Stock Yards Bancorp Reports Record 2022 Earnings and Strong Fourth Quarter Earnings of $29.8 Million or $1.01 Per Diluted Share

Rhea-AI Summary

Stock Yards Bancorp (NASDAQ: SYBT) reported record earnings for Q4 2022, with net income rising to $29.8 million ($1.01 per diluted share), a significant increase from $24.6 million ($0.92 per share) in Q4 2021. Key drivers included strong organic loan growth of $134 million and an expanded net interest margin (NIM) of 3.64%. Total net interest income reached $65.3 million, a 41% increase year-over-year. Despite a decline in total deposits by $110 million, total assets rose to $7.50 billion, reflecting continued strong performance across various loan categories and solid capital levels.

Positive

• Record Q4 2022 earnings of $29.8 million, a 21% increase year-over-year.
• Strong organic loan growth of $134 million (3%) quarter-over-quarter.
• Net interest income increased by $19.1 million (41%) year-over-year.
• NIM improved for the fourth consecutive quarter to 3.64%.
• Wealth management and trust income grew by 31% year-over-year.

Negative

• Total deposits decreased by $110 million (2%) quarter-over-quarter.
• Anticipated challenges in deposit pricing could hinder future NIM expansion.
• Total non-interest expenses rose sharply by $11.4 million (33%) year-over-year.

Results Highlighted by Continued Strong Organic Loan Growth and Net Interest Margin Expansion

LOUISVILLE, Ky., Jan. 25, 2023 (GLOBE NEWSWIRE) -- Stock Yards Bancorp, Inc. (NASDAQ: SYBT), parent company of Stock Yards Bank & Trust Company, with offices in Louisville, central, eastern and northern Kentucky, as well as the Indianapolis, Indiana and Cincinnati, Ohio metropolitan markets, today reported record earnings for the fourth quarter ended December 31, 2022, of $29.8 million, or $1.01 per diluted share. This compares to net income of $24.6 million, or $0.92 per diluted share, for the fourth quarter of 2021. Organic loan growth across all markets and expanded net interest margin (NIM) contributed to strong fourth quarter 2022 operating results.

(dollar amounts in thousands, except per share data)		4Q22			3Q22			4Q21
Net income	$	29,817		$	28,455		$	24,589
Net income per share, diluted		1.01			0.97			0.92
Net interest income	$	65,263		$	62,376		$	46,182
Provision for credit loss expense(6)		3,375			4,803			(1,900	)
Non-interest income		23,142			24,864			18,604
Non-interest expenses		45,946			44,873			34,572
Net interest margin		3.64	%		3.46	%		3.07	%
Efficiency ratio(4)		51.85	%		51.30	%		53.24	%
Tangible common equity to tangible assets(1)		7.44	%		6.78	%		8.22	%
Annualized return on average equity(7)		15.99	%		14.85	%		14.60	%
Annualized return on average assets(7)		1.56	%		1.47	%		1.52	%

“We delivered excellent fourth quarter and full year 2022 results, highlighted by strong loan growth, NIM expansion and improving capital levels since our merger earlier this past year,” said James A. (Ja) Hillebrand, Chairman and Chief Executive Officer. “Strong fourth quarter net loan growth (excluding PPP loans) of $134 million was well diversified within loan categories and across all of our markets. While we generated the strongest annual organic loan growth year in our history, we anticipate overall growth moderating towards historical averages in 2023. On the linked quarter, total deposits declined $110 million, primarily due to the contraction in non-interest bearing demand deposit balances. While we are not seeing fallout within our customer base, we anticipate deposit pricing to be a challenge to future NIM expansion.”

“Non-interest income for the fourth quarter aligned with the prior quarter, and significantly exceeded the same period of the prior year. Solid wealth management and trust fees along with record treasury management and card income served to cap off a strong fee income year for us,” continued Hillebrand. “Similar to the prior quarter, we executed several cost saving measures related to our first quarter Commonwealth Bancshares acquisition and disposed of certain overlapping properties, resulting in a non-recurring pre-tax gain of $1.3 million. Additionally, we sold our interest in an investment advisor subsidiary that we acquired from Commonwealth, resulting in a non-recurring pre-tax loss of $870,000. This line of business was not within our geographic footprint and did not ultimately align with our long-term strategic model.”

At December 31, 2022, the Company had $7.50 billion in assets, $5.21 billion in loans and $6.39 billion in total deposits. The Company’s combined enterprise, which encompasses 73 branch offices across three contiguous states, will continue to benefit from a diversified geographic footprint and provide significant growth opportunities in both the banking and wealth management arenas.

Key factors contributing to the fourth quarter of 2022 results included:

