Market Overview

Stock Yards Bancorp Reports Strong Fourth Quarter Earnings of $16.6 Million or $0.73 Per Diluted Share

Share:

Record Year-To-Date Results, Both Including and Excluding Non-recurring Items

Stock Yards Bancorp, Inc. (NASDAQ:SYBT), parent company of Stock Yards Bank & Trust Company, with offices in the Louisville, Indianapolis and Cincinnati metropolitan markets, today reported results for both the fourth quarter and year ended December 31, 2019.

Total revenue, comprised of net interest income and non-interest income, increased 11% to $45.9 million for the fourth quarter of 2019 from $41.5 million for the fourth quarter of 2018. Net income for the fourth quarter of 2019 rose 14% to $16.6 million or $0.73 per diluted share from $14.7 million or $0.64 per diluted share for the fourth quarter of 2018.

Record year-to-date net income of $66.1 million, which increased $10.6 million or 19%, reflected record loan production, completion of a successful bank acquisition, record wealth management and trust (WM&T) income, continued strong credit metrics and solid organic growth. In addition, 2019 net income was impacted favorably by approximately $3.6 million in non-recurring items, most notably state income tax benefits offset by acquisition deal costs.

 

 

 

 

 

 

 

 

 

 

 

Twelve Months Ended

December 31,

(dollar amounts in thousands, except per share data)

4Q19

3Q19

4Q18

2019

2018

Net interest income

$

32,720

 

$

32,070

 

$

29,912

 

$

125,221

 

$

114,416

 

Provision for loan and lease losses

 

-

 

 

400

 

 

-

 

 

1,000

 

 

2,705

 

Non-interest income

 

13,161

 

 

13,304

 

 

11,576

 

 

49,790

 

 

45,346

 

Non-interest expenses

 

26,291

 

 

23,957

 

 

24,565

 

 

98,351

 

 

89,509

 

Income before income tax expense

 

19,590

 

 

21,017

 

 

16,923

 

 

75,660

 

 

67,548

 

Income tax expense

 

2,941

 

 

3,783

 

 

2,265

 

 

9,593

 

 

12,031

 

Net income

$

16,649

 

$

17,234

 

$

14,658

 

$

66,067

 

$

55,517

 

Net income per share, diluted

$

0.73

 

$

0.76

 

$

0.64

 

$

2.89

 

$

2.42

 

Net interest margin

 

3.70

%

 

3.86

%

 

3.84

%

 

3.81

%

 

3.83

%

Efficiency ratio

 

57.24

%

 

52.73

%

 

59.12

%

 

56.13

%

 

55.92

%

Tangible common equity to tangible assets(1)

 

10.55

%

 

10.83

%

 

11.05

%

 

10.55

%

 

11.05

%

Annualized return on average equity

 

16.48

%

 

17.41

%

 

16.23

%

 

17.09

%

 

16.00

%

Annualized return on average assets

 

1.78

%

 

1.95

%

 

1.78

%

 

1.90

%

 

1.76

%

 

 

 

 

 

 

 

Key factors affecting the Company's results for the fourth quarter of 2019 included:

  • Average loans increased $289 million year over year, contributing to the 9% increase in net interest income on a comparable quarter basis.
  • Total loans increased 12% and legacy (excluding the King Southern Bank ("KSB") acquisition) loans increased 6% year over year, as record loan production was partially muted by elevated payoffs.
  • Continued strong growth in non-interest income, with WM&T income increasing 9%, as assets under management grew to a record $3.3 billion, led by both record net new business generation and strong market returns. Card income and treasury management fees, bolstered by increased volume and usage, also continued to stand out as diversifying non-interest revenue streams, representing a combined 26% of total non-interest income.
  • Sustained strong credit quality metrics and minimal charge-offs resulted in no provision for loan and lease losses in the fourth quarter.

"Stock Yards Bancorp had a great fourth quarter and year, with strong growth in net income, record loan production and solid deposit growth," said Chief Executive Officer James A. (Ja) Hillebrand. "Our loan portfolio increased $297 million or 12% in 2019, with solid contribution from all three of our markets and credit quality metrics remained strong relative to our peers. Prudent interest rate management drove a $2.8 million or 9% increase in net interest income compared with the fourth quarter of 2018 and a $10.8 million or 9% increase compared with the full year 2018. We ended the year with a robust loan pipeline, positioning us for continued strength in loan production heading into 2020.

"Non-interest income increased 14% and 10% for the fourth quarter and full year of 2019 and continues to demonstrate stable and diversified revenue streams. The WM&T group continued to be a leading source of fee income, representing 46% of total non-interest income for 2019, and ending at record levels. Debit and credit card income and treasury management fees combined grew 13% to account for 26% of fourth quarter 2019 total non-interest income. We are also pleased to note the on-going contribution of mortgage banking income, which grew a healthy 83% in the fourth quarter. These diverse revenue sources remain key to the long-term stability of our growth and demonstrate our sound business model.

"We are pleased with the Company's growth during 2019. These achievements reaffirm the road map we have in place to increase our business across our markets and also reflect the hard work everyone at Stock Yards Bank & Trust puts forth in building long-term customer relationships. While the competitive landscape is intense, we remain optimistic based on our loan pipeline and core deposit growth. We continue to deliver market share gains and are excited about the opportunities in the markets we serve to continue the Company's legacy of growth and performance."

