Stock Yards Bancorp (SYBT) risk factors, FY2025 10-K

What changed since the prior 10-K

New

• New

  FACTORS THAT MAY AFFECT FUTURE RESULTS

• New

  Fluctuations in interest rates could reduce profitability

  Fluctuations in interest rates and FRB policy changes can compress our net interest spread and reduce earnings.

• New

  local, regional, national or international disorder and instability in financial markets

  An inverted yield curve increases our funding costs and limits loan earnings, decreasing net interest income.

• New

  Financial condition and profitability depend significantly on local and national economic conditions

  Economic uncertainty, stubborn inflation, and softening labor markets in 2026 could impair borrowers' ability to repay loans.

• New

  Our allowance for credit losses may not be adequate to cover actual losses, which could negatively impact earnings

  Inaccurate management assumptions in our allowance for credit losses could require material reserve increases and hurt earnings.

• New

  Our credit quality metrics are currently at solid levels and this trend could normalize over time

  Loans originated during the pandemic-era low-rate environment will mature or renew at significantly higher prime rates in 2026, increasing credit risk.

• New

  Financial condition and profitability could be negatively impacted by collateral values

  Deterioration in collateral values for our secured loans could lead to higher loan losses and hurt financial results.

• New

  Significant stock market volatility could negatively affect our financial results

  Capital market volatility can reduce wealth management and trust assets under management, cutting our non-interest income.

• New

  The value of our investment securities may be negatively affected by factors outside of our control and impairment of these securities could have an adverse impact on our financial condition and results of operations

  Changes in interest rates and market conditions can impair our investment securities portfolio, creating unrealized losses.

• New

  Impairment of goodwill, other intangible assets or deferred tax assets could have an adverse impact on our financial condition and results of operations

  Potential goodwill or intangible asset impairment would require non-cash charges to earnings.

• New

  The soundness of other financial institutions could adversely affect us

  Troubles or failures at other financial institutions could cause market-wide liquidity problems and potential defaults for us.

• New

  Derivatives associated with our mortgage banking line of business subject us to interest rate and counter-party risks, which could adversely affect our business, financial condition and results of operations

  Mortgage banking derivatives like forward sales contracts expose us to interest rate and counterparty risks.

• New

  Changing industry trends or regulations related to consumer deposit relationships could have an adverse impact on our financial condition and results of operations

• NewStrategic Risks

  Acquisitions could adversely affect our business, financial condition and results of operations

• NewStrategic Risks

  Organic expansion into new markets could adversely affect our business, financial condition and results of operations

• NewStrategic Risks

  Competition with other financial institutions could adversely affect profitability

• NewStrategic Risks

  We may not be able to attract and retain skilled people

• NewStrategic Risks

  We are subject to liquidity risks

• NewStrategic Risks

  Our ability to maintain and/or raise deposits is critical to our strategic goals. Any failure to successfully manage our deposit portfolio could have an adverse impact on our results of operations and financial condition

• NewStrategic Risks

  Our investment in tax credit partnerships may not generate expected or anticipated returns, which could have an adverse impact on our results of operations and financial condition

• NewOperational Risks

  Our risk management framework could prove ineffective, which could have an adverse effect on our business, results of operations and financial condition

• NewOperational Risks

  Accounting policies and methods are fundamental to how we record and report our financial condition and results of operations. Management must exercise judgment in selecting and applying these accounting policies and methods so they comply with GAAP

• NewOperational Risks

  An extended disruption of vital infrastructure could negatively impact our business, results of operations, and financial condition

• NewOperational Risks

  Security breaches could negatively impact our business, results of operations, and financial condition

• NewOperational Risks

  Incidences of fraud could negatively impact our business, results of operations, and financial condition

• NewOperational Risks

  We are dependent upon outside third parties for processing and handling of the Company’s records and data

• NewOperational Risks

  Our ability to stay current on technological changes in order to compete and meet customer demands is constantly being challenged

• NewOperational Risks

  The development and use of generative artificial intelligence (AI) technology presents risks and challenges that may adversely impact our business, financial condition and results of operations

• NewOperational Risks

  Changes in customer use of banks could adversely affect our financial condition and results of operations

• NewRegulatory and Legal Risks

  We operate in a highly regulated environment and may be adversely affected by changes to or lack of compliance with federal, state and local laws and regulations

• NewRegulatory and Legal Risks

  We will be subject to increased regulation once our total consolidated assets exceed $10 billion as of any year-end

• NewRegulatory and Legal Risks

  Changes in tax laws and regulations may have an adverse impact on our financial condition and results of operations

• NewRegulatory and Legal Risks

  We are subject to litigation risk and reputational risk pertaining to fiduciary responsibility

• NewRegulatory and Legal Risks

  Increasing scrutiny and evolving expectations from regulators, investors and other stakeholders with respect to our ESG practices may impose additional costs on us or expose us to new or additional risks

• NewRisks Related to Owning Our Common Stock

  Our common stock price may fluctuate significantly, which could make it difficult to resell our common stock at times and/or prices acceptable to an investor

• NewRisks Related to Owning Our Common Stock

  litigation and governmental investigations

Dropped

• Dropped

  Issued but Not Yet Effective Accounting Standards Updates

  Disclosures regarding issued but not yet effective accounting standards updates.

