Exhibit 99.1
S.Y. Bancorp Announces Higher First Quarter Earnings
as Net Income Per Diluted Share Increases 8% to $0.39
LOUISVILLE, Ky.--(BUSINESS WIRE)--April 18, 2007--S.Y. Bancorp,
Inc. (NASDAQ: SYBT), parent company of Stock Yards Bank & Trust
Company, with offices in Louisville, southern Indiana and
Indianapolis, today reported results for the first quarter ended March
31, 2007. Highlights of the Company's report included record earnings
driven by continued loan growth and strong credit quality, together
with higher income from investment management and trust services. A
summary of results for the first quarter follows:
Quarter ended March 31, 2007 2006 Change
- --------------------------------------- ---------- ---------- ------
Net income $5,704,000 $5,320,000 7.2%
Net income per share, diluted $ 0.39 $ 0.36 8.3%
Return on average equity 16.60% 16.81%
Return on average assets 1.64% 1.60%
Additional unaudited supplemental financial information for the first
quarter ended March 31, 2007 and 2006, may be obtained by following
this link: http://www.irinfo.com/sybt/1q07fsm.pdf.
Commenting on the announcement, David Heintzman, Chairman and
Chief Executive Officer, said, "We are pleased to begin 2007 with
solid earnings growth that again has translated into strong returns on
average equity and assets. Stock Yards Trust Company continued to play
an important role in the Company's growth during the first quarter,
achieving a 15% increase in revenue versus the same period last year.
While asset growth accounted for a portion of that, the Company also
continued to increase executor and other fee income. Assets under
management increased to $1.60 billion at March 31, 2007, from $1.47
billion at March 31, 2006. Also, during the first quarter, we
maintained good momentum in our lending operations, enabling us to
increase our loan portfolio 8% year over year. At the same time, we
also remained intently focused on credit quality. With credit quality
already at a very sound level, we are gratified to note that several
key metrics showed further improvement in the first quarter versus
both the fourth quarter of 2006 and the same period last year. On the
strength of these combined gains, our core banking businesses
continued as a key catalyst for our growth.
"While we are pleased with the Company's solid start to the new
year, we recognize that we operate in an increasingly competitive
environment that continues to place pressure on margins," Heintzman
continued. "Loan growth, however, especially in the area of commercial
and industrial relationship lending, has remained strong for us, even
though the market in general has seen some slowing in
transaction-oriented business. This growth has helped offset the
margin compression we have experienced.
"Looking ahead, we remain dedicated to implementing new business
development programs, deepening current client relationships, and
extending the advantages that come with a customer-centered philosophy
on community banking," Heintzman added. "Longer term, we remain
excited about the prospects of opening our second office in
Indianapolis later this year and continuing our efforts to introduce
Stock Yards Bank & Trust to the Cincinnati market."
Net interest income, the Company's largest source of revenue,
increased $441,000 or 3% in the first quarter of 2007 compared with
the year-earlier period. This increase reflected continued growth in
the Company's loan portfolio, its most significant earning asset,
which helped offset the impact of margin compression over the past
year. Net interest margin for the first quarter of 2007 was 4.23%,
down 13 basis points from 4.36% for the fourth quarter of 2006 and
three basis points below 4.26% in the year-earlier quarter. Although
the Company has experienced an increase in interest rates on its
earning assets, the rate of increase seen on interest-bearing
liabilities has exceeded that of earning assets. Both an ongoing
inverted yield curve and the competitive pressures on both loan and
deposit interest rates have had a negative impact on net interest
margin. While the Company believes it remains well positioned for the
current interest rate environment, with its loan portfolio being
almost evenly split between fixed and variable rates, it expects
ongoing pressure on net interest margins.
During the first quarter of 2007, the Company maintained a strong
trend line in credit quality. Non-performing loans dropped to 0.45% of
total loans from 0.59% in the fourth quarter of 2006 and 0.50% in the
year-earlier period. This was the third consecutive quarter of such
improvement. Total non-performing loans declined to $5,137,000 in the
first quarter from $6,753,000 in the fourth quarter of 2006 and
$5,331,000 in the first quarter of 2006. Net charge-offs, while down
to 0.07% of average loans outstanding in the first quarter versus
0.08% in the fourth quarter last year, were up from 0.03% in the
year-earlier quarter. The year-over-year increase in net charge-offs
primarily reflected the charge-off of a single loan that involved
fraudulent collateral. The principal balance of this loan was
specifically reserved to the allowance for loan losses and, in
connection with the Company's recent regular FDIC examination and at
the examiners' recommendation, the Bank fully charged off the loan in
the first quarter of 2007. The Company believes it has legal remedies
and insurable interests available and, at this time, expects partial
recovery in this matter.
