Stock Yards Bancorp Reports Record Second Quarter and Year-to-Date Results
Record Loan Production;
Record Diluted Earnings Per Share,
Both Including and Excluding Non-Recurring Items
LOUISVILLE, Ky.--(BUSINESS WIRE)--
Stock Yards Bancorp, Inc. (NASDAQ: SYBT), parent company of Stock Yards Bank & Trust Company, with offices in the Louisville, Indianapolis and Cincinnati metropolitan markets, today reported record results for both the second quarter and six months ended June 30, 2019. Total revenue, comprising net interest income and non-interest income, increased 7% to $43.0 million for the second quarter of 2019 from $40.1 million for the second quarter of 2018. Net income before income taxes increased 5% to $17.6 million for the second quarter of 2019 from $16.7 million for the comparable quarter, despite incurring $1.3 million in one-time transaction costs related to the acquisition of King Bancorp, Inc. Net income for the second quarter of 2019, which includes a non‑recurring state income tax benefit, rose 22% to $16.5 million or $0.72 per diluted share from $13.6 million or $0.59 per diluted share for the second quarter of 2018.
(dollar amounts in thousands, except per share data)
2Q19
1Q19
2Q18
Net interest income
$
30,774
$
29,657
$
28,674
Provision for loan and lease losses
–
600
1,235
Non-interest income
12,263
11,062
11,435
Non-interest expenses
25,464
22,639
22,136
Income before income tax expense
17,573
17,480
16,738
Income tax expense
1,030
1,839
3,159
Net income
$
16,543
$
15,641
$
13,579
Net income per share, diluted
$
0.72
$
0.68
$
0.59
Net interest margin
3.81
%
3.89
%
3.88
%
Efficiency ratio
59.09
%
55.52
%
55.07
%
Tangible common equity to tangible assets (1)
10.85
%
11.47
%
10.35
%
Annualized return on average equity
17.40
%
17.09
%
15.94
%
Annualized return on average assets
1.93
%
1.94
%
1.74
%
Key factors affecting the Company’s results for the second quarter of 2019 included:
Successful completion of the acquisition of King Bancorp, Inc. and its subsidiary, King Southern Bank (KSB);
Average loans increased $128 million year over year, contributing to the 7% increase in net interest income on a comparable quarter basis;
Continued robust legacy loan production (excluding the KSB acquisition) led to both year-to-date and quarter-to-date records, with loan payoffs/pay-downs trending lower in the second quarter of 2019;
Legacy net loan growth (excluding the KSB acquisition) was $77 million for the second quarter of 2019 compared to $66 million for the same period in 2018;
Credit quality metrics remained sound, as the Company did not record a provision for loan and lease losses in the second quarter;
Wealth Management and Trust (WM&T) services income rose consistent with increased new business generation and strong market performance for the quarter;
Card income and treasury management fees, bolstered by increased volume and usage, continued to stand out as diversifying non-interest revenue streams, representing a combined 27% of total non-interest income compared to 21% two years ago;
One-time pre-tax KSB acquisition transaction costs totaled $1.3 million, a $0.05 impact to net income per diluted share for the second quarter of 2019;
The effective income tax rate declined to 5.9% for the second quarter of 2019, primarily due to a Kentucky tax law change allowing a bank holding company’s net operating losses to offset against net revenues generated by the bank, beginning in 2021. The Bank recognized a non-recurring state deferred tax asset and corresponding state income tax benefit, the effect of which added $0.11 to net income per diluted share for the second quarter 2019; and
Excluding the two non-recurring items above, the Company would have reported record net income per diluted share for the second quarter 2019.
“As our record results reflect, Stock Yards Bancorp had a very successful second quarter,” said James A. (Ja) Hillebrand, Chief Executive Officer. “We posted solid net income, return on average assets and return on average equity. Record loan production and strong net loan growth drove the net interest income increase of $2.1 million or 7% compared with the second quarter of 2018. Our loan portfolio increased $186 million compared to June 30, 2018, and $216 million compared to December 31, 2018, with $160 million of this growth in both comparisons attributable to the KSB acquisition. Moreover, we ended the second quarter with a very robust loan pipeline leading into the summer months, positioning the Company for continued heightened loan production. Despite such growth, we are committed to preserving credit quality, as evidenced by our key metrics that remain at sound levels and are some of the highest among community banks.
