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 record earnings for the first quarter ended March 31, 2021. Net income for the first quarter increased 72% to $22.7 million, or $0.99 per diluted share, compared with net income of $13.2 million, or $0.58 per diluted share, for the first quarter of 2020. Strong core deposit growth, as well as significant fee and interest income from the Small Business Administration's (“SBA”) Paycheck Protection Program (“PPP”), contributed to record profitability for the quarter.
       
(dollar amounts in thousands, except per share data) 1Q21 4Q20 1Q20
Net interest income $ 37,825   $ 36,252   $ 32,446  
Provision for credit loss expense(6)   (1,475 )   500     5,925  
Non-interest income   13,844     13,698     12,536  
Non-interest expenses   24,973     29,029     23,575  
Income before income tax expense   28,171     20,421     15,482  
Income tax expense   5,461     2,685     2,250  
Net income $ 22,710   $ 17,736   $ 13,232  
Net income per share, diluted $ 0.99   $ 0.78   $ 0.58  
Net interest margin   3.39 %   3.35 %   3.71 %
Efficiency ratio(4)   48.29 %   58.06 %   52.35 %
Tangible common equity to tangible assets(1)   8.97 %   9.28 %   10.48 %
Annualized return on average equity   20.71 %   16.27 %   13.18 %
Annualized return on average assets   1.96 %   1.56 %   1.43 %
       

“Stock Yards again delivered record earnings for the quarter, supported by strong revenue generation, substantial deposit growth, a release of credit loss reserves and controlled operating expenses,” said James A. (Ja) Hillebrand, Chairman and Chief Executive Officer. “In addition to our financial performance, a highlight of the quarter was the signing of a definitive agreement to acquire Kentucky Bancshares, Inc. This transaction expands our presence into the attractive Central Kentucky market and represents a complementary fit with our organization. The combination of our two companies provides the opportunity to create efficiencies and enhance the value of the combined entity while offering Kentucky Bank customers broader product offerings, increased lending capabilities and an expanded branch delivery system that stretches throughout the Louisville, Indianapolis and Northern Kentucky/Cincinnati metropolitan markets. We remain on track to welcome Kentucky Bank to the Stock Yards family with an anticipated closing date during the second quarter.”

Kentucky Bancshares, headquartered in Paris, Kentucky, is the holding company for Kentucky Bank, which operates 19 branches in 11 communities throughout Central Kentucky serving the Lexington, Kentucky metropolitan statistical area and each of its contiguous counties. As of March 31, 2021, Kentucky Bancshares reported approximately $1.3 billion in assets, $766 million in loans, $1.0 billion in deposits and $113 million in tangible common equity.

Another key activity for the first quarter related to the additional COVID-19 stimulus relief, which was signed into law in late 2020, allowing for a second round of PPP funding through May 31, 2021. The program offers new PPP loans for companies that did not receive PPP funds in 2020 in addition to “second draw” loans targeted at hard-hit businesses that exhausted their initial PPP proceeds. Consistent with the first round, the Company was very active in this program in the first quarter of 2021, closing over 1,600 loans with total originations in excess of $241 million with fee income of nearly $9 million received that will be recognized over the earlier of five years or loan forgiveness. The Company is estimating that approximately 40% of these loans will be forgiven in 2021. As these borrowers are not required to make payments for 10 months, it is probable that a significant portion of the borrowing base will defer forgiveness until early 2022.

“Due to an improvement in forecasted economic indicators utilized during the current quarter, we recorded a net benefit of $1.2 million to provision for credit losses for loans during the first quarter. This compares to a $5.6 million provision expense for loans in the first quarter a year ago. We feel that we are well positioned as we navigate through the pandemic, having built up significant loan loss reserves, excluding PPP loans, of 1.68%(2) at March 31, 2021,” said Hillebrand.

Additional key factors impacting the first quarter of 2021 results included:

