News Details

FIRST QUARTER HIGHLIGHTED BY STRONG ORGANIC LOAN GROWTH, RECORD LEVELS OF NON-INTEREST INCOME & COMPLETED ACQUISITION OF COMMONWEALTH BANCSHARES

LOUISVILLE, Ky., April 27, 2022 (GLOBE NEWSWIRE) -- Stock Yards Bancorp, Inc. (NASDAQ: SYBT), parent company of Stock Yards Bank & Trust Company, with offices in Louisville, Central and Eastern Kentucky, as well as the Indianapolis, Indiana and Cincinnati, Ohio metropolitan markets, today reported earnings for the first quarter ended March 31, 2022. Net income for the first quarter of 2022 was $7.9 million, or $0.29 per diluted share, reflecting $19.5 million in merger expenses and $4.4 million in merger related credit loss expense for the quarter. This compares to net income of $22.7 million, or $0.99 per diluted share, for the first quarter of 2021. The results for the first quarter of 2022 also included strong organic loan growth and record levels of non-interest income highlighted by wealth management and trust income, card income and treasury management fees.

(dollar amounts in thousands, except per share data)	1Q22			4Q21			1Q21
Net income	$	7,906		$	24,589		$	22,710
Net income per share, diluted		0.29			0.92			0.99
Net interest income	$	48,760		$	46,182		$	37,825
Provision for credit loss expense(6)		2,279			(1,900	)		(1,475	)
Non-interest income		19,203			18,604			13,844
Non-interest expenses		56,297			34,572			24,973
Net interest margin		3.11	%		3.07	%		3.39	%
Efficiency ratio(4)		82.61	%		53.24	%		48.29	%
Tangible common equity to tangible assets(1)		6.94	%		8.22	%		8.97	%
Annualized return on average equity(7)		4.55	%		14.60	%		20.71	%
Annualized return on average assets(7)		0.47	%		1.52	%		1.96	%

“Our first quarter operating results continued to reflect strong organic loan growth, record quarterly loan production and solid revenue generation,” said James A. (Ja) Hillebrand, Chairman and Chief Executive Officer. “Similar to last quarter, we reported record non-interest income during the first quarter of 2022, a complement to our diversified income revenue streams. Card income and treasury management fees climbed to record levels at quarter-end, primarily due to increases in new business, volume and usage. Given the volatile stock market during the first three months of the year, we are very encouraged by the growth in wealth management and trust income, as the growth in assets under management and fee income was driven significantly by customer expansion. Despite quarter over prior year quarter lower yields on interest earning assets, net interest margin (NIM) improved on a linked quarter basis. With the recent rate increase enacted by the Federal Reserve at the end of the quarter, we anticipate further improvement in our NIM in future periods, especially with the probability of additional rate increases throughout the year.

“The highlight of the first quarter was the March 7th completion of the Commonwealth Bancshares acquisition, which added $1.34 billion in assets, $632 million in loans net of purchase accounting marks, $1.12 billion in total deposits and $2.93 billion in wealth management and trust assets under management. The acquisition is already positively impacting our operating results by increasing our scale and reach, as Commonwealth was the largest privately-held bank headquartered in the Louisville MSA. The transaction, which not only builds upon our already prominent market share in the Louisville market, expands our presence in the attractive Shelby County and Northern Kentucky markets and provides a solid opportunity for future growth.

“In addition to completing the acquisition, we also completed our core conversion at the end of the current quarter. Although additional work remains to complete the full integration of the two companies and fully realize the expected operating synergies, we expect that, similar to our three prior successful acquisitions, the Commonwealth Bancshares acquisition will result in significant benefits to our expanding group of clients, communities and employees. While costs associated with the merger significantly impacted first quarter earnings, they remained in line with our expectations, and we believe the majority of merger related expenses are behind us,” Hillebrand concluded.

At March 31, 2022, the Company had $7.77 billion in assets, $4.85 billion in loans and $6.75 billion in total deposits. The combined enterprise, with 73 branch offices, has and will continue to benefit from a diversified geographic footprint that provides significant growth opportunities in both the banking and wealth management arenas.

Additional key factors contributing to the first quarter of 2022 results included:

• Loan growth within the legacy Stock Yards portfolio, excluding PPP loans and loans acquired from Commonwealth Bancshares, totaled $118 million, or 3%, compared to the fourth quarter of 2021. Legacy loan growth for the first three months of 2022 represented the strongest first quarter in the Company’s history.
• Deposit balances grew by $958 million during the first quarter of 2022, as over $1.12 billion in deposits assumed from the Commonwealth Bancshares acquisition were partially offset by anticipated seasonal legacy deposit run-off.
• Despite a significant slowdown in PPP income recognition, net interest income increased $10.9 million, or 29%, for the first quarter of 2022, compared to the first quarter a year ago, with a sizable portion of the increase representing the Central/Eastern Kentucky market contribution. The Company entered the Central/Eastern Kentucky market in May 2021 in conjunction with the Kentucky Bancshares merger.
• After several quarters of NIM being negatively impacted by loan yield contraction and significant ongoing levels of excess balance sheet liquidity, NIM improved four basis points on a linked quarter basis.
• Consistent with further stabilization in the Federal Reserve unemployment forecast, net recoveries and solid credit quality statistics, a net reduction of $1.7 million in credit loss expense on loans and $400,000 reduction in credit losses on off-balance sheet exposures was recorded for the first quarter of 2022. These reductions were offset by $4.4 million in credit loss expense recorded on loans acquired from Commonwealth Bancshares.
• Non-interest income increased by $5.4 million, or 39%, over the first quarter of 2021, as customer expansion and recent acquisitions drove record quarterly wealth management and trust income, card income and treasury management fees.
• Despite significant non-interest expenses associated with the Commonwealth Bancshares acquisition, total company non-interest expenses remained controlled and consistent with expectations.
• Tangible book value per share was $17.92 at March 31, 2022, compared to $20.09 at December 31, 2021, and $18.82 at March 31, 2021. The decrease in tangible book value per share during the current quarter was attributable to the Commonwealth Bancshares acquisition and to a greater extent a $50 million decline in accumulated other comprehensive income. The significant increase in interest rates during March led to outsized unrealized losses within the available for sale debt securities portfolio. These securities 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. Accordingly, there is a zero credit loss expectation on these securities.

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

Net interest income, the Company’s largest source of revenue, increased 29%, or $10.9 million, to $48.8 million, driven by higher interest income on non-PPP loans and the continued decline in cost of funds. Organic growth and to a greater extent the Central/Eastern Kentucky market expansion have boosted net interest income over the past 12 months.

• Total interest income increased by $10.5 million, or 26%, to $50.0 million, primarily due to increased interest income on non-PPP loans generated by organic growth and the Central/Eastern Kentucky market expansion.
• Total interest expense declined 28%, to $1.2 million. Interest expense on deposits decreased $339,000, or 22%, as the cost of interest bearing deposits declined to 0.11% in the first quarter of 2022, from 0.22% in the first quarter a year ago, as the Company continued to benefit significantly from the strategic lowering of stated deposit rates. Average interest bearing deposit balances, predominantly demand accounts, have surged $1.33 billion, or 47%, consistent with the current year and prior year acquisitions. In addition, a $293,000 interest expense reduction was posted during first quarter of 2022 consistent with purchase accounting adjustments associated with the recent acquisitions.
• NIM decreased 28 basis points to 3.11% for the first quarter of 2022, from 3.39% for the first quarter a year ago. During the quarter, forgiveness within the PPP loan portfolio and related fee income recognition had a 13 basis point positive impact to NIM, compared to a 21 basis point positive impact to NIM in the first quarter a year ago. Overall, NIM continues to be negatively impacted by loan yield contraction and significant ongoing excess balance sheet liquidity, the latter of which represented a 30 basis point negative impact to NIM in the first quarter of 2022, compared to a 13 basis point negative impact to NIM in the first quarter a year ago.
• Interest income on non-PPP loans increased $11.9 million, or 40%, over the prior year quarter primarily attributed to the Central/Eastern Kentucky contribution. Despite a $1.30 billion, or 43%, increase in average non-PPP loans, rate contraction impacted the portfolio, with the average quarterly yield earned on non-PPP loans contracting 10 basis points over the past 12 months to 3.99%. PPP interest and fee income totaled $2.8 million and $7.0 million for the first quarters of 2022 and 2021, respectively.
• Interest income on debt securities increased $2.6 million, or 111%, compared to the first quarter of 2021. While the average balance of securities increased $660 million over the prior year quarter, the yield earned increased 8 basis points to 1.51%.

The Company recorded a net $2.3 million provision to credit losses during the first quarter of 2022, which included a $1.7 million benefit to provision for credit losses on loans and $400,000 benefit to provision for credit losses on off-balance sheet exposures. The reductions were consistent with further stabilization in the Federal Reserve unemployment forecast, net recoveries, and solid credit quality statistics and were offset by $4.4 million of credit loss expense recorded on loans acquired from Commonwealth Bancshares.

Non-interest income increased $5.4 million, or 39%, to $19.2 million, with the recent acquisitions contributing significantly to the increase.

• Wealth management and trust income set a new quarterly record at $8.5 million for the first quarter of 2022, increasing $2.2 million, or 36%, over the first quarter a year ago. Growth in assets under management, tied to the addition of Commonwealth Bancshares and significant growth in legacy business, served to boost asset-based fees and led to an increase in assets under management of $3.60 billion, or 90%, over the past 12 months. The March acquisition of Commonwealth Bancshares contributed meaningfully to first quarter 2022 wealth management and trust income.
• Card income increased $1.8 million, or 81%, over the first quarter of 2021, setting a quarterly record at $4.1 million. Growth trends in both debit and credit card portfolios remain positive, as card income benefited significantly from improving economic activity, with consumers and businesses increasing their spend, complimented by a meaningful contribution from the Central/Eastern Kentucky market.
• Treasury management fees increased by $364,000, or 24%, to a record $1.9 million driven by increased transaction volume, new product sales and customer base expansion. In addition, calling efforts to existing customers have led to significant increases in online services, reporting, ACH and wire origination, remote deposit and fraud mitigation services.
• Mortgage banking income, which primarily consists of gain on sale of loans, servicing income and mortgage servicing rights amortization, was $1.0 million for the first quarter of 2022, down 31% from the first quarter a year ago, primarily due to a decline in mortgage originations stemming from the increase in long-term interest rates.

