UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________
FORM 8-K
_________________
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 26, 2023
_______________________________
STOCK YARDS BANCORP, INC.
(Exact name of registrant as specified in its charter)
_______________________________
Kentucky | 001-13661 | 61-1137529 |
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
1040 East Main Street,
Louisville, Kentucky 40206
(Address of Principal Executive Offices) (Zip Code)
(502) 582-2571
(Registrant's telephone number, including area code)
_______________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Common stock, no par value | SYBT | The NASDAQ Stock Market, LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
On July 26, 2023, Stock Yards Bancorp, Inc. issued a press release, a copy of which is attached hereto as Exhibit 99.1 and incorporated by reference, announcing earnings for the three and six months ended June 30, 2023.
The information in this Form 8-K and the attached Exhibits shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.
(D) Exhibits
99.1 | Press release dated July 26, 2023 | |
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Stock Yards Bancorp, Inc. | ||
Date: July 26, 2023 | By: | /s/ T. Clay Stinnett |
T. Clay Stinnett | ||
Executive Vice President, Treasurer and Chief Financial Officer | ||
EXHIBIT 99.1
Stock Yards Bancorp Reports Solid Second Quarter Earnings of $27.7 Million or $0.94 per Diluted Share
Results Highlighted by Strong Loan Growth and Excellent Credit Quality
LOUISVILLE, Ky., July 26, 2023 (GLOBE NEWSWIRE) -- Stock Yards Bancorp, Inc. (NASDAQ: SYBT), parent company of Stock Yards Bank & Trust Company, with offices in Louisville, central, eastern and northern Kentucky, as well as the Indianapolis, Indiana and Cincinnati, Ohio metropolitan markets, today reported earnings for the second quarter ended June 30, 2023, of $27.7 million, or $0.94 per diluted share. This compares to net income of $26.8 million, or $0.91 per diluted share, for the second quarter of 2022. The results for the second quarter of 2023 included strong loan growth and record levels of non-interest income, highlighted by treasury management fees and wealth management and trust income.
(dollar amounts in thousands, except per share data) | 2Q23 | 1Q23 | 2Q22 | ||||||
Net income | $ | 27,664 | $ | 29,048 | $ | 26,794 | |||
Net income per share, diluted | 0.94 | 0.99 | 0.91 | ||||||
Net interest income | $ | 60,929 | $ | 63,072 | $ | 56,984 | |||
Provision for credit losses(1) | 2,350 | 2,625 | (200 | ) | |||||
Non-interest income | 23,085 | 22,047 | 21,940 | ||||||
Non-interest expenses | 46,025 | 45,314 | 44,675 | ||||||
Net interest margin | 3.42 | % | 3.59 | % | 3.20 | % | |||
Efficiency ratio(2) | 54.69 | % | 53.13 | % | 56.42 | % | |||
Tangible common equity to tangible assets(3) | 7.87 | % | 7.74 | % | 7.00 | % | |||
Annualized return on average assets(4) | 1.46 | % | 1.55 | % | 1.40 | % | |||
Annualized return on average equity(4) | 13.87 | % | 15.15 | % | 14.34 | % | |||
“We are delighted by continued strong loan demand from the customers we serve. While the economic outlook remains difficult to forecast, the current brisk lending environment in our markets is encouraging,” said James A. (Ja) Hillebrand, Chairman and Chief Executive Officer. “We remain positive about the opportunities in our markets, as loan pipelines and overall business activity remain solid. Total loans, excluding PPP loans, increased $571 million, or 12%, over the last 12 months, while growing $178 million during the second quarter. While our loan growth stands out given the current environment, I am most pleased to report that our credit quality metrics remain outstanding – with past dues and classified loans reaching three year lows. On the linked quarter, total deposits declined $149 million, as deposit pricing pressures persist. Although total interest bearing deposits have not fluctuated as widely as non-interest bearing deposits, we experienced anticipated public funds run off in addition to a significant shift in the mix of interest bearing deposits, which is driving up the overall cost of funds. Despite the noted quarterly deposit contraction, we are not seeing fallout in our overall customer base.”
“Recurring non-interest income once again set a quarterly record, led by gains in several categories and is a complement to our diversified revenue streams,” continued Hillebrand. “Treasury management fees climbed to record levels at quarter-end, primarily driven by increased demand and customer expansion. In addition, wealth management and trust reached new highs, with net new business growth and market appreciation contributing to the record results. Notwithstanding the current strong financial results, we remain cautious in our outlook for the remainder of the year, particularly with the challenging interest rate environment and continuing national recessionary fears. During uncertain and challenging economic times, we remain focused on our business model, which emphasizes strong, full customer relationships. Our history of success as a community bank is rooted in the unwavering, unified mission of providing exceptional service to our customers and meeting all of their banking needs. For nearly 120 years we have stayed true to this simple mission, through all economic cycles.”
At June 30, 2023, the Company had $7.73 billion in assets, $5.42 billion in loans and $6.21 billion in total deposits. The Company’s combined enterprise, which encompasses 72 branch offices across three contiguous states, will continue to benefit from a diversified geographic footprint and provide significant growth opportunities in both the banking and wealth management arenas.
Key factors contributing to the second quarter of 2023 results included:
Hillebrand concluded, “In May, we were named a winner of the 2022 Raymond James Community Bankers Cup, which recognizes the top 10% of community banks with assets between $500 million and $10 billion based on various profitability, operational efficiency and balance sheet metrics. Only 22 banks in the nation received this award and we were the only bank in Indiana, Kentucky and Ohio to be honored. This recognition not only reflects the success of our Company, but the dedication that we have to providing high quality service to the community.” Stock Yards Bancorp has been named to the Raymond James Community Bankers Cup eight times.
