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Stock Yards Bancorp, Inc.
Stock Yards Bancorp Reports Record Third Quarter Earnings of $17.2 Million or $0.76 Per Diluted Share
Published Oct 23 2019
5 min read

Stock Yards Bancorp Reports Record Third Quarter Earnings of $17.2 Million or $0.76 Per Diluted Share

SYBT Also Reports Third Quarter Record Loan Production; Record Return on Average Assets and Return on Average Equity

LOUISVILLE, Ky.--(BUSINESS WIRE)-- 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 results for both the third quarter and nine months ended September 30, 2019. Total revenue, comprised of net interest income and non-interest income, increased 14% to $45.4 million for the third quarter of 2019 from $39.9 million for the third quarter of 2018. Notwithstanding several non-recurring income items recognized in the quarter, the company still posted record results. Net income for the third quarter of 2019 rose 24% to $17.2 million or $0.76 per diluted share from $13.9 million or $0.60 per diluted share for the third quarter of 2018.

   

 

 

 

 

 

(dollar amounts in thousands, except per share data)

3Q19

2Q19

3Q18

Net interest income

$

32,070

 

$

30,774

 

$

28,521

 

Provision for loan and lease losses

 

400

 

–

 

 

735

 

Non-interest income

 

13,304

 

 

12,263

 

 

11,426

 

Non-interest expenses

 

23,957

 

 

25,464

 

 

21,781

 

Income before income tax expense

 

21,017

 

 

17,573

 

 

17,431

 

Income tax expense

 

3,783

 

 

1,030

 

 

3,555

 

Net income

$

17,234

 

$

16,543

 

$

13,876

 

Net income per share, diluted

$

0.76

 

$

0.72

 

$

0.60

 

Net interest margin

 

3.86

%

 

3.81

%

 

3.79

%

Efficiency ratio

 

52.73

%

 

59.09

%

 

54.43

%

Tangible common equity to tangible assets (1)

 

10.83

%

 

10.85

%

 

10.57

%

Annualized return on average equity

 

17.41

%

 

17.40

%

 

15.67

%

Annualized return on average assets

 

1.95

%

 

1.93

%

 

1.75

%

 

 

 

 

 

   

Key factors affecting the Company’s results for the third quarter of 2019 included:

  • Average loans increased $260 million year over year, contributing to the 12% increase in net interest income on a comparable quarter basis.
  • Legacy (excluding the King Southern Bank (“KSB”) acquisition) average loans increased $104 million or 4% year over year.
  • Strong net loan growth of $93 million for the third quarter of 2019, building upon a strong second quarter of 2019.
  • Continued robust loan production set a year to date record, with loan payoffs/pay-downs trending lower in the second half of 2019.
  • Net interest margin increased seven basis points to 3.86% from the same period last year and increased five basis points on a sequential quarterly basis. As the Federal Reserve Bank (FRB) lowered rates twice during the third quarter, the Company followed suit by lowering stated rates on most types of interest-bearing deposit and certificates of deposit account types, offsetting the decline in loan rates. Loan yields were also boosted during the quarter by a higher than normal level of fee income. Continued lowering of short term rates by the FRB and yield-curve inversion will place pressure on net interest margin. It is likely that future rate drops will not be fully offset through further deposit rate declines.
  • Continued strong growth in non-interest income, led by a 7% increase in wealth management and trust (WM&T) services income, as well as a 19% increase in debit and credit card income.
  • Card income and treasury management fees, bolstered by increased volume and usage, continued to stand out as diversifying non-interest revenue streams, representing a combined 25% of total non-interest income.
  • Sustained strong credit quality metrics continued to result in low provisioning, with the Company recording a $400 thousand provision for loan and lease losses in the third quarter.
  • The Company’s Mt. Washington branch opened during the quarter and has exceeded expectations. It represents a natural extension of the Company’s existing Bullitt County franchise and complements the recent expansion into Nelson County via the KSB acquisition.
  • Non-recurring items boosted Bank Owned Life Insurance (BOLI) income and other non-interest income during the quarter.

“Stock Yards Bancorp closed out a great third quarter, setting records in net income, loan production and returns on average assets and equity,” said Chief Executive Officer James A. (Ja) Hillebrand. “Exceptional loan production and strong net loan growth drove a $3.5 million or 12% net interest income increase compared with the third quarter of 2018. Loan growth has continued to accelerate through 2019, as we have focused heavily on growing and expanding customer relationships in addition to integrating our new KSB customer base. Our loan portfolio increased $93 million this quarter due to the hard work of our entire lending team. Prudent deposit rate management also contributed to a steady net interest margin. Our credit quality metrics remain at sound levels and are some of the highest relative to our peers. Our core deposit growth is strong, further highlighting our optimism for the future. We ended the third quarter with a solid loan pipeline, positioning the Company for continued strength in loan production heading into the final quarter of the year.