Non-interest expenses increased $31.3 million to $56.3 million, with $19.5 million of the increase associated with non-recurring merger expenses.

• Compensation expense increased $5.1 million, or 40%, primarily due to the increase in full time equivalent employees associated with the recent acquisitions, as well as annual merit-based salary increases. Full time equivalent employees increased to 997 at March 31, 2022, from 638 at March 31, 2021, as the Bank added 190 associates in connection with the Commonwealth Bancshares merger and 182 associates in connection with its expansion into Central/Eastern Kentucky.
• Employee benefits increased $1.3 million, or 39%, compared to the first quarter of 2021, mainly due to the elevated health insurance, 401(k) and payroll tax expenses associated with the above-mentioned increase in full time equivalent employees.
• Net occupancy and equipment expenses increased $980,000, or 48%, consistent with significant acquisition related branch expansion.
• 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 $1.1 million, or 46%, consistent with branch expansion and core system upgrades.
• Card processing expense increased $632,000, consistent with the card income revenue trend discussed previously.
• Merger expenses totaled $19.5 million in the first quarter of 2022. Substantially all of the merger expenses related to the Commonwealth Bancshares acquisition have been recognized and the Company expects remaining merger related expenses will be minimal over the remainder of the year.
• Intangible amortization expense increased $636,000, consistent with the Commonwealth Bancshares core deposit intangible and customer lists.
• Other non-interest expenses increased $1.4 million primarily due to increased card rewards and insurance captive expenses.

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

Total assets increased $2.98 billion, or 62%, year over year to $7.77 billion boosted by the two recent acquisitions and strong organic growth.

Total loans increased $1.21 billion year over year, or 33%, to $4.85 billion. Excluding the PPP loan portfolio, total loans increased $1.75 billion, or 58%, over the past 12 months, with approximately $1.39 billion of combined growth attributable to the Commonwealth Bancshares acquisition and Central/Eastern Kentucky market expansion.

The Company acquired $647 million in securities in the recent acquisitions and has deployed $847 million of excess cash into securities over the past 12 months.

Total deposits increased $2.55 billion, or 61%, from March 31, 2021 to March 31, 2022, with non-interest bearing deposits representing $719 million of the growth. Both period end and average deposit balances ended at record levels at March 31, 2022, as the Commonwealth Bancshares merger added approximately $1.12 billion to total deposits.

Asset quality, which has trended within a narrow range over the past several years, has remained solid. During the first quarter of 2022, the Company recorded net recoveries of $539,000, compared to net loan charge-offs of $6,000 in the first quarter of 2021. Non-performing loans totaled $13 million, or 0.27%⁽²⁾ of total loans outstanding (excluding PPP) compared to $14 million, or 0.47%⁽²⁾ of total loans (excluding PPP) outstanding at March 31, 2021. These strong metrics along with an improving economic forecast offset by purchase accounting adjustments, resulted in a ratio of allowance for credit losses to loans (excluding PPP) of 1.40%⁽²⁾ at March 31, 2022 compared to 1.68%⁽²⁾ at March 31, 2021.

At March 31, 2022, the Company remained “well-capitalized,” the highest regulatory capital rating for financial institutions. Total equity to assets was 9.71%⁽¹⁾ and the tangible common equity ratio was 6.94%⁽¹⁾ at March 31, 2022, compared to 9.25%⁽¹⁾ and 8.97%⁽¹⁾, respectively, at March 31, 2021. The significant increase in interest rates during March led to outsized unrealized losses within the available for sale debt securities portfolio, with a $50 million decline in accumulated other comprehensive income driving down the tangible common equity ratio.

In February 2022, the board of directors declared a cash dividend of $0.28 per common share. The dividend was paid April 1, 2022, to shareholders of record as of March 21, 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 – First Quarter 2022 Compared with Fourth Quarter 2021

Net interest income increased $2.6 million, or 6%, over the prior quarter to $48.8 million, led by the Commonwealth Bancshares acquisition, organic loan growth and the continued decline in cost of funds. While overall NIM was challenged by increased levels of excess liquidity, loan yields showed signs of stabilization in the first quarter of 2022.

As previously discussed, the Company recorded a net $2.3 million provision to credit losses during the first quarter of 2022, which included a $1.7 million benefit to provision for credit losses on loans and $400,000 benefit to provision credit losses on off-balance sheet exposures. The reductions were consistent with further stabilization in the Federal Reserve unemployment forecast, net recoveries, and solid credit quality statistics and were offset by $4.4 million of credit loss expense recorded on loans acquired from Commonwealth Bancshares. During the fourth quarter of 2021, the Company recorded a net benefit of $1.9 million for credit losses, which included a $1.1 million benefit to provision for credit losses on loans and a $800,000 net benefit to provision for credit losses on off-balance sheet exposures consistent with the improvement in underlying CECL model factors along with increased line utilization in the Commercial & Industrial portfolio during the quarter.

