• Stock Yards Bancorp Reports Strong Third Quarter Earnings of $23.2 Million or $0.86 Per Diluted Share

    Источник: Nasdaq GlobeNewswire / 27 окт 2021 06:30:01   America/Chicago

    LOUISVILLE, Ky., Oct. 27, 2021 (GLOBE NEWSWIRE) -- Stock Yards Bancorp, Inc. (NASDAQ: SYBT), parent company of Stock Yards Bank & Trust Company, with offices in Louisville, Central and Eastern Kentucky, as well as the Indianapolis and Cincinnati metropolitan markets, today reported earnings for the third quarter ended September 30, 2021. Net income for the third quarter was $23.2 million, or $0.86 per diluted share, compared with net income of $14.5 million, or $0.64 per diluted share, for the third quarter of 2020. Strong organic loan growth across all markets and record levels of operating (non-interest) income highlighted by wealth management and trust, card income and treasury management fees, contributed to strong profitability for the quarter.

                
    (dollar amounts in thousands, except per share data) 3Q21   2Q21   3Q20 
    Net interest income$45,483  $41,584  $33,695 
    Provision for credit loss expense(6) (1,525)  4,147   4,968 
    Non-interest income 17,614   15,788   13,043 
    Non-interest expenses 34,558   48,177   25,646 
    Income before income tax expense 30,064   5,048   16,124 
    Income tax expense 6,902   864   1,591 
    Net income$23,162  $4,184  $14,533 
    Net income per share, diluted$0.86  $0.17  $0.64 
    Net interest margin 3.14%  3.36%  3.26%
    Efficiency ratio(4) 54.63%  83.86%  54.79%
    Tangible common equity to tangible assets(1) 8.64%  8.57%  9.52%
    Annualized return on average equity(7) 13.92%  3.25%  13.57%
    Annualized return on average assets(7) 1.50%  0.32%  1.34%
        

    “We delivered strong earnings for the third quarter, highlighted by strong organic loan growth, record loan production, solid revenue growth from both organic and acquired assets and record operating income,” said James A. (Ja) Hillebrand, Chairman and Chief Executive Officer. “In addition to solid organic growth, our successful merger with Kentucky Bancshares early in the second quarter of this year has contributed nicely to top line revenue growth. Further, we are confident that our recently announced merger of Commonwealth Bancshares, Inc. (Commonwealth) will provide tremendous opportunities to generate additional growth going forward. This combination brings together two Louisville based community banks who are like-minded with similar cultures. The transaction not only builds upon our already prominent market share in the Louisville market, as Commonwealth is the largest privately-held bank headquartered in the Louisville MSA, but also expands our presence in the attractive Shelby County and Northern Kentucky markets. Additionally, and just as important, this combination bolsters our wealth management capabilities, adding significant wealth and trust assets. We remain on track to welcome Commonwealth to the Stock Yards family with an anticipated legal closing date during the fourth quarter.”

    Commonwealth, headquartered in Louisville, Kentucky, operates 15 retail branches, including 9 in Jefferson County, four in Shelby County and two in Northern Kentucky. As of September 30, 2021, Commonwealth reported approximately $1.2 billion in assets, $711 million in loans (excluding PPP), $1.0 billion in deposits and $89 million in tangible common equity. Commonwealth also maintains a Wealth Management and Trust Department with total assets under management of $2.6 billion at September 30, 2021.

    “During the third quarter, we completed our system conversion of Kentucky Bancshares and the majority of the costs associated with the merger were recognized during the second quarter. Although additional work remains to complete the full integration of the two companies and realize all expected operating synergies, we are exceptionally pleased with the progress we have made through the dedicated efforts of our employees. We anticipate, similar to our two prior successful mergers, the merger with Kentucky Bancshares will result in significant benefits to our expanding group of clients, communities, employees and shareholders,” said Hillebrand.

    “With loans growing by approximately $750 million and deposits by approximately $1 billion, the Kentucky Bancshares merger, which was completed on May 31, 2021, is already having a significant impact on our operating results -  increasing our scale and reach and providing tremendous opportunity for future growth,” said Hillebrand. With the completion of the merger, at September 30, 2021, the Company had $6.2 billion in assets, $4.1 billion in net loans and $5.3 billion in total deposits. The combined enterprise, with 63 branch offices, has and will continue to benefit from a diversified geographic footprint with significant growth opportunities.

    “Due to further economic forecast improvements and continued solid performance of the loan portfolio during the current quarter, we recorded a net benefit of $1.5 million to provision for credit loss expense during the third quarter. This compares to a $5.0 million net provision expense in the third quarter a year ago. We feel that we are well-positioned for future growth, having established credit loss reserves to total loans (excluding PPP loans), of 1.43%(2) at September 30, 2021,” concluded Hillebrand.

    Additional key factors contributing to the third quarter of 2021 results included:

    • Organic loan growth, excluding PPP loans, totaled $128 million for the third quarter of 2021 – the second largest growth quarter in the company’s history behind the fourth quarter of 2020. Over the past twelve months, organic growth in loans totaled $254 million, or 9%, with $28 million of the growth attributed to the new Central Kentucky market.
    • Ending loan balances across all four primary markets (Louisville, Cincinnati, Indianapolis and Central Kentucky) were at historical highs at quarter end.
    • Deposit growth remained strong at $82 million on a linked quarter basis.
    • Interest income on non-PPP loans increased $9.2 million, or 31%, over the third quarter of 2020 with $7.7 million of the increase representing the Central Kentucky contribution. Significant rate contraction continued to impact the loan portfolio. PPP interest/fee income totaled $4.4 million and $4.2 million for the third quarters of 2021 and 2020, respectively.
    • Despite a 14 basis point benefit from PPP loans, net interest margin (NIM) continued to be negatively impacted by loan yield contraction and significant ongoing levels of excess balance sheet liquidity.
    • Consistent with stabilization in the Federal Reserve Board unemployment forecast, solid credit quality statistics and a decline in available credit, a net reduction of $1.5 million in credit loss reserves was recorded for the third quarter of 2021, compared to a net reserve build of $5.0 million for the third quarter of 2020.
    • Non-interest income increased 35% over the third quarter of 2020, boosted by a $3.0 million Central Kentucky contribution. Significant growth in assets under management tied to record net new business and strong market performance served to boost asset-based fees and wealth management and trust services income to a record quarter. Deposit service charges increased significantly, or 77% over the third quarter of 2020, a period significantly impacted by the pandemic. Card income and treasury management fees once again set historic quarterly records, representing 75% and 29% increases over the third quarter of 2020, respectively. The significant decline in mortgage banking income of 54% was consistent with a nearly 50% decline in origination volume. Brokerage income increased 81%, the strongest quarterly performance in over five years.
    • The increase in non-interest expenses primarily related to higher compensation expenses, correlating with the increase in full time equivalent employees and increased incentive compensation tied to Company performance.

    Results of Operations – Third Quarter 2021 Compared with Third Quarter 2020

    Net interest income – the Company’s largest source of revenue – increased 35%, or $11.8 million, to $45.5 million, driven by higher interest income on non-PPP loans and the continued decline in cost of funds.

    • Total interest income increased by $10.8 million, or 30%, to $46.9 million, primarily due to increased interest income on non-PPP loans, partly offset by continued earning-asset yield contraction.
    • Total interest expense declined 40%, to $1.5 million. Interest expense on deposits decreased $704,000, or 33%, as the cost of interest bearing deposits declined to 0.16% in the third quarter of 2021 from 0.33% in the third quarter a year ago. While average interest bearing deposit balances surged, demand accounts increased $555 million, or 48%, as the Company continued to benefit significantly from the strategic lowering of stated deposit rates.
    • NIM decreased 12 basis points to 3.14% for the third quarter of 2021 from 3.26% for the third quarter a year ago. During the quarter, forgiveness within the PPP loan portfolio and related fee income recognition had a 14 basis point positive impact to NIM. However, overall NIM continues to be negatively impacted by loan yield contraction and significant ongoing excess balance sheet liquidity, which represented a 26 basis point negative impact.
    • Interest income on non-PPP loans increased $9.2 million, or 31%, quarter over prior year quarter, with $7.7 million of the increase representing the Central Kentucky market contribution. Despite a $1.01 billion increase in average non-PPP loans, significant rate contraction has continued to impact the portfolio, with the average quarterly yield earned on non-PPP loans contracting 24 basis points over the past 12 months to 3.98%. PPP interest/fee income totaled $4.4 million and $4.2 million for the third quarters of 2021 and 2020, respectively.
    • Despite a $931 million combined quarter over prior year quarter increase in average balance of overnight funds and securities, corresponding interest income increased only $1.5 million, attributable to the decline in rates earned.
    • Interest expense on FHLB advances declined $282,000, or 85%, consistent with the $49 million, or 83%, decline in average balance from the third quarter of 2020 to the third quarter of 2021. The Bank has not replaced any matured advances in 2020 and 2021.

    The Company recorded a net benefit of $1.5 million for credit losses during the third quarter of 2021, which included a $1.0 million benefit to provision for credit losses for loans and a $525,000 net benefit to provision for credit losses for off-balance sheet exposures consistent with improvement in underlying CECL model factors.

    Non-interest income increased $4.6 million, or 35%, to $17.6 million.

    • Wealth management and trust income totaled a record $7.1 million for the third quarter of 2021, increasing $1.5 million, or 26%, over the third quarter a year ago. Significant growth in assets under management tied to record net new business and strong market performance served to boost asset-based fees and wealth management and trust services income to a record quarter. In addition, the new Central Kentucky market boosted assets under management by $250 million at September 30, 2021.
    • Retail deposit service charges increased $770,000 compared to the third quarter a year ago, a period severely impacted by the pandemic.
    • Card income increased $1.7 million, or 75%, over the third quarter of 2020. Growth trends in both portfolios remain positive, as card income benefitted significantly from improving economic activity, with consumers and businesses increasing their spending activities, complimented by a meaningful contribution from Central Kentucky.
    • Treasury management fees increased by $403,000, or 29%, driven by increased transaction volume, new product sales and customer base expansion. In addition, calling efforts to existing customers have led to significant increases in online services, reporting, ACH origination, remote deposit and fraud mitigation services.
    • Mortgage banking income, which primarily consists of gain on sale of loans, servicing income and mortgage servicing rights amortization, was $915,000 for the third quarter of 2021, down 54% from the third quarter a year ago primarily due to a significant decline in loans sold and higher mortgage rates.

    Non-interest expenses increased $8.9 million, to $34.6 million.

    • Compensation expense increased $4.1 million, or 31%, primarily due to the increase in full time equivalent employees. Full time equivalent employees increased to 794 at quarter end from 626 at September 30, 2020, as the Bank added 156 associates in connection with its expansion into Central Kentucky, contributing $2.9 million to the total compensation increase. Contributing to the increase, additional incentive compensation of $949,000 was expensed in the third quarter of 2021, consistent with the Company’s operating performance.
    • Employee benefits increased $809,000, or 28%, primarily due to higher health insurance expense, 401(k) matching and payroll tax expenses associated with the above-mentioned increase in full time equivalent employees.
    • Net occupancy and equipment expenses increased $555,000, or 25%, as 19 branches were added with the second quarter expansion into Central Kentucky.
    • Technology and communication expenses, which include computer software amortization, equipment depreciation and expenditures related to investments in technology needed to maintain and improve the quality of customer delivery channels, information security and internal resources, increased $850,000, or 37%. The majority of the increase related to the merger, as the system conversion did not occur until late August.
    • Card processing expense increased $830,000, consistent with the card income trend noted above. Expense related to the Central Kentucky market totaled $651,000 for the third quarter of 2021.
    • Marketing and business development expense, which includes all costs associated with promoting the Bank, community investment, retaining customers and acquiring new business increased $488,000, or 93%, compared to the third quarter a year ago, a period significantly impacted by the pandemic.
    • Capital and deposit tax declined $520,000, or 48%, as the Company has transitioned to record Kentucky state income tax as a component of tax expense.
    • Merger expenses totaled $525,000 for the third quarter of 2021 and related to the pending Commonwealth merger.
    • Other non-interest expenses increased $1.0 million, or 83%, primarily due to merger related items such as core deposit intangible amortization and insurance captive expenses.

