SYBT Stock Yards Bancorp Inc

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 earnings of $23.9 million, or $0.82 per diluted share, for the fourth quarter ended December 31, 2023. This compares to net income of $29.8 million, or $1.01 per diluted share, for the fourth quarter of 2022. For the year ended December 31, 2023, the Company produced record net income of $107.7 million, and diluted earnings per share of $3.67. Strong loan growth across all markets and deposit growth contributed to solid fourth quarter and full year 2023 operating results.

(dollar amounts in thousands, except per share data)	4Q23			3Q23			4Q22
Net income	$	23,944		$	27,092		$	29,817
Net income per share, diluted		0.82			0.92			1.01
Net interest income	$	62,016		$	61,315		$	65,263
Provision for credit losses(1)		6,046			2,775			3,375
Non-interest income		24,417			22,896			23,142
Non-interest expenses		50,013			46,702			45,946
Net interest margin		3.25	%		3.34	%		3.64	%
Efficiency ratio(2)		57.80	%		55.38	%		51.85	%
Tangible common equity to tangible assets(3)		8.09	%		7.69	%		7.44	%
Annualized return on average assets(4)		1.17	%		1.38	%		1.56	%
Annualized return on average equity(4)		11.62	%		13.26	%		15.99	%

“I am pleased with our fourth quarter and record full year 2023 results, highlighted by strong loan production and fee income led by Wealth Management & Trust (WM&T). We continue to see broad-based loan demand from our customers throughout our markets. Total loans, excluding PPP loans, increased $580 million, or 11%, over the last 12 months, of which $155 million was generated during the fourth quarter, setting a record for the best fourth quarter of organic loan expansion in the Company’s history. Thanks to the dedication and commitment of our employees, our net income surpassed the $100 million mark for the first time in 2023,” commented James A. (Ja) Hillebrand, Chairman and Chief Executive Officer.

“Net interest income increased for the second consecutive linked quarter, due to loan growth and continued yield expansion from assets re-pricing. However, our net interest margin contracted over the linked quarter, as the increase in cost of funds continued to outpace the growth in yields on earning assets. We anticipate net interest margin compression will most likely persist into the first part of the year,” Hillebrand continued. “Deposit balances expanded nicely during the fourth quarter, increasing $268 million, or 4%, on the linked quarter and increasing $279 million, or 4%, over the last 12 months. We continue to focus on organic growth, while avoiding brokered deposits, which provide more expensive funding than in-market deposit relationships.”

“Non-interest income, led by fourth quarter gains in several categories, once again fueled our operating results. WM&T posted another record year, benefiting from strong equity and fixed income market performance, coupled with net new business growth. Robust card income, treasury management and brokerage fees, driven by increased demand and customer expansion, served to cap off a record fee income year for us. We look forward to carrying this momentum into 2024 – our 120th year of operation – with an unwavering focus on cultivating full customer relationships,” said Hillebrand.

At December 31, 2023, the Company had $8.17 billion in assets, $5.77 billion in loans and $6.67 billion in total deposits. The Company’s combined enterprise, which encompasses 71 branch offices across three contiguous states, will continue to benefit from a diversified geographic footprint that provides significant growth opportunities in both the banking and WM&T arenas.

Key factors contributing to the fourth quarter of 2023 results included:

• Loan growth and loan production represented the best fourth quarter in the Company’s history. Total loans, excluding PPP loans, increased $155 million, or 3%, on the linked quarter. The yield earned on loans expanded to 5.79% for the fourth quarter of 2023, benefiting from average balance growth and to a lesser extent, interest rate expansion.
• Deposit balances expanded $268 million, or 4%, on the linked quarter, as interest bearing deposits grew $434 million and non-interest bearing deposits contracted by $166 million.
  • Interest bearing demand accounts increased $197 million, or 9%, consistent with seasonal public funds activity.
  • Money market accounts expanded $134 million, or 12%, led by growth in WM&T money market funds held at the Bank.
  • Time deposits grew by $120 million, or 14%, a tribute to successful marketing of promotional products, primarily in the Central Kentucky market.
• Increasing costs of funds continued to outpace earning asset yield growth during the fourth quarter of 2023. Net interest income declined $3.2 million, or 5%, for the fourth quarter of 2023 compared to the fourth quarter a year ago, with net interest margin compressing 39 bps to 3.25%. While net interest margin also declined on the linked quarter, contracting 9 basis points from 3.34%, net interest income increased $701,000. Given the current interest rate environment, the change in deposit mix has and will continue to place pressure on funding costs.
• While credit quality remains strong in comparison to traditional metrics, credit loss expense on loans of $5.8 million was recorded for the fourth quarter of 2023. The Bank recorded a $4.1 million charge-off related to a single Commercial & Industrial (C&I) relationship in late December. The Bank became aware of credit deterioration in the third quarter of 2023 and the relationship was downgraded at that time. The relationship was subsequently placed on non-accrual in the fourth quarter. The Bank considers this to be a conservative approach to an isolated situation with one customer and no additional loss is anticipated. Despite the charge-off, management remains confident in the current quality of the loan portfolio, as demonstrated by the relatively low concentration of classified and delinquent loans, and does not believe this instance is reflective of broader portfolio concerns. With the allowance for credit losses to total loans standing at 1.38%, the Bank is well-positioned based on current credit metrics and forecasts in the allowance for credit losses model.
• Non-interest income increased $1.3 million, or 6%, over the fourth quarter of 2022. WM&T income expanded $878K, or 10%, to $10.1 million, benefitting from improved market conditions and net new business expansion. Card income set quarterly and year to date records, led by interchange income expansion and increased debit card processor incentives and treasury management fees once again demonstrated double digit growth. Fee income expansion in the fourth quarter of 2023 is especially notable given $1.3 million in non-recurring gains on sale of premises and equipment recorded in the fourth quarter of 2022.
• Total non-interest expenses increased $4.1 million, or 9%, during the fourth quarter of 2023 compared to the fourth quarter of 2022, primarily due to higher compensation expense tied to employee growth and expense recorded related to an executive retirement agreement. Further, additional occupancy expense was incurred related to the relocation of all WM&T employees to a consolidated central location.
• Tangible common equity per share(3) was $21.95 at December 31, 2023, compared to $20.17 at September 30, 2023, and $18.50 at December 31, 2022. Over the past several quarters, tangible common equity and tangible book value have been impacted by the volatile interest rate market and corresponding impact on accumulated other comprehensive income/loss, primarily as a result of changes in unrealized losses in the available for sale debt securities portfolio, which has a current weighted average life of 5.5 years.

