Exhibit 99.1
S.Y. Bancorp Announces Higher Third Quarter Earnings as Net Income
Per Diluted Share Increases 11% to $0.41
LOUISVILLE, Ky.--(BUSINESS WIRE)--Oct. 17, 2007--S.Y. Bancorp,
Inc. (NASDAQ: SYBT), parent company of Stock Yards Bank & Trust
Company, with offices in the Louisville metropolitan area,
Indianapolis and Cincinnati, today reported results for the third
quarter and nine months ended September 30, 2007. Highlights of the
third quarter included higher earnings, largely driven by ongoing
growth in non-interest income, particularly with respect to the
Company's investment management and trust services, and the
continuation of strong credit quality characteristics in the loan
portfolio, which have helped counter increasing competitive pressures
affecting loan growth and interest margins. A summary of results for
the third quarter and year-to-date period follows:
Quarter ended September 30, 2007 2006 Change
- ------------------------------------- ----------- ----------- ------
Net income $ 5,887,000 $ 5,421,000 9%
Net income per share, diluted $ 0.41 $ 0.37 11%
Return on average equity 16.50% 16.29%
Return on average assets 1.66% 1.60%
Nine months ended September 30, 2007 2006 Change
- ------------------------------------- ----------- ----------- ------
Net income $ 17,888,000 $ 16,609,000 8%
Net income per share, diluted $ 1.23 $ 1.13 9%
Return on average equity 17.00% 17.03%
Return on average assets 1.70% 1.65%
Commenting on the announcement, David Heintzman, Chairman and
Chief Executive Officer, said, "Against the backdrop of an intensely
competitive operating environment, which has affected our loan growth
and pressured our net interest margin, the Company continued to
produce solid earnings performance and high returns for our
stockholders. Our success despite difficult industry conditions
demonstrates the importance we have placed on expanding our revenue
base, with one key factor in those efforts being the growth of our
investment management and trust operations. These services continue to
complement and provide synergy for our banking activities. This
department has developed a sound and growing reputation supported by
solid, consistent investment performance for our clients. We were
gratified to see revenue growth of 12% in the third quarter from our
investment management and trust operations, clearly the largest source
of non-interest income, as total assets under management increased
13.3% to $1.7 billion over the past year primarily due to market
appreciation.
"It is noteworthy that the Company has produced consistent
earnings even as we have ramped up our expansion activities, adding to
our presence in Indianapolis and entering the Cincinnati market,"
Heintzman continued. "The Indianapolis market has been instrumental to
our overall loan growth over the past year, and we expect that the
upcoming opening of our second office there will add further momentum
to our efforts to reach new customers. In Cincinnati, we recently
selected a prominent downtown location for our flagship office and are
well underway in building a team of experienced lenders to lead our
expansion there."
Concluding, Heintzman added, "Looking ahead to the final quarter
of the year, we remain concerned about general market forces,
including a highly competitive marketplace, the effect of declining
interest rates, and overall conditions in the economy. Competition
will continue to restrain loan growth and will place additional
pressure on net interest margin. Taking a longer-term view, however,
we remain excited about the prospects of expanding our reach to new
markets and the growth opportunities created by that expansion."
Net interest income, the Company's largest source of revenue,
declined $66,000, or less than 1%, in the third quarter of 2007
compared with the year-earlier period. Net interest income increased
$504,000 or 1% in the first nine months of 2007 compared with the same
period last year. The third quarter decline in net interest income
reflected modest growth in the Company's loan portfolio, which was
more than offset by net interest margin compression. Net interest
margin for the third quarter, at 4.18%, declined eight basis points
from 4.26% in the second quarter of 2007 and was 21 basis points lower
than the 4.39% reported in the year-earlier period. This ongoing
margin pressure, which began in the third quarter last year, reflects
the persistence of a relatively flat yield curve coupled with the
impact of higher interest expense associated with local competition
for deposits. The Company expects pressure on net interest margins to
continue in the near term, and further reductions in short-term rates
by the Federal Reserve could add more pressure.
