SYBT Reports Record First Quarter Loan
Production, Deposit Growth in a Difficult Operating
Environment
Stock Yards Bancorp, Inc. (NASDAQ: SYBT), parent company of
Stock Yards Bank & Trust Company, with offices in the
Louisville, Indianapolis and Cincinnati metropolitan markets, today
reported results for the first quarter ended March 31, 2020. Net
income for the first quarter was $13.2 million or $0.59 per diluted
share compared with net income of $15.6 million or $0.68 per
diluted share for the first quarter of 2019. As previously
disclosed, the first quarter 2019 results included a favorable $1.3
million or $0.06 per diluted share non-recurring state tax
adjustment related to a tax law change.
(dollar amounts in thousands, except per
share data)
1Q20
4Q19
1Q19
Net interest income
$
32,446
$
32,756
$
29,684
Provision for credit losses
5,550
-
600
Non-interest income
12,536
12,987
11,008
Non-interest expenses
23,950
26,153
22,612
Income before income tax
expense
15,482
19,590
17,480
Income tax expense
2,250
2,941
1,839
Net income
$
13,232
$
16,649
$
15,641
Net income per share, diluted
$
0.59
$
0.73
$
0.68
Net interest margin
3.71
%
3.70
%
3.89
%
Efficiency ratio
53.19
%
57.11
%
55.49
%
Tangible common equity to
tangible assets(1)
10.48
%
10.55
%
11.47
%
Annualized return on average
equity
13.18
%
16.48
%
17.09
%
Annualized return on average
assets
1.43
%
1.78
%
1.94
%
In commenting on the first quarter results, Chief Executive
Officer James A. (Ja) Hillebrand said, “Despite minimal charge-offs
and strong credit metrics, a significant provision for credit
losses was recorded in the first quarter of 2020 based on loan
growth and the potential economic effects of the COVID-19 pandemic
on the Company’s portfolio. The pandemic has caused severe
disruptions to the global economy and the markets in which we
operate, capping off what was, up to that point, a great quarter
with excellent momentum coming off a record 2019. Our top concerns
have shifted to servicing the immediate liquidity needs of our
clients, ensuring the health and well-being of our employees and
supporting the communities in which we live and serve. Our teams
have been working tirelessly to assist clients by executing the SBA
Paycheck Protection Program (PPP) enacted as part of the CARES Act
stimulus legislation, assisting with payment forbearance as
appropriate and other relief programs. We have executed our
strategic pandemic plan, which included implementing remote work
arrangements to the full extent possible, separating individual
departments, operating select branch lobbies by appointment only,
fully staffing all branch drive-thru lanes, communicating with and
encouraging our customers to use our free self-service tools such
as Interactive Teller Machines/Automatic Teller Machines, online
banking, mobile banking and bill pay and actively promoting social
distancing in all aspects of our everyday business.”
The Company’s management team continues to analyze the evolving
economic conditions in our markets while closely monitoring credit
metrics, particularly as it relates the following initially
identified COVID‑19 sensitive loan segments:
Industry Segments (dollars in millions)
Outstanding % of Total Loans Shopping
Centers
$
58
2.0
%
Lodging / Hotels
57
1.9
%
Nursing homes / Residential Care
45
1.5
%
Recreation / Entertainment
40
1.4
%
Bars / Restaurants
27
0.9
%
Travel Related
23
0.8
%
Hillbrand added, “As previously mentioned, we are actively
participating in the federal PPP program for our existing client
base and expect to fund it with minimal capital impact. Between
April 3rd and April 20th, we have approved and the SBA has
authorized 2,190 loan requests for approximately $583 million under
this program.
“Across our three markets, state issued stay-at-home orders have
disrupted non-essential businesses, caused large disruptions in
spending and caused widespread furloughs and layoffs within the
workforce. In response to requests from borrowers who have
experienced pandemic related business or personal cash flow
interruptions, and in accordance with recently issued regulatory
guidance, we have made short-term loan modifications involving both
interest only and full payment deferrals. Through April 20th,
approximately $312 million in full payment deferrals had been
processed, with the largest concentration in the commercial real
estate (CRE) and commercial and industrial (C&I) segments.
Loans to dentists/physicians, which the Company believes will not
be as severely impacted as those segments noted above, represented
the largest concentration within the C&I segment.”