“Non-interest income remained strong and continues to represent diversified revenue streams poised for attractive and predictable long-term growth,” Hillebrand continued. “The WM&T group, with approximately $3.1 billion of assets under management, continued to be a leading source of fee income, with revenues increasing 6% versus the year-earlier period and contributing 46% of total non-interest income in the second quarter of 2019. Debit/credit card income and treasury management fees combined grew 20% to account for 27% of second quarter 2019 total non-interest income. These diverse sources of revenue remain key to long-term stability in our growth and demonstrate our sound business model.”
Hillebrand also noted that, as a result of the KSB transaction and proximity of acquired branch locations to existing Stock Yards branch locations, the Company expects to divest three acquired branch locations in Louisville during the third quarter of 2019. Also in the third quarter, the Company will open a new branch location in Mt. Washington, Bullitt County, an area that has expanded significantly over the last several years and represents a natural extension of the Company’s concentrated presence in metropolitan Louisville.
In closing, Hillebrand said, “The outstanding results for the second quarter reflect healthy economies in our geographic locations, diversified revenue streams, the hard work of over 600 dedicated employees and solid execution of our strategic business plan. As evidenced by the second quarter authorization of a share repurchase plan, our Board is also highly optimistic about the Company’s future. I am pleased to announce that we have repurchased approximately 107 thousand shares of stock at a weighted average cost of $34.15 per share during the quarter. We are excited about the remainder of the year, supported by attractive business fundamentals, a robust loan production pipeline and the opportunity to welcome our new KSB customers to our broad suite of product offerings. Considering the solid fundamentals driving our business, the economic vibrancy of the markets we serve, and the opportunities we continue to see ahead as we pursue long-term growth, we remain confident about our future and our ability to continue to reward our shareholders for their loyalty.”
Second Quarter 2019 Compared with Second Quarter 2018
Net interest income – the Company’s largest source of revenue – increased approximately $2.1 million or 7% to $30.8 million.
Net interest margin decreased seven basis points to 3.81% from 3.88% primarily due to the following:
While the Company has not aggressively pursued deposits since mid-2018, nor has it significantly raised rates, the Company experienced a natural shift in deposits from non‑interest bearing accounts to interest bearing accounts during the period;
Asset yields were impacted by the downward trending of the overall rate environment during 2019, as fixed rate loan pricing and LIBOR based loans were impacted;
The second quarter 2018 margin was elevated by prepayment fees collected, with a much lighter impact experienced in the second quarter of 2019; and
The KSB portfolio mix of earning assets and interest bearing liabilities had a slight negative impact on margin overall.
Interest income rose $5.0 million or 16%, driven by higher market interest rates and increased average loan volume. The KSB portfolio contributed $110 million in average loans and generated $1.6 million in interest income for the second quarter of 2019.
As anticipated, interest expense increased $2.9 million or 86% during the second quarter due to growth of deposits – primarily time deposits – resulting from a prior-year deposit-gathering campaign. Also, approximately $530 thousand of the second quarter interest expense increase related to the KSB portfolio, which was concentrated in time deposits with higher costs.
Non-interest income increased $828 thousand or 7% to $12.3 million.
WM&T income rose 6% due to increased new business generation and strong market performance for the quarter;
The Company maintained its strategic focus of growing the debit/credit card and treasury management non-interest income revenue streams, which combined to increase 20%.
Non-interest expenses increased $3.3 million or 15% to $25.5 million.
The Company incurred $1.3 million in pre-tax one-time transaction costs related to its acquisition of KSB, a $0.05 impact to earnings per diluted share for the second quarter of 2019.
Compensation expense for the second quarter of 2019 increased $1.0 million or 9% compared with the prior-year quarter, with approximately $550 thousand of the increase attributable to KSB staff additions and restructuring charges. The remainder of the increase related to the addition of new legacy employees to support strategic growth initiatives and regular annual salary increases.
Legal and professional fees increased $1.0 million during the second quarter of 2019, with nearly $900 thousand of the increase associated with the KSB acquisition.
The Company’s effective tax rate declined to 5.9% from 18.9%.
During the second quarter of 2019, Kentucky tax law changed to allow a bank holding company’s net operating losses to offset against net revenues generated by the bank, beginning in 2021. In connection with this change, the Bank recognized a non-recurring state deferred tax asset and corresponding state income tax benefit, the effect of which added $0.11 to net income per diluted share for the second quarter of 2019.
