Exhibit 99.1
Stock Yards Bancorp Reports Record Net Income for the Fourth Quarter and Full Year 2016 as Earnings Per Diluted Share Rise to $0.46 and $1.80, Respectively
LOUISVILLE, Ky.--(BUSINESS WIRE)--January 26, 2017--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 fourth quarter and year ended December 31, 2016. Net income for the fourth quarter of 2016 increased 10% to $10.6 million or $0.46 per diluted share – a record in terms of net income for a quarter and equaling the best net income per diluted share for a quarter in the Company's history – compared with $9.6 million or $0.43 per diluted share for the fourth quarter of 2015. Net income for the year ended December 31, 2016, increased 10% to a record $41.0 million or $1.80 per diluted share from $37.2 million or $1.65 per diluted share. All per share information in this release has been adjusted for and reflects the three-for-two stock split distributed in May 2016.
The Company's performance for the fourth quarter of 2016 reflected several positive factors, including:
- Remarkable net loan growth, capitalizing on the momentum that has been building over the past several years and resulting in 10% net interest income growth versus the year-earlier quarter;
- Credit quality reached historically strong levels;
- Significantly higher fee income, led by wealth management and trust; and
- Solid returns on average assets and equity of 1.41% and 13.44%, respectively.
"We are pleased to report a strong finish to 2016, capping another year of growth and increasing profitability, as total assets surpassed $3 billion and net income reached another record amount," said David P. Heintzman, Chairman and Chief Executive Officer. "A central driver for this performance can be seen in our outstanding loan production this past year, which marked a new high point for the Bank and, importantly, reflected increases across all three of our markets. This progress, in turn, powered a 13% rise in our loan portfolio for the year, while credit quality metrics remained exceptionally strong. The Company's results also reflected a 9% increase in fee-based income, which continued to comprise 31% of our total revenue for 2016. This level is well ahead of peers and even more impressive given the higher net interest income associated with loan portfolio growth. Together, these factors continue to drive consistent, predictable results that translate into attractive returns on assets and equity, and provide the foundation for steadily higher cash dividends for our stockholders."
Commenting further on loan growth, Heintzman noted that many customers increasingly have begun to utilize credit facilities put in place since the last financial crisis, resulting in increased conversion of loan production into loans outstanding. Consistent with its strategy, management continues to focus on select loan categories, such as commercial and industrial lending and owner-occupied commercial real estate, as the Company builds its loan portfolio. Meanwhile, the Company remains well under regulatory guidelines for commercial real estate lending.
Speaking to the growth of fee-based income, Heintzman said, "The substantial amount and diverse sources of this revenue continue to set us apart from most other community banks. Our most significant source of fee income, wealth management and trust, produced almost one-half of the year's total, as it grew assets under management 13% to $2.5 billion. This increase reflected not only a rising stock market during 2016, but also the best year ever for wealth management and trust in terms of adding new clients. Also contributing to wealth management and trust's fee income for 2016 was an increase in non-recurring revenue related to estate settlement and corporate retirement plans. Because of this momentum and with an impressive pipeline of new business opportunities, we look for another solid performance from this area in the coming year." Heintzman also noted that, in tandem with wealth management and trust, the Company's other platforms for fee-based service, including service charges on deposit accounts, bank card income, mortgage banking, and securities brokerage, also posted higher revenue in 2016.
"A discussion of the past year would be incomplete without acknowledging the increase in the Company's share price," Heintzman continued. "We recognize much of the increase reflected external factors beyond our control, most notably the stock market rally that occurred after the presidential election. However, we also note that almost one-half of the increase in our share price during 2016 preceded that event. This indicates, in our view, the Company's fundamental strengths, strategic advantages, long-term prospects, and the way those factors combine to shape a consistent, long-term performance that continues to place Stock Yards Bancorp among the nation's top-performing community banks."
In conclusion, Heintzman said, "We have long considered that the best way to build our business is through organic growth, one relationship at a time. Our entire organization is aligned on that philosophy, and we believe it shows in the loyalty that our customers express, which, in turn, reflects in the Company's record performance for 2016. Coming off of a year of exceptional loan growth and significantly higher fee-based income, and the high expectations they may foster, we nonetheless are pleased to begin 2017 with strong momentum throughout our business and across our markets. Considering this and the Company's strong capital base, we look forward to future success and growth."
Total assets increased $222 million or 8% at December 31, 2016, to $3.04 billion from $2.82 billion at December 31, 2015. Driving this increase was ongoing growth in the Company's loan portfolio, which rose a record $272 million or 13% to $2.31 billion at December 31, 2016, from $2.03 billion at December 31, 2015. The Company continues to provide substantial support for its balance sheet growth through increased deposits. Total deposits increased $149 million or 6% to $2.52 billion at December 31, 2016, from $2.37 billion at December 31, 2015, reflecting growth across most deposit account categories, including non-interest bearing accounts, for both existing and new customers. Core deposits, which exclude brokered deposits and time deposits greater than $250,000, held steady at 98.4% of total deposits as of December 31, 2016.