Based on the Bank's systematic credit risk assessment process, the
increase in net charge-offs, and in view of a more uncertain economic
climate this past year, management considered it prudent and necessary
to increase the quarterly loan loss provision in the first quarter of
2007 to $780,000 versus $350,000 in the year-earlier quarter. The
Company's allowance for loan losses was 1.06% of total end-of-quarter
loans at March 31, 2007, compared with 1.14% at March 31, 2006.
Non-interest income increased $243,000 or 4% for the first quarter
of 2007 compared with the year-earlier period, led by higher
investment management and trust income, the largest component of
non-interest income. This increase more than offset declines in
service charges, gains on sales of mortgage loans, brokerage fees and
commissions, and other non-interest income. Gains on sales of mortgage
loans for the year-earlier period was higher than anticipated due to a
rolling effect from 2005. The first quarter of 2007 was on target for
projected volume, and gains on sales of mortgage loans are expected to
be up 10% for the year.
Non-interest expense declined $404,000 or 3% in the first quarter
of 2007 compared with the year-earlier period. The decline in
non-interest expense for the period reflected lower salaries and
employee benefits due to reduced stock compensation expense and a
one-time reduction in state bank taxes reflecting tax credits
purchased in the quarter. The Company's efficiency ratio for the first
quarter of 2007 improved to 54.54% from 58.54% in the first quarter
last year.
S.Y. Bancorp's total assets at the end of the first quarter of
2007 increased 4% to $1.414 billion from $1.359 billion at March
31, 2006. The Company's loan portfolio increased 8% to $1.150 billion
from $1.061 billion at March 31, 2006, primarily due to steady loan
growth throughout the past year. Deposits at March 31, 2007, increased
3% to $1.110 billion from $1.075 billion at March 31, 2006, reflecting
primarily growth in time deposits and money market accounts.
In February, the Company's Board of Directors declared a regular
quarterly cash dividend of $0.15 per share. The latest dividend was
distributed on April 2, 2007, to stockholders of record as of
March 16, 2007.
Louisville, Kentucky-based S.Y. Bancorp, Inc., with $1.414 billion
in assets, was incorporated in 1988 as a bank holding company. It is
the parent company of Stock Yards Bank & Trust Company, which was
established in 1904.
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 markets 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; and 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)
First Quarter Ended
March 31,
------------------------------
2007 2006
------------ ------------
Interest income $ 22,606 $ 20,327
Interest expense 9,192 7,354
------------ ------------
Net interest income 13,414 12,973
Provision for loan losses 780 350
------------ ------------
Net interest income after
provision for loan losses 12,634 12,623
Non-interest income 7,156 6,913
Non-interest expense 11,374 11,778
------------ ------------
Net income before income
taxes 8,416 7,758
Provision for income taxes 2,712 2,438
------------ ------------
Net income $ 5,704 $ 5,320
============ ============
Net income per share (a)
Basic $ 0.40 $ 0.37
Diluted $ 0.39 $ 0.36
Weighted average shares
outstanding (a)
Basic 14,389 14,504
Diluted 14,642 14,749
March, 31, Dec. 31, March 31,
2007 2006 2006
----------- -------------- ---------------
Total assets $1,414,364 $ 1,426,321 $ 1,359,319
Total loans 1,149,940 1,148,954 1,060,842
Non-interest bearing
deposits 174,383 179,657 183,378
Interest-bearing deposits 935,395 923,585 891,238
---------- ------------ ------------
Total deposits 1,109,778 1,103,242 1,074,616
Stockholders' equity 140,176 137,444 128,331
Book value per share (a) 9.75 9.54 8.85
(a) Adjusted for the May 2006 5% stock dividend.
Unaudited supplemental financial information for the first quarter
ended March 31, 2007 and 2006, may be obtained by following this
link: http://www.irinfo.com/sybt/1q07fsm.pdf.
CONTACT: S.Y. Bancorp, Inc.
Nancy B. Davis, 502-625-9176
Executive Vice President,
Treasurer and Chief Financial Officer