Results of Operations – Second Quarter 2023 Compared with Second Quarter 2022
Net interest income, the Company’s largest source of revenue, increased 7%, or $3.9 million, to $60.9 million. Strong organic loan expansion has boosted net interest income over the past 12 months.
The Company recorded $2.4 million in provision for credit losses(1) during the second quarter of 2023, which included a $2.2 million provision for credit losses on loans and $200,000 of credit loss expense for off-balance sheet exposures. Although the credit quality statistics remain strong, the Company recorded credit loss expense based upon strong loan growth, qualitative factor adjustments, minimal net charge-offs and improvement in the Company’s unemployment forecast. For the second quarter of 2022, consistent with net recoveries and solid credit quality statistics, the Company recorded a $700,000 reduction in provision for credit losses on loans offset by a $500,000 provision for credit losses for off balances sheet exposures.
Non-interest income increased $1.1 million, or 5%, to $23.1 million.
Non-interest expenses increased $1.4 million, or 3%, compared to the second quarter of 2022, to $46.0 million.
Financial Condition – June 30, 2023 Compared with June 30, 2022
Total assets increased $149 million, or 2%, year over year to $7.73 billion.
Total loans increased $541 million, or 11%, to $5.42 billion, led by expansion in most major loan categories. Excluding the PPP loan portfolio, total loans increased $571 million, or 12% over the past 12 months.
Total investment securities, which spiked during the second quarter of 2021 and the first quarter of 2022 due to acquisitions, decreased $83 million, or 5%, year over year. Higher yielding investment purchases made in 2022 have boosted the overall portfolio yield to 2.05% during the second quarter of 2023, from 1.69% in the second quarter of 2022. In 2023, cash flows from the investment portfolio have been utilized to fund loan growth and provide liquidity in lieu of redeployment.
Total deposits contracted $341 million, or 5%, over the past 12 months, led by a $355 million decline in non-interest bearing demand deposits, partially offset by interest bearing demand and time deposit expansion. Approximately $90 million of the decline was associated with seasonal public funds account balances.
Asset quality has remained solid with past dues and classified loans reaching three year lows. During the second quarter of 2023, the Company recorded net loan charge-offs of $113,000, compared to net loan charge-offs of $5,000 in the second quarter of 2022. Non-performing loans(5) totaled $18 million, or 0.33% of total loans outstanding compared to $9 million, or 0.18% of total loans outstanding at June 30, 2022. The ratio of allowance for credit losses to loans (5) ended at 1.43% at June 30, 2023 compared to 1.36% at June 30, 2022.
At June 30, 2023, the Company continued to be “well-capitalized,” the highest regulatory capital rating for financial institutions, with all capital ratios remaining strong. Total equity to assets(1) was 10.45% and the tangible common equity ratio(1) was 7.87%(1) at June 30, 2023, compared to 9.85% and 7.00% at June 30, 2022, respectively. The increase in interest rates over the last 12 months have led to outsized unrealized losses within the available for sale debt securities portfolio, with the decline in accumulated other comprehensive income/loss putting pressure on the tangible common equity ratio, which has been steadily improving post acquisition activity.
In May 2023, the board of directors declared a quarterly cash dividend of $0.29 per common share. The dividend was paid July 3, 2023, to shareholders of record as of June 20, 2023.
No shares have been purchased since 2020, and approximately 741,000 shares remain eligible for repurchase under the current buy-back plan, which expires in May 2025.
Results of Operations – Second Quarter 2023 Compared with First Quarter 2023
Net interest income declined $2.1 million, or 3%, over the prior quarter to $60.9 million. NIM declined 17 basis points on the linked quarter to 3.42%, as the cost of funds growth outpaced earning asset yield growth.
The Company recorded $2.4 million in provision for credit losses(1) during the second quarter of 2023, which included a $2.2 million provision for credit losses on loans and $200,000 of credit loss expense for off-balance sheet exposures. During the first quarter of 2023, the Company recorded $2.6 million in provision for credit losses, which included a $2.3 million provision for credit losses on loans and a $375,000 credit loss expense for off-balance sheet exposures.
Non-interest income increased $1.0 million, or 5%, to $23.1 million on the linked quarter, consistent with expansion in wealth management and trust, treasury and card income.
Non-interest expenses increased $711,000, or 2%, to $46.0 million, as increased compensation, marketing and card processing more than off-set declines in FDIC insurance and net occupancy expense.
Financial Condition – June 30, 2023 Compared with March 31, 2023
Total assets increased $65 million on the linked quarter to $7.73 billion.
Total loans increased $176 million, or 3%, on the linked quarter, led by increases in the Commercial Real Estate and Residential Real Estate loan portfolios. Total line of credit usage was 40.1% as of June 30, 2023, compared to 41.1% as of March 31, 2023 – driven by strong production (new lines that have yet to fund). Commercial and industrial line usage was 29.6% as of June 30, 2023, compared to 30.5% as of March 31, 2023.
Total deposits decreased $149 million, or 2%, on the linked quarter, with non-interest bearing demand deposit balances contracting $79 million. Total interest bearing deposits decreased $70 million, on the linked quarter, as a $119 million increase in time deposits was offset by contraction in interest bearing demand deposit, savings and money market accounts. Excluding the public funds decline, total deposits decreased $65 million on the linked quarter.
About the Company
Louisville, Kentucky-based Stock Yards Bancorp, Inc., with $7.73 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.”
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 banking subsidiary operates; competition for the Company’s customers from other providers of financial services; changes in, or forecasts of, future political and economic conditions, inflation and efforts to control it; government legislation and regulation, which change 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. Refer to Stock Yards’ Annual Report on Form 10-K for the year ended December 31, 2022, 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.