• Total loans, excluding PPP loans, grew $134 million, or 3%, on a linked quarter basis. Total loan production remained strong for the fourth consecutive quarter.
• Deposit balances declined $110 million, or 2%, on a linked quarter basis, as non-interest bearing demand deposit balances contracted $250 million offset by increases in interest bearing demand deposits.
• Net interest income increased $19.1 million, or 41%, for the fourth quarter of 2022 compared to the fourth quarter a year ago, consistent with the $1.14 billion, or 19%, increase in average earning assets and the increase in spread. Higher loan yields and volume more than offset significantly lower fee income recognition from the declining PPP loan portfolio.
• NIM improved for the fourth consecutive quarter, increasing 18 basis points on a linked quarter basis to 3.64%.
• Current credit quality remains solid; however, consistent with strong loan growth and the increase in the projected unemployment rate forecast used in modeling, $3.4 million of net credit loss expense⁽⁶⁾ was recorded for the fourth quarter of 2022. Included in credit loss expense for the fourth quarter of 2022 was a $1.6 million specific reserve for a commercial real estate loan.
• Non-interest income increased by $4.5 million, or 24%, over the fourth quarter of 2021, as customer expansion and recent acquisitions once again drove record quarterly card income and treasury management fees. Also, as previously mentioned, the Company disposed of certain overlapping acquired properties, resulting in a non-recurring pre-tax gain of $1.3 million.
• Net new business growth and market improvement in both the fixed income and equity markets drove linked quarter improvements in wealth management and trust income, as well as growth in assets under management.
• The Company sold its partial interest in an investment advisor subsidiary that was acquired from Commonwealth Bancshares in March of 2022, realizing a non-recurring pre-tax loss of $870,000 during the quarter.
• Total non-interest expenses remained controlled and consistent with management expectations, generating an efficiency ratio of 51.85%⁽⁴⁾ for the fourth quarter of 2022.
• Tangible book value per share was $18.50⁽¹⁾ at December 31, 2022, compared to $16.98⁽¹⁾ at September 30, 2022, and $20.09⁽¹⁾ at December 31, 2021. During 2022, tangible common equity and tangible book value have been significantly impacted by the marked increase in interest rates and the related negative impact on accumulated other comprehensive income/loss, leading to a $108 million reduction in equity, primarily as a result of unrealized losses in the available for sale debt securities portfolio. These securities, which management has the ability and intent to hold to maturity, are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major rating agencies, and have a long history of no credit losses.

Highlights for the year ended December 31, 2022:

• Nine months of activity generated by the Commonwealth Bancshares merger exceeded management expectations and boosted overall operating results.
• Loans (excluding PPP) grew $1.16 billion, or 29%, over the past 12 months with $630 million of the growth attributed to the acquisition.
• Excluding the acquisition, organic loan growth totaled $529 million, or 13%, over the past 12 months.
• Inclusive of the first quarter acquisition, deposit balances grew by $604 million, or 10%, over the past 12 months. Non-interest bearing deposits and interest bearing demand deposits represented $194 million and $410 million of the growth, respectively.
• Higher loan yield expansion accompanied with a reduction in excess balance sheet liquidity led to NIM expanding 13 basis points in 2022 over 2021.
• Wealth management and trust income reached and surpassed record levels during the year, increasing $8.5 million, or 31%, over the past 12 months, with net new business more than offsetting the current market volatility.
• Customer expansion and transaction growth have led to record 2022 card and treasury management income.
  

Hillebrand said, “In November, we were once again nationally recognized by American Banker Magazine as one of the Best Banks to Work for in 2022. The Best Banks to Work For program identifies and honors U.S. banks for outstanding employee satisfaction. In addition, in September, we were one of 35 banks in the U.S. to be named a “Sm-All Star” in Piper Sandler’s annual list of top-performing small-cap banks. This elite annual list reflects the top 10% of the industry across a number of metrics including growth, profitability, credit quality and capital strength. We have now been named a Sm-All Star five times - 2008, 2011, 2019, 2020 and 2022. These recognitions are an honor and a testament to the dedication of our employees, who continue to work purposefully to support our communities.”

“During the fourth quarter of 2022, we published our inaugural Environmental, Social and Governance (“ESG”) Corporate Responsibility Report,” Hillebrand continued. “While ESG reporting is not mandatory, we believe it provides important information on our operations and management priorities. This report identifies ongoing practices and recent accomplishments in the areas of environmental risk and impact management, social responsibility, including diversity, equity and inclusion, and governance. We hold a strong commitment to developing and maintaining a solid ESG program, and this report allows us to give our stakeholders an even more transparent look into our best practices.”

To learn more about the Bank’s ESG efforts and view the report, please visit the ESG report tab under Resources at www.syb.com.

Results of Operations – Fourth Quarter 2022 Compared with Fourth Quarter 2021

Net interest income, the Company’s largest source of revenue, increased 41%, or $19.1 million, to $65.3 million, primarily due to average earning asset growth and rate increases. Organic growth, and to a greater extent the recent acquisitions, have boosted net interest income over the past 12 months.

• Total interest income increased by $27.6 million, or 58%, to $75.2 million.
  • Interest income on loans increased $20.4 million, or 47%, over the prior year quarter. Consistent with the $1.07 billion increase in average non-PPP loans, and interest rate increases, the average quarterly yield earned on non-PPP loans increased 103 basis points over the past 12 months to 5.00%. PPP interest and fee income totaled $118,000 and $3.7 million for the fourth quarters of 2022 and 2021, respectively.
  • Interest income on debt securities increased $5.5 million compared to the fourth quarter of 2021, driven by average balance growth of $687 million and significantly improved yields on recent purchases stemming from rising rates.
  • Interest income on overnight funds increased $1.9 million over the prior year quarter. The FRB has increased the rate paid on reserve balances meaningfully during 2022, which has significantly benefitted interest income.
• Total interest expense increased $8.6 million to $9.9 million, as the cost of interest bearing liabilities increased 72 basis points to 0.86%.
• NIM expanded 57 basis points to 3.64% for the fourth quarter of 2022, from 3.07% for the fourth quarter a year ago, primarily due to higher loan yields and volume, which more than offset significantly lower fee income recognition from the declining PPP loan portfolio.

The Company recorded $3.4 million in provision for credit losses⁽⁶⁾ during the fourth quarter of 2022, which included a $3.6 million provision for credit losses on loans and a $225,000 benefit to credit loss expense for off-balance sheet exposures. Significant loan growth during the quarter and the increase in the unemployment projection drove additional provision expense within the CECL allowance model. In addition, the Bank recorded a $1.6 million specific reserve for a commercial real estate loan during the fourth quarter of 2022. This was the primary driver of the increase in non-performing loans for the quarter.