June 30, 2019 Compared with June 30, 2018
Total loans increased $186 million or 7% to $2.8 billion.
Approximately $160 million in loans were added in connection with the KSB acquisition.
Excluding the KSB acquisition, the loan portfolio grew by a net $55 million during the first six months of 2019, bolstered by record loan production of $446 million.
Total deposits increased $343 million or 14% to $2.9 billion.
Approximately $116 million in deposits were added in connection with the KSB acquisition.
Time deposits have increased $184 million or 73%, as the Bank pursued aggressive term funding in the first part of 2018.
Core deposits, which exclude brokered deposits and time deposits greater than $250 thousand, represented 97% of total deposits.
Asset quality, which has remained exceptional and has trended within a narrow range over the past several years, remains sound. While the Company is pleased with this performance, management recognizes the cyclical nature of banking and believes asset quality metrics will normalize over the long term, which will eventually result in higher provisioning for loan and lease losses.
Non-performing loans (NPLs) were $3.9 million or 0.14% of total loans outstanding versus $7.4 million or 0.29% of total loans outstanding.
Non-performing assets (NPAs), which include NPLs along with other real estate owned and repossessed assets, were $4.5 million or 0.13% of total assets versus $7.7 million or 0.23% of total assets.
Based on net charge-offs of $48 thousand in the second quarter of 2019, combined with other considerations, including the overall level of risk in the portfolio, the Company did not record a provision for loan and lease losses in the second quarter of 2019 versus $1.2 million in the second quarter of 2018.
The allowance for loan and lease losses relative to total end-of-period loans remained flat at 0.96%.
The Company remained “well capitalized” – the highest capital rating for financial institutions.
Total equity to assets was 11.24% and tangible common equity ratio was 10.85%,(1) compared to 10.40% and 10.35%, respectively, with the fluctuation primarily associated with the KSB acquisition.
Even with its strong capital position, the Company continues to consistently achieve industry-leading returns on equity due to its superior earnings performance.
In addition to a substantial and sustained dividend payout ratio, the Company continues to pursue other strategies to enhance stockholder value, such as the previously mentioned share repurchase plan. In May 2019, the Board of Directors increased the quarterly cash dividend 4% to $0.26 per common share. Stock Yards Bancorp has now raised its quarterly dividend rate a total of 11 times since 2014, including two increases during 2018 and each of the previous four years.
Second Quarter 2019 Compared to First Quarter 2019
Net interest margin decreased eight basis points to 3.81% from 3.89% primarily due to the following:
The Company continued to experience a natural shift in deposits from non-interest bearing accounts to interest bearing accounts during the period.
Asset yields were impacted by the downward trending of the overall rate environment, as fixed rate loan pricing and LIBOR based loans were impacted.
The first quarter 2019 margin was elevated by prepayment fees collected, with a much lighter impact experienced in the second quarter.
The KSB portfolio mix of earning assets and interest bearing liabilities had a slight negative impact on margin overall.
Net interest income increased 4%.
The KSB portfolio contributed $110 million in average loans and generated $1.6 million in interest income for the second quarter, offset by approximately $530 thousand in interest expense.
Non-interest income increased 11%.
WM&T income rose 4% due to increased new business generation and strong market performance for the quarter;
Debit/credit card income increased $424 thousand or 24%, consistent with growth and usage in the program, in addition to incentives paid to the Company by its credit card processor.
Consistent with the decline in long-term fixed rates, mortgage banking income finished the spring/early summer season higher than the first quarter of 2019.
Non-interest expenses increased 12%.
As previously noted, the Company completed its acquisition of KSB on May 1, 2019. As a result, the Company incurred $1.3 million in pre-tax acquisition-related expenses, professional fees and compensation-related expenses. In addition, approximately $400 thousand in ongoing KSB non-interest expenses were recorded.
The Company’s effective tax rate declined to 5.9% for the second quarter of 2019 from 10.5% for the first quarter of 2019.
During the second quarter of 2019, Kentucky tax law changed to allow a bank holding company’s net operating losses to offset against net revenues generated by the bank, beginning in 2021. In connection with this change, the Bank recognized a non-recurring state deferred tax asset and corresponding state income tax benefit, the effect of which added $0.11 to net income per diluted share for the second quarter of 2019.
