility in 2015 with the opening of pressure on fee revenue. Coming off the strongest year in its history, it will be a challenge for the Wealth Management Group to top that performance in 2015, but we believe the infrastructure we have built will continue to produce solid results in the year ahead. Well established in Louisville, we are excited about the opportunities we see in Indianapolis and Cincinnati, as we further leverage our combined banking and wealth management services in those markets. GOODBYES AND HELLOS three branch locations. Not only will additional branches make us more convenient to customers, they also will position us to increase our market share as we execute on growth strategies in areas surrounding each location. And while growth for our Wealth Management Group will be more challenging in 2015, it still will continue to factor significantly in our financial results and provide strategic diversity to our revenue streams. With this outlook, we believe Stock Yards Bancorp – as a leading community bank in economically strong markets – remains poised for growth as the overall business climate continues to improve. Moreover, our strong At midyear 2014, we experienced a changing of the guard at Stock capital base provides us with the financial flexibility to pursue Yards Bank & Trust with the retirement of Gregory Hoeck, head of our growth opportunities as they arise and positions us to extend our retail banking operations since 1998. Over the past 16 years, Greg record of steadily higher dividend payments as we strive to further worked to enhance the Bank's reputation for superior customer enhance stockholder value. service, and we appreciate his many contributions. He approached his work with great enthusiasm and clearly played an important role in our continued growth. We are grateful to have had Greg on our team. On behalf of the Board of Directors, management and our employees, please accept our gratitude for your support and for the confidence you express in our company through your continued share ownership. In saying goodbye to Greg last year, we were fortunate to find his replacement within our very ranks, as we promoted Michael Croce to David P. Heintzman Executive Vice President and Director of Retail Banking. Mike was Chairman and Chief Executive Officer most recently our Division Manager of Business Banking. He joined us in 2004 to develop and manage the business banking group after serving in business banking roles at other super-regional banks. We are confident that under Mike's leadership, Stock Yards Bank will continue to set the standard for banking capabilities and service in our markets. “Our record results for 2014 translated in a very tangible way for investors in terms of enhanced stockholder value.”2014 BY THE NUMBERS Net income for 2014 rose 28% to $34.8 million from $27.2 million for 2013. Earnings per diluted share rose 25% to $2.36 compared with $1.89 for 2013. Returns on average equity and assets both improved significantly for 2014, rising to 14.19% and 1.45%, respectively, from 12.34% and 1.22%, respectively, for 2013. Our results for 2014 translated in a very tangible way for investors in terms of enhanced stockholder value. During 2014, we raised our cash dividends to you on two occasions, resulting in a cumulative increase of 9%. With the increases in 2014, we now have raised our dividend six times over the past four years for a cumulative increase of more than 35%. Totaling $0.88 per share for the year, cash dividends to stockholders represented a payout of approximately 37% of earnings for 2014. The most recent increase in November resulted in a forward dividend yield of 2.8% as of December 31, 2014. Additionally, our strong capital position during and through the financial crisis, along with a solid earnings track record, has enabled Stock Yards Bancorp to pursue a consistent and dependable dividend strategy as a way of enhancing total return. Since our very first dividend payment to stockholders, we have never reduced or suspended dividend payments. Many banks that experienced difficult times during the crisis are now eager to overlook how their returns fared then, intent rather on highlighting recent performance during more forgiving industry conditions. In our opinion, a recent run-up in stock price is not a reliable proxy for true performance. Instead, we think it is measured over a meaningful timeframe, one that takes into account both up and down market cycles. For the 10-year period ended with 2014, Stock Yards Bancorp total return increased 92% compared with a 6% decline for a commonly used NASDAQ bank index. We believe most investors, particularly those that I am pleased to write you about the continued growth of Stock Yards Bancorp. We began 2014 with a sense of optimism against the backdrop of ongoing economic recovery, an improving credit climate, and the fundamental strength of our banking footprint across our three markets. Looking back on 2014, the momentum we saw building early in the year continued to accelerate, translating into net growth in our loan portfolio of almost 9% and the strongest credit metrics we have experienced in several years. This success, together with 12% growth in our enviable investment management and trust revenue, helped drive earnings per share to a record level for the fourth consecutive year. The foregoing comments also provide a positive framework for our view take a long-term view of ahead and point to opportunities yet to