Highlights for the year ended December 31, 2023:

• Loans (excluding PPP) grew $580 million, or 11%, over the past 12 months, marking the third consecutive year of double digit loan growth.
• Average loans increased $604 million, or 13%, for the year.
• Loan production set a new record for 2023.
• Deposit balances grew by $279 million, or 4%, over the past 12 months. Interest bearing demand, money market, and time deposit expansion combined to more than offset declines in non-interest bearing demand accounts.
• Net interest income increased $13.9 million, or 6%, over 2022.
• Loan yield expansion led to net interest margin expanding four basis points to 3.39% in 2023 over 2022.
• WM&T income reached and surpassed record levels during the year, increasing $3.7 million, or 10%, over the past 12 months, reflecting improved market conditions and net new business growth. Assets Under Management (AUM) surpassed the $7 billion mark at year-end.
• Customer expansion and increased transaction volume led to record 2023 card, treasury management and brokerage income.

Hillebrand concluded, “In January, Stock Yards was named to Stephen’s 2024 Bank Industry & Top Picks List as the top Small-Cap stock with upside price potential. We were also named to Stephen’s 2024 Best Ideas List, as the top company within the Midwest Bank category. In November, we were once again nationally recognized by American Banker Magazine as one of the Best Banks to Work for in 2023. The Best Banks to Work For program identifies and honors U.S. banks for outstanding employee satisfaction. In addition, in May, we were named a winner of the 2022 Raymond James Community Bankers Cup, which recognizes the top 10% of community banks with assets between $500 million and $10 billion based on various profitability, operational efficiency and balance sheet metrics, marking our 8th time being named to the Raymond James Community Bankers Cup. These recognitions are a testament to the dedication of our employees, who continue to work diligently to support our customers. We will not rest on our laurels as we enter 2024 – our 120th year of service to the communities we are honored to serve.”

Results of Operations – Fourth Quarter 2023 Compared with Fourth Quarter 2022

Net interest income, the Company’s largest source of revenue, decreased by $3.2 million, or 5%, to $62.0 million. While strong organic loan growth boosted net interest income over the past 12 months, the cost of interest bearing liabilities more than offset the increase in total interest income.

• Total interest income increased by $20.1 million, or 27%, to $95.2 million.
  • Interest income and fees on loans increased $18.7 million, or 29%, over the prior year quarter. Consistent with the $582 million, or 11%, increase in average loans and interest rate expansion, the average quarterly yield earned on loans increased 79 basis points, or 16%, over the past 12 months to 5.79%.
  • Interest income on securities decreased $413,000, or 5%, compared to the fourth quarter of 2022. While average securities balances have declined $168 million, or 9%, over the past 12 months, the rate earned on securities has increased 9 bps to 2.05%, as lower rate securities either matured or paid down.
  • Average overnight funds increased $24 million quarter over prior year quarter, with interest income increasing $1.4 million consistent with the increase in seasonal public funds accounts. The Federal Reserve Bank has increased the rate paid on reserve balances meaningfully during the past 12 months, which has significantly benefited related interest income on excess cash held at the Bank.

• Total interest expense increased $23.3 million to $33.2 million, as the cost of interest bearing liabilities increased 158 basis points to 2.44%.
  • Interest expense on deposits increased $20.6 million over the past 12 months, as the overall cost of interest bearing deposits increased from 0.81% for the fourth quarter of 2022 to 2.34%. Deposit costs during the fourth quarter of 2023 have been significantly impacted by changes in mix, individual rate exceptions, successful new product promotions and growth in the WM&T money market account. Average interest bearing deposit balances increased $597 million, or 13%, from the fourth quarter of 2022 to the fourth quarter of 2023, with time deposits representing $458 million of the increase.
  • Interest expense on Federal Home Loan Bank (FHLB) advances totaled $2.1 million for the fourth quarter of 2023. The Bank had $200 million in FHLB advances outstanding at the end of the fourth quarter of 2023.