Contact:
T. Clay Stinnett
Executive Vice President,
Treasurer and Chief Financial Officer
(502) 625-0890
Stock Yards Bancorp, Inc. Financial Information (unaudited) | |||||||||||||
Second Quarter 2023 Earnings Release | |||||||||||||
(In thousands unless otherwise noted) | |||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||
June 30, | June 30, | ||||||||||||
Income Statement Data | 2023 | 2022 | 2023 | 2022 | |||||||||
Net interest income, fully tax equivalent (6) | $ 61,074 | $ 57,244 | $ 124,319 | $ 106,189 | |||||||||
Interest income: | |||||||||||||
Loans | $ 72,308 | $ 50,612 | $ 141,095 | $ 95,355 | |||||||||
Federal funds sold and interest bearing due from banks | 1,664 | 1,113 | 3,245 | 1,395 | |||||||||
Mortgage loans held for sale | 77 | 50 | 118 | 74 | |||||||||
Securities | 9,014 | 7,333 | 18,072 | 12,268 | |||||||||
Total interest income | 83,063 | 59,108 | 162,530 | 109,092 | |||||||||
Interest expense: | |||||||||||||
Deposits | 17,081 | 1,770 | 30,580 | 2,941 | |||||||||
Securities sold under agreements to repurchase and | |||||||||||||
other short-term borrowings | 546 | 76 | 1,179 | 96 | |||||||||
Federal Home Loan Bank advances | 3,962 | - | 5,696 | - | |||||||||
Subordinated debentures | 545 | 278 | 1,074 | 311 | |||||||||
Total interest expense | 22,134 | 2,124 | 38,529 | 3,348 | |||||||||
Net interest income | 60,929 | 56,984 | 124,001 | 105,744 | |||||||||
Provision for credit losses (1) | 2,350 | (200) | 4,975 | 2,079 | |||||||||
Net interest income after provision for credit losses | 58,579 | 57,184 | 119,026 | 103,665 | |||||||||
Non-interest income: | |||||||||||||
Wealth management and trust services | 10,146 | 9,495 | 19,673 | 17,738 | |||||||||
Deposit service charges | 2,201 | 2,061 | 4,350 | 3,924 | |||||||||
Debit and credit card income | 4,712 | 4,748 | 9,194 | 8,867 | |||||||||
Treasury management fees | 2,549 | 2,187 | 4,867 | 4,091 | |||||||||
Mortgage banking income | 1,030 | 1,295 | 2,068 | 2,298 | |||||||||
Net investment product sales commissions and fees | 800 | 731 | 1,554 | 1,338 | |||||||||
Bank owned life insurance | 559 | 270 | 1,108 | 536 | |||||||||
Gain (Loss) on sale of premises and equipment | - | (2) | (2) | (28) | |||||||||
Other | 1,088 | 1,155 | 2,320 | 2,379 | |||||||||
Total non-interest income | 23,085 | 21,940 | 45,132 | 41,143 | |||||||||
Non-interest expenses: | |||||||||||||
Compensation | 22,107 | 22,204 | 44,003 | 40,173 | |||||||||
Employee benefits | 5,061 | 4,429 | 10,114 | 8,968 | |||||||||
Net occupancy and equipment | 3,739 | 3,663 | 7,638 | 6,688 | |||||||||
Technology and communication | 4,219 | 3,984 | 8,470 | 7,403 | |||||||||
Debit and credit card processing | 1,706 | 1,665 | 3,125 | 3,002 | |||||||||
Marketing and business development | 1,784 | 1,445 | 2,879 | 2,217 | |||||||||
Postage, printing and supplies | 889 | 825 | 1,763 | 1,558 | |||||||||
Legal and professional | 819 | 1,027 | 1,616 | 1,677 | |||||||||
FDIC Insurance | 779 | 536 | 1,914 | 1,181 | |||||||||
Amortization of investments in tax credit partnerships | 324 | 89 | 647 | 177 | |||||||||
Capital and deposit based taxes | 607 | 582 | 1,246 | 1,100 | |||||||||
Merger expenses | - | - | - | 19,500 | |||||||||
Intangible amortization | 1,172 | 1,611 | 2,352 | 2,324 | |||||||||
Other | 2,819 | 2,615 | 5,572 | 5,004 | |||||||||
Total non-interest expenses | 46,025 | 44,675 | 91,339 | 100,972 | |||||||||
Income before income tax expense | 35,639 | 34,449 | 72,819 | 43,836 | |||||||||
Income tax expense | 7,975 | 7,547 | 16,107 | 8,992 | |||||||||
Net income | 27,664 | 26,902 | 56,712 | 34,844 | |||||||||
Less: net income attributed to non-controlling interest | - | 108 | - | 144 | |||||||||
Net income available to stockholders | $ 27,664 | $ 26,794 | $ 56,712 | $ 34,700 | |||||||||
Net income per share - Basic | $ 0.95 | $ 0.92 | $ 1.94 | $ 1.23 | |||||||||
Net income per share - Diluted | 0.94 | 0.91 | 1.93 | 1.22 | |||||||||
Cash dividend declared per share | 0.29 | 0.28 | 0.58 | 0.56 | |||||||||
Weighted average shares - Basic | 29,223 | 29,131 | 29,200 | 28,186 | |||||||||
Weighted average shares - Diluted | 29,340 | 29,346 | 29,353 | 28,421 | |||||||||
June 30, | |||||||||||||
Balance Sheet Data | 2023 | 2022 | |||||||||||
Investment securities | $ 1,542,753 | $ 1,625,488 | |||||||||||
Loans | 5,418,609 | 4,877,324 | |||||||||||
Allowance for credit losses on loans | 77,710 | 66,362 | |||||||||||
