Exhibit 99.1
Stock Yards Bancorp Second Quarter 2016 Net Income Rises 12% to a Record $10.1 Million
Diluted Earnings Per Share Increase to $0.45 for the Quarter
LOUISVILLE, Ky.--(BUSINESS WIRE)--July 27, 2016--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 results for the second quarter ended June 30, 2016, with net income increasing 12% to $10.1 million or $0.45 per diluted share from $9.0 million or $0.40 per diluted share for the second quarter of 2015. Net income for the six months ended June 30, 2016, increased 9% to $19.9 million or $0.88 per diluted share from $18.3 million or $0.82 per diluted share. Please note that all per share information in this release has been adjusted for the three-for-two stock split that was distributed in May 2016.
The Company's performance for the second quarter of 2016 reflected several positive factors, including:
- Strong organic net loan growth, accelerating further from the first quarter pace and building on the momentum seen over the past several years;
- Continued high credit quality;
- The advantage of diverse sources of fee income, which continued to contribute to revenue growth; and
- Solid returns on average assets and equity of 1.42% and 13.53%, respectively.
"We are pleased to report another strong performance by the Company in the second quarter, highlighted by an increase of 12% in diluted earnings per share compared with the year-earlier quarter," said David P. Heintzman, Chairman and Chief Executive Officer. "These results, driven by exceptional loan production and net loan growth, combined with higher revenue from our fee-based businesses, particularly investment management and trust services and mortgage banking, continue to set Stock Yards Bank & Trust apart as a high-performing community bank – both in our markets and from a national standpoint.
"Earlier this year, we reported the best-ever quarter in the Bank's history in terms of loan growth and, now, with continued acceleration in our loan production and record second quarter net loan growth, we are pleased to have produced strong back-to-back quarters to power an outstanding first half of 2016," Heintzman continued. "With a 7% increase in our portfolio through the first six months of the year, and a positive outlook for our loan pipeline heading into the third quarter, we believe the Company is well positioned to extend its track record for predictable, reliable earnings growth for 2016." Heintzman noted that each of the Company's three markets are participating in loan growth trends this year, led by Stock Yards Bank's home market of Louisville. Additionally, in expanding its portfolio, the Company has continued to focus on its core lines of business – commercial and industrial along with owner-occupied real estate – and has avoided concentration in the investment commercial real estate sector.
Heintzman pointed out that, following a rebound in asset quality after the 2008 financial crisis, all key credit metrics have remained at historically strong levels. While the Company continues to provide prudently for possible credit losses, it currently sees no significant indications of stress in credit quality.
According to Heintzman, the Company's fee-based income businesses continued to make a significant contribution to the Company's results for the second quarter. For the quarter, fee-based income represented 31% of total revenue, up from 30% in the first quarter of 2016. This proportion remains well ahead of peers, but is down slightly from the year-earlier quarter due to a 10% increase in net interest income driven by outstanding loan growth. The Company's investment management and trust department, with total assets under management reaching $2.3 billion, remained at the forefront in terms of fee-income production, providing almost half of the Company's fee-based income in the second quarter of 2016. Mortgage banking revenue also increased in the second quarter, both sequentially and on a year-over-year basis, as pricing has improved on loans sold into the secondary market.
In conclusion, Heintzman said, "At this midyear point, we are pleased with the direction of our business, the positive economic conditions we see across our markets, the inherent strength of our operations, and the ongoing value that our customer-focused service brings to our business model. These factors are all evident in the Company's first-half performance. As we look ahead to the second half of 2016, we are encouraged by the strength of our lending pipeline going into the third quarter, as well as the diverse strength of our fee-income revenue; together they provide a positive outlook for our second-half performance. As always, we continue to pursue opportunities to further enhance total return to stockholders and build on our reputation as one of the top-performing community banks in the country."
Total assets increased $427 million or 17% at June 30, 2016, to $2.91 billion from $2.48 billion at June 30, 2015. Driving this increase was continued growth in the Company's loan portfolio, which rose $276 million or 15% to $2.18 billion at June 30, 2016, from $1.90 billion at June 30, 2015. On the funding side, total deposits likewise increased $278 million or 13% to $2.35 billion at June 30, 2016, from $2.07 billion at June 30, 2015. On a linked-quarter basis, total deposits declined slightly due to a seasonal drawdown in public funds. Core deposits, as defined by the Company's primary regulator, held steady at 98.5% of total deposits as of June 30, 2016.
The Company continued to sustain strong capital levels in the second quarter of 2016, remaining "well capitalized" – the highest capital rating for financial institutions. Capital ratios, however, have declined slightly over the past year as asset growth has outpaced the capital contribution from net income. Stock Yards Bancorp's tangible common equity ratio as of June 30, 2016, was 10.42% (tangible common equity is a non-GAAP financial measure; see reconciliation of total stockholders' equity to tangible common equity and total assets to tangible assets later in this release). While some may consider the Company's capital level excessive, management believes it is in an enviable position being able to maintain high levels of capital for strength and stability while, at the same time, producing strong returns on stockholders' equity.