  • Record diluted quarterly EPS exceeding the previous record set in the fourth quarter of 2020.
  • COVID-19 related loan deferrals declined significantly to 0.45% of total loans (excluding PPP) at the end of the first quarter of 2021 from 1.24% of total loans three months earlier.
  • Average loan balance growth, excluding PPP, totaled $95 million, or 3%, on a linked quarter basis.
  • Deposit balances remained at record levels, with additional PPP and federal stimulus payments contributing to strong quarterly deposit growth of $211 million. In total, deposit balances have increased $1.0 billion over the last twelve months.
  • Net interest margin (NIM) compressed 32 basis points to 3.39% compared to the first quarter a year ago. NIM continued to be negatively impacted by loan yield contraction accompanied with ongoing excess balance sheet liquidity offset by the positive impact of PPP.
  • Despite ongoing contraction in loan yields, net interest income increased $5.4 million, or 17%, over the first quarter of 2020, boosted by $7.0 million in PPP income and a significant decline in cost of funds.
  • Non-interest income increased 10% over the first quarter of 2020, reflecting record debit/credit card income and treasury management fees and continued strong mortgage banking income. While slowly rebounding, deposit service charges continue to be impacted by pandemic related stimulus and general changes in customer behavior/spending.
  • Non-interest expenses reflected moderate increases in compensation, technology and communication and FDIC insurance premiums. Legal and professional fees reflected $400,000 in expense related to the pending Kentucky Bancshares acquisition. Capital and deposit tax declined significantly, as the Company transitioned to report Kentucky state income tax as a component of tax expense in accordance with the State law change taking effect this quarter.

Hillebrand added, “In March, we were one of 30 financial institutions recognized in the inaugural Hovde High Performer List based on our prior year results. Criteria to be admitted included market capitalization below $1 billion, above median average pre-provision ROA, loan and deposit growth, and tangible book value growth. In their screening methodology, Hovde eliminated 261 financial institutions, or nearly 90% of the potential class of banks and thrifts that trade on major exchanges. This recognition is an honor and a testament to the dedication of our employees, who continue to work diligently to support the communities we serve.”

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

Net interest income – the Company’s largest source of revenue – increased $5.4 million, or 17%, to $37.8 million, driven primarily by PPP loan fees and a significant decline in cost of funds.

  • Total interest income rose $2.6 million, or 7%, to $39.5 million, primarily due to a 10% increase in interest income on loans resulting from strong PPP income partly offset by continued yield contraction.
  • With regard to the first round of PPP lending, as of March 31, 2021, approximately 41% of total loan originations (in terms of dollars) had been forgiven by the SBA and another 21% have been submitted for forgiveness. With regard to fee income, approximately 73% of the $19.5 million in fee income received has been recognized life to date. Round one PPP borrowers are required to begin making payments in July, which will likely accelerate forgiveness submissions for this round of PPP.
  • Interest expense declined $2.7 million, or 62%, to $1.7 million. Interest expense on deposits decreased $2.5 million, or 62%, as the cost of interest bearing deposits declined to 0.22% in the first quarter of 2021 from 0.69% in the first quarter a year ago. While average interest bearing deposit balances surged $499 million, or 22%, the Company significantly benefited from the strategic lowering of stated deposit rates in early 2020 in tandem with the Federal Reserve’s short-term interest rate moves and the corresponding lowering of CD offering rates.
  • NIM decreased 32 basis points to 3.39% for the first quarter of 2021 from 3.71% in the first quarter a year ago. NIM contraction was primarily driven by lower interest rates, coupled with higher levels of excess balance sheet liquidity. The Company has maintained significantly higher levels of balance sheet liquidity driven in part by the funding of PPP loans through deposit growth. During the quarter, the PPP loan portfolio and the related fee income had a 21 basis point positive impact to NIM, while excess liquidity had a 14 basis point negative impact.

Due to continued improvement in the unemployment forecast combined with minimal net charge-offs and solid traditional credit metrics including and excluding PPP loans, the Bank recorded a $1.2 million net benefit to provision for credit losses for loans in the first quarter of 2021. In addition, a $275,000 net benefit was recorded to provision for credit losses for off balance sheet exposures consistent with improvement in underlying CECL model factors.

Non-interest income increased $1.3 million, or 10%, to $13.8 million.

  • Wealth management and trust income totaled $6.2 million for the first quarter of 2021 and slightly exceeded the first quarter a year ago. Despite a meaningful decline in non-recurring estate fees, significant growth in assets under management and record market performance served to elevate asset-based fees.
  • Retail deposit service charges decreased $339,000, or 26%, primarily related to a decline in non-sufficient funds fees collected. Stimulus checks, more lucrative unemployment compensation, diminished pandemic spending and PPP funding have all had a sustained impact upon our customers’ spending and savings behavior.
  • Debit/credit card income increased $293,000, or 15%. Growth trends in both portfolios remain positive with debit card business benefitting from a significant increase in signature, or in person, payment presentment.
  • Treasury management fees increased by $256,000, or 20%, 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 revenue increased $598,000, or 71%, to $1.4 million for the first quarter of 2021. While rising mortgage rates, tight housing supply and diminishing affordability driven by surging housing prices will likely weigh on the enthusiasm of home buyers in the months ahead, the pipeline of viable loans going into the second quarter of 2021 was strong, with incoming applications remaining steady.

Non-interest expenses increased $1.4 million, or 6%, to $25.0 million.