Total assets | 7,732,552 | 7,583,105 | |||||||||||
Non-interest bearing deposits | 1,766,132 | 2,121,304 | |||||||||||
Interest bearing deposits | 4,442,248 | 4,427,826 | |||||||||||
Federal Home Loan Bank advances | 400,000 | - | |||||||||||
Stockholders' equity | 808,082 | 747,131 | |||||||||||
Total shares outstanding | 29,323 | 29,243 | |||||||||||
Book value per share (3) | $ 27.56 | $ 25.55 | |||||||||||
Tangible common equity per share (3) | 20.17 | 17.59 | |||||||||||
Market value per share | 45.37 | 59.82 | |||||||||||
Stock Yards Bancorp, Inc. Financial Information (unaudited) | |||||||||||||
Second Quarter 2023 Earnings Release | |||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||
June 30, | June 30, | ||||||||||||
Average Balance Sheet Data | 2023 | 2022 | 2023 | 2022 | |||||||||
Federal funds sold and interest bearing due from banks | $ 131,958 | $ 561,101 | $ 136,369 | $ 615,878 | |||||||||
Mortgage loans held for sale | 8,420 | 11,303 | 7,446 | 9,974 | |||||||||
Investment securities | 1,719,045 | 1,741,844 | 1,736,734 | 1,560,873 | |||||||||
Federal Home Loan Bank stock | 25,074 | 13,811 | 20,311 | 12,169 | |||||||||
Loans | 5,286,597 | 4,846,013 | 5,261,876 | 4,613,264 | |||||||||
Total interest earning assets | 7,171,094 | 7,174,072 | 7,162,736 | 6,812,158 | |||||||||
Total assets | 7,594,901 | 7,651,332 | 7,587,211 | 7,264,423 | |||||||||
Interest bearing deposits | 4,414,599 | 4,515,563 | 4,447,194 | 4,333,153 | |||||||||
Total deposits | 6,195,937 | 6,639,458 | 6,276,748 | 6,304,678 | |||||||||
Securities sold under agreement to repurchase and other short term borrowings | 126,653 | 149,747 | 132,440 | 125,545 | |||||||||
Federal Home Loan Bank advances | 348,352 | - | 256,215 | - | |||||||||
Subordinated debentures | 26,508 | 26,111 | 26,458 | 17,132 | |||||||||
Total interest bearing liabilities | 4,916,112 | 4,691,421 | 4,862,307 | 4,475,830 | |||||||||
Total stockholders' equity | 799,886 | 749,445 | 788,782 | 727,244 | |||||||||
Performance Ratios | |||||||||||||
Annualized return on average assets (4) | 1.46% | 1.40% | 1.51% | 0.96% | |||||||||
Annualized return on average equity (4) | 13.87% | 14.34% | 14.50% | 9.62% | |||||||||
Net interest margin, fully tax equivalent | 3.42% | 3.20% | 3.50% | 3.14% | |||||||||
Non-interest income to total revenue, fully tax equivalent | 27.43% | 27.71% | 26.63% | 27.93% | |||||||||
Efficiency ratio, fully tax equivalent (2) | 54.69% | 56.42% | 53.90% | 68.53% | |||||||||
Capital Ratios | |||||||||||||
Total stockholders' equity to total assets (3) | 10.45% | 9.85% | |||||||||||
Tangible common equity to tangible assets (3) | 7.87% | 7.00% | |||||||||||
Average stockholders' equity to average assets | 10.40% | 10.01% | |||||||||||
Total risk-based capital | 12.78% | 12.27% | |||||||||||
Common equity tier 1 risk-based capital | 11.20% | 10.81% | |||||||||||
Tier 1 risk-based capital | 11.61% | 11.26% | |||||||||||
Leverage | 9.83% | 8.58% | |||||||||||
Loan Segmentation | |||||||||||||
Commercial real estate - non-owner occupied | $ 1,477,733 | $ 1,397,330 | |||||||||||
Commercial real estate - owner occupied | 873,980 | 787,559 | |||||||||||
Commercial and industrial | 1,226,554 | 1,090,404 | |||||||||||
Commercial and industrial - PPP | 7,088 | 36,767 | |||||||||||
Residential real estate - owner occupied | 664,870 | 533,577 | |||||||||||
Residential real estate - non-owner occupied | 338,727 | 293,852 | |||||||||||
Construction and land development | 451,324 | 372,197 | |||||||||||
Home equity lines of credit | 202,574 | 192,102 | |||||||||||
Consumer | 139,602 | 137,278 | |||||||||||
Leases | 13,967 | 14,611 | |||||||||||
Credit cards | 22,190 | 21,647 | |||||||||||
Total loans and leases | $ 5,418,609 | $ 4,877,324 | |||||||||||
Asset Quality Data | |||||||||||||
Non-accrual loans | $ 17,364 | $ 7,827 | |||||||||||
Troubled debt restructurings | - | - | |||||||||||
Loans past due 90 days or more and still accruing | 437 | 1,176 | |||||||||||
Total non-performing loans | 17,801 | 9,003 | |||||||||||
Other real estate owned | 677 | 7,601 | |||||||||||
Total non-performing assets | $ 18,478 | $ 16,604 | |||||||||||
Non-performing loans to total loans (5) | 0.33% | 0.18% | |||||||||||
Non-performing assets to total assets | 0.24% | 0.22% | |||||||||||
Allowance for credit losses on loans to total loans (5) | 1.43% | 1.36% | |||||||||||