The Bank recorded $5.8 million in credit loss expense for loans during the fourth quarter of 2023. In addition to strong loan growth, a flat unemployment projection and other factors within the CECL allowance model, the Bank recorded $4.7 million in charge-offs, with $4.1 million attributed to one C&I relationship offset by $235,000 in total recoveries. The Bank also recorded a $275,000 expense for off balance sheet exposures associated with expansion of Construction & Land Development (C&LD) and C&I lines of credit (increased availability and utilization). For the fourth quarter of 2022, consistent with strong loan growth and deterioration within the future unemployment rate forecast, the Company recorded $3.6 million in provision for credit losses on loans and a $225,000 benefit to credit loss expense for off balance sheet exposures. In addition, the Bank recorded a $1.6 million specific reserve for a Commercial Real Estate loan during the fourth quarter of 2022.

Non-interest income increased $1.3 million, or 6%, to $24.4 million.

• WM&T income ended the fourth quarter of 2023 at $10.1 million, increasing $878,000, or 10%, over the fourth quarter of 2022. WM&T income benefited from strong fourth quarter equity and fixed income market performance, coupled with quarterly estate fees collected and net new business growth.
• WM&T AUM expanded $575 million, or 9%, over the past 12 months consistent with market performance and net new business growth. With the especially strong market performance experienced in November and December, AUM once again surpassed the $7 billion mark.
• Treasury management fees increased $253,000, or 11%, compared to the fourth quarter of 2022, driven by strong transaction volume, organic growth, modified fee schedules, strong foreign exchange income, new product sales and continued product expansion to the customer base added through recent merger activity.
• Card income increased $328,000, or 7%, over the fourth quarter of 2022, driven by increased interchange income and credit card processor spend incentives. While card volume has increased over 2022, interchange rate compression has placed pressure on growth.
• The Company recognized $1.3 million in non-recurring gains on sales of premises and equipment in the fourth quarter of 2022 related to the disposition of acquired locations.
• Other non-interest income, which primarily includes swap fees, letter of credit fees and OREO activity increased by $527,000, or 34%, over the fourth quarter of 2022. During the fourth quarter of 2023, the Company sold other real estate owned and Visa Class B stock for $207,000 and $487,000 in non-recurring gains, respectively.

Non-interest expenses increased $4.1 million, or 9%, compared to the fourth quarter of 2022, to $50.0 million.

• Compensation and employee benefits expense combined to increase $1.5 million, or 6%, compared to the fourth quarter of 2022, consistent with a 4% increase in full time equivalent employees and expense recorded related to an executive retirement agreement.
• Net occupancy and equipment expenses increased $1.3 million, or 34%, over the fourth quarter of 2022 primarily due to the relocation of all WM&T employees to a consolidated central location.
• 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 $865,000, or 23%, consistent with software upgrades, equipment upgrades, customer expansion and increased transaction activity.
• Legal and professional fees increased $801,000 compared to the fourth quarter of 2022, led by increased compliance-related consulting in preparation for expanded regulatory oversight in conjunction with future growth in total assets.
• During the fourth quarter of 2022, the Company sold its partial interest in an investment adviser subsidiary that was acquired from Commonwealth Bancshares, realizing a non-recurring pre-tax loss of $870,000. Also, intangible amortization expense decreased $443,000, or 28%, during the fourth quarter of 2023, consistent with the sale of the investment advisor and the prior year intangible asset write-off.

Financial Condition – December 31, 2023 Compared with December 31, 2022

Total assets increased $674 million, or 9%, year over year to $8.17 billion.

Total loans (excluding PPP) increased $580 million, or 11%, to $5.77 billion, with the largest sources of growth stemming from the commercial real estate and residential real estate portfolios. In addition to the strong growth, the Company has benefitted from the higher rate environment in 2023 that has generally slowed loan payoff activity. Total line of credit usage was 39.2% as of December 31, 2023, compared to 42.3% as of December 31, 2022, driven by strong production. C&I line of credit usage was 28.6% as of December 31, 2023, compared to 33.1% as of December 31, 2022.

Total investment securities, which spiked during the second quarter of 2021 and the first quarter of 2022 in part due to acquisitions, decreased $147 million, or 9%, year over year. Maturities/pay-downs of lower yielding investments have boosted the overall portfolio yield to 2.05% for the fourth quarter of 2023, from 1.96% in the fourth quarter of 2022. In 2023, cash flows from the investment portfolio have been utilized to fund loan growth and provide liquidity in lieu of redeployment.

Total deposits increased $279 million, or 4%, over the past 12 months, led by interest bearing demand and time deposit expansion which was partially offset by a decline in non-interest bearing demand deposits.

During the fourth quarter of 2023, the Company recorded net loan charge-offs of $4.5 million, with $4.1 million attributed to one C&I relationship. This compares to $152,000 in net charge offs during the fourth quarter of 2022. Non-performing loans(5) totaled $19 million, or 0.33% of total loans outstanding at December 31, 2023, compared to $15 million, or 0.29% of total loans outstanding at December 31, 2022. The ratio of allowance for credit losses to loans (5) ended at 1.38% at December 31, 2023 compared to 1.41% at December 31, 2022.

At December 31, 2023, 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(3) was 10.50% and the tangible common equity ratio(3) was 8.09% at December 31, 2023, compared to 10.14% and 7.44% at December 31, 2022, respectively. Interest rate volatility over the last 12 months has significantly impacted unrealized losses within the available for sale debt securities portfolio.

In November 2023, the board of directors declared a quarterly cash dividend of $0.30 per common share. The dividend was paid December 29, 2023 to shareholders of record as of December 18, 2023.

No shares have been purchased since 2020, and approximately 741,000 shares remain eligible for repurchase under the current buy-back plan, which expires in May 2025.