Stock Yards Bancorp has continued to pursue capital strategies to enhance stockholder value. In May 2016, the Company's Board of Directors declared a three-for-two split of the Company's common stock, effected in the form of a 50% stock dividend. Because of the Company's consistently sound capital position, continued strong performance, as well as the Board's ongoing confidence in future earnings growth, the Board also raised the Company's split-adjusted quarterly dividend rate 8% to $0.18 per common share on the next regular cash dividend, which was distributed to stockholders of record on July 1, 2016. This marked the seventh increase in the dividend over the past five years, for a cumulative increase of approximately 50% since 2011. The Company has maintained its financial flexibility to pursue strategic expansion and acquisition opportunities that may arise, and management and the Company's Board continue to consider alternatives to deploy capital in methods that will drive higher long-term stockholder value.
Net interest income – the Company's largest source of revenue – increased $2.1 million or 10% to $24.0 million in the second quarter of 2016 from $21.8 million in the prior-year quarter. The increase reflected the impact of ongoing growth in the loan portfolio, coupled with continued restraint on interest costs. Net interest income increased $4.0 million or 9% to $47.4 million in the first half of 2016 from $43.4 million in the prior-year period.
As anticipated, net interest margin (on a fully tax-equivalent basis) remained under pressure in the second quarter of 2016, reflecting primarily the impact of heightened competition on lending rates. In the second quarter of 2016, net interest margin was 3.59% versus 3.56% in the first quarter of 2016 and 3.75% in the second quarter of 2015. The Company's normalized or core net interest margin (core net interest margin is a non-GAAP financial measure, see reconciliation of net interest margin to core interest margin later in this release) was 3.60% for the second quarter of 2016, down four basis points from the first quarter of 2016 and down nine basis points from the second quarter of 2015. The decrease in core net interest margin in the second quarter of 2016 versus the linked first quarter was due primarily to decreasing rates earned on loans.
Management anticipates that margin pressure will continue due to competition and the low-rate environment. Further, since approximately 64% of the Company's loan portfolio is priced at fixed rates and 13% is priced at variable rates with floors of 4%, rate increases will not fully benefit the Company until new fixed-rate loans originate at higher rates and the prime rate, currently at 3.5%, rises to exceed the 4% floors associated with variable rate loans.
Non-performing loans (NPLs) totaled $6.4 million or 0.29% of total loans outstanding at June 30, 2016, down from $8.9 million or 0.43% of total loans outstanding at March 31, 2016, and $9.9 million or 0.52% of total loans outstanding at June 30, 2015. Similarly, non-performing assets, which include NPLs along with other real estate owned (OREO) and repossessed assets, were $11.5 million or 0.40% of total assets at June 30, 2016, versus $14.0 million or 0.49% of total assets at March 31, 2016, and $14.1 million or 0.57% of total assets at June 30, 2015. These positive trends, ongoing for more than three years, have enabled the Company to reach asset quality levels that have not been experienced consistently since periods prior to the 2008 financial crisis. Net charge-offs in the second quarter of 2016 totaled $60 thousand versus $490 thousand in the first quarter of 2016 and $1.6 million in the second quarter of 2015.
During the second quarter of 2016, the Company recorded a loan loss provision of $750 thousand, compared with $500 thousand in the first quarter of 2016 and no loan loss provision in the second quarter of 2015. The Company's allowance for loan losses was 1.06% of total loans as of June 30, 2016, versus 1.07% as of March 31, 2016, and 1.23% at June 30, 2015.
Total non-interest income in the second quarter of 2016 increased $559 thousand or 5% to $10.8 million from $10.2 million in the prior-year quarter. This increase reflected, among other things, growth in bankcard transaction revenue, increased revenue from investment management and trust services, and higher mortgage banking revenue. Total non-interest income for the six months ended June 30, 2016, increased $968 thousand or 5% to $20.9 million from $19.9 million in the prior-year period, reflecting trends similar to those of the second quarter.
Total non-interest expense for the second quarter of 2016 increased $1.3 million or 7% to $20.2 million from $18.9 million in the prior-year quarter. The increase reflected in part the amortization of investments in tax-credit partnerships, which was more than offset by related tax credits that reduced the Company's effective tax rate for the second quarter of 2016. In addition, salaries and employee benefits increased due to higher salaries and wages, reflecting normal salary increases, the addition of personnel associated with further market expansion, and increased incentive compensation related to accelerating loan and earnings growth. These increases were partially offset by lower health insurance costs. Due to a recovery of previously written-off OREO during the second quarter, recorded as a credit to other non-interest expense, versus OREO expense in the prior-year quarter, other non-interest expense declined compared with that in the year-earlier quarter. For the six months ended June 30, 2016, total non-interest expense increased to $3.1 million or 8% to $39.7 million from $36.6 million in the prior-year period, largely reflecting the same trends noted for the quarter.
Louisville, Kentucky-based Stock Yards Bancorp, Inc., with $2.9 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.