The Company continued to sustain strong capital levels in the fourth quarter of 2016, remaining "well capitalized" – the highest capital rating for financial institutions. Stock Yards Bancorp's tangible common equity ratio as of December 31, 2016, was 10.27% (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).
With its balance sheet strength, Stock Yards Bancorp has continued to pursue capital strategies to enhance stockholder value, including a substantial and sustained dividend payout ratio. These efforts reflect nine dividend increases during the past five years, including two during 2016, for a cumulative increase of approximately 58% since 2011. Meanwhile, the Company has maintained its financial flexibility to pursue strategic expansion and acquisition opportunities that may arise. While some may consider the Company's capital level as higher than needed, management believes Stock Yards Bancorp's stockholders value its ability to maintain high levels of capital for strength, stability and expansion, as opportunities arise, while, at the same time, producing consistently strong returns.
Net interest income – the Company's largest source of revenue – increased $2.3 million or 10% to $25.1 million in the fourth quarter of 2016 from $22.8 million in the prior-year quarter. The increase reflected the impact of further growth in the loan portfolio together with stable, deposit-driven funding costs. Net interest income increased $8.9 million or 10% to $97.3 million in 2016 from $88.3 million in the prior-year period, reflecting the same factors.
As anticipated, net interest margin (on a fully tax-equivalent basis) remained under pressure in the fourth quarter of 2016, continuing a trend that has spanned the last several years and reflecting the impact of a highly competitive lending market. In the fourth quarter of 2016, net interest margin was 3.56% compared with 3.65% in the third quarter of 2016 and 3.57% in the fourth 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 fourth quarter of 2016, up one basis point from the third quarter of 2016 and level with the fourth quarter of 2015. Considering the recent increase in short-term interest rates implemented by the Federal Open Market Committee and with the expectation of additional increases in 2017, management anticipates that net interest margins will increase during the coming year. Since approximately 67% of the Company's loan portfolio is priced at fixed rates and 12% is priced at variable rates with floors of 4%, future rate increases will not fully benefit the Company until existing fixed-rate loans renew and new fixed-rate loans originate at higher rates, and the prime rate, currently at 3.75%, rises to exceed the floor associated with variable rate loans.
The Company's solid asset quality metrics have continued to trend within a narrow range over the past several years and reached historically strong levels during the fourth quarter of 2016. Non-performing loans (NPLs) totaled $6.7 million or 0.29% of total loans outstanding at December 31, 2016, versus $8.0 million or 0.36% of total loans outstanding at September 30, 2016, and $8.9 million or 0.44% of total loans outstanding at December 31, 2015. Similarly, non-performing assets, which include NPLs along with other real estate owned and repossessed assets, were $11.7 million or 0.39% of total assets at December 31, 2016, versus $13.0 million or 0.44% of total assets at September 30, 2016, and $13.5 million or 0.48% of total assets at December 31, 2015. Net charge-offs in the fourth quarter of 2016 totaled $862 thousand versus $22 thousand in the third quarter of 2016 and net recoveries of $77 thousand in the fourth quarter of 2015. Management considers the present asset quality metrics to be exceptionally strong and, recognizing the cyclical nature of the lending business, believes they will normalize over the long term.
Reflecting a number of factors, including loan growth and qualitative considerations, the Company recorded a loan loss provision of $500 thousand during the fourth quarter of 2016 compared with $1.3 million in the third quarter of 2016 and $750 thousand in the fourth quarter of 2015. The Company's allowance for loan losses was 1.04% of total loans as of December 31, 2016, versus 1.10% as of September 30, 2016, and 1.10% at December 31, 2015.
Total non-interest income in the fourth quarter of 2016 increased $1.2 million or 12% to $11.3 million from $10.1 million in the prior-year quarter. This increase reflected higher fee income from various sources, but particularly from wealth management and trust. Total non-interest income for the year ended December 31, 2016, increased $3.6 million or 9% to $43.5 million from $40.0 million in the prior-year period, again led by fee income from wealth management and trust.
Total non-interest expense for the fourth quarter of 2016 increased $3.0 million or 16% to $21.3 million from $18.3 million in the prior-year quarter. The increase reflected the addition of personnel associated with growth and operational support, higher incentive compensation related to accelerating loan and earnings growth, and increases in certain employee benefits. Additionally, the amortization of investments in tax-credit partnerships was higher compared with the year-earlier quarter as the Company has increased its commitment to customers pursuing tax-advantaged projects primarily involving historical redevelopment. These investments generate income tax savings that exceed amortization expense. For the year ended December 31, 2016, total non-interest expense increased $8.1 million or 11% to $81.5 million from $73.4 million in the prior-year period, largely reflecting the same trends noted for the quarter. The net effect of amortization of investments in tax-credit partnerships and related income tax savings added approximately $0.04 to the Company's net income per diluted share for 2016.
