Stock Yards Bancorp Reports Record 2021 Earnings and Strong Fourth Quarter Earnings of $24.6 Million or $0.92 per Diluted Share

Rhea-AI Summary

Stock Yards Bancorp (NASDAQ: SYBT) reported a robust fourth quarter for 2021, with net income rising to $24.6 million ($0.92 per diluted share) compared to $17.7 million ($0.78 per diluted share) in Q4 2020. Total assets reached $6.65 billion, fueled by strong organic growth and a successful merger with Kentucky Bancshares. Non-interest income surged 36%, driven by record wealth management and card income. Total loans increased 18%, with notable contributions from the Central/Eastern Kentucky market. The company expects further growth from its upcoming merger with Commonwealth Bancshares.

Positive

• Net income for Q4 2021 rose 39% to $24.6 million, or $0.92 per share.
• Total non-interest income increased 36% to $18.6 million, driven by record card income and wealth management services.
• Loans (excluding PPP) grew 18% YoY, totaling $4.17 billion, with significant contributions from Central/Eastern Kentucky.
• The merger with Kentucky Bancshares exceeded expectations, contributing positively to operating results.
• The upcoming merger with Commonwealth Bancshares is expected to enhance growth and market presence.

Negative

• Net interest margin (NIM) decreased 28 basis points to 3.07% due to loan yield contraction and excess liquidity.
• Mortgage banking income decreased 38% due to lower loan originations amid a rising interest rate environment.

Highlighted by Solid Organic Balance Sheet Growth and Record Levels of Non-Interest Income

LOUISVILLE, Ky., Jan. 26, 2022 (GLOBE NEWSWIRE) -- Stock Yards Bancorp, Inc. (NASDAQ: SYBT), parent company of Stock Yards Bank & Trust Company, with offices in Louisville, Central and Eastern Kentucky, as well as the Indianapolis, Indiana and Cincinnati, Ohio metropolitan markets, today reported earnings for the fourth quarter ended December 31, 2021. Net income for the fourth quarter was $24.6 million, or $0.92 per diluted share, compared with net income of $17.7 million, or $0.78 per diluted share, for the fourth quarter of 2020. Net income for the twelve months ended December 31, 2021 ended at a record $74.6 million, or $2.97 per diluted share, compared to $58.9 million, or $2.59 per diluted share, in 2020. Strong organic balance sheet growth across all markets, the successful entry into the Central/Eastern Kentucky market and record levels of non-interest income highlighted by card income, wealth management and trust and treasury management, contributed to a strong 2021.

(dollar amounts in thousands, except per share data)		4Q21			3Q21			4Q20
Net interest income	$	46,182		$	45,483		$	36,252
Provision for credit loss expense(6)		(1,900	)		(1,525	)		500
Non-interest income		18,604			17,614			13,698
Non-interest expenses		34,572			34,558			29,029
Income before income tax expense		32,114			30,064			20,421
Income tax expense		7,525			6,902			2,685
Net income	$	24,589		$	23,162		$	17,736
Net income per share, diluted	$	0.92		$	0.87		$	0.78
Net interest margin		3.07	%		3.14	%		3.35	%
Efficiency ratio(4)		53.24	%		54.63	%		58.06	%
Tangible common equity to tangible assets(1)		8.22	%		8.64	%		9.28	%
Annualized return on average equity(7)		14.60	%		13.92	%		16.27	%
Annualized return on average assets(7)		1.52	%		1.50	%		1.56	%

“We delivered excellent fourth quarter and full year 2021 results, highlighted by strong organic loan growth, record loan production and solid revenue growth, both organically and from acquired assets,” said James A. (Ja) Hillebrand, Chairman and Chief Executive Officer. “Additionally, we reported record non-interest income during the quarter, a complement to our diversified income revenue streams. Treasury management fees and card income reached record levels at year-end due to increases in new business, volume and usage, while wealth management and trust income also generated record results, driven by record net new business development and strong market appreciation. We achieved this growth while keeping operating expenses under control.

“In addition to growing the company organically, our successful entry into the Central/Eastern Kentucky market, through our merger with Kentucky Bancshares in the second quarter, contributed significantly to our 2021 operating results,” Hillebrand continued. “The merger has exceeded our expectations and was a meaningful driver of our record results for the year. Additionally, this new market provides tremendous opportunity for future growth by increasing our scale and reach. We are exceptionally pleased with the progress we have made through the dedicated efforts of our employees. We anticipate, similar to our prior successful mergers, the merger with Kentucky Bancshares will result in significant benefits in 2022 and beyond.”

At December 31, 2021, the Company had $6.65 billion in assets, $4.17 billion in loans and $5.79 billion in total deposits. The combined enterprise, with 63 branch offices, has and will continue to benefit from a diversified geographic footprint that provides significant growth opportunities in both the banking and wealth management arenas.

“Following the success of our prior mergers, we are confident that our announced merger with Commonwealth Bancshares, Inc. (Commonwealth) will provide exceptional opportunities to generate additional growth going forward. This combination brings together two Louisville based community banks who are like-minded with complementary cultures. The transaction not only builds upon our already prominent market share in the Louisville market, as Commonwealth is the largest privately-held bank headquartered in the Louisville MSA, but also expands our presence in the attractive Shelby County and Northern Kentucky markets. We have received regulatory approvals from the Kentucky Department of Financial Institutions and the Federal Deposit Insurance Corporation and are currently awaiting regulatory holding company approval from the Federal Reserve Board. At this juncture, we anticipate closing sometime during the first quarter of 2022,” concluded Hillebrand.

Commonwealth, headquartered in Louisville, Kentucky, operates 15 retail branches, including nine in Jefferson County, four in Shelby County and two in Northern Kentucky. As of December 31, 2021, Commonwealth reported approximately $1.31 billion in assets, $680 million in loans, $1.15 billion in deposits and $88 million in tangible common equity. Commonwealth also maintains a Wealth Management and Trust Department with total assets under management of $2.73 billion at December 31, 2021.