be realized. Looking forward to the market, appreciate 2015, Stock Yards Bank remains well positioned as a premier community bank in Louisville, Indianapolis and Cincinnati and well prepared to extend its long-term record of growth, profitability and attractive shareholder returns. consistency in earnings growth coupled with steadily increasing dividends, as delivered by Stock Yards Bancorp over the past decade. We are proud that our total return to our investors remains an enviable benchmark for many other community banks. LOAN AND DEPOSITS As a premier community bank and a trusted partner to businesses and consumers for more than 110 years, Stock Yards Bank & Trust Company is well positioned as an attractive alternative to super-regional and national banks that dominate our market. Known for a responsive, customer-driven approach to service, our bank offers an unmatched combination of service excellence, capabilities and products that continues to maintain the loyalty of existing customers and gain new customers in Louisville, Indianapolis and Cincinnati. During 2014, our lenders achieved a 10% increase in loan production, marking the second consecutive year of record loan production for the Bank. Driven by continued expansion of our commercial loan portfolio, this growth resulted in a net increase in our portfolio of almost 9% for 2014. Notably, each of our markets participated in that success. Like 2013, early repayments of loans continued to exert some pressure on overall loan growth in 2014. Of course, a growing loan portfolio is only part of the equation in delivering solid, long-term financial performance, as is the case with Stock Yards Bancorp. Throughout 2014, we experienced steady and ongoing improvements in credit quality and, in turn, reductions in credit costs. Last year, many of the measures we use to assess the strength and stability of our portfolio returned to their strongest levels since 2008, enabling us to reduce our provision for loan losses as well as our allowance for loan losses. Supporting our growth during 2014, we were pleased to see our deposit base expand in lockstep with our lending activities. These deposits, increasing 7% to $2.12 billion, supply ample funding PAGE 3 STOCK YARDS BANCORP, INC. 2014 SUMMARY ANNUAL REPORT resources for our growing loan portfolio. As we look ahead to 2015, we remain confident and excited about the opportunities for our company to grow market share. Already this year, we have opened one new branch location on the south side of Indianapolis and plan to open two additional branches by midyear in northern Kentucky, a part of the Cincinnati metropolitan area. This strategic expansion extends our footprint in both of these attractive markets and helps us capitalize on local conditions that mesh well with our style of community banking. Equally important, it ensures that we remain at the industry forefront by addressing all the banking channels that our customers use, balancing the desire for emerging technology alongside traditional, face-to-face service from knowledgeable representatives. FEE REVENUE During 2014, we were pleased to see ongoing expansion of our non-interest income, which increased to approximately $39.2 million and represented about 32% of total revenue. Leading the way in this growth was revenue from our investment management and trust department, branded as our Wealth Management Group, which operates in all three of our markets. It has continued to expand beyond traditional investment management and trust services to provide comprehensive financial services that now include financial and retirement planning, life and disability insurance, and business succession planning. the year, our Wealth total fee revenue for almost half of our “Accounting for Management Group stockholders.” delivers tangible value to you, our Our Wealth Management Group, which had assets under management totaling $2.3 billion at the end of 2014, produced a record $18.2 million in revenue for 2014, representing an increase of 12% from 2013 fee revenue. Accounting for almost half of our total fee revenue for the year, our Wealth Management Group delivers tangible value to you, our stockholders. Ranking among the top 150 trust departments in the country based on revenue, it distinguishes CONCLUSION Stock Yards Bank & Trust from most community banks in terms of With another year of record results, we enter 2015 with solid both size and capabilities and provides us with a significant source of momentum and a sense of optimism about growth opportunities for recurring revenue. Most other community banks do not possess our company in the coming year. Our lending pipeline remains solid, these capabilities and, thus, are now experiencing considerable and we expect to increase our visibility in 2015 with the opening of pressure on fee revenue. Coming off the strongest year in its history, it will be a challenge for the Wealth Management Group to top that performance in 2015, but we believe the infrastructure we have built will continue to produce solid results in the year ahead. Well established in Louisville, we are excited about the opportunities we see in Indianapolis and Cincinnati, as we further leverage our combined banking and wealth management services in those markets. GOODBYES AND HELLOS three branch locations. Not only will additional branches make us more convenient to customers, they also will position us to increase our market share as we execute on growth strategies