Non-interest income increased $4.5 million, or 24%, to $23.1 million, with the recent acquisitions contributing significantly to revenue growth.

• Wealth management and trust income ended the fourth quarter of 2022 at $9.2 million, increasing $1.8 million, or 25%, over the fourth quarter of 2021. Net new business growth and market improvement in both fixed income and equity markets drove the linked quarter improvement in assets under management and asset-based fees.
• Card income increased $1.0 million, or 26%, over the fourth quarter of 2021, as card activity continues to benefit from generally strong spending trends and customer expansion.
• Treasury management fees increased $407,000, or 22%, driven by increased transaction volume, expanded foreign exchange income, new product sales and both organic and acquisition-related customer base expansion. Continued calling efforts and the Company’s ability to generate new fee income has been the catalyst for this growth trend.
• Mortgage banking income, which primarily consists of gain on sale of loans, net servicing income and mortgage servicing rights amortization, totaled $209,000 for the fourth quarter of 2022, down significantly compared to the fourth quarter a year ago. Overall volume in 2022 has cooled dramatically consistent with rising interest rates.
• Consistent with the third quarter of 2022, the Company disposed of certain overlapping properties acquired from the March Commonwealth acquisition, resulting in a non-recurring pre-tax gain of $1.3 million during the fourth quarter of 2022.
  

Non-interest expenses increased $11.4 million, or 33%, compared to the fourth quarter of 2021, to $45.9 million.

• Compensation and employee benefits expense increased $6.3 million, or 36%, primarily due to the increase in full time equivalent employees associated with the recent acquisitions. Consistent with organic and acquisition related expansion, full time equivalent employees increased to 1,040 at December 31, 2022 from 820 at December 31, 2021.
• Net occupancy and equipment expenses increased $1.2 million, or 44%, compared to the fourth quarter a year ago. In connection with the recent acquisition, a total of ten branches were added in addition to operational buildings.
• Technology and communication expenses, which includes 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 $791,000, or 27%, consistent with an increase in customer accounts and core system upgrades.
• Intangible amortization expense increased $1.3 million consistent with the increase in customer intangible assets related to the first quarter acquisition.
• The Company sold its partial interest in an investment adviser subsidiary that was acquired from Commonwealth Bancshares in March of 2022, realizing a non-recurring pre-tax loss of $870,000 during the quarter.
• Other non-interest expenses increased $606,000, or 25%, primarily due to increased credit card rewards expense, and fraud losses.

Financial Condition – December 31, 2022 Compared with December 31, 2021

Total assets increased $850 million, or 13%, year over year to $7.50 billion, boosted by stellar organic growth and the recent acquisition.

Total loans increased $1.04 billion year over year, or 25%, to $5.21 billion. Excluding the PPP loan portfolio, total loans increased $1.2 billion, or 29%, over the past 12 months, with approximately $630 million of the growth attributable to the first quarter acquisition.

Total investment securities have increased $438 million, or 37%, year over prior year, as the Company added $247 million in securities in the first quarter Commonwealth acquisition and deployed a significant amount of excess cash into securities during the first part of the year.

Inclusive of the Commonwealth acquisition, total deposits increased $604 million, or 10%, over the past 12 months.

Asset quality, which has trended within a narrow range over the past several years, has remained solid. During the fourth quarter of 2022, the Company recorded net loan charge-offs of $152,000, compared to $1.5 million in the fourth quarter of 2021. Non-performing loans totaled $15.1 million, or 0.29% of total loans outstanding compared to $7.4 million, or 0.18% of total loans outstanding at December 31, 2021. The ratio of allowance for credit losses to loans (excluding PPP) ended at 1.42%⁽²⁾ at December 31, 2022 compared to 1.34%⁽²⁾ at December 31, 2021.

At December 31, 2022, the Company continued to be “well-capitalized,” the highest regulatory capital rating for financial institutions, with all capital ratios remaining strong. Total equity to assets was 10.14%⁽¹⁾ and the tangible common equity ratio was 7.44%⁽¹⁾ at December 31, 2022, compared to 10.17%⁽¹⁾ and 8.22%⁽¹⁾ at December 31, 2021, respectively. The increase in interest rates during 2022 have led to outsized unrealized losses within the available for sale debt securities portfolio, with the decline in accumulated other comprehensive income/loss driving down the tangible common equity ratio.

In November 2022, the board of directors declared a quarterly cash dividend of $0.29 per common share. The dividend was paid December 30, 2022, to shareholders of record as of December 19, 2022.

No shares were repurchased in 2022 or 2021 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 2022 Compared with Third Quarter 2022

Net interest income increased $2.9 million, or 5%, over the prior quarter to $65.3 million, led by the increase in earning assets and rising rates. NIM improved for the fourth consecutive quarter, increasing 18 basis points on a linked quarter basis to 3.64%.

The Company recorded $3.4 million in provision for credit losses⁽⁶⁾ during the fourth quarter of 2022, which included a $3.6 million provision for credit losses on loans and a $225,000 benefit to credit loss expense for off-balance sheet exposures. Solid loan growth during the quarter and the increase in the unemployment projection drove provision expense within the CECL allowance model. In addition, the Bank recorded a $1.6 million specific reserve for a commercial real estate loan. During the third quarter of 2022, the Company recorded $4.8 million in provision for credit loss expense, which included a $4.1 million provision for credit losses on loans and a $700,000 provision for credit loss expense for off-balance sheet exposures.