In closing, Hillebrand said, "The outstanding results for 2019 reflect the solid execution of our strategic plan to grow in our markets of Louisville, Cincinnati and Indianapolis, while completing a successful acquisition and expanding our dedicated team of professionals. Our continued growth, profitability, credit quality and capital strength demonstrate our ability to continue to deliver value to our shareholders, and we remain confident in our Company's progress as we move forward into the new decade."

Fourth Quarter 2019 Compared with Fourth Quarter 2018

Net interest income – the Company's largest source of revenue – increased approximately $2.8 million or 9% to $32.7 million. Legacy net interest income increased $1.5 million or 5%.

  • Total interest income rose $2.8 million or 8% to $37.8 million driven by an increase in interest income on loans consistent with growth in the portfolio, as well as an increase in loan fees. Excluding the KSB contribution, interest income on loans exceeded the prior year by $892 thousand or 3%.
  • Interest expense remained flat at $5.1 million despite $617 thousand in additional interest expense related to KSB.
  • Net interest margin decreased 14 basis points to 3.70% from 3.84%, primarily due to a higher than normal level of excess balance sheet liquidity at year end 2019, which was partially offset by elevated loan fees. The excess liquidity is expected to decline during the first half of 2020 and will cause net interest margin to rise from fourth quarter 2019, as deposit balances are expected to return to more normalized levels. As the Federal Reserve Bank (FRB) lowered rates for the third time in 2019, the Company followed suit by lowering stated rates on most types of interest-bearing deposit and certificates of deposit account types, partially offsetting the decline in loan rates. Continued lowering of short term rates by the FRB and yield-curve inversion could place pressure on net interest margin, as future rate drops will likely not be fully offset through further deposit rate declines.

Non-interest income increased $1.6 million or 14% to $13.2 million.

  • WM&T income increased $492 thousand or 9% due to increased new business generation, continued strong market performance and growth in corporate retirement plans.
  • Mortgage banking revenue increased $444 thousand or 83% primarily as a result of the continued decline in long-term rates.
  • Debit and credit card income once again demonstrated double digit growth, accounting for approximately 16% of total non-interest income during the quarter.
  • Non-recurring life insurance proceeds boosted Bank Owned Life Insurance (BOLI) income for the fourth quarter of the prior year.
  • Other non-interest income increased $614 thousand, in large part due to interest rate swap fees. Opportunities to earn swap fee income are sporadic due to the specialized nature of these types of transactions.

Non-interest expenses increased $1.7 million or 7% to $26.3 million.

  • Approximately $500 thousand of the increase related to recurring KSB expenses, concentrated in compensation, employee benefits, net occupancy and capital and deposit based taxes.
  • Compensation expense for the fourth quarter of 2019 increased $1.6 million or 14% compared with the prior-year quarter. Additional bonus expense was recorded consistent with record operating results in addition to an overall increase in headcount, highlighted by the Company's efforts to add loan production talent to support strategic growth initiatives.
  • Marketing and business development expense rose $459 thousand or 51%, as the Company increased its contribution to the Bank's foundation, established to support various community initiatives, due to outstanding 2019 results.
  • Net occupancy and equipment expenses increased $274 thousand or 13% due to additional depreciation expense and routine operating expenses associated with 2019 branch expansion.
  • The Company recognized $837 thousand in amortization of investments in tax credit partnerships compared to $1.1 million for the same period in the prior year. The expense levels related to these investments can fluctuate materially from period to period based on the timing of project completion and allocation of tax credits.
  • Other non-interest expenses reflect the second consecutive quarter of no FDIC insurance expense, as the target FDIC Reserve Ratio was reached during the period and credits were issued to qualifying institutions.

December 31, 2019 Compared with December 31, 2018

Total loans increased $297 million or 12% to $2.8 billion.

  • Excluding the KSB acquisition, the loan portfolio grew by 6%, bolstered by record annual loan production, overcoming significant levels of payoffs.
  • With elevated levels of excess liquidity at year end due to strong deposit growth, excess funds were invested in federal funds sold and interest bearing due from banks and short term securities available for sale, accounting for the increases over the prior year.

Total deposits increased $340 million or 12% to $3.1 billion.

  • Total legacy deposits increased $249 million or 9% due to higher deposit levels consistent with the seasonal increase in public funds and growth in balances with both existing and new customers.
  • Core deposits, which exclude brokered deposits and time deposits greater than $250 thousand, represented 96% of total deposits.

Asset quality, which has trended within a narrow range over the past several years, remained sound. While the Company is pleased with this performance, management recognizes the cyclical nature of the economy and believes asset quality metrics will normalize over the long term, which will eventually result in higher provisioning for loan and lease losses.

  • Non-performing loans (NPLs) were $12 million or 0.42% of total loans outstanding versus $3 million or 0.13% of total loans outstanding a year ago. The increase was due to one large relationship placed on non-accrual status. The relationship has been evaluated for potential loss and the Company believes its estimated reserve is adequate at year end.
  • Non-performing assets (NPAs), which include NPLs along with other real estate owned, totaled $13 million or 0.34% of total assets versus $4 million or 0.13% of total assets at December 31, 2018. The allowance for loan and lease losses relative to total end-of-period loans was 0.94%, down six basis points from the same period of 2018.

