Stock Yards Bancorp, Inc. · NASDAQ:SYBT
Stock Yards Bancorp — KBW Winter Financial Services Symposium 2021
35 slides from Stock Yards Bancorp's conference presentation, Feb 10, 2021
Slide 1: Stock Yards Bancorp KBW Winter Financial Services Symposium
Stock Yards Bancorp KBW Winter Financial Services Symposium V irtual Event February 10 - 11, 2021
Slide 2: Cautionary statement for investors
Cautionary statement for investors 2 This presentation contains forward - looking statements about future financial performance, business plans and strategies of Stock Yards Bancorp , Inc . Because forward - looking statements involve risks and uncertainties, actual results may differ materially fro
Slide 3: COVID-19 pandemic
COVID - 19 pandemic • Generally followed our Pandemic Plan that was in place and updated in November 2019 • Geographically diversified our key operational teams by dividing them and having them work from different locations • Identified at risk employees and immediately arranged for them to work fro
Slide 4: SBA Payroll Protection Plan
SBA Payroll Protection Plan As of December 31, 2020 • 3,400 SBA payroll protection plan loans originated totaling $657 million • $550 million outstanding • $20 million in origination fees received • 341 new clients with opportunities to sell additional services 1,300 second round PPP loans forecaste
Slide 5: COVID-related loan deferrals
COVID - 19 related loan deferrals Industry Loans (000’s) % of total loan portfolio* Lodging / hotel $16,000 0.53% Tradeshows / events 8,000 0.27% Other 8,000 0.27% Residential RE secured 2,000 0.07% Retail Centers 2,000 0.07% Real estate / land development 1,000 0.03% Total $37,000 1.24% Lodging / h
Slide 6: Strong capital structure
Strong capital structure Key ratios and per share data as of December 31 , 2020 Equity / total assets 9.56% TCE / tangible assets 9.28% Total risk - based 13.36% Tier 1 risk - based 12.23% Leverage 9.57% 6 Note: Tangible common equity to tangible assets is a non - GAAP financial measure. See “Reconc
Slide 7: Company profile
Company profile 7 • Founded in 1904 • NASDAQ Global Select – SYBT • Headquartered in Louisville, KY. • 44 locations in Louisville, Indianapolis, and Cincinnati MSAs • $4.6 billion in assets at December 31, 2020 • $3.9 billion Wealth Management & Trust AUM at December 31, 2020
Slide 8: Louisville area major employers
Louisville area major employers 8 World - wide air hub 2 production facilities
Slide 9: Over three decades of growth
Over three decades of growth $1,744 $4,056 $11,592 $21,644 $22,953 $37,187 $58,869 $- $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 Net income Compound Annual Growth 1989 – 2020 • Net Income = 12% • Earnings pe
Slide 10: Three-year financial highlights
Three - year financial highlights 10 2020 2019 2018 Net interest income $ 135.9 $ 125.3 $ 114.6 Wealth management and trust income 23.4 22.6 21.5 Net income 58.9 66.1 55.5 Earnings per share (diluted) 2.59 2.89 2.42 Total assets $ 4,609 $ 3,724 $ 3,303 Net interest margin 3.39% 3.82% 3.83% Return on
Slide 11: Efficiency ratio
Efficiency ratio 58.7% 56.0% 56.5% 57.4% 60.8% 58.9% 56.6% 57.4% 60.6% 55.9% 56.1% 54.9% 48.0% 58.0% 68.0% 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Efficiency ratio Consistent investment in technology and branch network expansion 11
Slide 12: Key drivers for 2021 and beyond
Key drivers for 2021 and beyond • Continued attraction and retention of talented people • Commercial banking focus leading to full relationships • Organic business model with sustainable growth in large mature markets complimented by acquisition • Growing core deposit base • Diverse and enviable non
Slide 13: Commercial banking leads to full relationships
Commercial banking leads to full relationships • Full - service bank relationships built by introducing our bank partners when their expertise is needed • 29 experienced commercial bankers with average of 20 years in banking • 17 business bankers with average of 20 years in banking • 10 commercial r
Slide 14: Loan production vs. net loan growth
Loan production vs. net loan growth 14 $317 $296 $442 $489 $536 $690 $714 $665 $769 $918 $951 $73 $ 36 $40 $98 $147 $165 $272 $104 $139 $163 $136 $0 $250 $500 $750 $1,000 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Loan production Net loan growth 1) Excludes $39 million of loans from 2013
Slide 15: Loan growth by market
Loan growth by market Louisville (established 1904) $1,283 85% Indianapolis (established 2003) 148 10% Cincinnati (established 2007) 77 5% Total loans $1,508 100% $2,027 68% 527 18% 427 14% $2,981 100% Market 2010 2020 * *Excludes Payroll Protection loans Dollars in millions 15
Slide 16: Growing core deposit base
Growing core deposit base Dollars in millions 16 $1,566 $1,725 $1,936 $2,077 $2,332 $ 2,480 $ 2,540 $2,711 $3,025 $3,894 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Savings and money market Demand interest bearing Demand non-interest bearing Time deposits ≤ $250K % core/total deposits 97% 97%
Slide 17: Deposit breakdown
Deposit breakdown Deposit composition at end of period 2009 2020 Non - interest bearing demand deposits 15% 30% Interest bearing demand, savings & MMA 49% 60% Time deposits ≥ $100,000 14% 4% Time deposits < $100,000 22% 5% Brokered deposits -- 1% Total deposits (billions) $1.4 $4.0 1.35% 0.91% 0.65%
Slide 18: Non-interest income
$23,406 $8,480 $5,407 $6,155 $4,161 $1,775 $693 $1,822 Wealth management Debit and credit cards Treasury management Mortgage banking Deposit service charges Investment products Bank-owned life insurance Other Non - interest income 2020 Non - interest income as % of total income Stock Yards Bank 28%
Slide 19: Wealth management and trust – an enviable model
Wealth management and trust – an enviable model 19 • $3.9 billion AUM at December 31, 2020 - generated $23.4 million revenue for the year with a 46% pre - tax margin - contributed 38 ¢ to EPS - represented 12% of company earnings • 45% of company non - interest income attributable to wealth manageme
Slide 20: Key investment points
Key investments points 20 • Industry leading performance • Consistent growth strategy • Diversified revenue streams distinguished by wealth management business with growing card income • Expanding presence in large markets • Positioned for sustainable, profitable growth • We want long term sharehold
Slide 21: Earnings and dividends per share
Earnings and dividends per share 21 Per share information adjusted to reflect stock dividends and splits Dividend payout ratio $0.54 $0.97 $1.11 $1.65 $2.59 $0.13 $0.30 $0.46 $0.64 $1.08 $0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 Earnings per sha
Slide 22: Merger with Kentucky Bancshares, Inc.
