Stock Yards Bancorp Inc. Annual Report 2018

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FY2018 Annual Report · Stock Yards Bancorp Inc.

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2 0 1 8 S U M M A R Y A N N U A L R E P OR T

PAGE 1

2018
Financial Highlights

(Dollars in thousands, except per share data)

2018

2017

2016

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

160

TOTAL REVENUE
(dollars in millions)

55,517

38,043

41,027

2.42
0.96
16.11
32.80

3,302,924
2,548,171
2,794,356
366,500

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

1.76
16.00
55.92

1.25
11.61
60.61

1.42
13.49
57.39

144

128

112

09 10 11 12 13 14 15 16 17 18

3,400

3,060

2,720

2,380

2,040

1,700

1,360

1,020

680

340

TOTAL ASSETS
(dollars in millions)

09 10 11 12 13 14 15 16 17 18

2.50

DILUTED EPS

1.0

DIVIDENDS PER SHARE

2.25

2.00

1.75

1.50

1.25

1.00

0.75

0.50

0.25

0.00

09 10 11 12 13 14 15 16 17 18

0.8

0.6

0.4

0.2

0.0

09 10 11 12 13 14 15 16 17 18

STOCK YARDS BANCORP, INC. 2018 SUMMARY ANNUAL REPORT

“In 2018, our balance sheet remained steadfastly strong. Total assets increased to $3.3 billion during the year while our loan portfolio rose 6% to $2.5 billion.”“With strong growth throughout most of the Company last year, we increased diluted earnings per share 46% to $2.42 in 2018. This resulted in solid returns on average assets and equity of 1.76% and 16.00%, respectively, for the year – a signiﬁcant increase over 2017.”PAGE 2

BALANCE SHEET GROWTH
In 2018, our balance sheet remained steadfastly strong. Total
assets increased to $3.3 billion during the year while our loan
portfolio rose 6% to $2.5 billion. Simultaneously, we have
remained true to our conservative credit culture and have
continued to focus on loan quality, as evidenced by credit quality
metrics that, already at historically solid levels as we entered the
year, improved further in 2018.

Complementing our portfolio growth and providing important
funding for new loans, total deposits increased 8% to $2.8 billion
at December 31, 2018, as we experienced good momentum with
new and existing customers.

STOCKHOLDER RETURNS
As a key directive for our company, Stock Yards Bancorp always
seeks to enhance stockholder value through earnings per share
growth and a variety of capital management strategies, including
a substantial and growing dividend payout. I am pleased with our
sustained progress toward this objective in 2018. As was the case
in each of the previous four years, our Board increased the
Company’s quarterly cash dividend twice in 2018 – this past year
for a total of $0.04 per share for the year – a testament to our
strong operating results reported in 2018. Stock Yards Bancorp
has now raised its quarterly dividend rate a total of 11 times over
the past ﬁve years, resulting in a cumulative increase of 79%.

While our company’s published operating performance was
among best in class, I know your investment statement tells its
own tale. Please know that we measure our performance over
the long term, since shorter-term views can tilt outcomes and
obscure lagging results. That said, I am pleased to report that for
the latest 10-year period, our stockholder return was 136%
versus an average 100% increase for comparable banks in a
commonly used NASDAQ bank index. This outperformance

STOCK YARDS BANCORP, INC. 2018 SUMMARY ANNUAL REPORT

David P. Heintzman
Chairman

To Our Stockholders

I am pleased to report another year of record earnings for Stock
Yards Bancorp. With strong growth throughout most of the
Company last year, we increased diluted earnings per share 46%
to $2.42 in 2018. This resulted in solid returns on average assets
and equity of 1.76% and 16.00%, respectively, for the year – a
signiﬁcant increase over 2017.

Beyond obvious beneﬁts from tax reform, robust economic
conditions across our markets continued to drive impressive
results. Our loan portfolio and net interest income were higher,
while the magnitude of our other revenue sources – most
notably from our Wealth Management and Trust Group – also
contributed to our exceptional 2018 performance. This progress
served to enhance our returns to stockholders, strengthen our
position as a leader among peer community banks and provide a
strong foundation for growth we seek in years ahead. Also
reﬂecting the dedicated efforts of our team of bankers, managers
and advisors, our achievements in 2018 stand as a tribute to our
pursuit of the highest possible levels of customer service and our
commitment to building long-term relationships.

bonds, mutual funds, money market investments, annuities

and other insurance products. Stock Yards Financial Services is

a valuable component of our non-interest income by building

recurring revenue.