  • Compensation expense increased $594,000, or 5%, primarily due to annual merit-based salary increases, an increase in full time equivalent employees, and increased incentive compensation, partially offset by an expense reduction attributable to the origination of PPP loans.
  • Employee benefits increased $94,000, or 3%, primarily due to elevated 401(k) and payroll tax expenses, which was partially offset by lower health insurance expense.
  • Technology and communication expense for the first quarter of 2021 increased $283,000, or 14%, consistent with expanded data storage and increased expenses related to the hosted core system.
  • Marketing and business development expense, which includes all costs associated with promoting the Bank, community investment, retaining customers and acquiring new business, has remained significantly below historic levels consistent with reduced travel and customer entertainment expense related to the pandemic.
  • Legal and professional fees reflected approximately $400,000 in expense related to the pending Kentucky Bancshares acquisition.

Financial Condition – March 31, 2021 Compared with March 31, 2020

Total loans increased $698 million, or 24%, to $3.6 billion. Excluding the PPP loan portfolio, total loans increased $85 million, or 3%, during the year, with $128 million of growth in the commercial real estate portfolio and $45 million of growth in residential real estate loans, partially offset by a $114 million decrease in the commercial and industrial portfolio tied to line of credit usage. Similar to what was experienced in the second quarter of 2020, a portion of the Company’s customer base that received second round PPP funding have utilized their excess liquidity to pay down operating lines.

In an effort to deploy excess balance sheet liquidity, the Company continued its strategy of expanding the investment portfolio, growing total investment securities by a net $226 million, or 51%, over the past twelve months.

Asset quality, which has trended within a narrow range over the past several years, has remained strong. During the first quarter of 2021, the Company recorded net loan charge-offs of $6,000, compared to net loan charge-offs of $54,000 in the first quarter of 2020. Non-performing loans were $14.3 million, or 0.47%(2), of total loans (excluding PPP) outstanding compared to $6.0 million, or 0.21%, of total loans outstanding at March 31, 2020. Approximately $10 million of the non-accrual loan balance at March 31, 2021 and December 31, 2020 relates to one commercial real estate relationship that was placed on non-accrual status during the second quarter of 2020.

Total deposits increased $1.0 billion, or 31%, from March 31, 2020 to March 31, 2021, with non-interest bearing deposits representing $511 million of the increase. The mix of deposits has also improved with higher-cost time deposits declining $55 million over the past twelve months. Both period end and average deposit balances ended at record levels at March 31, 2021. Federal programs such as the PPP and stimulus checks have boosted deposit balances.

At March 31, 2021, the Company remained “well capitalized,” the highest regulatory capital rating for financial institutions. Total equity to assets was 9.25% and the tangible common equity ratio was 8.97%(1) at March 31, 2021, compared to 10.83% and 10.48%(1), respectively, at March 31, 2020, with the decline attributable to the January 1, 2020 CECL adoption, loan growth and a $12 million accumulated other comprehensive equity decline associated with the late first quarter increase in bond yields.

In March 2021, the Board of Directors continued the dividend rate of $0.27 per common share initially set in November 2019. The Company will continue to evaluate dividend rate increases in relation to maintaining strong capital levels.

No shares were repurchased in the first quarter of 2021 and approximately 741,000 shares remain eligible for repurchase under the current buy-back plan which expires in May 2021.

Results of Operations – First Quarter 2021 Compared with Fourth Quarter 2020

Net interest income increased $1.6 million, or 4%, over the prior quarter to $37.8 million, led by loan growth, PPP fee recognition and the continued decline in cost of funds.

Due to continued improvement in the unemployment forecast combined with minimal net charge-offs and solid traditional credit metrics including and excluding PPP loans, the Company recorded a $1.2 million benefit to provision for credit losses for loans in the first quarter of 2021, compared to $1.4 million provision for credit loss expense for loans in the prior quarter. In addition, consistent with improvement in underlying CECL model factors, a net benefit was recorded to provision for credit losses for off balance sheet exposures of $275,000 and $900,000 in the first quarter of 2021 and fourth quarter of 2020, respectively.

Non-interest income increased $146,000 to $13.8 million. Increases in wealth management and trust service fees, debit/credit card income and higher treasury management fees more than offset a modest first quarter reduction in mortgage banking income.

Non-interest expenses decreased $4.1 million, or 14%, to $25.0 million.