The Company remained "well capitalized" – the highest regulatory capital rating for financial institutions.

  • Total equity to assets was 10.91% and the tangible common equity ratio was 10.55%,(1) at December 31, 2019, compared to 11.10% and 11.05%,(1) at December 31, 2018, with the fluctuation associated with record earnings slightly offset by the KSB acquisition and regular dividend payments to shareholders.
  • Even with its strong capital position, the Company continues to consistently achieve industry-leading returns on equity due to its superior earnings performance.
  • The Company continues to pursue and consider strategies to enhance stockholder value, including a substantial and sustained dividend payout ratio. In November 2019, the Company's Board of Directors increased the Company's quarterly cash dividend by $0.01 or 4% to $0.27 per common share. With the November increase, Stock Yards Bancorp has raised its quarterly dividend rate 12 times since 2013, including two increases during 2019 and each of the previous five years, resulting in a cumulative increase of 93% over that time.
  • In 2019, the Company repurchased approximately 259 thousand shares of its stock at a weighted average cost of $35.46 per share. Approximately 741 thousand shares remain available for repurchase under the current buy-back plan.

Fourth Quarter 2019 Compared to Third Quarter 2019

Net interest income increased during the quarter to $32.7 million, despite a declining net interest margin and significant interest rate movement throughout the year. An increase in loan prepayment fees and average balance sheet growth offset the negative trends.

Non-interest income decreased slightly to $13.2 million.

  • Increases in mortgage banking, treasury management fees and WM&T income were offset by a decrease in both BOLI and other income, which returned to more normalized levels in the fourth quarter.
  • BOLI and other income were significantly impacted by death proceeds during the third quarter of 2019.
  • Other non-interest income reflected swap fees of $374 thousand and $304 thousand during the third and fourth quarters, respectively, and a one-time gain of $212 thousand on the sale of Visa Class B stock was realized during the third quarter of 2019.

Non-interest expenses increased 10% to $26.3 million.

  • Compensation expense for the fourth quarter of 2019 increased $1.1 million primarily due to an increase in bonus expenses tied to record Company operating results.
  • Employee benefits expense declined 11%, consistent with the decrease in self-insured medical claims.
  • An additional $420 thousand in community support expenses were recorded during the fourth quarter of 2019.

The Company's effective tax rate decreased to 15.0% for the fourth quarter of 2019 from 18.0% for the third quarter of 2019 primarily due to tax credits received for investments in federal historic rehabilitation tax credit projects.

December 31, 2019 Compared to September 30, 2019

Total loans decreased $12 million due to expected loan payoffs despite strong loan production for the quarter.

Total deposits increased $188 million or 6%.

  • Despite expected seasonal increases, interest bearing demand, money market and non-interest bearing deposit balances showed solid growth on the linked quarter basis.

Asset quality remained at historically strong levels.

  • The allowance for loan and lease losses relative to total end-of-period loans was flat at 0.94% for both periods.

About the Company

Louisville, Kentucky-based Stock Yards Bancorp, Inc., with $3.7 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 Global Select Market under the symbol SYBT.

This report contains forward-looking statements under the Private Securities Litigation Reform Act that involve risks and uncertainties. Although the Company's management believes the assumptions underlying the forward-looking statements contained herein are reasonable, any of these assumptions could be inaccurate. Therefore, there can be no assurance the forward-looking statements included herein will prove to be accurate. Factors that could cause actual results to differ from those discussed in forward-looking statements include, but are not limited to: economic conditions both generally and more specifically in the markets in which the Company and its subsidiary operates; competition for the Company's customers from other providers of financial services; government legislation and regulation, which change and over which the Company has no control; changes in interest rates; material unforeseen changes in liquidity, results of operations, or financial condition of the Company's customers; 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, 2018.

 
Stock Yards Bancorp, Inc. Financial Information (unaudited)
Fourth Quarter 2019 Earnings Release
(In thousands unless otherwise noted)

Three Months Ended

Twelve Months Ended

December 31,

December 31,

Income Statement Data

2019

2018

2019

2018

 
Net interest income, fully tax equivalent (2)

$

32,772

$

29,972

$

125,445

$

114,723

Interest income:
Loans and leases

$

34,357

$

31,591

$

134,342

$

118,467

Federal funds sold and interest bearing due from banks

 

804

 

503

 

2,933

 

1,307

Mortgage loans held for sale

 

61

 

45

 

182

 

166

Securities

 

2,573

 

2,865

 

10,308

 

9,833

Total interest income

 

37,795

 

35,004

 

147,765

 

129,773

Interest expense:
Deposits

 

4,526

 

4,718

 

20,560

 

13,441

Securities sold under agreements to repurchase and other short-term borrowings

 

63

 

142

 

318

 

992

Federal Home Loan Bank (FHLB) advances and other long-term debt

 

486

 

232

 

1,666

 

924

Total interest expense

 

5,075

 

5,092

 

22,544

 

15,357

Net interest income

 

32,720

 

29,912

 

125,221

 

114,416

Provision for loan and lease losses

 

-

 

-

 

1,000

 

2,705

Net interest income after provision for loan and lease losses

 

32,720

 

29,912

 