    Financial Condition – September 30, 2021 Compared with September 30, 2020

    Total assets increased $1.8 billion year over year, or 42%, to $6.2 billion.

    Total loans increased $717 million year over year, or 21%, to $4.2 billion. Excluding the PPP loan portfolio, total loans increased $1.1 billion, or 40%, over the past twelve months, with approximately $750 million of growth associated with the Central Kentucky market. Total line of credit usage increased to 41% as of September 30, 2021, from 37% at September 30, 2020, with commercial and industrial line usage increasing meaningfully, but remaining well below pre-pandemic levels.

    The Company acquired nearly $400 million in securities related to the current year merger and has deployed $325 million of excess cash into securities in 2021, contributing significantly to the $641 million of growth in the investment portfolio over the past twelve months.

    Total deposits increased $1.6 billion, or 42%, from September 30, 2020, to September 30, 2021, with non-interest bearing deposits representing $565 million of the growth. Both period end and average deposit balances ended at record levels at September 30, 2021, as Federal programs such as the PPP and stimulus checks have boosted deposit balances.

    Asset quality, which has trended within a narrow range over the past several years, has remained solid. During the third quarter of 2021, the Company recorded net loan charge-offs of $1.9 million, primarily related to one Central Kentucky commercial real estate relationship where the charged off amount  had been fully reserved for at the time of merger. This compared to net loan charge-offs of $1.6 million in the third quarter of 2020. Non-performing loans totaled $5 million, or 0.13%(2) of total loans (excluding PPP) outstanding compared to $14 million, or 0.48%(2) of total loans (excluding PPP) outstanding at September 30, 2020.

    At September 30, 2021, the Company remained “well-capitalized,” the highest regulatory capital rating for financial institutions. Total equity to assets was 10.73% and the tangible common equity ratio was 8.64%(1) at September 30, 2021, compared to 9.82%(1) and 9.52%(1), respectively, at December 31, 2020 and September 30, 2020.

    In August, 2021, the Board of Directors increased its cash dividend rate to $0.28 per common share. The dividend was paid on October 1, 2021, to stockholders of record as of September 20, 2021.

    No shares were repurchased in the current year and approximately 741,000 shares remain eligible for repurchase under the current buy-back plan, which expires in May 2023.

    Results of Operations – Third Quarter 2021 Compared with Second Quarter 2021

    Net interest income increased $3.9 million, or 9%, over the prior quarter to $45.5 million, led by the merger, organic loan growth, PPP fee recognition and the continued decline in cost of funds.

    Due to continued improvement in the unemployment forecast combined with solid traditional credit metrics, the Company recorded a $1.0 million benefit to provision for credit losses on loans in the third quarter of 2021. During the second quarter of 2021, the Company recorded a net benefit of $2.7 million to provision for credit losses for legacy Stock Yards loan portfolio and an additional $7.4 million in merger related credit loss expense associated with the acquired non-Purchase Credit Deteriorated loan portfolio.

    Non-interest income increased $1.8 million, or 12%, to $17.6 million. Higher card income, deposit service fees, wealth management and trust service fees and treasury management fees more than offset the reduction in mortgage banking income. During the third quarter of 2021, the Company benefitted from three full months of Central Kentucky operations compared to one month during the second quarter of 2021.

    Non-interest expenses decreased $13.6 million, or 28%, to $34.6 million, with the majority of the decrease associated with the Central Kentucky market expansion. Merger expenses totaled $525,000 in the third quarter of 2021 and related primarily to the pending Commonwealth merger, compared to $18.1 million of merger expenses related to the Kentucky Bancshares merger in the second quarter. Compensation expense increased $1.7 million, to $17.4 million compared with the second quarter of 2021, due to the addition of 156 full time equivalent employees in association with the Central Kentucky expansion and additional incentive compensation recorded during the current quarter tied to Company performance.

    Financial Condition – September 30, 2021, Compared with June 30, 2021

    Total assets increased $93 million on a linked quarter basis to $6.2 billion, reflecting organic increases in loans and investment securities.

    Total loans decreased $17 million on a linked quarter basis to $4.2 billion at quarter end. Total loans excluding the PPP portfolio increased $128 million, or 3%, on a linked quarter basis. Total line of credit usage increased to 41% as of September 30, 2021, from 39% at June 30, 2021, with commercial and industrial line usage increasing meaningfully, but remaining well below pre-pandemic levels.

    Total deposits increased $82 million, or 2%, on a linked quarter basis, as a result of organic growth in deposit balances with both existing and new customers.

    About the Company

    Louisville, Kentucky-based Stock Yards Bancorp, Inc., with $6.2 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. The Company’s common shares trade on The NASDAQ Stock Market under the symbol “SYBT.”