CONCLUSION

We turn enthusiastically to the prospects and emerging

opportunities ahead, across all our markets. The strategies we

have developed provide us with a sturdy foundation from

which to build in 2019 and offer a clear path forward. As we

continue to pursue organic growth, we do so within the

framework of philosophies and values honed for nearly 115

years. These principals include a customer-driven business

model, high service standards, a strong credit culture,

recognition of the value of those who have chosen to work on

our team, and a dedication toward delivering impressive

stockholder returns. It’s the Stock Yards’ way, it’s how we have

built an unrivaled reputation in the industry, and why we have

been a Trusted Partner since 1904.

demonstrates why, year in and year out, Stock Yards Bancorp

real estate and development, John’s expertise, insight and strong

remains among the nation’s high-performing community banks.

reputation in the Louisville business community will add a

valuable dimension to the work of our Board.

At our annual meeting in April 2019, Charlie Edinger and Rick

Northern will retire from our Board of Directors. Charlie joined the

Board in 1985 and Rick joined in 2011. As Board members, they

have been a part of and led many committees, thereby making

important contributions to our long-term strategic directions and

the governance of our company. We cannot thank them enough

for their tireless efforts to better our company.

IN MEMORIAM

Lastly, we would like to pay our respects to the family of Harry

Troutman, former Chairman of the Board and Chief Executive

Ofﬁcer, who passed away in 2018. Harry joined the Bank in 1941,

serving on the Board from 1961 until 1993 and serving as Chief

Executive Ofﬁcer from July 1978 until his retirement in January

1988. We are deeply indebted to Harry for his guidance,

commitment and contributions to the Company.

FINAL THOUGHTS

Our entire team is energized and excited about the Bank’s growth

prospects, buoyed by record-breaking achievements this past

year. With a strong capital base, attractive loan growth

opportunities across three vibrant markets, pristine asset quality,

and an acclaimed Wealth Management and Trust Group, we

believe the Company is well positioned to extend its record for

stable and predictable earnings growth. Complementing these

organic conditions, we also are enthusiastic about the prospects

to expand via selective market ﬁll-ins like the pending King

Bancorp deal, which Ja will address on the following pages.

We appreciate your continued conﬁdence in our company, as

demonstrated by your investment in Stock Yards Bancorp. We

take our responsibilities to you, as a stockholder, very seriously

and pledge our best efforts to build stockholder value in the

future – a future that is in very capable hands with Ja Hillebrand

as CEO and the strong management team that surrounds him.

Thank you for joining us on the journey ahead.

David P. Heintzman

Chairman

MANAGEMENT TRANSITIONS

In May, I announced my intention to retire as Chief Executive

Ofﬁcer on October 1, 2018, to remain as Executive Chairman

through the end of the year and continue as non-executive

Chairman of the Board beginning in 2019. This move reﬂected

our company’s astute planning for new leadership over time and

building talent from within. So, I was pleased to recommend and

have the Board approve Ja Hillebrand as my successor as CEO, and

alongside that, Phil Poindexter was promoted to President.

Additionally, in November 2018, we announced that CFO Nancy

Davis will retire from the Company on April 30, 2019, and that

Clay Stinnett, who currently serves as Executive Vice President

and Chief Strategic Ofﬁcer – a position he has held since 2011 –

will be promoted to Chief Financial Ofﬁcer on May 1. We want to

congratulate Clay on his advancement in our management team

and thank Nancy for her tireless efforts over a 27-year tenure

with the Company. Nancy and I began our careers in public

accounting on a community bank audit team. After I joined Stock

Yards in 1985, I engaged that ﬁrm and a few years later hired

Nancy. I greatly respect her professional capabilities and careful

oversight of our ﬁnancial processes.

BOARD CHANGES

In July 2018, we announced the appointment of John Schutte to

our Board of Directors, part of a succession plan already underway

in anticipation that two current members of the Board would

reach mandatory retirement age prior to the 2019 annual

meeting. John is CEO of GeriMed, Inc., a nationwide group

purchasing organization specializing in long-term care pharmacy

services for independent pharmacies that serve long-term care

providers. In February 2017, he founded MainPointe

Pharmaceuticals, a national company that markets and distributes

pharmaceuticals as well as OTC products and supplements. With

extensive experience in many aspects of business and commercial

computer, tablet or mobile device. Our online banking platform

allows our customers and prospective customers to open

checking accounts, savings accounts and Certiﬁcates of Deposit.

