Stock Yards Bancorp Reports Fourth Quarter Earnings of $23.9 Million or $0.82 Per Diluted Share and Record Earnings for the Year
LOUISVILLE, Ky., Jan. 24, 2024 (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 of $23.9 million, or $0.82 per diluted share, for the fourth quarter ended December 31, 2023. This compares to net income of $29.8 million, or $1.01 per diluted share, for the fourth quarter of 2022. For the year ended December 31, 2023, the Company produced record net income of $107.7 million, and diluted earnings per share of $3.67. Strong loan growth across all markets and deposit growth contributed to solid fourth quarter and full year 2023 operating results.
(dollar amounts in thousands, except per share data)
4Q23
3Q23
4Q22
Net income
$
23,944
$
27,092
$
29,817
Net income per share, diluted
0.82
0.92
1.01
Net interest income
$
62,016
$
61,315
$
65,263
Provision for credit losses(1)
6,046
2,775
3,375
Non-interest income
24,417
22,896
23,142
Non-interest expenses
50,013
46,702
45,946
Net interest margin
3.25
%
3.34
%
3.64
%
Efficiency ratio(2)
57.80
%
55.38
%
51.85
%
Tangible common equity to tangible assets(3)
8.09
%
7.69
%
7.44
%
Annualized return on average assets(4)
1.17
%
1.38
%
1.56
%
Annualized return on average equity(4)
11.62
%
13.26
%
15.99
%
"I am pleased with our fourth quarter and record full year 2023 results, highlighted by strong loan production and fee income led by Wealth Management & Trust (WM&T). We continue to see broad-based loan demand from our customers throughout our markets. Total loans, excluding PPP loans, increased $580 million, or 11%, over the last 12 months, of which $155 million was generated during the fourth quarter, setting a record for the best fourth quarter of organic loan expansion in the Company's history. Thanks to the dedication and commitment of our employees, our net income surpassed the $100 million mark for the first time in 2023," commented James A. (Ja) Hillebrand, Chairman and Chief Executive Officer.
"Net interest income increased for the second consecutive linked quarter, due to loan growth and continued yield expansion from assets re-pricing. However, our net interest margin contracted over the linked quarter, as the increase in cost of funds continued to outpace the growth in yields on earning assets. We anticipate net interest margin compression will most likely persist into the first part of the year," Hillebrand continued. "Deposit balances expanded nicely during the fourth quarter, increasing $268 million, or 4%, on the linked quarter and increasing $279 million, or 4%, over the last 12 months. We continue to focus on organic growth, while avoiding brokered deposits, which provide more expensive funding than in-market deposit relationships."
"Non-interest income, led by fourth quarter gains in several categories, once again fueled our operating results. WM&T posted another record year, benefiting from strong equity and fixed income market performance, coupled with net new business growth. Robust card income, treasury management and brokerage fees, driven by increased demand and customer expansion, served to cap off a record fee income year for us. We look forward to carrying this momentum into 2024 – our 120th year of operation – with an unwavering focus on cultivating full customer relationships," said Hillebrand.
At December 31, 2023, the Company had $8.17 billion in assets, $5.77 billion in loans and $6.67 billion in total deposits. The Company's combined enterprise, which encompasses 71 branch offices across three contiguous states, will continue to benefit from a diversified geographic footprint that provides significant growth opportunities in both the banking and WM&T arenas.
Key factors contributing to the fourth quarter of 2023 results included:
Loan growth and loan production represented the best fourth quarter in the Company's history. Total loans, excluding PPP loans, increased $155 million, or 3%, on the linked quarter. The yield earned on loans expanded to 5.79% for the fourth quarter of 2023, benefiting from average balance growth and to a lesser extent, interest rate expansion.
Deposit balances expanded $268 million, or 4%, on the linked quarter, as interest bearing deposits grew $434 million and non-interest bearing deposits contracted by $166 million.
Interest bearing demand accounts increased $197 million, or 9%, consistent with seasonal public funds activity.
Money market accounts expanded $134 million, or 12%, led by growth in WM&T money market funds held at the Bank.
Time deposits grew by $120 million, or 14%, a tribute to successful marketing of promotional products, primarily in the Central Kentucky market.
Increasing costs of funds continued to outpace earning asset yield growth during the fourth quarter of 2023. Net interest income declined $3.2 million, or 5%, for the fourth quarter of 2023 compared to the fourth quarter a year ago, with net interest margin compressing 39 bps to 3.25%. While net interest margin also declined on the linked quarter, contracting 9 basis points from 3.34%, net interest income increased $701,000. Given the current interest rate environment, the change in deposit mix has and will continue to place pressure on funding costs.
While credit quality remains strong in comparison to traditional metrics, credit loss expense on loans of $5.8 million was recorded for the fourth quarter of 2023. The Bank recorded a $4.1 million charge-off related to a single Commercial & Industrial (C&I) relationship in late December. The Bank became aware of credit deterioration in the third quarter of 2023 and the relationship was downgraded at that time. The relationship was subsequently placed on non-accrual in the fourth quarter. The Bank considers this to be a conservative approach to an isolated situation with one customer and no additional loss is anticipated. Despite the charge-off, management remains confident in the current quality of the loan portfolio, as demonstrated by the relatively low concentration of classified and delinquent loans, and does not believe this instance is reflective of broader portfolio concerns. With the allowance for credit losses to total loans standing at 1.38%, the Bank is well-positioned based on current credit metrics and forecasts in the allowance for credit losses model.