Non-interest income increased $599,000, or 3%, to $19.2 million. Higher wealth management and trust income, card income and treasury management fees all contributed to the quarterly increase.

Non-interest expenses increased $21.7 million, or 63%, to $56.3 million, with $19.5 million of the increase associated with non-recurring merger expenses. Compensation expense increased $823,000, to $18.0 million compared with the fourth quarter of 2022, due to the addition of 190 full time equivalent employees in association with the Commonwealth Bancshares acquisition and annual merit increases.

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

Total assets increased $1.13 billion, or 17% on a linked quarter basis to $7.77 billion, reflecting the acquisition of Commonwealth Bancshares, as well as organic increases in loans and investment securities.

Total loans (excluding PPP) increased $748 million, or 19%, on a linked quarter basis, with the Commonwealth Bancshares merger contributing $632 million of the total loan growth. Total line of credit usage was 41% as of March 31, 2022, and unchanged compared to December 31, 2021. Commercial and industrial line usage was 32% as of March 31, 2022, and also unchanged compared to December 31, 2021.

Total deposits increased $958 million, or 17%, on a linked quarter basis due in part to the acquisition of Commonwealth Bancshares offset by anticipated seasonal legacy deposit run-off.

About the Company

Louisville, Kentucky-based Stock Yards Bancorp, Inc., with $7.77 billion in assets, was incorporated in 1988 as a bank holding company. It is the parent company of Stock Yards Bank & Trust Company, which was established in 1904. The Company’s common shares trade on The NASDAQ Stock Market under the symbol “SYBT.”