124,221

 

111,711

Non-interest income:
Wealth management and trust services

 

5,804

 

5,312

 

22,643

 

21,536

Deposit service charges

 

1,486

 

1,419

 

5,513

 

5,759

Debit and credit card income

 

2,109

 

1,813

 

8,123

 

6,769

Treasury management fees

 

1,369

 

1,260

 

4,992

 

4,571

Mortgage banking income

 

978

 

534

 

3,090

 

2,568

Net investment product sales commissions and fees

 

378

 

432

 

1,498

 

1,677

Bank owned life insurance

 

182

 

565

 

1,031

 

1,129

Other

 

855

 

241

 

2,900

 

1,337

Total non-interest income

 

13,161

 

11,576

 

49,790

 

45,346

Non-interest expenses:
Compensation

 

13,473

 

11,824

 

50,319

 

46,104

Employee benefits

 

2,580

 

2,452

 

11,038

 

10,098

Net occupancy and equipment

 

2,384

 

2,110

 

8,417

 

7,653

Technology and communication

 

1,636

 

1,659

 

7,098

 

6,569

Debit and credit card processing

 

613

 

595

 

2,493

 

2,328

Marketing and business development

 

1,367

 

908

 

3,627

 

3,099

Postage, printing, and supplies

 

434

 

397

 

1,652

 

1,558

Legal and professional

 

433

 

1,116

 

3,014

 

2,614

Amortization of investments in tax credit partnerships

 

837

 

1,179

 

1,078

 

1,237

Capital and deposit based taxes

 

1,006

 

873

 

3,870

 

3,325

Other

 

1,528

 

1,452

 

5,745

 

4,924

Total non-interest expenses

 

26,291

 

24,565

 

98,351

 

89,509

Income before income tax expense

 

19,590

 

16,923

 

75,660

 

67,548

Income tax expense

 

2,941

 

2,265

 

9,593

 

12,031

Net income

$

16,649

$

14,658

$

66,067

$

55,517

 
Net income per share - Basic

$

0.74

$

0.65

$

2.92

$

2.45

Net income per share - Diluted

 

0.73

 

0.64

 

2.89

 

2.42

Cash dividend declared per share

 

0.27

 

0.25

 

1.04

 

0.96

 
Weighted average shares - Basic

 

22,493

 

22,638

 

22,598

 

22,619

Weighted average shares - Diluted

 

22,760

 

22,907

 

22,865

 

22,944

 

December 31,

Balance Sheet Data

2019

2018

 
Loans and leases

$

2,845,016

$

2,548,171

Allowance for loan and lease losses

 

26,791

 

25,534

Total assets

 

3,724,197

 

3,302,924

Non-interest bearing deposits

 

810,475

 

711,023

Interest bearing deposits

 

2,323,463

 

2,083,333

FHLB advances

 

79,953

 

48,177

Stockholders' equity

 

406,297

 

366,500

Total shares outstanding

 

22,604

 

22,749

Book value per share (1)

$

17.97

$

16.11

Tangible common equity per share (1)

 

17.32

 

16.03

Market value per share

 

41.06

 

32.80

 
Stock Yards Bancorp, Inc. Financial Information (unaudited)
Fourth Quarter 2019 Earnings Release
 

Three Months Ended

Twelve Months Ended

December 31,

December 31,

Average Balance Sheet Data

2019

2018

2019

2018

 
Federal funds sold and interest bearing due from banks

$

187,865

 

$

86,725

 

$

136,514

 

$

67,083

 

Mortgage loans held for sale

 

5,889

 

 

2,140

 

 

3,836

 

 

2,549

 

Securities available for sale

 

476,360

 

 

468,856

 

 

436,511

 

 

415,069

 

FHLB stock

 

11,317

 

 

10,370

 

 

10,858

 

 

9,348

 

Loans and leases

 

2,828,142

 

 

2,539,750

 

 

2,702,626

 

 

2,519,936

 

Total earning assets

 

3,509,573

 

 

3,096,931

 

 

3,290,345

 

 

2,998,526

 

Total assets

 

3,709,250

 

 

3,260,322

 

 

3,480,998

 

 

3,159,726

 

Interest bearing deposits

 

2,284,195

 

 

2,012,489

 

 

2,143,993

 

 

1,907,070

 

Total deposits

 

3,108,640

 

 

2,738,678

 

 

2,909,096

 

 

2,610,524

 

Securities sold under agreement to repurchase other short-term borrowings

 

49,881

 

 

67,731

 

 

49,737

 

 

107,873

 

FHLB advances and other long-term borrowings

 

80,457

 

 

48,287

 

 

71,677

 

 

48,766

 

Total interest bearing liabilities

 

2,414,533

 

 

2,128,507

 

 

2,265,407

 

 

2,063,709

 

Total stockholders' equity

 

400,870

 

 

358,293

 

 

386,563

 

 

347,041

 

 
Performance Ratios
Annualized return on average assets

 

1.78

%

 

1.78

%

 

1.90

%

 

1.76

%

Annualized return on average equity

 

16.48

%

 

16.23

%

 

17.09

%

 

16.00

%

Net interest margin, fully tax equivalent

 

3.70

%

 

3.84

%

 

3.81

%

 

3.83

%

Non-interest income to total revenue, fully tax equivalent

 