“Non-interest income increased 16% and continues to demonstrate stable and diversified revenue streams. The WM&T group, with assets under management rising to over $3 billion, continued to be a leading source of fee income, with revenues increasing 7% versus the year-earlier period and contributing 43% of total non-interest income in the third quarter of 2019. Debit/credit card income and treasury management fees combined grew 16% to account for 25% of third quarter 2019 total non-interest income. We are also pleased to note the on-going contribution of mortgage banking income, which grew a healthy 17%. These diverse revenue sources remain key to the long-term stability in our growth and demonstrate our sound business model.

“While the competitive landscape is intense, we remain optimistic based on our loan pipeline and core deposit base growth and we continue to deliver market share gains. We are excited about the opportunities in the markets we serve to continue the Company’s legacy of growth and performance. As evidenced by the second quarter authorization of a share repurchase plan, our Board of Directors shares our enthusiasm about the Company’s future. I am pleased to announce that through the end of the third quarter, we have repurchased approximately 259 thousand shares of 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.”

In closing, Hillebrand said, “The outstanding results for the third quarter reflect solid execution of our strategic plan by our dedicated team of professionals. I am pleased to note that we were named to the 2019 Bank and Thrift SM-ALL STARS by Sandler O’Neill & Partners during the quarter, one of only 30 institutions to receive this honor based on our continued growth, profitability, credit quality and capital strength. We are honored to be recognized and are confident in our ability to continue to deliver value to our shareholders.”

Third Quarter 2019 Compared with Third Quarter 2018

Net interest income – the Company’s largest source of revenue – increased approximately $3.5 million or 12% to $32.1 million. Legacy net interest income increased $2.1 million or 7%.

  • Net interest margin increased seven basis points to 3.86% from 3.79%, primarily due to a decline in deposit rates, which more than offset the decline in loan rates during the quarter, as the FRB cut rates twice. Rates on loans and thus earning assets were boosted by a higher than normal level of loan fees during the quarter.
  • Total interest income rose $5.0 million or 15% to $38.0 million driven by an increase in interest income on loans consistent with growth in the portfolio. Excluding the KSB contribution, interest income on loans exceeded the prior year by $2.6 million or 9%.
  • Interest expense increased $1.4 million or 31% over the prior year quarter due to a higher volume of interest bearing deposits, with approximately $394 thousand of the increase related to the KSB deposit portfolio, which was concentrated in time deposits.

Non-interest income increased $1.9 million or 16% to $13.3 million.

  • WM&T income increased $358 thousand or 7% due to increased new business generation, continued strong market performance and growth in corporate retirement plans. WM&T continues to represent a steady source of growth in non-interest income for the Company.
  • Debit and credit card income and treasury management fees both showed continued double digit growth, accounting for approximately 25% of total non-interest income during the quarter.
  • Mortgage banking revenue increased 17% over the prior year period primarily as a result of the decline in long-term rates during the third quarter.
  • BOLI income increased $301 thousand during the quarter, reflecting the receipt of life insurance proceeds during the quarter.
  • Other non-interest income increased $723 thousand in large part due to interest rate swap fees on loans recognized during the quarter totaling $374 thousand. Other income was also impacted by a gain of $212 thousand on the sale of Visa Class B stock and life insurance proceeds recognized outside our normal BOLI program of $142 thousand.

Non-interest expenses increased $2.2 million or 10% to $24.0 million.

  • Excluding ongoing KSB expenses, non-interest expenses would have increased $1.6 million or 7%.
  • Compensation expense for the third quarter of 2019 increased $723 thousand or 6% compared with the prior-year quarter related to an overall increase in headcount, led by the Company’s efforts to add loan production talent to support strategic growth initiatives in addition to the KSB acquisition.
  • Employee benefits rose $407 thousand or 16% due to elevated medical claims, increased 401(k) matching expense and increased FICA expense consistent with compensation growth.
  • Net occupancy and equipment expenses increased $285 thousand or 15% due to the addition of the Mt. Washington and KSB branches.
  • Technology and communication expenses increased $246 thousand or 15%, as the Company added new hardware and software to support capacity and capabilities for customers.
  • The Company recorded no FDIC insurance expense during the quarter as the target national FDIC Reserve Ratio was reached during the period and credits were issued to qualifying institutions.

September 30, 2019 Compared with September 30, 2018

Total loans increased $322 million or 13% to $2.9 billion.

  • Approximately $152 million of the growth in loans was a direct result of the KSB acquisition.
  • Excluding the KSB acquisition, the loan portfolio grew by a net $170 million or 7%, bolstered by record loan production over the previous 12 months.

Total deposits increased $348 million or 13% to $2.9 billion.

  • Approximately $99 million in deposit growth during this period was due to the KSB acquisition.
  • Growth in deposits was led by a solid increase in non-interest bearing deposits, interest bearing demand deposits and time deposits.
  • Core deposits, which exclude brokered deposits and time deposits greater than $250 thousand, represented 97% of total deposits.

