Stock Yards Bancorp Inc. Annual Report 2017

Plain-text annual report

2 0 1 7 S U M M A R Y A N N U A L R E P OR T PAGE 1 2017 Financial Highlights FOR THE YEAR Net income PER COMMON SHARE Net income per share, diluted Cash dividends declared Book value at year end Market price at year end AT YEAR END Total assets Loans Deposits Stockholders’ equity RATIOS Return on average assets Return on average equity Efﬁciency $ 150 TOTAL REVENUE (in millions of dollars) 2017 2016 2015 $ 38,043 $ 41,027 $ 37,187 $ $ 1.66 0.80 14.71 37.70 3,239,646 2,409,570 2,578,295 333,644 $ $ 1.80 0.72 13.88 46.95 3,039,481 2,305,375 2,520,548 313,872 $ $ 1.65 0.64 12.80 25.19 2,816,801 2,033,007 2,371,702 286,519 % 1.25 11.61 60.86 % 1.42 13.49 57.56 % 1.44 13.55 56.81 135 120 105 90 75 60 45 30 15 0 08 09 10 11 12 13 14 15 16 17 $ 3300 2970 2640 2310 1980 1650 1320 990 660 330 0 TOTAL ASSETS (in millions of dollars) 08 09 10 11 12 13 14 15 16 17 $ 2.10 2.10 DILUTED EPS $ 0.80 DIVIDENDS PER SHARE * Diluted EPS graph (at right); Net income for 2017 included a non-cash charge of $5.9 million or $0.25 per share to revalue the Company’s net deferred asset in connection with Federal tax legislation enacted December 22, 2017. Per share information has been adjusted for the 2016 stock split. 1.89 1.89 1.68 1.68 1.47 1.47 1.26 1.26 1.05 1.05 0.84 0.84 0.63 0.63 0.42 0.42 0.21 0.21 0.00 0.00 08 09 10 11 12 13 14 15 16 17* 0.70 0.60 0.50 0.40 0.30 0.20 0.10 0.00 08 09 10 11 12 13 14 15 16 17 STOCK YARDS BANCORP, INC. 2017 SUMMARY ANNUAL REPORT “We remain grateful for your continued support, your conﬁdence in the Company and your willingness to invest in our future.”“Stock Yards Bancorp continues to pursue strategies to enhance stockholder value, including a substantial and sustained dividend payout ratio.”PAGE 2 Because of the reduction in corporate income tax rates and the timing of that change, we were required to lower the value of our net deferred tax asset in 2017, but the lower tax rate did not begin until 2018. This non-cash adjustment resulted in additional David P. Heintzman Chairman and Chief Executive Ofﬁcer To Our Stockholders With the successful conclusion of another year, I am pleased to report to you again on the exceptional performance of our company in 2017 and the dedicated efforts of our entire team in delivering ongoing growth and strong ﬁnancial results. Credit for this goes to the strategic course on which we have consistently remained: (1) stridently pursuing the highest possible level of service for our customers in everything we do, (2) building long-term relationships that prevail across generations, (3) choosing wisely the markets we serve and the talent we have brought to our team and (4) diversifying our business in ways that support long-term, consistent growth. All of this combined again in 2017 to produce record results for Stock Yards Bancorp and position our company to share our prosperity with you through increasingly higher dividends. GOOD NEWS, BAD NEWS Before any discussion of our ﬁnancial results, we must footnote the effect of tax reform late last year. With the enactment of the Tax Cuts and Jobs Act on December 22, 2017, we and many other companies faced a rare situation, one with immediate negative consequences that will be more than offset by very positive long-term consequences in the future. income tax expense in the fourth quarter of 2017 and reduced net income for the year by $5.9 million or $0.25 per diluted share. However, we believe lower tax rates will promote growth and expansion across the business spectrum, leading to higher capital investment and new job creation, both of which would be positive for our bank. Additionally, the lower statutory rate going forward will allow us to more than recoup during 2018 the adjustment we recorded in 2017, and future periods will beneﬁt from lower income taxes. This tax reform will equate to higher earnings for the Company going forward and, for you, our stockholders, the potential for growing dividends, as evidenced by a 10% increase in our dividend announced in February 2018. The timing of tax reform enactment caused net income to decline in 2017 to $38.0 million or $1.66 per diluted share compared with $41.0 million or $1.80 per diluted share for 2016, after seven consecutive years of growth following the Great Recession. We trust you will see past this aberration to the real and meaningful beneﬁts that tax reform will bring. With a lower marginal tax rate going forward, our Board intends to implement strategies to deploy tax savings in ways that grow our business and drive higher stockholder value. BY THE NUMBERS To clarify the underlying and fundamental strength of our company during 2017, consider that total revenue for 2017 increased 6% to a record $148.7 million. This improvement reﬂected a solid performance in many key aspects of our business, such as loan production and loan growth, net interest margin and wealth management and trust, and again call to mind the beneﬁt of our diversiﬁed revenue streams. Alongside these standout accomplishments, credit quality remained exceptionally strong. STOCK YARDS BANCORP, INC. 2017 SUMMARY ANNUAL REPORT On the balance sheet, total assets increased $200 million or 6% to best-performing community banks between $1 billion and $10 $3.24 billion during the year while our loan portfolio grew $104.2 billion in assets, based on six core ﬁnancial performance metrics. million or almost 5%. Supporting this growth, total deposits increased $57.7 million or 2% to $2.58 billion at December 31, 2017, as we continued to attract new customers and experience growth with existing customers across most account categories. STOCKHOLDER RETURNS STRENGTHENING OUR BOARD In December of 2017, Paul J. Bickel III joined our Board of Directors, expanding it to 12 members and furthering our efforts for succession planning and leadership continuity in view of mandatory retirements expected in 2019. As founder and President of U.S. Stock Yards Bancorp continues to pursue strategies to enhance Specialties, a commercial building supply company, he adds stockholder value, including a substantial and sustained dividend executive leadership skills and insight to our board. Considering his payout ratio. As it did in each of the previous three years, Stock Yards perspective as a longtime customer of the Bank and his deep Bancorp’s Board of Directors increased the Company’s quarterly cash connections to our city, both in terms of business initiatives and dividend twice during 2017. With the most recent dividend increase community involvement, we believe Paul will be an asset for us as we continue to develop strategies for long-term growth and success aimed at creating value for the Company’s stockholders. referenced earlier, the Company has now raised its quarterly dividend rate a total of 10 times since the beginning of 2013, resulting in a cumulative increase of 73% over a ﬁve-year period. While there are many catalysts that drive investment decisions, I think most of our stockholders are drawn by the attractive growth opportunities we pursue, the way we execute on our plans and the consistency of our returns. In my view, nothing measures the latter better than to consider a company’s performance over the long term, since the optics of using shorter timeframes can easily mask habitual underperformance. Our traditional benchmark measures total stockholder return for the latest 10-year period, which for the decade ended with 2017 stood at 213% and in stark contrast to a CONCLUSION 72% increase for a commonly used NASDAQ bank index. This plainly We are pleased with the Company’s overall progress and prosperity illustrates why, year after year, Stock Yards Bancorp ranks among during 2017. These achievements underscore the strategies we the country’s top-performing community banks. Continuous enhancement of stockholder value has been and remains an important priority for the Company. WALL STREET RECOGNITION Stock Yards Bancorp continues to earn accolades on Wall Street for its consistent performance against rigorous criteria. For many years have in place to grow our business across our markets. The diverse nature of our business and the strong lending pipeline we have developed as we move into 2018, along with the positive effect of lower tax rates in the future – both internally and across the economy, bode well for the Company’s prospects to extend its record of growth in the future. now, Stock Yards Bancorp has been named to the KBW Bank Honor We remain grateful for your continued support, your conﬁdence in Roll, an annual selection based on a bank’s 10-year performance the Company and your willingness to invest in our future. We look record. Those banks recognized for the Honor Roll, among the forward to the coming year with great enthusiasm and are eager to almost 400 nationwide having at least $500 million in total assets, capitalize on the opportunities before us. typically number less than 50 and totaled only 15 in the latest Honor Roll. The Company also has received the Raymond James Community Bankers Cup, which recognizes the top 10% of community banks in the country with assets between $500 million and $10 billion, in each of the ﬁve years since its inception. Additionally, S&P Global Market Intelligence has included the Company in its most recent annual ranking of the 100 David P. Heintzman Chairman and Chief Executive Ofﬁcer STOCK YARDS FINANCIAL SERVICES Stock Yards Financial Services complements our Wealth Management & Trust Group, providing a wide range of investment options for those seeking alternative investments to bank deposits as well as customers who want to make their own investment decisions. Stock Yards Financial Services is a important component of our non-interest income, up almost 3% in 2017 and accounting for almost 5% of the total non-interest income for the year. We are prepared for changes driven by new rules and regulations from the Department of Labor that are effective in 2018. These changes will not affect the high level of service we will continue to offer our clients. SUMMARY Clearly, we are pleased with the accomplishments of the past year and are excited about the potential to extend our success in the coming year. We have many runways for growth, many avenues for prosperity and a great corporate culture – centered around exemplary customer service and strong client relationships. This is our path forward, our direction ahead. It’s why we’ve earned the reputation as “A Trusted Partner since 1904.” James A. (Ja) Hillebrand President complementary and ancillary ﬁnancial solutions so that we may offer our customers a full range of capabilities to support their goals, ambitions and needs. A recent example of this is our consumer and small business digital lending products – Loan Express and Business Loan Express. These technology solutions allow Stock Yards Bank & Trust to provide loans online using a computer or mobile device. We continue to look for ways to provide the best access and service to all of our customers through the delivery channel they prefer. In our ongoing efforts to protect our customers and provide enhanced customer service through technology, we’ve invested in new fraud detection software to react more quickly and effectively to fraud and potential fraud – a continuing challenge for our industry. We also provide 24/7 support to customers with debit card issues or questions. In 2018, we’re scheduled to upgrade and replace all of our ATMs with the newest technology available. MORTGAGE SERVICES An important feature of the services we offer to families in our markets is mortgage lending. Home ownership is the American dream, and we are dedicated to making this dream possible. This area accounted for about 7% of our total non-interest income for 2017. In late 2017, we expanded the variety of mortgage products we offer by rolling out our new “Residential Construction to Perm” program, which simpliﬁes and streamlines the home construction process for our customers. Over the long term, our Mortgage Department continues to help diversify our revenue, smoothing and supporting