This report contains forward-looking statements under the Private Securities Litigation Reform Act that involve risks and uncertainties. Although the Company’s management believes the assumptions underlying the forward-looking statements contained herein are reasonable, any of these assumptions could be inaccurate. Therefore, there can be no assurance the forward-looking statements included herein will prove to be accurate. Factors that could cause actual results to differ from those discussed in forward-looking statements include, but are not limited to: the possibility that any of the anticipated benefits of the Commonwealth Bancshares merger will not be realized or will not be realized within the expected time period; the risk that integration of Commonwealth Bancshares’ operations with those of Stock Yards will be materially delayed or will be more costly or difficult than expected; diversion of management's attention from ongoing business operations and opportunities due to the merger; the challenges of integrating and retaining key employees; the effect of the combined company's respective customer and employee relationships and operating results; the possibility that the merger may be more expensive to complete than anticipated, including as a result of unexpected factors or events; dilution caused by Stock Yards’ issuance of additional shares of Stock Yards common stock in connection with the merger; economic conditions both generally and more specifically in the markets in which the Company and its subsidiary operates; competition for the Company’s customers from other providers of financial services; 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)
First Quarter 2022 Earnings Release
(In thousands unless otherwise noted)
		Three Months Ended
		March 31,
Income Statement Data		2022			2021
Net interest income, fully tax equivalent (3)		$	48,944		$	37,874
Interest income:
Loans		$	44,743		$	37,000
Federal funds sold and interest bearing due from banks		282			66
Mortgage loans held for sale		24			64
Securities		4,935			2,388
Total interest income		49,984			39,518
Interest expense:
Deposits		1,171			1,510
Securities sold under agreements to repurchase and
other short-term borrowings		20			7
Federal Home Loan Bank advances		-			176
Subordinated debentures		33			-
Total interest expense		1,224			1,693
Net interest income		48,760			37,825
Provision for credit losses (6)		2,279			(1,475)
Net interest income after provision for credit losses		46,481			39,300
Non-interest income:
Wealth management and trust services		8,469			6,248
Deposit service charges		1,863			944
Debit and credit card income		4,119			2,273
Treasury management fees		1,904			1,540
Mortgage banking income		1,003			1,444
Net investment product sales commissions and fees		607			464
Bank owned life insurance		266			161
Other		972			770
Total non-interest income		19,203			13,844
Non-interest expenses:
Compensation		17,969			12,827
Employee benefits		4,539			3,261
Net occupancy and equipment		3,025			2,045
Technology and communication		3,419			2,346
Debit and credit card processing		1,337			705
Marketing and business development		772			524
Postage, printing and supplies		733			409
Legal and professional		650			462
FDIC Insurance		645			405
Amortization of investments in tax credit partnerships		88			31
Capital and deposit based taxes		518			458
Merger expenses		19,500			400
Intangible amortization		713			77
Other		2,389			1,023
Total non-interest expenses		56,297			24,973
Income before income tax expense		9,387			28,171
Income tax expense		1,445			5,461
Net income		7,942			22,710
Less: net income attributed to non-controlling interest		36			-
Net income attributed to stockholders		$	7,906		$	22,710
Net income per share - Basic		$	0.29		$	1.00
Net income per share - Diluted		0.29			0.99
Cash dividend declared per share		0.28			0.27
Weighted average shares - Basic		27,230			22,622
Weighted average shares - Diluted		27,485			22,865
		March 31,
Balance Sheet Data		2022			2021
Investment securities		$	1,698,546		$	672,167
Loans		4,847,683			3,635,156
Allowance for credit losses on loans		67,067			50,714
Total assets		7,774,057			4,794,075
Non-interest bearing deposits		2,089,072			1,370,183
Interest bearing deposits		4,656,419			2,829,779
Federal Home Loan Bank advances		-			24,180
Subordinated debentures		26,045			-
Stockholders' equity		755,048			443,232
Total shares outstanding		29,220			22,781
Book value per share (1)		$	25.84		$	19.46
Tangible common equity per share (1)		17.92			18.82
Market value per share		52.90			51.06
Stock Yards Bancorp, Inc. Financial Information (unaudited)
First Quarter 2022 Earnings Release
		Three Months Ended
		March 31,
Average Balance Sheet Data		2022			2021
Federal funds sold and interest bearing due from banks		$	671,263		$	235,370
Mortgage loans held for sale		8,629			14,618
Investment securities		1,321,551			661,175
Federal Home Loan Bank stock		10,509			10,640
Loans		4,377,930			3,605,760
Total interest earning assets		6,389,882			4,527,563
Total assets		6,872,273			4,710,836
Interest bearing deposits		4,148,716			2,815,986
Total deposits		5,966,178			4,094,179
Securities sold under agreement to repurchase and other short term borrowings		101,075			56,536
Federal Home Loan Bank advances		-			29,270
Subordinated debentures		8,052			-
Total interest bearing liabilities		4,257,843			2,901,792
Total stockholders' equity		703,929			444,821