Asset quality, which has remained exceptional and 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 $3.2 million or 0.11% of total loans outstanding versus $5.0 million or 0.20% of total loans outstanding a year ago.
  • Non-performing assets (NPAs), which include NPLs along with other real estate owned and repossessed assets, totaled $3.8 million or 0.11% of total assets versus $6.6 million or 0.20% of total assets.
  • The allowance for loan and lease losses relative to total end-of-period loans was 0.94%, down slightly from 2018 levels.

The Company remained “well capitalized” – the highest capital rating for financial institutions.

  • Total equity to assets was 11.21% and the tangible common equity ratio was 10.83%,(1) compared to 10.62% and 10.57%, respectively, with the fluctuation primarily associated with record earnings slightly offset by the KSB acquisition.
  • Even with its strong capital position, the Company continues to consistently achieve industry-leading returns on equity due to its superior earnings performance.
  • Stock Yards Bancorp continues to pursue and consider strategies to enhance stockholder value, including a substantial and sustained dividend payout ratio. In August 2019, the Company's board of directors continued the higher dividend rate of $0.26 per common share initially set in May 2019. With the May increase, Stock Yards Bancorp has raised its quarterly dividend rate 11 times since 2013, including two increases during 2018 and each of the previous four years.

Third Quarter 2019 Compared to Second Quarter 2019

Net interest income increased $1.3 million or 4%, as loan growth during the quarter, combined with a slight increase in margin, led to a record for the quarter.

Non-interest income increased 8%.

  • WM&T, deposit service charges, treasury management fees and mortgage banking all showed increases for the linked quarter comparison.
  • BOLI and other income increased due to the receipt of life insurance proceeds during the quarter.
  • Swap fees totaling $108 thousand and $374 thousand were recognized during the second and third quarters, respectively.
  • 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 improved 6%.

  • As a result of the closing of the KSB acquisition on May 1, 2019, second quarter non-interest expenses included $1.3 million in pre-tax acquisition-related expenses, professional fees and compensation-related expenses.
  • The company recorded no FDIC insurance expense during the third quarter of 2019.

The Company’s effective tax rate increased to 18.0% for the third quarter of 2019 from 5.9% for the second quarter of 2019.

  • During the second quarter of 2019, Kentucky tax law changed to allow a bank holding company’s net operating losses to offset against net revenues generated by banks, beginning in 2021. In connection with this change, the Company recognized a non-recurring state deferred tax asset and corresponding state income tax benefit, the effect of which added $0.11 to net income per diluted share for the second quarter of 2019.

September 30, 2019 Compared to June 30, 2019

Total loans increased $93 million or 3%.

  • The Company experienced continued strong production during the third quarter with loan pipelines remaining solid headed into the fourth quarter of 2019.

Total deposits increased $63 million or 2%.

  • Money market, interest bearing demand 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 0.94%, a decrease of two basis points.

About the Company

Louisville, Kentucky-based Stock Yards Bancorp, Inc., with $3.5 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)  
Third Quarter 2019 Earnings Release
(In thousands unless otherwise noted)

Three Months Ended

 

Nine Months Ended

September 30,

 

September 30,

Income Statement Data

2019

 

2018

 

2019

 

2018

 
Net interest income, fully tax equivalent (2)

 $

            32,131

 $

            28,590

 $

               92,673

 $

               84,751

Interest income:
Loans and leases

 $

            35,022

 $

            30,359

 $

               99,985

 $

               86,877

Federal funds sold and interest bearing due from banks

 

                    566

 

                    373

 

                    2,129

 

                       804

Mortgage loans held for sale

 

                      41

 

                      42

 

                       121

 

                       121

Securities

 

                 2,344

 

                 2,247

 

                    7,735

 

                    6,967

Total interest income

 

               37,973

 

               33,021

 

                109,970

 

                  94,769

Interest expense:
Deposits

 

                 5,316

 

                 3,972

 

                  16,034

 

                    8,723

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

 

78

 

 

300

 

 

255

 

 

850

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

 

                    509

 

                    228

 

                    1,180

 

                       692

Total interest expense

 

                 5,903

 

                 4,500

 

                  17,469

 

                  10,265

Net interest income

 

               32,070

 

               28,521

 

                  92,501

 

                  84,504

Provision for loan and lease losses

 

                    400

 

                    735

 

                    1,000

 

                    2,705

Net interest income after provision for loan and lease losses

 

               31,670

 

               27,786

 

                  91,501

 

                  81,799

Non-interest income:
Wealth management and trust services

 

                 5,738

 

                 5,380

 

                  16,839

 

                  16,224

Deposit service charges

 

                 1,444

 

                 1,482

 

                    4,027

 

                    4,340

Debit and credit card income

 

                 2,102

 

                 1,759

 

                    6,014

 

                    4,956

Treasury management fees

 

                 1,264

 

                 1,151

 

                    3,623

 

                    3,311

Mortgage banking income

 

                    834

 

                    712

 

                    2,112

 

                    2,034

Net investment product sales commissions and fees

 

                    400

 

                    444

 

                    1,120

 

                    1,245

Bank owned life insurance

 

                    487

 

                    186

 

                       849

 