The following table provides a reconciliation of total stockholders' equity, in accordance with US GAAP, to tangible common equity, which is a non-GAAP financial measure. The Company provides the tangible common equity ratio, in addition to those defined by banking regulators, because of its widespread use by investors as a means to evaluate capital adequacy.
| |
| Tangible Common Equity Ratio (Dollars in thousands) |
| | | | | | |
| | | June 30,
2016 | | | March 31,
2016 | | | June 30,
2015 |
| Total stockholders' equity (a) | | | $ | 305,051 | | | | $ | 296,323 | | | | $ | 272,382 | |
| Less goodwill | | | | (682 | ) | | | | (682 | ) | | | | (682 | ) |
| Less core deposit intangible | | | | (1,500 | ) | | | | (1,549 | ) | | | | (1,706 | ) |
| Tangible common equity (c) | | | $ | 302,869 | | | | $ | 294,092 | | | | $ | 269,994 | |
| | | | | | | | | |
| Total assets (b) | | | $ | 2,909,519 | | | | $ | 2,824,107 | | | | $ | 2,482,687 | |
| Less goodwill | | | | (682 | ) | | | | (682 | ) | | | | (682 | ) |
| Less core deposit intangible | | | | (1,500 | ) | | | | (1,549 | ) | | | | (1,706 | ) |
| Tangible assets (d) | | | $ | 2,907,337 | | | | $ | 2,821,876 | | | | $ | 2,480,299 | |
| | | | | | | | | |
| Total stockholders' equity to total assets (a/b) | | | | 10.48 | % | | | | 10.49 | % | | | | 10.97 | % |
| Tangible common equity ratio (c/d) | | | | 10.42 | % | | | | 10.42 | % | | | | 10.89 | % |
| | | | | | | | | |
The following table provides a reconciliation of net interest margin in accordance with US GAAP to core net interest margin, which is a non-GAAP financial measure. Core net interest margin excludes the effect of prepayment penalty and late charge income from borrowers, the accretion of purchase accounting loan fair value adjustments, and the effect of excess liquidity, which the Company defines as the combined amount of federal funds sold and short-term securities available for sale, typically maturing in one week or less, in excess of $60 million. The Company provides this information to illustrate sequentially the trend in quarterly net interest margin to show the impact of those items on net interest margin.
| |
| Reconciliation of Net Interest Margin to Core Interest Margin |
| |
| | | June 30,
2016 | | | March 31,
2016 | | | Dec. 31,
2015 | | | Sept. 30,
2015 | | | June 30,
2015 |
| Net interest margin | | | 3.59 | % | | | 3.56 | % | | | 3.57 | % | | | 3.66 | % | | | 3.75 | % |
| Prepayment penalties / late charges | | | (0.02 | ) | | | (0.05 | ) | | | (0.02 | ) | | | (0.01 | ) | | | (0.03 | ) |
| Accretion of fair value adjustments | | | -- | | | | -- | | | | (0.01 | ) | | | (0.02 | ) | | | (0.01 | ) |
| Excess liquidity | | | 0.03 | | | | 0.13 | | | | 0.06 | | | | 0.03 | | | | (0.02 | ) |
| Core net interest margin | | | 3.60 | % | | | 3.64 | % | | | 3.60 | % | | | 3.66 | % | | | 3.69 | % |
| | | | | | | | | | | | | | | |
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 subsidiaries operate; competition for the Company's customers from other providers of financial services; government legislation and regulation, which change from time to time 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, 2015.
| | | |
| Stock Yards Bancorp, Inc. Financial Information (unaudited) |
| Second Quarter 2016 Earnings Release |
| (In thousands unless otherwise noted) |
| | | Three Months Ended | | | Six Months Ended |
| | | June 30, | | | June 30, |
| | | 2016 | | | 2015 | | | 2016 | | | 2015 |
| Income Statement Data | | | | | | | | | | | | |
| Net interest income, fully tax equivalent (1) | | | $ | 24,165 | | | $ | 22,035 | | | $ | 47,853 | | | $ | 43,884 |
| Interest income: | | | | | | | | | | | | |
| Loans | | | $ | 22,563 | | | $ | 20,612 | | | $ | 44,556 | | | $ | 41,027 |
| Federal funds sold | | | | 111 | | | | 51 | | | | 300 | | | | 119 |
| Mortgage loans held for sale | | | | 59 | | | | 74 | | | | 119 | | | | 113 |
| Securities | | | | 2,429 | | | | 2,263 | | | | 4,887 | | | | 4,588 |
| Total interest income | | | | 25,162 | | | | 23,000 | | | | 49,862 | | | | 45,847 |
| Interest expense: | | | | | | | | | | | | |
| Deposits | | | | 979 | | | | 938 | | | | 1,975 | | | | 1,911 |
| Federal funds purchased and short-term borrowing | | | | 23 | | | | 5 | | | | 38 | | | | 12 |