long-term earnings growth. BUSINESS CREDIT CARDS We are now in our second full year of having a direct card product, which adds to our reputation for leading customer service, over and above the card brand. This product has allowed us to expand the services we have available to offer business customers with credit needs. It has been well received by our customers, and we have high expectations for its future. PRIVATE BANKING Our longstanding private banking services continue to meet the demands and needs of afﬂuent customers by concentrating all of our solutions and alternatives with one point of contact – our private bankers. In 2017, we recorded a solid performance in all markets with continued success in dental lending and medical residence lending programs, among other initiatives. Growth in private banking was especially notable in Indianapolis last year and, building on that, we expect to expand our Cincinnati private banking staff during 2018. BUSINESS BANKING Business banking is now available in all of our markets. Our business bankers are focused on small businesses, which have somewhat different needs than those of larger businesses serviced through our commercial lending area. Offering a blend of services tailored for each business, our business banking solutions package credit, savings and checking options that help small businesses achieve ﬁnancial efﬁciencies and improve proﬁtability. TREASURY MANAGEMENT SERVICES We continue to achieve solid growth in treasury services. Our treasury products and services help companies mitigate risk, improve working capital, and generate income by utilizing innovative banking technology. The treasury group’s expertise includes: payments and disbursement management, lockbox, remote deposit, Automated Clearing House (ACH), sweep accounts, liquidity and investments, information reporting and online banking. WEALTH MANAGEMENT & TRUST Our Wealth Management & Trust Group, with approximately $2.8 billion of assets under management, comprises more than 45% of the Company’s fee-based income and, thus, has been a key element of our strategy to create and grow diverse fee-based revenue streams to support predictable and reliable earnings growth over the long term. For 2017, its revenue increased 7%. The Indianapolis market was instrumental in this growth, with more than 200% growth in gross revenues, the largest increase of our three markets. Our emphasis remains on providing unparalleled service to our clients through every stage of their lives, providing a holistic ﬁnancial plan for every client. Alongside that focus, we continue to help businesses with succession planning, as well as with their corporate retirement 401(k) plans. Across this spectrum, our investment strategy for clients remains concrete as we strive to deliver attractive risk-adjusted investment results that will allow our clients to reach their goals. With a staff of more than 60 professional and support personnel, wealth management and trust continues to focus on serving the investment, ﬁnancial and trust needs of individuals, multi-generational families and institutions from our ofﬁces in Kentucky, Indiana and Ohio. This widespread presence across our banking footprint positions us for continued growth in the future. RETAIL BANKING Retail banking is an important component of what we do, day in and day out, meeting the banking needs for thousands of customers across our markets. Each of our retail ofﬁces has courteous, highly trained staff ready to solve problems and raise possibilities. Our representatives are prepared to present our customers with the solutions that best meet their ﬁnancial needs − whether it be a household checking account, a savings account for a new child, a home equity line of credit for home improvements, or the many other products and services we have to offer. Since our founding, we’ve not only expanded our physical presence, but also the depth and breadth of our ﬁnancial products and services, staying at the forefront of the evolution of banking. This is yet another way to think about our growth strategies. From basic lending and deposits, we’ve progressed by specializing in key elements of these services and adding We are pleased with the Bank’s consistent growth and expansion ramping up strongly in the fourth quarter of the year, which in Indianapolis and Cincinnati. Both markets have matured more represented one of the best quarterly performances ever for the quickly than we expected, and we will continue to expand our Bank and helped to push our total portfolio up almost 5% for presence there over the next several years. Yet, more than 10 the entire year. Building on momentum inherent in our years after exporting our business model to Indianapolis and business, we have increased our loan portfolio at a 9% Cincinnati, we really have only just begun to build the compound annual rate over the past ﬁve years. community bank that we will become. Importantly, we’ll do this the same way we did in Louisville – one relationship at a time. COMMERCIAL BANKING Importantly, all of our markets participated in the Bank’s loan growth in 2017. Loan production remained robust and, as a result, our pipeline is strong as we move into 2018. In the coming year, Serving all facets of the marketplace, from consumers to we plan to add additional lenders across our footprint. commercial customers, Stock Yards Bank & Trust has traditionally focused on business lending. At the end of 2017, commercial and industrial loans together with owner-occupied commercial real estate loans comprised almost one-half of our $2.4 billion loan portfolio. After a slower-than-usual start to 2017 in terms of net loan growth, our strong loan production throughout the remainder of the year led to loan growth We have placed new emphasis in other areas, such as corporate banking, which will focus on larger middle-market clients and should provide us with another avenue for growth. Correspondent banking remains steady and international banking achieved record fee income in 2017 – and is poised to exceed those results in 2018. “All of this combined again in 2017 to produce record results for Stock Yards Bancorp and position our company to share our prosperity with you through increasingly higher dividends.”Because of the reduction in corporate income tax rates and the timing of that change, we were required to lower the value of our net deferred tax asset in 2017, but the lower tax rate did not begin until 2018. This non-cash adjustment resulted in additional income tax expense in the fourth quarter of 2017 and reduced net income for the year by $5.9 million or $0.25 per diluted share. However, we believe lower tax rates will promote growth and expansion across the business spectrum, leading to higher capital investment and new job creation, both of which would be positive for our bank. Additionally, the lower statutory rate going forward will allow us to more than recoup during 2018 the adjustment we recorded in 2017, and future periods will beneﬁt from lower income taxes. This tax reform will equate to higher earnings for the Company going forward and, for you, our With the successful conclusion of another year, I am pleased to stockholders, the potential for growing dividends, as evidenced report to you again on the exceptional performance of our by a 10% increase in our dividend announced in February 2018. company in 2017 and the dedicated efforts of our entire team in delivering ongoing growth and strong ﬁnancial results. Credit for this goes to the strategic course on which we have consistently remained: (1) stridently pursuing the highest possible level of service for our customers in everything we do, (2) building long-term relationships that prevail across generations, (3) choosing wisely the markets we serve and the talent we have brought to our team and (4) diversifying our business in ways that support long-term, consistent growth. All of this combined again in 2017 to produce record results for Stock Yards Bancorp and position our company to share our prosperity with you through increasingly higher dividends. GOOD NEWS, BAD NEWS Before any discussion of our ﬁnancial results, we must footnote the effect of tax reform late last year. With the enactment of the Tax Cuts and Jobs Act on December 22, 2017, we and many other companies faced a rare situation, one with immediate negative consequences that will be more than offset by very positive long-term consequences in the future. The timing of tax reform enactment caused net income to decline in 2017 to $38.0 million or $1.66 per diluted share compared with $41.0 million or $1.80 per diluted share for 2016, after seven consecutive years of growth following the Great Recession. We trust you will see past this aberration to the real and meaningful beneﬁts that tax reform will bring. With a lower marginal tax rate going forward, our Board intends to implement strategies to deploy tax savings in ways that grow our business and drive higher stockholder value. BY THE NUMBERS To clarify the underlying and fundamental strength of our company during 2017, consider that total revenue for 2017 increased 6% to a record $148.7 million. This improvement reﬂected a solid performance in many key aspects of our business, such as loan production and loan growth, net interest margin and wealth management and trust, and again call to mind the beneﬁt of our diversiﬁed revenue streams. Alongside these standout accomplishments, credit quality remained exceptionally strong. PAGE 3 On the balance sheet, total assets increased $200 million or 6% to $3.24 billion during the year while our loan portfolio grew $104.2 million or almost 5%. Supporting this growth, total deposits increased $57.7 million or 2% to $2.58 billion at December 31, 2017, as we continued to attract new customers and experience growth with existing customers across most account categories. STOCKHOLDER RETURNS Stock Yards Bancorp continues to pursue strategies to enhance stockholder value, including a substantial and sustained dividend payout ratio. As it did in each of the previous three years, Stock Yards Bancorp’s Board of Directors increased the Company’s quarterly cash dividend twice during 2017. With the most recent dividend increase referenced earlier, the Company has now raised its quarterly dividend rate a total of 10 times since the beginning of 2013, resulting in a cumulative increase of 73% over a ﬁve-year period. While there are many catalysts that drive investment decisions, I think most of our stockholders are drawn by the attractive growth opportunities we pursue, the way we execute on our plans and the consistency of our returns. In my view, nothing measures the latter better than to consider a company’s performance over the long term, since the optics of using shorter timeframes can easily mask habitual underperformance. Our traditional benchmark measures total stockholder return for the latest 10-year period, which for the decade ended with 2017 stood at 213% and in stark contrast to a 72% increase for a commonly used NASDAQ bank index. This plainly illustrates why, year after year, Stock Yards Bancorp ranks among the country’s top-performing community banks. Continuous enhancement of stockholder value has been and remains an important priority for the Company. WALL STREET RECOGNITION Stock Yards Bancorp continues to earn accolades on Wall Street for its consistent performance against rigorous criteria. For many years now, Stock Yards Bancorp has been named to the KBW Bank Honor Roll, an annual selection based on a bank’s 10-year performance record. Those banks recognized for the Honor Roll, among the almost 400 nationwide having at least $500 million in total assets, typically number less than 50 and totaled only 15 in the latest Honor Roll. The Company also has received the Raymond James Community Bankers Cup, which recognizes the top 10% of community banks in the country with assets between $500 million and $10 billion, in each of the ﬁve years since its inception. Additionally, S&P Global Market Intelligence has included the Company in its most recent annual ranking of