Results of Operations – Fourth Quarter 2023 Compared with Third Quarter 2023

Net interest margin declined 9 basis points on the linked quarter to 3.25%, as cost of funds growth continued to outpace earning asset yield growth.

Net interest income expanded $701,000, or 1%, over the prior quarter to $62.1 million, as management is optimistic that net interest margin contraction is starting to slow.

• Total interest income increased $6.3 million, or 7%, led predominantly by the increase in interest income on loans.
  • Interest income and fees on loans increased $4.5 million, or 6%, over the linked quarter. Average loans increased $190 million, or 4%, and the corresponding yield earned increased 13 basis points over the linked quarter.
  • Average overnight funds increased $134 million over the linked quarter with interest income increasing $1.9 million. The fourth quarter of each year reflects elevated cash levels consistent with the seasonal increase in public funds.
• Total interest expense increased $5.6 million, or 20%, led by a $8.3 million, or 39%, increase in the cost of total interest-bearing deposits, which was partially offset by a $2.8 million decline in FHLB borrowings expense.

The Company recorded $6.0 million in provision for credit losses(1) during the fourth quarter of 2023, which included a $5.8 million provision for credit losses on loans and $275,000 of credit loss expense for off-balance sheet exposures. During the third quarter of 2023, the Company recorded $2.8 million in provision for credit losses, which included a $2.3 million provision for credit losses on loans and $475,000 of credit loss expense for off-balance sheet exposures.

Non-interest income increased $1.5 million, or 7% on the linked quarter, led by record card income, strong swap and letter of credit fees, OREO activity and the sale of Visa Class B stock.

Non-interest expenses increased $3.3 million, or 7%, to $50.0 million, as increased compensation, net occupancy expense, technology expense and consulting expenses more than off-set a decline in employee benefits.

Financial Condition – December 31, 2023 Compared with September 30, 2023

Total assets increased $267 million, or 3%, on the linked quarter to $8.17 billion.

Total loans expanded $154 million, or 3%, on the linked quarter, led by increases in nearly every category, with the C&I and C&LD loan portfolios leading the growth. Total line of credit usage was 39.2% as of December 31, 2023, compared to 38.8% as of September 30, 2023, driven by strong production. C&I line of credit usage was 28.6% as of December 31, 2023, compared to 26.8% as of September 30, 2023.

Total deposits increased $268 million, or 4%, on the linked quarter. Total interest bearing deposits increased $434 million, on the linked quarter, as increases in interest bearing demand, money market accounts and time deposits more than offset the $166 million contraction in non-interest bearing demand. Excluding public funds, total deposits increased $121 million on the linked quarter.

About the Company

Louisville, Kentucky-based Stock Yards Bancorp, Inc., with $8.17 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, 2022, 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 StinnettExecutive Vice President, Treasurer and Chief Financial Officer(502) 625-0890