22 Stock Yards Bancorp, Inc. Merger with Kentucky Bancshares, Inc. (OTCQX:KTYB) January 27, 2021
Slide 23: Forward-Looking Statements
Forward - Looking Statements Certain statements contained in this communication, which are not statements of historical fact, constitute forward - looking statements w ithin the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, certain
Slide 24: Important additional information
Important additional information Additional Information Regarding the Proposed Transaction This communication is being made in respect of the proposed merger transaction between Stock Yards and Kentucky Bancshares. S toc k Yards will file a registration statement on Form S - 4 with the SEC in connec
Slide 25: Transaction highlights
Transaction highlights ► Entry into attractive Central Kentucky markets, including the Lexington MSA (Kentucky’s second largest market), with a scalable franchise bringing $1.2B in assets ► Enhances SYBT’s position as the preeminent Kentucky community bank − Pro forma entity has the #7 (1) deposit m
Slide 26: Strategic expansion into Central Kentucky
Strategic expansion into Central Kentucky Source: S&P Global Market Intelligence and Commerce Lexington Economic Development. Deposit data as of 6/30/20 and is pro f orm a for pending or recently completed transactions. (1) Pro forma does not reflect purchase accounting or merger adjustments. Financ
Slide 27: Overview of Kentucky Bancshares, Inc.
Overview of Kentucky Bancshares, Inc. (1) Based on KTYB closing common stock price of $19.01 as of 1/25/21. (2) NPLs include nonaccrual loans (less portion guaranteed by US government), loans 90+ days past due and TDRs. NPAs include NPL s and OREO. (3) As of 12/31/20, the PPP loan balance was approx
Slide 28: Complementary franchises
Complementary franchises Note: Data as of 12/31/20. Excludes loans held for sale. (1) Pro forma does not reflect purchase accounting merger adjustments. Construction 8% Resi. R.E. 1 - 4 Fam. 13% O.O. CRE 15% Non - O.O. CRE 21% Multifamily 3% C&I 38% Consumer 1% Other 1% Noninterest - bearing 30% Oth
Slide 29: Transaction overview
Transaction overview (1) Based on SYBT closing common stock price of $42.24 as of 1/25/21. (2) Based on KTYB financials as of 12/31/20. (3) Reflects the addition of $7.6 million in after - tax cost savings. Consideration ► Approximately $190 million deal value, or $31.78 per KTYB share (1) ► 0.640 s
Slide 30: Supplemental information
30 Supplemental information
Slide 31: Loan portfolio detail
Loan portfolio detail 31 $833 $802 $550 $509 $380 $292 $95 $45 $15 $10 CRE-Investment - 23% Commercial (C&I) - 22% C&I PPP loans - 16% CRE-Owner occupied - 14% RE 1-4 family - 11% Construction & development - 8% HELOC - 3% Consumer - 1% Leases - < 1% Commercial credit cards - < 1% As of December 31,
Slide 32: Unused credit trends
Unused credit trends (excluding construction loans) 32 $575 $532 $486 $449 $454 $499 $563 $615 $627 $669 $519 $292 $305 $344 $393 $426 $529 $547 $596 $613 $767 $986 66% 64% 59% 53% 52% 49% 51% 51% 51% 47% 34% $0 $300 $600 $900 $1,200 $1,500 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 line
Slide 33: Asset quality
Asset quality 0.20% 0.16% 0.59% 0.40% 0.55% 0.60% 0.60% 0.18% 0.17% 0.07% 0.07% 0.08% 0.05% 1.12% 1.14% 1.39% 1.60% 1.93% 2.01% 1.66% 1.33% 1.10% 1.04% 1.03% 1.00% 0.94% 1.47% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 0.00% 0.10% 0.20% 0.30% 0.40% 0.50% 0.60% 0.70% 0.80% 2007 2008 2009 2010 2011 2012 2013
Slide 34: Deposit detail
Deposit detail 34 $1,053 $1,356 $1,187 $297 $70 $25 Savings and money market - 26% Demand interest-bearing - 34% Demand noninterest-bearing - 30% Time deposits ≤ $250K - 7% Time deposits > $250K - 2% Brokered deposits - 1% Total deposits - $3,988 Total core deposits $3,894 97.6% As of December 31, 2
Slide 35: Wealth management asset detail
Wealth management asset detail 35 Assets Under Management $3.9 billion as of December 31, 2020 Individual equities 34% Mutual funds & ETFs 32% 401k participant directed 13% Individual bonds 9% Money market funds 7% Real estate 1% Other 4% Assets by class Assets by account type Personal investment m
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