the 100 best-performing community banks between $1 billion and $10 billion in assets, based on six core ﬁnancial performance metrics. STRENGTHENING OUR BOARD In December of 2017, Paul J. Bickel III joined our Board of Directors, expanding it to 12 members and furthering our efforts for succession planning and leadership continuity in view of mandatory retirements expected in 2019. As founder and President of U.S. Specialties, a commercial building supply company, he adds executive leadership skills and insight to our board. Considering his perspective as a longtime customer of the Bank and his deep connections to our city, both in terms of business initiatives and community involvement, we believe Paul will be an asset for us as we continue to develop strategies for long-term growth and success aimed at creating value for the Company’s stockholders. CONCLUSION We are pleased with the Company’s overall progress and prosperity during 2017. These achievements underscore the strategies we have in place to grow our business across our markets. The diverse nature of our business and the strong lending pipeline we have developed as we move into 2018, along with the positive effect of lower tax rates in the future – both internally and across the economy, bode well for the Company’s prospects to extend its record of growth in the future. We remain grateful for your continued support, your conﬁdence in the Company and your willingness to invest in our future. We look forward to the coming year with great enthusiasm and are eager to capitalize on the opportunities before us. David P. Heintzman Chairman and Chief Executive Ofﬁcer STOCK YARDS BANCORP, INC. 2017 SUMMARY ANNUAL REPORT STOCK YARDS FINANCIAL SERVICES Stock Yards Financial Services complements our Wealth Management & Trust Group, providing a wide range of investment options for those seeking alternative investments to bank deposits as well as customers who want to make their own investment decisions. Stock Yards Financial Services is a important component of our non-interest income, up almost 3% in 2017 and accounting for almost 5% of the total non-interest income for the year. We are prepared for changes driven by new rules and regulations from the Department of Labor that are effective in 2018. These changes will not affect the high level of service we will continue to offer our clients. SUMMARY Clearly, we are pleased with the accomplishments of the past year and are excited about the potential to extend our success in the coming year. We have many runways for growth, many avenues for prosperity and a great corporate culture – centered around exemplary customer service and strong client relationships. This is our path forward, our direction ahead. It’s why we’ve earned the reputation as “A Trusted Partner since 1904.” James A. (Ja) Hillebrand President complementary and ancillary ﬁnancial solutions so that we may offer our customers a full range of capabilities to support their goals, ambitions and needs. A recent example of this is our consumer and small business digital lending products – Loan Express and Business Loan Express. These technology solutions allow Stock Yards Bank & Trust to provide loans online using a computer or mobile device. We continue to look for ways to provide the best access and service to all of our customers through the delivery channel they prefer. In our ongoing efforts to protect our customers and provide enhanced customer service through technology, we’ve invested in new fraud detection software to react more quickly and effectively to fraud and potential fraud – a continuing challenge for our industry. We also provide 24/7 support to customers with debit card issues or questions. In 2018, we’re scheduled to upgrade and replace all of our ATMs with the newest technology available. MORTGAGE SERVICES An important feature of the services we offer to families in our markets is mortgage lending. Home ownership is the American dream, and we are dedicated to making this dream possible. This area accounted for about 7% of our total non-interest income for 2017. In late 2017, we expanded the variety of mortgage products we offer by rolling out our new “Residential Construction to Perm” program, which simpliﬁes and streamlines the home construction process for our customers. Over the long term, our Mortgage Department continues to help diversify our revenue, smoothing and supporting long-term earnings growth. BUSINESS CREDIT CARDS We are now in our second full year of having a direct card product, which adds to our reputation for leading customer service, over and above the card brand. This product has allowed us to expand the services we have available to offer business customers with credit needs. It has been well received by our customers, and we have high expectations for its future. PRIVATE BANKING Our longstanding private banking services continue to meet the demands and needs of afﬂuent customers by concentrating all of our solutions and alternatives with one point of contact – our private bankers. In 2017, we recorded a solid performance in all markets with continued success in dental lending and medical residence lending programs, among other initiatives. Growth in private banking was especially notable in Indianapolis last year and, building on that, we expect to expand our Cincinnati private banking staff during 2018. BUSINESS BANKING Business banking is now available in all of our markets. Our business bankers are focused on small businesses, which have somewhat different needs than those of larger businesses serviced through our commercial lending area. Offering a blend of services tailored for each business, our business banking solutions package credit, savings and checking options that help small businesses achieve ﬁnancial efﬁciencies and improve proﬁtability. TREASURY MANAGEMENT SERVICES We continue to achieve solid growth in treasury services. Our treasury products and services help companies mitigate risk, improve working capital, and generate income by utilizing innovative banking technology. The treasury group’s expertise includes: payments and disbursement management, lockbox, remote deposit, Automated Clearing House (ACH), sweep accounts, liquidity and investments, information reporting and online banking. WEALTH MANAGEMENT & TRUST Our Wealth Management & Trust Group, with approximately $2.8 billion of assets under management, comprises more than 45% of the Company’s fee-based income and, thus, has been a key element of our strategy to create and grow diverse fee-based revenue streams to support predictable and reliable earnings growth over the long term. For 2017, its revenue increased 7%. The Indianapolis market was instrumental in this growth, with more than 200% growth in gross revenues, the largest increase of our three markets. Our emphasis remains on providing unparalleled service to our clients through every stage of their lives, providing a holistic ﬁnancial plan for every client. Alongside that focus, we continue to help businesses with succession planning, as well as with their corporate retirement 401(k) plans. Across this spectrum, our investment strategy for clients remains concrete as we strive to deliver attractive risk-adjusted investment results that will allow our clients to reach their goals. With a staff of more than 60 professional and support personnel, wealth management and trust continues to focus on serving the investment, ﬁnancial and trust needs of individuals, multi-generational families and institutions from our ofﬁces in Kentucky, Indiana and Ohio. This widespread presence across our banking footprint positions us for continued growth in the future. RETAIL BANKING Retail banking is an important component of what we do, day in and day out, meeting the banking needs for thousands of customers across our markets. Each of our retail ofﬁces has courteous, highly trained staff ready to solve problems and raise possibilities. Our representatives are prepared to present our customers with the solutions that best meet their ﬁnancial needs − whether it be a household checking account, a savings account for a new child, a home equity line of credit for home improvements, or the many other products and services we have to offer. Since our founding, we’ve not only expanded our physical presence, but also the depth and breadth of our ﬁnancial products and services, staying at the forefront of the evolution of banking. This is yet another way to think about our growth strategies. From basic lending and deposits, we’ve progressed by specializing in key elements of these services and adding We are pleased with the Bank’s consistent growth and expansion ramping up strongly in the fourth quarter of the year, which in Indianapolis and Cincinnati. Both markets have matured more represented one of the best quarterly performances ever for the quickly than we expected, and we will continue to expand our Bank and helped to push our total portfolio up almost 5% for presence there over the next several years. Yet, more than 10 the entire year. Building on momentum inherent in our years after exporting our business model to Indianapolis and business, we have increased our loan portfolio at a 9% Cincinnati, we really have only just begun to build the compound annual rate over the past ﬁve years. community bank that we will become. Importantly, we’ll do this the same way we did in Louisville – one relationship at a time. COMMERCIAL BANKING Importantly, all of our markets participated in the Bank’s loan growth in 2017. Loan production remained robust and, as a result, our pipeline is strong as we move into 2018. In the coming year, Serving all facets of the marketplace, from consumers to we plan to add additional lenders across our footprint. commercial customers, Stock Yards Bank & Trust has traditionally focused on business lending. At the end of 2017, commercial and industrial loans together with owner-occupied commercial real estate loans comprised almost one-half of our $2.4 billion loan portfolio. After a slower-than-usual start to 2017 in terms of net loan growth, our strong loan production throughout the remainder of the year led to loan growth We have placed new emphasis in other areas, such as corporate banking, which will focus on larger middle-market clients and should provide us with another avenue for growth. Correspondent banking remains steady and international banking achieved record fee income in 2017 – and is poised to exceed those results in 2018. “Continuous enhancement of stockholder value has been and remains an important priority for the Company.”STOCK YARDS FINANCIAL SERVICES Stock Yards Financial Services complements our Wealth Management & Trust Group, providing a wide range of investment options for those seeking alternative investments to bank deposits as well as customers who want to make their own investment decisions. Stock Yards Financial Services is a important component of our non-interest income, up almost 3% in 2017 and accounting for almost 5% of the total non-interest income for the year. We are prepared for changes driven by new rules and regulations from the Department of Labor that are effective in 2018. These changes will not affect the high level of service we will continue to offer our clients. SUMMARY Clearly, we are pleased with the accomplishments of the past year and are excited about the potential to extend our success in the coming year. We have many runways for growth, many avenues for prosperity and a great corporate culture – centered around exemplary customer service and strong client relationships. This is our path forward, our direction ahead. It’s why we’ve earned the reputation as “A Trusted Partner since 1904.” James A. (Ja) Hillebrand President complementary and ancillary ﬁnancial solutions so that we may offer our customers a full range of capabilities to support their goals, ambitions and needs. A recent example of this is our consumer and small business digital lending products – Loan Express and Business Loan Express. These technology solutions allow Stock Yards Bank & Trust to provide loans online using a computer or