in areas surrounding each location. And while growth for our Wealth Management Group will be more challenging in 2015, it still will continue to factor significantly in our financial results and provide strategic diversity to our revenue streams. With this outlook, we believe Stock Yards Bancorp – as a leading community bank in economically strong markets – remains poised for growth as the overall business climate continues to improve. Moreover, our strong At midyear 2014, we experienced a changing of the guard at Stock capital base provides us with the financial flexibility to pursue Yards Bank & Trust with the retirement of Gregory Hoeck, head of our growth opportunities as they arise and positions us to extend our retail banking operations since 1998. Over the past 16 years, Greg record of steadily higher dividend payments as we strive to further worked to enhance the Bank's reputation for superior customer enhance stockholder value. service, and we appreciate his many contributions. He approached his work with great enthusiasm and clearly played an important role in our continued growth. We are grateful to have had Greg on our team. On behalf of the Board of Directors, management and our employees, please accept our gratitude for your support and for the confidence you express in our company through your continued share ownership. In saying goodbye to Greg last year, we were fortunate to find his replacement within our very ranks, as we promoted Michael Croce to David P. Heintzman Executive Vice President and Director of Retail Banking. Mike was Chairman and Chief Executive Officer most recently our Division Manager of Business Banking. He joined us in 2004 to develop and manage the business banking group after serving in business banking roles at other super-regional banks. We are confident that under Mike's leadership, Stock Yards Bank will continue to set the standard for banking capabilities and service in our markets. “During 2014, our lenders achieved a 10% increase in loan production, marking the second consecutive year of record loan production for the Bank.”2014 BY THE NUMBERS Net income for 2014 rose 28% to $34.8 million from $27.2 million for 2013. Earnings per diluted share rose 25% to $2.36 compared with $1.89 for 2013. Returns on average equity and assets both improved significantly for 2014, rising to 14.19% and 1.45%, respectively, from 12.34% and 1.22%, respectively, for 2013. Our results for 2014 translated in a very tangible way for investors in terms of enhanced stockholder value. During 2014, we raised our cash dividends to you on two occasions, resulting in a cumulative increase of 9%. With the increases in 2014, we now have raised our dividend six times over the past four years for a cumulative increase of more than 35%. Totaling $0.88 per share for the year, cash dividends to stockholders represented a payout of approximately 37% of earnings for 2014. The most recent increase in November resulted in a forward dividend yield of 2.8% as of December 31, 2014. Additionally, our strong capital position during and through the financial crisis, along with a solid earnings track record, has enabled Stock Yards Bancorp to pursue a consistent and dependable dividend strategy as a way of enhancing total return. Since our very first dividend payment to stockholders, we have never reduced or suspended dividend payments. Many banks that experienced difficult times during the crisis are now eager to overlook how their returns fared then, intent rather on highlighting recent performance during more forgiving industry conditions. In our opinion, a recent run-up in stock price is not a reliable proxy for true performance. Instead, we think it is measured over a meaningful timeframe, one that takes into account both up and down market cycles. For the 10-year period ended with 2014, Stock Yards Bancorp total return increased 92% compared with a 6% decline for a commonly used NASDAQ bank index. We believe most investors, particularly those that I am pleased to write you about the continued growth of Stock Yards Bancorp. We began 2014 with a sense of optimism against the backdrop of ongoing economic recovery, an improving credit climate, and the fundamental strength of our banking footprint across our three markets. Looking back on 2014, the momentum we saw building early in the year continued to accelerate, translating into net growth in our loan portfolio of almost 9% and the strongest credit metrics we have experienced in several years. This success, together with 12% growth in our enviable investment management and trust revenue, helped drive earnings per share to a record level for the fourth consecutive year. The foregoing comments also provide a positive framework for our view take a long-term view of ahead and point to opportunities yet to be realized. Looking forward to the market, appreciate 2015, Stock Yards Bank remains well positioned as a premier community bank in Louisville, Indianapolis and Cincinnati and well prepared to extend its long-term record of growth, profitability and attractive shareholder returns. consistency in earnings growth coupled with steadily increasing dividends, as delivered by Stock Yards Bancorp over the past decade. We are proud that our resources for our growing loan portfolio. total return to our investors remains an enviable benchmark for many other community banks. LOAN AND DEPOSITS As a premier community bank and a trusted partner to businesses and consumers for more