Stock Yards Bancorp, Inc. Financial Information (unaudited)
Fourth Quarter 2023 Earnings Release
(In thousands unless otherwise noted)
		Three Months Ended						Twelve Months Ended
		December 31,						December 31,
Income Statement Data		2023			2022			2023			2022
Net interest income, fully tax equivalent (6)		$	62,112		$	65,469		$	247,869		$	234,267
Interest income:
Loans		$	82,715		$	64,033		$	302,044		$	216,138
Federal funds sold and interest bearing due from banks		3,526			2,173			8,411			6,018
Mortgage loans held for sale		38			13			211			190
Investment securities and FHLB stock		8,962			8,931			36,030			29,306
Total interest income		95,241			75,150			346,696			251,652
Interest expense:
Deposits		29,645			9,022			81,585			16,412
Securities sold under agreements to repurchase and
other short-term borrowings		843			399			2,776			721
Federal Home Loan Bank advances		2,155			12			12,768			12
Subordinated debentures		582			454			2,235			1,124
Total interest expense		33,225			9,887			99,364			18,269
Net interest income		62,016			65,263			247,332			233,383
Provision for credit losses (1)		6,046			3,375			13,796			10,257
Net interest income after provision for credit losses		55,970			61,888			233,536			223,126
Non-interest income:
Wealth management and trust services		10,099			9,221			39,802			36,111
Deposit service charges		2,244			2,183			8,866			8,286
Debit and credit card income		5,374			5,046			19,438			18,623
Treasury management fees		2,531			2,278			10,033			8,590
Mortgage banking income		823			209			3,705			3,210
Loss on sale of securities		(44)			-			(44)			-
Net investment product sales commissions and fees		860			833			3,205			3,063
Bank owned life insurance		576			545			2,253			1,597
Gain (Loss) on sale of premises and equipment		(105)			1,295			(30)			4,341
Other		2,059			1,532			4,992			5,328
Total non-interest income		24,417			23,142			92,220			89,149
Non-interest expenses:
Compensation		24,494			23,398			91,876			86,640
Employee benefits		3,829			3,421			18,451			16,568
Net occupancy and equipment		5,150			3,843			16,384			14,298
Technology and communication		4,612			3,747			17,318			14,897
Debit and credit card processing		1,719			1,470			6,481			5,909
Marketing and business development		1,754			1,544			5,990			5,005
Postage, printing and supplies		903			893			3,604			3,354
Legal and professional		1,293			492			3,958			2,943
FDIC Insurance		1,060			730			3,911			2,758
Amortization of investments in tax credit partnerships		324			88			1,294			353
Capital and deposit based taxes		601			799			2,476			2,621
Merger expenses		-			-			-			19,500
Intangible amortization		1,167			1,610			4,686			5,544
Loss on disposition of LFA		-			870			-			870
Other		3,107			3,041			11,400			10,531
Total non-interest expenses		50,013			45,946			187,829			191,791
Income before income tax expense		30,374			39,084			137,927			120,484
Income tax expense		6,430			9,174			30,179			27,190
Net income		23,944			29,910			107,748			93,294
Less: net income attributed to non-controlling interest		-			93			-			322
Net income available to stockholders		$	23,944		$	29,817		$	107,748		$	92,972
Net income per share - Basic		$	0.82		$	1.02		$	3.69		$	3.24
Net income per share - Diluted		0.82			1.01			3.67			3.21
Cash dividend declared per share		0.30			0.29			1.18			1.14
Weighted average shares - Basic		29,226			29,157			29,212			28,672
Weighted average shares - Diluted		29,331			29,428			23,343			28,922
								December 31,
Balance Sheet Data								2023			2022
Investment securities								$	1,471,016		$	1,617,834
Loans								5,771,038			5,205,918
Allowance for credit losses on loans								79,374			73,531
Total assets								8,170,102			7,496,261
Non-interest bearing deposits								1,548,624			1,950,198
Interest bearing deposits								5,122,124			4,441,054
Federal Home Loan Bank advances								200,000			50,000
Stockholders' equity								858,103			760,432
Total shares outstanding								29,329			29,259
Book value per share (3)								$	29.26		$	25.99
Tangible common equity per share (3)								21.95			18.50
Market value per share								51.49			64.98
Stock Yards Bancorp, Inc. Financial Information (unaudited)
Fourth Quarter 2023 Earnings Release
		Three Months Ended						Twelve Months Ended
		December 31,						December 31,
Average Balance Sheet Data		2023			2022			2023			2022
Federal funds sold and interest bearing due from banks		$	258,950		$	235,448		$	164,314		$	477,341
Mortgage loans held for sale		5,305			6,735			6,822			8,835
Investment securities		1,618,799			1,786,383			1,687,639			1,670,324
Federal Home Loan Bank stock		20,519			10,928			22,123			11,741
Loans		5,676,193			5,094,356			5,422,865			4,819,124
Total interest earning assets		7,579,766			7,133,850			7,303,763			6,987,365
Total assets		8,116,569			7,559,260			7,775,574			7,438,880
Non-interest bearing deposits		1,663,962			2,097,858			1,763,157			2,053,213
Interest bearing deposits		5,025,240			4,428,582			4,608,575			4,385,393
Total deposits		6,689,202			6,526,440			6,371,732			6,438,606
Securities sold under agreement to repurchase		130,148			117,138			123,111			122,154
Federal Home Loan Bank advances		205,435			1,087			280,068			274
Subordinated debentures		26,706			26,309			26,558			21,733
Total interest bearing liabilities		5,401,135			4,582,005			5,052,106			4,538,911
Total stockholders' equity		817,682			740,007			801,593			738,798
Performance Ratios
Annualized return on average assets (4)		1.17%			1.56%			1.39%			1.25%
Annualized return on average equity (4)		11.62%			15.99%			13.44%			12.58%