Allowance for credit losses on loans to average loans | 1.48% | 1.44% | |||||||||||
Allowance for credit losses on loans to non-performing loans | 437% | 737% | |||||||||||
Net (charge-offs) recoveries | $ (113) | $ (5) | $ (221) | $ 535 | |||||||||
Net (charge-offs) recoveries to average loans (7) | 0.00% | 0.00% | 0.00% | 0.01% | |||||||||
Stock Yards Bancorp, Inc. Financial Information (unaudited) | |||||||||||||
Second Quarter 2023 Earnings Release | |||||||||||||
Quarterly Comparison | |||||||||||||
Income Statement Data | 6/30/23 | 3/31/23 | 12/31/22 | 9/30/22 | 6/30/22 | ||||||||
Net interest income, fully tax equivalent (6) | $ 61,074 | $ 63,245 | $ 65,469 | $ 62,608 | $ 57,244 | ||||||||
Net interest income | $ 60,929 | $ 63,072 | $ 65,263 | $ 62,376 | $ 56,984 | ||||||||
Provision for credit losses (1) | 2,350 | 2,625 | 3,375 | 4,803 | (200) | ||||||||
Net interest income after provision for credit losses | 58,579 | 60,447 | 61,888 | 57,573 | 57,184 | ||||||||
Non-interest income: | |||||||||||||
Wealth management and trust services | 10,146 | 9,527 | 9,221 | 9,152 | 9,495 | ||||||||
Deposit service charges | 2,201 | 2,149 | 2,183 | 2,179 | 2,061 | ||||||||
Debit and credit card income | 4,712 | 4,482 | 5,046 | 4,710 | 4,748 | ||||||||
Treasury management fees | 2,549 | 2,318 | 2,278 | 2,221 | 2,187 | ||||||||
Mortgage banking income | 1,030 | 1,038 | 209 | 703 | 1,295 | ||||||||
Net investment product sales commissions and fees | 800 | 754 | 833 | 892 | 731 | ||||||||
Bank owned life insurance | 559 | 549 | 545 | 516 | 270 | ||||||||
Gain (Loss) on sale of premises and equipment | - | (2) | 1,295 | 3,074 | (2) | ||||||||
Other | 1,088 | 1,232 | 1,532 | 1,417 | 1,155 | ||||||||
Total non-interest income | 23,085 | 22,047 | 23,142 | 24,864 | 21,940 | ||||||||
Non-interest expenses: | |||||||||||||
Compensation | 22,107 | 21,896 | 23,398 | 23,069 | 22,204 | ||||||||
Employee benefits | 5,061 | 5,053 | 3,421 | 4,179 | 4,429 | ||||||||
Net occupancy and equipment | 3,739 | 3,899 | 3,843 | 3,767 | 3,663 | ||||||||
Technology and communication | 4,219 | 4,251 | 3,747 | 3,747 | 3,984 | ||||||||
Debit and credit card processing | 1,706 | 1,419 | 1,470 | 1,437 | 1,665 | ||||||||
Marketing and business development | 1,784 | 1,095 | 1,544 | 1,244 | 1,445 | ||||||||
Postage, printing and supplies | 889 | 874 | 893 | 903 | 825 | ||||||||
Legal and professional | 819 | 797 | 492 | 774 | 1,027 | ||||||||
FDIC Insurance | 779 | 1,135 | 730 | 847 | 536 | ||||||||
Amortization of investments in tax credit partnerships | 324 | 323 | 88 | 88 | 89 | ||||||||
Capital and deposit based taxes | 607 | 639 | 799 | 722 | 582 | ||||||||
Merger expenses | - | - | - | - | - | ||||||||
Intangible amortization | 1,172 | 1,180 | 1,610 | 1,610 | 1,611 | ||||||||
Loss on disposition of Landmark Financial Advisors | - | - | 870 | - | - | ||||||||
Other | 2,819 | 2,753 | 3,041 | 2,486 | 2,615 | ||||||||
Total non-interest expenses | 46,025 | 45,314 | 45,946 | 44,873 | 44,675 | ||||||||
Income before income tax expense | 35,639 | 37,180 | 39,084 | 37,564 | 34,449 | ||||||||
Income tax expense | 7,975 | 8,132 | 9,174 | 9,024 | 7,547 | ||||||||
Net income | 27,664 | 29,048 | 29,910 | 28,540 | 26,902 | ||||||||
Less: net income attributed to non-controlling interest | - | - | 93 | 85 | 108 | ||||||||
Net income available to stockholders | $ 27,664 | $ 29,048 | $ 29,817 | $ 28,455 | $ 26,794 | ||||||||
Net income per share - Basic | $ 0.95 | $ 1.00 | $ 1.02 | $ 0.98 | $ 0.92 | ||||||||
Net income per share - Diluted | 0.94 | 0.99 | 1.01 | 0.97 | 0.91 | ||||||||
Cash dividend declared per share | 0.29 | 0.29 | 0.29 | 0.29 | 0.28 | ||||||||
Weighted average shares - Basic | 29,223 | 29,178 | 29,157 | 29,144 | 29,131 | ||||||||
Weighted average shares - Diluted | 29,340 | 29,365 | 29,428 | 29,404 | 29,346 | ||||||||
Quarterly Comparison | |||||||||||||
Balance Sheet Data | 6/30/23 | 3/31/23 | 12/31/22 | 9/30/22 | 6/30/22 | ||||||||
Cash and due from banks | $ 111,126 | $ 87,922 | $ 82,515 | $ 93,948 | $ 88,422 | ||||||||
Federal funds sold and interest bearing due from banks | 103,204 | 229,076 | 84,852 | 235,973 | 485,447 | ||||||||
Mortgage loans held for sale | 7,069 | 6,397 | 2,606 | 5,230 | 10,045 | ||||||||
Investment securities | 1,542,753 | 1,600,603 | 1,617,834 | 1,627,298 | 1,625,488 | ||||||||
Federal Home Loan Bank stock | 27,366 | 23,226 | 10,928 | 10,928 | 13,811 | ||||||||
