Exhibit 99.1
S.Y. Bancorp Announces Record Fourth
Quarter Results; 2004 Marks Company's
Seventeenth Consecutive Year of Higher Earnings
LOUISVILLE, Ky.--(BUSINESS WIRE)--Jan. 21, 2005--S.Y. Bancorp,
Inc. (Amex:SYI), parent company of Stock Yards Bank & Trust Company in
Louisville, southern Indiana and Indianapolis, today reported results
for the fourth quarter and year ended December 31, 2004. Record
earnings for the periods reflected moderate growth in net interest
income, strong gains in several categories of non-interest income,
including investment management and trust income, and a lower
provision for loan losses. These factors helped offset the impact of
an industry-wide slowdown in mortgage refinancings during the year. An
earnings summary of fourth quarter and year-to-date results follows:
Quarter ended December 31, 2004 2003 Change
- -------------------------- ----------- ----------- ------
Net income $ 4,914,000 $ 4,462,000 10.13%
Net income per share, basic $ 0.35 $ 0.33 6.06%
Net income per share, diluted $ 0.35 $ 0.32 9.38%
Return on average equity 16.87% 17.86%
Return on average assets 1.64% 1.59%
Year ended December 31, 2004 2003 Change
- ----------------------- ----------- ----------- ------
Net income $18,912,000 $17,709,000 6.79%
Net income per share, basic $ 1.37 $ 1.31 4.58%
Net income per share, diluted $ 1.33 $ 1.27 4.72%
Return on average equity 17.28% 18.88%
Return on average assets 1.65% 1.63%
Commenting on the announcement, David P. Heintzman, who became
Chairman of the Board and Chief Executive officer effective January 1,
2005, in addition to his responsibilities as President, said, "While
our results for the past year did not match higher historical trends
for S.Y. Bancorp, the momentum building at year's end was encouraging.
These signs, along with ongoing efforts to expand the reach of our
business and improve our process and structure internally during 2005,
give us greater confidence that we can accelerate our growth
throughout the coming year. Consequently, our goal is to increase
earnings at least 10% in 2005, building on the stronger pace we
witnessed in the fourth quarter.
"The year provided a number of significant highlights," he
continued. "The close of 2004 extended a remarkable period of
consistent prosperity for S.Y. Bancorp, as earnings rose for the
seventeenth consecutive year. It also was the eighth straight year in
which our returns on average assets and equity exceeded 1.5% and 15%,
respectively, underscoring what we believe is one of the strongest
track records in banking. This performance, in turn, paved the way for
continued growth in our dividend rate, which advanced a total of 38%
in two steps during 2004."
Heintzman pointed out that diversity in the Company's revenue
streams again helped S.Y. Bancorp meet the year's challenges, which
included slowing mortgage lending and lingering uncertainty in some
sectors of the economy. Strong growth rates in several key areas of
non-interest income, especially from Stock Yards Trust Company, other
fee-related activities and the Company's brokerage business,
effectively countered the significant reduction seen in gains on sales
of mortgage loans. As the banking environment grows increasingly
competitive, the Company believes this balance inherent in its
operations will continue to be a key to future success.
"We worked hard in 2004 to reorganize our lending process to
improve efficiencies and revitalize our loan growth, and we are
pleased to have begun to see tangible benefits from these efforts."
Heintzman continued. "Additionally, we believe, for the most part,
economic conditions across our markets began to improve in 2004.
Because of these factors, loan growth in the final months of 2004,
particularly in commercial lending - our largest lending division, was
very strong and reflected a pace we have not seen at Stock Yards Bank
in at least three years. Importantly, we achieved this progress
despite an increasingly crowded marketplace that reflects several new
entrants from the surrounding area."
Concluding, Heintzman added, "Any commentary on 2004 would be
incomplete without acknowledging our former Chairman and Chief
Executive Officer, David Brooks, who retired effective January 1,
2005, and his tireless efforts to build this Company. Because of his
accomplishments, I begin my first year as Chairman with enthusiasm and
confidence as we work to leverage that success into an even better
performance in the years ahead. In doing this, we intend to maintain
our focus on providing a level of service that differentiates Stock
Yards Bank & Trust from its competitors. Our trust company, with $1.3
billion in assets and annual revenues of more than $9.4 million - and
an enviable track record for outperforming the Standard & Poor's 500
Index, continues to provide a major point of distinction and will
remain a key element in this strategy. On the banking side, we are
excited by the potential we see in our marketplace for future growth,
as our customer base still represents a small percentage of the local
financial services market. Additionally, our recent entry into
Indianapolis, with the establishment of our first branch there and our
investment in the start-up of Indiana Business Bank during 2004,
should enhance our opportunities for growth."
Net interest income, the Company's largest source of revenue,
increased 4% in the fourth quarter and the year versus comparable 2003
periods, primarily reflecting volume increases in earning assets that
were offset somewhat by a decline in net interest margin. On a
taxable-equivalent basis, net interest income also was up 4% for the
quarter and year compared with prior-year periods. Net interest margin
for the fourth quarter, at 4.14%, was down seven basis points from the
year-earlier period, but was up three basis points from the third
quarter of 2004. Although the Company believes it is well positioned
for a rising interest rate environment, the effects of increases in
rates by the Federal Reserve may be offset by more competitive
pressure in deposit pricing. Depending on such factors as competitive
rate pressures or unforeseen changes in the Company's funding mix, the
net interest margin could continue to experience some slight
contraction during the next quarter.