Louisville, Kentucky-based Stock Yards Bancorp, Inc., with $3.0 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.
| |
| Reconciliation of Total Stockholders' Equity to Tangible Common Equity Ratio |
(Dollars in thousands) |
| | | | |
| | Dec. 31, | | Sept. 30, | | Dec. 31, |
| | 2016 | | 2016 | | 2015 |
| Total stockholders' equity (a) | | $ | 313,872 | | | $ | 311,570 | | | $ | 286,519 | |
| Less goodwill | | | (682 | ) | | | (682 | ) | | | (682 | ) |
| Less core deposit intangible | | | (1,405 | ) | | | (1,453 | ) | | | (1,601 | ) |
| Tangible common equity (c) | | $ | 311,785 | | | $ | 309,435 | | | $ | 284,236 | |
| | | | | | |
| Total assets (b) | | $ | 3,038,659 | | | $ | 2,938,665 | | | $ | 2,816,801 | |
| Less goodwill | | | (682 | ) | | | (682 | ) | | | (682 | ) |
| Less core deposit intangible | | | (1,405 | ) | | | (1,453 | ) | | | (1,601 | ) |
| Tangible assets (d) | | $ | 3,036,572 | | | $ | 2,936,530 | | | $ | 2,814,518 | |
| | | | | | |
| Total stockholders' equity to total assets (a/b) | | | 10.33 | % | | | 10.60 | % | | | 10.17 | % |
| Tangible common equity ratio (c/d) | | | 10.27 | % | | | 10.54 | % | | | 10.10 | % |
| | | | | | |
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 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.
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| Reconciliation of Net Interest Margin to Core Net Interest Margin |
| |
| | Dec. 31, | | Sept. 30, | | June 30, | | March 31, | | Dec. 31, |
| | 2016 | | 2016 | | 2016 | | 2016 | | 2015 |
| Net interest margin | | 3.56 | % | | 3.65 | % | | 3.59 | % | | 3.56 | % | | 3.57 | % |
| Prepayment penalties | | (0.02 | ) | | (0.07 | ) | | (0.02 | ) | | (0.05 | ) | | (0.02 | ) |
| Accretion of fair value adjustments | | -- | | | -- | | | -- | | | -- | | | (0.01 | ) |
| Excess liquidity | | 0.06 | | | 0.01 | | | 0.03 | | | 0.13 | | | 0.06 | |
| Core net interest margin | | 3.60 | % | | 3.59 | % | | 3.60 | % | | 3.64 | % | | 3.60 | % |
| | | | | | | | | | |
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.
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| Stock Yards Bancorp, Inc. Financial Information (unaudited) |
| Fourth Quarter 2016 Earnings Release |
| (In thousands unless otherwise noted) |
| | | | Three Months Ended | | Year Ended |
| | | | December 31, | | December 31, |
| | | | 2016 | | 2015 | | 2016 | | 2015 |
| Income Statement Data | | | | | | | | | | |
| Net interest income, fully tax equivalent (1) | | $ | 25,272 | | $ | 23,050 | | $ | 98,088 | | $ | 89,246 |
| Interest income: | | | | | | | | | | |
| Loans | | | | $ | 23,806 | | $ | 21,420 | | $ | 91,798 | | $ | 83,371 |
| Federal funds sold | | | | | 96 | | | 79 | | | 491 | | | 263 |
| Mortgage loans held for sale | | | | | 52 | | | 69 | | | 237 | | | 249 |
| Securities | | | | | 2,414 | | | 2,471 | | | 9,646 | | | 9,287 |
| Total interest income | | | | | 26,368 | | | 24,039 | | | 102,172 | | | 93,170 |
| Interest expense: | | | | | | | | | | |
| Deposits | | | | | 1,027 | | | 928 | | | 3,943 | | | 3,739 |
| Federal funds purchased and short-term borrowing | | | 19 | | | 6 | | | 76 | | | 25 |
| Securities sold under agreements to repurchase | | | 36 | | | 38 | | | 136 | | | 149 |
| Federal Home Loan Bank (FHLB) advances | | | 211 | | | 245 | | | 763 | | | 939 |
| Total interest expense | | | | | 1,293 | | | 1,217 | | | 4,918 | | | 4,852 |
| Net interest income | | | | | 25,075 | | | 22,822 | | | 97,254 | | | 88,318 |
| Provision for loan losses | | | | | 500 | | | 750 | | | 3,000 | | | 750 |
| Net interest income after provision for loan losses | | | 24,575 | | | 22,072 | | | 94,254 | | | 87,568 |
| Non-interest income: | | | | | | | | | | |
| Wealth management and trust services | | | | | 4,936 | | | 4,450 | | | 19,155 | | | 18,026 |