Non-interest income increased $1.3 million, or 6%, over the fourth quarter of 2022. WM&T income expanded $878K, or 10%, to $10.1 million, benefitting from improved market conditions and net new business expansion. Card income set quarterly and year to date records, led by interchange income expansion and increased debit card processor incentives and treasury management fees once again demonstrated double digit growth. Fee income expansion in the fourth quarter of 2023 is especially notable given $1.3 million in non-recurring gains on sale of premises and equipment recorded in the fourth quarter of 2022.
Total non-interest expenses increased $4.1 million, or 9%, during the fourth quarter of 2023 compared to the fourth quarter of 2022, primarily due to higher compensation expense tied to employee growth and expense recorded related to an executive retirement agreement. Further, additional occupancy expense was incurred related to the relocation of all WM&T employees to a consolidated central location.
Tangible common equity per share(3) was $21.95 at December 31, 2023, compared to $20.17 at September 30, 2023, and $18.50 at December 31, 2022. Over the past several quarters, tangible common equity and tangible book value have been impacted by the volatile interest rate market and corresponding impact on accumulated other comprehensive income/loss, primarily as a result of changes in unrealized losses in the available for sale debt securities portfolio, which has a current weighted average life of 5.5 years.
Highlights for the year ended December 31, 2023:
Loans (excluding PPP) grew $580 million, or 11%, over the past 12 months, marking the third consecutive year of double digit loan growth.
Average loans increased $604 million, or 13%, for the year.
Loan production set a new record for 2023.
Deposit balances grew by $279 million, or 4%, over the past 12 months. Interest bearing demand, money market, and time deposit expansion combined to more than offset declines in non-interest bearing demand accounts.
Net interest income increased $13.9 million, or 6%, over 2022.
Loan yield expansion led to net interest margin expanding four basis points to 3.39% in 2023 over 2022.
WM&T income reached and surpassed record levels during the year, increasing $3.7 million, or 10%, over the past 12 months, reflecting improved market conditions and net new business growth. Assets Under Management (AUM) surpassed the $7 billion mark at year-end.
Customer expansion and increased transaction volume led to record 2023 card, treasury management and brokerage income.
Hillebrand concluded, "In January, Stock Yards was named to Stephen's 2024 Bank Industry & Top Picks List as the top Small-Cap stock with upside price potential. We were also named to Stephen's 2024 Best Ideas List, as the top company within the Midwest Bank category. In November, we were once again nationally recognized by American Banker Magazine as one of the Best Banks to Work for in 2023. The Best Banks to Work For program identifies and honors U.S. banks for outstanding employee satisfaction. In addition, 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, marking our 8th time being named to the Raymond James Community Bankers Cup. These recognitions are a testament to the dedication of our employees, who continue to work diligently to support our customers. We will not rest on our laurels as we enter 2024 – our 120th year of service to the communities we are honored to serve."
Results of Operations – Fourth Quarter 2023 Compared with Fourth Quarter 2022
Net interest income, the Company's largest source of revenue, decreased by $3.2 million, or 5%, to $62.0 million. While strong organic loan growth boosted net interest income over the past 12 months, the cost of interest bearing liabilities more than offset the increase in total interest income.
Total interest income increased by $20.1 million, or 27%, to $95.2 million.
Interest income and fees on loans increased $18.7 million, or 29%, over the prior year quarter. Consistent with the $582 million, or 11%, increase in average loans and interest rate expansion, the average quarterly yield earned on loans increased 79 basis points, or 16%, over the past 12 months to 5.79%.
Interest income on securities decreased $413,000, or 5%, compared to the fourth quarter of 2022. While average securities balances have declined $168 million, or 9%, over the past 12 months, the rate earned on securities has increased 9 bps to 2.05%, as lower rate securities either matured or paid down.
Average overnight funds increased $24 million quarter over prior year quarter, with interest income increasing $1.4 million consistent with the increase in seasonal public funds accounts. The Federal Reserve Bank has increased the rate paid on reserve balances meaningfully during the past 12 months, which has significantly benefited related interest income on excess cash held at the Bank.
Total interest expense increased $23.3 million to $33.2 million, as the cost of interest bearing liabilities increased 158 basis points to 2.44%.
Interest expense on deposits increased $20.6 million over the past 12 months, as the overall cost of interest bearing deposits increased from 0.81% for the fourth quarter of 2022 to 2.34%. Deposit costs during the fourth quarter of 2023 have been significantly impacted by changes in mix, individual rate exceptions, successful new product promotions and growth in the WM&T money market account. Average interest bearing deposit balances increased $597 million, or 13%, from the fourth quarter of 2022 to the fourth quarter of 2023, with time deposits representing $458 million of the increase.
Interest expense on Federal Home Loan Bank (FHLB) advances totaled $2.1 million for the fourth quarter of 2023. The Bank had $200 million in FHLB advances outstanding at the end of the fourth quarter of 2023.