Non-interest income decreased $1.7 million, or 7%, to $23.1 million on the linked quarter. As previously mentioned, the Company disposed of certain overlapping acquired properties, resulting in a non-recurring pre-tax gain of $1.3 million during the fourth quarter of 2022 compared to a $3.1 million similar gain during the third quarter of 2022. While mortgage banking income declined $494,000 on the linked quarter, card income and wealth management and trust income increased $336,000 and $69,000, respectively.

Non-interest expenses increased $1.1 million to $45.9 million led by the previously mentioned loss recorded on the disposition of the Company’s interest in an investment advisor subsidiary.

Financial Condition – December 31, 2022 Compared with September 30, 2022

Total assets decreased $58 million, or 1%, on a linked quarter basis to $7.50 billion.

Total loans (excluding PPP) increased $134 million, or 3%, on a linked quarter basis, with meaningful increases across the Commercial & Industrial, Construction & Land Development and Residential Real Estate portfolios. Total line of credit usage reached its highest level in two years, increasing to 42% as of December 31, 2022, compared to 40% as of September 30, 2022. Commercial and industrial line usage increased to 33% as of December 31, 2022, compared to 30% as of September 30, 2022.

Total deposits decreased $110 million, or 2%, on a linked quarter basis, with non-interest bearing demand deposit balances contracting $250 million. Total interest bearing deposits increased $140 million, on a linked quarter basis, led by a $203 million increase in interest bearing demand deposit accounts offset by contraction in savings, money market and time deposits.

About the Company

Louisville, Kentucky-based Stock Yards Bancorp, Inc., with $7.50 billion in assets, was incorporated in 1988 as a bank holding company. It is the parent company of Stock Yards Bank & Trust Company, which was established in 1904. The Company’s common shares trade on The NASDAQ Stock Market under the symbol “SYBT.”

This report contains forward-looking statements under the Private Securities Litigation Reform Act that involve risks and uncertainties. Although the Company’s management believes the assumptions underlying the forward-looking statements contained herein are reasonable, any of these assumptions could be inaccurate. Therefore, there can be no assurance the forward-looking statements included herein will prove to be accurate. Factors that could cause actual results to differ from those discussed in forward-looking statements include, but are not limited to: economic conditions both generally and more specifically in the markets in which the Company and its banking subsidiary operates; competition for the Company’s customers from other providers of financial services; changes in, or forecasts of, future political and economic conditions, inflation and efforts to control it; government legislation and regulation, which change and over which the Company has no control; changes in interest rates; material unforeseen changes in liquidity, results of operations, or financial condition of the Company’s customers; and other risks detailed in the Company’s filings with the Securities and Exchange Commission, all of which are difficult to predict and many of which are beyond the control of the Company. Refer to Stock Yards’ Annual Report on Form 10-K for the year ended December 31, 2021, 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.