| Service charges on deposit accounts | | | | | 2,519 | | | 2,285 | | | 9,471 | | | 8,906 |
| Bankcard transaction | | | | | 1,457 | | | 1,285 | | | 5,655 | | | 4,876 |
| Mortgage banking | | | | | 1,001 | | | 975 | | | 3,897 | | | 3,488 |
| Securities brokerage | | | | | 606 | | | 449 | | | 2,145 | | | 1,994 |
| Bank owned life insurance | | | | | 214 | | | 219 | | | 871 | | | 889 |
| Other non-interest income | | | | | 586 | | | 410 | | | 2,343 | | | 1,771 |
| Total non-interest income | | | | | 11,319 | | | 10,073 | | | 43,537 | | | 39,950 |
| Non-interest expense: | | | | | | | | | | |
| Salaries and employee benefits | | | | | 12,971 | | | 10,893 | | | 49,185 | | | 44,709 |
| Net occupancy | | | | | 1,563 | | | 1,475 | | | 6,279 | | | 5,912 |
| Data processing | | | | | 1,901 | | | 1,566 | | | 7,073 | | | 6,348 |
| Furniture and equipment | | | | | 290 | | | 285 | | | 1,143 | | | 1,074 |
| FDIC insurance | | | | | 146 | | | 326 | | | 1,181 | | | 1,258 |
| Amortization of investment in tax credit partnerships | | | 1,412 | | | 159 | | | 4,458 | | | 634 |
| Other non-interest expenses | | | | | 2,986 | | | 3,618 | | | 12,201 | | | 13,463 |
| Total non-interest expense | | | | | 21,269 | | | 18,322 | | | 81,520 | | | 73,398 |
| Net income before income tax expense | | | | | 14,625 | | | 13,823 | | | 56,271 | | | 54,120 |
| Income tax expense | | | | | 4,009 | | | 4,177 | | | 15,244 | | | 16,933 |
| Net income | | | | $ | 10,616 | | $ | 9,646 | | $ | 41,027 | | $ | 37,187 |
| | | | | | | | | | |
| Weighted average shares - basic (2) | | | | | 22,448 | | | 22,183 | | | 22,356 | | | 22,088 |
| Weighted average shares - diluted | | | | | 22,952 | | | 22,566 | | | 22,792 | | | 22,459 |
| | | | | | | | | | |
| Net income per share, basic | | | | $ | 0.47 | | $ | 0.43 | | $ | 1.84 | | $ | 1.68 |
| Net income per share, diluted | | | | | 0.46 | | | 0.43 | | | 1.80 | | | 1.65 |
| Cash dividend declared per share | | | | | 0.19 | | | 0.17 | | | 0.72 | | | 0.64 |
| | | | | | | | | | |
| Balance Sheet Data (at period end) | | | | | | | | | | |
| Total loans | | | | | | | | $ | 2,305,375 | | $ | 2,033,007 |
| Allowance for loan losses | | | | | | | | | 24,007 | | | 22,441 |
| Total assets | | | | | | | | | 3,038,659 | | | 2,816,801 |
| Non-interest bearing deposits | | | | | | | | | 680,156 | | | 583,768 |
| Interest bearing deposits | | | | | | | | | 1,840,392 | | | 1,787,934 |
| Federal Home Loan Bank advances | | | | | | | | | 51,075 | | | 43,468 |
| Stockholders' equity | | | | | | | | | 313,872 | | | 286,519 |
| Total shares outstanding | | | | | | | | | 22,617 | | | 22,379 |
| Book value per share | | | | | | | | | 13.88 | | | 12.80 |
| Market value per share | | | | | | | | | 46.95 | | | 25.19 |
| | | | | | | | | | |
| |
| Stock Yards Bancorp, Inc. Financial Information (unaudited) |
Fourth Quarter 2016 Earnings Release |
| | | | | | | | | | |
| | | | Three Months Ended | | Year Ended |
| | | | December 31, | | December 31, |
| | | | 2016 | | 2015 | | 2016 | | 2015 |
| Average Balance Sheet Data | | | | | | | | | | |
| Average federal funds sold | | | | $ | 70,186 | | | $ | 99,903 | | | $ | 92,994 | | | $ | 82,405 | |
| Average mortgage loans held for sale | | | | | 4,770 | | | | 4,991 | | | | 4,881 | | | | 5,345 | |
| Average securities available for sale | | | | | 494,868 | | | | 471,349 | | | | 479,938 | | | | 424,723 | |
| Average FHLB stock and other securities | | | 6,347 | | | | 6,347 | | | | 6,347 | | | | 6,347 | |
| Average loans | | | | | 2,261,104 | | | | 1,986,289 | | | | 2,159,153 | | | | 1,919,201 | |
| Average earning assets | | | | | 2,821,373 | | | | 2,561,650 | | | | 2,730,949 | | | | 2,430,400 | |
| Average assets | | | | | 2,984,696 | | | | 2,708,630 | | | | 2,886,396 | | | | 2,573,901 | |