| Securities sold under agreements to repurchase | | | | 29 | | | | 32 | | | | 62 | | | | 69 |
| Federal Home Loan Bank (FHLB) advances | | | | 181 | | | | 224 | | | | 368 | | | | 440 |
| Total interest expense | | | | 1,212 | | | | 1,199 | | | | 2,443 | | | | 2,432 |
| Net interest income | | | | 23,950 | | | | 21,801 | | | | 47,419 | | | | 43,415 |
| Provision for loan losses | | | | 750 | | | | - | | | | 1,250 | | | | - |
| Net interest income after provision for loan losses | | | | 23,200 | | | | 21,801 | | | | 46,169 | | | | 43,415 |
| Non-interest income: | | | | | | | | | | | | |
| Investment management and trust income | | | | 4,807 | | | | 4,651 | | | | 9,419 | | | | 9,203 |
| Service charges on deposit accounts | | | | 2,262 | | | | 2,199 | | | | 4,408 | | | | 4,279 |
| Bankcard transaction revenue | | | | 1,433 | | | | 1,246 | | | | 2,743 | | | | 2,368 |
| Mortgage banking revenue | | | | 1,030 | | | | 913 | | | | 1,824 | | | | 1,741 |
| Brokerage commissions and fees | | | | 538 | | | | 499 | | | | 981 | | | | 960 |
| Bank owned life insurance | | | | 220 | | | | 226 | | | | 441 | | | | 448 |
| Other non-interest income | | | | 488 | | | | 485 | | | | 1,044 | | | | 893 |
| Total non-interest income | | | | 10,778 | | | | 10,219 | | | | 20,860 | | | | 19,892 |
| Non-interest expense: | | | | | | | | | | | | |
| Salaries and employee benefits expense | | | | 11,971 | | | | 11,383 | | | | 24,166 | | | | 22,483 |
| Net occupancy expense | | | | 1,546 | | | | 1,450 | | | | 3,070 | | | | 2,919 |
| Data processing expense | | | | 1,881 | | | | 1,756 | | | | 3,425 | | | | 3,210 |
| Furniture and equipment expense | | | | 291 | | | | 260 | | | | 576 | | | | 507 |
| FDIC insurance expense | | | | 351 | | | | 317 | | | | 679 | | | | 614 |
| Amortization of investment in tax credit partnerships | | | | 1,016 | | | | 159 | | | | 2,031 | | | | 317 |
| Other non-interest expenses | | | | 3,137 | | | | 3,542 | | | | 5,786 | | | | 6,596 |
| Total non-interest expense | | | | 20,193 | | | | 18,867 | | | | 39,733 | | | | 36,646 |
| Net income before income tax expense | | | | 13,785 | | | | 13,153 | | | | 27,296 | | | | 26,661 |
| Income tax expense | | | | 3,676 | | | | 4,151 | | | | 7,352 | | | | 8,404 |
| Net income | | | $ | 10,109 | | | $ | 9,002 | | | $ | 19,944 | | | $ | 18,257 |
| | | | | | | | | | | | |
| Weighted average shares - basic (2) | | | | 22,336 | | | | 22,065 | | | | 22,295 | | | | 22,018 |
| Weighted average shares - diluted | | | | 22,704 | | | | 22,404 | | | | 22,658 | | | | 22,353 |
| | | | | | | | | | | | |
| Net income per share, basic | | | $ | 0.45 | | | $ | 0.41 | | | $ | 0.89 | | | $ | 0.83 |
| Net income per share, diluted | | | | 0.45 | | | | 0.40 | | | | 0.88 | | | | 0.82 |
| Cash dividend declared per share | | | | 0.18 | | | | 0.16 | | | | 0.35 | | | | 0.31 |
| | | | | | | | | | | | |
| Balance Sheet Data (at period end) | | | | | | | | | | | | |
| Total loans | | | | | | | | | $ | 2,175,551 | | | $ | 1,899,302 |
| Allowance for loan losses | | | | | | | | | | 23,141 | | | | 23,308 |
| Total assets | | | | | | | | | | 2,909,519 | | | | 2,482,687 |
| Non-interest bearing deposits | | | | | | | | | | 637,812 | | | | 551,723 |
| Interest bearing deposits | | | | | | | | | | 1,712,136 | | | | 1,520,042 |
| Federal Home Loan Bank advances | | | | | | | | | | 43,002 | | | | 38,855 |
| Stockholders' equity | | | | | | | | | | 305,051 | | | | 272,382 |
| Total shares outstanding | | | | | | | | | | 22,510 | | | | 22,277 |
| Book value per share | | | | | | | | | | 13.55 | | | | 12.23 |
| Market value per share | | | | | | | | | | 28.23 | | | | 25.19 |
| | | | | | | | | | | | |
| |
| Stock Yards Bancorp, Inc. Financial Information (unaudited) |
| Second Quarter 2016 Earnings Release |
| | | | | | | | | | | | |
| | | Three Months Ended | | | Six Months Ended |
| | | June 30, | | | June 30, |
| | | 2016 | | | 2015 | | | 2016 | | | 2015 |
| Average Balance Sheet Data | | | | | | | | | | | | |
| Average federal funds sold | | | $ | 85,914 | | | | $ | 56,671 | | | | $ | 114,797 | | | | $ | 71,679 | |
| Average mortgage loans held for sale | | | | 5,432 | | | | | 7,701 | | | | | 4,840 | | | | | 5,678 | |