We also offer Loan Express and Business Loan Express – our

consumer and small business digital lending products. Our goal

is to provide the best access and service to all customers

through the delivery channels they prefer.

MORTGAGE SERVICES

An important dimension of the services we offer to families in

our markets is mortgage lending. Home ownership is the

American dream, and we are dedicated to helping make this

dream a reality for as many as possible. Mortgage lending

represented 6% of our total non-interest income for 2018. 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, and throughout 2018,

this program continued to gain favor with customers. Over

the long term, our mortgage lending continues to help

diversify our revenue, smoothing and supporting long-term

earnings growth.

STOCK YARDS FINANCIAL SERVICES

Complementing the services offered by our Wealth

Management & Trust Group, Stock Yards Financial Services

offers a range of investment options to help customers plan

for their ﬁnancial future and expand the diversiﬁcation of

their assets. Products offered include individual stocks and

growth was especially notable in Indianapolis last year, for the

second consecutive year, and that market is well positioned to

extend its progress in 2019.

BUSINESS BANKING

Business Banking, available in all of our markets, is focused on

small- and middle-market companies that have somewhat

different needs and require additional capabilities from 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 solutions

that help small businesses achieve ﬁnancial efﬁciencies and

improve proﬁtability.

Through our consistent calling efforts, this area established new

deposit and loan relationships across our entire footprint.

TREASURY MANAGEMENT SERVICES

Treasury Management Services recorded its largest-ever revenue

production in 2018, up 6% over the prior year. These 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 SERVICES

Our Wealth Management & Trust Group is a generational-oriented

resource that has a substantial presence across our markets and

reported solid growth in 2018. It comprises 47% of our fee-based

income, as revenue increased 5% last year. With $2.8 billion under

management, wealth management has been an important

component of our strategy to create and grow diverse fee-based

revenue streams to support predictable and reliable earnings growth

over the long term.

Wealth Management’s growth in 2018 reﬂected momentum from

the acquisition of new clients, but even more notable was our

strong retention rate among existing client relationships. Having

earlier described this as a generational-oriented resource, it is

worthwhile to note that many of our client relationships trace

back three to four generations, reﬂecting not only loyalty, but

conﬁdence and trust.

Despite extreme volatility in the stock market during the fourth

quarter, our conservative, risk-adjusted approach and diversiﬁed

asset allocation held up well for our clients during this period.

With an experienced staff of 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 extensive presence across our

banking footprint positions us for continued growth in the future.

RETAIL BANKING

Success of a retail banking program can be gauged by its deposit

trends, and ours remained very favorable during 2018. Total

deposits at the end of the year topped $2.8 billion, representing

an increase of almost 8% from 2017. This growth spanned all

three of our markets, reﬂecting gains in the number of account

relationships as well as average balances.

Retail Banking remains an important service for our customers,

even in a digital world. The physical aspects and comforts of our

branches remain important for times when only face-to-face

banking will sufﬁce. Each of our retail ofﬁces has courteous, highly

trained staff ready to solve problems and prepared to present our

customers with solutions that best meet their ﬁnancial needs.

We continue to further develop all of our delivery channels, digital

in particular, to meet the changing needs of our customers. From a

digital perspective, our customers can do business with us using a

coupled with pristine credit quality, our meaningful deposit

growth, the impact of other sources of fee income, and stable

margins. This momentum continues to validate our conﬁdence in

the Company’s long-term strategies and helps strengthen our

foundation for future growth.

The 6% increase in our loan portfolio during 2018 reﬂected

contributions from all three of our markets. Loan production

reached a record in 2018 as we ﬁnished the year on a strong pace.

STRATEGIC GROWTH

In 2003, as our bank was approaching the century mark as one of

Louisville’s premier community banks, we pivoted to enter a

second market – Indianapolis – using our successful and

well-established banking model to expand our footprint in the

region. Few other decisions in our history have changed our

growth trajectory as that did. Unlike most other growth stories

you may hear about in banking today that rely mainly on

acquisitions for expansion, we embraced a strategy that focuses

on organic growth – building a local, community bank one

customer relationship at a time. Because of the early success of

this move, we decided in 2007 to once again expand our

footprint, this time to Cincinnati.