Loans | 5,418,609 | 5,243,104 | 5,205,918 | 5,072,877 | 4,877,324 | ||||||||
Allowance for credit losses on loans | 77,710 | 75,673 | 73,531 | 70,083 | 66,362 | ||||||||
Goodwill | 194,074 | 194,074 | 194,074 | 202,524 | 202,524 | ||||||||
Total assets | 7,732,552 | 7,667,648 | 7,496,261 | 7,554,210 | 7,583,105 | ||||||||
Non-interest bearing deposits | 1,766,132 | 1,845,302 | 1,950,198 | 2,200,041 | 2,121,304 | ||||||||
Interest bearing deposits | 4,442,248 | 4,511,893 | 4,441,054 | 4,300,732 | 4,427,826 | ||||||||
Securities sold under agreements to repurchase | 138,347 | 104,578 | 133,342 | 124,567 | 161,512 | ||||||||
Federal funds purchased | 11,646 | 14,745 | 8,789 | 8,970 | 8,771 | ||||||||
Federal Home Loan Bank advances | 400,000 | 275,000 | 50,000 | - | - | ||||||||
Subordinated debentures | 26,541 | 26,442 | 26,343 | 26,244 | 26,144 | ||||||||
Stockholders' equity | 808,082 | 794,368 | 760,432 | 727,754 | 747,131 | ||||||||
Total shares outstanding | 29,323 | 29,324 | 29,259 | 29,242 | 29,243 | ||||||||
Book value per share (3) | $ 27.56 | $ 27.09 | $ 25.99 | $ 24.89 | $ 25.55 | ||||||||
Tangible common equity per share (3) | 20.17 | 19.66 | 18.50 | 16.98 | 17.59 | ||||||||
Market value per share | 45.37 | 55.14 | 64.98 | 68.01 | 59.82 | ||||||||
Capital Ratios | |||||||||||||
Total stockholders' equity to total assets (3) | 10.45% | 10.36% | 10.14% | 9.63% | 9.85% | ||||||||
Tangible common equity to tangible assets (3) | 7.87% | 7.74% | 7.44% | 6.78% | 7.00% | ||||||||
Average stockholders' equity to average assets | 10.53% | 10.26% | 9.79% | 9.92% | 9.79% | ||||||||
Total risk-based capital | 12.78% | 12.91% | 12.54% | 12.16% | 12.27% | ||||||||
Common equity tier 1 risk-based capital | 11.20% | 11.30% | 11.04% | 10.69% | 10.81% | ||||||||
Tier 1 risk-based capital | 11.61% | 11.73% | 11.47% | 11.13% | 11.26% | ||||||||
Leverage | 9.83% | 9.56% | 9.33% | 8.85% | 8.58% | ||||||||
Stock Yards Bancorp, Inc. Financial Information (unaudited) | |||||||||||||
Second Quarter 2023 Earnings Release | |||||||||||||
Quarterly Comparison | |||||||||||||
Average Balance Sheet Data | 6/30/23 | 3/31/23 | 12/31/22 | 9/30/22 | 6/30/22 | ||||||||
Federal funds sold and interest bearing due from banks | $ 131,958 | $ 140,831 | $ 235,448 | $ 442,880 | $ 561,101 | ||||||||
Mortgage loans held for sale | 8,420 | 6,460 | 6,735 | 8,694 | 11,303 | ||||||||
Investment securities | 1,719,045 | 1,754,620 | 1,786,383 | 1,769,597 | 1,741,844 | ||||||||
Loans | 5,286,597 | 5,236,879 | 5,094,356 | 4,948,898 | 4,846,013 | ||||||||
Total interest earning assets | 7,171,094 | 7,154,286 | 7,133,850 | 7,181,781 | 7,174,072 | ||||||||
Total assets | 7,594,901 | 7,579,439 | 7,559,260 | 7,661,720 | 7,651,332 | ||||||||
Interest bearing deposits | 4,414,599 | 4,480,151 | 4,428,582 | 4,444,983 | 4,515,563 | ||||||||
Total deposits | 6,195,937 | 6,358,458 | 6,526,440 | 6,614,263 | 6,639,458 | ||||||||
Securities sold under agreement to repurchase and federal funds purchased | 126,653 | 138,292 | 126,027 | 148,734 | 149,747 | ||||||||
Federal Home Loan Bank advances | 348,352 | 163,056 | 1,087 | - | - | ||||||||
Subordinated debentures | 26,508 | 26,408 | 26,309 | 26,210 | 26,111 | ||||||||
Total interest bearing liabilities | 4,916,112 | 4,807,907 | 4,582,005 | 4,619,927 | 4,691,421 | ||||||||
Total stockholders' equity | 799,886 | 777,555 | 740,007 | 760,322 | 749,445 | ||||||||
Performance Ratios | |||||||||||||
Annualized return on average assets (4) | 1.46% | 1.55% | 1.56% | 1.47% | 1.40% | ||||||||
Annualized return on average equity (4) | 13.87% | 15.15% | 15.99% | 14.85% | 14.34% | ||||||||
Net interest margin, fully tax equivalent | 3.42% | 3.59% | 3.64% | 3.46% | 3.20% | ||||||||
Non-interest income to total revenue, fully tax equivalent | 27.43% | 25.85% | 27.56% | 28.43% | 27.71% | ||||||||
Efficiency ratio, fully tax equivalent (2) | 54.69% | 53.13% | 51.85% | 51.30% | 56.42% | ||||||||
Loans Segmentation | |||||||||||||
Commercial real estate - non-owner occupied | $ 1,477,733 | $ 1,421,660 | $ 1,397,346 | $ 1,415,180 | $ 1,397,330 | ||||||||
Commercial real estate - owner occupied | 873,980 | 850,766 | 834,629 | 819,727 | 787,559 | ||||||||
Commercial and industrial | 1,226,554 | 1,205,222 | 1,230,976 | 1,170,241 | 1,090,404 | ||||||||
Commercial and industrial - PPP | 7,088 | 9,557 | 18,593 | 19,469 | 36,767 | ||||||||