Non-performing loans for the third quarter declined 11% on a
linked-quarter basis to $4,244,000 from $4,769,000 in the second
quarter of 2007, and were 37% below non-performing loans of $6,765,000
in the third quarter of 2006. The ratio of non-performing loans to
total loans was 0.37% in the third quarter of 2007, down from 0.41% in
the second quarter of 2007 and 0.61% in the third quarter last year.
Net charge-offs totaled 0.03% of average loans in the third quarter of
2007 compared with 0.04% in same period last year. However, in view of
near-term concerns about the economy in general, the Company increased
its provision for loan losses to $850,000 in the third quarter from
$450,000 in the third quarter of 2006. For the first nine months of
2007, the loan loss provision totaled $2,090,000 versus $1,400,000 in
the year-earlier period. The Company's allowance for loan losses was
1.08% of total loans at September 30, 2007, compared with 1.04% of
total loans at June 30, 2007, and 1.11% at September 30, 2006.
Management noted that the Company has no sub-prime loans in its
portfolio.
Non-interest income increased $557,000 or 8% in the third quarter
compared with the same quarter last year, primarily due to higher
investment management and trust income, which rose $345,000 or 12%
during the quarter. This, along with higher bankcard transaction
revenue, service charges on deposit accounts, brokerage fees and
commissions, and other non-interest income offset lower gains on sales
of mortgage loans for the quarter. Non-interest income increased
$1,295,000 or 6% in the first nine months of 2007 compared with the
year-earlier period, again driven primarily by higher investment
management and trust income.
Non-interest expense declined $386,000 or 3% in the third quarter
of 2007 versus the same period last year. The decline for the third
quarter primarily reflected the non-recurring impact in the
year-earlier quarter of the write-off of $879,000 of unamortized
issuance costs associated with the Company's trust preferred
securities that were redeemed on July 1, 2006. Also, as a result of
revised standard costs applied to the loan production process and an
increase in loan volume, the Company's deferred salaries associated
with loan originations in the third quarter of 2007 exceeded those
amounts in the same period last year. These factors helped offset a
rise in salaries and employee benefits expense related in part to the
addition of staff associated with the development of a second office
in the Indianapolis market and the Company's recent entry into the
Cincinnati market. Non-interest expense declined $584,000 or 2% in the
first nine months of 2007 compared with the year-earlier period, again
primarily due to the write-off of unamortized issuance costs on the
Company's trust preferred securities in the year-earlier period and
the impact of deferred salary expense in 2007. These factors, along
with a first quarter 2007 reduction in state bank taxes, resulting
from tax credits purchased in the quarter, helped offset higher
salaries and employee benefits, data processing and net occupancy
expenses for the first nine months of 2007. The Company's third
quarter efficiency ratio was to 53.95% compared with 53.22% in the
second quarter of 2007 and 57.07% in the third quarter last year.
S.Y. Bancorp's total assets for the third quarter increased 4% to
$1.410 billion from $1.354 billion at September 30, 2006. The
Company's loan portfolio also increased 4% to $1.157 billion from
$1.117 billion for the year-earlier period, primarily due to steady
loan growth throughout the year. Deposits of $1.067 billion at
September 30, 2007, were level with the year-earlier period.
In July, the Company's Board of Directors expanded the Company's
stock repurchase plan by 550,000 shares, or approximately 4% of the
Company's total common shares outstanding, increasing the remaining
authorization at that time to 567,500 shares. In August, as a part of
this stock repurchase program, the Company established a Rule 10b5-1
stock trading plan. During the third quarter, the Company repurchased
approximately 316,000 shares, or about 2% of its shares outstanding.
As of September 30, 2007, the Company had remaining authorization to
repurchase approximately 251,500 shares. In August, the Board of
Directors declared a regular quarterly cash dividend of $0.16 per
share, which was distributed on October 1, 2007, to stockholders of
record as of September 14, 2007.