    Forward-looking Statements

    Certain statements contained in this communication, which are not statements of historical fact, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, certain plans, expectations, goals, projections and benefits relating to the merger transaction between Stock Yards and Kentucky Bancshares, which are subject to numerous assumptions, risks and uncertainties. Words or phrases such as “anticipate,” “believe,” “aim,” “can,” “conclude,” “continue,” “could,” “estimate,” “expect,” “foresee,” “goal,” “intend,” “may,” “might,” “outlook,” “possible,” “plan,” “predict,” “project,” “potential,” “seek,” “should,” “target,” “will,” “will likely,” “would,” or the negative of these terms or other comparable terminology, as well as similar expressions, are intended to identify forward-looking statements but are not the exclusive means of identifying such statements.

    Forward-looking statements are not historical facts but instead express only management’s beliefs regarding future results or events, many of which, by their nature, are inherently uncertain and outside of the management’s control. It is possible that actual results and outcomes may differ, possibly materially, from the anticipated results or outcomes indicated in these forward-looking statements. In addition to factors disclosed in reports filed by Stock Yards with the SEC, risks and uncertainties for Stock Yards include but are not limited to: the possibility that any of the anticipated benefits of the recent Kentucky Bancshares merger and proposed Commonwealth Bancshares merger will not be realized or will not be realized within the expected time period; the risk that integration of acquired operations with those of Stock Yards will be materially delayed or will be more costly or difficult than expected; diversion of management's attention from ongoing business operations and opportunities due to the merger; the challenges of integrating and retaining key employees; the effect of the announcement of the merger on the combined company's respective customer and employee relationships and operating results; the possibility that the merger may be more expensive to complete than anticipated, including as a result of unexpected factors or events; dilution caused by Stock Yards’ issuance of additional shares of Stock Yards common stock in connection with the merger; the magnitude and duration of the COVID-19 pandemic and its impact on the global economy and financial market conditions and the business, results of operations and financial condition of the combined company; and general competitive, economic, political and market conditions and fluctuations. All forward-looking statements included in this communication are made as of the date hereof and are based on information available at that time. Except as required by law, Stock Yards assumes no obligation to update any forward-looking statement to reflect events or circumstances that occur after the date the forward-looking statements were made.

    Please refer to Stock Yards’ Annual Report on Form 10-K for the year ended December 31, 2020 and its Quarterly Report on Form 10-Q for the three and six months ended June 30, 2021, as well as its other filings with the SEC for a more detailed discussion of risks, uncertainties and factors that could cause actual results to differ from those discussed in the forward-looking statements.

     

               
    Stock Yards Bancorp, Inc. Financial Information (unaudited)
    Third Quarter 2021 Earnings Release
    (In thousands unless otherwise noted)
        Three Months Ended Nine Months Ended
        September 30, September 30,
    Income Statement Data    2021   2020   2021   2020 
               
    Net interest income, fully tax equivalent (3)   $45,643  $33,768  $125,178  $99,834 
    Interest income:          
    Loans   $43,307  $33,844  $120,402  $101,692 
    Federal funds sold and interest bearing due from banks    208   54   358   673 
    Mortgage loans held for sale    53   173   175   359 
    Securities    3,380   2,073   8,633   6,808 
    Total interest income    46,948   36,144   129,568   109,532 
    Interest expense:          
    Deposits    1,403   2,107   4,348   8,676 
    Securities sold under agreements to repurchase and          
    other short-term borrowings    11   9   27   64 
    Federal Home Loan Bank advances    51   333   301   1,123 
    Total interest expense    1,465   2,449   4,676   9,863 
    Net interest income    45,483   33,695   124,892   99,669 
    Provision for credit losses (6)    (1,525)  4,968   1,147   17,918 
    Net interest income after provision for credit losses    47,008   28,727   123,745   81,751 
    Non-interest income:          
    Wealth management and trust services    7,128   5,657   20,234   17,601 
    Deposit service charges    1,768   998   3,945   3,081 
    Debit and credit card income    3,887   2,218   9,444   6,261 
    Treasury management fees    1,771   1,368   5,041   3,901 
    Mortgage banking income    915   1,979   3,662   4,447 
    Net investment product sales commissions and fees    780   431   1,789   1,288 
    Bank owned life insurance    275   172   642   527 
    Other    1,090   220   2,489   1,095 
    Total non-interest income    17,614   13,043   47,246   38,201 
    Non-interest expenses:          
    Compensation    17,381   13,300   45,888   37,296 
    Employee benefits    3,662   2,853   10,290   8,891 
    Net occupancy and equipment    2,732   2,177   7,021   6,045 
    Technology and communication    3,173   2,323   8,189   6,385 
    Debit and credit card processing    1,479   649   3,160   1,908 
    Marketing and business development    1,011   523   2,357   1,548 
    Postage, printing and supplies    630   472   1,499   1,355 
    Legal and professional    700   544   1,828   1,795 
    FDIC Insurance    387   435   1,141   894 
    Amortization of investments in tax credit partnerships    53   52   315   141 
    Capital and deposit based taxes    556   1,076   1,541   3,331 
    Merger expenses    525   -   19,025   - 
    Federal Home Loan Bank early termination penalty    -   -   474   - 
    Other    2,269   1,242   4,980   3,041 
    Total non-interest expenses    34,558   25,646   107,708   72,630 
    Income before income tax expense    30,064   16,124   63,283   47,322 
    Income tax expense    6,902   1,591   13,227   6,189 
    Net income   $23,162  $14,533  $50,056  $41,133 
               
    Net income per share - Basic   $0.87  $0.64  $2.04  $1.82 
    Net income per share - Diluted    0.86   0.64   2.02   1.81 
    Cash dividend declared per share    0.28   0.27   0.82   0.81 
               
    Weighted average shares - Basic    26,688   22,582   24,567   22,553 
    Weighted average shares - Diluted    26,929   22,802   24,809   22,759 
               