Performance Ratios
Annualized return on average assets (7)		0.47%			1.96%
Annualized return on average equity (7)		4.55%			20.71%
Net interest margin, fully tax equivalent		3.11%			3.39%
Non-interest income to total revenue, fully tax equivalent		28.18%			26.77%
Efficiency ratio, fully tax equivalent (4)		82.61%			48.29%
Capital Ratios
Total stockholders' equity to total assets (1)		9.71%			9.25%
Tangible common equity to tangible assets (1)		6.94%			8.97%
Average stockholders' equity to average assets		10.24%			9.44%
Total risk-based capital		12.14%			13.39%
Common equity tier 1 risk-based capital		10.66%			12.32%
Tier 1 risk-based capital		11.12%			12.32%
Leverage		9.34%			9.46%
Loan Segmentation
Commercial real estate - non-owner occupied		$	1,397,633		$	876,523
Commercial real estate - owner occupied		803,181			527,316
Commercial and industrial		1,083,980			769,773
Commercial and industrial - PPP		71,361			612,885
Residential real estate - owner occupied		492,123			262,516
Residential real estate - non-owner occupied		297,127			136,380
Construction and land development		346,372			281,815
Home equity lines of credit		186,024			91,233
Consumer		135,198			51,058
Leases		13,952			14,115
Credit cards		20,732			11,542
Total loans and leases		$	4,847,683		$	3,635,156
Asset Quality Data
Non-accrual loans		$	12,494		$	12,913
Troubled debt restructurings		10			15
Loans past due 90 days or more and still accruing		300			1,377
Total non-performing loans		12,804			14,305
Other real estate owned		7,156			281
Total non-performing assets		$	19,960		$	14,586
Non-performing loans to total loans (2)		0.26%			0.39%
Non-performing assets to total assets		0.26%			0.30%
Allowance for credit losses on loans to total loans (2)		1.38%			1.40%
Allowance for credit losses on loans to average loans		1.53%			1.41%
Allowance for credit losses on loans to non-performing loans		524%			355%
Net (charge-offs) recoveries		$	539		$	(6)
Net (charge-offs) recoveries to average loans (5)		0.01%			-0.00%
Stock Yards Bancorp, Inc. Financial Information (unaudited)
First Quarter 2022 Earnings Release
		Quarterly Comparison
Income Statement Data		3/31/22			12/31/21			9/30/21			6/30/21			3/31/21
Net interest income, fully tax equivalent (3)		$	48,944		$	46,328		$	45,643		$	41,661		$	37,874
Net interest income		$	48,760		$	46,182		$	45,483		$	41,584		$	37,825
Provision for credit losses (6)		2,279			(1,900)			(1,525)			4,147			(1,475)
Net interest income after provision for credit losses		46,481			48,082			47,008			37,437			39,300
Non-interest income:
Wealth management and trust services		8,469			7,379			7,128			6,858			6,248
Deposit service charges		1,863			1,907			1,768			1,233			944
Debit and credit card income		4,119			4,012			3,887			3,284			2,273
Treasury management fees		1,904			1,871			1,771			1,730			1,540
Mortgage banking income		1,003			1,062			915			1,303			1,444
Net investment product sales commissions and fees		607			764			780			545			464
Bank owned life insurance		266			272			275			206			161
Other		972			1,337			1,090			629			770
Total non-interest income		19,203			18,604			17,614			15,788			13,844
Non-interest expenses:
Compensation		17,969			17,146			17,381			15,680			12,827
Employee benefits		4,539			3,189			3,662			3,367			3,261
Net occupancy and equipment		3,025			2,667			2,732			2,244			2,045
Technology and communication		3,419			2,956			3,173			2,670			2,346
Debit and credit card processing		1,337			1,334			1,479			976			705
Marketing and business development		772			1,793			1,011			822			524
Postage, printing and supplies		733			714			630			460			409
Legal and professional		650			755			700			666			462
FDIC Insurance		645			706			387			349			405
Amortization of investments in tax credit partnerships		88			52			53			231			31
Capital and deposit based taxes		518			549			556			527			458
Merger expenses		19,500			-			525			18,100			400
Federal Home Loan Bank early termination penalty		-			-			-			474			-
Intangible amortization		713			275			290			127			77
Other		2,389			2,436			1,979			1,484			1,023
Total non-interest expenses		56,297			34,572			34,558			48,177			24,973
Income before income tax expense		9,387			32,114			30,064			5,048			28,171
Income tax expense		1,445			7,525			6,902			864			5,461
Net income		7,942			24,589			23,162			4,184			22,710
Less: net income attributed to non-controlling interest		36			-			-			-			-
Net income attributed to stockholders		$	7,906		$	24,589		$	23,162		$	4,184		$	22,710
Net income per share - Basic		$	0.29		$	0.93		$	0.87		$	0.17		$	1.00
Net income per share - Diluted		0.29			0.92			0.87			0.17			0.99
Cash dividend declared per share		0.28			0.28			0.28			0.27			0.27
Weighted average shares - Basic		27,230			26,492			26,485			23,932			22,622
Weighted average shares - Diluted		27,485			26,800			26,726			24,171			22,865
		Quarterly Comparison
Balance Sheet Data		3/31/22			12/31/21			9/30/21			6/30/21			3/31/21
Cash and due from banks		$	109,799		$	62,304		$	84,520		$	58,477		$	43,061
Federal funds sold and interest bearing due from banks		641,892			898,888			500,421			481,716			289,920
Mortgage loans held for sale		9,323			8,614			10,201			5,420			6,579
Investment securities		1,698,546			1,180,298			1,070,148			1,006,908			672,167
Federal Home Loan Bank stock		13,811			9,376			9,376			14,475			10,228
Loans		4,847,683			4,169,303			4,189,117			4,206,392			3,635,156
Allowance for credit losses on loans		67,067			53,898			56,533			59,424			50,714