Louisville, Kentucky-based S.Y. Bancorp, Inc., with $1.410 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, Inc.
Summary Unaudited Financial Information
(in thousands except per share amounts)
Third Quarter Nine Months
Ended Ended
September 30, September 30,
--------------- ---------------
2007 2006 2007 2006
------ ------ ------ ------
Interest income $23,062 $22,029 $68,483 $63,600
Interest expense 9,521 8,422 27,949 23,570
------ ------ ------ ------
Net interest income 13,541 13,607 40,534 40,030
Provision for loan losses 850 450 2,090 1,400
------ ------ ------ ------
Net interest income after provision
for loan losses 12,691 13,157 38,444 38,630
Non-interest income 7,566 7,009 22,446 21,151
Non-interest expense 11,527 11,913 34,385 34,969
------ ------ ------ ------
Net income before income taxes 8,730 8,253 26,505 24,812
Provision for income taxes 2,843 2,832 8,617 8,203
------ ------ ------ ------
Net income $ 5,887 $ 5,421 $17,888 $16,609
====== ====== ====== ======
Net income per share
Basic $ 0.42 $ 0.38 $ 1.25 $ 1.15
Diluted $ 0.41 $ 0.37 $ 1.23 $ 1.13
Weighted average shares outstanding
Basic 14,185 14,426 14,299 14,471
Diluted 14,400 14,718 14,525 14,736
Sept. 30, Dec. 31, Sept. 30,
2007 2006 2006
--------- --------- ---------
Total assets $1,410,453 $1,426,321 $1,353,893
Total loans 1,156,899 1,148,954 1,116,799
Non-interest bearing deposits 167,614 179,657 168,190
Interest-bearing deposits 899,815 923,585 898,774
--------- --------- ---------
Total deposits 1,067,429 1,103,242 1,066,964
Stockholders' equity 138,623 137,444 134,576
Book value per share 9.90 9.54 9.32
Unaudited supplemental financial information for the third quarter
and nine months ended September 30, 2007 and 2006, appears on the
following pages.
S. Y. Bancorp, Inc. Financial Information
Third Quarter 2007 Earnings Release
(all figures other than per share amounts and number of employees are
expressed in thousands unless otherwise noted)
Third Quarter Ended Nine Months Ended
September 30, September 30,
------------------- ---------------------
2007 2006 2007 2006
----------- ------- ---------- ----------
Income Statement Data
Net interest income, fully
tax equivalent (1) $ 13,802 $13,865 $ 41,355 $ 40,777
=========== ======= ========== ==========
Net interest income $ 13,541 $13,607 $ 40,534 $ 40,030
Provision for loan losses 850 450 2,090 1,400
----------- ------- ---------- ----------
Net interest income after
provision for loan losses 12,691 13,157 38,444 38,630
----------- ------- ---------- ----------
Gain on the sale of
securities - - - -
Investment management and
trust income 3,227 2,882 9,760 8,600
Service charges on deposit
accounts 2,260 2,188 6,482 6,596
Bankcard transaction revenue 596 509 1,728 1,495
Gains on sales of mortgage
loans held for sale 227 326 874 933
Brokerage commissions and
fees 498 460 1,443 1,559
Other non-interest income 758 644 2,159 1,968
----------- ------- ---------- ----------
Total non-interest income 7,566 7,009 22,446 21,151
----------- ------- ---------- ----------
Salaries and employee
benefits expense 6,865 6,356 20,104 19,800
Net occupancy expense 917 899 2,737 2,608
Data processing expense 979 929 3,045 2,819
Furniture and equipment
expense 291 285 873 888
Amortization and writeoff of
issuance costs of trust
preferred - 879 - 897