Additional key factors contributing to the fourth quarter of 2021 results included:

• Organic loan growth (excluding PPP), totaled $71 million for the fourth quarter of 2021. Loan balances across all four primary markets ended at historical highs at December 31, 2021.
• Deposit growth was robust at $446 million on a linked quarter basis.
• Total interest income increased $9.2 million, or 24%, for the fourth quarter of 2021 compared to the fourth quarter of 2020.
• Interest income on non-PPP loans increased $10.1 million, or 34%, over the fourth quarter of 2020, with a large portion of the increase representing the Central/Eastern Kentucky market contribution. Additionally, significant fluctuation in PPP-related income had a major impact on the comparison between periods. PPP interest/fee income totaled $3.7 million and $6.1 million for the fourth quarters of 2021 and 2020, respectively.
• Interest expense declined $761,000, or 36%, as the Bank benefited from lower stated interest rates on interest bearing deposits and the decline in FHLB advances.
• Despite an 18 basis point benefit from the PPP loan portfolio for the fourth quarter of 2021, net interest margin (NIM) continued to be negatively impacted by loan yield contraction and significant ongoing levels of excess balance sheet liquidity.
• Consistent with further improvement and stabilization in the Federal Reserve unemployment forecast, solid credit quality statistics and increased credit line utilization, a net reduction of $1.9 million in credit loss reserves was recorded for the fourth quarter of 2021, compared to a net reserve build of $500,000 for the fourth quarter of 2020.
• Non-interest income increased 36% over the fourth quarter of 2020 boosted by solid contributions from Central/Eastern Kentucky, along with strong growth in legacy income sources. Significant growth in assets under management tied to record net new business and strong market performance resulted in record wealth management and trust income of $7.4 million for the quarter and record ending assets under management of $4.80 billion. Deposit service charges, enhanced by the Central/Eastern Kentucky market and continued recovery from the pandemic, increased 77% over the fourth quarter of 2020. Card income and treasury management fees once again set historic quarterly records, representing 81% and 24% increases over the fourth quarter of 2020, respectively. Consistent with the continued decline in loan origination volume, mortgage banking income was down 38% quarter over prior year quarter.             

Highlights for the year ended December 31, 2021:

• Seven months of activity generated by the Kentucky Bancshares merger exceeded management expectations and stood out as a meaningful contributor to operating results.
• Loans (excluding PPP) grew $1.05 billion over the past twelve months with $756 million of the growth attributed to the Central/Eastern Kentucky market.
• Excluding the Central/Eastern Kentucky market, the legacy bank grew loans by 10%, or $291 million. Loan balances across all markets ended the year at historic highs.
• Deposit balances grew by $1.80 billion over the past twelve months with $1.08 billion of the growth attributed to the Central/Eastern Kentucky market. Non-interest bearing deposits and interest bearing demand deposits represented $569 million and $776 million of the growth, respectively.
• In 2021, PPP income totaled $22.0 million, compared to $13.6 million for 2020. Going into 2022, approximately $4.6 million in net unrecognized PPP fee income remains to be recognized.
• Since the early part of 2020, ongoing loan yield contraction accompanied with significant excess balance sheet liquidity has led to NIM compression.
• Wide fluctuations within the provision for credit losses over recent periods are consistent with the pandemic and subsequent recovery, Central/Eastern Kentucky market expansion, legacy bank net loan growth and other factors within the CECL allowance for credit loss model. Steady improvement within the Federal Reserve’s forecast of future unemployment throughout 2021 further led to the release of credit loss reserves.
• Wealth management income reached and surpassed record levels over the past six consecutive quarters, with assets under management soaring $949 million over the past twelve months. Record net new business and market performance have served to elevate asset-based fees.
• Recovery from pandemic levels and the entrance into Central/Eastern Kentucky have significantly boosted deposit fees.
• Customer expansion and transaction growth have led to record 2021 card and treasury management income.
• Brokerage income ended the year strong, reflective of the Central/Eastern Kentucky contribution and higher trading volumes.

Hillebrand added, “In November, we were one of 25 banks with asset size between $3 billion to $10 billion that were nationally recognized by American Banker Magazine as one of the Best Banks to Work for in 2021. The Best Banks to Work For program identifies and honors U.S. banks for outstanding employee satisfaction. In addition, in March, we were one of 30 financial institutions recognized in the inaugural Hovde High Performer List, based on our prior year results. Criteria to be admitted included market capitalization below $1 billion, above median average pre-provision ROA, loan and deposit growth and tangible book value growth. These recognitions are an honor and a testament to the dedication of our employees, who continue to work diligently to support our communities.”

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

Net interest income, the Company’s largest source of revenue, increased 27%, or $9.9 million, to $46.2 million, driven by higher interest income on non-PPP loans and the continued decline in cost of funds.

• Total interest income increased by $9.2 million, or 24%, to $47.5 million, primarily due to increased interest income on non-PPP loans, partly offset by continued earning-asset yield contraction.
• Total interest expense declined 36%, to $1.3 million. Interest expense on deposits decreased $523,000, or 29%, as the cost of interest bearing deposits declined to 0.13% in the fourth quarter of 2021 from 0.27% in the fourth quarter a year ago, as the Company continued to benefit significantly from the strategic lowering of stated deposit rates. Average interest bearing deposit balances, predominantly demand accounts, surged $1.11 billion, or 41%, consistent with the Central/Eastern Kentucky market expansion.
• NIM decreased 28 basis points to 3.07% for the fourth quarter of 2021 from 3.35% for the fourth quarter a year ago. During the quarter, forgiveness within the PPP loan portfolio and related fee income recognition had an 18 basis point positive impact to NIM. Overall NIM continues to be negatively impacted by loan yield contraction and significant ongoing excess balance sheet liquidity, which represented a 35 basis point negative impact compared to a year ago.
• Interest income on non-PPP loans increased $10.1 million, or 34%, over the prior year quarter. Despite a $1.12 billion, or 39%, increase in average non-PPP loans, significant rate contraction impacted the portfolio, with the average quarterly yield earned on non-PPP loans contracting 16 basis points over the past twelve months to 3.98%. PPP interest and fee income totaled $3.7 million and $6.1 million for the fourth quarters of 2021 and 2020, respectively.
• Interest income on debt securities increased $1.4 million, or 68%, compared to the fourth quarter of 2020. Despite a $589 million increase in average balance of securities, the corresponding interest income increase was muted by the overall decline in rates earned.