| Average interest bearing deposits | | | | | 1,802,150 | | | | 1,664,979 | | | | 1,763,858 | | | | 1,594,256 | |
| Average total deposits | | | | | 2,488,590 | | | | 2,271,431 | | | | 2,413,894 | | | | 2,152,441 | |
| Average securities sold under agreement | | | | | | | | |
| to repurchase | | | | | 69,318 | | | | 66,918 | | | | 62,670 | | | | 65,140 | |
| Average federal funds purchased and | | | | | | | | | | |
| other short term borrowings | | | | | 18,076 | | | | 14,147 | | | | 23,275 | | | | 15,147 | |
| Average Federal Home Loan Bank advances | | | 51,183 | | | | 43,546 | | | | 45,455 | | | | 41,041 | |
| Average interest bearing liabilities | | | | | 1,940,727 | | | | 1,789,590 | | | | 1,895,258 | | | | 1,715,584 | |
| Average stockholders' equity | | | | | 314,299 | | | | 284,824 | | | | 304,151 | | | | 274,451 | |
| | | | | | | | | | |
| Performance Ratios | | | | | | | | | | |
| Annualized return on average assets | | | | | 1.41 | % | | | 1.41 | % | | | 1.42 | % | | | 1.44 | % |
| Annualized return on average equity | | | | | 13.44 | % | | | 13.44 | % | | | 13.49 | % | | | 13.55 | % |
| Net interest margin, fully tax equivalent | | | | | 3.56 | % | | | 3.57 | % | | | 3.59 | % | | | 3.67 | % |
| Non-interest income to total revenue, fully | | | | | | | | |
| tax equivalent | | | | | 30.93 | % | | | 30.41 | % | | | 30.74 | % | | | 30.92 | % |
| Efficiency ratio | | | | | 58.13 | % | | | 55.32 | % | | | 57.56 | % | | | 56.81 | % |
| | | | | | | | | | |
| Capital Ratios | | | | | | | | | | |
| Average stockholders' equity to average assets | | | 10.53 | % | | | 10.52 | % | | | 10.54 | % | | | 10.66 | % |
| Common equity tier 1 capital | | | | | | | | | 12.10 | % | | | 12.32 | % |
| Tier 1 risk-based capital | | | | | | | | | 12.10 | % | | | 12.32 | % |
| Total risk-based capital | | | | | | | | | 13.04 | % | | | 13.31 | % |
| Leverage | | | | | | | | | 10.54 | % | | | 10.53 | % |
| | | | | | | | | | |
| Loans by Type | | | | | | | | | | |
| Commercial and industrial | | | | | | | | $ | 736,841 | | | $ | 644,398 | |
| Construction and development | | | | | | | | | 213,844 | | | | 155,667 | |
| Real estate mortgage - commercial investment | | | | | | | 538,886 | | | | 436,989 | |
| Real estate mortgage - owner occupied commercial | | | | | | | 408,292 | | | | 420,666 | |
| Real estate mortgage - 1-4 family residential | | | | | | | 249,498 | | | | 226,575 | |
| Home equity - first lien | | | | | | | | | 55,325 | | | | 50,115 | |
| Home equity - junior lien | | | | | | | | | 67,519 | | | | 63,066 | |
| Consumer | | | | | | | | | 35,170 | | | | 35,531 | |
| Total loans | | | | | | | | $ | 2,305,375 | | | $ | 2,033,007 | |
| | | | | | | | | | |
| Asset Quality Data | | | | | | | | | | |
| Allowance for loan losses to total loans | | | | | | | | | 1.04 | % | | | 1.10 | % |
| Allowance for loan losses to average loans | | | 1.06 | % | | | 1.13 | % | | | 1.11 | % | | | 1.17 | % |
| Allowance for loan losses to non-performing loans | | | | | | | 357.94 | % | | | 251.33 | % |
| Nonaccrual loans | | | | | | | | $ | 5,295 | | | $ | 7,693 | |
| Troubled debt restructuring | | | | | | | | | 974 | | | | 1,060 | |
| Loans - 90 days past due & still accruing | | | | | | | 438 | | | | 176 | |
| Total non-performing loans | | | | | | | | | 6,707 | | | | 8,929 | |
| OREO and repossessed assets | | | | | | | | | 5,033 | | | | 4,541 | |
| Total non-performing assets | | | | | | | | $ | 11,740 | | | $ | 13,470 | |
| Non-performing loans to total loans | | | | | | | | | 0.29 | % | | | 0.44 | % |
| Non-performing assets to total assets | | | | | | | | | 0.39 | % | | | 0.48 | % |
| Net charge-offs to average loans (3) | | | | | 0.04 | % | | | 0.00 | % | | | 0.07 | % | | | 0.17 | % |
| Net charge-offs | | | | $ | 862 | | | $ | (77 | ) | | $ | 1,434 | | | $ | 3,229 | |