than 110 years, Stock Yards Bank & Trust Company is well positioned as an attractive alternative to super-regional and national banks that dominate our market. Known for a responsive, As we look ahead to 2015, we remain confident and excited about the opportunities for our company to grow market share. Already this year, we have opened one new branch location on the south side of Indianapolis and plan to open two additional branches by midyear in northern Kentucky, a part of the Cincinnati metropolitan area. This strategic expansion extends our footprint in both of these attractive markets and helps us capitalize on local conditions that mesh well with our style of community banking. Equally important, it ensures that we remain at the industry forefront by addressing all the banking channels that our customers use, balancing the desire for emerging technology alongside traditional, face-to-face service from knowledgeable representatives. FEE REVENUE customer-driven approach to service, our bank offers an unmatched combination of service excellence, capabilities and products that continues to maintain the loyalty of existing customers and gain new customers in Louisville, Indianapolis and Cincinnati. During 2014, we were pleased to see ongoing expansion of our non-interest income, which increased to approximately $39.2 million and represented about 32% of total revenue. Leading the way in this growth was revenue from our investment management and trust During 2014, our lenders achieved a 10% increase in loan production, department, branded as our Wealth Management Group, which marking the second consecutive year of record loan production for operates in all three of our markets. It has continued to expand the Bank. Driven by continued expansion of our commercial loan beyond traditional investment management and trust services to portfolio, this growth resulted in a net increase in our portfolio of provide comprehensive almost 9% for 2014. Notably, each of our markets participated in financial services that now that success. Like 2013, early repayments of loans continued to exert include financial and some pressure on overall loan growth in 2014. retirement planning, life and disability insurance, and business succession planning. Of course, a growing loan portfolio is only part of the equation in delivering solid, long-term financial performance, as is the case with Stock Yards Bancorp. Throughout 2014, we experienced steady and ongoing improvements in credit quality and, in turn, reductions in Our Wealth Management credit costs. Last year, many of the measures we use to assess the Group, which had assets strength and stability of our portfolio returned to their strongest under management levels since 2008, enabling us to reduce our provision for loan losses totaling $2.3 billion at the as well as our allowance for loan losses. end of 2014, produced a Supporting our growth during 2014, we were pleased to see our deposit base expand in lockstep with our lending activities. These deposits, increasing 7% to $2.12 billion, supply ample funding record $18.2 million in revenue for 2014, representing an increase of 12% from 2013 fee revenue. Accounting for almost half of our total fee revenue for the year, our Wealth Management Group delivers tangible value to you, our stockholders. Ranking among the top 150 CONCLUSION With another year of record results, we enter 2015 with solid momentum and a sense of optimism about growth opportunities for our company in the coming year. Our lending pipeline remains solid, and we expect to increase our visibility in 2015 with the opening of three branch locations. Not only will additional branches make us more convenient to customers, they also will position us to increase our market share as we execute on growth strategies in areas surrounding each location. And while growth for our Wealth Management Group will be more challenging in 2015, it still will continue to factor significantly in our financial results and provide strategic diversity to our revenue streams. With this outlook, we believe Stock Yards Bancorp – as a leading community bank in economically strong markets – remains poised for growth as the overall business climate continues to improve. Moreover, our strong capital base provides us with the financial flexibility to pursue growth opportunities as they arise and positions us to extend our record of steadily higher dividend payments as we strive to further enhance stockholder value. On behalf of the Board of Directors, management and our employees, please accept our gratitude for your support and for the confidence you express in our company through your continued share ownership. David P. Heintzman Chairman and Chief Executive Officer trust departments in the country based on revenue, it distinguishes Stock Yards Bank & Trust from most community banks in terms of both size and capabilities and provides us with a significant source of recurring revenue. Most other community banks do not possess these capabilities and, thus, are now experiencing considerable pressure on fee revenue. Coming off the strongest year in its history, it will be a challenge for the Wealth Management Group to top that performance in 2015, but we believe the infrastructure we have built will continue to produce solid results in the year ahead. Well established in Louisville, we are excited about the opportunities we see in Indianapolis and Cincinnati, as we further leverage our combined banking and wealth