                       564

Other 

 

                 1,035

 

                    312

 

                    2,045

 

                    1,096

Total non-interest income

 

               13,304

 

               11,426

 

                  36,629

 

                  33,770

Non-interest expenses:
Compensation

 

               12,330

 

               11,607

 

                  36,846

 

                  34,280

Employee benefits

 

                 2,908

 

                 2,501

 

                    8,458

 

                    7,646

Net occupancy and equipment

 

                 2,199

 

                 1,914

 

                    6,033

 

                    5,543

Technology and communication

 

                 1,841

 

                 1,595

 

                    5,462

 

                    4,910

Debit and credit card processing

 

                    662

 

                    588

 

                    1,880

 

                    1,733

Marketing and business development

 

                    732

 

                    740

 

                    2,260

 

                    2,191

Postage, printing, and supplies

 

                    402

 

                    370

 

                    1,218

 

                    1,161

Legal and professional

 

                    524

 

                    501

 

                    2,581

 

                    1,498

FDIC insurance

 

                         -

 

                    238

 

                       486

 

                       718

Amortization/impairment of investments in tax credit partnerships    

 

                    137

 

                         -

 

                       241

 

                         58

Capital and deposit based taxes

 

                    993

 

                    738

 

                    2,864

 

                    2,452

Other

 

                 1,229

 

                    989

 

                    3,731

 

                    2,754

Total non-interest expenses

 

               23,957

 

               21,781

 

                  72,060

 

                  64,944

Income before income tax expense

 

               21,017

 

               17,431

 

                  56,070

 

                  50,625

Income tax expense

 

                 3,783

 

                 3,555

 

                    6,652

 

                    9,766

Net income

 $

            17,234

 $

            13,876

 $

               49,418

 $

               40,859

 
Net income per share - Basic

 $

                0.76

 $

                0.61

 $

                   2.18

 $

                   1.81

Net income per share - Diluted

 

                   0.76

 

                   0.60

 

                      2.16

 

                      1.78

Cash dividend declared per share

 

                   0.26

 

                   0.25

 

                      0.77

 

                      0.71

 
Weighted average shares - Basic 

 

               22,550

 

               22,636

 

                  22,633

 

                  22,613

Weighted average shares - Diluted

 

               22,810

 

               22,968

 

                  22,901

 

                  22,956

 

September 30,

Balance Sheet Data 

2019

 

2018

 
Loans and leases

 $

          2,856,664

 $

          2,534,483

Allowance for loan and lease losses

 

                  26,877

 

                  25,222

Total assets

 

             3,533,926

 

             3,324,797

Non-interest bearing deposits

 

                795,793

 

                705,386

Interest bearing deposits

 

             2,150,520

 

             1,892,652

FHLB advances

 

                  81,985

 

                  48,500

Stockholders' equity

 

                396,111

 

                352,980

Total shares outstanding

 

                  22,597

 

                  22,746

Book value per share (1)

 $

                 17.53

 $

                 15.52

Tangible common equity per share (1)

 

                    16.87

 

                    15.44

Market value per share

 

                    36.69

 

                    36.30

 

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

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

September 30,

 

September 30,

Average Balance Sheet Data

2019

 

2018

 

2019

 

2018

 
Federal funds sold and interest bearing due from banks

 $

            98,569

 

 $

            73,196

 

 $

             119,210

 

 $

               60,463

 

Mortgage loans held for sale

 

                 3,887

 

 

                 2,980

 

 

                    3,144

 

 

                    2,687

 

Securities available for sale

 

             396,686

 

 

             372,251

 

 

                423,082

 

 

                396,943

 

FHLB stock 

 

               11,317

 

 

               10,370

 

 

                  10,704

 

 

                    9,004

 

Loans and leases

 

          2,800,445

 

 

          2,547,474

 

 

             2,670,121

 

 

             2,513,259

 

Total earning assets

 

          3,310,904

 

 

          3,006,271

 

 

             3,226,261

 

 

             2,982,356

 

Total assets

 

          3,502,267

 

 

          3,153,406

 

 

             3,404,080

 

 

             3,125,825

 

Interest bearing deposits

 

          2,127,769

 

 

          1,874,853

 

 

             2,096,745

 

 

             1,871,546

 

Total deposits

 

          2,912,631

 

 

          2,590,156

 

 

             2,841,850

 

 

             2,567,337

 

Securities sold under agreement to repurchase other short-term borrowings

 

48,376

 

 

 

116,287

 

 

 

49,690

 

 

 

121,400

 

FHLB advances and other long-term borrowings

 

               83,386

 

 

               48,612

 

 

                  68,718

 

 

                  48,927

 

Total interest bearing liabilities

 

          2,259,531

 

 

          2,039,752

 

 

             2,215,153

 

 

             2,041,873

 

Total stockholders' equity

 

             392,840

 

 

             351,376

 

 

                381,743

 

 

                343,248

 

 
Performance Ratios
Annualized return on average assets

 

1.95

%

 

1.75

%

 

1.94

%

 