Like Louisville, both the Indianapolis and Cincinnati metro areas

are vibrant, with great business dynamics and strong consumer

demographics. Our expansions there were bold and

transformative, greatly extending our pathways for future

growth and positioning Stock Yards to capitalize on new

opportunities outside our home market.

KING SOUTHERN BANK ACQUISITION

If you are a long-time stockholder, you know that we also

opportunistically pursue strategic ﬁll-in or adjacent-market

acquisitions from time to time to complement organic growth

and our capital allocation strategies. In December 2018, we

announced the planned acquisition of King Bancorp, the holding

company for King Southern Bank, which operates ﬁve ofﬁces in

and near Louisville. As of December 31, 2018, King Bancorp had

approximately $199 million in assets, $171 million in loans, $124

million in deposits and $16 million in tangible common equity.

I am humbled to have the opportunity to address you for the ﬁrst

time as CEO of Stock Yards Bancorp. Having succeeded David

Heintzman in this position on October 1, 2018, I have high

expectations to meet. Fortunately, by serving as President with

David for 10 years and with a total of 22 years with Stock Yards, I

know the character of our company, the strategic platform for

growth we have methodically constructed over the years, and the

customer-driven philosophies and strict standards of service to

which we adhere. Recognizing this foundation, in the making for

nearly 115 years, I look forward to the future with conﬁdence and

excitement. But ﬁrst, I would like to take a few moments to

review my thoughts on the Company’s performance for 2018.

Later, I will highlight some of the key accomplishments for the

year and describe my views on future opportunities.

FINANCIAL OVERVIEW

As David mentioned, 2018 was another record year for Stock

Yards Bancorp in terms of top- and bottom-line results. While

lower income tax rates contributed to the latter, I am pleased by

the underlying fundamentals that continue to drive our strong

performance, including the success of our lending operations

The all-cash transaction, which is valued at $28 million and

I am highly conﬁdent in the caliber of our team and the experience

expected to close in the second quarter of 2019, subject to

customary regulatory approval and completion of closing

each brings to his new role. Though we have worked together for

many years and in different ways, I believe the fresh perspectives

conditions, will enable us to leverage our capital effectively. The

and changing responsibilities will present a valuable outcome from

transaction should also contribute mid-single digit earnings per

this transition.

share accretion when fully phased in.

King Southern represents a solid strategic ﬁt for us, considering it

David Heintzman. I can speak for everyone here in saying that David

too has built a reputation for responsive, high-quality customer

has always been an honest and ethical leader, persistent and

service and shares our core philosophies, values and ambitions. It

practical, caring, and a person you could trust and know where he

I could not have hoped for a better mentor or business partner than

stood on any question. Our team looks forward to continuing to

work with him as Chairman of the Board of Directors.

will strengthen our presence in Louisville and expand our

footprint to include Nelson County, Kentucky. After the

transaction closes later this year, we look forward to providing

King Southern’s customers with a broader array of products,

capabilities and resources – including one of the top wealth

management groups in the country – which we believe will

translate into meaningful enhancements to the way they

experience banking.

NEW TEAM

As I mentioned at the

outset, I moved into the

role of CEO in October, and

with that came the

promotion of Phil

Poindexter to President.

in 2004, he was most

recently EVP and Chief

Lending Ofﬁcer. Michael

Rehm, who joined Stock

Yards as SVP and

Commercial Banking

Having joined the Company

market, the majority of which reﬂected strength in commercial real

estate related largely to medical facilities and physician ofﬁce

buildings, along with continued success in our private banking area.

Underscoring the ongoing growth of the metro area and its strong

business environment, Indianapolis continues to present new

opportunities for us. In November 2018, we opened our ﬁfth

branch in Plainﬁeld, the ﬁrst “ground-up” new build for our

Indianapolis operations. This follows the recent relocation of our

Indianapolis headquarters to the Capital Center, one of the largest

commercial buildings in the downtown area, providing us with a

more visible and easily accessible location for clients and better

accommodating our growing team of specialized lenders and

wealth management advisors.

Division Manager in 2006, stepped into Phil’s position. In addition

to this leadership transition, we also announced in November that

Clay Stinnett, who has served as EVP and Chief Strategic Ofﬁcer

since 2011 and has more than 19 years with Stock Yards, will

succeed CFO Nancy Davis when she retires from the Company at

the end of April 2019.