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| | | | | | | |
| Stock Yards Bancorp, Inc. Financial Information (unaudited) |
| Fourth Quarter 2016 Earnings Release |
| | | | | | | | | | |
| | Five Quarter Comparison |
| | 12/31/16 | | 9/30/16 | | 6/30/16 | | 3/31/16 | | 12/31/15 |
| Income Statement Data | | | | | | | | | | |
| Net interest income, fully tax equivalent (1) | | $ | 25,272 | | | $ | 24,963 | | | $ | 24,165 | | | $ | 23,687 | | | $ | 23,050 | |
| Net interest income | | $ | 25,075 | | | $ | 24,760 | | | $ | 23,950 | | | $ | 23,469 | | | $ | 22,822 | |
| Provision for loan losses | | | 500 | | | | 1,250 | | | | 750 | | | | 500 | | | | 750 | |
| Net interest income after provision for loan losses | | | 24,575 | | | | 23,510 | | | | 23,200 | | | | 22,969 | | | | 22,072 | |
| Wealth management and trust services | | | 4,936 | | | | 4,800 | | | | 4,807 | | | | 4,612 | | | | 4,450 | |
| Service charges on deposit accounts | | | 2,519 | | | | 2,544 | | | | 2,262 | | | | 2,146 | | | | 2,285 | |
| Bankcard transaction | | | 1,457 | | | | 1,455 | | | | 1,433 | | | | 1,310 | | | | 1,285 | |
| Mortgage banking | | | 1,001 | | | | 1,072 | | | | 1,030 | | | | 794 | | | | 975 | |
| Securities brokerage | | | 606 | | | | 558 | | | | 538 | | | | 443 | | | | 449 | |
| Bank owned life insurance | | | 214 | | | | 216 | | | | 220 | | | | 221 | | | | 219 | |
| Other non-interest income | | | 586 | | | | 713 | | | | 488 | | | | 556 | | | | 410 | |
| Total non-interest income | | | 11,319 | | | | 11,358 | | | | 10,778 | | | | 10,082 | | | | 10,073 | |
| Salaries and employee benefits | | | 12,971 | | | | 12,048 | | | | 11,971 | | | | 12,195 | | | | 10,893 | |
| Net occupancy | | | 1,563 | | | | 1,646 | | | | 1,546 | | | | 1,524 | | | | 1,475 | |
| Data processing | | | 1,901 | | | | 1,747 | | | | 1,881 | | | | 1,544 | | | | 1,566 | |
| Furniture and equipment | | | 290 | | | | 277 | | | | 291 | | | | 285 | | | | 285 | |
| FDIC Insurance | | | 146 | | | | 356 | | | | 351 | | | | 328 | | | | 326 | |
| Amortization of investment in tax credit partnerships | | | 1,412 | | | | 1,015 | | | | 1,016 | | | | 1,015 | | | | 159 | |
| Other non-interest expenses | | | 2,986 | | | | 3,429 | | | | 3,137 | | | | 2,649 | | | | 3,618 | |
| Total non-interest expense | | | 21,269 | | | | 20,518 | | | | 20,193 | | | | 19,540 | | | | 18,322 | |
| Net income before income tax expense | | | 14,625 | | | | 14,350 | | | | 13,785 | | | | 13,511 | | | | 13,823 | |
| Income tax expense | | | 4,009 | | | | 3,883 | | | | 3,676 | | | | 3,676 | | | | 4,177 | |
| Net income | | $ | 10,616 | | | $ | 10,467 | | | $ | 10,109 | | | $ | 9,835 | | | $ | 9,646 | |
| | | | | | | | | | |
| Weighted average shares - basic | | | 22,448 | | | | 22,385 | | | | 22,336 | | | | 22,254 | | | | 22,183 | |
| Weighted average shares - diluted | | | 22,952 | | | | 22,803 | | | | 22,704 | | | | 22,592 | | | | 22,566 | |
| | | | | | | | | | |
| Net income per share, basic | | $ | 0.47 | | | $ | 0.47 | | | $ | 0.45 | | | $ | 0.44 | | | $ | 0.43 | |
| Net income per share, diluted | | | 0.46 | | | | 0.46 | | | | 0.45 | | | | 0.44 | | | | 0.43 | |
| Cash dividend declared per share | | | 0.19 | | | | 0.18 | | | | 0.18 | | | | 0.17 | | | | 0.17 | |
| | | | | | | | | | |
| Balance Sheet Data (at period end) | | | | | | | | | | |
| Cash and due from banks | | $ | 39,709 | | | $ | 41,533 | | | $ | 40,618 | | | $ | 35,022 | | | $ | 35,895 | |
| Federal funds sold | | | 8,264 | | | | 16,360 | | | | 9,616 | | | | 13,016 | | | | 67,938 | |
| Mortgage loans held for sale | | | 3,213 | | | | 5,959 | | | | 6,405 | | | | 3,984 | | | | 6,800 | |
| Securities available for sale | | | 570,074 | | | | 541,681 | | | | 567,307 | | | | 569,012 | | | | 565,876 | |