Goodwill		199,429			135,830			135,830			136,529			12,513
Total assets		7,774,057			6,646,025			6,181,188			6,088,072			4,794,075
Non-interest bearing deposits		2,089,072			1,755,754			1,744,790			1,743,953			1,370,183
Interest bearing deposits		4,656,419			4,031,760			3,597,234			3,516,153			2,829,779
Securities sold under agreements to repurchase		142,146			75,466			74,406			63,942			51,681
Federal funds purchased		8,920			10,374			10,908			10,947			8,642
Federal Home Loan Bank advances		-			-			10,000			10,000			24,180
Subordinated debentures		26,045			-			-			-			-
Stockholders' equity		755,048			675,869			663,547			651,089			443,232
Total shares outstanding		29,220			26,596			26,585			26,588			22,781
Book value per share (1)		$	25.84		$	25.41		$	24.96		$	24.49		$	19.46
Tangible common equity per share (1)		17.92			20.09			19.63			19.16			18.82
Market value per share		52.90			63.88			58.65			50.89			51.06
Capital Ratios
Total stockholders' equity to total assets (1)		9.71%			10.17%			10.73%			10.69%			9.25%
Tangible common equity to tangible assets (1)		6.94%			8.22%			8.64%			8.57%			8.97%
Average stockholders' equity to average assets		10.24%			10.43%			10.75%			9.88%			9.44%
Total risk-based capital		12.14%			12.79%			12.61%			12.80%			13.39%
Common equity tier 1 risk-based capital		10.66%			11.94%			11.69%			11.79%			12.32%
Tier 1 risk-based capital		11.12%			11.94%			11.69%			11.79%			12.32%
Leverage		9.34%			8.86%			8.98%			10.26%			9.46%
Stock Yards Bancorp, Inc. Financial Information (unaudited)
First Quarter 2022 Earnings Release
		Quarterly Comparison
Average Balance Sheet Data		3/31/22			12/31/21			9/30/21			6/30/21			3/31/21
Federal funds sold and interest bearing due from banks		$	671,263		$	699,222		$	532,549		$	313,954		$	235,370
Mortgage loans held for sale		8,629			12,556			8,875			8,678			14,618
Investment securities		1,321,551			1,099,235			1,034,712			793,696			661,175
Loans		4,377,930			4,172,676			4,173,260			3,844,662			3,605,760
Total interest earning assets		6,389,882			5,993,065			5,760,760			4,972,914			4,527,563
Total assets		6,872,273			6,406,612			6,139,176			5,226,654			4,710,836
Interest bearing deposits		4,148,716			3,798,666			3,525,785			3,055,360			2,815,986
Total deposits		5,966,178			5,559,577			5,297,917			4,552,583			4,094,179
Securities sold under agreement to repurchase and federal funds purchased		101,075			86,911			82,048			66,591			56,536
Federal Home Loan Bank advances		-			7,174			10,000			19,135			29,270
Subordinated debentures		8,052			-			-			-			-
Total interest bearing liabilities		4,257,843			3,892,751			3,617,833			3,141,086			2,901,792
Total stockholders' equity		703,929			668,287			660,099			516,427			444,821
Performance Ratios
Annualized return on average assets (7)		0.47%			1.52%			1.50%			0.32%			1.96%
Annualized return on average equity (7)		4.55%			14.60%			13.92%			3.25%			20.71%
Net interest margin, fully tax equivalent		3.11%			3.07%			3.14%			3.36%			3.39%
Non-interest income to total revenue, fully tax equivalent		28.18%			28.65%			27.85%			27.48%			26.77%
Efficiency ratio, fully tax equivalent (4)		82.61%			53.24%			54.63%			83.86%			48.29%
Loans Segmentation
Commercial real estate - non-owner occupied		$	1,397,633		$	1,128,244		$	1,142,647		$	1,170,461		$	876,523
Commercial real estate - owner occupied		803,181			678,405			652,631			604,120			527,316
Commercial and industrial		1,083,980			967,022			910,923			845,038			742,505
Commercial and industrial - PPP		71,361			140,734			231,335			377,021			612,885
Residential real estate - owner occupied		492,123			400,695			398,069			377,783			262,516
Residential real estate - non-owner occupied		297,127			281,018			277,045			273,782			136,380
Construction and land development		346,372			299,206			303,642			281,149			281,815
Home equity lines of credit		186,024			138,976			140,027			142,468			91,233
Consumer		135,198			104,294			104,629			105,439			78,326
Leases		13,952			13,622			12,348			14,171			14,115
Credit cards		20,732			17,087			15,821			14,960			11,542
Total loans and leases		$	4,847,683		$	4,169,303		$	4,189,117		$	4,206,392		$	3,635,156
Asset Quality Data
Non-accrual loans		$	12,494		$	6,712		$	5,036		$	12,814		$	12,913
Troubled debt restructurings		10			12			13			14			15
Loans past due 90 days or more and still accruing		300			684			-			1,050			1,377
Total non-performing loans		12,804			7,408			5,049			13,878			14,305
Other real estate owned		7,156			7,212			7,229			648			281
Total non-performing assets		$	19,960		$	14,620		$	12,278		$	14,526		$	14,586
Non-performing loans to total loans (2)		0.26%			0.18%			0.12%			0.33%			0.39%
Non-performing assets to total assets		0.26%			0.22%			0.20%			0.24%			0.30%
Allowance for credit losses on loans to total loans (2)		1.38%			1.29%			1.35%			1.41%			1.40%
Allowance for credit losses on loans to average loans		1.53%			1.29%			1.35%			1.55%			1.41%
Allowance for credit losses on loans to non-performing loans		524%			728%			1120%			428%			355%
Net (charge-offs) recoveries		$	539		$	(1,535)		$	(1,891)		$	(2,743)		$	(6)
Net (charge-offs) recoveries to average loans (5)		0.01%			-0.04%			-0.05%			-0.07%			-0.00%
Other Information
Total assets under management (in millions)		$	7,587		$	4,801		$	4,506		$	4,440		$	3,989
Full-time equivalent employees		997			820			794			823			638
(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)		3/31/22			12/31/21			9/30/21			6/30/21			3/31/21