Stock Yards Bancorp, Inc. Financial Information (unaudited)
Fourth Quarter 2022 Earnings Release
(In thousands unless otherwise noted)
		Three Months Ended						Twelve Months Ended
		December 31,						December 31,
Income Statement Data		2022			2021			2022			2021
Net interest income, fully tax equivalent (3)		$	65,469		$	46,328		$	234,267		$	171,508
Interest income:
Loans		$ 64,033			$ 43,671			$ 216,138			$ 164,073
Federal funds sold and interest bearing due from banks		2,173			287			6,018			645
Mortgage loans held for sale		13			74			190			249
Securities		8,931			3,476			29,306			12,109
Total interest income		75,150			47,508			251,652			177,076
Interest expense:
Deposits		9,022			1,279			16,412			5,627
Securities sold under agreements to repurchase and
other short-term borrowings		399			11			721			38
Federal Home Loan Bank advances		12			36			12			337
Subordinated debentures		454			-			1,124			-
Total interest expense		9,887			1,326			18,269			6,002
Net interest income		65,263			46,182			233,383			171,074
Provision for credit losses (6)		3,375			(1,900)			10,257			(753)
Net interest income after provision for credit losses		61,888			48,082			223,126			171,827
Non-interest income:
Wealth management and trust services		9,221			7,379			36,111			27,613
Deposit service charges		2,183			1,907			8,286			5,852
Debit and credit card income		5,046			4,012			18,623			13,456
Treasury management fees		2,278			1,871			8,590			6,912
Mortgage banking income		209			1,062			3,210			4,724
Net investment product sales commissions and fees		833			764			3,063			2,553
Bank owned life insurance		545			272			1,597			914
Gain (Loss) on sale of premises and equipment		1,295			(37)			4,369			(78)
Other		1,532			1,374			5,300			3,904
Total non-interest income		23,142			18,604			89,149			65,850
Non-interest expenses:
Compensation		23,398			17,146			86,640			63,034
Employee benefits		3,421			3,189			16,568			13,479
Net occupancy and equipment		3,843			2,667			14,298			9,688
Technology and communication		3,747			2,956			14,897			11,145
Debit and credit card processing		1,470			1,334			5,909			4,494
Marketing and business development		1,544			1,793			5,005			4,150
Postage, printing and supplies		893			714			3,354			2,213
Legal and professional		492			755			2,943			2,583
FDIC Insurance		730			706			2,758			1,847
Amortization of investments in tax credit partnerships		88			52			353			367
Capital and deposit based taxes		799			549			2,621			2,090
Merger expenses		-			-			19,500			19,025
Federal Home Loan Bank early termination penalty		-			-			-			474
Intangible amortization		1,610			276			5,544			770
Loss on disposition of Landmark Financial Advisors		870			-			870			-
Other		3,041			2,435			10,531			6,921
Total non-interest expenses		45,946			34,572			191,791			142,280
Income before income tax expense		39,084			32,114			120,484			95,397
Income tax expense		9,174			7,525			27,190			20,752
Net income		29,910			24,589			93,294			74,645
Less: income attributed to non-controlling interest		93			-			322			-
Net income available to stockholders		$	29,817		$	24,589		$	92,972		$	74,645
Net income per share - Basic		$	1.02		$	0.93		$	3.24		$	3.00
Net income per share - Diluted		1.01			0.92			3.21			2.97
Cash dividend declared per share		0.29			0.28			1.14			1.10
Weighted average shares - Basic		29,157			26,492			28,672			24,898
Weighted average shares - Diluted		29,428			26,800			28,922			25,156
								December 31,
Balance Sheet Data								2022			2021
Investment securities								$	1,617,834		$	1,180,298
Loans								5,205,918			4,169,303
Allowance for credit losses on loans								73,531			53,898
Total assets								7,496,261			6,646,025
Non-interest bearing deposits								1,950,198			1,755,754
Interest bearing deposits								4,441,054			4,031,760
Federal Home Loan Bank advances								50,000			-
Subordinated debentures								26,343			-
Stockholders' equity								760,432			675,869
Total shares outstanding								29,259			26,596
Book value per share (1)								$	25.99		$	25.41
Tangible common equity per share (1)								18.50			20.09
Market value per share								64.98			63.88
Stock Yards Bancorp, Inc. Financial Information (unaudited)
Fourth Quarter 2022 Earnings Release
		Three Months Ended						Twelve Months Ended
		December 31,						December 31,
Average Balance Sheet Data		2022			2021			2022			2021
Federal funds sold and interest bearing due from banks		$	235,448		$	699,222		$	477,341		$	446,783
Mortgage loans held for sale		6,735			12,556			8,835			11,170
Investment securities		1,786,383			1,099,235			1,670,324			898,934
Federal Home Loan Bank stock		10,928			9,376			11,741			10,824
Loans		5,094,356			4,172,676			4,819,124			3,951,257
Total interest earning assets		7,133,850			5,993,065			6,987,365			5,318,968
Total assets		7,559,260			5,935,146			7,438,880			5,626,886
Interest bearing deposits		4,428,582			3,798,666			4,385,393			3,302,262
Total deposits		6,526,440			5,559,577			6,438,606			4,881,057
Securities sold under agreement to repurchase and other short term borrowings		117,138			86,911			122,154			73,130
Federal Home Loan Bank advances		1,087			7,174			274			16,317
Subordinated debentures		26,309			-			21,733			-
Total interest bearing liabilities		4,582,005			3,892,751			4,538,911			3,391,709
Total stockholders' equity		740,007			668,287			738,798			573,261
Performance Ratios
Annualized return on average assets (7)		1.56%			1.52%			1.25%			1.33%
Annualized return on average equity (7)		15.99%			14.60%			12.58%			13.02%
Net interest margin, fully tax equivalent		3.64%			3.07%			3.35%			3.22%
Non-interest income to total revenue, fully tax equivalent		27.56%			28.65%			26.12%			27.74%
Efficiency ratio, fully tax equivalent (4)		51.85%			53.24%			59.30%			59.94%
Capital Ratios
Total stockholders' equity to total assets (1)								10.14%			10.17%