          September 30,
    Balance Sheet Data         2021   2020 
               
    Loans       $4,189,117  $3,472,481 
    Allowance for credit losses on loans        56,533   50,501 
    Total assets        6,181,188   4,365,129 
    Non-interest bearing deposits        1,744,790   1,180,001 
    Interest bearing deposits        3,597,234   2,574,217 
    Federal Home Loan Bank advances        10,000   56,356 
    Stockholders' equity        663,547   428,598 
    Total shares outstanding        26,585   22,692 
    Book value per share (1)       $24.96  $18.89 
    Tangible common equity per share (1)        19.63   18.25 
    Market value per share        58.65   34.04 
               
    Stock Yards Bancorp, Inc. Financial Information (unaudited)          
    Third Quarter 2021 Earnings Release          
               
        Three Months Ended Nine Months Ended
        September 30, September 30,
    Average Balance Sheet Data    2021   2020   2021   2020 
               
    Federal funds sold and interest bearing due from banks   $532,549  $194,100  $361,713  $216,014 
    Mortgage loans held for sale    8,875   28,520   10,703   17,202 
    Available for sale debt securities    1,034,712   442,089   831,229   433,744 
    Federal Home Loan Bank stock    11,364   11,284   11,312   11,284 
    Loans    4,173,260   3,444,407   3,876,639   3,245,011 
    Total interest earning assets    5,760,760   4,120,400   5,091,596   3,923,255 
    Total assets    6,139,176   4,325,500   5,364,121   4,118,441 
    Interest bearing deposits    3,525,785   2,521,838   3,134,978   2,446,585 
    Total deposits    5,297,917   3,707,845   4,652,401   3,514,554 
    Securities sold under agreement to repurchase and other short term borrowings    82,048   49,709   68,485   47,803 
    Federal Home Loan Bank advances    10,000   59,487   19,398   65,751 
    Total interest bearing liabilities    3,617,833   2,631,034   3,222,861   2,560,139 
    Total stockholders' equity    660,099   426,049   541,238   415,595 
               
    Performance Ratios          
    Annualized return on average assets (7)    1.50%  1.34%  1.25%  1.33%
    Annualized return on average equity (7)    13.92%  13.57%  12.37%  13.22%
    Net interest margin, fully tax equivalent    3.14%  3.26%  3.29%  3.40%
    Non-interest income to total revenue, fully tax equivalent    27.85%  27.86%  27.40%  27.67%
    Efficiency ratio, fully tax equivalent (4)    54.63%  54.79%  62.47%  52.62%
               
    Capital Ratios          
    Total stockholders' equity to total assets (1)        10.73%  9.82%
    Tangible common equity to tangible assets (1)        8.64%  9.52%
    Average stockholders' equity to average assets        10.09%  10.09%
    Total risk-based capital        12.61%  13.79%
    Common equity tier 1 risk-based capital        11.69%  12.61%
    Tier 1 risk-based capital        11.69%  12.61%
    Leverage        8.98%  9.70%
               
    Loan Segmentation          
    Commercial real estate - non-owner occupied       $1,142,647  $828,328 
    Commercial real estate - owner occupied        652,631   492,825 
    Commercial and industrial        910,923   704,582 
    Commercial and industrial - PPP        231,335   642,056 
    Residential real estate - owner occupied        398,069   211,984 
    Residential real estate - non-owner occupied        277,045   143,149 
    Construction and land development        303,642   257,875 
    Home equity lines of credit        140,027   97,150 
    Consumer        104,629   71,429 
    Leases        12,348   13,981 
    Credit cards - commercial        15,821   9,122 
    Total loans and leases       $4,189,117  $3,472,481 
               
    Asset Quality Data          
    Non-accrual loans       $5,036  $12,358 
    Troubled debt restructurings        13   18 
    Loans past due 90 days or more and still accruing        -   1,152 
    Total non-performing loans        5,049   13,528 
    Other real estate owned        7,229   612 
    Total non-performing assets       $12,278  $14,140 
    Non-performing loans to total loans (2)        0.12%  0.39%
    Non-performing assets to total assets        0.20%  0.32%
    Allowance for credit losses on loans to total loans (2)        1.35%  1.45%
    Allowance for credit  losses on loans to average loans        1.46%  1.56%
    Allowance for credit losses on loans to non-performing loans        1120%  373%
    Net (charge-offs) recoveries   $(1,891) $(1,625) $(4,640) $(1,664)
    Net (charge-offs) recoveries to average loans (5)    -0.05%  -0.05%  -0.12%  -0.05%
               
    Stock Yards Bancorp, Inc. Financial Information (unaudited)          
    Third Quarter 2021 Earnings Release          
               
      Quarterly Comparison
    Income Statement Data 9/30/21 6/30/21 3/31/21 12/31/20 9/30/20
               