Underlying the major challenges detailed above, since December
31, 2019, mainly in response to COVID‑19, the Federal Reserve Bank
(FRB) has lowered the Fed Funds Target Rate (FFTR) on two separate
occasions for a total of 150 basis points, with the March 15th
movement lowering the FFTR to a range of 0% - 0.25%, the lowest
level since late 2015.
Key factors impacting the first quarter of 2020 included:
- Net loan growth of $92 million versus year-end, with the
largest increases in the CRE - non-owner occupied and C&I
categories, occurred despite flat line of credit utilization in the
first quarter. Robust loan production led to the second highest
first quarter loan growth in the Bank’s history. Despite the
current pandemic, the Company has not currently experienced
significant line of credit drawdowns.
- Record first quarter deposit growth with the majority of the
growth in non-interest bearing products.
- The first quarter under which we began accounting for credit
losses under Accounting Standards Codification 326, Financial
Instruments – Credit Losses (CECL). The adoption of this standard
increased the opening balance for the allowance for credit losses
(ACL) by $8.2 million and reserve for off-balance sheet exposures
by $3.5 million as of January 1st. The adoption entries reduced the
Company’s retained earnings on a tax-effected basis of $8.8
million, with no impact on earnings. In addition, $1.6 million in
non-accretable credit marks allocated to Purchased Credit
Deteriorated loans were grossed up between loans and the ACL, with
no retained earnings impact.
- Increased non-interest income of $1.5 million or 14%, with
Wealth Management and Trust Group (WM&T) income increasing $779
thousand or 14%, boosted by a large non-recurring estate fee, and
mortgage banking income increasing $396 thousand or 88%. Card
income and treasury management fees also continued to stand out as
diversifying revenue streams, representing a combined 26% of total
non-interest income.
- Well-controlled non-interest expenses despite the addition of
personnel and other expenses related to the May 2019 acquisition.
In closing, Hillebrand added, “In these very unusual times, our
strength and resolve enable us to take exceptional care of our
customers, employees and communities. Based on our capital levels,
conservative underwriting policies, on and off balance sheet
liquidity, strong loan diversification, and current economic
conditions within the markets we serve, management expects to
navigate the uncertainties associated with the pandemic and remain
well-capitalized. We are closely monitoring the rapid developments
regarding the pandemic and remain confident in our long-term
strategic vision.
“As a final thought, I would like to express my sincere
appreciation to every Stock Yards Bancorp employee for their
efforts and dedication in serving our customers during this crisis.
Just as importantly, I want to express my gratitude to all those on
the front lines of the pandemic, especially health care workers and
first responders who are there to help all of us, but especially
the most vulnerable among us. We will weather this storm together
and I believe that Stock Yards Bancorp will emerge from this crisis
even stronger.”
Results of Operations - First Quarter
2020 Compared with First Quarter 2019
Net interest income – the Company’s largest source of revenue –
increased approximately $2.8 million or 9% to $32.5 million.
- Net interest margin decreased 18 basis points to 3.71% from
3.89%, as the FRB lowered rates five times over the last 12 months.
The Company has followed suit by lowering the stated rates on most
types of interest-bearing deposit and certificates of deposit
offerings in tandem with the FRB moves. Beginning with the third
FRB rate move, the Company was not able to fully offset the decline
in loan rates. Beyond potential pricing pressure/competition and
the absolute low level of rates, the current economic outlook and
prospects of a sustained historic low rate environment will likely
continue to place pressure on net interest margin. Exacerbating the
above, the Company has maintained significantly higher levels of
excess balance sheet liquidity during the first quarter of
2020.
- Total interest income rose $1.8 million or 5% to $36.9 million,
driven by an increase in interest income on loans consistent with
growth in the portfolio, partially offset by less interest earned
on overnight funds and securities, mainly attributable to lower
market rates.
- Interest expense decreased $936 thousand or 17% to $4.4
million. Interest expense on interest bearing deposits declined
$1.1 million consistent with the lowering of stated interest rates,
partially offset by increased Federal Home Loan Bank interest
expense associated with long-term advances assumed in the Company’s
2019 acquisition.