mobile device. We continue to look for ways to provide the best access and service to all of our customers through the delivery channel they prefer. In our ongoing efforts to protect our customers and provide enhanced customer service through technology, we’ve invested in new fraud detection software to react more quickly and effectively to fraud and potential fraud – a continuing challenge for our industry. We also provide 24/7 support to customers with debit card issues or questions. In 2018, we’re scheduled to upgrade and replace all of our ATMs with the newest technology available. MORTGAGE SERVICES An important feature of the services we offer to families in our markets is mortgage lending. Home ownership is the American dream, and we are dedicated to making this dream possible. This area accounted for about 7% of our total non-interest income for 2017. In late 2017, we expanded the variety of mortgage products we offer by rolling out our new “Residential Construction to Perm” program, which simpliﬁes and streamlines the home construction process for our customers. Over the long term, our Mortgage Department continues to help diversify our revenue, smoothing and supporting long-term earnings growth. We are pleased with the Bank’s consistent growth and expansion ramping up strongly in the fourth quarter of the year, which in Indianapolis and Cincinnati. Both markets have matured more represented one of the best quarterly performances ever for the quickly than we expected, and we will continue to expand our Bank and helped to push our total portfolio up almost 5% for presence there over the next several years. Yet, more than 10 the entire year. Building on momentum inherent in our years after exporting our business model to Indianapolis and business, we have increased our loan portfolio at a 9% Cincinnati, we really have only just begun to build the compound annual rate over the past ﬁve years. community bank that we will become. Importantly, we’ll do this the same way we did in Louisville – one relationship at a time. COMMERCIAL BANKING Importantly, all of our markets participated in the Bank’s loan growth in 2017. Loan production remained robust and, as a result, our pipeline is strong as we move into 2018. In the coming year, Serving all facets of the marketplace, from consumers to we plan to add additional lenders across our footprint. commercial customers, Stock Yards Bank & Trust has traditionally focused on business lending. At the end of 2017, commercial and industrial loans together with owner-occupied commercial real estate loans comprised almost one-half of our $2.4 billion loan portfolio. After a slower-than-usual start to 2017 in terms of net loan growth, our strong loan production throughout the remainder of the year led to loan growth We have placed new emphasis in other areas, such as corporate banking, which will focus on larger middle-market clients and should provide us with another avenue for growth. Correspondent banking remains steady and international banking achieved record fee income in 2017 – and is poised to exceed those results in 2018. BUSINESS CREDIT CARDS We are now in our second full year of having a direct card product, which adds to our reputation for leading customer service, over and above the card brand. This product has allowed us to expand the services we have available to offer business customers with credit needs. It has been well received by our customers, and we have high expectations for its future. PRIVATE BANKING Our longstanding private banking services continue to meet the demands and needs of afﬂuent customers by concentrating all of our solutions and alternatives with one point of contact – our private bankers. In 2017, we recorded a solid performance in all markets with continued success in dental lending and medical residence lending programs, among other initiatives. Growth in private banking was especially notable in Indianapolis last year and, building on that, we expect to expand our Cincinnati private banking staff during 2018. BUSINESS BANKING Business banking is now available in all of our markets. Our business bankers are focused on small businesses, which have somewhat different needs than those of larger businesses serviced through our commercial lending area. Offering a blend of services tailored for each business, our business banking solutions package credit, savings and checking options that help small businesses achieve ﬁnancial efﬁciencies and improve proﬁtability. TREASURY MANAGEMENT SERVICES We continue to achieve solid growth in treasury services. Our treasury products and services help companies mitigate risk, improve working capital, and generate income by utilizing innovative banking technology. The treasury group’s expertise includes: payments and disbursement management, lockbox, remote deposit, Automated Clearing House (ACH), sweep accounts, liquidity and investments, information reporting and online banking. WEALTH MANAGEMENT & TRUST Our Wealth Management & Trust Group, with approximately $2.8 billion of assets under management, comprises more than 45% of the Company’s fee-based income and, thus, has been a key element of our strategy to create and grow diverse fee-based revenue streams to support predictable and reliable earnings growth over the long term. For 2017, its revenue increased 7%. The Indianapolis market was instrumental in this growth, with more than 200% growth in gross revenues, the largest increase of our three markets. Our emphasis remains on providing unparalleled service to our clients through every stage of their lives, providing a holistic ﬁnancial plan for every client. Alongside that focus, we continue to help businesses with succession planning, as well as with their corporate retirement 401(k) plans. Across this spectrum, our investment strategy for clients remains concrete as we strive to deliver attractive risk-adjusted investment results that will allow our clients to reach their goals. With a staff of more than 60 professional and support personnel, wealth management and trust continues to focus on serving the investment, ﬁnancial and trust needs of individuals, multi-generational families and institutions from our ofﬁces in Kentucky, Indiana and Ohio. This widespread presence across our banking footprint positions us for continued growth in the future. RETAIL BANKING Retail banking is an important component of what we do, day in and day out, meeting the banking needs for thousands of customers across our markets. Each of our retail ofﬁces has courteous, highly trained staff ready to solve problems and raise possibilities. Our representatives are prepared to present our customers with the solutions that best meet their ﬁnancial needs − whether it be a household checking account, a savings account for a new child, a home equity line of credit for home improvements, or the many other products and services we have to offer. Since our founding, we’ve not only expanded our physical presence, but also the depth and breadth of our ﬁnancial products and services, staying at the forefront of the evolution of banking. This is yet another way to think about our growth strategies. From basic lending and deposits, we’ve progressed by specializing in key elements of these services and adding Ja Hillebrand President PAGE 4 A Message from the President In 2017, we continued to beneﬁt from several long-term strategies that diversify and steadily build our robust platform for growth. You’ve already heard how these beneﬁts manifested themselves in solid loan growth coupled with extraordinary credit quality – chief drivers for an expanding bottom line – along with the Bank’s signiﬁcant sources of fee income, which differentiate Stock Yards Bank & Trust as a leading community bank. I’d like to take a few moments to talk about our strategies as they relate to our markets and lines of business. EXPANSION Perhaps the most transformative and overarching action we have taken to produce consistent and industry-leading growth for our stockholders took place in 2003 when we expanded to Indianapolis, opening our ﬁrst ofﬁce outside of the Louisville metro market. Already 99 years in the making as a premier community bank, one built around the value of responsive customer service and offering an array of ﬁnancial products needed by clients, we seized the opportunity to replicate our business model in another similarly attractive metro market. This was and is quite different from commonplace strategies for expansion, which typically rely on acquisitions. Instead, we have focused on organic growth – building a local, community bank one employee at a time and one customer at a time. Clearly, the leap to a new metro area – to reproduce our successful community banking model – was a bold move, but one that quickly found traction and success. So much so, that in 2007 we followed up with another expansion move, this time to Cincinnati, where Stock Yards Bank & Trust has enjoyed similar success. To put all of this in context, before we expanded into these outer markets, we had one runway for growth, the Louisville market, and that runway looked like it had limited opportunity due to stagnant economic growth at that time. While the picture for Louisville has changed dramatically for the better since then, our bank now has three long runways for growth, with Indianapolis and Cincinnati complementing and expanding the opportunities before us today and well into the future. STOCK YARDS BANCORP, INC. 2017 SUMMARY ANNUAL REPORT “In 2017, we continued to beneﬁt from several long-term strategies that diversify and steadily build our robust platform for growth.”STOCK YARDS FINANCIAL SERVICES Stock Yards Financial Services complements our Wealth Management & Trust Group, providing a wide range of investment options for those seeking alternative investments to bank deposits as well as customers who want to make their own investment decisions. Stock Yards Financial Services is a important component of our non-interest income, up almost 3% in 2017 and accounting for almost 5% of the total non-interest income for the year. We are prepared for changes driven by new rules and regulations from the Department of Labor that are effective in 2018. These changes will not affect the high level of service we will continue to offer our clients. SUMMARY Clearly, we are pleased with the accomplishments of the past year and are excited about the potential to extend our success in the coming year. We have many runways for growth, many avenues for prosperity and a great corporate culture – centered around exemplary customer service and strong client relationships. This is our path forward, our direction ahead. It’s why we’ve earned the reputation as “A Trusted Partner since 1904.” James A. (Ja) Hillebrand President complementary and ancillary ﬁnancial solutions so that we may offer our customers a full range of capabilities to support their goals, ambitions and needs. A recent example of this is our consumer and small business digital lending products – Loan Express and Business Loan Express. These technology solutions allow Stock Yards Bank & Trust to provide loans online using a computer or mobile device. We continue to look for ways to provide the best access and service to all of our customers through the delivery channel they prefer. In our ongoing efforts to protect our customers and provide enhanced customer service through technology, we’ve invested in new fraud detection software to react more quickly and effectively to fraud and potential fraud – a continuing challenge for our industry. We also provide 24/7 support to customers with debit card issues or questions. In 2018, we’re scheduled to upgrade and replace all of our ATMs with the newest technology available. MORTGAGE SERVICES An important feature of the services we offer to families in our markets is mortgage lending. Home ownership is the American dream, and we are dedicated to making this dream possible. This area accounted for about 7% of our total non-interest income for 2017. In late 2017, we expanded the variety of mortgage products we offer by rolling out our new “Residential Construction to Perm” program, which simpliﬁes and streamlines the home construction process for our customers. Over the long term, our Mortgage Department continues to help diversify our revenue, smoothing and supporting long-term earnings growth. BUSINESS CREDIT CARDS We are now in our second full year of having a direct card product, which adds to our reputation for leading customer service, over and above the card brand. This product has allowed us to expand the services we have available to offer business customers with credit needs. It has been well received by our customers, and we have high expectations for its future. PRIVATE BANKING Our longstanding private banking services continue to meet the demands and needs of afﬂuent customers by concentrating all of our solutions and alternatives with one point of contact – our private bankers. In 2017, we recorded a solid performance in all markets with continued success in dental lending and medical residence lending programs, among other initiatives. Growth in private banking was especially notable in Indianapolis last year and, building on that, we expect to expand our Cincinnati private banking staff during 2018. BUSINESS BANKING Business banking is now available in all of our markets. Our business bankers are focused on small businesses, which have somewhat different needs than those of larger businesses serviced through our commercial lending area. Offering a blend of services tailored for each business, our business banking solutions package credit, savings and checking options that help small businesses achieve ﬁnancial efﬁciencies and improve proﬁtability. TREASURY MANAGEMENT SERVICES We continue to achieve solid growth in treasury services. Our treasury products and services help companies mitigate risk, improve working capital, and generate income by utilizing innovative banking technology. The treasury group’s expertise includes: payments and disbursement management, lockbox, remote deposit, Automated Clearing House (ACH), sweep accounts, liquidity and investments, information reporting and online banking. WEALTH MANAGEMENT & TRUST Our Wealth Management & Trust Group, with approximately $2.8 billion of assets under management, comprises more than 45% of the Company’s fee-based income and, thus, has been a key element of our strategy to create and grow diverse fee-based revenue streams to support predictable and reliable earnings growth over the long term. For 2017, its revenue increased 7%. The Indianapolis market was instrumental in this growth, with more than 200% growth in gross revenues, the largest increase of our three markets. Our emphasis remains on providing unparalleled service to our clients through every stage of their lives, providing a holistic ﬁnancial plan for every client. Alongside that focus, we continue to help businesses with succession planning, as well as with their corporate retirement 401(k) plans. Across this spectrum, our investment strategy for clients remains concrete as we strive to deliver attractive risk-adjusted investment results that will allow our clients to reach their goals. With a staff of more than 60 professional and support personnel, wealth management and trust continues to focus on serving the investment, ﬁnancial and trust needs of individuals, multi-generational families and institutions from our ofﬁces in Kentucky, Indiana and Ohio. This widespread presence across our banking footprint positions us for continued growth in the future. RETAIL BANKING Retail banking is an important component of what we do, day in and day out, meeting the banking needs for thousands of customers across our markets. Each of our retail ofﬁces has courteous, highly trained staff ready to solve problems and raise possibilities. Our representatives are prepared to present our customers with the solutions that best meet their ﬁnancial needs − whether it be a household checking account, a savings account for a new child, a home equity line of credit for home improvements, or the many other products and services we have to offer. Since our founding, we’ve not only expanded our physical presence, but also the depth and breadth of our ﬁnancial products and services, staying at the forefront of the evolution of banking. This is yet another way to think about our growth strategies. From basic lending and deposits, we’ve progressed by specializing in key elements of these services and adding PAGE 5 INDIANAPOLIS Indianapolis had the Bank’s largest percentage loan growth by market for 2017, up 15%, with its loans outstanding now accounting for 13% of the Bank’s total loan portfolio. Earlier this year, we relocated our main Indianapolis ofﬁce to a larger, more centralized downtown location at Capital Center Building. This new ofﬁce will give us greater visibility among potential customers and provide much needed additional ofﬁce space to accommodate our talented and growing staff of commercial lenders and commercial real estate lenders, as well as enable us to serve this market more efﬁciently as we continue to expand our capabilities and reach. We currently have four locations in Indianapolis and have acquired land for a ﬁfth ofﬁce in the growing west-side suburb of Plainﬁeld, which has a strong commercial and consumer presence. This ofﬁce is slated to open in the fourth quarter of 2018. CINCINNATI / NORTHERN KENTUCKY Paula Moan Market Executive Indianapolis “Banking with us at Stock Yards Bank & Trust is an experience unlike what you’ll see at your current bank or most of the super-regional banks. We are proud of our community-bank style of service, and our team of talented professionals who are eager to serve all of your banking needs – from basic banking services to the most sophisticated ﬁnancial strategies.” The Cincinnati/Northern Kentucky market recorded the Bank’s second largest percentage loan growth by market for 2017, up 14%, with its loans outstanding now comprising 14% of the Bank’s total loan portfolio. We currently have five locations in the region, with the potential for several more offices to cover the market successfully. We continue to attract new customers in the Cincinnati/Northern Kentucky market from businesses that were affected by bank mergers and acquisitions in 2016 and 2017. Considering additional market disruption that will take place in 2018, we will continue to be a great banking alternative to businesses and owners that value our high-touch, relationship banking model. Stephen Brown Market Executive Cincinnati / Northern Kentucky “Since coming to this market, we’ve focused on building a talented, market-savvy team that is truly connected to our customer base in Cincinnati and Northern Kentucky. Building on the Stock Yards Bank & Trust’s model, we have staked our claim in this city and are working hard to build our business, one relationship at a time.” STOCK YARDS BANCORP, INC. 2017 SUMMARY ANNUAL REPORT We are pleased with the Bank’s consistent growth and expansion ramping up strongly in the fourth quarter of the year, which in Indianapolis and Cincinnati. Both markets have matured more represented one of the best quarterly performances ever for the quickly than we expected, and we will continue to expand our Bank and helped to push our total portfolio up almost 5% for presence there over the next several years. Yet, more than 10 the entire year. Building on momentum inherent in our years after exporting our business model to Indianapolis and business, we have increased our loan portfolio at a 9% Cincinnati, we really have only just begun to build the compound annual rate over the past ﬁve years. community bank that we will become. Importantly, we’ll do this the same way we did in Louisville – one relationship at a time. COMMERCIAL BANKING Importantly, all of our markets participated in the Bank’s loan growth in 2017. Loan production remained robust and, as a result, our pipeline is strong as we move into 2018. In the coming year, Serving all facets of the marketplace, from consumers to we plan to add additional lenders across our footprint. commercial customers, Stock Yards Bank & Trust has traditionally focused on business lending. At the end of 2017, commercial and industrial loans together with owner-occupied commercial real estate loans comprised almost one-half of our $2.4 billion loan portfolio. After a slower-than-usual start to 2017 in terms of net loan growth, our strong loan production throughout the remainder of the year led to loan growth We have placed new emphasis in other areas, such as corporate banking, which will focus on larger middle-market clients and should provide us with another avenue for growth. Correspondent banking remains steady and international banking achieved record fee income in 2017 – and is poised to exceed those results in 2018. STOCK YARDS FINANCIAL SERVICES Stock Yards Financial Services complements our Wealth Management & Trust Group, providing a wide range of investment options for those seeking alternative investments to bank deposits as well as customers who want to make their own investment decisions. Stock Yards Financial Services is a important component of our non-interest income, up almost 3% in 2017 and accounting for almost 5% of the total non-interest income for the year. We are prepared for changes driven by new rules and regulations from the Department of Labor that are effective in 2018. These changes will not affect the high level of service we will continue to offer our clients. SUMMARY Clearly, we are pleased with the accomplishments of the past year and are excited about the potential to extend our success in the coming year. We have many runways for growth, many avenues for prosperity and a great corporate culture – centered around exemplary customer service and strong client relationships. This is our path forward, our direction ahead. It’s why we’ve earned the reputation as “A Trusted Partner since 1904.” James A. (Ja) Hillebrand President complementary and ancillary ﬁnancial solutions so that we may offer our customers a full range of capabilities to support their goals, ambitions and needs. A recent example of this is our consumer and small business digital lending products – Loan Express and Business Loan Express. These technology solutions allow Stock Yards Bank & Trust to provide loans online using a computer or mobile device. We continue to look for ways to provide the best access and service to all of our customers through the delivery channel they prefer. In our ongoing efforts to protect our customers and provide enhanced customer service through technology, we’ve invested in new fraud detection software to react more quickly and effectively to fraud and potential fraud – a continuing challenge for our industry. We also provide 24/7 support to customers with debit card issues or questions. In 2018, we’re scheduled to upgrade and replace all of our ATMs with the newest technology available. MORTGAGE SERVICES An important feature of the services we offer to families in our markets is mortgage lending. Home ownership is the American dream, and we are dedicated to making this dream possible. This area accounted for about 7% of our total non-interest income for 2017. In late 2017, we expanded the variety of mortgage products we offer by rolling out our new “Residential Construction to Perm” program, which simpliﬁes and streamlines the home construction process for our customers. Over the long term, our Mortgage Department continues to help diversify our revenue, smoothing and supporting long-term earnings growth. PAGE 6 Clay Stinnett EXECUTIVE VICE PRESIDENT CHIEF STRATEGIC OFFICER Kathy Thompson SR EXECUTIVE VICE PRESIDENT WEALTH MANAGEMENT & TRUST Mike Croce EXECUTIVE VICE PRESIDENT RETAIL BANKING GROUP Ja Hillebrand President Phil Poindexter EXECUTIVE VICE PRESIDENT CHIEF LENDING OFFICER Nancy Davis EXECUTIVE VICE PRESIDENT CHIEF FINANCIAL OFFICER Bill Dishman EXECUTIVE VICE PRESIDENT CHIEF RISK OFFICER We are pleased with the Bank’s consistent growth and expansion in Indianapolis and Cincinnati. Both markets have matured more quickly than we expected, and we will continue to expand our presence