Net interest margin, fully tax equivalent		3.25%			3.64%			3.39%			3.35%
Non-interest income to total revenue, fully tax equivalent		28.22%			26.12%			27.12%			27.56%
Efficiency ratio, fully tax equivalent (2)		57.80%			51.85%			55.23%			59.30%
Capital Ratios
Total stockholders' equity to total assets (3)								10.50%			10.14%
Tangible common equity to tangible assets (3)								8.09%			7.44%
Average stockholders' equity to average assets								10.31%			9.93%
Total risk-based capital								12.43%			12.54%
Common equity tier 1 risk-based capital								11.04%			11.04%
Tier 1 risk-based capital								11.43%			11.47%
Leverage								9.62%			9.33%
Loan Segmentation
Commercial real estate - non-owner occupied								$	1,561,689		$	1,443,813
Commercial real estate - owner occupied								907,424			788,936
Commercial and industrial								1,302,809			1,230,976
Commercial and industrial - PPP								4,319			18,593
Residential real estate - owner occupied								708,893			591,515
Residential real estate - non-owner occupied								358,715			312,474
Construction and land development								531,324			445,690
Home equity lines of credit								211,390			200,725
Consumer								145,340			139,461
Leases								15,503			13,322
Credit cards								23,632			20,413
Total loans and leases								$	5,771,038		$	5,205,918
Asset Quality Data
Non-accrual loans								$	19,058		$	14,242
Troubled debt restructurings								-			-
Loans past due 90 days or more and still accruing								110			892
Total non-performing loans								19,168			15,134
Other real estate owned								10			677
Total non-performing assets								$	19,178		$	15,811
Non-performing loans to total loans (5)								0.33%			0.29%
Non-performing assets to total assets								0.23%			0.21%
Allowance for credit losses on loans to total loans (5)								1.38%			1.41%
Allowance for credit  losses on loans to average loans								1.46%			1.53%
Allowance for credit losses on loans to non-performing loans								414%			486%
Net (charge-offs) recoveries		$	(4,472)		$	(152)		$	(6,628)		$	1
Net (charge-offs) recoveries to average loans (7)		-0.08%			0.00%			-0.12%			0.00%
Stock Yards Bancorp, Inc. Financial Information (unaudited)
Fourth Quarter 2023 Earnings Release
		Quarterly Comparison
Income Statement Data		12/31/23			9/30/23			6/30/23			3/31/23			12/31/22
Net interest income, fully tax equivalent  (6)		$	62,112		$	61,437		$	61,074		$	63,245		$	65,469
Net interest income		$	62,016		$	61,315		$	60,929		$	63,072		$	65,263
Provision for credit losses (1)		6,046			2,775			2,350			2,625			3,375
Net interest income after provision for credit losses		55,970			58,540			58,579			60,447			61,888
Non-interest income:
Wealth management and trust services		10,099			10,030			10,146			9,527			9,221
Deposit service charges		2,244			2,272			2,201			2,149			2,183
Debit and credit card income		5,374			4,870			4,712			4,482			5,046
Treasury management fees		2,531			2,635			2,549			2,318			2,278
Mortgage banking income		823			814			1,030			1,038			209
Loss on sale of securities		(44)			-			-			-			-
Net investment product sales commissions and fees		860			791			800			754			833
Bank owned life insurance		576			569			559			549			545
Gain (Loss) on sale of premises and equipment		(105)			302			(225)			(2)			1,295
Other		2,059			613			1,088			1,232			1,532
Total non-interest income		24,417			22,896			22,860			22,047			23,142
Non-interest expenses:
Compensation		24,494			23,379			22,107			21,896			23,398
Employee benefits		3,829			4,508			5,061			5,053			3,421
Net occupancy and equipment		5,150			3,821			3,514			3,899			3,843
Technology and communication		4,612			4,236			4,219			4,251			3,747
Debit and credit card processing		1,719			1,637			1,706			1,419			1,470
Marketing and business development		1,754			1,357			1,784			1,095			1,544
Postage, printing and supplies		903			938			889			874			893
Legal and professional		1,293			1,049			819			797			492
FDIC Insurance		1,060			937			779			1,135			730
Amortization of investments in tax credit partnerships		324			323			324			323			88
Capital and deposit based taxes		601			629			607			639			799
Merger expenses		-			-			-			-			-
Intangible amortization		1,167			1,167			1,172			1,180			1,610
Loss on disposition of LFA		-			-			-			-			870
Other		3,107			2,721			2,819			2,753			3,041
Total non-interest expenses		50,013			46,702			45,800			45,314			45,946
Income before income tax expense		30,374			34,734			35,639			37,180			39,084
Income tax expense		6,430			7,642			7,975			8,132			9,174
Net income		23,944			27,092			27,664			29,048			29,910
Less: net income attributed to non-controlling interest		-			-			-			-			93
Net income available to stockholders		$	23,944		$	27,092		$	27,664		$	29,048		$	29,817
Net income per share - Basic		$	0.82		$	0.93		$	0.95		$	1.00		$	1.02
Net income per share - Diluted		0.82			0.92			0.94			0.99			1.01
Cash dividend declared per share		0.30			0.30			0.29			0.29			0.29
Weighted average shares - Basic		29,226			29,223			29,223			29,178			29,157
Weighted average shares - Diluted		29,331			29,336			29,340			29,365			29,428
		Quarterly Comparison
Balance Sheet Data		12/31/23			9/30/23			6/30/23			3/31/23			12/31/22
Cash and due from banks		$	94,466		$	79,538		$	111,126		$	87,922		$	82,515
Federal funds sold and interest bearing due from banks		171,493			113,499			103,204			229,076			84,852
Mortgage loans held for sale		6,056			6,535			7,069			6,397			2,606
Investment securities		1,471,016			1,465,453			1,542,753			1,600,603			1,617,834