28.65

%

 

27.86

%

 

28.41

%

 

28.33

%

Efficiency ratio, fully tax equivalent (3)

 

57.24

%

 

59.12

%

 

56.13

%

 

55.92

%

 
Capital Ratios
Total stockholders' equity to total assets (1)

 

10.91

%

 

11.10

%

Tangible common equity to tangible assets (1)

 

10.55

%

 

11.05

%

Average stockholders' equity to average assets

 

10.81

%

 

10.99

%

 

11.10

%

 

10.98

%

Total risk-based capital

 

12.85

%

 

13.91

%

Common equity tier 1 risk-based capital

 

12.02

%

 

13.00

%

Tier 1 risk-based capital

 

12.02

%

 

13.00

%

Leverage

 

10.60

%

 

11.33

%

 
Loans by Type
Commercial and industrial

$

870,511

 

$

833,524

 

Construction and land development

 

260,182

 

 

255,142

 

Real estate mortgage - commercial investment

 

736,618

 

 

588,610

 

Real estate mortgage - owner occupied commercial

 

473,783

 

 

426,373

 

Real estate mortgage - 1-4 family residential

 

334,358

 

 

276,017

 

Home equity - first lien

 

48,620

 

 

49,500

 

Home equity - junior lien

 

73,477

 

 

70,947

 

Consumer

 

47,467

 

 

48,058

 

Total loans and leases

$

2,845,016

 

$

2,548,171

 

 
Asset Quality Data
Non-accrual loans

$

11,494

 

$

2,611

 

Troubled debt restructurings

 

34

 

 

42

 

Loans past due 90 days or more and still accruing

 

535

 

 

745

 

Total non-performing loans

 

12,063

 

 

3,398

 

Other real estate owned

 

493

 

 

1,018

 

Total non-performing assets

$

12,556

 

$

4,416

 

Non-performing loans to total loans

 

0.42

%

 

0.13

%

Non-performing assets to total assets

 

0.34

%

 

0.13

%

Allowance for loan and lease losses to total loans

 

0.94

%

 

1.00

%

Allowance for loan and lease losses to average loans

 

0.99

%

 

1.01

%

Allowance for loan and lease losses to non-performing loans

 

222

%

 

751

%

Net charge-offs (recoveries)

$

86

 

$

(312

)

$

(257

)

$

2,056

 

Net charge-offs (recoveries) to average loans (4)

 

0.00

%

 

-0.01

%

 

-0.01

%

 

0.08

%

 
Stock Yards Bancorp, Inc. Financial Information (unaudited)
Fourth Quarter 2019 Earnings Release
 

Quarterly Comparison

Income Statement Data

12/31/19

9/30/19

6/30/19

3/31/19

12/31/18

 
Net interest income, fully tax equivalent (2)

$

32,772

 

$

32,131

 

$

30,829

 

$

29,713

 

$

29,972

 

Net interest income

$

32,720

 

$

32,070

 

$

30,774

 

$

29,657

 

$

29,912

 

Provision for loan and lease losses

 

-

 

 

400

 

 

-

 

 

600

 

 

-

 

Net interest income after provision for loan and lease losses

 

32,720

 

 

31,670

 

 

30,774

 

 

29,057

 

 

29,912

 

Non-interest income:
Wealth management and trust services

 

5,804

 

 

5,738

 

 

5,662

 

 

5,439

 

 

5,312

 

Deposit service charges

 

1,486

 

 

1,444

 

 

1,336

 

 

1,247

 

 

1,419

 

Debit and credit card income

 

2,109

 

 

2,102

 

 

2,168

 

 

1,744

 

 

1,813

 

Treasury management fees

 

1,369

 

 

1,264

 

 

1,202

 

 

1,157

 

 

1,260

 

Mortgage banking income

 

978

 

 

834

 

 

796

 

 

482

 

 

534

 

Net investment product sales commissions and fees

 

378

 

 

400

 

 

364

 

 

356

 

 

432

 

Bank owned life insurance

 

182

 

 

487

 

 

184

 

 

178

 

 

565

 

Other

 

855

 

 

1,035

 

 

551

 

 

459

 

 

241

 

Total non-interest income

 

13,161

 

 

13,304

 

 

12,263

 

 

11,062

 

 

11,576

 

Non-interest expenses:
Compensation

 

13,473

 

 

12,330

 

 

12,715

 

 

11,801

 

 

11,824

 

Employee benefits

 

2,580

 

 

2,908

 

 

2,908

 

 

2,642

 

 

2,452

 

Net occupancy and equipment

 

2,384

 

 

2,199

 

 

1,976

 

 

1,858

 

 

2,110

 

Technology and communication

 

1,636

 

 

1,841

 

 

1,848

 

 

1,773

 

 

1,660

 

Debit and credit card processing

 

613

 

 

662

 

 

631

 

 

587

 

 

594

 

Marketing and business development

 

1,367

 

 

732

 

 

903

 

 

625

 

 

908

 

Postage, printing, and supplies

 

434

 

 

402

 

 

410

 

 

406

 

 

397

 

Legal and professional

 

433

 

 

524

 

 

1,523

 

 

534

 

 

1,116

 

Amortization of investments in tax credit partnerships

 

837

 

 