First quarter 2020 results included a provision for credit
losses of $5.6 million, representing an increase of $5.0 million
over the same period in the prior year. The first quarter 2020
provision reflects the implementation of CECL and the corresponding
impact of financial forecasting required. As the primary
forecasting tool within the model is the Seasonally Adjusted
National Civilian Unemployment Rate, the model called for large
increases in the quantitative portion of the calculation which was
tempered with qualitative adjustments to account for the massive
federal stimulus programs. To a lesser extent, the provision was
also impacted by strong growth during the period.
Non-interest income increased $1.5 million or 14% to $12.5
million.
- WM&T income increased $779 thousand or 14%. Despite a down
market that began half way through the first quarter of 2020, the
WM&T department was able to offset the decline in fees
associated with the market volatility with a large non-recurring
estate fee.
- Mortgage banking revenue increased $396 thousand or 88%, as
sustained low long-term rates continued to entice
re-financings.
- Debit/credit card income and treasury management fees combined
increased $363 thousand, representing 26% of non-interest income.
Treasury management fee growth benefited from the continued
expansion of its commercial client base along with sales of
additional products to existing customers.
- Other non-interest income decreased $226 thousand, primarily
due to a fair value adjustment related to a company owned life
insurance policy that is tied to stock market performance. The
prior year period included a $126 thousand incentivization payment
received related to a banking center relocation.
Non-interest expenses increased $1.3 million or 6% to $24.0
million.
- Compensation expense for the first quarter of 2020 increased
$432 thousand or 4% compared with the prior-year quarter as a
result of an increase in full time equivalent employees associated
with the May 2019 acquisition.
- Employee benefits for the first quarter of 2020 increased $612
thousand or 24% compared with the prior-year quarter due to the
increase in full-time equivalent employees associated with the May
2019 acquisition and higher levels of health insurance claims.
- Technology and communication expense for the first quarter of
2020 increased $240 thousand or 14% compared with the prior-year
quarter consistent with expanding customer facing software/system
functionality and the resulting higher licensing/maintenance
expense.
- Marketing and business development expense, which include all
costs associated with promoting the Bank, community investment,
retaining customers and acquiring new business, decreased $65
thousand in the first quarter of 2020, mainly due to the timing of
community support spend.
- Legal and professional fees were elevated in both periods as a
result of higher levels of professional fees incurred related to
the prior year acquisition, CECL consulting and other miscellaneous
consulting projects.
- FDIC insurance expense decreased $109 thousand, as the Bank
benefited from credits released by the FDIC.
Financial Condition – March 31, 2020
Compared with March 31, 2019
Total loans increased $412 million or 16% to $2.9 billion
attributable to both the May 2019 acquisition and strong organic
loan growth and loan production over the past 12 months.
The ACL to total loans increased 38 basis points to 1.43% from
the same period in 2019 due to the CECL adoption, significant loan
growth and increased provisioning related to the potential economic
effects of the pandemic on the loan portfolio.
Asset quality, which has trended within a narrow range over the
past several years, has remained sound and reflected no impact
related to the pandemic at March 31, 2020. Non-performing loans
were $6 million or 0.21% of total loans outstanding versus $4
million or 0.15% of total loans outstanding a year ago.
Total deposits increased $446 million or 16% to $3.2 billion
with growth in balances with both existing and new customers,
including the May 2019 acquisition.
The Company remained “well capitalized” – the highest regulatory
capital rating for financial institutions. Total equity to assets
was 10.83% and the tangible common equity ratio was 10.48%,(1) at
March 31, 2020, compared to 11.52% and 11.47%,(1) at March 31,
2019, with the decline attributable to the January 1, 2020 CECL
adoption and the prior year acquisition. The Company continues to
consistently achieve industry-leading returns on equity due to its
strong earnings performance.
In February 2020, the Company’s board of directors continued the
higher rate of $0.27 per common share initially set in November
2019. With the November increase, the Company has raised its
quarterly dividend rate 12 times since 2013, including two
increases during 2019 and each of the previous five years,
resulting in a cumulative increase of 93% over that time.
Based on recent economic developments and the increased
importance of capital preservation, no shares were repurchased in
2020. Approximately 741 thousand shares remain eligible for
repurchase under the current buy-back plan.
Results of Operations - First Quarter
2020 Compared with Fourth Quarter 2019
Net interest income, which decreased slightly during the quarter
to $32.5 million, reflected strong average balance sheet growth
over the past 12 months offset by significant interest rate
movement over the same period.
