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S.Y. Bancorp, Inc. - Response Letter 6-5-2009

S. Y. BANCORP,
INC.

1040 East Main
Street

Louisville,
Kentucky  40206

June 5, 2009

Ms. Kathryn McHale

Mail Stop 4561

Division of Corporation Finance

United States Securities and Exchange Commission

Washington, D.C. 20549

Re:       S.Y. Bancorp, Inc.

            Form 10-K for the year ended December 31, 2008

            Form 8-K furnished April 22, 2009

            Form 10-Q for the quarter ended March 31, 2009

            File No. 001-13661

Dear Ms. McHale:

We are responding to your letter dated May 26, 2009
regarding your review of the documents listed above. In accordance with your
request, our response keys to your comments.

Form  10-K for the year ended December 31, 2008

Item 11. Executive Compensation, page 79

Specific Elements of Compensation and How Performance
Impacts Each, page 13 of Definitive Proxy Statement on Schedule 14A

1.   Please
tell us why you have not disclosed certain of the performance targets utilized
in determining annual cash incentive compensation for your named executive
officers for the 2008 fiscal year. For example, you have not disclosed the
information the matrix used to compute annual cash incentive compensation for
certain of your named executive officers. To the extent you  believe that
disclosure of the historical performance targets is not required because it
would result in competitive harm such that the targets could be excluded under
Instruction 4 to Item 402(b) of Regulation S-K, please provide a detailed
supplemental analysis supporting your conclusion. In particular, your
competitive harm analysis should clearly explain the nexus between disclosure of
the performance objectives and the competitive harm that is likely to result
from disclosure. Refer to Item 402(b)(2)(v) of Regulation S-K and Regulation S-K
Compliance and Disclosure Interpretation 118.04.

Response:

We have chosen not to disclose
performance targets utilized in determining annual cash incentives for named
executive officers for 2008. We believe to do so would cause competitive harm to
the Company and shareholders by providing competitors with access to information
which would allow them to develop more attractive compensation packages for our
key executives. Competitors could derive a better understanding of the
compensation structure of the Company and the likelihood that the Company will
be able to pay annual incentive awards to its executive officers. Such knowledge
would enable the Company's competitors to attract the Company's key personnel
away from the Company. The Company's competitors could also use the knowledge to
structure their compensation and bonus programs in such a way as to more
effectively compete against the Company for talent in the workforce going
forward. As noted in the proxy statement, the performance targets are aggressive
and considered relatively difficult to achieve.  This increases the risk of
potential harm from a competitor who might offer a more lucrative incentive
arrangement with more easily attainable goals.

Certain of the Company's
competitors are private companies, and their incentive compensation structures
are not made publicly available. Thus, their possession of the Company's
specific numerical goals tied to compensation could result in an unfair
advantage to the Company's competitors and disadvantage the Company's efforts to
effectively provide incentive and retain its key talent.

The market for executive personnel in the banking industry,
particularly within the geographic market in which the Company primarily
operates, is highly competitive.  The Company's senior executives are critical
to its success as noted in the risk factor discussion in the 2008 Form 10-K. Our
ability to retain executive officers and the current management teams of each of
our lines of business will continue to be important to successful implementation
of our strategies.  The unexpected loss of services of any key management
personnel, or the inability to recruit and retain qualified personnel in the
future, could have an adverse effect on our business and financial results.
Additionally, as noted in the proxy statement, base salaries are set at a range
between the 50th and 75th percentiles relative to peers. Thus the relative
importance of cash incentives to the executives' total annual compensation
opportunity is significant.

In conclusion, the competitive
harm to the Company and its shareholders from disclosure of performance targets
utilized in determining annual cash incentives for named executive officers
could be significant.

Item 13. Certain Relationships and Related Transaction,
and Director Independence, page 80

Transactions with Management and Others, page 27 of
Definitive Proxy Statements on Schedule 14A.