Tangible common equity to tangible assets (1)								7.44%			8.22%
Average stockholders' equity to average assets								9.93%			10.19%
Total risk-based capital								12.54%			12.79%
Common equity tier 1 risk-based capital								11.47%			11.94%
Tier 1 risk-based capital								11.04%			11.94%
Leverage								9.33%			8.86%
Loan Segmentation
Commercial real estate - non-owner occupied								$	1,397,346		$	1,128,244
Commercial real estate - owner occupied								834,629			678,405
Commercial and industrial								1,230,976			967,022
Commercial and industrial - PPP								18,593			140,734
Residential real estate - owner occupied								591,515			400,695
Residential real estate - non-owner occupied								313,248			281,018
Construction and land development								445,690			299,206
Home equity lines of credit								200,725			138,976
Consumer								139,461			104,294
Leases								13,322			13,622
Credit cards								20,413			17,087
Total loans and leases								$	5,205,918		$	4,169,303
Asset Quality Data
Non-accrual loans								$	14,242		$	6,712
Troubled debt restructurings								-			12
Loans past due 90 days or more and still accruing								892			684
Total non-performing loans								15,134			7,408
Other real estate owned								677			7,212
Total non-performing assets								$	15,811		$	14,620
Non-performing loans to total loans (2)								0.29%			0.18%
Non-performing assets to total assets								0.21%			0.22%
Allowance for credit losses on loans to total loans (2)								1.41%			1.29%
Allowance for credit losses on loans to average loans								1.53%			1.36%
Allowance for credit losses on loans to non-performing loans								486%			728%
Net (charge-offs) recoveries		$	(152)		$	(1,535)		$	1		$	(6,176)
Net (charge-offs) recoveries to average loans (5)		0.00%			-0.04%			0.00%			-0.16%
Stock Yards Bancorp, Inc. Financial Information (unaudited)
Fourth Quarter 2022 Earnings Release
		Quarterly Comparison
Income Statement Data		12/31/22			9/30/22			6/30/22			3/31/22			12/31/21
Net interest income, fully tax equivalent (3)		$	65,469		$	62,608		$	57,244		$	48,944		$	46,328
Net interest income		$	65,263		$	62,376		$	56,984		$	48,760		$	46,182
Provision for credit losses (6)		3,375			4,803			(200)			2,279			(1,900)
Net interest income after provision for credit losses		61,888			57,573			57,184			46,481			48,082
Non-interest income:
Wealth management and trust services		9,221			9,152			9,495			8,243			7,379
Deposit service charges		2,183			2,179			2,061			1,863			1,907
Debit and credit card income		5,046			4,710			4,748			4,119			4,012
Treasury management fees		2,278			2,221			2,187			1,904			1,871
Mortgage banking income		209			703			1,295			1,003			1,062
Net investment product sales commissions and fees		833			892			731			607			764
Bank owned life insurance		545			516			270			266			272
Gain (Loss) on sale of premises and equipment		1,295			3,074			-			-			(37)
Other		1,532			1,417			1,153			1,198			1,374
Total non-interest income		23,142			24,864			21,940			19,203			18,604
Non-interest expenses:
Compensation		23,398			23,069			22,204			17,969			17,146
Employee benefits		3,421			4,179			4,429			4,539			3,189
Net occupancy and equipment		3,843			3,767			3,663			3,025			2,667
Technology and communication		3,747			3,747			3,984			3,419			2,956
Debit and credit card processing		1,470			1,437			1,665			1,337			1,334
Marketing and business development		1,544			1,244			1,445			772			1,793
Postage, printing and supplies		893			903			825			733			714
Legal and professional		492			774			1,027			650			755
FDIC Insurance		730			847			536			645			706
Amortization of investments in tax credit partnerships		88			88			89			88			52
Capital and deposit based taxes		799			722			582			518			549
Merger expenses		-			-			-			19,500			-
Intangible amortization		1,610			1,610			1,611			713			275
Loss on disposition of Landmark Financial Advisors		870			-			-			-			-
Other		3,041			2,486			2,615			2,389			2,436
Total non-interest expenses		45,946			44,873			44,675			56,297			34,572
Income before income tax expense		39,084			37,564			34,449			9,387			32,114
Income tax expense		9,174			9,024			7,547			1,445			7,525
Net income		29,910			28,540			26,902			7,942			24,589
Less: income attributed to non-controlling interest		93			85			108			36			-
Net income available to stockholders		$	29,817		$	28,455		$	26,794		$	7,906		$	24,589
Net income per share - Basic		$	1.02		$	0.98		$	0.92		$	0.29		$	0.93
Net income per share - Diluted		1.01			0.97			0.91			0.29			0.92
Cash dividend declared per share		0.29			0.29			0.28			0.28			0.28
Weighted average shares - Basic		29,157			29,144			29,131			27,230			26,492
Weighted average shares - Diluted		29,428			29,404			29,346			27,485			26,800
		Quarterly Comparison
Balance Sheet Data		12/31/22			9/30/22			6/30/22			3/31/22			12/31/21
Cash and due from banks		$	82,515		$	93,948		$	88,422		$	109,799		$	62,304
Federal funds sold and interest bearing due from banks		84,852			235,973			485,447			641,892			898,888
Mortgage loans held for sale		2,606			5,230			10,045			9,323			8,614
Investment securities		1,617,834			1,627,298			1,625,488			1,698,546			1,180,298
Federal Home Loan Bank stock		10,928			10,928			13,811			13,811			9,376
Loans		5,205,918			5,072,877			4,877,324			4,847,683			4,169,303
Allowance for credit losses on loans		73,531			70,083			66,362			67,067			53,898
Goodwill		194,074			202,524			202,524			202,524			135,830
Total assets		7,496,261			7,554,210			7,583,105			7,777,152			6,646,025
Non-interest bearing deposits		1,950,198			2,200,041			2,121,304			2,089,072			1,755,754
Interest bearing deposits		4,441,054			4,300,732			4,427,826			4,656,419			4,031,760
Securities sold under agreements to repurchase		133,342			124,567			161,512			142,146			75,466