  • Compensation expense decreased $1.2 million, to $12.8 million compared with the fourth quarter of 2020 due to higher fourth quarter incentive compensation expense and deferred expenses associated with the latest round of PPP loans originated in the current quarter.
  • Employee benefits increased $1.1 million primarily due to higher health insurance expense, 401(k) expense and payroll tax expenses.
  • The fourth quarter of 2020 reflected the completion of a large tax credit project and elevated amortization of investment in tax credit partnership expense, with a corresponding offset to tax expense spread proportionately over the year.
  • Capital and deposit tax expense declined significantly, as the Company transitioned to report Kentucky state income tax as a component of tax expense.

Financial Condition March 31, 2021, Compared with December 31, 2020

Total assets increased $185 million on a linked quarter basis to $4.8 billion, reflecting significant increases in both loans and investment securities.

Total loans increased $104 million on a linked quarter basis to $3.6 billion at quarter end and the deployment of excess liquidity led to a $85 million increase in securities. Total line of credit usage decreased to 37% as of March 31, 2021, from 38% at December 31, 2020. Commercial and industrial line usage decreased to 26% as of March 31, 2021, compared to 28% at December 31, 2020.

Total deposits increased $211 million, or 5%, on a linked quarter basis due to higher deposit levels consistent with growth in balances with both existing and new customers. Federal programs such as the PPP, stimulus checks and increased unemployment benefits have boosted deposit balances during the quarter. Additionally, economic uncertainty surrounding the pandemic has resulted in a portion of the customer base maintaining generally higher deposit balances.

About the Company

Louisville, Kentucky-based Stock Yards Bancorp, Inc., with $4.8 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: the possibility that any of the anticipated benefits of the proposed Kentucky Bancshares merger will not be realized or will not be realized within the expected time period; the risk that integration of Kentucky Bancshares’ 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; 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 government stimulus programs such as the Consolidated Appropriations Act; 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, 2020.

Stock Yards Bancorp, Inc. Financial Information (unaudited)              
First Quarter 2021 Earnings Release              
(In thousands unless otherwise noted)              
        Three Months Ended  
        March 31,  
Income Statement Data         2021       2020    
               
Net interest income, fully tax equivalent (3)       $ 37,874     $ 32,494    
Interest income:              
Loans       $ 37,000     $ 33,749    
Federal funds sold and interest bearing due from banks         66       531    
Mortgage loans held for sale         64       61    
Securities         2,388       2,541    
Total interest income         39,518       36,882    
Interest expense:              
Deposits         1,510       3,962    
Securities sold under agreements to repurchase and              
other short-term borrowings         7       45    
Federal Home Loan Bank (FHLB) advances         176       429    
Total interest expense         1,693       4,436    
Net interest income         37,825       32,446    
Provision for credit losses (6)         (1,475 )     5,925    
Net interest income after provision for credit losses         39,300       26,521    
Non-interest income:              
Wealth management and trust services         6,248       6,218    
Deposit service charges         944       1,283    
Debit and credit card income         2,273       1,980    
Treasury management fees         1,540       1,284    
Mortgage banking income         1,444       846    
Net investment product sales commissions and fees         464       466    
Bank owned life insurance         161       179    
Other         770       280    
Total non-interest income         13,844       12,536    
Non-interest expenses:              
Compensation         12,827       12,233    
Employee benefits         3,261       3,167    
Net occupancy and equipment         2,045       1,831    
Technology and communication         2,346       2,063    
Debit and credit card processing         705       656    
Marketing and business development         524       560    
Postage, printing and supplies         409       441    
Legal and professional         862       623    
FDIC Insurance         405       129    
Amortization of investments in tax credit partnerships         31       36    
Capital and deposit based taxes         458       1,030    
Other         1,100       806    
Total non-interest expenses         24,973       23,575    
Income before income tax expense         28,171       15,482    
Income tax expense         5,461       2,250    
Net income       $ 22,710     $ 13,232    
               
Net income per share - Basic       $ 1.00     $ 0.59    
Net income per share - Diluted         0.99       0.58    
Cash dividend declared per share         0.27       0.27    
               
Weighted average shares - Basic         22,622       22,516    
Weighted average shares - Diluted         22,865       22,736    
               
        March 31,  
Balance Sheet Data         2021       2020    
               
Loans       $ 3,635,156     $ 2,937,366    
Allowance for credit losses on loans         50,714       42,143    
Total assets         4,794,075       3,784,586    
Non-interest bearing deposits         1,370,183       858,883    
Interest bearing deposits         2,829,779       2,339,995    
FHLB advances         24,180       69,191    
Stockholders' equity         443,232       409,702    
Total shares outstanding         22,781       22,665    
Book value per share (1)       $ 19.46     $ 18.08    
Tangible common equity per share (1)         18.82       17.43    
Market value per share         51.06       28.93    
               
Stock Yards Bancorp, Inc. Financial Information (unaudited)              
First Quarter 2021 Earnings Release              
               