Non-interest income decreased 3% to $12.5 million.
- A 7% increase in WM&T income was offset by a slight
decrease in debit/credit card income and deposit service charges
which correlates closely to customer behavior and the evolving
pandemic.
- Other non-interest income reflects a decline in swap fees
collected.
Non-interest expenses decreased 8% to $24.0 million.
- Compensation expense decreased 9% to $12.2 million compared
with the fourth quarter of 2019, which included additional bonus
expense tied to record 2019 operating results.
- Employee benefits expense increased 26% as a result of
increased full-time equivalent employees and higher levels of
health insurance claims.
- Net occupancy and equipment expenses declined over the linked
quarter consistent with a lease accounting system forecast
adjustment.
- Technology and communication expenses continued to increase as
a result of expanding customer facing software/system functionality
and the resulting higher licensing/maintenance expense.
- Marketing and business development expenses included higher
community support expenses during the fourth quarter of 2019.
- The expense levels related to tax credit investments can
fluctuate materially from period-to-period based on the timing of
project completion and allocation of tax credits.
Financial Condition March 31, 2020
Compared with December 31, 2019
Securities available for sale decreased $25 million during the
first quarter of 2020, as cash from maturing short-term securities,
coupled with deposit growth, were used to help build balance sheet
liquidity.
Total loans increased $92 million or 3% boosted by record first
quarter loan production.
The ACL increased $15 million related to the CECL adoption, loan
growth and increased provisioning related to the potential economic
effects of the pandemic on the loan portfolio.
Total deposits increased $65 million or 2%. Despite elevated
levels of seasonal deposits and public funds at year-end, interest
bearing and non-interest bearing demand deposit balances increased,
as customers have maintained higher levels of liquidity due to
economic uncertainty.
Based on the favorable interest rate environment, during the
first quarter of 2020, the Company prepaid approximately $10
million in Federal Home Loan Bank advances obtained in its 2019
acquisition without penalty.
Stockholders’ equity increased $3 million in the first quarter
of 2020 compared with the prior quarter, with net income of $13.2
million and the positive change in equity related to the Bank’s
investment portfolio, offset by CECL related adjustments and
dividends declared.
About the Company
Louisville, Kentucky-based Stock Yards Bancorp, Inc., with $3.8
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 subsidiary
operates; competition for the Company’s customers from other
providers of financial services; 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; the effects of the FRB’s benchmark interest
rate cuts on liquidity and margins; the potential adverse effects
of the coronavirus or any other pandemic on the ability of
borrowers to satisfy their obligations to the Company, the level of
the Company’s non-performing assets, the demand for the Company’s
loans or its other products and services, other aspects of the
Company’s business and operations, and financial markets and
economic growth, 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. See “Risk Factors” outlined in the Company’s Form 10-K
for the year ended December 31, 2019.
Stock Yards Bancorp, Inc. Financial Information
(unaudited) First Quarter 2020 Earnings Release (In
thousands unless otherwise noted)
Three Months Ended
March 31,
Income Statement Data
2020
2019
Net interest income, fully tax equivalent (2)
$
32,494
$
29,740
Interest income: Loans and leases