2.   We note
the disclosure on page 27 that loans were made on substantially the same terms
as those prevailing at the time for comparable transactions with other persons.
Please confirm, and revise future filings to disclose, if true, that the loans
were made on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable loans with persons
not related to the lender.  Refer to Instruction 4(c) to Item 404(a) of
Regulation S-K

Response:

We confirm and will revise future
filings to disclose that loans made to directors and officers of the Company and
bank were made on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable loans with persons
not related to the lender.

Exhibits 31.1 and 31.2

3.   We note
that Exhibits 31.1 and 31.2 to the Form 10-K contain modifications of the exact
form of certification as set forth in Item 601(b)(31) of Regulation S-K. In
particular, you have included the titles of the certifying officers, added the
word "annual" throughout the certification, added the word "we" in paragraph 4
and deleted the parenthetical in paragraph 4(d). We noted similar modification
in Exhibits 31.1 and 31.2 to the Form 10-Q for the quarterly period ended March
31, 2009. In future filings, please ensure that the certifications are in the
exact form as set forth in Item 601(b)(31) of Regulation S-K, except as
otherwise indicated in Commission statements or staff interpretations.

Response:

In future filings we will ensure
that the certifications are in the exact form as set forth in Item 601(b)(31) of
Regulation S-K, except as otherwise indicated in Commission statements or staff
interpretations.

Form 8-K filed April 22, 2009

4.   We note
your presentation of "tangible common equity" in this Form 8-K and in your Form
10-K for the quarter ended March 31, 2009. This ratio appears to be a non-GAAP
measure as defined by Regulation G and Item 10(e) of Regulation S-K as it is not
required by GAAP, Commission Rules, or banking regulatory requirements. To the
extent you plan to present this non-GAAP measure in the future, the staff notes
the following:

--    To the extent
the ratio is disclosed in future filings with the Commission, you should comply
with all of the requirements in Item 10(e) of Regulation S-K, including clearly
labeling the ratio as a non-GAAP measure and complying with all of the
disclosure requirements.

--    To the extent
that you plan to disclose the ratio in future filings Future Item 2.02 Form
8-Ks, you should provide all of the disclosures required by Item 10(e)(1)(i) of
Regulation S-K as required by Instruction 2 to Item 2.02 of Form 8-K.

--    To the extent
you disclose or release publicly any material information that includes a non-GAAP
measures you should be cognizant of the requirements in Regulation G to label
the measure as non-GAAP and provide a reconciliation to the most closely
comparable GAAP measure.

Response:

To the extent we present
"tangible common equity" or any other item deemed to be a non-GAAP measure in:

--    Future filings
with the Commission, we shall comply with all of the requirements in Item 10(e)
of Regulation S-K, including clearly labeling the ratio as a non-GAAP measure
and complying with all of the disclosure requirements.

--    Future Item
2.02 Form 8-Ks, we shall provided all of the disclosures required by Item
10(e)(1)(i) of Regulation S-K as required by Instruction 2 to Item 2.02 of Form
8-K.

--    Future
disclosures or releases we shall be cognizant of the requirements in Regulation
G to label the measure as non-GAAP and provide a reconciliation to the most
closely comparable GAAP measure.

In connection with responding to your comments, we
acknowledge:

--    that the
Company is responsible for the adequacy and accuracy of the disclosures in our
filings,

--    that staff
comments or changes to disclosures in response to staff comments do not
foreclose the Commission from taking any action with respect to the filings and

--    the Company
may not assert staff comments as a defense in any proceedings initiated by the
Commission or any person under ht federal securities laws of the United States.

We hope we have sufficiently addressed your comments;
however, should you have additional comments after reviewing our responses,
please let us know and we will address those promptly.

Very truly yours,

S.Y. Bancorp, Inc.

/s/ Nancy B. Davis

Nancy B. Davis

Executive Vice President and Chief Financial Officer