        Three Months Ended  
        March 31,  
Average Balance Sheet Data         2021       2020    
               
Federal funds sold and interest bearing due from banks       $ 235,370     $ 168,563    
Mortgage loans held for sale         14,618       4,953    
Available for sale debt securities         661,175       449,610    
FHLB stock         10,640       11,284    
Loans         3,605,760       2,891,668    
Total interest earning assets         4,527,563       3,526,078    
Total assets         4,710,836       3,710,119    
Interest bearing deposits         2,815,986       2,316,774    
Total deposits         4,094,179       3,120,242    
Securities sold under agreement to repurchase and other short term borrowings         56,536       43,739    
FHLB advances         29,270       73,939    
Total interest bearing liabilities         2,901,792       2,434,452    
Total stockholders' equity         444,821       403,702    
               
Performance Ratios              
Annualized return on average assets         1.96 %     1.43 %  
Annualized return on average equity         20.71 %     13.18 %  
Net interest margin, fully tax equivalent         3.39 %     3.71 %  
Non-interest income to total revenue, fully tax equivalent         26.77 %     27.84 %  
Efficiency ratio, fully tax equivalent (4)         48.29 %     52.35 %  
               
Capital Ratios              
Total stockholders' equity to total assets (1)         9.25 %     10.83 %  
Tangible common equity to tangible assets (1)         8.97 %     10.48 %  
Average stockholders' equity to average assets         9.44 %     10.88 %  
Total risk-based capital         13.39 %     12.75 %  
Common equity tier 1 risk-based capital         12.32 %     11.81 %  
Tier 1 risk-based capital         12.32 %     11.81 %  
Leverage         9.46 %     10.78 %  
               
Loan Segmentation              
Commercial real estate - non-owner occupied       $ 876,523     $ 799,284    
Commercial real estate - owner occupied         527,316       476,534    
Commercial and industrial         769,773       883,868    
Commercial and industrial - PPP         612,885       -    
Residential real estate - owner occupied         262,516       219,221    
Residential real estate - non-owner occupied         136,380       134,734    
Construction and land development         281,815       246,040    
Home equity lines of credit         91,233       107,121    
Consumer         51,058       44,939    
Leases         14,115       15,476    
Credit cards - commercial         11,542       10,149    
Total loans and leases       $ 3,635,156     $ 2,937,366    
               
Asset Quality Data              
Non-accrual loans       $ 12,913     $ 4,235    
Troubled debt restructurings         15       52    
Loans past due 90 days or more and still accruing         1,377       1,762    
Total non-performing loans         14,305       6,049    
Other real estate owned         281       493    
Total non-performing assets       $ 14,586     $ 6,542    
Non-performing loans to total loans (2)         0.39 %     0.21 %  
Non-performing assets to total assets         0.30 %     0.17 %  
Allowance for credit losses on loans to total loans (2)         1.40 %     1.43 %  
Allowance for credit losses on loans to average loans         1.41 %     1.46 %  
Allowance for credit losses on loans to non-performing loans         355 %     697 %  
Net (charge-offs) recoveries       $ (6 )   $ (54 )  
Net (charge-offs) recoveries to average loans (5)         0.00 %     0.00 %  
               
Stock Yards Bancorp, Inc. Financial Information (unaudited)                    
First Quarter 2021 Earnings Release                    
                     
    Quarterly Comparison
Income Statement Data   3/31/21   12/31/20   9/30/20   6/30/20   3/31/20
                     
Net interest income, fully tax equivalent (3)   $ 37,874     $ 36,301     $ 33,768     $ 33,573     $ 32,494  
Net interest income   $ 37,825     $ 36,252     $ 33,695     $ 33,528     $ 32,446  
Provision for credit losses (6)     (1,475 )     500       4,968       7,025       5,925  
Net interest income after provision for credit losses     39,300       35,752       28,727       26,503       26,521  
Non-interest income:                    
Wealth management and trust services     6,248       5,805       5,657       5,726       6,218  
Deposit service charges     944       1,080       998       800       1,283  
Debit and credit card income     2,273       2,219       2,218       2,063       1,980  
Treasury management fees     1,540       1,506       1,368       1,249       1,284  
Mortgage banking income     1,444       1,708       1,979       1,622       846  
Net investment product sales commissions and fees     464       487       431       391       466  
Bank owned life insurance     161       166       172       176       179  
Other     770       727       220       595       280  
Total non-interest income     13,844       13,698       13,043       12,622       12,536  
Non-interest expenses:                    
Compensation     12,827       14,072       13,300       11,763       12,233  
Employee benefits     3,261       2,173       2,853       2,871       3,167  
Net occupancy and equipment     2,045       2,137       2,177       2,037       1,831  
Technology and communication     2,346       2,347       2,323       1,999       2,063  
Debit and credit card processing     705       698       649       603       656  
Marketing and business development     524       835       523       465       560  
Postage, printing and supplies     409       423       472       442       441  
Legal and professional     862       597       544       628       623  
FDIC Insurance     405       323       435       330       129  
Amortization of investments in tax credit partnerships     31       2,955       52       53       36  
Capital and deposit based taxes     458       1,055       1,076       1,225       1,030  
Other     1,100       1,414       1,242       993       806  
Total non-interest expenses     24,973       29,029       25,646       23,409       23,575  
Income before income tax expense     28,171       20,421       16,124       15,716       15,482  
Income tax expense     5,461       2,685       1,591       2,348       2,250  
Net income   $ 22,710     $ 17,736     $ 14,533     $ 13,368     $ 13,232  
                     