In response to the Company's assessment of inherent risk in the
loan portfolio, the provision for loan losses declined 8%, or $50,000,
in the fourth quarter of 2004 and 18%, or $460,000, for the year
compared with the same periods in 2003. Most notable among these
measures were net charge-offs which, on an annual basis, reached their
lowest level since 2000. Although net charge-offs were up compared
with the fourth quarter of 2003 and the third quarter of 2004, the
level seen in the fourth quarter of 2004 compares favorably with the
level of charge-offs seen over the past several years. The relative
level of non-performing assets at year's end was consistent with the
prior year, however, non-performing assets were higher than in the
third quarter and at the end of 2003. The Company believes the
absolute increase in non-performing assets does not represent a trend
of declining loan quality. Management considers the allowance for loan
losses adequate to cover losses inherent in the loan portfolio at
December 31, 2004.
Non-interest income declined 3% in the fourth quarter of 2004 and
was up 1% for the year, compared with the same periods in 2003. These
changes primarily reflected higher investment management and trust
income, as trust assets under management rose 10% from December 31,
2003, increased bankcard transaction volume, and increased brokerage
fees. These gains helped offset a large decline in mortgage banking
income of 42% for the quarter and 58% for the year caused by the
significant decline in mortgage refinance activity that began in the
second half of 2003.
Non-interest expenses declined 5% for the quarter and increased 1%
for the year compared with the same 2003 periods. An 8% decline in
salaries and benefits for the fourth quarter accounted for most of the
change from the prior-year period. Salaries and benefits were down for
the quarter primarily due to lower levels of annual bonus pay, much of
which was tied to the Company's annual minimum growth target of 10%.
Net occupancy expense increased 17% for the quarter and 15% for the
year, largely as a result of the opening of new facilities and the
remodeling of some existing facilities.
Total assets for the fourth quarter increased 8% to $1.21 billion
from $1.12 billion at the end of 2003. Loans increased 11% from the
end of 2003. Most of this growth occurred during the three months
ended December 31, 2004. Deposits increased 8% from December 31, 2003;
the Company supplemented this growth earlier in 2004 by securing
lower-cost, fixed-rate advances from the Federal Home Loan Bank.
S.Y. Bancorp, Inc. was incorporated in 1988 as a bank holding
company in Louisville, Kentucky, and is the parent company of Stock
Yards Bank & Trust Company, which has locations in Louisville and
southern Indiana, as well as a branch in Indianapolis. Stock Yards
Bank & Trust Company was established in 1904 in Louisville, Kentucky.
S.Y. Bancorp, Inc. is also the parent company of S.Y. Bancorp Capital
Trust I, a Delaware statutory business trust that is a 100%-owned
finance subsidiary.
This report contains forward-looking statements under the Private
Securities Litigation Reform Act that involve risks and uncertainties.
Although the Company's management believes the assumptions underlying
the forward-looking statements contained herein are reasonable, any of
these assumptions could be inaccurate. Therefore, there can be no
assurance the forward-looking statements included herein will prove to
be accurate. Factors that could cause actual results to differ from
those discussed in forward-looking statements include, but are not
limited to: economic conditions both generally and more specifically
in the market in which the Company and its subsidiaries operate;
competition for the Company's customers from other providers of
financial services; government legislation and regulation which change
from time to time and over which the Company has no control; changes
in interest rates; material unforeseen changes in liquidity, results
of operations, or financial condition of the Company's customers;
other risks detailed in the Company's filings with the Securities and
Exchange Commission, all of which are difficult to predict and many of
which are beyond the control of the Company.
S.Y. Bancorp
Summary Unaudited Financial Information
(in thousands except per share amounts)
Fourth Quarter Ended Year Ended
December 31, December 31,
----------------------- -----------------------
2004 2003 2004 2003
---------- ---------- ---------- ----------
Net interest
income $ 11,302 $ 10,920 $ 44,221 $ 42,748
Provision for
loan losses 600 650 2,090 2,550
---------- ---------- ---------- ----------
Net interest income
after provision
for loan losses 10,702 10,270 42,131 40,198
Non-interest income 6,201 6,406 24,676 24,498
Non-interest
expense 9,761 10,221 39,093 38,625
---------- ---------- ---------- ----------
Net income before
income taxes 7,142 6,455 27,714 26,071
Provision for
income taxes 2,228 1,993 8,802 8,362
---------- ---------- ---------- ==========
Net income $ 4,914 $ 4,462 $ 18,912 $ 17,709
========== ========== ========== ==========
Net income per
share:
Basic $ 0.35 $ 0.33 $ 1.37 $ 1.31
Fully diluted $ 0.35 $ 0.32 $ 1.33 $ 1.27
Weighted average
shares
outstanding:
Basic 13,907 13,517 13,797 13,481
Fully diluted 14,217 14,041 14,169 13,975
Dec. 31, Dec. 31,
2004 2003
---------- ----------
Total assets $1,211,340 $1,118,521
Total loans 984,841 886,153
Non-interest bearing deposits 159,342 143,901
Interest-bearing deposits 790,741 737,965
Stockholders' equity 116,647 100,414
Book value per share 8.36 7.40
Unaudited supplemental financial information for the fourth
quarter and year ended December 31, 2004 and 2003, may be obtained by
following this link: http://www.irinfo.com/syi/4q04fs.pdf.
CONTACT: S.Y. Bancorp, Inc.
Nancy B. Davis, 502-625-9176