1.75

%

Annualized return on average equity

 

17.41

%

 

15.67

%

 

17.31

%

 

15.92

%

Net interest margin, fully tax equivalent

 

3.86

%

 

3.79

%

 

3.85

%

 

3.82

%

Non-interest income to total revenue, fully tax equivalent

 

29.28

%

 

 

28.55

%

 

 

28.33

%

 

 

28.49

%

Efficiency ratio, fully tax equivalent (3)

 

52.73

%

 

54.43

%

 

55.73

%

 

54.80

%

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

 

11.21

%

 

10.62

%

Tangible common equity to tangible assets (1)

 

10.83

%

 

10.57

%

Average stockholders' equity to average assets

 

11.21

%

 

10.98

%

Total risk-based capital

 

12.53

%

 

13.50

%

Common equity tier 1 risk-based capital

 

11.69

%

 

12.61

%

Tier 1 risk-based capital

 

11.69

%

 

12.61

%

Leverage

 

10.90

%

 

11.40

%

 
Loans by Type
Commercial and industrial

 $

             876,127

 

 $

             816,252

 

Construction and land development

 

                283,465

 

 

                233,107

 

Real estate mortgage - commercial investment

 

                727,531

 

 

                630,000

 

Real estate mortgage - owner occupied commercial

 

                470,678

 

 

                420,098

 

Real estate mortgage - 1-4 family residential

 

                331,747

 

 

                274,409

 

Home equity - first lien

 

                  51,015

 

 

                  46,062

 

Home equity - junior lien

 

                  72,533

 

 

                  67,105

 

Consumer

 

                  43,568

 

 

                  47,450

 

Total loans and leases

 $

          2,856,664

 

 $

          2,534,483

 

 
Asset Quality Data
Non-accrual loans

 $

                 2,722

 

 $

                 3,982

 

Troubled debt restructurings

 

                         35

 

 

                       792

 

Loans past due 90 days or more and still accruing

 

                       487

 

 

                       212

 

Total non-performing loans

 

                    3,244

 

 

                    4,986

 

Other real estate owned

 

                       563

 

 

                    1,604

 

Total non-performing assets

 $

                 3,807

 

 $

                 6,590

 

Non-performing loans to total loans

 

0.11

%

 

0.20

%

Non-performing assets to total assets

 

0.11

%

 

0.20

%

Allowance for loan and lease losses to total loans

 

0.94

%

 

1.00

%

Allowance for loan and lease losses to average loans

 

1.01

%

 

1.00

%

Allowance for loan and lease losses to non-performing loans

 

829

%

 

506

%

Net charge-offs (recoveries)

 $

                  (61

)

 $

                 386

 

 $

                  (343

)

 $

                 2,368

 

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

 

0.00

%

 

0.02

%

 

-0.01

%

 

0.09

%

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

Quarterly Comparison

Income Statement Data

9/30/19

 

6/30/19

 

3/31/19

 

12/31/18

 

9/30/18

 
Net interest income, fully tax equivalent  (2)

 $

            32,131

 

 $

            30,829

 

 $

            29,713

 

 $

               29,972

 

 $

               28,590

 

Net interest income

 $

            32,070

 

 $

            30,774

 

 $

            29,657

 

 $

               29,912

 

 $

               28,521

 

Provision for loan and lease losses

 

                    400

 

 

                         -

 

 

                    600

 

 

                            -

 

 

                       735

 

Net interest income after provision for loan and lease losses

 

               31,670

 

 

               30,774

 

 

               29,057

 

 

                  29,912

 

 

                  27,786

 

Non-interest income:
Wealth management and trust services

 

                 5,738

 

 

                 5,662

 

 

                 5,439

 

 

                    5,312

 

 

                    5,380

 

Deposit service charges

 

                 1,444

 

 

                 1,336

 

 

                 1,247

 

 

                    1,419

 

 

                    1,482

 

Debit and credit card income

 

                 2,102

 

 

                 2,168

 

 

                 1,744

 

 

                    1,813

 

 

                    1,759

 

Treasury management fees

 

                 1,264

 

 

                 1,202

 

 

                 1,157

 

 

                    1,260

 

 

                    1,151

 

Mortgage banking income

 

                    834

 

 

                    796

 

 

                    482

 

 

                       534

 

 

                       712

 

Net investment product sales commissions and fees

 

                    400

 

 

                    364

 

 

                    356

 

 

                       432

 

 

                       444

 

Bank owned life insurance

 

                    487

 

 

                    184

 

 

                    178

 

 

                       565

 

 

                       186

 

Other

 

                 1,035

 

 

                    551

 

 

                    459

 

 

                       241

 

 

                       312

 

Total non-interest income

 

               13,304

 

 

               12,263

 

 

               11,062

 

 

                  11,576

 

 

                  11,426

 

Non-interest expenses:
Compensation

 

               12,330

 

 

               12,715

 

 

               11,801

 

 

                  11,824

 

 

                  11,607

 

Employee benefits

 

                 2,908

 

 