Net income per share - Basic   $ 1.00     $ 0.79     $ 0.64     $ 0.59     $ 0.59  
Net income per share - Diluted     0.99       0.78       0.64       0.59       0.58  
Cash dividend declared per share     0.27       0.27       0.27       0.27       0.27  
                     
Weighted average shares - Basic     22,622       22,593       22,582       22,560       22,516  
Weighted average shares - Diluted     22,865       22,794       22,802       22,739       22,736  
                     
    Quarterly Comparison
Balance Sheet Data   3/31/21   12/31/20   9/30/20   6/30/20   3/31/20
                     
Cash and due from banks   $ 43,061     $ 43,179     $ 49,517     $ 46,362     $ 47,662  
Federal funds sold and interest bearing due from banks     289,920       274,766       241,486       178,032       206,849  
Mortgage loans held for sale     6,579       22,547       23,611       17,364       8,141  
Available for sale debt securities     672,167       586,978       429,184       485,249       445,813  
FHLB stock     10,228       11,284       11,284       11,284       11,284  
Loans     3,635,156       3,531,596       3,472,481       3,464,077       2,937,366  
Allowance for credit losses on loans     50,714       51,920       50,501       47,708       42,143  
Total assets     4,794,075       4,608,629       4,365,129       4,334,533       3,784,586  
Non-interest bearing deposits     1,370,183       1,187,057       1,180,001       1,205,253       858,883  
Interest bearing deposits     2,829,779       2,801,577       2,574,517       2,521,903       2,339,995  
Securities sold under agreements to repurchase     51,681       47,979       40,430       42,722       32,366  
Federal funds purchased     8,642       11,464       9,179       8,401       9,747  
FHLB advances     24,180       31,639       56,536       61,432       69,191  
Stockholders' equity     443,232       440,701       428,598       420,231       409,702  
Total shares outstanding     22,781       22,692       22,692       22,667       22,665  
Book value per share (1)   $ 19.46     $ 19.42     $ 18.89     $ 18.54     $ 18.08  
Tangible common equity per share (1)     18.82       18.78       18.25       17.89       17.43  
Market value per share     51.06       40.48       34.04       40.20       28.93  
                     
Capital Ratios                    
Total stockholders' equity to total assets (1)     9.25 %     9.56 %     9.82 %     9.69 %     10.83 %
Tangible common equity to tangible assets (1)     8.97 %     9.28 %     9.52 %     9.39 %     10.48 %
Average stockholders' equity to average assets     9.44 %     9.61 %     9.85 %     9.66 %     10.88 %
Total risk-based capital     13.39 %     13.36 %     13.79 %     13.50 %     12.75 %
Common equity tier 1 risk-based capital     12.32 %     12.23 %     12.61 %     12.39 %     11.81 %
Tier 1 risk-based capital     12.32 %     12.23 %     12.61 %     12.39 %     11.81 %
Leverage     9.46 %     9.57 %     9.70 %     9.50 %     10.78 %
                     
Stock Yards Bancorp, Inc. Financial Information (unaudited)                    
First Quarter 2021 Earnings Release                    
                     
    Quarterly Comparison
Average Balance Sheet Data   3/31/21   12/31/20   9/30/20   6/30/20   3/31/20
                     