137

 

 

52

 

 

52

 

 

1,179

 

Capital and deposit based taxes

 

1,006

 

 

993

 

 

967

 

 

904

 

 

873

 

Other

 

1,528

 

 

1,229

 

 

1,531

 

 

1,457

 

 

1,452

 

Total non-interest expenses

 

26,291

 

 

23,957

 

 

25,464

 

 

22,639

 

 

24,565

 

Income before income tax expense

 

19,590

 

 

21,017

 

 

17,573

 

 

17,480

 

 

16,923

 

Income tax expense

 

2,941

 

 

3,783

 

 

1,030

 

 

1,839

 

 

2,265

 

Net income

$

16,649

 

$

17,234

 

$

16,543

 

$

15,641

 

$

14,658

 

 
Net income per share - Basic

$

0.74

 

$

0.76

 

$

0.73

 

$

0.69

 

$

0.65

 

Net income per share - Diluted

 

0.73

 

 

0.76

 

 

0.72

 

 

0.68

 

 

0.64

 

Cash dividend declared per share

 

0.27

 

 

0.26

 

 

0.26

 

 

0.25

 

 

0.25

 

 
Weighted average shares - Basic

 

22,493

 

 

22,550

 

 

22,689

 

 

22,661

 

 

22,638

 

Weighted average shares - Diluted

 

22,760

 

 

22,810

 

 

22,949

 

 

22,946

 

 

22,907

 

 

Quarterly Comparison

Balance Sheet Data

12/31/19

9/30/19

6/30/19

3/31/19

12/31/18

 
Cash and due from banks

$

46,863

 

$

68,107

 

$

51,264

 

$

44,014

 

$

51,892

 

Federal funds sold and interest bearing due from banks

 

202,861

 

 

68,107

 

 

64,775

 

 

67,326

 

 

147,047

 

Mortgage loans held for sale

 

8,748

 

 

6,329

 

 

3,922

 

 

2,981

 

 

1,675

 

Securities available for sale

 

470,738

 

 

375,601

 

 

423,579

 

 

507,131

 

 

436,995

 

FHLB stock

 

11,316

 

 

11,316

 

 

11,316

 

 

9,779

 

 

10,370

 

Loans and leases

 

2,845,016

 

 

2,856,664

 

 

2,763,880

 

 

2,525,709

 

 

2,548,171

 

Allowance for loan and lease losses

 

26,791

 

 

26,877

 

 

26,416

 

 

26,464

 

 

25,534

 

Total assets

 

3,724,197

 

 

3,533,926

 

 

3,463,823

 

 

3,281,016

 

 

3,302,924

 

Non-interest bearing deposits

 

810,475

 

 

795,793

 

 

777,652

 

 

698,783

 

 

711,023

 

Interest bearing deposits

 

2,323,463

 

 

2,150,520

 

 

2,105,801

 

 

2,053,757

 

 

2,083,333

 

Securities sold under agreements to repurchase

 

31,985

 

 

33,172

 

 

33,809

 

 

34,633

 

 

36,094

 

Federal funds purchased

 

10,887

 

 

9,957

 

 

12,012

 

 

12,218

 

 

10,247

 

FHLB advances

 

79,953

 

 

81,985

 

 

84,279

 

 

47,853

 

 

48,177

 

Stockholders' equity

 

406,297

 

 

396,111

 

 

389,365

 

 

377,994

 

 

366,500

 

Total shares outstanding

 

22,604

 

 

22,597

 

 

22,721

 

 

22,823

 

 

22,749

 

Book value per share (1)

$

17.97

 

$

17.53

 

$

17.14

 

$

16.56

 

$

16.11

 

Tangible common equity per share (1)

 

17.32

 

 

16.87

 

 

16.46

 

 

16.49

 

 

16.03

 

Market value per share

 

41.06

 

 

36.69

 

 

36.15

 

 

33.81

 

 

32.80

 

 
Capital Ratios
Total stockholders' equity to total assets (1)

 

10.91

%

 

11.21

%

 

11.24

%

 

11.52

%

 

11.10

%

Tangible common equity to tangible assets (1)

 

10.55

%

 

10.83

%

 

10.85

%

 

11.47

%

 

11.05

%

Average stockholders' equity to average assets

 

10.81

%

 

11.22

%

 

11.10

%

 

11.34

%

 

10.99

%

Total risk-based capital

 

12.85

%

 

12.53

%

 

12.67

%

 

14.04

%

 

13.91

%

Common equity tier 1 risk-based capital

 

12.02

%

 

11.69

%

 

11.82

%

 

13.11

%

 

13.00

%

Tier 1 risk-based capital

 

12.02

%

 

11.69

%

 

11.82

%

 

13.11

%

 

13.00

%

Leverage

 

10.60

%

 

10.90

%

 

10.91

%

 

11.57

%

 

11.33

%

 
Stock Yards Bancorp, Inc. Financial Information (unaudited)
Fourth Quarter 2019 Earnings Release
           
  Quarterly Comparison
Average Balance Sheet Data   12/31/19   9/30/19   6/30/19   3/31/19   12/31/18
           
Federal funds sold and interest bearing due from banks  

$

187,865

 

 

$

98,569

 

 

$

137,130

 

 

$

122,189

 

 

$

86,725

 