Federal funds purchased		8,789			8,970			8,771			8,920			10,374
Federal Home Loan Bank advances		50,000			-			-			-			-
Subordinated debentures		26,343			26,244			26,144			26,045			-
Stockholders' equity		760,432			727,754			747,131			758,143			675,869
Total shares outstanding		29,259			29,242			29,243			29,220			26,596
Book value per share (1)		25.99			$	24.89		$	25.55		$	25.95		$	25.41
Tangible common equity per share (1)		18.50			16.98			17.59			17.92			20.09
Market value per share		64.98			68.01			59.82			52.90			63.88
Capital Ratios
Total stockholders' equity to total assets (1)		10.14%			9.63%			9.85%			9.75%			10.17%
Tangible common equity to tangible assets (1)		7.44%			6.78%			7.00%			6.94%			8.22%
Average stockholders' equity to average assets		9.79%			9.92%			9.79%			10.24%			10.43%
Total risk-based capital		12.54%			12.16%			12.27%			12.14%			12.79%
Common equity tier 1 risk-based capital		11.47%			10.69%			10.81%			10.66%			11.94%
Tier 1 risk-based capital		11.04%			11.13%			11.26%			11.12%			11.94%
Leverage		9.33%			8.85%			8.58%			9.34%			8.86%
Stock Yards Bancorp, Inc. Financial Information (unaudited)
Fourth Quarter 2022 Earnings Release
		Quarterly Comparison
Average Balance Sheet Data		12/31/22			9/30/22			6/30/22			3/31/22			12/31/21
Federal funds sold and interest bearing due from banks		$	235,448		$	442,880		$	561,101		$	671,263		$	699,222
Mortgage loans held for sale		6,735			8,694			11,303			8,629			12,556
Investment securities		1,786,383			1,769,597			1,741,844			1,321,551			1,099,235
Loans		5,094,356			4,948,898			4,846,013			4,377,930			4,172,676
Total interest earning assets		7,133,850			7,181,781			7,174,072			6,389,882			5,993,065
Total assets		7,559,260			7,661,720			7,651,332			6,872,273			6,406,612
Interest bearing deposits		4,428,582			4,444,983			4,515,563			4,148,716			3,798,666
Total deposits		6,526,440			6,614,263			6,639,458			5,966,178			5,559,577
Securities sold under agreement to repurchase and federal funds purchased		117,138			148,734			149,747			101,075			86,911
Federal Home Loan Bank advances		1,087			-			-			-			7,174
Subordinated debentures		26,309			26,210			26,111			8,052			-
Total interest bearing liabilities		4,582,005			4,619,927			4,691,421			4,257,843			3,892,751
Total stockholders' equity		740,007			760,322			749,445			703,929			668,287
Performance Ratios
Annualized return on average assets (7)		1.56%			1.47%			1.40%			0.47%			1.52%
Annualized return on average equity (7)		15.99%			14.85%			14.34%			4.55%			14.60%
Net interest margin, fully tax equivalent		3.64%			3.46%			3.20%			3.11%			3.07%
Non-interest income to total revenue, fully tax equivalent		27.56%			28.43%			27.71%			28.18%			28.65%
Efficiency ratio, fully tax equivalent (4)		51.85%			51.30%			56.42%			82.61%			53.24%
Loans Segmentation
Commercial real estate - non-owner occupied		$	1,397,346		$	1,415,180		$	1,397,330		$	1,397,633		$	1,128,244
Commercial real estate - owner occupied		834,629			819,727			787,559			803,181			678,405
Commercial and industrial		1,230,976			1,170,241			1,090,404			1,083,980			967,022
Commercial and industrial - PPP		18,593			19,469			36,767			71,361			140,734
Residential real estate - owner occupied		591,515			557,638			533,577			492,123			400,695
Residential real estate - non-owner occupied		313,248			302,936			293,852			297,127			281,018
Construction and land development		445,690			414,632			372,197			346,372			299,206
Home equity lines of credit		200,725			199,485			192,102			186,024			138,976
Consumer		139,461			138,843			137,278			135,198			104,294
Leases		13,322			13,959			14,611			13,952			13,622
Credit cards		20,413			20,767			21,647			20,732			17,087
Total loans and leases		$	5,205,918		$	5,072,877		$	4,877,324		$	4,847,683		$	4,169,303
Asset Quality Data
Non-accrual loans		$	14,242		$	10,580		$	7,827		$	12,494		$	6,712
Troubled debt restructurings		-			-			-			10			12
Loans past due 90 days or more and still accruing		892			32			1,176			300			684
Total non-performing loans		15,134			10,612			9,003			12,804			7,408
Other real estate owned		677			996			7,601			7,156			7,212
Total non-performing assets		$	15,811		$	11,608		$	16,604		$	19,960		$	14,620
Non-performing loans to total loans (2)		0.29%			0.21%			0.18%			0.26%			0.18%
Non-performing assets to total assets		0.21%			0.15%			0.22%			0.26%			0.22%
Allowance for credit losses on loans to total loans (2)		1.41%			1.38%			1.36%			1.38%			1.29%
Allowance for credit losses on loans to average loans		1.44%			1.42%			1.37%			1.53%			1.29%
Allowance for credit losses on loans to non-performing loans		486%			660%			737%			524%			728%
Net (charge-offs) recoveries		$	(152)		$	(382)		$	(5)		$	540		$	(1,535)
Net (charge-offs) recoveries to average loans (5)		0.00%			-0.01%			0.00%			0.01%			-0.04%
Other Information
Total assets under management (in millions)		$	6,585		$	6,293		$	6,555		$	7,305		$	4,801
Full-time equivalent employees		1,040			1,028			1,018			997			820
(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)		12/31/22			9/30/22			6/30/22			3/31/22			12/31/21
Total stockholders' equity - GAAP (a)		$	760,432		$	727,754		$	747,131		$	758,143		$	675,869
Less: Goodwill		(194,074)			(202,524)			(202,524)			(202,524)			(135,830)
Less: Core deposit and other intangibles		(24,990)			(28,747)			(30,357)			(31,968)			(5,596)
Tangible common equity - Non-GAAP (c)		$	541,368		$	496,483		$	514,250		$	523,651		$	534,443
Total assets - GAAP (b)		$	7,496,261		$	7,554,210		$	7,583,105		$	7,777,152		$	6,646,025
Less: Goodwill		(194,074)			(202,524)			(202,524)			(202,524)			(135,830)
Less: Core deposit and other intangibles		(24,990)			(28,747)			(30,357)			(31,968)			(5,596)
Tangible assets - Non-GAAP (d)		$	7,277,197		$	7,322,939		$	7,350,224		$	7,542,660		$	6,504,599