The Company recorded a net benefit of $1.9 million for credit losses during the fourth quarter of 2021, which included a $1.1 million benefit to provision for credit losses for loans and a $800,000 net benefit to provision for credit losses for off-balance sheet exposures consistent with the improvement in underlying CECL model factors along with increased line utilization in the Commercial & Industrial portfolio during the quarter.

Non-interest income increased $4.9 million, or 36%, to $18.6 million.

• Wealth management and trust income totaled a record $7.4 million for the fourth quarter of 2021, increasing $1.6 million, or 27%, over the fourth quarter a year ago. Significant growth in assets under management tied to record net new business and strong market performance served to boost asset-based fees and led to an increase of assets under management by $949 million over the past twelve months.
• Retail deposit service charges increased $827,000 compared to the fourth quarter a year ago, a period severely impacted by the pandemic. The increase also reflects the expansion into Central/Eastern Kentucky.
• Card income increased $1.8 million, or 81%, over the fourth quarter of 2020. Growth trends in both debit and credit card portfolios remain positive, as card income benefited significantly from improving economic activity, with consumers and businesses increasing their spending, complimented by a meaningful contribution from the Central/Eastern Kentucky market.
• Treasury management fees increased by $365,000, or 24%, driven by increased transaction volume, new product sales and customer base expansion. In addition, calling efforts to existing customers have led to significant increases in online services, reporting, ACH origination, remote deposit and fraud mitigation services.
• Mortgage banking income, which primarily consists of gain on sale of loans, servicing income and mortgage servicing rights amortization, was $1.1 million for the fourth quarter of 2021, down 38% from the fourth quarter a year ago primarily due to a decline in mortgage originations stemming from a rising rate environment that has cooled.

Non-interest expenses increased $5.5 million to $34.6 million.

• Compensation and employee benefits expense increased $4.1 million, or 25%, primarily due to the increase in full time equivalent employees associated with the merger. Full time equivalent employees increased to 820 at December 31, 2021, from 641 at December 31, 2020, as the Bank added 184 associates in connection with its expansion into Central/Eastern Kentucky.
• Net occupancy and equipment expenses increased $530,000, or 25%, as 19 branches were added with the second quarter expansion into Central/Eastern Kentucky.
• Technology and communication expenses, which include computer software amortization, equipment depreciation and expenditures related to investments in technology needed to maintain and improve the quality of customer delivery channels, information security and internal resources, increased $609,000, or 26%. The majority of the increase related to the merger, as the system conversion did not occur until late August.
• Card processing expense increased $636,000, consistent with the card income revenue trend discussed throughout.
• Marketing and business development expense, which includes all costs associated with promoting the Bank, community investment, retaining customers and acquiring new business increased $958,000, compared to the fourth quarter a year ago, a period significantly impacted by the pandemic. Consistent with the Company’s strategic plan, a significant investment was made to advertise and promote the Bank in the Central/Eastern Kentucky market in the fourth quarter of 2021. In addition, the Company increased its contribution to the Bank’s foundation established to support various community initiatives, due to outstanding 2021 operational results.
• Capital and deposit tax declined $506,000, or 48%, as the Company has transitioned to record Kentucky state income tax as a component of tax expense.
• A large tax credit was completed during the fourth quarter a year ago, leading to $2.9 million in additional tax credit amortization expense for that period.
• Other non-interest expenses increased $1.3 million, or 92%, primarily due to merger related items such as core deposit intangible amortization, increased card rewards expense and insurance captive expenses.

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

Total assets increased $2.04 billion year over year, or 44%, to $6.65 billion boosted by the merger and strong organic growth.

Total loans increased $638 million year over year, or 18%, to $4.17 billion. Excluding the PPP loan portfolio, total loans increased $1.05 billion, or 35%, over the past twelve months. Approximately $756 million of the year over year growth was associated with the Central/Eastern Kentucky market and $291 million, or 10%, related to legacy bank growth. Total line of credit usage increased to 41% as of December 31, 2021, from 38% at December 31, 2020, with commercial and industrial line usage increasing meaningfully, but remaining below pre-pandemic levels.

The Company acquired nearly $400 million in debt securities related to the current year merger and has deployed $192 million of excess cash into securities in 2021, contributing significantly to the $593 million of growth in the investment portfolio over the past twelve months.

Total deposits increased $1.80 billion, or 45%, from December 31, 2020 to December 31, 2021, with non-interest bearing deposits representing $569 million of the growth. Both period end and average deposit balances ended at record levels at December 31, 2021, as the Central/Eastern Kentucky market added approximately $1.08 billion to total deposits.

Asset quality, which has trended within a narrow range over the past several years, has remained solid. During the fourth quarter of 2021, the Company recorded net loan charge-offs of $1.5 million compared to net loan recoveries of $19,000 in the fourth quarter of 2020. Non-performing loans totaled $7 million, or 0.18%⁽²⁾ of total loans outstanding (excluding PPP) compared to $13 million, or 0.44%⁽²⁾ of total loans (excluding PPP) outstanding at December 31, 2020. These strong metrics along with an improving economic forecast, resulted in a ratio of allowance for credit losses to loans (excluding PPP) of 1.34%⁽²⁾ at December 31, 2021.

At December 31, 2021, the Company remained “well-capitalized,” the highest regulatory capital rating for financial institutions. Total equity to assets was 10.17% and the tangible common equity ratio was 8.22%⁽¹⁾ at December 31, 2021, compared to 9.56%⁽¹⁾ and 9.28%⁽¹⁾, respectively, at December 31, 2020.