Residential real estate - owner occupied | 664,870 | 620,417 | 591,515 | 557,638 | 533,577 | ||||||||
Residential real estate - non-owner occupied | 338,727 | 323,519 | 313,248 | 302,936 | 293,852 | ||||||||
Construction and land development | 451,324 | 439,673 | 445,690 | 414,632 | 372,197 | ||||||||
Home equity lines of credit | 202,574 | 200,933 | 200,725 | 199,485 | 192,102 | ||||||||
Consumer | 139,602 | 136,412 | 139,461 | 138,843 | 137,278 | ||||||||
Leases | 13,967 | 13,207 | 13,322 | 13,959 | 14,611 | ||||||||
Credit cards | 22,190 | 21,738 | 20,413 | 20,767 | 21,647 | ||||||||
Total loans and leases | $ 5,418,609 | $ 5,243,104 | $ 5,205,918 | $ 5,072,877 | $ 4,877,324 | ||||||||
Asset Quality Data | |||||||||||||
Non-accrual loans | $ 17,364 | $ 17,389 | $ 14,242 | $ 10,580 | $ 7,827 | ||||||||
Troubled debt restructurings | - | - | - | - | - | ||||||||
Loans past due 90 days or more and still accruing | 437 | 894 | 892 | 32 | 1,176 | ||||||||
Total non-performing loans | 17,801 | 18,283 | 15,134 | 10,612 | 9,003 | ||||||||
Other real estate owned | 677 | 677 | 677 | 996 | 7,601 | ||||||||
Total non-performing assets | $ 18,478 | $ 18,960 | $ 15,811 | $ 11,608 | $ 16,604 | ||||||||
Non-performing loans to total loans (5) | 0.33% | 0.35% | 0.29% | 0.21% | 0.18% | ||||||||
Non-performing assets to total assets | 0.24% | 0.25% | 0.21% | 0.15% | 0.22% | ||||||||
Allowance for credit losses on loans to total loans (5) | 1.44% | 1.44% | 1.41% | 1.38% | 1.36% | ||||||||
Allowance for credit losses on loans to average loans | 1.47% | 1.45% | 1.44% | 1.42% | 1.37% | ||||||||
Allowance for credit losses on loans to non-performing loans | 437% | 414% | 486% | 660% | 737% | ||||||||
Net (charge-offs) recoveries | $ (113) | $ (108) | $ (152) | $ (382) | $ (5) | ||||||||
Net (charge-offs) recoveries to average loans (7) | -0.00% | -0.00% | -0.00% | -0.01% | -0.00% | ||||||||
Other Information | |||||||||||||
Total assets under management (in millions) | $ 6,976 | $ 6,764 | $ 6,585 | $ 6,293 | $ 6,555 | ||||||||
Full-time equivalent employees | 1,064 | 1,044 | 1,040 | 1,028 | 1,018 | ||||||||
(1) - Detail of Provision for credit losses follows: | |||||||||||||
(in thousands) | 6/30/23 | 3/31/23 | 12/31/22 | 9/30/22 | 6/30/22 | ||||||||
Provision for credit losses - loans | $ 2,150 | $ 2,250 | $ 3,600 | $ 4,103 | $ (700) | ||||||||
Provision for credit losses - off balance sheet exposures | 200 | 375 | (225) | 700 | 500 | ||||||||
Total provision for credit losses | $ 2,350 | $ 2,625 | $ 3,375 | $ 4,803 | $ (200) | ||||||||
(2) - 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. In addition to the efficiency ratio presented, Bancorp considers an adjusted efficiency ratio to be important because it provides a comparable ratio after eliminating net gains (losses) on sales, calls, and impairment of investment securities, as well as net gains (losses) on sales of premises and equipment and disposition of any acquired assets, if applicable, and the fluctuation in non-interest expenses related to amortization of investments in tax credit partnerships and merger-related expenses. | |||||||||||||
Quarterly Comparison | |||||||||||||
(Dollars in thousands) | 6/30/23 | 3/31/23 | 12/31/22 | 9/30/22 | 6/30/22 | ||||||||
Total non-interest expenses (a) | $ 46,025 | $ 45,314 | $ 45,946 | $ 44,873 | $ 44,675 | ||||||||
Less: Loss on disposition of Landmark Financial Advisors | - | - | (870) | - | - | ||||||||
Less: Amortization of investments in tax credit partnerships | (324) | (323) | (88) | (88) | (89) | ||||||||
Total non-interest expenses - Non-GAAP (c) | $ 45,701 | $ 44,991 | $ 44,988 | $ 44,785 | $ 44,586 | ||||||||
Total net interest income, fully tax equivalent | $ 61,074 | $ 63,245 | $ 65,469 | $ 62,608 | $ 57,244 | ||||||||
Total non-interest income | 23,085 | 22,047 | 23,142 | 24,864 | 21,940 | ||||||||
Total revenue - Non-GAAP (b) | 84,159 | 85,292 | 88,611 | 87,472 | 79,184 | ||||||||
Less: Gain/loss on sale of premises and equipment | - | 2 | (1,295) | (3,074) | - | ||||||||
Less: Gain/loss on sale of securities | - | - | - | - | - | ||||||||
Total adjusted revenue - Non-GAAP (d) | $ 84,159 | $ 85,294 | $ 87,316 | $ 84,398 | $ 79,184 | ||||||||
Efficiency ratio - Non-GAAP (a/b) | 54.69% | 53.13% | 51.85% | 51.30% | 56.42% | ||||||||
Adjusted efficiency ratio - Non-GAAP (c/d) | 54.30% | 52.75% | 51.52% | 53.06% | 56.31% | ||||||||