$
33,749
$
31,571
Federal funds sold and interest bearing due from banks
531
733
Mortgage loans held for sale
61
37
Securities
2,541
2,715
Total interest income
36,882
35,056
Interest expense: Deposits
3,962
5,066
Securities sold under agreements to repurchase and other short-term
borrowings
45
85
Federal Home Loan Bank (FHLB) advances and other long-term debt
429
221
Total interest expense
4,436
5,372
Net interest income
32,446
29,684
Provision for credit losses
5,550
600
Net interest income after provision for credit losses
26,896
29,084
Non-interest income: Wealth management and trust
services
6,218
5,439
Deposit service charges
1,283
1,178
Debit and credit card income
1,980
1,744
Treasury management fees
1,284
1,157
Mortgage banking income
846
450
Net investment product sales commissions and fees
466
356
Bank owned life insurance
179
178
Other
280
506
Total non-interest income
12,536
11,008
Non-interest expenses: Compensation
12,233
11,801
Employee benefits
3,167
2,555
Net occupancy and equipment
1,881
1,849
Technology and communication
2,013
1,773
Debit and credit card processing
656
587
Marketing and business development
560
625
Postage, printing, and supplies
441
406
Legal and professional
623
534
Amortization of investments in tax credit partnerships
36
52
Capital and deposit based taxes
1,030
904
Other
1,310
1,526
Total non-interest expenses
23,950
22,612
Income before income tax expense
15,482
17,480
Income tax expense
2,250
1,839
Net income
$
13,232
$
15,641
Net income per share - Basic
$
0.59
$
0.69
Net income per share - Diluted
0.59
0.68
Cash dividend declared per share
0.27
0.25
Weighted average shares - Basic
22,266
22,661
Weighted average shares - Diluted
22,487
22,946
March 31,
Balance Sheet Data
2020
2019
Loans and leases
$
2,937,366
$
2,525,709
Allowance for credit losses
42,143
26,464
Total assets
3,784,586
3,281,016
Non-interest bearing deposits
858,883
698,783
Interest bearing deposits
2,339,995
2,053,757
FHLB advances
69,191
47,853
Stockholders' equity
409,702
377,994
Total shares outstanding
22,665
22,823
Book value per share (1)
$
18.08
$
16.56
Tangible common equity per share (1)
17.43
16.49
Market value per share
28.93
33.81
Stock Yards Bancorp, Inc. Financial Information (unaudited)
First Quarter 2020 Earnings Release
Three Months Ended
March 31,
Average Balance Sheet Data
2020
2019
Federal funds sold and interest bearing due
from banks
$
168,563
$
122,189
Mortgage loans held for sale
4,953
1,727
Securities available for sale
449,610
437,619
FHLB stock
11,284
10,192
Loans and leases
2,891,668
2,528,625
Total earning assets
3,526,078
3,100,352
Total assets
3,710,119
3,271,258
Interest bearing deposits
2,316,774
2,048,830
Total deposits
3,120,242
2,743,701
Securities sold under agreement to repurchase other short-term
borrowings
43,739
48,956
FHLB advances and other long-term borrowings
73,939
47,962
Total interest bearing liabilities
2,434,452
2,145,748
Total stockholders' equity
403,702
371,070
Performance Ratios
Annualized return on average assets
1.43
%
1.94
%
Annualized return on average equity
13.18
%
17.09
%
Net interest margin, fully tax equivalent
3.71
%
3.89
%
Non-interest income to total revenue, fully tax
equivalent
27.84
%
27.01
%
Efficiency ratio, fully tax equivalent (3)
53.19
%
55.49
%
Capital Ratios Total
stockholders' equity to total assets (1)
10.83
%
11.52
%
Tangible common equity to tangible assets (1)
10.48
%
11.47
%
Average stockholders' equity to average assets
10.88
%
11.34
%
Total risk-based capital
12.75
%
14.04
%
Common equity tier 1 risk-based capital
11.81
%
13.11
%
Tier 1 risk-based capital
11.81
%
13.11
%
Leverage
10.78
%
11.57
%
Loan Segmentation
Commercial real estate - non-owner occupied
$
799,284
$
595,609
Commercial real estate - owner occupied