State bank taxes 326 327 815 971
Other non-interest expenses 2,149 2,238 6,811 6,986
----------- ------- ---------- ----------
Total non-interest expense 11,527 11,913 34,385 34,969
----------- ------- ---------- ----------
Net income before income tax
expense 8,730 8,253 26,505 24,812
Income tax expense 2,843 2,832 8,617 8,203
----------- ------- ---------- ----------
Net income $ 5,887 $ 5,421 $ 17,888 $ 16,609
=========== ======= ========== ==========
Weighted average shares -
basic 14,185 14,426 14,299 14,471
Weighted average shares -
diluted 14,400 14,718 14,525 14,736
Basic earnings per share $ 0.42 $ 0.38 $ 1.25 $ 1.15
Diluted earnings per share 0.41 0.37 1.23 1.13
Cash dividend declared per
share 0.16 0.15 0.47 0.42
Balance Sheet Data (at
period end)
Total loans $1,156,899 $1,116,799
Allowance for loan losses 12,550 12,442
Total assets 1,410,453 1,353,893
Non-interest bearing
deposits 167,614 168,190
Interest bearing deposits 899,815 898,774
Federal home loan bank
advances 70,000 30,000
Subordinated debentures 90 120
Stockholders' equity 138,623 134,576
Total shares outstanding 14,005 14,442
Book value per share 9.90 9.32
Market value per share 27.04 29.67
S. Y. Bancorp, Inc. Financial Information
Third Quarter 2007 Earnings Release
Third Quarter Ended Nine Months Ended
September 30, September 30,
----------------------- -----------------------
2007 2006 2007 2006
----------- ----------- ----------- -----------
Average Balance Sheet
Data
Average loans $1,155,211 $1,097,176 $1,152,709 $1,082,517
Average assets 1,409,653 1,347,654 1,405,845 1,344,175
Average earning assets 1,311,152 1,251,388 1,309,989 1,249,697
Average deposits 1,063,718 1,060,109 1,078,815 1,053,535
Average long-term debt 70,090 30,568 62,220 46,066
Average interest
bearing liabilities 1,057,138 1,013,960 1,056,505 1,011,307
Average stockholders'
equity 141,583 132,066 140,700 130,357
Performance Ratios
Annualized return on
average assets 1.66% 1.60% 1.70% 1.65%
Annualized return on
average equity 16.50% 16.29% 17.00% 17.03%
Net interest margin,
fully tax equivalent 4.18% 4.39% 4.22% 4.35%
Non-interest income to
total revenue, fully
tax equivalent 35.41% 33.58% 35.18% 34.15%
Efficiency ratio 53.95% 57.07% 53.89% 56.47%
Capital Ratios
Average stockholders'
equity to average
assets 10.04% 9.80% 10.01% 9.70%
Tier 1 risk-based
capital 10.47% 10.81%
Total risk-based
capital 11.42% 11.82%
Leverage 9.81% 10.00%
Loans by Type
Commercial and
industrial $ 304,930 $ 248,230
Construction and
development 123,505 123,404
Real estate mortgage -
commercial investment 236,847 235,510
Real estate mortgage -
owner occupied
commercial 186,564 176,644
Real estate mortgage -
1-4 family
residential 144,221 163,479
Home equity 136,064 132,053
Consumer 24,768 37,479
Asset Quality Data
Allowance for loan
losses to total loans 1.08% 1.11%
Allowance for loan
losses to average
loans 1.09% 1.15%
Allowance for loan
losses to non-
performing loans 295.71% 183.92%
Nonaccrual loans $ 2,985 $ 5,998
Restructured loans - -
Loans - 90 days past
due & still accruing 1,259 767
Total non-performing
loans 4,244 6,765
OREO and repossessed
assets 3,436 2,895
Total non-performing
assets 7,680 9,660
Non-performing loans
to total loans 0.37% 0.61%
Non-performing assets
to total assets 0.54% 0.71%
Net charge-offs to
average loans (2) 0.15% 0.09%