| Average securities available for sale | | | | 475,275 | | | | | 406,854 | | | | | 479,203 | | | | | 412,325 | |
| Average FHLB stock and other securities | | | | 6,347 | | | | | 6,347 | | | | | 6,347 | | | | | 6,347 | |
| Average loans | | | | 2,142,530 | | | | | 1,887,913 | | | | | 2,092,990 | | | | | 1,882,782 | |
| Average earning assets | | | | 2,705,358 | | | | | 2,357,555 | | | | | 2,689,600 | | | | | 2,370,820 | |
| Average assets | | | | 2,858,624 | | | | | 2,498,677 | | | | | 2,838,345 | | | | | 2,512,140 | |
| Average interest bearing deposits | | | | 1,736,478 | | | | | 1,557,922 | | | | | 1,757,413 | | | | | 1,577,155 | |
| Average total deposits | | | | 2,400,547 | | | | | 2,090,448 | | | | | 2,385,682 | | | | | 2,103,578 | |
Average securities sold under agreement to repurchase | | | | 53,514 | | | | | 58,060 | | | | | 56,193 | | | | | 61,185 | |
Average federal funds purchased and other short term borrowings | | | | 28,152 | | | | | 14,420 | | | | | 25,804 | | | | | 15,142 | |
| Average Federal Home Loan Bank advances | | | | 43,081 | | | | | 41,017 | | | | | 43,198 | | | | | 38,907 | |
| Average interest bearing liabilities | | | | 1,861,225 | | | | | 1,671,419 | | | | | 1,882,608 | | | | | 1,692,389 | |
| Average stockholders' equity | | | | 300,553 | | | | | 271,477 | | | | | 296,558 | | | | | 268,104 | |
| | | | | | | | | | | | |
| Performance Ratios | | | | | | | | | | | | |
| Annualized return on average assets | | | | 1.42 | % | | | | 1.45 | % | | | | 1.41 | % | | | | 1.47 | % |
| Annualized return on average equity | | | | 13.53 | % | | | | 13.30 | % | | | | 13.52 | % | | | | 13.73 | % |
| Net interest margin, fully tax equivalent | | | | 3.59 | % | | | | 3.75 | % | | | | 3.58 | % | | | | 3.73 | % |
Non-interest income to total revenue, fully tax equivalent | | | | 30.84 | % | | | | 31.68 | % | | | | 30.36 | % | | | | 31.19 | % |
| Efficiency ratio | | | | 57.79 | % | | | | 58.50 | % | | | | 57.82 | % | | | | 57.46 | % |
| | | | | | | | | | | | |
| Capital Ratios | | | | | | | | | | | | |
| Average stockholders' equity to average assets | | | | 10.51 | % | | | | 10.86 | % | | | | 10.45 | % | | | | 10.67 | % |
| Common equity tier 1 capital | | | | | | | | | | 12.06 | % | | | | 12.72 | % |
| Tier 1 risk-based capital | | | | | | | | | | 12.06 | % | | | | 12.72 | % |
| Total risk-based capital | | | | | | | | | | 13.01 | % | | | | 13.82 | % |
| Leverage | | | | | | | | | | 10.46 | % | | | | 10.83 | % |
| | | | | | | | | | | | |
| Loans by Type | | | | | | | | | | | | |
| Commercial and industrial | | | | | | | | | $ | 721,956 | | | | $ | 595,584 | |
| Construction and development | | | | | | | | | | 156,371 | | | | | 122,239 | |
| Real estate mortgage - commercial investment | | | | | | | | | | 572,438 | | | | | 524,696 | |
| Real estate mortgage - owner occupied commercial | | | | | | | | | | 333,862 | | | | | 302,342 | |
| Real estate mortgage - 1-4 family residential | | | | | | | | | | 240,770 | | | | | 216,864 | |
| Home equity - first lien | | | | | | | | | | 52,360 | | | | | 42,612 | |
| Home equity - junior lien | | | | | | | | | | 65,999 | | | | | 65,354 | |
| Consumer | | | | | | | | | | 31,795 | | | | | 29,611 | |
| | | | | | | | | | | | |
| Asset Quality Data | | | | | | | | | | | | |
| Allowance for loan losses to total loans | | | | | | | | | | 1.06 | % | | | | 1.23 | % |
| Allowance for loan losses to average loans | | | | | | | | | | 1.11 | % | | | | 1.24 | % |
| Allowance for loan losses to non-performing loans | | | | | | | | | | 361.58 | % | | | | 236.08 | % |
| Nonaccrual loans | | | | | | | | | $ | 4,970 | | | | $ | 8,781 | |
| Troubled debt restructuring | | | | | | | | | | 1,020 | | | | | 1,092 | |
| Loans - 90 days past due & still accruing | | | | | | | | | | 410 | | | | | - | |
| Total non-performing loans | | | | | | | | | | 6,400 | | | | | 9,873 | |
| OREO and repossessed assets | | | | | | | | | | 5,093 | | | | | 4,296 | |
| Total non-performing assets | | | | | | | | | | 11,493 | | | | | 14,169 | |
| Non-performing loans to total loans | | | | | | | | | | 0.29 | % | | | | 0.52 | % |
| Non-performing assets to total assets | | | | | | | | | | 0.40 | % | | | | 0.57 | % |