Also, as previously disclosed, beginning in 2021, the Kentucky franchise tax will be replaced with a 5% income-based tax. Associated with this change, the Bank recognized a non-recurring state deferred tax asset and corresponding state income tax benefit, the effect of which added $0.06 to net income per diluted share for the first quarter of 2019.
June 30, 2019 Compared to March 31, 2019
Total loans increased $238 million or 9%.
Approximately $160 million in loans were added in connection with the KSB acquisition.
The Company experienced legacy loan growth of $77 million during the second quarter of 2019 compared to net contraction of $22 million for the first quarter of 2019.
After strong production during the second quarter, loan pipelines remain robust headed into the third quarter of 2019.
Total deposits increased $131 million or 5%.
The linked-quarter increase in total deposits related primarily to the KSB acquisition, which contributed $116 million in total deposits.
Asset quality remained at historically strong levels.
NPLs were $3.9 million or 0.14% of total loans outstanding versus $3.8 million or 0.15% of total loans outstanding.
NPAs were $4.5 million or 0.13% of total assets versus $4.6 million or 0.14% of total assets.
Net charge-offs were $48 thousand compared with net loan loss recoveries of $330 thousand.
There was no loan loss provision in the second quarter of 2019, compared with a provision for loan and lease losses of $600 thousand in the first quarter of 2019.
The allowance for loan and lease losses relative to total end-of-period loans was 0.96%, a decrease of nine basis points.
About the Company
Louisville, Kentucky-based Stock Yards Bancorp, Inc., with $3.5 billion in assets, was incorporated in 1988 as a bank holding company. It is the parent company of Stock Yards Bank & Trust Company, which was established in 1904. The Company’s common shares trade on the NASDAQ Global Select Market under the symbol SYBT.
This report contains forward-looking statements under the Private Securities Litigation Reform Act that involve risks and uncertainties. Although the Company’s management believes the assumptions underlying the forward-looking statements contained herein are reasonable, any of these assumptions could be inaccurate. Therefore, there can be no assurance the forward-looking statements included herein will prove to be accurate. Factors that could cause actual results to differ from those discussed in forward-looking statements include, but are not limited to: economic conditions both generally and more specifically in the markets in which the Company and its subsidiary operates; competition for the Company’s customers from other providers of financial services; government legislation and regulation, which change and over which the Company has no control; changes in interest rates; material unforeseen changes in liquidity, results of operations, or financial condition of the Company’s customers; and other risks detailed in the Company’s filings with the Securities and Exchange Commission, all of which are difficult to predict and many of which are beyond the control of the Company. See Risk Factors outlined in the Company’s Form 10-K for the year ended December 31, 2018.
Stock Yards Bancorp, Inc. Financial Information (unaudited)
Second Quarter 2019 Earnings Release
(In thousands unless otherwise noted)
Three Months Ended
Six Months Ended
June 30,
June 30,
Income Statement Data
2019
2018
2019
2018
Net interest income, fully tax equivalent (2)
$
30,829
$
28,759
$
60,542
$
56,161
Interest income:
Loans and leases
$
33,419
$
29,456
$
64,963
$
56,518
Federal funds sold and interest bearing due from banks
830
163
1,563
431
Mortgage loans held for sale
43
44
80
79
Securities
2,676
2,341
5,391
4,720
Total interest income