Mortgage loans held for sale  

 

5,889

 

 

 

3,887

 

 

 

3,794

 

 

 

1,727

 

 

 

2,140

 

Securities available for sale  

 

476,360

 

 

 

396,686

 

 

 

435,391

 

 

 

437,619

 

 

 

468,856

 

Loans and leases  

 

2,828,142

 

 

 

2,800,445

 

 

 

2,668,058

 

 

 

2,538,940

 

 

 

2,539,750

 

Total earning assets  

 

3,509,573

 

 

 

3,310,904

 

 

 

3,244,941

 

 

 

3,100,352

 

 

 

3,096,931

 

Total assets  

 

3,709,250

 

 

 

3,502,267

 

 

 

3,436,175

 

 

 

3,271,257

 

 

 

3,260,322

 

Interest bearing deposits  

 

2,284,195

 

 

 

2,127,769

 

 

 

2,112,768

 

 

 

2,048,830

 

 

 

2,012,489

 

Total deposits  

 

3,108,640

 

 

 

2,912,631

 

 

 

2,867,360

 

 

 

2,743,701

 

 

 

2,738,678

 

Securities sold under agreement to repurchase and other short-term borrowings

 

 

49,881

 

 

 

48,376

 

 

 

51,743

 

 

 

48,956

 

 

 

67,731

 

FHLB advances  

 

80,457

 

 

 

83,386

 

 

 

74,420

 

 

 

47,962

 

 

 

48,287

 

Total interest bearing liabilities  

 

2,414,533

 

 

 

2,259,531

 

 

 

2,238,931

 

 

 

2,145,748

 

 

 

2,128,507

 

Total stockholders' equity  

 

400,870

 

 

 

392,840

 

 

 

381,270

 

 

 

371,070

 

 

 

358,293

 

           
Performance Ratios          
Annualized return on average assets  

 

1.78

%

 

 

1.95

%

 

 

1.93

%

 

 

1.94

%

 

 

1.78

%

Annualized return on average equity  

 

16.48

%

 

 

17.41

%

 

 

17.40

%

 

 

17.09

%

 

 

16.23

%

Net interest margin, fully tax equivalent  

 

3.70

%

 

 

3.86

%

 

 

3.81

%

 

 

3.89

%

 

 

3.84

%

Non-interest income to total revenue, fully tax equivalent  

 

28.65

%

 

 

29.28

%

 

 

28.46

%

 

 

27.13

%

 

 

27.86

%

Efficiency ratio, fully tax equivalent (3)  

 

57.24

%

 

 

52.73

%

 

 

59.09

%

 

 

55.52

%

 

 

59.12

%

           
Loans by Type          
Commercial and industrial  

$

870,511

 

 

$

876,127

 

 

$

860,085

 

 

$

827,747

 

 

$

833,524

 

Construction and land development  

 

260,182

 

 

 

283,465

 

 

 

257,801

 

 

 

244,548

 

 

 

255,142

 

Real estate mortgage - commercial investment  

 

736,618

 

 

 

727,531

 

 

 

696,421

 

 

 

586,648

 

 

 

588,610

 

Real estate mortgage - owner occupied commercial  

 

473,783

 

 

 

470,678

 

 

 

452,719

 

 

 

428,163

 

 

 

426,373

 

Real estate mortgage - 1-4 family residential  

 

334,358

 

 

 

331,747

 

 

 

338,957

 

 

 

277,847

 

 

 

276,017

 

Home equity - first lien  

 

48,620

 

 

 

51,015

 

 

 

46,012

 

 

 

48,656

 

 

 

49,500

 

Home equity - junior lien  

 

73,477

 

 

 

72,533

 

 

 

67,948

 

 

 

66,837

 

 

 

70,947

 

Consumer  

 

47,467

 

 

 

43,568

 

 

 

43,937

 

 

 

45,263

 

 

 

48,058

 

Total loans and leases  

$

2,845,016

 

 

$

2,856,664

 

 

$

2,763,880

 

 

$

2,525,709

 

 

$

2,548,171

 

           
Asset Quality Data          
Non-accrual loans  

$

11,494

 

 

$

2,722

 

 

$

3,030

 

 

$

3,273

 

 

$

2,611

 

Troubled debt restructurings  

 

34

 

 

 

35

 

 

 

37

 

 

 

39

 

 

 

42

 

Loans past due 90 days or more and still accruing  

 

535

 

 

 

487

 

 

 

861

 

 

 

454

 

 

 

745

 

Total non-performing loans  

 

12,063

 

 

 

3,244

 

 

 

3,928

 

 

 

3,766

 

 

 

3,398

 

Other real estate owned  

 

493

 

 

 

563

 

 

 

563

 

 

 

878

 

 

 

1,018

 

Total non-performing assets  

$

12,556

 

 

$

3,807

 

 

$

4,491

 

 

$

4,644

 

 

$

4,416

 

Non-performing loans to total loans  

 

0.42

%

 

 

0.11

%

 

 

0.14

%

 

 

0.15

%

 

 

0.13

%

Non-performing assets to total assets  

 

0.34

%

 

 

0.11

%

 

 

0.13

%

 

 

0.14

%

 

 

0.13

%

Allowance for loan and lease losses to total loans  

 

0.94

%

 