    Net interest income, fully tax equivalent  (3) $45,643  $41,661  $37,874  $36,301  $33,768 
    Net interest income $45,483  $41,584  $37,825  $36,252  $33,695 
    Provision for credit losses (6)  (1,525)  4,147   (1,475)  500   4,968 
    Net interest income after provision for credit losses  47,008   37,437   39,300   35,752   28,727 
    Non-interest income:          
    Wealth management and trust services  7,128   6,858   6,248   5,805   5,657 
    Deposit service charges  1,768   1,233   944   1,080   998 
    Debit and credit card income  3,887   3,284   2,273   2,219   2,218 
    Treasury management fees  1,771   1,730   1,540   1,506   1,368 
    Mortgage banking income  915   1,303   1,444   1,708   1,979 
    Net investment product sales commissions and fees  780   545   464   487   431 
    Bank owned life insurance  275   206   161   166   172 
    Other  1,090   629   770   727   220 
    Total non-interest income  17,614   15,788   13,844   13,698   13,043 
    Non-interest expenses:          
    Compensation  17,381   15,680   12,827   14,072   13,300 
    Employee benefits  3,662   3,367   3,261   2,173   2,853 
    Net occupancy and equipment  2,732   2,244   2,045   2,137   2,177 
    Technology and communication  3,173   2,670   2,346   2,347   2,323 
    Debit and credit card processing  1,479   976   705   698   649 
    Marketing and business development  1,011   822   524   835   523 
    Postage, printing and supplies  630   460   409   423   472 
    Legal and professional  700   666   462   597   544 
    FDIC Insurance  387   349   405   323   435 
    Amortization of investments in tax credit partnerships  53   231   31   2,955   52 
    Capital and deposit based taxes  556   527   458   1,055   1,076 
    Merger expenses  525   18,100   400   -   - 
    Federal Home Loan Bank early termination penalty  -   474   -   -   - 
    Other  2,269   1,611   1,100   1,414   1,242 
    Total non-interest expenses  34,558   48,177   24,973   29,029   25,646 
    Income before income tax expense  30,064   5,048   28,171   20,421   16,124 
    Income tax expense  6,902   864   5,461   2,685   1,591 
    Net income $23,162  $4,184  $22,710  $17,736  $14,533 
               
    Net income per share - Basic $0.87  $0.17  $1.00  $0.79  $0.64 
    Net income per share - Diluted  0.86   0.17   0.99   0.78   0.64 
    Cash dividend declared per share  0.28   0.27   0.27   0.27   0.27 
               
    Weighted average shares - Basic  26,688   24,140   22,622   22,593   22,582 
    Weighted average shares - Diluted  26,929   24,379   22,865   22,794   22,802 
               
      Quarterly Comparison
    Balance Sheet Data 9/30/21 6/30/21 3/31/21 12/31/20 9/30/20
               
    Cash and due from banks $84,520  $58,477  $43,061  $43,179  $49,517 
    Federal funds sold and interest bearing due from banks  500,421   481,716   289,920   274,766   241,486 
    Mortgage loans held for sale  10,201   5,420   6,579   22,547   23,611 
    Available for sale debt securities  1,070,148   1,006,908   672,167   586,978   429,184 
    Federal Home Loan Bank stock  9,376   14,475   10,228   11,284   11,284 
    Loans  4,189,117   4,206,392   3,635,156   3,531,596   3,472,481 
    Allowance for credit losses on loans  56,533   59,424   50,714   51,920   50,501 
    Goodwill  135,830   136,529   12,513   12,513   12,513 
    Total assets  6,181,188   6,088,072   4,794,075   4,608,629   4,365,129 
    Non-interest bearing deposits  1,744,790   1,743,953   1,370,183   1,187,057   1,180,001 
    Interest bearing deposits  3,597,234   3,516,153   2,829,779   2,801,577   2,574,517 
    Securities sold under agreements to repurchase  74,406   63,942   51,681   47,979   40,430 
    Federal funds purchased  10,908   10,947   8,642   11,464   9,179 
    Federal Home Loan Bank advances  10,000   10,000   24,180   31,639   56,536 
    Stockholders' equity  663,547   651,089   443,232   440,701   428,598 
    Total shares outstanding  26,585   26,588   22,781   22,692   22,692 
    Book value per share (1) $24.96  $24.49  $19.46  $19.42  $18.89 
    Tangible common equity per share (1)  19.63   19.16   18.82   18.78   18.25 
    Market value per share  58.65   50.89   51.06   40.48   34.04 
               
    Capital Ratios          
    Total stockholders' equity to total assets (1)  10.73%  10.69%  9.25%  9.56%  9.82%
    Tangible common equity to tangible assets (1)  8.64%  8.57%  8.97%  9.28%  9.52%
    Average stockholders' equity to average assets  10.75%  9.88%  9.44%  9.61%  9.85%
    Total risk-based capital  12.61%  12.80%  13.39%  13.36%  13.79%
    Common equity tier 1 risk-based capital  11.69%  11.79%  12.32%  12.23%  12.61%
    Tier 1 risk-based capital  11.69%  11.79%  12.32%  12.23%  12.61%
    Leverage  8.98%  10.26%  9.46%  9.57%  9.70%
               
    Stock Yards Bancorp, Inc. Financial Information (unaudited)          
    Third Quarter 2021 Earnings Release          
               
      Quarterly Comparison
    Average Balance Sheet Data 9/30/21 6/30/21 3/31/21 12/31/20 9/30/20
               
    Federal funds sold and interest bearing due from banks $532,549  $313,954  $235,370  $271,277  $194,100 
    Mortgage loans held for sale  8,875   8,678   14,618   28,951   28,520 
    Available for sale debt securities  1,034,712   793,696   661,175   510,677   442,089 
    Loans  4,173,260   3,844,662   3,605,760   3,483,298   3,444,407 
    Total interest earning assets  5,760,760   4,972,914   4,527,563   4,305,487   4,120,400 
    Total assets  6,139,176   5,226,654   4,710,836   4,512,874   4,325,500 
    Interest bearing deposits  3,525,785   3,055,360   2,815,986   2,689,103   2,521,838 
    Total deposits  5,297,917   4,552,583   4,094,179   3,888,247   3,707,845 
    Securities sold under agreement to repurchase  82,048   66,591   56,536   55,825   49,709 
    Federal Home Loan Bank advances  10,000   19,135   29,270   48,771   59,487 
    Total interest bearing liabilities  3,617,833   3,141,086   2,901,792   2,793,699   2,631,034 
    Total stockholders' equity  660,099   516,427   444,821   433,596   426,049 
               