In November, 2021, the board of directors declared a cash dividend of $0.28 per common share. The dividend was paid on December 31, 2021, to stockholders of record as of December 20, 2021.

No shares were repurchased in the current year and approximately 741,000 shares remain eligible for repurchase under the current buy-back plan, which expires in May 2023.

Results of Operations – Fourth Quarter 2021 Compared with Third Quarter 2021

Net interest income increased $699,000, or 2%, over the prior quarter to $46.2 million, consistent with the continued decline in cost of funds and organic loan growth. While overall NIM was challenged by increased levels of excess liquidity, loan yield contraction showed signs of stabilization in the fourth quarter of 2021.

Due to continued improvement in the unemployment forecast combined with solid traditional credit metrics, the Company recorded a $1.1 million benefit to provision for credit losses on loans in the fourth quarter of 2021. During the third quarter of 2021, the Company recorded a net benefit of $1.0 million to provision for credit losses on loans.

Non-interest income increased $990,000, or 6%, to $18.6 million. Higher card income, deposit service fees, wealth management and trust service fees, treasury management fees and mortgage banking income all contributed to the quarterly increase.
             
Non-interest expenses remained flat compared to the prior quarter at $34.6 million.

Financial Condition – December 31, 2021, Compared with September 30, 2021

Total assets increased $465 million on a linked quarter basis to $6.65 billion, reflecting organic increases in loans and investment securities.

Total loans (excluding PPP) increased $71 million, or 2%, on a linked quarter basis. Total line of credit usage was 41% as of December 31, 2021 and unchanged compared to September 30, 2021. While remaining well below pre-pandemic levels, commercial and industrial line usage increased to 32% at year-end compared to 29% at September 30, 2021.

Total deposits increased $445 million, or 8%, on a linked quarter basis, due to higher deposit levels consistent with the seasonal increase in public funds and growth in balances for both existing and new customers.

About the Company

Louisville, Kentucky-based Stock Yards Bancorp, Inc., with $6.65 billion in assets, was incorporated in 1988 as a bank holding company. It is the parent company of Stock Yards Bank & Trust Company, which was established in 1904. The Company’s common shares trade on The NASDAQ Stock Market under the symbol “SYBT.”

This report contains forward-looking statements under the Private Securities Litigation Reform Act that involve risks and uncertainties. Although the Company’s management believes the assumptions underlying the forward-looking statements contained herein are reasonable, any of these assumptions could be inaccurate. Therefore, there can be no assurance the forward-looking statements included herein will prove to be accurate. Factors that could cause actual results to differ from those discussed in forward-looking statements include, but are not limited to: the possibility that any of the anticipated benefits of the proposed Commonwealth Bancshares merger will not be realized or will not be realized within the expected time period; the risk that integration of Commonwealth Bancshares’ operations with those of Stock Yards will be materially delayed or will be more costly or difficult than expected; diversion of management's attention from ongoing business operations and opportunities due to the merger; the challenges of integrating and retaining key employees; the effect of the announcement of the merger on the combined company's respective customer and employee relationships and operating results; the possibility that the merger may be more expensive to complete than anticipated, including as a result of unexpected factors or events; dilution caused by Stock Yards’ issuance of additional shares of Stock Yards common stock in connection with the merger; 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. Refer to Stock Yards’ Annual Report on Form 10-K for the year ended December 31, 2020, as well as its other filings with the SEC for a more detailed discussion of risks, uncertainties and factors that could cause actual results to differ from those discussed in the forward-looking statements.

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

 