476,534
415,342
Commercial and industrial
883,868
804,962
Residential real estate - owner occupied
218,585
191,561
Residential real estate - non-owner occupied
135,370
99,853
Construction and land development
246,040
241,112
Home equity lines of credit
107,121
101,889
Consumer
44,939
45,262
Leases
15,476
22,640
Credit cards - commercial
10,149
7,479
Total loans and leases
$
2,937,366
$
2,525,709
Asset Quality Data
Non-accrual loans
$
4,235
$
3,273
Troubled debt restructurings
52
39
Loans past due 90 days or more and still accruing
1,762
454
Total non-performing loans
6,049
3,766
Other real estate owned
493
878
Total non-performing assets
$
6,542
$
4,644
Non-performing loans to total loans
0.21
%
0.15
%
Non-performing assets to total assets
0.17
%
0.14
%
Allowance for credit losses to total loans
1.43
%
1.05
%
Allowance for credit losses to average loans
1.46
%
1.05
%
Allowance for credit losses to non-performing loans
697
%
703
%
Net charge-offs (recoveries)
$
54
$
(330
)
Net charge-offs (recoveries) to average loans (4)
0.00
%
-0.01
%
Stock Yards Bancorp,
Inc. Financial Information (unaudited) First Quarter 2020
Earnings Release
Quarterly Comparison Income Statement Data
3/31/20 12/31/19 9/30/19
6/30/19 3/31/19
Net interest income, fully tax equivalent (2)
$
32,494
$
32,808
$
32,167
$
30,857
$
29,740
Net interest income
$
32,446
$
32,756
$
32,106
$
30,802
$
29,684
Provision for credit losses
5,550
-
400
-
600
Net interest income after provision for credit losses
26,896
32,756
31,706
30,802
29,084
Non-interest income: Wealth
management and trust services
6,218
5,804
5,738
5,662
5,439
Deposit service charges
1,283
1,399
1,356
1,260
1,178
Debit and credit card income
1,980
2,109
2,102
2,168
1,744
Treasury management fees
1,284
1,369
1,264
1,202
1,157
Mortgage banking income
846
930
794
760
450
Net investment product sales commissions and fees
466
378
400
364
356
Bank owned life insurance
179
182
487
184
178
Other
280
816
1,068
624
506
Total non-interest income
12,536
12,987
13,209
12,224
11,008
Non-interest expenses:
Compensation
12,233
13,473
12,330
12,715
11,801
Employee benefits
3,167
2,510
2,819
2,807
2,555
Net occupancy and equipment
1,881
2,374
2,189
1,967
1,849
Technology and communication
2,013
1,636
1,841
1,848
1,773
Debit and credit card processing
656
613
662
631
587
Marketing and business development
560
1,367
732
903
625
Postage, printing, and supplies
441
434
402
410
406
Legal and professional
623
433
524
1,523
534
Amortization of investments in tax credit partnerships
36
837
137
52
52
Capital and deposit based taxes
1,030
1,006
993
967
904
Other
1,310
1,470
1,269
1,630
1,526
Total non-interest expenses
23,950
26,153
23,898
25,453
22,612
Income before income tax expense
15,482
19,590
21,017
17,573
17,480
Income tax expense
2,250
2,941
3,783
1,030
1,839
Net income
$
13,232
$
16,649
$
17,234
$
16,543
$
15,641
Net income per share -
Basic
$
0.59
$
0.74
$
0.76
$
0.73
$
0.69
Net income per share - Diluted
0.59
0.73
0.76
0.72
0.68
Cash dividend declared per share
0.27
0.27
0.26
0.26
0.25
Weighted average shares -
Basic
22,266
22,493
22,550
22,689
22,661
Weighted average shares - Diluted
22,487
22,760
22,810
22,949
22,946
Quarterly
Comparison Balance Sheet Data 3/31/20
12/31/19 9/30/19 6/30/19
3/31/19
Cash and due from banks
$
47,662
$
46,863
$
68,107
$
51,264
$
44,014
Federal funds sold and interest bearing due from banks
206,849
202,861
68,107
64,775
67,326
Mortgage loans held for sale
8,141
8,748
6,329
3,922
2,981
Securities available for sale
445,813
470,738
375,601
423,579
507,131
FHLB stock
11,284
11,316
11,316
11,316
9,779
Loans and leases
2,937,366
2,845,016
2,856,664
2,763,880
2,525,709
Allowance for credit losses
42,143
26,791
26,877
26,416
26,464
Total assets
3,784,586
3,724,197
3,533,926
3,463,823
3,281,016