36,968
32,004
71,997
61,748
Interest expense:
Deposits
5,652
2,674
10,718
4,751
Securities sold under agreements to repurchase and other short-term borrowings
92
427
177
550
Federal Home Loan Bank (FHLB) advances and long-term debt
450
229
671
464
Total interest expense
6,194
3,330
11,566
5,765
Net interest income
30,774
28,674
60,431
55,983
Provision for loan and lease losses
-
1,235
600
1,970
Net interest income after provision for loan and lease losses
30,774
27,439
59,831
54,013
Non-interest income:
Wealth management and trust services
5,662
5,344
11,101
10,844
Deposit service charges
1,336
1,447
2,583
2,858
Debit and credit card income
2,168
1,689
3,912
3,197
Treasury management fees
1,202
1,113
2,359
2,160
Mortgage banking income
796
746
1,278
1,322
Net investment product sales commissions and fees
364
397
720
801
Bank owned life insurance
184
191
362
378
Other
551
508
1,010
784
Total non-interest income
12,263
11,435
23,325
22,344
Non-interest expenses:
Compensation
12,715
11,703
24,516
22,673
Employee benefits
2,908
2,512
5,550
5,145
Net occupancy and equipment
1,976
1,811
3,834
3,629
Technology and communication
1,848
1,685
3,621
3,315
Debit and credit card processing
631
579
1,218
1,145
Marketing and business development
903
805
1,528
1,451
Postage, printing, and supplies
410
400
816
791
Legal and professional
1,523
504
2,057
997
FDIC insurance
248
238
486
480
Amortization/impairment of investments in tax credit partnerships
52
58
104
58
Capital and deposit based taxes
967
862
1,871
1,714
Other
1,283
979
2,502
1,765
Total non-interest expenses
25,464
22,136
48,103
43,163
Income before income tax expense
17,573
16,738
35,053
33,194
Income tax expense
1,030
3,159
2,869
6,211
Net income
$
16,543
$
13,579
$
32,184
$
26,983
Net income per share - Basic
$
0.73
$
0.60
$
1.42
$
1.19
Net income per share - Diluted
0.72
0.59
1.40
1.17
Cash dividend declared per share
0.26
0.23
0.51
0.46
Weighted average shares - Basic
22,689
22,625
22,675
22,601
Weighted average shares - Diluted
22,949
22,967
22,948
22,959
June 30,
Balance Sheet Data
2019
2018
Loans and leases
$
2,763,880
$
2,577,960
Allowance for loan and lease losses
26,416
24,873
Total assets
3,463,823
3,323,840
Non-interest bearing deposits
777,652
715,974
Interest bearing deposits
2,105,801
1,824,487
FHLB advances
84,279
48,821
Stockholders' equity
389,365
345,515
Total shares outstanding
22,721
22,746
Book value per share (1)
$
17.14
$
15.19
Tangible common equity per share (1)
16.46
15.11
Market value per share
36.15
38.15
Stock Yards Bancorp, Inc. Financial Information (unaudited)
Second Quarter 2019 Earnings Release
Three Months Ended
Six Months Ended
June 30,
June 30,
Average Balance Sheet Data
2019
2018
2019
2018
Federal funds sold and interest bearing due from banks
$
137,130
$
36,985
$
129,701
$
53,991
Mortgage loans held for sale
3,794
2,975
2,766
2,539
Securities available for sale
435,391
401,369
436,498
409,494
FHLB stock and other securities
10,590
8,925
10,392
8,310
Loans and leases
2,668,058
2,540,537
2,603,878
2,495,868
Total earning assets
3,244,941
2,973,704
3,173,069
2,952,638
Total assets
3,436,175
3,132,494
3,354,172
3,111,807
Interest bearing deposits
2,112,768
1,846,730
2,080,976
1,869,864
Total deposits
2,867,360
2,548,372
2,805,872
2,555,738
Securities sold under agreement to repurchase other short-term borrowings
51,743
150,173
50,357
124,000
FHLB advances and other long-term borrowings
74,420
48,929
61,264
49,087
Total interest bearing liabilities
2,238,931
2,045,832
2,192,597
2,042,951
Total stockholders' equity
381,270
341,637
376,198
339,117
Performance Ratios
Annualized return on average assets
1.93
%
1.74
%
1.93
%
1.75
%
Annualized return on average equity
17.40
%
15.94
%
17.25
%
16.05
%
Net interest margin, fully tax equivalent
3.81
%
3.88
%