Total stockholders' equity - GAAP (a)		$	755,048		$	675,869		$	663,547		$	651,089		$	443,232
Less: Goodwill		(199,429)			(135,830)			(135,830)			(136,529)			(12,513)
Less: Core deposit and other intangibles		(31,968)			(5,596)			(5,871)			(5,162)			(1,885)
Tangible common equity - Non-GAAP (c)		$	523,651		$	534,443		$	521,846		$	509,398		$	428,834
Total assets - GAAP (b)		$	7,774,057		$	6,646,025		$	6,181,188		$	6,088,072		$	4,794,075
Less: Goodwill		(199,429)			(135,830)			(135,830)			(136,529)			(12,513)
Less: Core deposit and other intangibles		(31,968)			(5,596)			(5,871)			(5,162)			(1,885)
Tangible assets - Non-GAAP (d)		$	7,542,660		$	6,504,599		$	6,039,487		$	5,946,381		$	4,779,677
Total stockholders' equity to total assets - GAAP (a/b)		9.71%			10.17%			10.73%			10.69%			9.25%
Tangible common equity to tangible assets - Non-GAAP (c/d)		6.94%			8.22%			8.64%			8.57%			8.97%
Total shares outstanding (e)		29,220			26,596			26,585			26,588			22,781
Book value per share - GAAP (a/e)		$	25.84		$	25.41		$	24.96		$	24.49		$	19.46
Tangible common equity per share - Non-GAAP (c/e)		17.92			20.09			19.63			19.16			18.82
(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)		3/31/22			12/31/21			9/30/21			6/30/21			3/31/21
Total Loans - GAAP (a)		$	4,847,683		$	4,169,303		$	4,189,117		$	4,206,392		$	3,635,156
Less: PPP loans		(71,361)			(140,734)			(231,335)			(377,021)			(612,885)
Total non-PPP Loans - Non-GAAP (b)		$	4,776,322		$	4,028,569		$	3,957,782		$	3,829,371		$	3,022,271
Allowance for credit losses on loans (c)		$	67,067		$	53,898		$	56,533		$	59,424		$	50,714
Total non-performing loans (d)		12,804			7,408			5,049			13,878			14,305
Allowance for credit losses on loans to total loans - GAAP (c/a)		1.38%			1.29%			1.35%			1.41%			1.40%
Allowance for credit losses on loans to total loans - Non-GAAP (c/b)		1.40%			1.34%			1.43%			1.55%			1.68%
Non-performing loans to total loans - GAAP (d/a)		0.26%			0.18%			0.12%			0.33%			0.39%
Non-performing loans to total loans - Non-GAAP (d/b)		0.27%			0.18%			0.13%			0.36%			0.47%
(3) - Interest income on a FTE basis includes the additional amount of interest income that would have been earned if investments in certain tax-exempt interest earning assets had been made in assets subject to federal, state and local taxes yielding the same after-tax income.
(4) - The efficiency ratio, a non-GAAP measure, equals total non-interest expenses divided by the sum of net interest income (FTE) and non-interest income. The ratio excludes net gains (losses) on sales, calls, and impairment of investment securities, if applicable. In addition to the efficiency ratio presented, Bancorp considers an adjusted efficiency ratio to be important because it provides a comparable ratio after eliminating the fluctuation in non-interest expenses related to amortization of investments in tax credit partnerships and non-recurring merger expenses.
		Quarterly Comparison
(Dollars in thousands)		3/31/22			12/31/21			9/30/21			6/30/21			3/31/21
Total non-interest expenses - GAAP (a)		$	56,297		$	34,572		$	34,558		$	48,177		$	24,973
Less: Non-recurring merger expenses		(19,500)			-			(525)			(18,100)			(400)
Less: Amortization of investments in tax credit partnerships		(88)			(52)			(53)			(231)			(31)
Total non-interest expenses - Non-GAAP (c)		$	36,709		$	34,520		$	33,980		$	29,846		$	24,542
Total net interest income, fully tax equivalent		$	48,944		$	46,328		$	45,643		$	41,661		$	37,874
Total non-interest income		19,203			18,604			17,614			15,788			13,844
Less: Gain/loss on sale of securities		-			-			-			-			-
Total revenue - GAAP (b)		$	68,147		$	64,932		$	63,257		$	57,449		$	51,718
Efficiency ratio - GAAP (a/b)		82.61%			53.24%			54.63%			83.86%			48.29%
Efficiency ratio - Non-GAAP (c/b)		53.87%			53.16%			53.72%			51.95%			47.45%
(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)		3/31/22			12/31/21			9/30/21			6/30/21			3/31/21
Provision for credit losses - loans		$	2,679		$	(1,100)		$	(1,000)		$	4,697		$	(1,200)
Provision for credit losses - off balance sheet exposures		(400)			(800)			(525)			(550)			(275)
Total provision for credit losses		$	2,279		$	(1,900)		$	(1,525)		$	4,147		$	(1,475)
(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 expenses and purchase accounting adjustments.
		Quarterly Comparison
(Dollars in thousands)		3/31/22			12/31/21			9/30/21			6/30/21			3/31/21
Net income attributable stockholders - GAAP (a)		$	7,906		$	24,589		$	23,162		$	4,184		$	22,710
Add: Non-recurring merger expenses		19,500			-			525			18,100			400
Add: Provision for credit losses on acquired loans		4,429			-			-			7,397			-
Less: Tax effect of adjustments to net income		(3,717)			-			(121)			(4,360)			(78)
Total net income - Non-GAAP (b)		$	28,118		$	24,589		$	23,577		$	24,327		$	23,026
Total average assets (c)		$	6,872,273		$	6,406,612		$	6,139,176		$	5,226,654		$	4,710,836
Total average stockholder equity (d )		703,929			668,287			660,099			516,427			444,821
Return on average assets - GAAP (a/c)		0.47%			1.52%			1.50%			0.32%			1.96%
Return on average assets - Non-GAAP (b/c)		1.66%			1.52%			1.52%			1.87%			1.98%
Return on average equity - GAAP (a/d)		4.55%			14.60%			13.92%			3.25%			20.71%
Return on average equity - Non-GAAP (b/d)		16.20%			14.60%			14.17%			18.89%			20.99%

Contact:        

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

Source: Stock Yards Bancorp, Inc.