Total stockholders' equity to total assets - GAAP (a/b)		10.14%			9.63%			9.85%			9.75%			10.17%
Tangible common equity to tangible assets - Non-GAAP (c/d)		7.44%			6.78%			7.00%			6.94%			8.22%
Total shares outstanding (e)		29,259			29,242			29,243			29,220			26,596
Book value per share - GAAP (a/e)		$	25.99		$	24.89		$	25.55		$	25.95		$	25.41
Tangible common equity per share - Non-GAAP (c/e)		18.50			16.98			17.59			17.92			20.09
(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)		12/31/22			9/30/22			6/30/22			3/31/22			12/31/21
Total Loans - GAAP (a)		$	5,205,918		$	5,072,877		$	4,877,324		$	4,847,683		$	4,169,303
Less: PPP loans		(18,593)			(19,469)			(36,767)			(71,361)			(140,734)
Total non-PPP Loans - Non-GAAP (b)		$	5,187,325		$	5,053,408		$	4,840,557		$	4,776,322		$	4,028,569
Allowance for credit losses on loans (c)		$	73,531		$	70,083		$	66,362		$	67,067		$	53,898
Total non-performing loans (d)		15,134			10,612			9,003			12,804			7,408
Allowance for credit losses on loans to total loans - GAAP (c/a)		1.41%			1.38%			1.36%			1.38%			1.29%
Allowance for credit losses on loans to total loans - Non-GAAP (c/b)		1.42%			1.39%			1.37%			1.40%			1.34%
Non-performing loans to total loans - GAAP (d/a)		0.29%			0.21%			0.18%			0.26%			0.18%
Non-performing loans to total loans - Non-GAAP (d/b)		0.29%			0.21%			0.19%			0.27%			0.18%
(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. In addition to the efficiency ratio presented, Bancorp considers an adjusted efficiency ratio to be important because it provides a comparable ratio after eliminating net gains (losses) on sales, calls, and impairment of investment securities, as well as net gains (losses) on sales of acquired premises and equipment and disposition of any acquired assets, if applicable, and the fluctuation in non-interest expenses related to amortization of investments in tax credit partnerships and non-recurring merger expenses.
		Quarterly Comparison
(Dollars in thousands)		12/31/22			9/30/22			6/30/22			3/31/22			12/31/21
Total non-interest expenses (a)		$	45,946		$	44,873		$	44,675		$	56,297		$	34,572
Less: Non-recurring merger expenses		-			-			-			(19,500)			-
Less: Loss on disposition of Landmark Financial Advisors		(870)			-			-			-			-
Less: Amortization of investments in tax credit partnerships		(88)			(88)			(89)			(88)			(52)
Total non-interest expenses - Non-GAAP (c)		$	44,988		$	44,785		$	44,586		$	36,709		$	34,520
Total net interest income, fully tax equivalent		$	65,469		$	62,608		$	57,244		$	48,944		$	46,328
Total non-interest income		23,142			24,864			21,940			19,203			18,604
Total revenue - Non-GAAP (b)		88,611			87,472			79,184			68,147			64,932
Less: Gain/loss on sale of acquired premises and equipment		(1,295)			(3,074)			-			-			-
Less: Gain/loss on sale of securities		-			-			-			-			-
Total adjusted revenue - Non-GAAP (d)		$	87,316		$	84,398		$	79,184		$	68,147		$	64,932
Efficiency ratio - Non-GAAP (a/b)		51.85%			51.30%			56.42%			82.61%			53.24%
Adjusted efficiency ratio - Non-GAAP (c/d)		51.52%			53.06%			56.31%			53.87%			53.16%
(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)		12/31/22			9/30/22			6/30/22			3/31/22			12/31/21
Provision for credit losses - loans		$	3,600		$	4,103		$	(700)		$	2,679		$	(1,100)
Provision for credit losses - off balance sheet exposures		(225)			700			500			(400)			(800)
Total provision for credit losses		$	3,375		$	4,803		$	(200)		$	2,279		$	(1,900)
(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 of non-recurring items related to the Commonwealth Bancshares and Kentucky Bancshares acquisitions, Bancorp considers adjusted return on average assets and return on average equity ratios important, as they reflect performance after removing certain merger-related sales of premises and equipment, expenses and purchase accounting adjustments.
		Quarterly Comparison
(Dollars in thousands)		12/31/22			9/30/22			6/30/22			3/31/22			12/31/21
Net income attributable to stockholders - GAAP (a)		$	29,817		$	28,455		$	26,794		$	7,906		$	24,589
Add: Non-recurring merger expenses		-			-			-			19,500			-
Add: Provision for credit losses on acquired loans		-			-			-			4,429			-
Add: Loss on disposition of Landmark Financial Advisors		870			-			-			-			-
Less: Gain/loss on sale of premises and equipment		(1,295)			(3,074)			-			-			-
Less: Tax effect of adjustments to net income		100			738			-			(3,717)			-
Total net income - Non-GAAP (b)		$	29,492		$	26,119		$	26,794		$	28,118		$	24,589
Total average assets (c)		$	7,559,260		$	7,661,720		$	7,651,332		$	6,872,273		$	6,406,612
Total average stockholder equity (d )		740,007			760,322			749,445			703,929			668,287
Return on average assets - GAAP (a/c)		1.56%			1.47%			1.40%			0.47%			1.52%
Return on average assets - Non-GAAP (b/c)		1.55%			1.35%			1.40%			1.66%			1.52%
Return on average equity - GAAP (a/d)		15.99%			14.85%			14.34%			4.55%			14.60%
Return on average equity - Non-GAAP (b/d)		15.81%			13.63%			14.34%			16.20%			14.60%

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

FAQ

What were Stock Yards Bancorp's earnings for Q4 2022?

In Q4 2022, Stock Yards Bancorp reported earnings of $29.8 million, or $1.01 per diluted share.

How much did organic loans grow in Q4 2022 for SYBT?

Organic loan growth for Stock Yards Bancorp in Q4 2022 was $134 million, representing a 3% increase.

What is the current net interest margin for SYBT?

As of Q4 2022, Stock Yards Bancorp's net interest margin improved to 3.64%.

How did total deposits change for SYBT in Q4 2022?

Total deposits for Stock Yards Bancorp decreased by $110 million, or 2%, in Q4 2022.

What were the key financial highlights for SYBT in 2022?

Key highlights for Stock Yards Bancorp in 2022 include record earnings, strong loan growth of $1.16 billion (29%), and significant increases in non-interest income.