3.85
%
3.84
%
Non-interest income to total revenue, fully tax equivalent
28.46
%
28.45
%
27.81
%
28.46
%
Efficiency ratio, fully tax equivalent (3)
59.09
%
55.07
%
57.36
%
54.98
%
Capital Ratios
Total stockholders' equity to total assets (1)
11.24
%
10.40
%
Tangible common equity to tangible assets (1)
10.85
%
10.35
%
Average stockholders' equity to average assets
11.22
%
10.90
%
Total risk-based capital
12.67
%
13.06
%
Common equity tier 1 risk-based capital
11.82
%
12.18
%
Tier 1 risk-based capital
11.82
%
12.18
%
Leverage
10.91
%
11.19
%
Loans by Type
Commercial and industrial
$
860,085
$
855,015
Construction and land development
257,801
238,224
Real estate mortgage - commercial investment
696,421
622,777
Real estate mortgage - owner occupied commercial
452,719
420,999
Real estate mortgage - 1-4 family residential
338,957
277,735
Home equity - first lien
46,012
53,257
Home equity - junior lien
67,948
66,323
Consumer
43,937
43,630
Total loans and leases
$
2,763,880
$
2,577,960
Asset Quality Data
Non-accrual loans
$
3,030
$
6,422
Troubled debt restructurings
37
817
Loans past due 90 days or more and still accruing
861
134
Total non-performing loans
3,928
7,373
Other real estate owned
563
360
Total non-performing assets
$
4,491
$
7,733
Non-performing loans to total loans
0.14
%
0.29
%
Non-performing assets to total assets
0.13
%
0.23
%
Allowance for loan and lease losses to total loans
0.96
%
0.96
%
Allowance for loan and lease losses to average loans
1.01
%
1.00
%
Allowance for loan and lease losses to non-performing loans
673
%
337
%
Net charge-offs (recoveries)
$
48
$
565
$
(282
)
$
1,982
Net charge-offs (recoveries) to average loans (4)
0.00
%
0.02
%
-0.01
%
0.08
%
Stock Yards Bancorp, Inc. Financial Information (unaudited)
Second Quarter 2019 Earnings Release
Quarterly Comparison
Income Statement Data
6/30/19
3/31/19
12/31/18
9/30/18
6/30/18
Net interest income, fully tax equivalent (2)
$
30,829
$
29,713
$
29,972
$
28,590
$
28,759
Net interest income
$
30,774
$
29,657
$
29,912
$
28,521
$
28,674
Provision for loan and lease losses
-
600
-
735
1,235
Net interest income after provision for loan and lease losses
30,774
29,057
29,912
27,786
27,439
Non-interest income:
Wealth management and trust services
5,662
5,439
5,312
5,380
5,344
Deposit service charges
1,336
1,247
1,419
1,482
1,447
Debit and credit card income
2,168
1,744
1,813
1,759
1,689
Treasury management fees
1,202
1,157
1,260
1,151
1,113
Mortgage banking income
796
482
534
712
746
Net investment product sales commissions and fees
364
356
432
444
397
Bank owned life insurance
184
178
565
186
191
Other
551
459
241
312
508
Total non-interest income
12,263
11,062
11,576
11,426
11,435
Non-interest expenses:
Compensation
12,715
11,801
11,824
11,607
11,703
Employee benefits
2,908
2,642
2,452
2,501
2,512
Net occupancy and equipment
1,976
1,858
2,110
1,914
1,811
Technology and communication
1,848
1,773
1,660
1,595
1,685
Debit and credit card processing
631
587
594
588
579
Marketing and business development
903
625
908
740
805
Postage, printing, and supplies
410
406
397
370
400
Legal and professional
1,523
534
1,116
501
504
FDIC insurance
248
238
243
238
238
Amortization/impairment of investments in tax credit partnerships
52
52
1,179
-
58
Capital and deposit based taxes
967
904
873
738
862
Other
1,283
1,219
1,209
989
979
Total non-interest expenses
25,464
22,639
24,565
21,781
22,136
Income before income tax expense
17,573
17,480
16,923
17,431
16,738
Income tax expense
1,030
1,839
2,265
3,555
3,159
Net income
$
16,543
$
15,641
$
14,658
$
13,876
$
13,579
Net income per share - Basic
$
0.73
$
0.69
$
0.65
$
0.61
$
0.60
Net income per share - Diluted
0.72
0.68
0.64
0.60
0.59
Cash dividend declared per share
0.26
0.25
0.25
0.25
0.23
Weighted average shares - Basic
22,689
22,661
22,638
22,636