Federal Home Loan Bank stock		16,236			26,241			27,366			23,226			10,928
Loans		5,771,038			5,617,084			5,418,609			5,243,104			5,205,918
Allowance for credit losses on loans		79,374			78,075			77,710			75,673			73,531
Goodwill		194,074			194,074			194,074			194,074			194,074
Total assets		8,170,102			7,903,430			7,732,552			7,667,648			7,496,261
Non-interest bearing deposits		1,548,624			1,714,918			1,766,132			1,845,302			1,950,198
Interest bearing deposits		5,122,124			4,687,889			4,442,248			4,511,893			4,441,054
Securities sold under agreements to repurchase		152,991			113,894			138,347			104,578			133,342
Federal funds purchased		12,852			11,518			11,646			14,745			8,789
Federal Home Loan Bank advances		200,000			350,000			400,000			275,000			50,000
Subordinated debentures		26,740			26,641			26,541			26,442			26,343
Stockholders' equity		858,103			806,918			808,082			794,368			760,432
Total shares outstanding		29,329			29,323			29,323			29,324			29,259
Book value per share (3)		$	29.26		$	27.52		$	27.56		$	27.09		$	25.99
Tangible common equity per share (3)		21.95			20.17			20.17			19.66			18.50
Market value per share		51.49			39.29			45.37			55.14			64.98
Capital Ratios
Total stockholders' equity to total assets (3)		10.50%			10.21%			10.45%			10.36%			10.14%
Tangible common equity to tangible assets (3)		8.09%			7.69%			7.87%			7.74%			7.44%
Average stockholders' equity to average assets		10.07%			10.39%			10.53%			10.26%			9.79%
Total risk-based capital		12.43%			12.71%			12.78%			12.91%			12.54%
Common equity tier 1 risk-based capital		11.04%			11.17%			11.20%			11.30%			11.04%
Tier 1 risk-based capital		11.43%			11.57%			11.61%			11.73%			11.47%
Leverage		9.62%			9.80%			9.83%			9.56%			9.33%
Stock Yards Bancorp, Inc. Financial Information (unaudited)
Fourth Quarter 2023 Earnings Release
		Quarterly Comparison
Average Balance Sheet Data		12/31/23			9/30/23			6/30/23			3/31/23			12/31/22
Federal funds sold and interest bearing due from banks		$	258,950		$	124,653		$	131,958		$	140,831		$	235,448
Mortgage loans held for sale		5,305			7,112			8,420			6,460			6,735
Investment securities		1,618,799			1,659,888			1,719,045			1,754,620			1,786,383
Federal Home Loan Bank stock		20,519			27,290			25,074			15,496			10,928
Loans		5,676,193			5,486,262			5,286,597			5,236,879			5,094,356
Total interest earning assets		7,579,766			7,305,205			7,171,094			7,154,286			7,133,850
Total assets		8,116,569			7,805,154			7,594,901			7,579,439			7,559,260
Non-interest bearing deposits		1,663,962			1,731,724			1,781,338			1,878,307			2,097,858
Interest bearing deposits		5,025,240			4,509,411			4,414,599			4,480,151			4,428,582
Total deposits		6,689,202			6,241,135			6,195,937			6,358,458			6,526,440
Securities sold under agreement to repurchase		130,148			127,063			113,051			122,049			117,138
Federal Home Loan Bank advances		205,435			401,630			348,352			163,056			1,087
Subordinated debentures		26,706			26,606			26,508			26,408			26,309
Total interest bearing liabilities		5,401,135			5,076,486			4,916,112			4,807,907			4,582,005
Total stockholders' equity		817,682			810,710			799,886			777,555			740,007
Performance Ratios
Annualized return on average assets (4)		1.17%			1.38%			1.46%			1.55%			1.56%
Annualized return on average equity (4)		11.62%			13.26%			13.87%			15.15%			15.99%
Net interest margin, fully tax equivalent		3.25%			3.34%			3.42%			3.59%			3.64%
Non-interest income to total revenue, fully tax equivalent		28.22%			27.15%			27.24%			25.85%			26.12%
Efficiency ratio, fully tax equivalent (2)		57.80%			55.38%			54.57%			53.13%			51.85%
Loans Segmentation
Commercial real estate - non-owner occupied		$	1,561,689		$	1,557,977		$	1,527,453		$	1,467,780		$	1,443,813
Commercial real estate - owner occupied		907,424			896,522			825,026			805,417			788,936
Commercial and industrial		1,302,809			1,246,200			1,226,554			1,205,222			1,230,976
Commercial and industrial - PPP		4,319			4,827			7,088			9,557			18,593
Residential real estate - owner occupied		708,893			696,162			664,870			620,417			591,515
Residential real estate - non-owner occupied		358,715			349,624			337,961			322,748			312,474
Construction and land development		531,324			480,120			451,324			439,673			445,690
Home equity lines of credit		211,390			203,184			202,574			200,933			200,725
Consumer		145,340			143,703			139,602			136,412			139,461
Leases		15,503			14,710			13,967			13,207			13,322
Credit cards		23,632			24,055			22,190			21,738			20,413
Total loans and leases		$	5,771,038		$	5,617,084		$	5,418,609		$	5,243,104		$	5,205,918
Asset Quality Data
Non-accrual loans		$	19,058		$	17,227		$	17,364		$	17,389		$	14,242
Troubled debt restructurings		-			-			-			-			-
Loans past due 90 days or more and still accruing		110			1			437			894			892
Total non-performing loans		19,168			17,228			17,801			18,283			15,134
Other real estate owned		10			427			677			677			677
Total non-performing assets		$	19,178		$	17,655		$	18,478		$	18,960		$	15,811
Non-performing loans to total loans (5)		0.33%			0.31%			0.33%			0.35%			0.29%
Non-performing assets to total assets		0.23%			0.22%			0.24%			0.25%			0.21%
Allowance for credit losses on loans to total loans (5)		1.38%			1.39%			1.43%			1.44%			1.41%
Allowance for credit losses on loans to average loans		1.40%			1.42%			1.47%			1.45%			1.44%
Allowance for credit losses on loans to non-performing loans		414%			453%			437%			414%			486%
Net (charge-offs) recoveries		$	(4,472)		$	(1,935)		$	(113)		$	(108)		$	(152)