| Net charge-offs to average loans (3) | | | | 0.00 | % | | | | 0.08 | % | | | | 0.03 | % | | | | 0.09 | % |
| Net charge-offs | | | $ | 60 | | | | $ | 1,574 | | | | $ | 550 | | | | $ | 1,612 | |
| | | | | | | | | | | | | | | | | | | | |
| |
| Stock Yards Bancorp, Inc. Financial Information (unaudited) |
| Second Quarter 2016 Earnings Release |
| |
| | | Five Quarter Comparison |
| | | 6/30/16 | | | 3/31/16 | | | 12/31/15 | | | 9/30/15 | | | 6/30/15 |
| Income Statement Data | | | | | | | | | | | | | | | |
| Net interest income, fully tax equivalent (1) | | | $ | 24,165 | | | | $ | 23,688 | | | | $ | 23,050 | | | | $ | 22,312 | | | | $ | 22,035 | |
| Net interest income | | | $ | 23,950 | | | | $ | 23,469 | | | | $ | 22,822 | | | | $ | 22,081 | | | | $ | 21,801 | |
| Provision for loan losses | | | | 750 | | | | | 500 | | | | | 750 | | | | | - | | | | | - | |
| Net interest income after provision for loan losses | | | | 23,200 | | | | | 22,969 | | | | | 22,072 | | | | | 22,081 | | | | | 21,801 | |
| Investment management and trust income | | | | 4,807 | | | | | 4,612 | | | | | 4,450 | | | | | 4,373 | | | | | 4,651 | |
| Service charges on deposit accounts | | | | 2,262 | | | | | 2,146 | | | | | 2,285 | | | | | 2,342 | | | | | 2,199 | |
| Bankcard transaction revenue | | | | 1,433 | | | | | 1,310 | | | | | 1,285 | | | | | 1,223 | | | | | 1,246 | |
| Mortgage banking revenue | | | | 1,030 | | | | | 794 | | | | | 975 | | | | | 772 | | | | | 913 | |
| Brokerage commissions and fees | | | | 538 | | | | | 443 | | | | | 449 | | | | | 585 | | | | | 499 | |
| Bank owned life insurance | | | | 220 | | | | | 221 | | | | | 219 | | | | | 222 | | | | | 226 | |
| Other non-interest income | | | | 488 | | | | | 556 | | | | | 410 | | | | | 468 | | | | | 485 | |
| Total non-interest income | | | | 10,778 | | | | | 10,082 | | | | | 10,073 | | | | | 9,985 | | | | | 10,219 | |
| Salaries and employee benefits expense | | | | 11,971 | | | | | 12,195 | | | | | 10,893 | | | | | 11,333 | | | | | 11,383 | |
| Net occupancy expense | | | | 1,546 | | | | | 1,524 | | | | | 1,475 | | | | | 1,518 | | | | | 1,450 | |
| Data processing expense | | | | 1,881 | | | | | 1,544 | | | | | 1,566 | | | | | 1,572 | | | | | 1,756 | |
| Furniture and equipment expense | | | | 291 | | | | | 285 | | | | | 285 | | | | | 282 | | | | | 260 | |
| FDIC Insurance expense | | | | 351 | | | | | 328 | | | | | 326 | | | | | 318 | | | | | 317 | |
| Amortization of investment in tax credit partnerships | | | | 1,016 | | | | | 1,015 | | | | | 159 | | | | | 158 | | | | | 159 | |
| Other non-interest expenses | | | | 3,137 | | | | | 2,649 | | | | | 3,618 | | | | | 3,249 | | | | | 3,542 | |
| Total non-interest expense | | | | 20,193 | | | | | 19,540 | | | | | 18,322 | | | | | 18,430 | | | | | 18,867 | |
| Net income before income tax expense | | | | 13,785 | | | | | 13,511 | | | | | 13,823 | | | | | 13,636 | | | | | 13,153 | |
| Income tax expense | | | | 3,676 | | | | | 3,676 | | | | | 4,177 | | | | | 4,352 | | | | | 4,151 | |
| Net income | | | $ | 10,109 | | | | $ | 9,835 | | | | $ | 9,646 | | | | $ | 9,284 | | | | $ | 9,002 | |
| | | | | | | | | | | | | | | |
| Weighted average shares - basic | | | | 22,336 | | | | | 22,254 | | | | | 22,183 | | | | | 22,131 | | | | | 22,065 | |
| Weighted average shares - diluted | | | | 22,704 | | | | | 22,592 | | | | | 22,567 | | | | | 22,479 | | | | | 22,404 | |
| | | | | | | | | | | | | | | |
| Net income per share, basic | | | $ | 0.45 | | | | $ | 0.44 | | | | $ | 0.43 | | | | $ | 0.42 | | | | $ | 0.41 | |
| Net income per share, diluted | | | | 0.45 | | | | | 0.44 | | | | | 0.43 | | | | | 0.41 | | | | | 0.40 | |
| Cash dividend declared per share | | | | 0.18 | | | | | 0.17 | | | | | 0.17 | | | | | 0.16 | | | | | 0.16 | |
| | | | | | | | | | | | | | | |
| Balance Sheet Data (at period end) | | | | | | | | | | | | | | | |
| Cash and due from banks | | | $ | 40,618 | | | | $ | 35,022 | | | | $ | 35,895 | | | | $ | 37,335 | | | | $ | 37,775 | |
| Federal funds sold | | | | 9,616 | | | | | 13,016 | | | | | 67,938 | | | | | 17,859 | | | | | 20,901 | |
| Mortgage loans held for sale | | | | 6,405 | | | | | 3,984 | | | | | 6,800 | | | | | 5,539 | | | | | 8,237 | |