22,625
Weighted average shares - Diluted
22,949
22,946
22,907
22,968
22,967
Quarterly Comparison
Balance Sheet Data
6/30/19
3/31/19
12/31/18
9/30/18
6/30/18
Cash and due from banks
$
51,264
$
44,014
$
51,892
$
66,029
$
44,052
Federal funds sold and interest bearing due from banks
64,775
67,326
147,047
54,451
10,948
Mortgage loans held for sale
3,922
2,981
1,675
2,533
2,053
Securities available for sale
423,579
507,131
436,995
550,091
574,570
FHLB stock and other securities
11,316
9,779
10,370
10,370
10,370
Loans and leases
2,763,880
2,525,709
2,548,171
2,534,483
2,577,960
Allowance for loan and lease losses
26,416
26,464
25,534
25,222
24,873
Total assets
3,463,823
3,281,016
3,302,924
3,324,797
3,323,840
Non-interest bearing deposits
777,652
698,783
711,023
705,386
715,974
Interest bearing deposits
2,105,801
2,053,757
2,083,333
1,892,652
1,824,487
Securities sold under agreements to repurchase
33,809
34,633
36,094
53,883
58,808
Federal funds purchased and other short-term borrowings
12,012
12,218
10,247
231,344
286,460
FHLB advances
84,279
47,853
48,177
48,500
48,821
Stockholders' equity
389,365
377,994
366,500
352,980
345,515
Total shares outstanding
22,721
22,823
22,749
22,746
22,746
Book value per share (1)
$
17.14
$
16.56
$
16.11
$
15.52
$
15.19
Tangible common equity per share (1)
16.46
16.49
16.03
15.44
15.11
Market value per share
36.15
33.81
32.80
36.30
38.15
Capital Ratios
Total stockholders' equity to total assets (1)
11.24
%
11.52
%
11.10
%
10.62
%
10.40
%
Tangible common equity to tangible assets (1)
10.85
%
11.47
%
11.05
%
10.57
%
10.35
%
Average stockholders' equity to average assets
11.10
%
11.34
%
10.99
%
11.14
%
10.91
%
Total risk-based capital
12.67
%
14.04
%
13.91
%
13.50
%
13.06
%
Common equity tier 1 risk-based capital
11.82
%
13.11
%
13.00
%
12.61
%
12.18
%
Tier 1 risk-based capital
11.82
%
13.11
%
13.00
%
12.61
%
12.18
%
Leverage
10.91
%
11.57
%
11.33
%
11.40
%
11.19
%
Stock Yards Bancorp, Inc. Financial Information (unaudited)
Second Quarter 2019 Earnings Release
Quarterly Comparison
Average Balance Sheet Data
6/30/19
3/31/19
12/31/18
9/30/18
6/30/18
Federal funds sold and interest bearing due from banks
$
137,130
$
122,189
$
86,725
$
73,196
$
36,985
Mortgage loans held for sale
3,794
1,727
2,140
2,980
2,975
Securities available for sale
435,391
437,619
468,856
372,251
401,369
Loans and leases
2,668,058
2,538,940
2,539,750
2,547,474
2,540,537
Total earning assets
3,244,941
3,100,352
3,096,931
2,990,401
2,973,704
Total assets
3,436,175
3,271,257
3,260,322
3,153,406
3,132,494
Interest bearing deposits
2,112,768
2,048,830
2,012,489
1,874,853
1,846,730
Total deposits
2,867,360
2,743,701
2,738,678
2,590,156
2,548,372
Securities sold under agreement to repurchase and other short-term borrowings
51,743
48,956
67,731
116,287
150,173
FHLB advances
74,420
47,962
48,287
48,612
48,929
Total interest bearing liabilities
2,238,931
2,145,748
2,128,507
2,039,752
2,045,832
Total stockholders' equity
381,270
371,070
358,293
351,376
341,637
Performance Ratios
Annualized return on average assets
1.93
%
1.94
%
1.78
%
1.75
%
1.74
%
Annualized return on average equity
17.40
%
17.09
%
16.23
%
15.67
%
15.94
%
Net interest margin, fully tax equivalent
3.81
%
3.89
%
3.84
%
3.79
%
3.88
%
Non-interest income to total revenue, fully tax equivalent
28.46
%
27.13
%
27.86
%
28.55
%
28.45
%
Efficiency ratio, fully tax equivalent (3)
59.09
%
55.52
%
55.52
%
59.12
%
55.07
%
Loans by Type
Commercial and industrial
$
860,085
$
827,747
$
833,524
$
816,252
$
855,015
Construction and land development
257,801
244,548
255,142
233,107
238,224
Real estate mortgage - commercial investment
696,421
586,648
588,610
630,000
622,777
Real estate mortgage - owner occupied commercial
452,719
428,163
426,373
420,098
420,999
Real estate mortgage - 1-4 family residential