The Bank recorded $5.8 million in credit loss expense for loans during the fourth quarter of 2023. In addition to strong loan growth, a flat unemployment projection and other factors within the CECL allowance model, the Bank recorded $4.7 million in charge-offs, with $4.1 million attributed to one C&I relationship offset by $235,000 in total recoveries. The Bank also recorded a $275,000 expense for off balance sheet exposures associated with expansion of Construction & Land Development (C&LD) and C&I lines of credit (increased availability and utilization). For the fourth quarter of 2022, consistent with strong loan growth and deterioration within the future unemployment rate forecast, the Company recorded $3.6 million in provision for credit losses on loans and a $225,000 benefit to credit loss expense for off balance sheet exposures. In addition, the Bank recorded a $1.6 million specific reserve for a Commercial Real Estate loan during the fourth quarter of 2022.
Non-interest income increased $1.3 million, or 6%, to $24.4 million.
WM&T income ended the fourth quarter of 2023 at $10.1 million, increasing $878,000, or 10%, over the fourth quarter of 2022. WM&T income benefited from strong fourth quarter equity and fixed income market performance, coupled with quarterly estate fees collected and net new business growth.
WM&T AUM expanded $575 million, or 9%, over the past 12 months consistent with market performance and net new business growth. With the especially strong market performance experienced in November and December, AUM once again surpassed the $7 billion mark.
Treasury management fees increased $253,000, or 11%, compared to the fourth quarter of 2022, driven by strong transaction volume, organic growth, modified fee schedules, strong foreign exchange income, new product sales and continued product expansion to the customer base added through recent merger activity.
Card income increased $328,000, or 7%, over the fourth quarter of 2022, driven by increased interchange income and credit card processor spend incentives. While card volume has increased over 2022, interchange rate compression has placed pressure on growth.
The Company recognized $1.3 million in non-recurring gains on sales of premises and equipment in the fourth quarter of 2022 related to the disposition of acquired locations.
Other non-interest income, which primarily includes swap fees, letter of credit fees and OREO activity increased by $527,000, or 34%, over the fourth quarter of 2022. During the fourth quarter of 2023, the Company sold other real estate owned and Visa Class B stock for $207,000 and $487,000 in non-recurring gains, respectively.
Non-interest expenses increased $4.1 million, or 9%, compared to the fourth quarter of 2022, to $50.0 million.
Compensation and employee benefits expense combined to increase $1.5 million, or 6%, compared to the fourth quarter of 2022, consistent with a 4% increase in full time equivalent employees and expense recorded related to an executive retirement agreement.
Net occupancy and equipment expenses increased $1.3 million, or 34%, over the fourth quarter of 2022 primarily due to the relocation of all WM&T employees to a consolidated central location.
Technology and communication expenses, which include computer software amortization, equipment depreciation and expenditures related to investments in technology needed to maintain and improve the quality of customer delivery channels, information security and internal resources, increased $865,000, or 23%, consistent with software upgrades, equipment upgrades, customer expansion and increased transaction activity.
Legal and professional fees increased $801,000 compared to the fourth quarter of 2022, led by increased compliance-related consulting in preparation for expanded regulatory oversight in conjunction with future growth in total assets.
During the fourth quarter of 2022, the Company sold its partial interest in an investment adviser subsidiary that was acquired from Commonwealth Bancshares, realizing a non-recurring pre-tax loss of $870,000. Also, intangible amortization expense decreased $443,000, or 28%, during the fourth quarter of 2023, consistent with the sale of the investment advisor and the prior year intangible asset write-off.
Financial Condition – December 31, 2023 Compared with December 31, 2022
Total assets increased $674 million, or 9%, year over year to $8.17 billion.
Total loans (excluding PPP) increased $580 million, or 11%, to $5.77 billion, with the largest sources of growth stemming from the commercial real estate and residential real estate portfolios. In addition to the strong growth, the Company has benefitted from the higher rate environment in 2023 that has generally slowed loan payoff activity. Total line of credit usage was 39.2% as of December 31, 2023, compared to 42.3% as of December 31, 2022, driven by strong production. C&I line of credit usage was 28.6% as of December 31, 2023, compared to 33.1% as of December 31, 2022.
Total investment securities, which spiked during the second quarter of 2021 and the first quarter of 2022 in part due to acquisitions, decreased $147 million, or 9%, year over year. Maturities/pay-downs of lower yielding investments have boosted the overall portfolio yield to 2.05% for the fourth quarter of 2023, from 1.96% in the fourth 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 increased $279 million, or 4%, over the past 12 months, led by interest bearing demand and time deposit expansion which was partially offset by a decline in non-interest bearing demand deposits.
During the fourth quarter of 2023, the Company recorded net loan charge-offs of $4.5 million, with $4.1 million attributed to one C&I relationship. This compares to $152,000 in net charge offs during the fourth quarter of 2022. Non-performing loans(5) totaled $19 million, or 0.33% of total loans outstanding at December 31, 2023, compared to $15 million, or 0.29% of total loans outstanding at December 31, 2022. The ratio of allowance for credit losses to loans (5) ended at 1.38% at December 31, 2023 compared to 1.41% at December 31, 2022.
At December 31, 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(3) was 10.50% and the tangible common equity ratio(3) was 8.09% at December 31, 2023, compared to 10.14% and 7.44% at December 31, 2022, respectively. Interest rate volatility over the last 12 months has significantly impacted unrealized losses within the available for sale debt securities portfolio.