| Securities available for sale | | | | 567,307 | | | | | 569,012 | | | | | 565,876 | | | | | 504,366 | | | | | 412,866 | |
| FHLB stock and other securities | | | | 6,347 | | | | | 6,347 | | | | | 6,347 | | | | | 6,347 | | | | | 6,347 | |
| Total loans | | | | 2,175,551 | | | | | 2,094,488 | | | | | 2,033,007 | | | | | 1,954,425 | | | | | 1,899,302 | |
| Allowance for loan losses | | | | 23,141 | | | | | 22,451 | | | | | 22,441 | | | | | 21,614 | | | | | 23,308 | |
| Total assets | | | | 2,909,519 | | | | | 2,824,107 | | | | | 2,816,801 | | | | | 2,624,607 | | | | | 2,482,687 | |
| Non-interest bearing deposits | | | | 637,812 | | | | | 606,375 | | | | | 583,768 | | | | | 595,039 | | | | | 551,723 | |
| Interest bearing deposits | | | | 1,712,136 | | | | | 1,759,725 | | | | | 1,787,934 | | | | | 1,546,539 | | | | | 1,520,042 | |
| Securities sold under agreements to repurchase | | | | 57,437 | | | | | 54,781 | | | | | 64,526 | | | | | 67,557 | | | | | 64,418 | |
| Federal funds purchased | | | | 114,154 | | | | | 30,083 | | | | | 22,477 | | | | | 62,101 | | | | | 13,290 | |
| Federal Home Loan Bank advances | | | | 43,002 | | | | | 43,236 | | | | | 43,468 | | | | | 43,699 | | | | | 38,855 | |
| Stockholders' equity | | | | 305,051 | | | | | 296,323 | | | | | 286,519 | | | | | 280,948 | | | | | 272,382 | |
| Total shares outstanding | | | | 22,510 | | | | | 22,478 | | | | | 22,379 | | | | | 22,303 | | | | | 22,277 | |
| Book value per share | | | | 13.55 | | | | | 13.18 | | | | | 12.80 | | | | | 12.60 | | | | | 12.23 | |
| Market value per share | | | | 28.23 | | | | | 25.69 | | | | | 25.19 | | | | | 24.23 | | | | | 25.19 | |
| | | | | | | | | | | | | | | |
| Capital Ratios | | | | | | | | | | | | | | | |
| Average stockholders' equity to average assets | | | | 10.51 | % | | | | 10.38 | % | | | | 10.52 | % | | | | 10.80 | % | | | | 10.86 | % |
| Common equity tier 1 capital | | | | 12.06 | % | | | | 12.23 | % | | | | 12.32 | % | | | | 12.68 | % | | | | 12.72 | % |
| Tier 1 risk-based capital | | | | 12.06 | % | | | | 12.23 | % | | | | 12.32 | % | | | | 12.68 | % | | | | 12.72 | % |
| Total risk-based capital | | | | 13.01 | % | | | | 13.19 | % | | | | 13.31 | % | | | | 13.68 | % | | | | 13.82 | % |
| Leverage | | | | 10.46 | % | | | | 10.35 | % | | | | 10.53 | % | | | | 10.82 | % | | | | 10.83 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| |
| Stock Yards Bancorp, Inc. Financial Information (unaudited) |
| Second Quarter 2016 Earnings Release |
| |
| | | Five Quarter Comparison |
| | | 6/30/16 | | | 3/31/16 | | | 12/31/15 | | | 9/30/15 | | | 6/30/15 |
| Average Balance Sheet Data | | | | | | | | | | | | | | | |
| Average federal funds sold | | | $ | 85,914 | | | | $ | 143,679 | | | | $ | 99,903 | | | | $ | 86,008 | | | | $ | 56,671 | |
| Average mortgage loans held for sale | | | | 5,432 | | | | | 4,249 | | | | | 4,991 | | | | | 5,045 | | | | | 7,701 | |
| Average investment securities | | | | 475,275 | | | | | 483,130 | | | | | 471,349 | | | | | 402,487 | | | | | 406,854 | |
| Average loans | | | | 2,142,530 | | | | | 2,043,450 | | | | | 1,986,289 | | | | | 1,923,762 | | | | | 1,887,913 | |
| Average earning assets | | | | 2,705,358 | | | | | 2,673,842 | | | | | 2,561,650 | | | | | 2,416,364 | | | | | 2,357,555 | |
| Average assets | | | | 2,858,624 | | | | | 2,818,072 | | | | | 2,708,630 | | | | | 2,560,680 | | | | | 2,498,677 | |
| Average interest bearing deposits | | | | 1,736,478 | | | | | 1,778,347 | | | | | 1,664,979 | | | | | 1,557,177 | | | | | 1,557,922 | |
| Average total deposits | | | | 2,400,547 | | | | | 2,370,819 | | | | | 2,271,431 | | | | | 2,129,583 | | | | | 2,090,448 | |
Average securities sold under agreement to repurchase | | | | 53,514 | | | | | 58,871 | | | | | 66,918 | | | | | 71,144 | | | | | 58,060 | |
Average federal funds purchased and other short term borrowings | | | | 28,152 | | | | | 23,456 | | | | | 14,147 | | | | | 16,156 | | | | | 14,420 | |
| Average Federal Home Loan Bank advances | | | | 43,081 | | | | | 43,316 | | | | | 43,546 | | | | | 42,732 | | | | | 41,017 | |
| Average interest bearing liabilities | | | | 1,861,225 | | | | | 1,903,990 | | | | | 1,789,590 | | | | | 1,687,209 | | | | | 1,671,419 | |