there over the next several years. Yet, more than 10 years after exporting our business model to Indianapolis and Cincinnati, we really have only just begun to build the community bank that we will become. Importantly, we’ll do this the same way we did in Louisville – one relationship at a time. COMMERCIAL BANKING Serving all facets of the marketplace, from consumers to commercial customers, Stock Yards Bank & Trust has traditionally focused on business lending. At the end of 2017, commercial and industrial loans together with owner-occupied commercial real estate loans comprised almost one-half of our $2.4 billion loan portfolio. After a slower-than-usual start to 2017 in terms of net loan growth, our strong loan production throughout the remainder of the year led to loan growth ramping up strongly in the fourth quarter of the year, which represented one of the best quarterly performances ever for the Bank and helped to push our total portfolio up almost 5% for the entire year. Building on momentum inherent in our business, we have increased our loan portfolio at a 9% compound annual rate over the past ﬁve years. Importantly, all of our markets participated in the Bank’s loan growth in 2017. Loan production remained robust and, as a result, our pipeline is strong as we move into 2018. In the coming year, we plan to add additional lenders across our footprint. We have placed new emphasis in other areas, such as corporate banking, which will focus on larger middle-market clients and should provide us with another avenue for growth. Correspondent banking remains steady and international banking achieved record fee income in 2017 – and is poised to exceed those results in 2018. STOCK YARDS BANCORP, INC. 2017 SUMMARY ANNUAL REPORT BUSINESS CREDIT CARDS We are now in our second full year of having a direct card product, which adds to our reputation for leading customer service, over and above the card brand. This product has allowed us to expand the services we have available to offer business customers with credit needs. It has been well received by our customers, and we have high expectations for its future. PRIVATE BANKING Our longstanding private banking services continue to meet the demands and needs of afﬂuent customers by concentrating all of our solutions and alternatives with one point of contact – our private bankers. In 2017, we recorded a solid performance in all markets with continued success in dental lending and medical residence lending programs, among other initiatives. Growth in private banking was especially notable in Indianapolis last year and, building on that, we expect to expand our Cincinnati private banking staff during 2018. BUSINESS BANKING Business banking is now available in all of our markets. Our business bankers are focused on small businesses, which have somewhat different needs than those of larger businesses serviced through our commercial lending area. Offering a blend of services tailored for each business, our business banking solutions package credit, savings and checking options that help small businesses achieve ﬁnancial efﬁciencies and improve proﬁtability. TREASURY MANAGEMENT SERVICES We continue to achieve solid growth in treasury services. Our treasury products and services help companies mitigate risk, improve working capital, and generate income by utilizing innovative banking technology. The treasury group’s expertise includes: payments and disbursement management, lockbox, remote deposit, Automated Clearing House (ACH), sweep accounts, liquidity and investments, information reporting and online banking. WEALTH MANAGEMENT & TRUST Our Wealth Management & Trust Group, with approximately $2.8 billion of assets under management, comprises more than 45% of the Company’s fee-based income and, thus, has been a key element of our strategy to create and grow diverse fee-based revenue streams to support predictable and reliable earnings growth over the long term. For 2017, its revenue increased 7%. The Indianapolis market was instrumental in this growth, with more than 200% growth in gross revenues, the largest increase of our three markets. Our emphasis remains on providing unparalleled service to our clients through every stage of their lives, providing a holistic ﬁnancial plan for every client. Alongside that focus, we continue to help businesses with succession planning, as well as with their corporate retirement 401(k) plans. Across this spectrum, our investment strategy for clients remains concrete as we strive to deliver attractive risk-adjusted investment results that will allow our clients to reach their goals. With a staff of more than 60 professional and support personnel, wealth management and trust continues to focus on serving the investment, ﬁnancial and trust needs of individuals, multi-generational families and institutions from our ofﬁces in Kentucky, Indiana and Ohio. This widespread presence across our banking footprint positions us for continued growth in the future. RETAIL BANKING Retail banking is an important component of what we do, day in and day out, meeting the banking needs for thousands of customers across our markets. Each of our retail ofﬁces has courteous, highly trained staff ready to solve problems and raise possibilities. Our representatives are prepared to present our customers with the solutions that best meet their ﬁnancial needs − whether it be a household checking account, a savings account for a new child, a home equity line of credit for home improvements, or the many other products and services we have to offer. Since our founding, we’ve not only expanded our physical presence, but also the depth and breadth of our ﬁnancial products and services, staying at the forefront of the evolution of banking. This is yet another way to think about our growth strategies. From basic lending and deposits, we’ve progressed by specializing in key elements of these services and adding STOCK YARDS FINANCIAL SERVICES Stock Yards Financial Services complements our Wealth Management & Trust Group, providing a wide range of investment options for those seeking alternative investments to bank deposits as well as customers who want to make their own investment decisions. Stock Yards Financial Services is a important component of our non-interest income, up almost 3% in 2017 and accounting for almost 5% of the total non-interest income for the year. We are prepared for changes driven by new rules and regulations from the Department of Labor that are effective in 2018. These changes will not affect the high level of service we will continue to offer our clients. SUMMARY Clearly, we are pleased with the accomplishments of the past year and are excited about the potential to extend our success in the coming year. We have many runways for growth, many avenues for prosperity and a great corporate culture – centered around exemplary customer service and strong client relationships. This is our path forward, our direction ahead. It’s why we’ve earned the reputation as “A Trusted Partner since 1904.” James A. (Ja) Hillebrand President complementary and ancillary ﬁnancial solutions so that we may offer our customers a full range of capabilities to support their goals, ambitions and needs. A recent example of this is our consumer and small business digital lending products – Loan Express and Business Loan Express. These technology solutions allow Stock Yards Bank & Trust to provide loans online using a computer or mobile device. We continue to look for ways to provide the best access and service to all of our customers through the delivery channel they prefer. In our ongoing efforts to protect our customers and provide enhanced customer service through technology, we’ve invested in new fraud detection software to react more quickly and effectively to fraud and potential fraud – a continuing challenge for our industry. We also provide 24/7 support to customers with debit card issues or questions. In 2018, we’re scheduled to upgrade and replace all of our ATMs with the newest technology available. MORTGAGE SERVICES An important feature of the services we offer to families in our markets is mortgage lending. Home ownership is the American dream, and we are dedicated to making this dream possible. This area accounted for about 7% of our total non-interest income for 2017. In late 2017, we expanded the variety of mortgage products we offer by rolling out our new “Residential Construction to Perm” program, which simpliﬁes and streamlines the home construction process for our customers. Over the long term, our Mortgage Department continues to help diversify our revenue, smoothing and supporting long-term earnings growth. We are pleased with the Bank’s consistent growth and expansion ramping up strongly in the fourth quarter of the year, which in Indianapolis and Cincinnati. Both markets have matured more represented one of the best quarterly performances ever for the quickly than we expected, and we will continue to expand our Bank and helped to push our total portfolio up almost 5% for presence there over the next several years. Yet, more than 10 the entire year. Building on momentum inherent in our years after exporting our business model to Indianapolis and business, we have increased our loan portfolio at a 9% Cincinnati, we really have only just begun to build the compound annual rate over the past ﬁve years. community bank that we will become. Importantly, we’ll do this the same way we did in Louisville – one relationship at a time. COMMERCIAL BANKING Importantly, all of our markets participated in the Bank’s loan growth in 2017. Loan production remained robust and, as a result, our pipeline is strong as we move into 2018. In the coming year, Serving all facets of the marketplace, from consumers to we plan to add additional lenders across our footprint. commercial customers, Stock Yards Bank & Trust has traditionally focused on business lending. At the end of 2017, commercial and industrial loans together with owner-occupied commercial real estate loans comprised almost one-half of our $2.4 billion loan portfolio. After a slower-than-usual start to 2017 in terms of net loan growth, our strong loan production throughout the remainder of the year led to loan growth We have placed new emphasis in other areas, such as corporate banking, which will focus on larger middle-market clients and should provide us with another avenue for growth. Correspondent banking remains steady and international banking achieved record fee income in 2017 – and is poised to exceed those results in 2018. PAGE 7 BUSINESS CREDIT CARDS We are now in our second full year of having a direct card product, which adds to our reputation for leading customer service, over and above the card brand. This product has allowed us to expand the services we have available to offer business customers with credit needs. It has been well received by our customers, and we have high expectations for its future. “Since our founding, we’ve not only expanded our physical presence, but also the depth and breadth of our ﬁnancial products and services, staying at the forefront of the evolution of banking.” PRIVATE BANKING Our longstanding private banking services continue to meet the demands and needs of afﬂuent customers by concentrating all of our solutions and alternatives with one point of contact – our private bankers. In 2017, we recorded a solid performance in all markets with continued success in dental lending and medical residence lending programs, among other initiatives. Growth in private banking was especially notable in Indianapolis last year and, building on that, we expect to expand our Cincinnati private banking staff during 2018. BUSINESS BANKING Business banking is now available in all of our markets. Our business bankers are focused on small businesses, which have somewhat different needs than those of larger businesses serviced through our commercial lending area. Offering a blend of services tailored for each business, our business banking solutions package credit, savings and checking options that help small businesses achieve ﬁnancial efﬁciencies and improve proﬁtability. TREASURY