INDIANAPOLIS

Our Indianapolis market,

which led all markets by

producing 48% of the Bank’s

loan growth, ended the year

with about 15% of the

Company’s total portfolio –

up from 13% at the end of

2017. Similarly, deposits

increased 12% to support this

growth. This marked the

second consecutive year of

record loan production in this

CINCINNATI

Our Cincinnati market

produced 17% of the

Bank’s loan growth in 2018

and ended the year with

about 14% of our loan

portfolio. This

accomplishment, together

with an increase in deposits

of 11% – the largest in

several years – reﬂects the

health and attractive

prospects of this market.

Market disruptions and displacements caused by bank

consolidations continue to create opportunities for us in

Cincinnati. These opportunities naturally manifest themselves in

new customer acquisitions, as familiar relationships turn into

more distant and indifferent ones, and as we identify high

quality personnel disenfranchised by the ever-changing

demands of a mega-bank culture. We currently have ﬁve

locations in the area and, due to our growth, are actively seeking

to hire additional specialized lenders.

COMMERCIAL BANKING

While we serve a broad customer base, from consumers to

commercial customers, Stock Yards Bank & Trust has historically

focused on business lending. At the end of 2018, commercial

and industrial loans together with owner-occupied commercial

real estate loans – which we consider core lending areas –

comprised about one-half of our $2.5 billion loan portfolio.

Overall, we posted a 6% increase in the portfolio for the year,

with all of our markets participating in this growth, which

resulted in a compound annual growth of 8% over the past ﬁve

years. Loan production reached another record in 2018, but this

did not translate into a similar increase in the portfolio due to

the partial offset of loan pay-offs – mostly reﬂecting

opportunities our customers had for collateral sales rather than

changing business relationships. Our pipeline remains promising

as we move into 2019, and to enhance our prospects further and

address what we consider to be favorable consumer sentiment,

we plan to add additional lenders across our footprint in the

coming year.

We continue to capitalize on opportunities in other areas, such

as with corporate banking, which will focus on larger

middle-market clients and should provide us with another

avenue for growth. Correspondent banking remains a consistent

business line for us to help other community banks with their

ﬁnancial needs and other services such as wealth management

and trust. Our business credit card product, which launched in

2016, has been well received by our customer base. Our credit

card spend increased 30% in 2018 and total credit card accounts

advanced 18%. We are excited about the growth opportunities

of this product as we expand penetration across our markets.

PRIVATE BANKING

Our longstanding private banking services continue to meet the

demands and needs of afﬂuent customers by packaging all of

our solutions and alternatives with one point of contact – our

private bankers. In 2018, we recorded a solid performance in all

markets with ongoing success in dental lending and medical

residence lending programs, among other initiatives. While

private banking continues to perform well across our markets,

“...I am pleased to report that for the latest 10-year period, our stockholder return was 136% versus an average 100% increase for comparable banks in a commonly used NASDAQ bank index. ”BALANCE SHEET GROWTH

In 2018, our balance sheet remained steadfastly strong. Total

assets increased to $3.3 billion during the year while our loan

portfolio rose 6% to $2.5 billion. Simultaneously, we have

remained true to our conservative credit culture and have

continued to focus on loan quality, as evidenced by credit quality

metrics that, already at historically solid levels as we entered the

year, improved further in 2018.

Complementing our portfolio growth and providing important

funding for new loans, total deposits increased 8% to $2.8 billion

at December 31, 2018, as we experienced good momentum with

new and existing customers.

STOCKHOLDER RETURNS

As a key directive for our company, Stock Yards Bancorp always

seeks to enhance stockholder value through earnings per share

growth and a variety of capital management strategies, including

a substantial and growing dividend payout. I am pleased with our

sustained progress toward this objective in 2018. As was the case

in each of the previous four years, our Board increased the

Company’s quarterly cash dividend twice in 2018 – this past year

for a total of $0.04 per share for the year – a testament to our

strong operating results reported in 2018. Stock Yards Bancorp

has now raised its quarterly dividend rate a total of 11 times over

the past ﬁve years, resulting in a cumulative increase of 79%.

While our company’s published operating performance was

among best in class, I know your investment statement tells its

own tale. Please know that we measure our performance over

the long term, since shorter-term views can tilt outcomes and

obscure lagging results. That said, I am pleased to report that for

the latest 10-year period, our stockholder return was 136%

versus an average 100% increase for comparable banks in a

commonly used NASDAQ bank index. This outperformance

I am pleased to report another year of record earnings for Stock

Yards Bancorp. With strong growth throughout most of the

Company last year, we increased diluted earnings per share 46%

to $2.42 in 2018. This resulted in solid returns on average assets

and equity of 1.76% and 16.00%, respectively, for the year – a

signiﬁcant increase over 2017.