(3) - The following table provides a reconciliation of total stockholders’ equity in accordance with 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) | 6/30/23 | 3/31/23 | 12/31/22 | 9/30/22 | 6/30/22 | ||||||||
Total stockholders' equity - GAAP (a) | $ 808,082 | $ 794,368 | $ 760,432 | $ 727,754 | $ 747,131 | ||||||||
Less: Goodwill | (194,074) | (194,074) | (194,074) | (202,524) | (202,524) | ||||||||
Less: Core deposit and other intangibles | (22,638) | (23,810) | (24,990) | (28,747) | (30,357) | ||||||||
Tangible common equity - Non-GAAP (c) | $ 591,370 | $ 576,484 | $ 541,368 | $ 496,483 | $ 514,250 | ||||||||
Total assets - GAAP (b) | $ 7,732,552 | $ 7,667,648 | $ 7,496,261 | $ 7,554,210 | $ 7,583,105 | ||||||||
Less: Goodwill | (194,074) | (194,074) | (194,074) | (202,524) | (202,524) | ||||||||
Less: Core deposit and other intangibles | (22,638) | (23,810) | (24,990) | (28,747) | (30,357) | ||||||||
Tangible assets - Non-GAAP (d) | $ 7,515,840 | $ 7,449,764 | $ 7,277,197 | $ 7,322,939 | $ 7,350,224 | ||||||||
Total stockholders' equity to total assets - GAAP (a/b) | 10.45% | 10.36% | 10.14% | 9.63% | 9.85% | ||||||||
Tangible common equity to tangible assets - Non-GAAP (c/d) | 7.87% | 7.74% | 7.44% | 6.78% | 7.00% | ||||||||
Total shares outstanding (e) | 29,323 | 29,324 | 29,259 | 29,242 | 29,243 | ||||||||
Book value per share - GAAP (a/e) | $ 27.56 | $ 27.09 | $ 25.99 | $ 24.89 | $ 25.55 | ||||||||
Tangible common equity per share - Non-GAAP (c/e) | 20.17 | 19.66 | 18.50 | 16.98 | 17.59 | ||||||||
(4) - 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 of non-recurring items related to the Commonwealth Bancshares and Kentucky Bancshares acquisitions, Bancorp considers adjusted return on average assets and return on average equity ratios important, as they reflect performance after removing net gains (losses) on certain sales of premises and equipment and the disposition of any acquired assets, merger-related expenses and purchase accounting adjustments. | |||||||||||||
Quarterly Comparison | |||||||||||||
(Dollars in thousands) | 6/30/23 | 3/31/23 | 12/31/22 | 9/30/22 | 6/30/22 | ||||||||
Net income attributable to stockholders - GAAP (a) | $ 27,664 | $ 29,048 | $ 29,817 | $ 28,455 | $ 26,794 | ||||||||
Add: Loss on disposition of Landmark Financial Advisors | - | - | 870 | - | - | ||||||||
Less: Gain/loss on sale of premises and equipment | - | 2 | (1,295) | (3,074) | - | ||||||||
Less: Tax effect of adjustments to net income | - | - | 100 | 738 | - | ||||||||
Total net income - Non-GAAP (b) | $ 27,664 | $ 29,050 | $ 29,492 | $ 26,119 | $ 26,794 | ||||||||
Total average assets (c) | $ 7,594,901 | $ 7,579,439 | $ 7,559,260 | $ 7,661,720 | $ 7,651,332 | ||||||||
Total average stockholder equity (d) | 799,886 | 777,555 | 740,007 | 760,322 | 749,445 | ||||||||
Return on average assets - GAAP (a/c) | 1.46% | 1.55% | 1.56% | 1.47% | 1.40% | ||||||||
Return on average assets - Non-GAAP (b/c) | 1.46% | 1.55% | 1.55% | 1.35% | 1.40% | ||||||||
Return on average equity - GAAP (a/d) | 13.87% | 15.15% | 15.99% | 14.85% | 14.34% | ||||||||
Return on average equity - Non-GAAP (b/d) | 13.87% | 15.15% | 15.81% | 13.63% | 14.34% | ||||||||
(5) - 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) | 6/30/23 | 3/31/23 | 12/31/22 | 9/30/22 | 6/30/22 | ||||||||
Total Loans - GAAP (a) | $ 5,418,609 | $ 5,243,104 | $ 5,205,918 | $ 5,072,877 | $ 4,877,324 | ||||||||
Less: PPP loans | (7,088) | (9,557) | (18,593) | (19,469) | (36,767) | ||||||||
Total non-PPP Loans - Non-GAAP (b) | $ 5,411,521 | $ 5,233,547 | $ 5,187,325 | $ 5,053,408 | $ 4,840,557 | ||||||||
Allowance for credit losses on loans (c) | $ 77,710 | $ 75,673 | $ 73,531 | $ 70,083 | $ 66,362 | ||||||||
Total non-performing loans (d) | 17,801 | 18,283 | 15,134 | 10,612 | 9,003 | ||||||||
Allowance for credit losses on loans to total loans - GAAP (c/a) | 1.43% | 1.44% | 1.41% | 1.38% | 1.36% | ||||||||
Allowance for credit losses on loans to total loans - Non-GAAP (c/b) | 1.44% | 1.45% | 1.42% | 1.39% | 1.37% | ||||||||
Non-performing loans to total loans - GAAP (d/a) | 0.33% | 0.35% | 0.29% | 0.21% | 0.18% | ||||||||
Non-performing loans to total loans - Non-GAAP (d/b) | 0.33% | 0.35% | 0.29% | 0.21% | 0.19% | ||||||||
(6) - 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. | |||||||||||||
(7) - Quarterly net (charge-offs) recoveries to average loans ratios are not annualized. |