Non-interest bearing deposits
858,883
810,475
795,793
777,652
698,783
Interest bearing deposits
2,339,995
2,323,463
2,150,520
2,105,801
2,053,757
Securities sold under agreements to repurchase
32,366
31,985
33,172
33,809
34,633
Federal funds purchased
9,747
10,887
9,957
12,012
12,218
FHLB advances
69,191
79,953
81,985
84,279
47,853
Stockholders' equity
409,702
406,297
396,111
389,365
377,994
Total shares outstanding
22,665
22,604
22,597
22,721
22,823
Book value per share (1)
$
18.08
$
17.97
$
17.53
$
17.14
$
16.56
Tangible common equity per share (1)
17.43
17.32
16.87
16.46
16.49
Market value per share
28.93
41.06
36.69
36.15
33.81
Capital Ratios
Total stockholders' equity to
total assets (1)
10.83
%
10.91
%
11.21
%
11.24
%
11.52
%
Tangible common equity to tangible assets (1)
10.48
%
10.55
%
10.83
%
10.85
%
11.47
%
Average stockholders' equity to average assets
10.88
%
10.81
%
11.22
%
11.10
%
11.34
%
Total risk-based capital
12.75
%
12.85
%
12.53
%
12.67
%
14.04
%
Common equity tier 1 risk-based capital
11.81
%
12.02
%
11.69
%
11.82
%
13.11
%
Tier 1 risk-based capital
11.81
%
12.02
%
11.69
%
11.82
%
13.11
%
Leverage
10.78
%
10.60
%
10.90
%
10.91
%
11.57
%
Stock Yards Bancorp,
Inc. Financial Information (unaudited) First Quarter 2020
Earnings Release
Quarterly Comparison
Average Balance Sheet Data
3/31/20
12/31/19
9/30/19
6/30/19
3/31/19
Federal funds sold and
interest bearing due from banks
$
168,563
$
187,865
$
98,569
$
137,130
$
122,189
Mortgage loans held for sale
4,953
5,889
3,887
3,794
1,727
Securities available for sale
449,610
476,360
396,686
435,391
437,619
Loans and leases
2,891,668
2,828,142
2,800,445
2,668,058
2,528,625
Total earning assets
3,526,078
3,509,573
3,310,904
3,244,941
3,100,352
Total assets
3,710,119
3,709,250
3,502,267
3,436,175
3,271,257
Interest bearing deposits
2,316,774
2,284,195
2,127,769
2,112,768
2,048,830
Total deposits
3,120,242
3,108,640
2,912,631
2,867,360
2,743,701
Securities sold under agreement to repurchase and other short-term
borrowings
43,739
49,881
48,376
51,743
48,956
FHLB advances
73,939
80,457
83,386
74,420
47,962
Total interest bearing liabilities
2,434,452
2,414,533
2,259,531
2,238,931
2,145,748
Total stockholders' equity
403,702
400,870
392,840
381,270
371,070
Performance Ratios
Annualized return on average
assets
1.43
%
1.78
%
1.95
%
1.93
%
1.94
%
Annualized return on average equity
13.18
%
16.48
%
17.41
%
17.40
%
17.09
%
Net interest margin, fully tax equivalent
3.71
%
3.70
%
3.86
%
3.81
%
3.89
%
Non-interest income to total revenue, fully tax equivalent
27.84
%
28.36
%
29.11
%
28.37
%
27.01
%
Efficiency ratio, fully tax equivalent (3)
53.19
%
57.11
%
52.67
%
59.08
%
55.49
%
Loans Segmentation
Commercial real estate -
non-owner occupied
$
799,284
$
746,283
$
737,464
$
706,310
$
595,609
Commercial real estate - owner occupied
476,534
474,329
458,526
440,216
415,342
Commercial and industrial
883,868
838,800
853,901
837,752
804,962
Residential real estate - owner occupied
218,585
217,606
221,411
247,789
191,561
Residential real estate - non-owner occupied
135,370
134,995
127,934
105,509
99,853
Construction and land development
246,040
255,816
278,910
253,358
241,112
Home equity lines of credit
107,121
103,854
105,935
99,610
101,889
Consumer
44,939
47,467
43,568
43,937
45,262
Leases
15,476
16,003
19,934
21,914
22,640
Credit cards - commercial
10,149
9,863
9,081
7,485
7,479
Total loans and leases
$
2,937,366
$
2,845,016
$
2,856,664
$
2,763,880
$
2,525,709
Asset Quality Data
Non-accrual loans
$
4,235
$
11,494
$
2,722
$
3,030
$
3,273
Troubled debt restructurings
52
34
35
37
39
Loans past due 90 days or more and still accruing
1,762
535
487
861
454
Total non-performing loans
6,049
12,063
3,244
3,928
3,766
Other real estate owned
493
493
563
563
878
Total non-performing assets
$