Net (charge-offs) recoveries to average loans (7)		-0.08%			-0.04%			0.00%			0.00%			0.00%
Other Information
Total assets under management (in millions)		$	7,160		$	6,670		$	6,976		$	6,764		$	6,585
Full-time equivalent employees		1,075			1,056			1,056			1,028			1,033
(1) - Detail of Provision for credit losses follows:
		Quarterly Comparison
(in thousands)		12/31/23			9/30/23			6/30/23			3/31/23			12/31/22
Provision for credit losses - loans		$	5,771		$	2,300		$	2,150		$	2,250		$	3,600
Provision for credit losses - off balance sheet exposures		275			475			200			375			(225)
Total provision for credit losses		$	6,046		$	2,775		$	2,350		$	2,625		$	3,375
(2) - 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 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 merger-related expenses.
		Quarterly Comparison
(Dollars in thousands)		12/31/23			9/30/23			6/30/23			3/31/23			12/31/22
Total non-interest expenses (a)		$	50,013		$	46,702		$	45,800		$	45,314		$	45,946
Less: Loss on disposition of LFA		-			-			-			-			(870)
Less: Amortization of investments in tax credit partnerships		(324)			(323)			(324)			(323)			(88)
Total non-interest expenses - Non-GAAP (c)		$	49,689		$	46,379		$	45,476		$	44,991		$	44,988
Total net interest income, fully tax equivalent		$	62,112		$	61,437		$	61,074		$	63,245		$	65,469
Total non-interest income		24,417			22,896			22,860			22,047			23,142
Total revenue - Non-GAAP (b)		86,529			84,333			83,934			85,292			88,611
Less: Gain/loss on sale of premises and equipment		105			(302)			225			2			(1,295)
Less: Loss on sale of securities		44			-			-			-			-
Total adjusted revenue - Non-GAAP (d)		$	86,678		$	84,031		$	84,159		$	85,294		$	87,316
Efficiency ratio - Non-GAAP (a/b)		57.80%			55.38%			54.57%			53.13%			51.85%
Adjusted efficiency ratio - Non-GAAP (c/d)		57.33%			55.19%			54.04%			52.75%			51.52%
(3) - The following table provides a reconciliation of total stockholders’ equity in accordance with 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)		12/31/23			9/30/23			6/30/23			3/31/23			12/31/22
Total stockholders' equity - GAAP (a)		$	858,103		$	806,918		$	808,082		$	794,368		$	760,432
Less: Goodwill		(194,074)			(194,074)			(194,074)			(194,074)			(194,074)
Less: Core deposit and other intangibles		(20,304)			(21,471)			(22,638)			(23,810)			(24,990)
Tangible common equity - Non-GAAP (c)		$	643,725		$	591,373		$	591,370		$	576,484		$	541,368
Total assets - GAAP (b)		$	8,170,102		$	7,903,430		$	7,732,552		$	7,667,648		$	7,496,261
Less: Goodwill		(194,074)			(194,074)			(194,074)			(194,074)			(194,074)
Less: Core deposit and other intangibles		(20,304)			(21,471)			(22,638)			(23,810)			(24,990)
Tangible assets - Non-GAAP (d)		$	7,955,724		$	7,687,885		$	7,515,840		$	7,449,764		$	7,277,197
Total stockholders' equity to total assets - GAAP (a/b)		10.50%			10.21%			10.45%			10.36%			10.14%
Tangible common equity to tangible assets - Non-GAAP (c/d)		8.09%			7.69%			7.87%			7.74%			7.44%
Total shares outstanding (e)		29,329			29,323			29,323			29,324			29,259
Book value per share - GAAP (a/e)		$	29.26		$	27.52		$	27.56		$	27.09		$	25.99
Tangible common equity per share - Non-GAAP (c/e)		21.95			20.17			20.17			19.66			18.50
(4) - 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. Bancorp also considers adjusted return on average assets and return on average equity ratios important, as they reflect performance after removing net gains (losses) on certain sales of premises and equipment.
		Quarterly Comparison
(Dollars in thousands)		12/31/23			9/30/23			6/30/23			3/31/23			12/31/22
Net income attributable to stockholders - GAAP (a)		$	23,944		$	27,092		$	27,664		$	29,048		$	29,817
Add: Loss on disposition of LFA		-			-			-			-			870
Less: Gain/loss on sale of premises and equipment		105			(302)			225			2			(1,295)
Less: Tax effect of adjustments to net income		(23)			66			(50)			-			100
Total net income - Non-GAAP (b)		$	24,026		$	26,856		$	27,664		$	29,050		$	29,492
Total average assets (c)		$	8,116,569		$	7,805,154		$	7,594,901		$	7,579,439		$	7,559,260
Total average stockholder equity (d)		817,682			810,710			799,886			777,555			740,007
Return on average assets - GAAP (a/c)		1.17%			1.38%			1.46%			1.55%			1.56%
Return on average assets - Non-GAAP (b/c)		1.17%			1.37%			1.46%			1.55%			1.55%
Return on average equity - GAAP (a/d)		11.62%			13.26%			13.87%			15.15%			15.99%
Return on average equity - Non-GAAP (b/d)		11.66%			13.14%			13.87%			15.15%			15.81%
(5) - 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)		12/31/23			9/30/23			6/30/23			3/31/23			12/31/22
Total Loans - GAAP (a)		$	5,771,038		$	5,617,084		$	5,418,609		$	5,243,104		$	5,205,918
Less: PPP loans		(4,319)			(4,827)			(7,088)			(9,557)			(18,593)
Total non-PPP Loans - Non-GAAP (b)		$	5,766,719		$	5,612,257		$	5,411,521		$	5,233,547		$	5,187,325
Allowance for credit losses on loans (c)		$	79,374		$	78,075		$	77,710		$	75,673		$	73,531
Total non-performing loans (d)		19,168			17,228			17,801			18,283			15,134
Allowance for credit losses on loans to total loans - GAAP (c/a)		1.38%			1.39%			1.43%			1.44%			1.41%
Allowance for credit losses on loans to total loans - Non-GAAP (c/b)		1.38%			1.39%			1.44%			1.45%			1.42%
Non-performing loans to total loans - GAAP (d/a)		0.33%			0.31%			0.33%			0.35%			0.29%
Non-performing loans to total loans - Non-GAAP (d/b)		0.33%			0.31%			0.33%			0.35%			0.29%
(6) - 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.
(7) - Quarterly net (charge-offs) recoveries to average loans ratios are not annualized.