                 2,908

 

 

                 2,642

 

 

                    2,452

 

 

                    2,501

 

Net occupancy and equipment

 

                 2,199

 

 

                 1,976

 

 

                 1,858

 

 

                    2,110

 

 

                    1,914

 

Technology and communication

 

                 1,841

 

 

                 1,848

 

 

                 1,773

 

 

                    1,660

 

 

                    1,595

 

Debit and credit card processing

 

                    662

 

 

                    631

 

 

                    587

 

 

                       594

 

 

                       588

 

Marketing and business development

 

                    732

 

 

                    903

 

 

                    625

 

 

                       908

 

 

                       740

 

Postage, printing, and supplies

 

                    402

 

 

                    410

 

 

                    406

 

 

                       397

 

 

                       370

 

Legal and professional

 

                    524

 

 

                 1,523

 

 

                    534

 

 

                    1,116

 

 

                       501

 

FDIC insurance

 

                         -

 

 

                    248

 

 

                    238

 

 

                       243

 

 

                       238

 

Amortization/impairment of investments in tax credit partnerships

 

137

 

 

 

52

 

 

 

52

 

 

 

1,179

 

 

 

-

 

Capital and deposit based taxes

 

                    993

 

 

                    967

 

 

                    904

 

 

                       873

 

 

                       738

 

Other

 

                 1,229

 

 

                 1,283

 

 

                 1,219

 

 

                    1,209

 

 

                       989

 

Total non-interest expenses

 

               23,957

 

 

               25,464

 

 

               22,639

 

 

                  24,565

 

 

                  21,781

 

Income before income tax expense

 

               21,017

 

 

               17,573

 

 

               17,480

 

 

                  16,923

 

 

                  17,431

 

Income tax expense

 

                 3,783

 

 

                 1,030

 

 

                 1,839

 

 

                    2,265

 

 

                    3,555

 

Net income

 $

            17,234

 

 $

            16,543

 

 $

            15,641

 

 $

               14,658

 

 $

               13,876

 

 
Net income per share - Basic

 $

                0.76

 

 $

                0.73

 

 $

                0.69

 

 $

                   0.65

 

 $

                   0.61

 

Net income per share - Diluted

 

                   0.76

 

 

                   0.72

 

 

                   0.68

 

 

                      0.64

 

 

                      0.60

 

Cash dividend declared per share

 

                   0.26

 

 

                   0.26

 

 

                   0.25

 

 

                      0.25

 

 

                      0.25

 

 
Weighted average shares - Basic

 

               22,550

 

 

               22,689

 

 

               22,661

 

 

                  22,638

 

 

                  22,636

 

Weighted average shares - Diluted

 

               22,810

 

 

               22,949

 

 

               22,946

 

 

                  22,907

 

 

                  22,968

 

 

Quarterly Comparison

Balance Sheet Data

9/30/19

 

6/30/19

 

3/31/19

 

12/31/18

 

9/30/18

 
Cash and due from banks

 $

            68,107

 

 $

            51,264

 

 $

            44,014

 

 $

               51,892

 

 $

               66,029

 

Federal funds sold and interest bearing due from banks

 

               68,107

 

 

               64,775

 

 

               67,326

 

 

                147,047

 

 

                  54,451

 

Mortgage loans held for sale

 

                 6,329

 

 

                 3,922

 

 

                 2,981

 

 

                    1,675

 

 

                    2,533

 

Securities available for sale

 

             375,601

 

 

             423,579

 

 

             507,131

 

 

                436,995

 

 

                550,091

 

FHLB stock

 

               11,316

 

 

               11,316

 

 

                 9,779

 

 

                  10,370

 

 

                  10,370

 

Loans and leases

 

          2,856,664

 

 

          2,763,880

 

 

          2,525,709

 

 

             2,548,171

 

 

             2,534,483

 

Allowance for loan and lease losses

 

               26,877

 

 

               26,416

 

 

               26,464

 

 

                  25,534

 

 

                  25,222

 

Total assets

 

          3,533,926

 

 

          3,463,823

 

 

          3,281,016

 

 

             3,302,924

 

 

             3,324,797

 

Non-interest bearing deposits

 

             795,793

 

 

             777,652

 

 

             698,783

 

 

                711,023

 

 

                705,386

 

Interest bearing deposits

 

          2,150,520

 

 

          2,105,801

 

 

          2,053,757

 

 

             2,083,333

 

 

             1,892,652

 

Securities sold under agreements to repurchase 

 

               33,172

 

 

               33,809

 

 

               34,633

 

 

                  36,094

 

 

                  53,883

 

Federal funds purchased 

 

                 9,957

 

 

               12,012

 

 

               12,218

 

 

                  10,247

 

 

                231,344

 

FHLB advances

 

               81,985

 

 

               84,279

 

 

               47,853

 

 

                  48,177

 

 

                  48,500

 

Stockholders' equity

 

             396,111

 

 

             389,365

 

 

             377,994

 

 

                366,500

 

 

                352,980

 