 

0.94

%

 

 

0.96

%

 

 

1.05

%

 

 

1.00

%

Allowance for loan and lease losses to average loans  

 

0.95

%

 

 

0.96

%

 

 

0.99

%

 

 

1.04

%

 

 

1.01

%

Allowance for loan and lease losses to non-performing loans  

 

222

%

 

 

829

%

 

 

673

%

 

 

703

%

 

 

751

%

Net charge-offs (recoveries)  

$

86

 

 

$

(61

)

 

$

48

 

 

$

(330

)

 

$

(312

)

Net charge-offs (recoveries) to average loans (4)  

 

0.00

%

 

 

0.00

%

 

 

0.00

%

 

 

-0.01

%

 

 

-0.01

%

           
Other Information          
Total assets under management (in millions)  

$

3,320

 

 

$

3,116

 

 

$

3,068

 

 

$

2,970

 

 

$

2,765

 

Full-time equivalent employees  

 

615

 

 

 

622

 

 

 

615

 

 

 

596

 

 

 

591

 

           
(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) 12/31/19 9/30/19 6/30/19 3/31/19 12/31/18
 
Total stockholders' equity - GAAP (a)

$

406,297

 

$

396,111

 

$

389,365

 

$

377,994

 

$

366,500

 

Less: Goodwill

 

(12,513

)

 

(12,593

)

 

(12,826

)

 

(682

)

 

(682

)

Less: Core deposit intangible

 

(2,285

)

 

(2,373

)

 

(2,461

)

 

(1,015

)

 

(1,057

)

Tangible common equity - Non-GAAP (c)

$

391,499

 

$

381,145

 

$

374,078

 

$

376,297

 

$

364,761

 

 
Total assets - GAAP (b)

$

3,724,197

 

$

3,533,926

 

$

3,463,823

 

$

3,281,016

 

$

3,302,924

 

Less: Goodwill

 

(12,513

)

 

(12,593

)

 

(12,826

)

 

(682

)

 

(682

)

Less: Core deposit intangible

 

(2,285

)

 

(2,373

)

 

(2,461

)

 

(1,015

)

 

(1,057

)

Tangible assets - Non-GAAP (d)

$

3,709,399

 

$

3,518,960

 

$

3,448,536

 

$

3,279,319

 

$

3,301,185

 

 
Total stockholders' equity to total assets - GAAP (a/b)

 

10.91

%

 

11.21

%

 

11.24

%

 

11.52

%

 

11.10

%

Tangible common equity to tangible assets - Non-GAAP (c/d)

 

10.55

%

 

10.83

%

 

10.85

%

 

11.47

%

 

11.05

%

 
Total shares outstanding (e)

 

22,604

 

 

22,597

 

 

22,721

 

 

22,823

 

 

22,749

 

 
Book value per share - GAAP (a/e)

$

17.97

 

$

17.53

 

$

17.14

 

$

16.56

 

$

16.11

 

Tangible common equity per share - Non-GAAP (c/e)

 

17.32

 

 

16.87

 

 

16.46

 

 

16.49

 

 

16.03

 

 
(2) - Interest income on a fully tax equivalent basis includes the additional amount of interest income that would have been earned if investments in certain tax-exempt interest earning assets had been made in assets subject to federal, state and local taxes yielding the same after-tax income.
 
(3) - The efficiency ratio, a non-GAAP measure, equals total non-interest expenses divided by the sum of fully tax equivalent net interest income and non-interest income. The ratio excludes net gains (losses) on sales, calls, and impairment of investment securities, if applicable. In addition to the efficiency ratio normally presented, Bancorp considers an adjusted efficiency ratio. Bancorp believes this ratio is important because of it provides a comparable ratio after eliminating the fluctuation in non-interest expenses related to amortization of investments in tax credit partnerships. The following table reconciles the efficiency ratio calculation to the adjusted efficiency ratio calculation.
 
Quarterly Comparison
(Dollars in thousands) 12/31/19 9/30/19 6/30/19 3/31/19 12/31/18
 
Total non-interest expenses (a)

$

26,291

 

$

23,957

 

$

25,464

 

$

22,639

 

$

24,565

 

Less: Amortization of investments in tax credit partnerships

 

(837

)

 

(137

)

 

(52

)

 

(52

)

 

(1,179

)

Total adjusted non-interest expenses (c)

$

25,454

 

$

23,820

 

$

25,412

 

$

22,587

 

$

23,386

 

 
Total net interest income, fully tax equivalent

$

32,772

 

$

32,131

 

$

30,829

 

$

29,713

 

$

29,972

 

Total non-interest income

 

13,161

 

 

13,304

 

 

12,263

 

 

11,062

 

 

11,576

 

Less: Gain/loss on sale of securities

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

Total revenue (b)

$

45,933

 

$

45,435

 

$

43,092

 

$

40,775

 

$

41,548

 

 
Efficiency ratio (a) / (b)

 

57.24

%

 

52.73

%

 

59.09

%

 

55.52

%

 

59.12

%

Adjusted Efficiency ratio (c) / (b)

 

55.42

%

 

52.43

%

 

58.97

%

 

55.39

%

 

56.29

%

 
(4) - Quarterly net charge-offs (recoveries) to average loans ratios are not annualized.

 

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