In November 2023, the board of directors declared a quarterly cash dividend of $0.30 per common share. The dividend was paid December 29, 2023 to shareholders of record as of December 18, 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 – Fourth Quarter 2023 Compared with Third Quarter 2023
Net interest margin declined 9 basis points on the linked quarter to 3.25%, as cost of funds growth continued to outpace earning asset yield growth.
Net interest income expanded $701,000, or 1%, over the prior quarter to $62.1 million, as management is optimistic that net interest margin contraction is starting to slow.
Total interest income increased $6.3 million, or 7%, led predominantly by the increase in interest income on loans.
Interest income and fees on loans increased $4.5 million, or 6%, over the linked quarter. Average loans increased $190 million, or 4%, and the corresponding yield earned increased 13 basis points over the linked quarter.
Average overnight funds increased $134 million over the linked quarter with interest income increasing $1.9 million. The fourth quarter of each year reflects elevated cash levels consistent with the seasonal increase in public funds.
Total interest expense increased $5.6 million, or 20%, led by a $8.3 million, or 39%, increase in the cost of total interest-bearing deposits, which was partially offset by a $2.8 million decline in FHLB borrowings expense.
The Company recorded $6.0 million in provision for credit losses(1) during the fourth quarter of 2023, which included a $5.8 million provision for credit losses on loans and $275,000 of credit loss expense for off-balance sheet exposures. During the third quarter of 2023, the Company recorded $2.8 million in provision for credit losses, which included a $2.3 million provision for credit losses on loans and $475,000 of credit loss expense for off-balance sheet exposures.
Non-interest income increased $1.5 million, or 7% on the linked quarter, led by record card income, strong swap and letter of credit fees, OREO activity and the sale of Visa Class B stock.
Non-interest expenses increased $3.3 million, or 7%, to $50.0 million, as increased compensation, net occupancy expense, technology expense and consulting expenses more than off-set a decline in employee benefits.
Financial Condition – December 31, 2023 Compared with September 30, 2023
Total assets increased $267 million, or 3%, on the linked quarter to $8.17 billion.
Total loans expanded $154 million, or 3%, on the linked quarter, led by increases in nearly every category, with the C&I and C&LD loan portfolios leading the growth. Total line of credit usage was 39.2% as of December 31, 2023, compared to 38.8% as of September 30, 2023, driven by strong production. C&I line of credit usage was 28.6% as of December 31, 2023, compared to 26.8% as of September 30, 2023.
Total deposits increased $268 million, or 4%, on the linked quarter. Total interest bearing deposits increased $434 million, on the linked quarter, as increases in interest bearing demand, money market accounts and time deposits more than offset the $166 million contraction in non-interest bearing demand. Excluding public funds, total deposits increased $121 million on the linked quarter.
About the Company
Louisville, Kentucky-based Stock Yards Bancorp, Inc., with $8.17 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)
Fourth Quarter 2023 Earnings Release
(In thousands unless otherwise noted)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
Income Statement Data
2023
2022
2023
2022
Net interest income, fully tax equivalent (6)
$
62,112
$
65,469
$
247,869
$
234,267
Interest income:
Loans
$
82,715
$
64,033
$
302,044
$
216,138
Federal funds sold and interest bearing due from banks
3,526
2,173
8,411
6,018
Mortgage loans held for sale
38
13
211
190
Investment securities and FHLB stock
8,962
8,931
36,030
29,306
Total interest income
95,241
75,150
346,696
251,652
Interest expense:
Deposits
29,645
9,022
81,585
16,412
Securities sold under agreements to repurchase and
other short-term borrowings
843
399
2,776
721
Federal Home Loan Bank advances
2,155
12
12,768
12
Subordinated debentures
582
454
2,235
1,124
Total interest expense
33,225
9,887
99,364
18,269
Net interest income
62,016
65,263
247,332
233,383
Provision for credit losses (1)
6,046
3,375
13,796
10,257
Net interest income after provision for credit losses
55,970
61,888
233,536
223,126
Non-interest income:
Wealth management and trust services
10,099
9,221
39,802
36,111