Stock Yards Bancorp, Inc. Financial Information (unaudited)
Fourth Quarter 2021 Earnings Release
(In thousands unless otherwise noted)
		Three Months Ended								Twelve Months Ended
		December 31,								December 31,
Income Statement Data			2021				2020				2021				2020
Net interest income, fully tax equivalent (3)		$	46,328			$	36,301			$	171,508			$	136,133
Interest income:
Loans		$	43,671			$	36,007			$	164,073			$	137,699
Federal funds sold and interest bearing due from banks			287				65				645				738
Mortgage loans held for sale			74				174				249				533
Securities			3,476				2,093				12,109				8,901
Total interest income			47,508				38,339				177,076				147,871
Interest expense:
Deposits			1,279				1,802				5,627				10,478
Securities sold under agreements to repurchase and
other short-term borrowings			11				8				38				72
Federal Home Loan Bank advances			36				277				337				1,400
Total interest expense			1,326				2,087				6,002				11,950
Net interest income			46,182				36,252				171,074				135,921
Provision for credit losses (6)			(1,900	)			500				(753	)			18,418
Net interest income after provision for credit losses			48,082				35,752				171,827				117,503
Non-interest income:
Wealth management and trust services			7,379				5,805				27,613				23,406
Deposit service charges			1,907				1,080				5,852				4,161
Debit and credit card income			4,012				2,219				13,456				8,480
Treasury management fees			1,871				1,506				6,912				5,407
Mortgage banking income			1,062				1,708				4,724				6,155
Net investment product sales commissions and fees			764				487				2,553				1,775
Bank owned life insurance			272				166				914				693
Other			1,337				727				3,826				1,822
Total non-interest income			18,604				13,698				65,850				51,899
Non-interest expenses:
Compensation			17,146				14,072				63,034				51,368
Employee benefits			3,189				2,173				13,479				11,064
Net occupancy and equipment			2,667				2,137				9,688				8,182
Technology and communication			2,956				2,347				11,145				8,732
Debit and credit card processing			1,334				698				4,494				2,606
Marketing and business development			1,793				835				4,150				2,383
Postage, printing and supplies			714				423				2,213				1,778
Legal and professional			755				597				2,583				2,392
FDIC Insurance			706				323				1,847				1,217
Amortization of investments in tax credit partnerships			52				2,955				367				3,096
Capital and deposit based taxes			549				1,055				2,090				4,386
Merger expenses			-				-				19,025				-
Federal Home Loan Bank early termination penalty			-				-				474				-
Other			2,711				1,414				7,691				4,455
Total non-interest expenses			34,572				29,029				142,280				101,659
Income before income tax expense			32,114				20,421				95,397				67,743
Income tax expense			7,525				2,685				20,752				8,874
Net income		$	24,589			$	17,736			$	74,645			$	58,869
Net income per share - Basic		$	0.93			$	0.79			$	3.00			$	2.61
Net income per share - Diluted			0.92				0.78				2.97				2.59
Cash dividend declared per share			0.28				0.27				1.10				1.08
Weighted average shares - Basic			26,492				22,593				24,898				22,563
Weighted average shares - Diluted			26,800				22,794				25,156				22,768
										December 31,
Balance Sheet Data											2021				2020
Loans										$	4,169,303			$	3,531,596
Allowance for credit losses on loans											53,898				51,920
Total assets											6,646,025				4,608,629
Non-interest bearing deposits											1,755,754				1,187,057
Interest bearing deposits											4,031,760				2,801,577
Federal Home Loan Bank advances											-				31,639
Stockholders' equity											675,869				440,701
Total shares outstanding											26,596				22,692
Book value per share (1)										$	25.41			$	19.42
Tangible common equity per share (1)											20.09				18.78
Market value per share											63.88				40.48
Stock Yards Bancorp, Inc. Financial Information (unaudited)
Fourth Quarter 2021 Earnings Release
		Three Months Ended								Twelve Months Ended
		December 31,								December 31,
Average Balance Sheet Data			2021				2020				2021				2020
Federal funds sold and interest bearing due from banks		$	699,222			$	271,277			$	446,783			$	229,905
Mortgage loans held for sale			12,556				28,951				11,170				20,156
Available for sale debt securities			1,099,235				510,677				898,934				453,082
Federal Home Loan Bank stock			9,376				11,284				10,824				11,284
Loans			4,172,676				3,483,298				3,951,257				3,304,909
Total interest earning assets			5,993,065				4,305,487				5,318,968				4,019,336
Total assets			6,406,612				4,512,874				5,626,886				4,217,593
Interest bearing deposits			3,798,666				2,689,103				3,302,262				2,507,545
Total deposits			5,559,577				3,888,247				4,881,057				3,608,487
Securities sold under agreement to repurchase and other short term borrowings			86,911				55,825				73,130				49,820
Federal Home Loan Bank advances			7,174				48,771				16,317				61,483
Total interest bearing liabilities			3,892,751				2,793,699				3,391,709				2,618,848
Total stockholders' equity			668,287				433,596				573,261				420,119
Performance Ratios
Annualized return on average assets (7)			1.52	%			1.56	%			1.33	%			1.40	%
Annualized return on average equity (7)			14.60	%			16.27	%			13.02	%			14.01	%
Net interest margin, fully tax equivalent			3.07	%			3.35	%			3.22	%			3.39	%
Non-interest income to total revenue, fully tax equivalent			28.65	%			27.40	%			27.74	%			27.60	%
Efficiency ratio, fully tax equivalent (4)			53.24	%			58.06	%			59.94	%			54.06	%
Capital Ratios
Total stockholders' equity to total assets (1)											10.17	%			9.56	%
Tangible common equity to tangible assets (1)											8.22	%			9.28	%
Average stockholders' equity to average assets											10.19	%			9.96	%
Total risk-based capital											12.79	%			13.36	%
Common equity tier 1 risk-based capital											11.94	%			12.23	%
Tier 1 risk-based capital											11.94	%			12.23	%
Leverage											8.86	%			9.57	%
Loan Segmentation
Commercial real estate - non-owner occupied										$	1,128,244			$	833,470
Commercial real estate - owner occupied											678,405				508,672
Commercial and industrial											967,022				775,154
Commercial and industrial - PPP											140,734				550,186