    Performance Ratios          
    Annualized return on average assets (7)  1.50%  0.32%  1.96%  1.56%  1.34%
    Annualized return on average equity (7)  13.92%  3.25%  20.71%  16.27%  13.57%
    Net interest margin, fully tax equivalent  3.14%  3.36%  3.39%  3.35%  3.26%
    Non-interest income to total revenue, fully tax equivalent  27.85%  27.48%  26.77%  27.40%  27.86%
    Efficiency ratio, fully tax equivalent (4)  54.63%  83.86%  48.29%  58.06%  54.79%
               
    Loans Segmentation          
    Commercial real estate - non-owner occupied $1,142,647  $1,170,461  $876,523  $833,470  $828,328 
    Commercial real estate - owner occupied  652,631   604,120   527,316   508,672   492,825 
    Commercial and industrial  910,923   845,038   742,505   775,154   704,582 
    Commercial and industrial - PPP  231,335   377,021   612,885   550,186   642,056 
    Residential real estate - owner occupied  398,069   377,783   262,516   239,191   211,984 
    Residential real estate - non-owner occupied  277,045   273,782   136,380   140,930   143,149 
    Construction and land development  303,642   281,149   281,815   291,764   257,875 
    Home equity lines of credit  140,027   142,468   91,233   95,366   97,150 
    Consumer  104,629   105,439   78,326   71,874   71,429 
    Leases  12,348   14,171   14,115   14,786   13,981 
    Credit cards - commercial  15,821   14,960   11,542   10,203   9,122 
    Total loans and leases $4,189,117  $4,206,392  $3,635,156  $3,531,596  $3,472,481 
               
    Asset Quality Data          
    Non-accrual loans $5,036  $12,814  $12,913  $12,514  $12,358 
    Troubled debt restructurings  13   14   15   16   18 
    Loans past due 90 days or more and still accruing  -   1,050   1,377   649   1,152 
    Total non-performing loans  5,049   13,878   14,305   13,179   13,528 
    Other real estate owned  7,229   648   281   281   612 
    Total non-performing assets $12,278  $14,526  $14,586  $13,460  $14,140 
    Non-performing loans to total loans (2)  0.12%  0.33%  0.39%  0.37%  0.39%
    Non-performing assets to total assets  0.20%  0.24%  0.30%  0.29%  0.32%
    Allowance for credit losses on loans to total loans (2)  1.35%  1.41%  1.40%  1.47%  1.45%
    Allowance for credit losses on loans to average loans  1.35%  1.55%  1.41%  1.49%  1.47%
    Allowance for credit losses on loans to non-performing loans  1120%  428%  355%  394%  373%
    Net (charge-offs) recoveries $(1,891) $(2,743) $(6) $19  $(1,625)
    Net (charge-offs) recoveries to average loans (5)  -0.05%  -0.07%  0.00%  0.00%  -0.05%
               
    Other Information          
    Total assets under management (in millions) $4,506  $4,440  $3,989  $3,852  $3,414 
    Full-time equivalent employees  794   823   638   641   626 
               
    (1) - The following table provides a reconciliation of total stockholders’ equity in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) to tangible stockholders’ equity, a non-GAAP disclosure. Bancorp provides the tangible book value per share, a non-GAAP measure, in addition to those defined by banking regulators, because of its widespread use by investors as a means to evaluate capital adequacy:
     
      Quarterly Comparison
    (In thousands, except per share data) 9/30/21 6/30/21 3/31/21 12/31/20 9/30/20
               
    Total stockholders' equity - GAAP (a) $663,547  $651,089  $443,232  $440,701  $428,598 
    Less: Goodwill  (135,830)  (136,529)  (12,513)  (12,513)  (12,513)
    Less: Core deposit intangible  (5,871)  (5,162)  (1,885)  (1,962)  (2,042)
    Tangible common equity - Non-GAAP (c) $521,846  $509,398  $428,834  $426,226  $414,043 
               
    Total assets - GAAP (b) $6,181,188  $6,088,072  $4,794,075  $4,608,629  $4,365,129 
    Less: Goodwill  (135,830)  (136,529)  (12,513)  (12,513)  (12,513)
    Less: Core deposit intangible  (5,871)  (5,162)  (1,885)  (1,962)  (2,042)
    Tangible assets - Non-GAAP (d) $6,039,487  $5,946,381  $4,779,677  $4,594,154  $4,350,574 
               
    Total stockholders' equity to total assets - GAAP (a/b)  10.73%  10.69%  9.25%  9.56%  9.82%
    Tangible common equity to tangible assets - Non-GAAP (c/d)  8.64%  8.57%  8.97%  9.28%  9.52%
               
    Total shares outstanding (e)  26,585   26,588   22,781   22,692   22,692 
               
    Book value per share - GAAP (a/e) $24.96  $24.49  $19.46  $19.42  $18.89 
    Tangible common equity per share - Non-GAAP (c/e)  19.63   19.16   18.82   18.78   18.25 
               
    (2) - Allowance for credit losses on loans to total non-PPP loans represents the allowance for credit losses on loans, divided by total loans less PPP loans. Non-performing loans to total non-PPP loans represents non-performing loans, divided by total loans less PPP loans. Bancorp believes these non-GAAP disclosures are important because they provide a comparable ratio after eliminating the PPP loans, which are fully guaranteed by the U.S. SBA and have not been allocated for within the allowance for credit losses on loans and are not at risk of non-performance.
     