Federal funds sold and interest bearing due from banks   $ 235,370     $ 271,277     $ 194,100     $ 285,617     $ 168,563  
Mortgage loans held for sale     14,618       28,951       28,520       18,010       4,953  
Available for sale debt securities     661,175       510,677       442,089       412,368       449,610  
Loans     3,605,760       3,483,298       3,444,407       3,396,767       2,891,668  
Total interest earning assets     4,527,563       4,305,487       4,120,400       4,124,046       3,526,078  
Total assets     4,710,836       4,512,874       4,325,500       4,317,430       3,710,119  
Interest bearing deposits     2,815,986       2,689,103       2,521,838       2,500,315       2,316,774  
Total deposits     4,094,179       3,888,247       3,707,845       3,713,451       3,120,242  
Securities sold under agreement to repurchase     56,536       55,825       49,709       49,940       43,739  
FHLB advances     29,270       48,771       59,487       63,896       73,939  
Total interest bearing liabilities     2,901,792       2,793,699       2,631,034       2,614,151       2,434,452  
Total stockholders' equity     444,821       433,596       426,049       416,920       403,702  
                     
Performance Ratios                    
Annualized return on average assets     1.96 %     1.56 %     1.34 %     1.25 %     1.43 %
Annualized return on average equity     20.71 %     16.27 %     13.57 %     12.90 %     13.18 %
Net interest margin, fully tax equivalent     3.39 %     3.35 %     3.26 %     3.27 %     3.71 %
Non-interest income to total revenue, fully tax equivalent     26.77 %     27.40 %     27.86 %     27.32 %     27.84 %
Efficiency ratio, fully tax equivalent (4)     48.29 %     58.06 %     54.79 %     50.67 %     52.35 %
                     
Loans Segmentation                    
Commercial real estate - non-owner occupied   $ 876,523     $ 833,470     $ 828,328     $ 815,464     $ 799,284  
Commercial real estate - owner occupied     527,316       508,672       492,825       472,457       476,534  
Commercial and industrial     769,773       802,422       731,850       764,480       883,868  
Commercial and industrial - PPP     612,885       550,186       642,056       630,082       -  
Residential real estate - owner occupied     262,516       239,191       211,984       215,891       219,221  
Residential real estate - non-owner occupied     136,380       140,930       143,149       139,121       134,734  
Construction and land development     281,815       291,764       257,875       255,447       246,040  
Home equity lines of credit     91,233       95,366       97,150       103,672       107,121  
Consumer     51,058       44,606       44,161       43,758       44,939  
Leases     14,115       14,786       13,981       14,843       15,476  
Credit cards - commercial     11,542       10,203       9,122       8,862       10,149  
Total loans and leases   $ 3,635,156     $ 3,531,596     $ 3,472,481     $ 3,464,077     $ 2,937,366  
                     
Asset Quality Data                    
Non-accrual loans   $ 12,913     $ 12,514     $ 12,358     $ 14,262     $ 4,235  
Troubled debt restructurings     15       16       18       45       52  
Loans past due 90 days or more and still accruing     1,377       649       1,152       48       1,762  
Total non-performing loans     14,305       13,179       13,528       14,355       6,049  
Other real estate owned     281       281       612       493       493  
Total non-performing assets   $ 14,586     $ 13,460     $ 14,140     $ 14,848     $ 6,542  
Non-performing loans to total loans (2)     0.39 %     0.37 %     0.39 %     0.41 %     0.21 %
Non-performing assets to total assets     0.30 %     0.29 %     0.32 %     0.34 %     0.17 %
Allowance for credit losses on loans to total loans (2)     1.40 %     1.47 %     1.45 %     1.38 %     1.43 %
Allowance for credit losses on loans to average loans     1.41 %     1.49 %     1.47 %     1.40 %     1.46 %
Allowance for credit losses on loans to non-performing loans     355 %     394 %     373 %     332 %     697 %
Net (charge-offs) recoveries   $ (6 )   $ 19     $ (1,625 )   $ 15     $ (54 )
Net (charge-offs) recoveries to average loans (5)     0.00 %     0.00 %     -0.05 %     0.00 %     0.00 %
                     
Other Information                    
Total assets under management (in millions)   $ 3,989     $ 3,852     $ 3,414     $ 3,204     $ 2,961  
Full-time equivalent employees     638       641       626       620       618  
                     
(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)   3/31/21   12/31/20   9/30/20   6/30/20   3/31/20
                     
Total stockholders' equity - GAAP (a)   $ 443,232     $ 440,701     $ 428,598     $ 420,231     $ 409,702  
Less: Goodwill     (12,513 )     (12,513 )     (12,513 )     (12,513 )     (12,513 )
Less: Core deposit intangible     (1,885 )     (1,962 )     (2,042 )     (2,122 )     (2,203 )
Tangible common equity - Non-GAAP (c)   $ 428,834     $ 426,226     $ 414,043     $ 405,596     $ 394,986  
                     