Residential real estate - owner occupied											400,695				239,191
Residential real estate - non-owner occupied											281,018				140,930
Construction and land development											299,206				291,764
Home equity lines of credit											138,976				95,366
Consumer											104,294				71,874
Leases											13,622				14,786
Credit cards											17,087				10,203
Total loans and leases										$	4,169,303			$	3,531,596
Asset Quality Data
Non-accrual loans										$	6,712			$	12,514
Troubled debt restructurings											12				16
Loans past due 90 days or more and still accruing											684				649
Total non-performing loans											7,408				13,179
Other real estate owned											7,212				281
Total non-performing assets										$	14,620			$	13,460
Non-performing loans to total loans (2)											0.18	%			0.37	%
Non-performing assets to total assets											0.22	%			0.29	%
Allowance for credit losses on loans to total loans (2)											1.29	%			1.47	%
Allowance for credit  losses on loans to average loans											1.36	%			1.57	%
Allowance for credit losses on loans to non-performing loans											728	%			394	%
Net (charge-offs) recoveries		$	(1,535	)		$	19			$	(6,176	)		$	(1,645	)
Net (charge-offs) recoveries to average loans (5)			-0.04	%			0.00	%			-0.16	%			-0.05	%
Stock Yards Bancorp, Inc. Financial Information (unaudited)
Fourth Quarter 2021 Earnings Release
		Quarterly Comparison
Income Statement Data		12/31/21				9/30/21				6/30/21				3/31/21				12/31/20
Net interest income, fully tax equivalent  (3)		$	46,328			$	45,643			$	41,661			$	37,874			$	36,301
Net interest income		$	46,182			$	45,483			$	41,584			$	37,825			$	36,252
Provision for credit losses (6)			(1,900	)			(1,525	)			4,147				(1,475	)			500
Net interest income after provision for credit losses			48,082				47,008				37,437				39,300				35,752
Non-interest income:
Wealth management and trust services			7,379				7,128				6,858				6,248				5,805
Deposit service charges			1,907				1,768				1,233				944				1,080
Debit and credit card income			4,012				3,887				3,284				2,273				2,219
Treasury management fees			1,871				1,771				1,730				1,540				1,506
Mortgage banking income			1,062				915				1,303				1,444				1,708
Net investment product sales commissions and fees			764				780				545				464				487
Bank owned life insurance			272				275				206				161				166
Other			1,337				1,090				629				770				727
Total non-interest income			18,604				17,614				15,788				13,844				13,698
Non-interest expenses:
Compensation			17,146				17,381				15,680				12,827				14,072
Employee benefits			3,189				3,662				3,367				3,261				2,173
Net occupancy and equipment			2,667				2,732				2,244				2,045				2,137
Technology and communication			2,956				3,173				2,670				2,346				2,347
Debit and credit card processing			1,334				1,479				976				705				698
Marketing and business development			1,793				1,011				822				524				835
Postage, printing and supplies			714				630				460				409				423
Legal and professional			755				700				666				462				597
FDIC Insurance			706				387				349				405				323
Amortization of investments in tax credit partnerships			52				53				231				31				2,955
Capital and deposit based taxes			549				556				527				458				1,055
Merger expenses			-				525				18,100				400				-
Federal Home Loan Bank early termination penalty			-				-				474				-				-
Other			2,711				2,269				1,611				1,100				1,414
Total non-interest expenses			34,572				34,558				48,177				24,973				29,029
Income before income tax expense			32,114				30,064				5,048				28,171				20,421
Income tax expense			7,525				6,902				864				5,461				2,685
Net income		$	24,589			$	23,162			$	4,184			$	22,710			$	17,736
Net income per share - Basic		$	0.93			$	0.87			$	0.17			$	1.00			$	0.79
Net income per share - Diluted			0.92				0.87				0.17				0.99				0.78
Cash dividend declared per share			0.28				0.28				0.27				0.27				0.27
Weighted average shares - Basic			26,492				26,485				23,932				22,622				22,593
Weighted average shares - Diluted			26,800				26,726				24,171				22,865				22,794
		Quarterly Comparison
Balance Sheet Data		12/31/21				9/30/21				6/30/21				3/31/21				12/31/20
Cash and due from banks		$	62,304			$	84,520			$	58,477			$	43,061			$	43,179
Federal funds sold and interest bearing due from banks			898,888				500,421				481,716				289,920				274,766
Mortgage loans held for sale			8,614				10,201				5,420				6,579				22,547
Available for sale debt securities			1,180,298				1,070,148				1,006,908				672,167				586,978
Federal Home Loan Bank stock			9,376				9,376				14,475				10,228				11,284
Loans			4,169,303				4,189,117				4,206,392				3,635,156				3,531,596
Allowance for credit losses on loans			53,898				56,533				59,424				50,714				51,920
Goodwill			135,830				135,830				136,529				12,513				12,513
Total assets			6,646,025				6,181,188				6,088,072				4,794,075				4,608,629
Non-interest bearing deposits			1,755,754				1,744,790				1,743,953				1,370,183				1,187,057
Interest bearing deposits			4,031,760				3,597,234				3,516,153				2,829,779				2,801,577
Securities sold under agreements to repurchase			75,466				74,406				63,942				51,681				47,979
Federal funds purchased			10,374				10,908				10,947				8,642				11,464
Federal Home Loan Bank advances			-				10,000				10,000				24,180				31,639
Stockholders' equity			675,869				663,547				651,089				443,232				440,701
Total shares outstanding			26,596				26,585				26,588				22,781				22,692
Book value per share (1)		$	25.41			$	24.96			$	24.49			$	19.46			$	19.42
Tangible common equity per share (1)			20.09				19.63				19.16				18.82				18.78
Market value per share			63.88				58.65				50.89				51.06				40.48
Capital Ratios
Total stockholders' equity to total assets (1)			10.17	%			10.73	%			10.69	%			9.25	%			9.56	%
Tangible common equity to tangible assets (1)			8.22	%			8.64	%			8.57	%			8.97	%			9.28	%
Average stockholders' equity to average assets			10.43	%			10.75	%			9.88	%			9.44	%			9.61	%
Total risk-based capital			12.79	%			12.61	%			12.80	%			13.39	%			13.36	%
Common equity tier 1 risk-based capital			11.94	%			11.69	%			11.79	%			12.32	%			12.23	%
Tier 1 risk-based capital			11.94	%			11.69	%			11.79	%			12.32	%			12.23	%