Total shares outstanding

 

               22,597

 

 

               22,721

 

 

               22,823

 

 

                  22,749

 

 

                  22,746

 

Book value per share (1)

 $

              17.53

 

 $

              17.14

 

 $

              16.56

 

 $

                 16.11

 

 $

                 15.52

 

Tangible common equity per share (1)

 

                 16.87

 

 

                 16.46

 

 

                 16.49

 

 

                    16.03

 

 

                    15.44

 

Market value per share

 

                 36.69

 

 

                 36.15

 

 

                 33.81

 

 

                    32.80

 

 

                    36.30

 

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

 

11.21

%

 

11.24

%

 

11.52

%

 

11.10

%

 

10.62

%

Tangible common equity to tangible assets (1)

 

10.83

%

 

10.85

%

 

11.47

%

 

11.05

%

 

10.57

%

Average stockholders' equity to average assets

 

11.22

%

 

11.10

%

 

11.34

%

 

10.99

%

 

11.14

%

Total risk-based capital

 

12.53

%

 

12.67

%

 

14.04

%

 

13.91

%

 

13.50

%

Common equity tier 1 risk-based capital

 

11.69

%

 

11.82

%

 

13.11

%

 

13.00

%

 

12.61

%

Tier 1 risk-based capital

 

11.69

%

 

11.82

%

 

13.11

%

 

13.00

%

 

12.61

%

Leverage

 

10.90

%

 

10.91

%

 

11.57

%

 

11.33

%

 

11.40

%

 

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

Quarterly Comparison

Average Balance Sheet Data

9/30/19

 

6/30/19

 

3/31/19

 

12/31/18

 

9/30/18

 
Federal funds sold and interest bearing due from banks

 $

            98,569

 

 $

          137,130

 

 $

          122,189

 

 $

               86,725

 

 $

               73,196

 

Mortgage loans held for sale

 

                 3,887

 

 

                 3,794

 

 

                 1,727

 

 

                    2,140

 

 

                    2,980

 

Securities available for sale

 

             396,686

 

 

             435,391

 

 

             437,619

 

 

                468,856

 

 

                372,251

 

Loans and leases

 

          2,800,445

 

 

          2,668,058

 

 

          2,538,940

 

 

             2,539,750

 

 

             2,547,474

 

Total earning assets 

 

          3,310,904

 

 

          3,244,941

 

 

          3,100,352

 

 

             3,096,931

 

 

             2,990,401

 

Total assets

 

          3,502,267

 

 

          3,436,175

 

 

          3,271,257

 

 

             3,260,322

 

 

             3,153,406

 

Interest bearing deposits

 

          2,127,769

 

 

          2,112,768

 

 

          2,048,830

 

 

             2,012,489

 

 

             1,874,853

 

Total deposits

 

          2,912,631

 

 

          2,867,360

 

 

          2,743,701

 

 

             2,738,678

 

 

             2,590,156

 

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

 

48,376

 

 

 

51,743

 

 

 

48,956

 

 

 

67,731

 

 

 

116,287

 

FHLB advances

 

               83,386

 

 

               74,420

 

 

               47,962

 

 

                  48,287

 

 

                  48,612

 

Total interest bearing liabilities

 

          2,259,531

 

 

          2,238,931

 

 

          2,145,748

 

 

             2,128,507

 

 

             2,039,752

 

Total stockholders' equity

 

             392,840

 

 

             381,270

 

 

             371,070

 

 

                358,293

 

 

                351,376

 

 
Performance Ratios
Annualized return on average assets

 

1.95

%

 

1.93

%

 

1.94

%

 

1.78

%

 

1.75

%

Annualized return on average equity

 

17.41

%

 

17.40

%

 

17.09

%

 

16.23

%

 

15.67

%

Net interest margin, fully tax equivalent 

 

3.86

%

 

3.81

%

 

3.89

%

 

3.84

%

 

3.79

%

Non-interest income to total revenue, fully tax equivalent

 

29.28

%

 

 

28.46

%

 

 

27.13

%

 

 

27.86

%

 

 

28.55

%

Efficiency ratio, fully tax equivalent (3)

 

52.73

%

 

59.09

%

 

55.52

%

 

59.12

%

 

54.43

%

 
Loans by Type
Commercial and industrial

 $

          876,127

 

 $

          860,085

 

 $

          827,747

 

 $

             833,524

 

 $

             816,252

 

Construction and land development

 

             283,465

 

 

             257,801

 

 

             244,548

 

 

                255,142

 

 

                233,107

 

Real estate mortgage - commercial investment

 

             727,531

 

 

             696,421

 

 

             586,648

 

 

                588,610

 

 

                630,000

 

Real estate mortgage - owner occupied commercial

 

             470,678

 

 

             452,719

 

 

             428,163

 

 

                426,373

 

 

                420,098

 

Real estate mortgage - 1-4 family residential

 

             331,747

 

 

             338,957

 

 

             277,847

 

 

                276,017

 

 

                274,409

 

Home equity - first lien

 