MANAGEMENT SERVICES We continue to achieve solid growth in treasury services. Our treasury products and services help companies mitigate risk, improve working capital, and generate income by utilizing innovative banking technology. The treasury group’s expertise includes: payments and disbursement management, lockbox, remote deposit, Automated Clearing House (ACH), sweep accounts, liquidity and investments, information reporting and online banking. WEALTH MANAGEMENT & TRUST Our Wealth Management & Trust Group, with approximately $2.8 billion of assets under management, comprises more than 45% of the Company’s fee-based income and, thus, has been a key element of our strategy to create and grow diverse fee-based revenue streams to support predictable and reliable earnings growth over the long term. For 2017, its revenue increased 7%. The Indianapolis market was instrumental in this growth, with more than 200% growth in gross revenues, the largest increase of our three markets. Our emphasis remains on providing unparalleled service to our clients through every stage of their lives, providing a holistic ﬁnancial plan for every client. Alongside that focus, we continue to help businesses with succession planning, as well as with their corporate retirement 401(k) plans. Across this spectrum, our investment strategy for clients remains concrete as we strive to deliver attractive risk-adjusted investment results that will allow our clients to reach their goals. With a staff of more than 60 professional and support personnel, wealth management and trust continues to focus on serving the investment, ﬁnancial and trust needs of individuals, multi-generational families and institutions from our ofﬁces in Kentucky, Indiana and Ohio. This widespread presence across our banking footprint positions us for continued growth in the future. RETAIL BANKING Retail banking is an important component of what we do, day in and day out, meeting the banking needs for thousands of customers across our markets. Each of our retail ofﬁces has courteous, highly trained staff ready to solve problems and raise possibilities. Our representatives are prepared to present our customers with the solutions that best meet their ﬁnancial needs − whether it be a household checking account, a savings account for a new child, a home equity line of credit for home improvements, or the many other products and services we have to offer. Since our founding, we’ve not only expanded our physical presence, but also the depth and breadth of our ﬁnancial products and services, staying at the forefront of the evolution of banking. This is yet another way to think about our growth strategies. From basic lending and deposits, we’ve progressed by specializing in key elements of these services and adding STOCK YARDS BANCORP, INC. 2017 SUMMARY ANNUAL REPORT PAGE 8 STOCK YARDS FINANCIAL SERVICES Stock Yards Financial Services complements our Wealth Management & Trust Group, providing a wide range of investment options for those seeking alternative investments to bank deposits as well as customers who want to make their own investment decisions. Stock Yards Financial Services is a important component of our non-interest income, up almost 3% in 2017 and accounting for almost 5% of the total non-interest income for the year. We are prepared for changes driven by new rules and regulations from the Department of Labor that are effective in 2018. These changes will not affect the high level of service we will continue to offer our clients. “We have many runways for growth, many avenues for prosperity and a great corporate culture – centered around exemplary customer service and strong client relationships.” SUMMARY Clearly, we are pleased with the accomplishments of the past year and are excited about the potential to extend our success in the coming year. We have many runways for growth, many avenues for prosperity and a great corporate culture – centered around exemplary customer service and strong client relationships. This is our path forward, our direction ahead. It’s why we’ve earned the reputation as “A Trusted Partner since 1904.” James A. (Ja) Hillebrand President “Our emphasis remains on providing unparalleled service to our clients through every stage of their lives, providing a holistic ﬁnancial plan for every client.” complementary and ancillary ﬁnancial solutions so that we may offer our customers a full range of capabilities to support their goals, ambitions and needs. A recent example of this is our consumer and small business digital lending products – Loan Express and Business Loan Express. These technology solutions allow Stock Yards Bank & Trust to provide loans online using a computer or mobile device. We continue to look for ways to provide the best access and service to all of our customers through the delivery channel they prefer. In our ongoing efforts to protect our customers and provide enhanced customer service through technology, we’ve invested in new fraud detection software to react more quickly and effectively to fraud and potential fraud – a continuing challenge for our industry. We also provide 24/7 support to customers with debit card issues or questions. In 2018, we’re scheduled to upgrade and replace all of our ATMs with the newest technology available. MORTGAGE SERVICES An important feature of the services we offer to families in our markets is mortgage lending. Home ownership is the American dream, and we are dedicated to making this dream possible. This area accounted for about 7% of our total non-interest income for 2017. In late 2017, we expanded the variety of mortgage products we offer by rolling out our new “Residential Construction to Perm” program, which simpliﬁes and streamlines the home construction process for our customers. Over the long term, our Mortgage Department continues to help diversify our revenue, smoothing and supporting long-term earnings growth. STOCK YARDS BANCORP, INC. 2017 SUMMARY ANNUAL REPORT We are pleased with the Bank’s consistent growth and expansion ramping up strongly in the fourth quarter of the year, which in Indianapolis and Cincinnati. Both markets have matured more represented one of the best quarterly performances ever for the quickly than we expected, and we will continue to expand our Bank and helped to push our total portfolio up almost 5% for presence there over the next several years. Yet, more than 10 the entire year. Building on momentum inherent in our years after exporting our business model to Indianapolis and business, we have increased our loan portfolio at a 9% Cincinnati, we really have only just begun to build the compound annual rate over the past ﬁve years. community bank that we will become. Importantly, we’ll do this the same way we did in Louisville – one relationship at a time. COMMERCIAL BANKING Importantly, all of our markets participated in the Bank’s loan growth in 2017. Loan production remained robust and, as a result, our pipeline is strong as we move into 2018. In the coming year, Serving all facets of the marketplace, from consumers to we plan to add additional lenders across our footprint. commercial customers, Stock Yards Bank & Trust has traditionally focused on business lending. At the end of 2017, commercial and industrial loans together with owner-occupied commercial real estate loans comprised almost one-half of our $2.4 billion loan portfolio. After a slower-than-usual start to 2017 in terms of net loan growth, our strong loan production throughout the remainder of the year led to loan growth We have placed new emphasis in other areas, such as corporate banking, which will focus on larger middle-market clients and should provide us with another avenue for growth. Correspondent banking remains steady and international banking achieved record fee income in 2017 – and is poised to exceed those results in 2018. BUSINESS CREDIT CARDS We are now in our second full year of having a direct card product, which adds to our reputation for leading customer service, over and above the card brand. This product has allowed us to expand the services we have available to offer business customers with credit needs. It has been well received by our customers, and we have high expectations for its future. PRIVATE BANKING Our longstanding private banking services continue to meet the demands and needs of afﬂuent customers by concentrating all of our solutions and alternatives with one point of contact – our private bankers. In 2017, we recorded a solid performance in all markets with continued success in dental lending and medical residence lending programs, among other initiatives. Growth in private banking was especially notable in Indianapolis last year and, building on that, we expect to expand our Cincinnati private banking staff during 2018. BUSINESS BANKING Business banking is now available in all of our markets. Our business bankers are focused on small businesses, which have somewhat different needs than those of larger businesses serviced through our commercial lending area. Offering a blend of services tailored for each business, our business banking solutions package credit, savings and checking options that help small businesses achieve ﬁnancial efﬁciencies and improve proﬁtability. TREASURY MANAGEMENT SERVICES We continue to achieve solid growth in treasury services. Our treasury products and services help companies mitigate risk, improve working capital, and generate income by utilizing innovative banking technology. The treasury group’s expertise includes: payments and disbursement management, lockbox, remote deposit, Automated Clearing House (ACH), sweep accounts, liquidity and investments, information reporting and online banking. WEALTH MANAGEMENT & TRUST Our Wealth Management & Trust Group, with approximately $2.8 billion of assets under management, comprises more than 45% of the Company’s fee-based income and, thus, has been a key element of our strategy to create and grow diverse fee-based revenue streams to support predictable and reliable earnings growth over the long term. For 2017, its revenue increased 7%. The Indianapolis market was instrumental in this growth, with more than 200% growth in gross revenues, the largest increase of our three markets. Our emphasis remains on providing unparalleled service to our clients through every stage of their lives, providing a holistic ﬁnancial plan for every client. Alongside that focus, we continue to help businesses with succession planning, as well as with their corporate retirement 401(k) plans. Across this spectrum, our investment strategy for clients remains concrete as we strive to deliver attractive risk-adjusted investment results that will allow our clients to reach their goals. With a staff of more than 60 professional and support personnel, wealth management and trust continues to focus on serving the investment, ﬁnancial and trust needs of individuals, multi-generational families and institutions from our ofﬁces in Kentucky, Indiana and Ohio. This widespread presence across our banking footprint positions us for continued growth in the future. RETAIL BANKING Retail banking is an important component of what we do, day in and day out, meeting the banking needs for thousands of customers across our markets. Each of our retail ofﬁces has courteous, highly trained staff ready to solve problems and raise possibilities. Our representatives are prepared to present our customers with the solutions that best meet their ﬁnancial needs − whether it be a household checking account, a savings account for a new child, a home equity line of credit for home improvements, or the many other products and services we have to offer. Since our founding, we’ve not only expanded our physical presence, but also the depth and breadth of our ﬁnancial products and services, staying at the forefront of the evolution of banking. This is yet another way to think about our growth strategies. From basic lending and deposits, we’ve progressed by specializing in key elements of these services and adding PAGE 9 STOCK YARDS BANCORP, INC. Selected Consolidated Financial Data (Dollars in thousands, except per share data) 2017 2016 2015 2014 2013 As of and for the year ended December 31, INCOME STATEMENT Net interest income Provision (recovery) for loan losses Non-interest income Non-interest expenses Net income1 PER SHARE2 Diluted EPS1 Cash dividends declared Book value Market value BALANCE SHEET Total loans Allowance for loan losses Total assets Total deposits Stockholders’ equity EARNINGS PERFORMANCE Return on average assets Return on average equity Net interest margin, fully tax equivalent KEY RATIOS Non-performing assets to total assets Net loan charge-offs Allowance for loan losses to total loans Avg stockholder’s equity to avg assets Total risk-based capital Leverage $ $ $ $ $ $ 103,603 2,550 45,120 90,991 38,043 1.66 0.80 14.71 37.70 2,409,570 24,885 3,239,646 2,578,295 333,644 97,254 3,000 43,537 81,520 41,027 1.80 0.72 13.88 46.95 $ $ 88,318 750 39,950 73,398 37,187 1.65 0.64 12.80 25.19 $ $ 83,757 (400) 39,155 73,209 34,822 1.57 0.59 11.75 22.23 2,305,375 24,007 3,039,481 2,520,548 313,872 $ 2,033,007 22,441 2,816,801 2,371,702 286,519 $ 1,868,550 24,920 2,563,868 2,123,627 259,895 $ $ $ 77,298 6,550 39,002 71,352 27,170 1.26 0.54 10.47 21.28 1,721,350 28,522 2,389,262 1,980,937 229,444 % 1.25 11.61 3.63 % 0.31 0.07 1.03 10.79 13.52 10.70 % 1.42 13.49 3.59 % 0.39 0.07 1.04 10.54 13.04 10.54 % 1.44 13.55 3.67 % 0.48 0.17 1.10 10.66 13.31 10.53 % 1.45 14.19 3.75 % 0.70 0.18 1.33 10.23 13.86 10.26 % 1.22 12.34 3.74 % 1.19 0.60 1.66 9.86 13.54 9.75 1. Net income for 2017 included a $5.9 million or $0.25 per share non-cash charge to revalue the Company’s net deferred asset in connection with Federal tax legislation enacted December 22, 2017. 