Deposit service charges
2,244
2,183
8,866
8,286
Debit and credit card income
5,374
5,046
19,438
18,623
Treasury management fees
2,531
2,278
10,033
8,590
Mortgage banking income
823
209
3,705
3,210
Loss on sale of securities
(44)
-
(44)
-
Net investment product sales commissions and fees
860
833
3,205
3,063
Bank owned life insurance
576
545
2,253
1,597
Gain (Loss) on sale of premises and equipment
(105)
1,295
(30)
4,341
Other
2,059
1,532
4,992
5,328
Total non-interest income
24,417
23,142
92,220
89,149
Non-interest expenses:
Compensation
24,494
23,398
91,876
86,640
Employee benefits
3,829
3,421
18,451
16,568
Net occupancy and equipment
5,150
3,843
16,384
14,298
Technology and communication
4,612
3,747
17,318
14,897
Debit and credit card processing
1,719
1,470
6,481
5,909
Marketing and business development
1,754
1,544
5,990
5,005
Postage, printing and supplies
903
893
3,604
3,354
Legal and professional
1,293
492
3,958
2,943
FDIC Insurance
1,060
730
3,911
2,758
Amortization of investments in tax credit partnerships
324
88
1,294
353
Capital and deposit based taxes
601
799
2,476
2,621
Merger expenses
-
-
-
19,500
Intangible amortization
1,167
1,610
4,686
5,544
Loss on disposition of LFA
-
870
-
870
Other
3,107
3,041
11,400
10,531
Total non-interest expenses
50,013
45,946
187,829
191,791
Income before income tax expense
30,374
39,084
137,927
120,484
Income tax expense
6,430
9,174
30,179
27,190
Net income
23,944
29,910
107,748
93,294
Less: net income attributed to non-controlling interest
-
93
-
322
Net income available to stockholders
$
23,944
$
29,817
$
107,748
$
92,972
Net income per share - Basic
$
0.82
$
1.02
$
3.69
$
3.24
Net income per share - Diluted
0.82
1.01
3.67
3.21
Cash dividend declared per share
0.30
0.29
1.18
1.14
Weighted average shares - Basic
29,226
29,157
29,212
28,672
Weighted average shares - Diluted
29,331
29,428
23,343
28,922
December 31,
Balance Sheet Data
2023
2022
Investment securities
$
1,471,016
$
1,617,834
Loans
5,771,038
5,205,918
Allowance for credit losses on loans
79,374
73,531
Total assets
8,170,102
7,496,261
Non-interest bearing deposits
1,548,624
1,950,198
Interest bearing deposits
5,122,124
4,441,054
Federal Home Loan Bank advances
200,000
50,000
Stockholders' equity
858,103
760,432
Total shares outstanding
29,329
29,259
Book value per share (3)
$
29.26
$
25.99
Tangible common equity per share (3)
21.95
18.50
Market value per share
51.49
64.98
Stock Yards Bancorp, Inc. Financial Information (unaudited)
Fourth Quarter 2023 Earnings Release
Three Months Ended
Twelve Months Ended
December 31,
December 31,
Average Balance Sheet Data
2023
2022
2023
2022
Federal funds sold and interest bearing due from banks
$
258,950
$
235,448
$
164,314
$
477,341
Mortgage loans held for sale
5,305
6,735
6,822
8,835
Investment securities
1,618,799
1,786,383
1,687,639
1,670,324
Federal Home Loan Bank stock
20,519
10,928
22,123
11,741
Loans
5,676,193
5,094,356
5,422,865
4,819,124
Total interest earning assets
7,579,766
7,133,850
7,303,763
6,987,365
Total assets
8,116,569
7,559,260
7,775,574
7,438,880
Non-interest bearing deposits
1,663,962
2,097,858
1,763,157
2,053,213
Interest bearing deposits
5,025,240
4,428,582
4,608,575
4,385,393
Total deposits
6,689,202
6,526,440
6,371,732
6,438,606
Securities sold under agreement to repurchase
130,148
117,138
123,111
122,154
Federal Home Loan Bank advances
205,435
1,087
280,068
274
Subordinated debentures
26,706
26,309
26,558
21,733
Total interest bearing liabilities
5,401,135
4,582,005
5,052,106
4,538,911
Total stockholders' equity
817,682
740,007
801,593
738,798
Performance Ratios
Annualized return on average assets (4)
1.17%
1.56%
1.39%
1.25%
Annualized return on average equity (4)
11.62%
15.99%
13.44%
12.58%
Net interest margin, fully tax equivalent
3.25%
3.64%
3.39%
3.35%
Non-interest income to total revenue, fully tax equivalent
28.22%
26.12%
27.12%
27.56%
Efficiency ratio, fully tax equivalent (2)
57.80%
51.85%
55.23%
59.30%
Capital Ratios
Total stockholders' equity to total assets (3)
10.50%
10.14%
Tangible common equity to tangible assets (3)
8.09%
7.44%
Average stockholders' equity to average assets
10.31%
9.93%
Total risk-based capital
12.43%
12.54%
Common equity tier 1 risk-based capital
11.04%
11.04%
Tier 1 risk-based capital
11.43%
11.47%
Leverage
9.62%
9.33%
Loan Segmentation
Commercial real estate - non-owner occupied
$
1,561,689
$
1,443,813
Commercial real estate - owner occupied
907,424
788,936
Commercial and industrial
1,302,809
1,230,976
Commercial and industrial - PPP
4,319
18,593