               51,015

 

 

               46,012

 

 

               48,656

 

 

                  49,500

 

 

                  46,062

 

Home equity - junior lien

 

               72,533

 

 

               67,948

 

 

               66,837

 

 

                  70,947

 

 

                  67,105

 

Consumer

 

               43,568

 

 

               43,937

 

 

               45,263

 

 

                  48,058

 

 

                  47,450

 

Total loans and leases

 $

       2,856,664

 

 $

       2,763,880

 

 $

       2,525,709

 

 $

          2,548,171

 

 $

          2,534,483

 

 
Asset Quality Data
Non-accrual loans

 $

              2,722

 

 $

              3,030

 

 $

              3,273

 

 $

                 2,611

 

 $

                 3,982

 

Troubled debt restructurings

 

                      35

 

 

                      37

 

 

                      39

 

 

                         42

 

 

                       792

 

Loans past due 90 days or more and still accruing

 

                    487

 

 

                    861

 

 

                    454

 

 

                       745

 

 

                       212

 

Total non-performing loans

 

                 3,244

 

 

                 3,928

 

 

                 3,766

 

 

                    3,398

 

 

                    4,986

 

Other real estate owned

 

                    563

 

 

                    563

 

 

                    878

 

 

                    1,018

 

 

                    1,604

 

Total non-performing assets

 $

              3,807

 

 $

              4,491

 

 $

              4,644

 

 $

                 4,416

 

 $

                 6,590

 

Non-performing loans to total loans

 

0.11

%

 

0.14

%

 

0.15

%

 

0.13

%

 

0.20

%

Non-performing assets to total assets

 

0.11

%

 

0.13

%

 

0.14

%

 

0.13

%

 

0.20

%

Allowance for loan and lease losses to total loans

 

0.94

%

 

0.96

%

 

1.05

%

 

1.00

%

 

1.00

%

Allowance for loan and lease losses to average loans

 

0.96

%

 

0.99

%

 

1.04

%

 

1.01

%

 

1.00

%

Allowance for loan and lease losses to non-performing loans

 

829

%

 

673

%

 

703

%

 

751

%

 

506

%

Net charge-offs (recoveries)

 $

                  (61

)

 $

                   48

 

 $

                (330

)

 $

                  (312

)

 $

                    386

 

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

 

0.00

%

 

0.00

%

 

-0.01

%

 

-0.01

%

 

0.02

%

 
Other Information
Total assets under management (in millions)

 $

              3,116

 

 $

              3,068

 

 $

              2,970

 

 $

                 2,765

 

 $

                 2,969

 

Full-time equivalent employees

 

                    622

 

 

                    615

 

 

                    596

 

 

                       591

 

 

                       593

 

 
 
 
(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. The Company 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

9/30/19

 

6/30/19

 

3/31/19

 

12/31/18

 

9/30/18

 
Total stockholders' equity - GAAP (a)

 $

          396,111

 

 $

          389,365

 

 $

          377,994

 

 $

             366,500

 

 $

             352,980

 

  Less: Goodwill

 

              (12,593

)

 

              (12,826

)

 

                   (682

)

 

                     (682

)

 

                     (682

)

  Less: Core deposit intangible

 

                (2,373

)

 

                (2,461

)

 

                (1,015

)

 

                  (1,057

)

 

                  (1,098

)

Tangible common equity - Non-GAAP (c)

 $

          381,145

 

 $

          374,078

 

 $

          376,297

 

 $

             364,761

 

 $

             351,200

 

 
Total assets - GAAP (b)

 $

       3,533,926

 

 $

       3,463,823

 

 $

       3,281,016

 

 $

          3,302,924

 

 $

          3,324,797

 

  Less: Goodwill

 

              (12,593

)

 

              (12,826

)

 

                   (682

)

 

                     (682

)

 

                     (682

)

  Less: Core deposit intangible

 

                (2,373

)

 

                (2,461

)

 

                (1,015

)

 

                  (1,057

)

 

                  (1,098

)

Tangible assets - Non-GAAP (d)

 $

       3,518,960

 

 $

       3,448,536

 

 $

       3,279,319

 

 $

          3,301,185

 

 $

          3,323,017

 

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

 

11.21

%

 

11.24

%

 

11.52

%

 

11.10

%

 

10.62

%

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

 

10.83

%

 

10.85

%

 

11.47

%

 

11.05

%

 

10.57

%

 
Total shares outstanding (e) 

 

               22,597

 

 

               22,721

 

 

               22,823

 

 

                  22,749

 

 

                  22,746

 

 
Book value per share - GAAP (a/e)

 $

              17.53

 

 $

              17.14

 

 $

              16.56

 

 $

                 16.11

 

 $

                 15.52

 

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

 

                 16.87

 

 

                 16.46

 

 

                 16.49

 

 

                    16.03

 

 

                    15.44

 

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

 

T. Clay Stinnett Executive Vice President, Treasurer and Chief Financial Officer (502) 625-0890

Source: Stock Yards Bancorp, Inc.