management services in those markets. GOODBYES AND HELLOS At midyear 2014, we experienced a changing of the guard at Stock Yards Bank & Trust with the retirement of Gregory Hoeck, head of our retail banking operations since 1998. Over the past 16 years, Greg worked to enhance the Bank's reputation for superior customer service, and we appreciate his many contributions. He approached his work with great enthusiasm and clearly played an important role in our continued growth. We are grateful to have had Greg on our team. In saying goodbye to Greg last year, we were fortunate to find his replacement within our very ranks, as we promoted Michael Croce to Executive Vice President and Director of Retail Banking. Mike was most recently our Division Manager of Business Banking. He joined us in 2004 to develop and manage the business banking group after serving in business banking roles at other super-regional banks. We are confident that under Mike's leadership, Stock Yards Bank will continue to set the standard for banking capabilities and service in our markets. PAGE 4 STOCK YARDS BANCORP, INC. 2014 SUMMARY ANNUAL REPORT “Looking forward to 2015, Stock Yards Bank remains well positioned as a premier community bank in Louisville, Indianapolis and Cincinnati.”STOCK YARDS BANCORP, INC. Selected Consolidated Financial Data (Dollars in thousands, except per share data) 2014 2013 2012 2011 2010 As of and for the year ended December 31, INCOME STATEMENT Net interest income Provision for loan losses 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 average loans Allowance for loan losses to average loans Average equity to average assets Tier 1 risk-based capital Total risk-based capital Leverage $ $ 83,757 (400) 39,155 73,209 34,822 2.39 2.36 0.88 17.63 33.34 $ 1,868,550 24,920 2,563,868 2,123,627 259,895 $ 1,773,011 2,398,430 2,010,823 245,425 $ $ 77,298 6,550 39,002 71,352 27,170 1.91 1.89 0.81 15.71 31.92 $ 1,721,350 28,522 2,389,262 1,980,937 229,444 $ 1,656,777 2,232,868 1,843,426 220,107 $ $ $ $ 73,950 11,500 38,457 65,472 25,801 1.86 1.85 0.77 14.74 22.42 1,584,594 31,881 2,148,262 1,781,693 205,075 1,563,918 2,070,967 1,659,594 197,551 $ $ $ $ 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 $ $ $ 66,879 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 1,529,556 1,959,609 1,549,708 179,638 $ 1,469,116 1,847,452 1,454,239 163,572 % 1.45 14.19 3.75 % 0.64 0.70 0.18 1.41 10.23 12.63 13.86 10.26 % 1.22 12.34 3.74 % 1.33 1.19 0.60 1.72 9.86 12.29 13.54 9.75 % 1.25 13.06 3.94 % 1.90 1.74 0.60 2.04 9.54 13.17 14.42 10.79 % 1.20 13.14 3.99 % 1.51 1.51 0.55 1.94 9.17 12.77 14.63 10.53 % 1.24 14.03 3.99 % 1.28 1.30 0.40 1.74 8.85 12.06 13.93 10.31 PAGE 5 STOCK YARDS BANCORP, INC. 2014 SUMMARY ANNUAL REPORT DIRECTORS Charles R. Edinger III President, J. Edinger & Son, Inc. David P. Heintzman Chairman and Chief Executive Officer, Stock Yards Bancorp, Inc. and Stock Yards Bank & Trust Company Carl G. Herde Chief Financial Officer, Baptist Healthcare System, Inc. James A. Hillebrand President, Stock Yards Bancorp, Inc. and Stock Yards Bank & Trust Company Richard A. Lechleiter President, Catholic Education Foundation Bruce P. Madison Chief Executive Officer, Plumbers Supply Company, Inc. EXECUTIVE OFFICERS David P. Heintzman Chairman and Chief Executive Officer James A. Hillebrand President Kathy C. Thompson Senior Executive Vice President Wealth Management Group Michael J. Croce Executive Vice President Retail Banking Group Nancy B. Davis Executive Vice President Chief Financial Officer William M. Dishman III Executive Vice President Chief Risk Officer Philip S. Poindexter Executive Vice President Chief Lending Officer T. Clay Stinnett Executive Vice President Chief Strategic Officer Richard Northern Partner, Wyatt, Tarrant & Combs LLP Nicholas X. Simon President and Chief Executive Officer, Publishers Printing Company Stephen M. Priebe President, Hall Contracting of Kentucky Norman Tasman President, Tasman Industries, Inc. and Tasman Hide Processing, Inc. Kathy C. Thompson Senior Executive Vice President, Stock Yards Bancorp, Inc. and Stock Yards Bank & Trust Company 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 Fourth Street Cincinnati, Ohio 45202 (513) 824-6100 PAGE 6 STOCK YARDS BANCORP, INC. 2014 SUMMARY ANNUAL REPORT Common Stock Stock Yards Bancorp, Inc.’s common stock trades on the NASDAQ Global Select Market under the symbol SYBT. Forms 10-K And 10-Q Stock Yards 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, Stock Yards Bancorp, Inc., nancy.davis@syb.com, (502) 625-9176. Transfer Agent The transfer agent for the common stock of Stock Yards Bancorp, Inc. is: Computershare P.O. Box 30170 College Station, TX 77842-3170 (800) 368-5948 Automatic Dividend Reinvestment Service The Company’s automatic dividend reinvestment service enables stockholders to reinvest cash dividends in additional shares of Stock Yards Bancorp, Inc. stock. For additional information, contact the Transfer Agent. Mailing And Street Addresses The mailing address for Stock Yards Bancorp, Inc. is: P.O. Box 32890, Louisville, Kentucky 40232-2890. The street address is: 1040 E. Main Street, Louisville, Kentucky 40206. Internet Address The Internet address for Stock Yards Bancorp, Inc. is www.syb.com. Stockholders can find share prices, trading volume, insider trading information, and other pertinent information (see “Investor Relations”). S T O C K H O L D E R I N F O R M AT I O N 

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