      Quarterly Comparison
    (Dollars in thousands) 9/30/21 6/30/21 3/31/21 12/31/20 9/30/20
               
    Total Loans - GAAP (a) $4,189,117  $4,206,392  $3,635,156  $3,531,596  $3,472,481 
    Less: PPP loans  (231,335)  (377,021)  (612,885)  (550,186)  (642,056)
    Total non-PPP Loans - Non-GAAP (b) $3,957,782  $3,829,371  $3,022,271  $2,981,410  $2,830,425 
               
    Allowance for credit losses on loans (c) $56,533  $59,424  $50,714  $51,920  $50,501 
    Total non-performing loans (d)  5,049   13,878   14,305   13,179   13,528 
               
    Allowance for credit losses on loans to total loans - GAAP (c/a)  1.35%  1.41%  1.40%  1.47%  1.45%
    Allowance for credit losses on loans to total loans - Non-GAAP (c/b)  1.43%  1.55%  1.68%  1.74%  1.78%
               
    Non-performing loans to total loans - GAAP (d/a)  0.12%  0.33%  0.39%  0.37%  0.39%
    Non-performing loans to total loans - Non-GAAP (d/b)  0.13%  0.36%  0.47%  0.44%  0.48%
               
    (3) - Interest income on a FTE 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.
               
    (4) - The efficiency ratio, a non-GAAP measure, equals total non-interest expenses divided by the sum of net interest income (FTE) and non-interest income. The ratio excludes net gains (losses) on sales, calls, and impairment of investment securities, if applicable. In addition to the efficiency ratio presented, Bancorp considers an adjusted efficiency ratio to be important because it provides a comparable ratio after eliminating the fluctuation in non-interest expenses related to amortization of investments in tax credit partnerships and non-recurring merger expenses.  
     
      Quarterly Comparison
    (Dollars in thousands) 9/30/21 6/30/21 3/31/21 12/31/20 9/30/20
               
    Total non-interest expenses - GAAP  (a) $34,558  $48,177  $24,973  $29,029  $25,646 
    Less: Non-recurring merger expenses  (525)  (18,100)  (400)  -   - 
    Less: Amortization of investments in tax credit partnerships  (53)  (231)  (31)  (2,955)  (52)
    Total non-interest expenses - Non-GAAP (c) $33,980  $29,846  $24,542  $26,074  $25,594 
               
    Total net interest income, fully tax equivalent $45,643  $41,661  $37,874  $36,301  $33,768 
    Total non-interest income  17,614   15,788   13,844   13,698   13,043 
    Less: Gain/loss on sale of securities  -   -   -   -   - 
    Total revenue - GAAP (b) $63,257  $57,449  $51,718  $49,999  $46,811 
               
    Efficiency ratio - GAAP (a/b)  54.63%  83.86%  48.29%  58.06%  54.79%
    Efficiency ratio - Non-GAAP (c/b)  53.72%  51.95%  47.45%  52.15%  54.68%
               
      Nine months
    ended    		 Nine months
    ended    		      
    (Dollars in thousands) 9/30/21 9/30/20      
               
    Total non-interest expenses - GAAP  (a) $107,708  $72,630       
    Less: Non-recurring merger expenses  (19,025)  -       
    Less: Amortization of investments in tax credit partnerships  (315)  (141)      
    Total non-interest expenses - Non-GAAP (c) $88,368  $72,489       
               
    Total net interest income, fully tax equivalent $125,178  $99,834       
    Total non-interest income  47,246   38,201       
    Less: Gain/loss on sale of securities  -   -       
    Total revenue - GAAP (b) $172,424  $138,035       
               
    Efficiency ratio - GAAP (a/b)  62.47%  52.62%      
    Efficiency ratio - Non-GAAP (c/b)  51.25%  52.51%      
               
    (5) - Quarterly net (charge-offs) recoveries to average loans ratios are not annualized.  
               
    (6) - Effective for the three month period ended March 31, 2020, the Company has reclassified credit loss expense for off-balance sheet exposures from non-interest expense to provision for credit losses and combined this with the provision for losses on loans on the face of the income statement.
     
      Quarterly Comparison
    (in thousands) 9/30/21 6/30/21 3/31/21 12/31/20 9/30/20
               
    Provision for credit losses - loans $(1,000) $4,697  $(1,200) $1,400  $4,418 
    Provision for credit losses - off balance sheet exposures  (525)  (550)  (275)  (900)  550 
    Total provision for credit losses $(1,525) $4,147  $(1,475) $500  $4,968 
               
    (7) - Return on average assets equals net income divided by total average assets, annualized to reflect a full year return on average assets. Similarly, return on average equity equals net income divided by total average equity, annualized to reflect a full year return on average equity.  As a result of the substantial impact that non-recurring items related to the Kentucky Bancshares acquisition had on results for the three and six months ended June 30, 2021, Bancorp considers adjusted return on average assets and return on average equity ratios important as they reflect performance after removing certain merger expenses and purchase accounting adjustments. 
     
      Quarterly Comparison
    (Dollars in thousands) 9/30/21 6/30/21 3/31/21 12/31/20 9/30/20
               
    Net income, as reported (a) $23,162  $4,184  $22,710  $17,736  $14,533 
    Add: Non-recurring merger expenses  525   18,100   400   -   - 
    Add: Provision for credit losses on non-PCD loans  -   7,397   -   -   - 
    Less: Tax effect of adjustments to net income  (110)  (5,354)  (84)  -   - 
    Total net income - Non-GAAP (b) $23,577  $24,327  $23,026  $17,736  $14,533 
               
    Total average assets (c) $6,139,176  $5,226,654  $4,710,836  $4,512,874  $4,325,500 
               
    Total average equity (d )  660,099   516,427   444,821   433,596   426,049 
               
    Return on average assets - GAAP (a/c)  1.50%  0.32%  1.96%  1.56%  1.34%
    Return on average assets - Non-GAAP (b/c)  1.52%  1.87%  1.98%  1.56%  1.34%
               
    Return on average equity - GAAP (a/d)  13.92%  3.25%  20.71%  16.27%  13.57%
    Return on average equity - Non-GAAP (b/d)  14.17%  18.89%  20.71%  16.27%  13.57%

     

    Contact:  T. Clay Stinnett
    Executive Vice President,
    Treasurer and Chief Financial Officer
    (502) 625-0890



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