338,957
277,847
276,017
274,409
277,735
Home equity - first lien
46,012
48,656
49,500
46,062
53,257
Home equity - junior lien
67,948
66,837
70,947
67,105
66,323
Consumer
43,937
45,263
48,058
47,450
43,630
Total loans and leases
$
2,763,880
$
2,525,709
$
2,548,171
$
2,534,483
$
2,577,960
Asset Quality Data
Non-accrual loans
$
3,030
$
3,273
$
2,611
$
3,982
$
6,422
Troubled debt restructurings
37
39
42
792
817
Loans past due 90 days or more and still accruing
861
454
745
212
134
Total non-performing loans
3,928
3,766
3,398
4,986
7,373
Other real estate owned
563
878
1,018
1,604
360
Total non-performing assets
$
4,491
$
4,644
$
4,416
$
6,590
$
7,733
Non-performing loans to total loans
0.14
%
0.15
%
0.13
%
0.20
%
0.29
%
Non-performing assets to total assets
0.13
%
0.14
%
0.13
%
0.20
%
0.23
%
Allowance for loan and lease losses to total loans
0.96
%
1.05
%
1.00
%
1.00
%
0.96
%
Allowance for loan and lease losses to average loans
0.99
%
1.04
%
1.01
%
1.00
%
0.98
%
Allowance for loan and lease losses to non-performing loans
673
%
703
%
751
%
506
%
337
%
Net charge-offs (recoveries)
$
48
$
(330
)
$
(312
)
$
386
$
565
Net charge-offs (recoveries) to average loans (4)
0.00
%
-0.01
%
-0.01
%
0.02
%
0.02
%
Other Information
Total assets under management (in millions)
$
3,068
$
2,970
$
2,765
$
2,969
$
2,852
Full-time equivalent employees
615
596
591
593
581
(1) - The following table provides a reconciliation of total stockholders’ equity in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) to tangible stockholders’ equity, a non-GAAP disclosure. The Company provides the tangible book value per share, a non-GAAP measure, in addition to those defined by banking regulators, because of its widespread use by investors as a means to evaluate capital adequacy:
Quarterly Comparison
6/30/19
3/31/19
12/31/18
9/30/18
6/30/18
Total stockholders' equity - GAAP (a)
$
389,365
$
377,994
$
366,500
$
352,980
$
345,515
Less: Goodwill
(12,825
)
(682
)
(682
)
(682
)
(682
)
Less: Core deposit intangible
(2,462
)
(1,015
)
(1,057
)
(1,098
)
(1,139
)
Tangible common equity - Non-GAAP (c)
$
374,078
$
376,297
$
364,761
$
351,200
$
343,694
Total assets - GAAP (b)
$
3,463,823
$
3,281,016
$
3,302,924
$
3,324,797
$
3,323,840
Less: Goodwill
(12,825
)
(682
)
(682
)
(682
)
(682
)
Less: Core deposit intangible
(2,462
)
(1,015
)
(1,057
)
(1,098
)
(1,139
)
Tangible assets - Non-GAAP (d)
$
3,448,536
$
3,279,319
$
3,301,185
$
3,323,017
$
3,322,019
Total stockholders' equity to total assets - GAAP (a/b)
11.24
%
11.52
%
11.10
%
10.62
%
10.40
%
Tangible common equity to tangible assets - Non-GAAP (c/d)
10.85
%
11.47
%
11.05
%
10.57
%
10.35
%
Total shares outstanding (e)
22,721
22,823
22,749
22,746
22,746
Book value per share - GAAP (a/e)
$
17.14
$
16.56
$
16.11
$
15.52
$
15.19
Tangible common equity per share - Non-GAAP (c/e)
16.46
16.49
16.03
15.44
15.11
(2) - Interest income on a fully tax equivalent basis includes the additional amount of interest income that would have been earned if investments in certain tax-exempt interest earning assets had been made in assets subject to federal, state and local taxes yielding the same after-tax income.
(3) - The efficiency ratio, a non-GAAP measure, equals total non interest expense divided by the sum of fully tax equivalent net interest income and non interest income. The ratio excludes net gains (losses) on sales, calls, and impairment of investment securities, if applicable.
(4) - Quarterly net charge-offs (recoveries) to average loans ratios are not annualized.
View source version on businesswire.com: https://www.businesswire.com/news/home/20190724005122/en/
T. Clay Stinnett
Executive Vice President,
Treasurer and Chief Financial Officer
(502) 625-0890
Source: Stock Yards Bancorp, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.