Total assets - GAAP (b)   $ 4,794,075     $ 4,608,629     $ 4,365,129     $ 4,334,533     $ 3,784,586  
Less: Goodwill     (12,513 )     (12,513 )     (12,513 )     (12,513 )     (12,513 )
Less: Core deposit intangible     (1,885 )     (1,962 )     (2,042 )     (2,122 )     (2,203 )
Tangible assets - Non-GAAP (d)   $ 4,779,677     $ 4,594,154     $ 4,350,574     $ 4,319,898     $ 3,769,870  
                     
Total stockholders' equity to total assets - GAAP (a/b)     9.25 %     9.56 %     9.82 %     9.69 %     10.83 %
Tangible common equity to tangible assets - Non-GAAP (c/d)     8.97 %     9.28 %     9.52 %     9.39 %     10.48 %
                     
Total shares outstanding (e)     22,781       22,692       22,692       22,667       22,665  
                     
Book value per share - GAAP (a/e)   $ 19.46     $ 19.42     $ 18.89     $ 18.54     $ 18.08  
Tangible common equity per share - Non-GAAP (c/e)     18.82       18.78       18.25       17.89       17.43  
                     
(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)   3/31/21   12/31/20   9/30/20   6/30/20   3/31/20
                     
Total Loans - GAAP (a)   $ 3,635,156     $ 3,531,596     $ 3,472,481     $ 3,464,077     $ 2,937,366  
Less: PPP loans     (612,885 )     (550,186 )     (642,056 )     (630,082 )     -  
Total non-PPP Loans - Non-GAAP (b)     3,022,271       2,981,410       2,830,425       2,833,995       2,937,366  
                     
Allowance for credit losses on loans (c)   $ 50,714     $ 51,920     $ 50,501     $ 47,708     $ 42,143  
Non-performing loans (d)     14,305       13,179       13,528       14,355       6,049  
                     
Allowance for credit losses on loans to total loans - GAAP (c/a)     1.40 %     1.47 %     1.45 %     1.38 %     1.43 %
Allowance for credit losses on loans to total loans - Non-GAAP (c/b)     1.68 %     1.74 %     1.78 %     1.68 %     1.43 %
                     
Non-performing loans to total loans - GAAP (d/a)     0.39 %     0.37 %     0.39 %     0.41 %     0.21 %
Non-performing loans to total loans - Non-GAAP (d/b)     0.47 %     0.44 %     0.48 %     0.51 %     0.21 %
                     
(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. The calculations below reflect the reclassification of credit loss expense for off-balance sheet exposures from non-interest expense to provision for credit losses, as described in footnote 6 below. 
 
    Quarterly Comparison
(Dollars in thousands)   3/31/21   12/31/20   9/30/20   6/30/20   3/31/20
                     
Total non-interest expenses - GAAP (a)   $ 24,973     $ 29,029     $ 25,646     $ 23,409     $ 23,575  
Less: Amortization of investments in tax credit partnerships     (31 )     (2,955 )     (52 )     (53 )     (36 )
Total non-interest expenses - Non-GAAP (c)   $ 24,942     $ 26,074     $ 25,594     $ 23,356     $ 23,539  
                     
Total net interest income, fully tax equivalent   $ 37,874     $ 36,301     $ 33,768     $ 33,573     $ 32,494  
Total non-interest income     13,844       13,698       13,043       12,622       12,536  
Less: Gain/loss on sale of securities     -       -       -       -       -  
Total revenue - GAAP (b)   $ 51,718     $ 49,999     $ 46,811     $ 46,195     $ 45,030  
                     
Efficiency ratio - GAAP (a/b)     48.29 %     58.06 %     54.79 %     50.67 %     52.35 %
Efficiency ratio - Non-GAAP (c/b)     48.23 %     52.15 %     54.68 %     50.56 %     52.27 %
                     
(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. The efficiency ratios and adjusted efficiency ratios calculated above in footnote 4 reflect this reclassification. 
 
    Quarterly Comparison
(in thousands)   3/31/21   12/31/20   9/30/20   6/30/20   3/31/20
                     
Provision for credit losses - loans   $ (1,200 )   $ 1,400     $ 4,418     $ 5,550     $ 5,550  
Provision for credit losses - off balance sheet exposures     (275 )     (900 )     550       1,475       375  
Total provision for credit losses     (1,475 )     500       4,968       7,025       5,925  
                     

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

Stock Yards Bancorp (NASDAQ:SYBT)
Historical Stock Chart
From Jun 2021 to Jul 2021 Click Here for more Stock Yards Bancorp Charts.
Stock Yards Bancorp (NASDAQ:SYBT)
Historical Stock Chart
From Jul 2020 to Jul 2021 Click Here for more Stock Yards Bancorp Charts.