6,542
$
12,556
$
3,807
$
4,491
$
4,644
Non-performing loans to total loans
0.21
%
0.42
%
0.11
%
0.14
%
0.15
%
Non-performing assets to total assets
0.17
%
0.34
%
0.11
%
0.13
%
0.14
%
Allowance for credit losses to total loans
1.43
%
0.94
%
0.94
%
0.96
%
1.05
%
Allowance for credit losses to average loans
1.46
%
0.95
%
0.96
%
0.99
%
1.05
%
Allowance for credit losses to non-performing loans
697
%
222
%
829
%
673
%
703
%
Net charge-offs (recoveries)
$
54
$
86
$
(61
)
$
48
$
(330
)
Net charge-offs (recoveries) to average loans (4)
0.00
%
0.00
%
0.00
%
0.00
%
-0.01
%
Other Information
Total assets under management
(in millions)
$
2,961
$
3,320
$
3,116
$
3,068
$
2,970
Full-time equivalent employees
618
615
622
615
596
(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)
3/31/20
12/31/19 9/30/19 6/30/19
3/31/19 Total
stockholders' equity - GAAP (a)
$
409,702
$
406,297
$
396,111
$
389,365
$
377,994
Less: Goodwill
(12,513
)
(12,513
)
(12,593
)
(12,826
)
(682
)
Less: Core deposit intangible
(2,203
)
(2,285
)
(2,373
)
(2,461
)
(1,015
)
Tangible common equity - Non-GAAP (c)
$
394,986
$
391,499
$
381,145
$
374,078
$
376,297
Total assets - GAAP (b)
$
3,784,586
$
3,724,197
$
3,533,926
$
3,463,823
$
3,281,016
Less: Goodwill
(12,513
)
(12,513
)
(12,593
)
(12,826
)
(682
)
Less: Core deposit intangible
(2,203
)
(2,285
)
(2,373
)
(2,461
)
(1,015
)
Tangible assets - Non-GAAP (d)
$
3,769,870
$
3,709,399
$
3,518,960
$
3,448,536
$
3,279,319
Total stockholders'
equity to total assets - GAAP (a/b)
10.83
%
10.91
%
11.21
%
11.24
%
11.52
%
Tangible common equity to tangible assets - Non-GAAP (c/d)
10.48
%
10.55
%
10.83
%
10.85
%
11.47
%
Total shares outstanding
(e)
22,665
22,604
22,597
22,721
22,823
Book value per share -
GAAP (a/e)
$
18.08
$
17.97
$
17.53
$
17.14
$
16.56
Tangible common equity per share - Non-GAAP (c/e)
17.43
17.32
16.87
16.46
16.49
(2) - Interest income on
a fully tax equivalent basis includes the additional amount of
interest income that would have been earned if investments in
certain tax-exempt interest earning assets had been made in assets
subject to federal, state and local taxes yielding the same
after-tax income. (3) -
The efficiency ratio, a non-GAAP measure, equals total non-interest
expenses divided by the sum of fully tax equivalent net interest
income 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 normally
presented, Bancorp considers an adjusted efficiency ratio. Bancorp
believes this ratio is important because it provides a comparable
ratio after eliminating the fluctuation in non-interest expenses
related to amortization of investments in tax credit partnerships.
The following table reconciles the efficiency ratio calculation to
the adjusted efficiency ratio calculation.
Quarterly Comparison (Dollars in
thousands)
3/31/20 12/31/19
9/30/19 6/30/19 3/31/19
Total non-interest expenses (a)
$
23,950
$
26,153
$
23,898
$
25,453
$
22,612
Less: Amortization of investments in tax credit partnerships
(36
)
(837
)
(137
)
(52
)
(52
)
Total adjusted non-interest expenses (c)
$
23,914
$
25,316
$
23,761
$
25,401
$
22,560
Total net interest
income, fully tax equivalent
$
32,494
$
32,808
$
32,167
$
30,857
$
29,740
Total non-interest income
12,536
12,987
13,209
12,224
11,008
Less: Gain/loss on sale of securities
-
-
-
-
-
Total revenue (b)
$
45,030
$
45,795
$
45,376
$
43,081
$
40,748
Efficiency ratio (a) /
(b)
53.19
%
57.11
%
52.67
%
59.08
%
55.49
%
Adjusted Efficiency ratio (c) / (b)
53.11
%
55.28
%
52.36
%
58.96
%
55.36
%
(4) - Quarterly net
charge-offs (recoveries) to average loans ratios are not
annualized.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200422005171/en/
T. Clay Stinnett Executive Vice President, Treasurer and Chief
Financial Officer (502) 625-0890
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