| Average stockholders' equity | | | | 300,553 | | | | | 292,540 | | | | | 284,824 | | | | | 276,563 | | | | | 271,477 | |
| | | | | | | | | | | | | | | |
| Performance Ratios | | | | | | | | | | | | | | | |
| Annualized return on average assets | | | | 1.42 | % | | | | 1.40 | % | | | | 1.41 | % | | | | 1.44 | % | | | | 1.45 | % |
| Annualized return on average equity | | | | 13.53 | % | | | | 13.52 | % | | | | 13.44 | % | | | | 13.32 | % | | | | 13.30 | % |
| Net interest margin, fully tax equivalent | | | | 3.59 | % | | | | 3.56 | % | | | | 3.57 | % | | | | 3.66 | % | | | | 3.75 | % |
Non-interest income to total revenue, fully tax equivalent | | | | 30.84 | % | | | | 29.85 | % | | | | 30.41 | % | | | | 30.92 | % | | | | 31.68 | % |
| Efficiency ratio | | | | 57.79 | % | | | | 57.86 | % | | | | 55.32 | % | | | | 57.06 | % | | | | 58.50 | % |
| | | | | | | | | | | | | | | |
| Loans by Type | | | | | | | | | | | | | | | |
| Commercial and industrial | | | $ | 721,956 | | | | $ | 676,782 | | | | $ | 644,398 | | | | $ | 610,877 | | | | $ | 595,584 | |
| Construction and development | | | | 156,371 | | | | | 160,667 | | | | | 155,667 | | | | | 128,820 | | | | | 122,239 | |
| Real estate mortgage - commercial investment | | | | 572,438 | | | | | 541,121 | | | | | 528,290 | | | | | 536,226 | | | | | 524,696 | |
| Real estate mortgage - owner occupied commercial | | | | 333,862 | | | | | 328,337 | | | | | 329,365 | | | | | 312,573 | | | | | 302,342 | |
| Real estate mortgage - 1-4 family residential | | | | 240,770 | | | | | 234,199 | | | | | 226,575 | | | | | 222,643 | | | | | 216,864 | |
| Home equity - 1st lien | | | | 52,360 | | | | | 52,042 | | | | | 50,115 | | | | | 49,937 | | | | | 42,612 | |
| Home equity - junior lien | | | | 65,999 | | | | | 63,336 | | | | | 63,066 | | | | | 62,223 | | | | | 65,354 | |
| Consumer | | | | 31,795 | | | | | 38,004 | | | | | 35,531 | | | | | 31,126 | | | | | 29,611 | |
| | | | | | | | | | | | | | | |
| Asset Quality Data | | | | | | | | | | | | | | | |
| Allowance for loan losses to total loans | | | | 1.06 | % | | | | 1.07 | % | | | | 1.10 | % | | | | 1.11 | % | | | | 1.23 | % |
| Allowance for loan losses to average loans | | | | 1.08 | % | | | | 1.10 | % | | | | 1.13 | % | | | | 1.12 | % | | | | 1.23 | % |
| Allowance for loan losses to non-performing loans | | | | 361.58 | % | | | | 251.75 | % | | | | 251.33 | % | | | | 193.03 | % | | | | 236.08 | % |
| Nonaccrual loans | | | $ | 4,970 | | | | $ | 7,878 | | | | $ | 7,693 | | | | $ | 9,574 | | | | $ | 8,781 | |
| Troubled debt restructuring | | | | 1,020 | | | | | 1,040 | | | | | 1,060 | | | | | 1,079 | | | | | 1,092 | |
| Loans - 90 days past due & still accruing | | | | 410 | | | | | - | | | | | 176 | | | | | 544 | | | | | - | |
| Total non-performing loans | | | | 6,400 | | | | | 8,918 | | | | | 8,929 | | | | | 11,197 | | | | | 9,873 | |
| OREO and repossessed assets | | | | 5,093 | | | | | 5,049 | | | | | 4,541 | | | | | 4,607 | | | | | 4,296 | |
| Total non-performing assets | | | | 11,493 | | | | | 13,967 | | | | | 13,470 | | | | | 15,804 | | | | | 14,169 | |
| Non-performing loans to total loans | | | | 0.29 | % | | | | 0.43 | % | | | | 0.44 | % | | | | 0.57 | % | | | | 0.52 | % |
| Non-performing assets to total assets | | | | 0.40 | % | | | | 0.49 | % | | | | 0.48 | % | | | | 0.60 | % | | | | 0.57 | % |
| Net charge-offs to average loans | | | | 0.00 | % | | | | 0.02 | % | | | | 0.00 | % | | | | 0.09 | % | | | | 0.08 | % |
| Net charge-offs (recoveries) | | | $ | 60 | | | | $ | 490 | | | | $ | (77 | ) | | | $ | 1,694 | | | | $ | 1,574 | |
| | | | | | | | | | | | | | | |
| Other Information | | | | | | | | | | | | | | | |
| Total assets under management (in millions) | | | $ | 2,342 | | | | $ | 2,255 | | | | $ | 2,238 | | | | $ | 2,189 | | | | $ | 2,289 | |
| Full-time equivalent employees | | | | 549 | | | | | 550 | | | | | 555 | | | | | 546 | | | | | 538 | |
| |
| (1) - 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. |
| (2) - Share and per share information adjusted to reflect the 3 for 2 stock split - May 2016 |
| (3) - Interim ratios not annualized |
| |
CONTACT:
Stock Yards Bancorp, Inc.
Nancy B. Davis, 502-625-9176
Executive Vice President and Chief Financial Officer