Residential real estate - owner occupied
708,893
591,515
Residential real estate - non-owner occupied
358,715
312,474
Construction and land development
531,324
445,690
Home equity lines of credit
211,390
200,725
Consumer
145,340
139,461
Leases
15,503
13,322
Credit cards
23,632
20,413
Total loans and leases
$
5,771,038
$
5,205,918
Asset Quality Data
Non-accrual loans
$
19,058
$
14,242
Troubled debt restructurings
-
-
Loans past due 90 days or more and still accruing
110
892
Total non-performing loans
19,168
15,134
Other real estate owned
10
677
Total non-performing assets
$
19,178
$
15,811
Non-performing loans to total loans (5)
0.33%
0.29%
Non-performing assets to total assets
0.23%
0.21%
Allowance for credit losses on loans to total loans (5)
1.38%
1.41%
Allowance for credit losses on loans to average loans
1.46%
1.53%
Allowance for credit losses on loans to non-performing loans
414%
486%
Net (charge-offs) recoveries
$
(4,472)
$
(152)
$
(6,628)
$
1
Net (charge-offs) recoveries to average loans (7)
-0.08%
0.00%
-0.12%
0.00%
Stock Yards Bancorp, Inc. Financial Information (unaudited)
Fourth Quarter 2023 Earnings Release
Quarterly Comparison
Income Statement Data
12/31/23
9/30/23
6/30/23
3/31/23
12/31/22
Net interest income, fully tax equivalent (6)
$
62,112
$
61,437
$
61,074
$
63,245
$
65,469
Net interest income
$
62,016
$
61,315
$
60,929
$
63,072
$
65,263
Provision for credit losses (1)
6,046
2,775
2,350
2,625
3,375
Net interest income after provision for credit losses
55,970
58,540
58,579
60,447
61,888
Non-interest income:
Wealth management and trust services
10,099
10,030
10,146
9,527
9,221
Deposit service charges
2,244
2,272
2,201
2,149
2,183
Debit and credit card income
5,374
4,870
4,712
4,482
5,046
Treasury management fees
2,531
2,635
2,549
2,318
2,278
Mortgage banking income
823
814
1,030
1,038
209
Loss on sale of securities
(44)
-
-
-
-
Net investment product sales commissions and fees
860
791
800
754
833
Bank owned life insurance
576
569
559
549
545
Gain (Loss) on sale of premises and equipment
(105)
302
(225)
(2)
1,295
Other
2,059
613
1,088
1,232
1,532
Total non-interest income
24,417
22,896
22,860
22,047
23,142
Non-interest expenses:
Compensation
24,494
23,379
22,107
21,896
23,398
Employee benefits
3,829
4,508
5,061
5,053
3,421
Net occupancy and equipment
5,150
3,821
3,514
3,899
3,843
Technology and communication
4,612
4,236
4,219
4,251
3,747
Debit and credit card processing
1,719
1,637
1,706
1,419
1,470
Marketing and business development
1,754
1,357
1,784
1,095
1,544
Postage, printing and supplies
903
938
889
874
893
Legal and professional
1,293
1,049
819
797
492
FDIC Insurance
1,060
937
779
1,135
730
Amortization of investments in tax credit partnerships
324
323
324
323
88
Capital and deposit based taxes
601
629
607
639
799
Merger expenses
-
-
-
-
-
Intangible amortization
1,167
1,167
1,172
1,180
1,610
Loss on disposition of LFA
-
-
-
-
870
Other
3,107
2,721
2,819
2,753
3,041
Total non-interest expenses
50,013
46,702
45,800
45,314
45,946
Income before income tax expense
30,374
34,734
35,639
37,180
39,084
Income tax expense
6,430
7,642
7,975
8,132
9,174
Net income
23,944
27,092
27,664
29,048
29,910
Less: net income attributed to non-controlling interest
-
-
-
-
93
Net income available to stockholders
$
23,944
$
27,092
$
27,664
$
29,048
$
29,817
Net income per share - Basic
$
0.82
$
0.93
$
0.95
$
1.00
$
1.02
Net income per share - Diluted
0.82
0.92
0.94
0.99
1.01
Cash dividend declared per share
0.30
0.30
0.29
0.29
0.29
Weighted average shares - Basic
29,226
29,223
29,223
29,178
29,157
Weighted average shares - Diluted
29,331
29,336
29,340
29,365
29,428
Quarterly Comparison
Balance Sheet Data
12/31/23
9/30/23
6/30/23
3/31/23
12/31/22
Cash and due from banks
$
94,466
$
79,538
$
111,126
$
87,922
$
82,515
Federal funds sold and interest bearing due from banks
171,493
113,499
103,204
229,076
84,852
Mortgage loans held for sale
6,056
6,535
7,069
6,397
2,606
Investment securities
1,471,016
1,465,453
1,542,753
1,600,603
1,617,834
Federal Home Loan Bank stock
16,236
26,241
27,366
23,226
10,928
Loans
5,771,038
5,617,084
5,418,609
5,243,104
5,205,918
Allowance for credit losses on loans
79,374
78,075
77,710
75,673
73,531
Goodwill
194,074
194,074
194,074
194,074
194,074
Total assets
8,170,102
7,903,430
7,732,552
7,667,648
7,496,261
Non-interest bearing deposits
1,548,624
1,714,918
1,766,132
1,845,302
1,950,198
Interest bearing deposits
5,122,124
4,687,889
4,442,248
4,511,893
4,441,054
Securities sold under agreements to repurchase
152,991