Net charge-offs $ 365 $ 400 $ 1,743 $ 993
Other Information
Total assets under
management (in
millions) $ 1,707 $ 1,506
Full-time equivalent
employees 443 433
S. Y. Bancorp, Inc. Financial Information
Third Quarter 2007 Earnings Release
Five Quarter Comparison
------------------------------------------------------
9/30/07 6/30/07 3/31/07 12/31/06 9/30/06
---------- ---------- ---------- ---------- ----------
Income
Statement Data
Net interest
income, fully
tax equivalent
(1) $ 13,802 $ 13,856 $ 13,697 $ 14,135 $ 13,865
========== ========== ========== ========== ==========
Net interest
income $ 13,541 $ 13,579 $ 13,414 $ 13,856 $ 13,607
Provision for
loan losses 850 460 780 700 450
---------- ---------- ---------- ---------- ----------
Net interest
income after
provision for
loan losses 12,691 13,119 12,634 13,156 13,157
---------- ---------- ---------- ---------- ----------
Gain on the
sale of
securities - - - - -
Investment
management and
trust income 3,227 3,336 3,197 3,032 2,882
Service charges
on deposit
accounts 2,260 2,204 2,018 2,195 2,188
Bankcard
transaction
revenue 596 590 542 533 509
Gains on sales
of mortgage
loans held for
sale 227 391 256 337 326
Brokerage
commissions
and fees 498 452 493 414 460
Other non-
interest
income 758 751 650 1,020 644
---------- ---------- ---------- ---------- ----------
Total non-
interest
income 7,566 7,724 7,156 7,531 7,009
---------- ---------- ---------- ---------- ----------
Salaries and
employee
benefits
expense 6,865 6,632 6,607 6,606 6,356
Net occupancy
expense 917 930 890 872 899
Data processing
expense 979 1,051 1,015 1,015 929
Furniture and
equipment
expense 291 290 292 264 285
Amortization
and write-off
of issuance
costs of trust
preferred
securities - - - - 879
State bank
taxes 326 311 178 327 327
Other non-
interest
expenses 2,149 2,270 2,392 2,557 2,238
---------- ---------- ---------- ---------- ----------
Total non-
interest
expense 11,527 11,484 11,374 11,641 11,913
---------- ---------- ---------- ---------- ----------
Net income
before income
tax expense 8,730 9,359 8,416 9,046 8,253
Income tax
expense 2,843 3,062 2,712 2,759 2,832
---------- ---------- ---------- ---------- ----------
Net income $ 5,887 $ 6,297 $ 5,704 $ 6,287 $ 5,421
========== ========== ========== ========== ==========
Weighted
average shares
- basic 14,185 14,325 14,389 14,436 14,426
Weighted
average shares
- diluted 14,400 14,536 14,642 14,728 14,718
Basic earnings
per share $ 0.42 $ 0.44 $ 0.40 $ 0.44 $ 0.38
Diluted
earnings per
share 0.41 0.43 0.39 0.43 0.37
Cash dividend
declared per
share 0.16 0.16 0.15 0.15 0.15
Balance Sheet
Data (at
period end)
Total loans $1,156,899 $1,162,906 $1,149,940 $1,148,954 $1,116,799
Allowance for
loan losses 12,550 12,065 12,183 12,203 12,442
Total assets 1,410,453 1,425,299 1,414,364 1,426,321 1,353,893
Non-interest
bearing
deposits 167,614 184,000 174,383 179,657 168,190
Interest
bearing
deposits 899,815 901,316 935,395 923,585 898,774
Federal home
loan bank
advances 70,000 70,000 50,000 60,000 30,000
Subordinated
debentures 90 90 90 120 120
Stockholders'
equity 138,623 141,888 140,176 137,444 134,576
Total shares
outstanding 14,005 14,298 14,373 14,400 14,442
Book value per
share 9.90 9.92 9.75 9.54 9.32
Market value
per share 27.04 23.76 24.86 28.00 29.67
S. Y. Bancorp, Inc. Financial Information