| FHLB stock and other securities | | | 6,347 | | | | 6,347 | | | | 6,347 | | | | 6,347 | | | | 6,347 | |
| Total loans | | | 2,305,375 | | | | 2,222,706 | | | | 2,175,551 | | | | 2,094,488 | | | | 2,033,007 | |
| Allowance for loan losses | | | 24,007 | | | | 24,369 | | | | 23,141 | | | | 22,451 | | | | 22,441 | |
| Total assets | | | 3,038,659 | | | | 2,938,665 | | | | 2,909,519 | | | | 2,824,107 | | | | 2,816,801 | |
| Non-interest bearing deposits | | | 680,156 | | | | 680,078 | | | | 637,812 | | | | 606,375 | | | | 583,768 | |
| Interest bearing deposits | | | 1,840,392 | | | | 1,710,519 | | | | 1,712,136 | | | | 1,759,725 | | | | 1,787,934 | |
| Securities sold under agreements to repurchase | | | 67,595 | | | | 67,315 | | | | 57,437 | | | | 54,781 | | | | 64,526 | |
| Federal funds purchased | | | 47,374 | | | | 76,387 | | | | 114,154 | | | | 30,083 | | | | 22,477 | |
| Federal Home Loan Bank advances | | | 51,075 | | | | 51,366 | | | | 43,002 | | | | 43,236 | | | | 43,468 | |
| Stockholders' equity | | | 313,872 | | | | 311,570 | | | | 305,051 | | | | 296,323 | | | | 286,519 | |
| Total shares outstanding | | | 22,617 | | | | 22,563 | | | | 22,510 | | | | 22,478 | | | | 22,379 | |
| Book value per share | | | 13.88 | | | | 13.81 | | | | 13.55 | | | | 13.18 | | | | 12.80 | |
| Market value per share | | | 46.95 | | | | 32.96 | | | | 28.23 | | | | 25.69 | | | | 25.19 | |
| | | | | | | | | | |
| Capital Ratios | | | | | | | | | | |
| Average stockholders' equity to average assets | | | 10.53 | % | | | 10.72 | % | | | 10.51 | % | | | 10.38 | % | | | 10.52 | % |
| Common equity tier 1 capital | | | 12.10 | % | | | 12.07 | % | | | 12.06 | % | | | 12.23 | % | | | 12.32 | % |
| Tier 1 risk-based capital | | | 12.10 | % | | | 12.07 | % | | | 12.06 | % | | | 12.23 | % | | | 12.32 | % |
| Total risk-based capital | | | 13.04 | % | | | 13.05 | % | | | 13.01 | % | | | 13.19 | % | | | 13.31 | % |
| Leverage | | | 10.54 | % | | | 10.63 | % | | | 10.46 | % | | | 10.35 | % | | | 10.53 | % |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
| Stock Yards Bancorp, Inc. Financial Information (unaudited) |
| Fourth Quarter 2016 Earnings Release |
| | | | | | | | | | |
| | Five Quarter Comparison |
| | 12/31/16 | | 9/30/16 | | 6/30/16 | | 3/31/16 | | 12/31/15 |
| Average Balance Sheet Data | | | | | | | | | | |
| Average federal funds sold | | $ | 70,186 | | | $ | 72,673 | | | $ | 85,914 | | | $ | 143,679 | | | $ | 99,903 | |
| Average mortgage loans held for sale | | | 4,770 | | | | 5,070 | | | | 5,432 | | | | 4,249 | | | | 4,991 | |
| Average investment securities | | | 494,868 | | | | 466,462 | | | | 475,275 | | | | 483,130 | | | | 471,349 | |
| Average loans | | | 2,261,104 | | | | 2,188,089 | | | | 2,142,530 | | | | 2,043,450 | | | | 1,986,289 | |
| Average earning assets | | | 2,821,373 | | | | 2,722,324 | | | | 2,705,358 | | | | 2,673,842 | | | | 2,561,650 | |
| Average assets | | | 2,984,696 | | | | 2,883,146 | | | | 2,858,624 | | | | 2,818,072 | | | | 2,708,630 | |
| Average interest bearing deposits | | | 1,802,150 | | | | 1,738,315 | | | | 1,736,478 | | | | 1,778,347 | | | | 1,664,979 | |
| Average total deposits | | | 2,488,590 | | | | 2,395,003 | | | | 2,400,547 | | | | 2,370,819 | | | | 2,271,431 | |
| Average securities sold under agreement | | | | | | | | | | |
| to repurchase | | | 69,318 | | | | 68,835 | | | | 53,514 | | | | 58,871 | | | | 66,918 | |
| Average federal funds purchased and | | | | | | | | | | |
| other short term borrowings | | | 18,076 | | | | 23,471 | | | | 28,152 | | | | 23,456 | | | | 14,147 | |
| Average Federal Home Loan Bank advances | | | 51,183 | | | | 44,194 | | | | 43,081 | | | | 43,316 | | | | 43,546 | |
| Average interest bearing liabilities | | | 1,940,727 | | | | 1,874,815 | | | | 1,861,225 | | | | 1,903,990 | | | | 1,789,590 | |