113,894
138,347
104,578
133,342
Federal funds purchased
12,852
11,518
11,646
14,745
8,789
Federal Home Loan Bank advances
200,000
350,000
400,000
275,000
50,000
Subordinated debentures
26,740
26,641
26,541
26,442
26,343
Stockholders' equity
858,103
806,918
808,082
794,368
760,432
Total shares outstanding
29,329
29,323
29,323
29,324
29,259
Book value per share (3)
$
29.26
$
27.52
$
27.56
$
27.09
$
25.99
Tangible common equity per share (3)
21.95
20.17
20.17
19.66
18.50
Market value per share
51.49
39.29
45.37
55.14
64.98
Capital Ratios
Total stockholders' equity to total assets (3)
10.50%
10.21%
10.45%
10.36%
10.14%
Tangible common equity to tangible assets (3)
8.09%
7.69%
7.87%
7.74%
7.44%
Average stockholders' equity to average assets
10.07%
10.39%
10.53%
10.26%
9.79%
Total risk-based capital
12.43%
12.71%
12.78%
12.91%
12.54%
Common equity tier 1 risk-based capital
11.04%
11.17%
11.20%
11.30%
11.04%
Tier 1 risk-based capital
11.43%
11.57%
11.61%
11.73%
11.47%
Leverage
9.62%
9.80%
9.83%
9.56%
9.33%
Stock Yards Bancorp, Inc. Financial Information (unaudited)
Fourth Quarter 2023 Earnings Release
Quarterly Comparison
Average Balance Sheet Data
12/31/23
9/30/23
6/30/23
3/31/23
12/31/22
Federal funds sold and interest bearing due from banks
$
258,950
$
124,653
$
131,958
$
140,831
$
235,448
Mortgage loans held for sale
5,305
7,112
8,420
6,460
6,735
Investment securities
1,618,799
1,659,888
1,719,045
1,754,620
1,786,383
Federal Home Loan Bank stock
20,519
27,290
25,074
15,496
10,928
Loans
5,676,193
5,486,262
5,286,597
5,236,879
5,094,356
Total interest earning assets
7,579,766
7,305,205
7,171,094
7,154,286
7,133,850
Total assets
8,116,569
7,805,154
7,594,901
7,579,439
7,559,260
Non-interest bearing deposits
1,663,962
1,731,724
1,781,338
1,878,307
2,097,858
Interest bearing deposits
5,025,240
4,509,411
4,414,599
4,480,151
4,428,582
Total deposits
6,689,202
6,241,135
6,195,937
6,358,458
6,526,440
Securities sold under agreement to repurchase
130,148
127,063
113,051
122,049
117,138
Federal Home Loan Bank advances
205,435
401,630
348,352
163,056
1,087
Subordinated debentures
26,706
26,606
26,508
26,408
26,309
Total interest bearing liabilities
5,401,135
5,076,486
4,916,112
4,807,907
4,582,005
Total stockholders' equity
817,682
810,710
799,886
777,555
740,007
Performance Ratios
Annualized return on average assets (4)
1.17%
1.38%
1.46%
1.55%
1.56%
Annualized return on average equity (4)
11.62%
13.26%
13.87%
15.15%
15.99%
Net interest margin, fully tax equivalent
3.25%
3.34%
3.42%
3.59%
3.64%
Non-interest income to total revenue, fully tax equivalent
28.22%
27.15%
27.24%
25.85%
26.12%
Efficiency ratio, fully tax equivalent (2)
57.80%
55.38%
54.57%
53.13%
51.85%
Loans Segmentation
Commercial real estate - non-owner occupied
$
1,561,689
$
1,557,977
$
1,527,453
$
1,467,780
$
1,443,813
Commercial real estate - owner occupied
907,424
896,522
825,026
805,417
788,936
Commercial and industrial
1,302,809
1,246,200
1,226,554
1,205,222
1,230,976
Commercial and industrial - PPP
4,319
4,827
7,088
9,557
18,593
Residential real estate - owner occupied
708,893
696,162
664,870
620,417
591,515
Residential real estate - non-owner occupied
358,715
349,624
337,961
322,748
312,474
Construction and land development
531,324
480,120
451,324
439,673
445,690
Home equity lines of credit
211,390
203,184
202,574
200,933
200,725
Consumer
145,340
143,703
139,602
136,412
139,461
Leases
15,503
14,710
13,967
13,207
13,322
Credit cards
23,632
24,055
22,190
21,738
20,413
Total loans and leases
$
5,771,038
$
5,617,084
$
5,418,609
$
5,243,104
$
5,205,918
Asset Quality Data
Non-accrual loans
$
19,058
$
17,227
$
17,364
$
17,389
$
14,242
Troubled debt restructurings
-
-
-
-
-
Loans past due 90 days or more and still accruing
110
1
437
894
892
Total non-performing loans
19,168
17,228
17,801
18,283
15,134
Other real estate owned
10
427
677
677
677
Total non-performing assets
$
19,178
$
17,655
$
18,478
$
18,960
$
15,811
Non-performing loans to total loans (5)
0.33%
0.31%
0.33%
0.35%
0.29%
Non-performing assets to total assets
0.23%
0.22%
0.24%
0.25%
0.21%
Allowance for credit losses on loans to total loans (5)
1.38%
1.39%
1.43%
1.44%
1.41%
Allowance for credit losses on loans to average loans
1.40%
1.42%
1.47%
1.45%
1.44%
Allowance for credit losses on loans to non-performing loans
414%
453%
437%
414%
486%
Net (charge-offs) recoveries
$
(4,472)
$
(1,935)
$
(113)
$
(108)
$
(152)
Net (charge-offs) recoveries to average loans (7)
-0.08%
-0.04%
0.00%
0.00%
0.00%
Other Information