Third Quarter 2007 Earnings Release
Five Quarter Comparison
9/30/07 6/30/07 3/31/07 12/31/06 9/30/06
---------- ---------- ---------- ---------- ----------
Average Balance
Sheet Data
Average loans $1,155,211 $1,160,064 $1,142,713 $1,127,456 $1,097,176
Average assets 1,409,653 1,401,020 1,406,832 1,381,770 1,347,654
Average earning
assets 1,311,152 1,304,508 1,314,341 1,284,983 1,251,388
Average
deposits 1,063,718 1,075,459 1,097,640 1,085,060 1,060,109
Average long-
term debt 70,090 60,420 55,993 41,356 30,568
Average
interest
bearing
liabilities 1,057,138 1,048,552 1,063,900 1,040,321 1,013,960
Average
stockholders'
equity 141,583 141,133 139,361 136,760 132,066
Performance
Ratios
Annualized
return on
average assets 1.66% 1.80% 1.64% 1.81% 1.60%
Annualized
return on
average equity 16.50% 17.90% 16.60% 18.24% 16.29%
Net interest
margin, fully
tax equivalent 4.18% 4.26% 4.23% 4.36% 4.39%
Non-interest
income to
total revenue,
fully tax
equivalent 35.41% 35.79% 34.32% 34.76% 33.58%
Efficiency
ratio 53.95% 53.22% 54.54% 53.73% 57.07%
Capital Ratios
Average
stockholders'
equity to
average assets 10.04% 10.07% 9.91% 9.90% 9.80%
Tier 1 risk-
based capital 10.47% 10.70% 10.89% 10.81% 10.81%
Total risk-
based capital 11.42% 11.62% 11.84% 11.77% 11.82%
Leverage 9.81% 10.17% 9.97% 10.18% 10.00%
Loans by Type
Commercial and
industrial $ 304,930 $ 310,697 $ 304,720 $ 286,987 $ 248,230
Construction
and
development 123,505 127,793 122,182 118,909 123,404
Real estate
mortgage -
commercial
investment 236,847 227,530 237,759 242,742 235,510
Real estate
mortgage -
owner occupied
commercial 186,564 183,199 173,915 178,439 176,644
Real estate
mortgage - 1-4
family
residential 144,221 145,165 144,708 152,349 163,479
Home equity 136,064 143,015 136,115 136,893 132,053
Consumer 24,768 25,507 30,541 32,635 37,479
Asset Quality
Data
Allowance for
loan losses to
total loans 1.08% 1.04% 1.06% 1.06% 1.11%
Allowance for
loan losses to
average loans 1.09% 1.05% 1.07% 1.12% 1.13%
Allowance for
loan losses to
non-performing
loans 295.71% 252.99% 237.16% 180.70% 183.92%
Nonaccrual
loans $ 2,985 $ 4,055 $ 4,697 $ 5,900 $ 5,998
Restructured
loans - - - - -
Loans - 90 days
past due &
still accruing 1,259 714 440 853 767
Total non-
performing
loans 4,244 4,769 5,137 6,753 6,765
OREO and
repossessed
assets 3,436 2,780 2,666 2,466 2,895
Total non-
performing
assets 7,680 7,549 7,803 9,219 9,660
Non-performing
loans to total
loans 0.37% 0.41% 0.45% 0.59% 0.61%
Non-performing
assets to
total assets 0.54% 0.53% 0.55% 0.65% 0.71%
Net charge-offs
to average
loans (2) 0.05% 0.05% 0.07% 0.08% 0.40%
Net charge-offs $ 365 $ 578 $ 800 $ 939 $ 400
Other
Information
Total assets
under
management (in
millions) $ 1,707 $ 1,669 $ 1,603 $ 1,582 $ 1,506
Full-time
equivalent
employees 443 445 444 437 433
(1) - Interest income on a fully tax equivalent basis includes the
additional amount of interest income that would have been earned if
investments in certain tax-exempt interest earning assets had been
made in assets subject to federal, state and local taxes yielding the
same after-tax income.
(2) - Amounts not annualized
Certain prior-period amounts have been reclassified to conform with
current presentation.
CONTACT: S.Y. Bancorp, Inc.
Nancy B. Davis, 502-625-9176
Executive Vice President,
Treasurer and Chief Financial Officer