Leverage			8.86	%			8.98	%			10.26	%			9.46	%			9.57	%
Stock Yards Bancorp, Inc. Financial Information (unaudited)
Fourth Quarter 2021 Earnings Release
		Quarterly Comparison
Average Balance Sheet Data		12/31/21				9/30/21				6/30/21				3/31/21				12/31/20
Federal funds sold and interest bearing due from banks		$	699,222			$	532,549			$	313,954			$	235,370			$	271,277
Mortgage loans held for sale			12,556				8,875				8,678				14,618				28,951
Available for sale debt securities			1,099,235				1,034,712				793,696				661,175				510,677
Loans			4,172,676				4,173,260				3,844,662				3,605,760				3,483,298
Total interest earning assets			5,993,065				5,760,760				4,972,914				4,527,563				4,305,487
Total assets			6,406,612				6,139,176				5,226,654				4,710,836				4,512,874
Interest bearing deposits			3,798,666				3,525,785				3,055,360				2,815,986				2,689,103
Total deposits			5,559,577				5,297,917				4,552,583				4,094,179				3,888,247
Securities sold under agreement to repurchase and federal funds purchased			86,911				82,048				66,591				56,536				55,825
Federal Home Loan Bank advances			7,174				10,000				19,135				29,270				48,771
Total interest bearing liabilities			3,892,751				3,617,833				3,141,086				2,901,792				2,793,699
Total stockholders' equity			668,287				660,099				516,427				444,821				433,596
Performance Ratios
Annualized return on average assets (7)			1.52	%			1.50	%			0.32	%			1.96	%			1.56	%
Annualized return on average equity (7)			14.60	%			13.92	%			3.25	%			20.71	%			16.27	%
Net interest margin, fully tax equivalent			3.07	%			3.14	%			3.36	%			3.39	%			3.35	%
Non-interest income to total revenue, fully tax equivalent			28.65	%			27.85	%			27.48	%			26.77	%			27.40	%
Efficiency ratio, fully tax equivalent (4)			53.24	%			54.63	%			83.86	%			48.29	%			58.06	%
Loans Segmentation
Commercial real estate - non-owner occupied		$	1,128,244			$	1,142,647			$	1,170,461			$	876,523			$	833,470
Commercial real estate - owner occupied			678,405				652,631				604,120				527,316				508,672
Commercial and industrial			967,022				910,923				845,038				742,505				775,154
Commercial and industrial - PPP			140,734				231,335				377,021				612,885				550,186
Residential real estate - owner occupied			400,695				398,069				377,783				262,516				239,191
Residential real estate - non-owner occupied			281,018				277,045				273,782				136,380				140,930
Construction and land development			299,206				303,642				281,149				281,815				291,764
Home equity lines of credit			138,976				140,027				142,468				91,233				95,366
Consumer			104,294				104,629				105,439				78,326				71,874
Leases			13,622				12,348				14,171				14,115				14,786
Credit cards			17,087				15,821				14,960				11,542				10,203
Total loans and leases		$	4,169,303			$	4,189,117			$	4,206,392			$	3,635,156			$	3,531,596
Asset Quality Data
Non-accrual loans		$	6,712			$	5,036			$	12,814			$	12,913			$	12,514
Troubled debt restructurings			12				13				14				15				16
Loans past due 90 days or more and still accruing			684				-				1,050				1,377				649
Total non-performing loans			7,408				5,049				13,878				14,305				13,179
Other real estate owned			7,212				7,229				648				281				281
Total non-performing assets		$	14,620			$	12,278			$	14,526			$	14,586			$	13,460
Non-performing loans to total loans (2)			0.18	%			0.12	%			0.33	%			0.39	%			0.37	%
Non-performing assets to total assets			0.22	%			0.20	%			0.24	%			0.30	%			0.29	%
Allowance for credit losses on loans to total loans (2)			1.29	%			1.35	%			1.41	%			1.40	%			1.47	%
Allowance for credit losses on loans to average loans			1.29	%			1.35	%			1.55	%			1.41	%			1.49	%
Allowance for credit losses on loans to non-performing loans			728	%			1120	%			428	%			355	%			394	%
Net (charge-offs) recoveries		$	(1,535	)		$	(1,891	)		$	(2,743	)		$	(6	)		$	19
Net (charge-offs) recoveries to average loans (5)			-0.04	%			-0.05	%			-0.07	%			0.00	%			0.00	%
Other Information
Total assets under management (in millions)		$	4,801			$	4,506			$	4,440			$	3,989			$	3,852
Full-time equivalent employees			820				794				823				638				641
(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)		12/31/21				9/30/21				6/30/21				3/31/21				12/31/20
Total stockholders' equity - GAAP (a)		$	675,869			$	663,547			$	651,089			$	443,232			$	440,701
Less: Goodwill			(135,830	)			(135,830	)			(136,529	)			(12,513	)			(12,513	)
Less: Core deposit intangible			(5,596	)			(5,871	)			(5,162	)			(1,885	)			(1,962	)
Tangible common equity - Non-GAAP (c)		$	534,443			$	521,846			$	509,398			$	428,834			$	426,226
Total assets - GAAP (b)		$	6,646,025			$	6,181,188			$	6,088,072			$	4,794,075			$	4,608,629
Less: Goodwill			(135,830	)			(135,830	)			(136,529	)			(12,513	)			(12,513	)
Less: Core deposit intangible			(5,596	)			(5,871	)			(5,162	)			(1,885	)			(1,962	)
Tangible assets - Non-GAAP (d)		$	6,504,599			$	6,039,487			$	5,946,381			$	4,779,677			$	4,594,154
Total stockholders' equity to total assets - GAAP (a/b)			10.17	%			10.73	%			10.69	%			9.25	%			9.56	%
Tangible common equity to tangible assets - Non-GAAP (c/d)			8.22	%			8.64	%			8.57	%			8.97	%			9.28	%
Total shares outstanding (e)			26,596				26,585				26,588				22,781				22,692
Book value per share - GAAP (a/e)		$	25.41			$	24.96			$	24.49			$	19.46			$	19.42
Tangible common equity per share - Non-GAAP (c/e)			20.09				19.63				19.16				18.82				18.78
(2) - Allowance for credit losses on loans to total non-PPP loans represents the allowance for credit losses on loans, divided by total loans less PPP loans. Non-performing loans to total non-PPP loans represents non-performing loans, divided by total loans less PPP loans. Bancorp believes these non-GAAP disclosures are important because they provide a comparable ratio after eliminating the PPP loans, which are fully guaranteed by the U.S. SBA and have not been allocated for within the allowance for credit losses on loans and are not at risk of non-performance.
		Quarterly Comparison
(Dollars in thousands)		12/31/21				9/30/21				6/30/21				3/31/21				12/31/20
Total Loans - GAAP (a)		$	4,169,303			$	4,189,117			$	4,206,392			$	3,635,156			$	3,531,596
Less: PPP loans			(140,734	)			(231,335	)			(377,021	)			(612,885	)			(550,186	)