| Average stockholders' equity | | | 314,299 | | | | 309,045 | | | | 300,553 | | | | 292,540 | | | | 284,824 | |
| | | | | | | | | | |
| Performance Ratios | | | | | | | | | | |
| Annualized return on average assets | | | 1.41 | % | | | 1.44 | % | | | 1.42 | % | | | 1.40 | % | | | 1.41 | % |
| Annualized return on average equity | | | 13.44 | % | | | 13.47 | % | | | 13.53 | % | | | 13.52 | % | | | 13.44 | % |
| Net interest margin, fully tax equivalent | | | 3.56 | % | | | 3.65 | % | | | 3.59 | % | | | 3.56 | % | | | 3.57 | % |
| Non-interest income to total revenue, fully | | | | | | | | | | |
| tax equivalent | | | 30.93 | % | | | 31.27 | % | | | 30.84 | % | | | 29.85 | % | | | 30.41 | % |
| Efficiency ratio | | | 58.13 | % | | | 56.49 | % | | | 57.79 | % | | | 57.86 | % | | | 55.32 | % |
| | | | | | | | | | |
| Loans by Type | | | | | | | | | | |
| Commercial and industrial | | $ | 736,841 | | | $ | 708,508 | | | $ | 721,956 | | | $ | 676,782 | | | $ | 644,398 | |
| Construction and development | | | 213,844 | | | | 191,987 | | | | 156,371 | | | | 160,667 | | | | 155,667 | |
| Real estate mortgage - commercial investment | | | 538,886 | | | | 510,128 | | | | 488,187 | | | | 452,173 | | | | 436,989 | |
| Real estate mortgage - owner occupied commercial | | | 408,292 | | | | 412,733 | | | | 418,113 | | | | 417,285 | | | | 420,666 | |
| Real estate mortgage - 1-4 family residential | | | 249,498 | | | | 245,229 | | | | 240,770 | | | | 234,199 | | | | 226,575 | |
| Home equity - 1st lien | | | 55,325 | | | | 54,837 | | | | 52,360 | | | | 52,042 | | | | 50,115 | |
| Home equity - junior lien | | | 67,519 | | | | 65,605 | | | | 65,999 | | | | 63,336 | | | | 63,066 | |
| Consumer | | | 35,170 | | | | 33,679 | | | | 31,795 | | | | 38,004 | | | | 35,531 | |
| Total loans | | $ | 2,305,375 | | | $ | 2,222,706 | | | $ | 2,175,551 | | | $ | 2,094,488 | | | $ | 2,033,007 | |
| | | | | | | | | | |
| Asset Quality Data | | | | | | | | | | |
| Allowance for loan losses to total loans | | | 1.04 | % | | | 1.10 | % | | | 1.06 | % | | | 1.07 | % | | | 1.10 | % |
| Allowance for loan losses to average loans | | | 1.06 | % | | | 1.11 | % | | | 1.08 | % | | | 1.10 | % | | | 1.13 | % |
| Allowance for loan losses to non-performing loans | | | 357.94 | % | | | 305.84 | % | | | 361.58 | % | | | 251.75 | % | | | 251.33 | % |
| Nonaccrual loans | | $ | 5,295 | | | $ | 6,889 | | | $ | 4,970 | | | $ | 7,878 | | | $ | 7,693 | |
| Troubled debt restructuring | | | 974 | | | | 999 | | | | 1,020 | | | | 1,040 | | | | 1,060 | |
| Loans - 90 days past due & still accruing | | | 438 | | | | 80 | | | | 410 | | | | - | | | | 176 | |
| Total non-performing loans | | | 6,707 | | | | 7,968 | | | | 6,400 | | | | 8,918 | | | | 8,929 | |
| OREO and repossessed assets | | | 5,033 | | | | 5,042 | | | | 5,093 | | | | 5,049 | | | | 4,541 | |
| Total non-performing assets | | $ | 11,740 | | | $ | 13,010 | | | $ | 11,493 | | | $ | 13,967 | | | $ | 13,470 | |
| Non-performing loans to total loans | | | 0.29 | % | | | 0.36 | % | | | 0.29 | % | | | 0.43 | % | | | 0.44 | % |
| Non-performing assets to total assets | | | 0.39 | % | | | 0.44 | % | | | 0.40 | % | | | 0.49 | % | | | 0.48 | % |
| Net charge-offs to average loans | | | 0.04 | % | | | 0.00 | % | | | 0.00 | % | | | 0.02 | % | | | 0.00 | % |
| Net charge-offs (recoveries) | | $ | 862 | | | $ | 22 | | | $ | 60 | | | $ | 490 | | | $ | (77 | ) |
| | | | | | | | | | |
| Other Information | | | | | | | | | | |
| Total assets under management (in millions) | | $ | 2,523 | | | $ | 2,413 | | | $ | 2,342 | | | $ | 2,255 | | | $ | 2,238 | |
| Full-time equivalent employees | | | 578 | | | | 558 | | | | 549 | | | | 550 | | | | 555 | |
| | | | | | | | | | |
| (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