2. Per share information has been adjusted for the 2016 stock split. STOCK YARDS BANCORP, INC. 2017 SUMMARY ANNUAL REPORT BUSINESS CREDIT CARDS We are now in our second full year of having a direct card product, which adds to our reputation for leading customer service, over and above the card brand. This product has allowed us to expand the services we have available to offer business customers with credit needs. It has been well received by our customers, and we have high expectations for its future. PRIVATE BANKING Our longstanding private banking services continue to meet the demands and needs of afﬂuent customers by concentrating all of our solutions and alternatives with one point of contact – our private bankers. In 2017, we recorded a solid performance in all markets with continued success in dental lending and medical residence lending programs, among other initiatives. Growth in private banking was especially notable in Indianapolis last year and, building on that, we expect to expand our Cincinnati private banking staff during 2018. BUSINESS BANKING Business banking is now available in all of our markets. Our business bankers are focused on small businesses, which have somewhat different needs than those of larger businesses serviced through our commercial lending area. Offering a blend of services tailored for each business, our business banking solutions package credit, savings and checking options that help small businesses achieve ﬁnancial efﬁciencies and improve proﬁtability. TREASURY MANAGEMENT SERVICES We continue to achieve solid growth in treasury services. Our treasury products and services help companies mitigate risk, improve working capital, and generate income by utilizing innovative banking technology. The treasury group’s expertise includes: payments and disbursement management, lockbox, remote deposit, Automated Clearing House (ACH), sweep accounts, liquidity and investments, information reporting and online banking. WEALTH MANAGEMENT & TRUST Our Wealth Management & Trust Group, with approximately $2.8 billion of assets under management, comprises more than 45% of the Company’s fee-based income and, thus, has been a key element of our strategy to create and grow diverse fee-based revenue streams to support predictable and reliable earnings growth over the long term. For 2017, its revenue increased 7%. The Indianapolis market was instrumental in this growth, with more than 200% growth in gross revenues, the largest increase of our three markets. Our emphasis remains on providing unparalleled service to our clients through every stage of their lives, providing a holistic ﬁnancial plan for every client. Alongside that focus, we continue to help businesses with succession planning, as well as with their corporate retirement 401(k) plans. Across this spectrum, our investment strategy for clients remains concrete as we strive to deliver attractive risk-adjusted investment results that will allow our clients to reach their goals. With a staff of more than 60 professional and support personnel, wealth management and trust continues to focus on serving the investment, ﬁnancial and trust needs of individuals, multi-generational families and institutions from our ofﬁces in Kentucky, Indiana and Ohio. This widespread presence across our banking footprint positions us for continued growth in the future. RETAIL BANKING Retail banking is an important component of what we do, day in and day out, meeting the banking needs for thousands of customers across our markets. Each of our retail ofﬁces has courteous, highly trained staff ready to solve problems and raise possibilities. Our representatives are prepared to present our customers with the solutions that best meet their ﬁnancial needs − whether it be a household checking account, a savings account for a new child, a home equity line of credit for home improvements, or the many other products and services we have to offer. Since our founding, we’ve not only expanded our physical presence, but also the depth and breadth of our ﬁnancial products and services, staying at the forefront of the evolution of banking. This is yet another way to think about our growth strategies. From basic lending and deposits, we’ve progressed by specializing in key elements of these services and adding STOCK YARDS FINANCIAL SERVICES Stock Yards Financial Services complements our Wealth Management & Trust Group, providing a wide range of investment options for those seeking alternative investments to bank deposits as well as customers who want to make their own investment decisions. Stock Yards Financial Services is a important component of our non-interest income, up almost 3% in 2017 and accounting for almost 5% of the total non-interest income for the year. We are prepared for changes driven by new rules and regulations from the Department of Labor that are effective in 2018. These changes will not affect the high level of service we will continue to offer our clients. SUMMARY Clearly, we are pleased with the accomplishments of the past year and are excited about the potential to extend our success in the coming year. We have many runways for growth, many avenues for prosperity and a great corporate culture – centered around exemplary customer service and strong client relationships. This is our path forward, our direction ahead. It’s why we’ve earned the reputation as “A Trusted Partner since 1904.” James A. (Ja) Hillebrand President complementary and ancillary ﬁnancial solutions so that we may offer our customers a full range of capabilities to support their goals, ambitions and needs. A recent example of this is our consumer and small business digital lending products – Loan Express and Business Loan Express. These technology solutions allow Stock Yards Bank & Trust to provide loans online using a computer or mobile device. We continue to look for ways to provide the best access and service to all of our customers through the delivery channel they prefer. In our ongoing efforts to protect our customers and provide enhanced customer service through technology, we’ve invested in new fraud detection software to react more quickly and effectively to fraud and potential fraud – a continuing challenge for our industry. We also provide 24/7 support to customers with debit card issues or questions. In 2018, we’re scheduled to upgrade and replace all of our ATMs with the newest technology available. MORTGAGE SERVICES An important feature of the services we offer to families in our markets is mortgage lending. Home ownership is the American dream, and we are dedicated to making this dream possible. This area accounted for about 7% of our total non-interest income for 2017. In late 2017, we expanded the variety of mortgage products we offer by rolling out our new “Residential Construction to Perm” program, which simpliﬁes and streamlines the home construction process for our customers. Over the long term, our Mortgage Department continues to help diversify our revenue, smoothing and supporting long-term earnings growth. We are pleased with the Bank’s consistent growth and expansion ramping up strongly in the fourth quarter of the year, which in Indianapolis and Cincinnati. Both markets have matured more represented one of the best quarterly performances ever for the quickly than we expected, and we will continue to expand our Bank and helped to push our total portfolio up almost 5% for presence there over the next several years. Yet, more than 10 the entire year. Building on momentum inherent in our years after exporting our business model to Indianapolis and business, we have increased our loan portfolio at a 9% Cincinnati, we really have only just begun to build the compound annual rate over the past ﬁve years. community bank that we will become. Importantly, we’ll do this the same way we did in Louisville – one relationship at a time. COMMERCIAL BANKING Importantly, all of our markets participated in the Bank’s loan growth in 2017. Loan production remained robust and, as a result, our pipeline is strong as we move into 2018. In the coming year, Serving all facets of the marketplace, from consumers to we plan to add additional lenders across our footprint. commercial customers, Stock Yards Bank & Trust has traditionally focused on business lending. At the end of 2017, commercial and industrial loans together with owner-occupied commercial real estate loans comprised almost one-half of our $2.4 billion loan portfolio. After a slower-than-usual start to 2017 in terms of net loan growth, our strong loan production throughout the remainder of the year led to loan growth We have placed new emphasis in other areas, such as corporate banking, which will focus on larger middle-market clients and should provide us with another avenue for growth. Correspondent banking remains steady and international banking achieved record fee income in 2017 – and is poised to exceed those results in 2018. DIRECTORS Paul J. Bickel III President, U.S. Specialties J. McCauley Brown Retired Vice President, Brown-Forman Corporation 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 Donna L. Heitzman Retired Portfolio Manager, KKR Prisma Capital Carl G. Herde Vice President / Finance, Kentucky Hospital Association James A. Hillebrand President, Stock Yards Bancorp, Inc. and Stock Yards Bank & Trust Company Richard A. Lechleiter President, Catholic Education Foundation of Louisville Richard Northern Partner, Wyatt, Tarrant & Combs LLP 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 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 PAGE 10 SHAREHOLDER INFORMATION Transfer Agent The transfer agent for the common stock of Stock Yards Bancorp, Inc. is: (FIRST CLASS / REGISTERED / CERTIFIED MAIL:) Computershare Investor Services P.O. Box 505000 Louisville, Kentucky 40233-5000 (800) 368-5948 (COURIER SERVICES:) Computershare Investor Services 462 S. Fourth Street, Suite 1600 Louisville, Kentucky 40202 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”). 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. LOUISVILLE - Corporate Center 1048 East Main Street Louisville, Kentucky 40206 (502) 582-2571 INDIANAPOLIS - Regional Center 201 N. Illinois Street, Suite 100 Indianapolis, IN 46204 (317) 238-2800 CINCINNATI - Regional Center 101 West Fourth Street Cincinnati, Ohio 45202 (513) 824-6100 STOCK YARDS BANCORP, INC. 2017 SUMMARY ANNUAL REPORT

Continue reading text version or see original annual report in PDF format above