Beyond obvious beneﬁts from tax reform, robust economic

conditions across our markets continued to drive impressive

results. Our loan portfolio and net interest income were higher,

while the magnitude of our other revenue sources – most

notably from our Wealth Management and Trust Group – also

contributed to our exceptional 2018 performance. This progress

served to enhance our returns to stockholders, strengthen our

position as a leader among peer community banks and provide a

strong foundation for growth we seek in years ahead. Also

reﬂecting the dedicated efforts of our team of bankers, managers

and advisors, our achievements in 2018 stand as a tribute to our

pursuit of the highest possible levels of customer service and our

commitment to building long-term relationships.

PAGE 3

demonstrates why, year in and year out, Stock Yards Bancorp
remains among the nation’s high-performing community banks.

MANAGEMENT TRANSITIONS
In May, I announced my intention to retire as Chief Executive
Ofﬁcer on October 1, 2018, to remain as Executive Chairman
through the end of the year and continue as non-executive
Chairman of the Board beginning in 2019. This move reﬂected
our company’s astute planning for new leadership over time and
building talent from within. So, I was pleased to recommend and
have the Board approve Ja Hillebrand as my successor as CEO, and
alongside that, Phil Poindexter was promoted to President.
Additionally, in November 2018, we announced that CFO Nancy
Davis will retire from the Company on April 30, 2019, and that
Clay Stinnett, who currently serves as Executive Vice President
and Chief Strategic Ofﬁcer – a position he has held since 2011 –
will be promoted to Chief Financial Ofﬁcer on May 1. We want to
congratulate Clay on his advancement in our management team
and thank Nancy for her tireless efforts over a 27-year tenure
with the Company. Nancy and I began our careers in public
accounting on a community bank audit team. After I joined Stock
Yards in 1985, I engaged that ﬁrm and a few years later hired
Nancy. I greatly respect her professional capabilities and careful
oversight of our ﬁnancial processes.

BOARD CHANGES
In July 2018, we announced the appointment of John Schutte to
our Board of Directors, part of a succession plan already underway
in anticipation that two current members of the Board would
reach mandatory retirement age prior to the 2019 annual
meeting. John is CEO of GeriMed, Inc., a nationwide group
purchasing organization specializing in long-term care pharmacy
services for independent pharmacies that serve long-term care
providers. In February 2017, he founded MainPointe
Pharmaceuticals, a national company that markets and distributes
pharmaceuticals as well as OTC products and supplements. With
extensive experience in many aspects of business and commercial

real estate and development, John’s expertise, insight and strong
reputation in the Louisville business community will add a
valuable dimension to the work of our Board.

At our annual meeting in April 2019, Charlie Edinger and Rick
Northern will retire from our Board of Directors. Charlie joined the
Board in 1985 and Rick joined in 2011. As Board members, they
have been a part of and led many committees, thereby making
important contributions to our long-term strategic directions and
the governance of our company. We cannot thank them enough
for their tireless efforts to better our company.

IN MEMORIAM
Lastly, we would like to pay our respects to the family of Harry
Troutman, former Chairman of the Board and Chief Executive
Ofﬁcer, who passed away in 2018. Harry joined the Bank in 1941,
serving on the Board from 1961 until 1993 and serving as Chief
Executive Ofﬁcer from July 1978 until his retirement in January
1988. We are deeply indebted to Harry for his guidance,
commitment and contributions to the Company.

FINAL THOUGHTS
Our entire team is energized and excited about the Bank’s growth
prospects, buoyed by record-breaking achievements this past
year. With a strong capital base, attractive loan growth
opportunities across three vibrant markets, pristine asset quality,
and an acclaimed Wealth Management and Trust Group, we
believe the Company is well positioned to extend its record for
stable and predictable earnings growth. Complementing these
organic conditions, we also are enthusiastic about the prospects
to expand via selective market ﬁll-ins like the pending King
Bancorp deal, which Ja will address on the following pages.

We appreciate your continued conﬁdence in our company, as
demonstrated by your investment in Stock Yards Bancorp. We
take our responsibilities to you, as a stockholder, very seriously
and pledge our best efforts to build stockholder value in the
future – a future that is in very capable hands with Ja Hillebrand
as CEO and the strong management team that surrounds him.
Thank you for joining us on the journey ahead.