Total assets under management (in millions)
$
7,160
$
6,670
$
6,976
$
6,764
$
6,585
Full-time equivalent employees
1,075
1,056
1,056
1,028
1,033
(1) - Detail of Provision for credit losses follows:
Quarterly Comparison
(in thousands)
12/31/23
9/30/23
6/30/23
3/31/23
12/31/22
Provision for credit losses - loans
$
5,771
$
2,300
$
2,150
$
2,250
$
3,600
Provision for credit losses - off balance sheet exposures
275
475
200
375
(225)
Total provision for credit losses
$
6,046
$
2,775
$
2,350
$
2,625
$
3,375
(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)
12/31/23
9/30/23
6/30/23
3/31/23
12/31/22
Total non-interest expenses (a)
$
50,013
$
46,702
$
45,800
$
45,314
$
45,946
Less: Loss on disposition of LFA
-
-
-
-
(870)
Less: Amortization of investments in tax credit partnerships
(324)
(323)
(324)
(323)
(88)
Total non-interest expenses - Non-GAAP (c)
$
49,689
$
46,379
$
45,476
$
44,991
$
44,988
Total net interest income, fully tax equivalent
$
62,112
$
61,437
$
61,074
$
63,245
$
65,469
Total non-interest income
24,417
22,896
22,860
22,047
23,142
Total revenue - Non-GAAP (b)
86,529
84,333
83,934
85,292
88,611
Less: Gain/loss on sale of premises and equipment
105
(302)
225
2
(1,295)
Less: Loss on sale of securities
44
-
-
-
-
Total adjusted revenue - Non-GAAP (d)
$
86,678
$
84,031
$
84,159
$
85,294
$
87,316
Efficiency ratio - Non-GAAP (a/b)
57.80%
55.38%
54.57%
53.13%
51.85%
Adjusted efficiency ratio - Non-GAAP (c/d)
57.33%
55.19%
54.04%
52.75%
51.52%
(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)
12/31/23
9/30/23
6/30/23
3/31/23
12/31/22
Total stockholders' equity - GAAP (a)
$
858,103
$
806,918
$
808,082
$
794,368
$
760,432
Less: Goodwill
(194,074)
(194,074)
(194,074)
(194,074)
(194,074)
Less: Core deposit and other intangibles
(20,304)
(21,471)
(22,638)
(23,810)
(24,990)
Tangible common equity - Non-GAAP (c)
$
643,725
$
591,373
$
591,370
$
576,484
$
541,368
Total assets - GAAP (b)
$
8,170,102
$
7,903,430
$
7,732,552
$
7,667,648
$
7,496,261
Less: Goodwill
(194,074)
(194,074)
(194,074)
(194,074)
(194,074)
Less: Core deposit and other intangibles
(20,304)
(21,471)
(22,638)
(23,810)
(24,990)
Tangible assets - Non-GAAP (d)
$
7,955,724
$
7,687,885
$
7,515,840
$
7,449,764
$
7,277,197
Total stockholders' equity to total assets - GAAP (a/b)
10.50%
10.21%
10.45%
10.36%
10.14%
Tangible common equity to tangible assets - Non-GAAP (c/d)
8.09%
7.69%
7.87%
7.74%
7.44%
Total shares outstanding (e)
29,329
29,323
29,323
29,324
29,259
Book value per share - GAAP (a/e)
$
29.26
$
27.52
$
27.56
$
27.09
$
25.99
Tangible common equity per share - Non-GAAP (c/e)
21.95
20.17
20.17
19.66
18.50
(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. Bancorp also 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.
Quarterly Comparison
(Dollars in thousands)
12/31/23
9/30/23
6/30/23
3/31/23
12/31/22
Net income attributable to stockholders - GAAP (a)
$
23,944
$
27,092
$
27,664
$
29,048
$
29,817
Add: Loss on disposition of LFA
-
-
-
-
870
Less: Gain/loss on sale of premises and equipment
105
(302)
225
2
(1,295)
Less: Tax effect of adjustments to net income
(23)
66
(50)
-
100
Total net income - Non-GAAP (b)
$
24,026
$
26,856
$
27,664
$
29,050
$
29,492
Total average assets (c)
$
8,116,569
$
7,805,154
$
7,594,901
$
7,579,439
$
7,559,260
Total average stockholder equity (d)
817,682
810,710
799,886
777,555
740,007
Return on average assets - GAAP (a/c)
1.17%
1.38%
1.46%
1.55%
1.56%
Return on average assets - Non-GAAP (b/c)
1.17%
1.37%
1.46%
1.55%
1.55%
Return on average equity - GAAP (a/d)
11.62%
13.26%
13.87%
15.15%
15.99%
Return on average equity - Non-GAAP (b/d)
11.66%
13.14%
13.87%
15.15%
15.81%
(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)
12/31/23
9/30/23
6/30/23
3/31/23
12/31/22
Total Loans - GAAP (a)
$
5,771,038
$
5,617,084
$
5,418,609
$
5,243,104
$
5,205,918
Less: PPP loans
(4,319)
(4,827)
(7,088)
(9,557)
(18,593)
Total non-PPP Loans - Non-GAAP (b)
$
5,766,719
$
5,612,257
$
5,411,521
$
5,233,547
$
5,187,325
Allowance for credit losses on loans (c)
$
79,374
$
78,075
$
77,710
$
75,673
$
73,531
Total non-performing loans (d)
19,168
17,228
17,801
18,283
15,134
Allowance for credit losses on loans to total loans - GAAP (c/a)
1.38%
1.39%
1.43%
1.44%
1.41%
Allowance for credit losses on loans to total loans - Non-GAAP (c/b)
1.38%
1.39%
1.44%
1.45%
1.42%
Non-performing loans to total loans - GAAP (d/a)
0.33%
0.31%
0.33%
0.35%
0.29%
Non-performing loans to total loans - Non-GAAP (d/b)
0.33%
0.31%
0.33%
0.35%
0.29%
(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.