Total non-PPP Loans - Non-GAAP (b)		$	4,028,569			$	3,957,782			$	3,829,371			$	3,022,271			$	2,981,410
Allowance for credit losses on loans (c)		$	53,898			$	56,533			$	59,424			$	50,714			$	51,920
Total non-performing loans (d)			7,408				5,049				13,878				14,305				13,179
Allowance for credit losses on loans to total loans - GAAP (c/a)			1.29	%			1.35	%			1.41	%			1.40	%			1.47	%
Allowance for credit losses on loans to total loans - Non-GAAP (c/b)			1.34	%			1.43	%			1.55	%			1.68	%			1.74	%
Non-performing loans to total loans - GAAP (d/a)			0.18	%			0.12	%			0.33	%			0.39	%			0.37	%
Non-performing loans to total loans - Non-GAAP (d/b)			0.18	%			0.13	%			0.36	%			0.47	%			0.44	%
(3) - Interest income on a FTE basis includes the additional amount of interest income that would have been earned if investments in certain tax-exempt interest earning assets had been made in assets subject to federal, state and local taxes yielding the same after-tax income.
(4) - The efficiency ratio, a non-GAAP measure, equals total non-interest expenses divided by the sum of net interest income (FTE) and non-interest income. The ratio excludes net gains (losses) on sales, calls, and impairment of investment securities, if applicable. In addition to the efficiency ratio presented, Bancorp considers an adjusted efficiency ratio to be important because it provides a comparable ratio after eliminating the fluctuation in non-interest expenses related to amortization of investments in tax credit partnerships and non-recurring merger expenses.
		Quarterly Comparison
(Dollars in thousands)		12/31/21				9/30/21				6/30/21				3/31/21				12/31/20
Total non-interest expenses - GAAP  (a)		$	34,572			$	34,558			$	48,177			$	24,973			$	29,029
Less: Non-recurring merger expenses			-				(525	)			(18,100	)			(400	)			-
Less: Amortization of investments in tax credit partnerships			(52	)			(53	)			(231	)			(31	)			(2,955	)
Total non-interest expenses - Non-GAAP (c)		$	34,520			$	33,980			$	29,846			$	24,542			$	26,074
Total net interest income, fully tax equivalent		$	46,328			$	45,643			$	41,661			$	37,874			$	36,301
Total non-interest income			18,604				17,614				15,788				13,844				13,698
Less: Gain/loss on sale of securities			-				-				-				-				-
Total revenue - GAAP (b)		$	64,932			$	63,257			$	57,449			$	51,718			$	49,999
Efficiency ratio - GAAP (a/b)			53.24	%			54.63	%			83.86	%			48.29	%			58.06	%
Efficiency ratio - Non-GAAP (c/b)			53.16	%			53.72	%			51.95	%			47.45	%			52.15	%
		Twelve months ended
(Dollars in thousands)		12/31/21				12/31/20
Total non-interest expenses - GAAP  (a)		$	142,280			$	101,659
Less: Non-recurring merger expenses			(19,025	)			-
Less: Amortization of investments in tax credit partnerships			(367	)			(3,096	)
Total non-interest expenses - Non-GAAP (c)		$	122,888			$	98,563
Total net interest income, fully tax equivalent		$	171,508			$	136,133
Total non-interest income			65,850				51,899
Less: Gain/loss on sale of securities			-				-
Total revenue - GAAP (b)		$	237,358			$	188,032
Efficiency ratio - GAAP (a/b)			59.94	%			54.06	%
Efficiency ratio - Non-GAAP (c/b)			51.77	%			52.42	%
(5) - Quarterly net (charge-offs) recoveries to average loans ratios are not annualized.
(6) - Detail of Provision for credit losses follows:
		Quarterly Comparison
(in thousands)		12/31/21				9/30/21				6/30/21				3/31/21				12/31/20
Provision for credit losses - loans		$	(1,100	)		$	(1,000	)		$	4,697			$	(1,200	)		$	1,400
Provision for credit losses - off balance sheet exposures			(800	)			(525	)			(550	)			(275	)			(900	)
Total provision for credit losses		$	(1,900	)		$	(1,525	)		$	4,147			$	(1,475	)		$	500
(7) - Return on average assets equals net income divided by total average assets, annualized to reflect a full year return on average assets. Similarly, return on average equity equals net income divided by total average equity, annualized to reflect a full year return on average equity.  As a result of the substantial impact that non-recurring items related to the Kentucky Bancshares acquisition had on results for the three and six months ended June 30, 2021, Bancorp considers adjusted return on average assets and return on average equity ratios important as they reflect performance after removing certain merger expenses and purchase accounting adjustments.
		Quarterly Comparison
(Dollars in thousands)		12/31/21				9/30/21				6/30/21				3/31/21				12/31/20
Net income, as reported (a)		$	24,589			$	23,162			$	4,184			$	22,710			$	17,736
Add: Non-recurring merger expenses			-				525				18,100				400				-
Add: Provision for credit losses on non-PCD loans			-				-				7,397				-				-
Less: Tax effect of adjustments to net income			-				(121	)			(4,360	)			(78	)			-
Total net income - Non-GAAP (b)		$	24,589			$	23,577			$	24,327			$	23,026			$	17,736
Total average assets (c)		$	6,406,612			$	6,139,176			$	5,226,654			$	4,710,836			$	4,512,874
Total average equity (d )			668,287				660,099				516,427				444,821				433,596
Return on average assets - GAAP (a/c)			1.52	%			1.50	%			0.32	%			1.96	%			1.56	%
Return on average assets - Non-GAAP (b/c)			1.52	%			1.52	%			1.87	%			1.98	%			1.56	%
Return on average equity - GAAP (a/d)			14.60	%			13.92	%			3.25	%			20.71	%			16.23	%
Return on average equity - Non-GAAP (b/d)			14.60	%			14.17	%			18.89	%			20.99	%			16.23	%

FAQ

What were Stock Yards Bancorp's earnings for Q4 2021?

Stock Yards Bancorp reported net income of $24.6 million, or $0.92 per diluted share, for Q4 2021.

How has the merger with Kentucky Bancshares impacted SYBT?

The merger with Kentucky Bancshares significantly boosted operating results, leading to record loan production and increased market presence.

What is the outlook for Stock Yards Bancorp following the Commonwealth Bancshares merger?

The merger with Commonwealth Bancshares is anticipated to further enhance growth opportunities and strengthen market share in the Louisville area.

How did total deposits change for SYBT in 2021?

Total deposits increased by $1.80 billion, or 45%, to $5.79 billion by December 31, 2021.

What impact did the Central/Eastern Kentucky market have on SYBT's growth?

The Central/Eastern Kentucky market contributed significantly to SYBT's loan and deposit growth, with notable increases in both areas.