• Dropped

  Critical Accounting Policies and Estimates

  Critical accounting policies and estimates required by GAAP.

• Dropped

  Allowance for Credit Losses on Loans and Provision for Credit Losses

  Methodology for establishing the general reserve of the allowance for credit losses.

• Dropped

  Business Segment Overview

  Overview of commercial banking and wealth management reporting segments.

• Dropped

  Overview – Operating Results (FTE)

  Overview of operating results and performance metrics for past years.

• Dropped

  Additional discussion follows under the section titled “Results of Operations.”

  General financial highlights and record net income figures for 2024.

• Dropped

  Interest income experienced a $66.0 million, or 19%, increase over the prior year associated with the benefits of higher yields and average earning asset growth, outpacing the $56.5 million, or 57%, increase in interest expense driven by the rising cost of funds and growth in interest-bearing liabilities

  Interest income growth and deposit mix migration towards higher-yielding options.

• Dropped

  Provision for the year ended December 31, 2024 was attributed mainly to substantial loan growth and to a lesser extent, an improved unemployment forecast and other factors within the CECL model. Further, net charge offs of $1.2 million were recorded for the year ended December 31, 2024

  Drivers of provision for credit losses and net charge-offs in 2024.

• Dropped

  Total deposits increased $496 million, or 7%, at December 31, 2024 compared to December 31, 2023. While total deposit growth was experienced compared to the prior year, a continued shift in the deposit base mix was also experienced, as pricing pressure/competition for deposits remained strong during the year

  Total deposit increases and shifts in the deposit base mix.

• Dropped

  Non-interest income increased $3.0 million, or 3%, for the year ended December 31, 2024, compared to the prior year, attributed largely to strong WM&T revenue, treasury management fees and card income

  Increases in non-interest income and non-interest expenses.

• Dropped

  Net income totaled $107.7 million for year ended December 31, 2023, resulting in diluted EPS of $3.67, compared to net income of $93.0 million for the year ended December 31, 2022, which resulted in diluted EPS of $3.21. The year ended December 31, 2022 was significantly impacted by the CB acquisition

  Net income comparisons and the impact of the CB acquisition.

• Dropped

  While interest income benefitted from rising interest rates in 2023, an increase in the cost of funds stemming from deposit contraction and pricing pressure, as well as increased borrowing activity, had a substantial impact on results for the year ended December 31, 2023 compared to the prior year

  Impact of rising interest rates and the CB acquisition details.

• Dropped

  Bancorp’s ACL on loans increased $6 million, or 8%, compared to December 31, 2022. Provision for credit losses on loans totaled $12.5 million for the year ended December 31, 2023, compared to $9.7 million for the prior year

• Dropped

  Provision for credit losses on loans for the prior year period included $4.4 million of expense related to the acquired loan portfolio, and to a lesser extent, a deteriorating economic forecast

• Dropped

  Interest-bearing deposits increased $681 million, or 15%, for the year ended December 31, 2023 compared to the prior year, led by a $511 million increase in time deposits associated with Bancorp’s successful promotional product offerings, offsetting a $402 million, or 21%, decline in non-interest bearing deposits

• Dropped

  Pricing pressure and competition for both loans and deposits will continue to present challenges in 2025, driven by uncertainty within the current interest rate environment, a flattened/inverted yield curve and overall liquidity management

• Dropped

  Net Interest Income - Overview

• Dropped

  5.11 % 5.07 % 1.99 % 4 bps 308 bps

• Dropped

  While recent projections indicate that the FRB will slow or halt interest rate reductions in 2025, Bancorp expects ongoing pricing pressure/competition for both loans and deposits and general liquidity management to be the primary challenges to NIM and net interest income growth in 2025

• Dropped

  Significant loan growth over the past 12 months has positively impacted interest income and average interest-earning asset growth, which Bancorp elected to fund with deposit and non-deposit sources, namely scheduled investment security maturities and FHLB borrowings

• Dropped

  Average total loan balances increased $663 million, or 12%, for the year ended December 31, 2024, compared to the prior year, driven by contributions from every loan category and every market

• Dropped

  Total interest income (FTE) increased $66.0 million, or 19%, to $413.2 million for the year ended December 31, 2024, as compared to the prior year

• Dropped

  Total average interest bearing liabilities increased $660 million, or 13%, to $5.71 billion for the year ended December 31, 2024 compared to the prior year

• Dropped

  Average SSUAR increased $31 million, or 25%, for the year ended December 31, 2024 compared to the prior year, as customers were attracted to the collateralized protection provided by this product

• Dropped

  Interest expense on SSUAR increased $1.3 million, or 64%, for the year ended December 31, 2024 compared to the prior year, consistent with average balance growth and rising rates

• Dropped

  The positive impact of rising interest rates on interest-earning assets, which drove a substantial increase in interest income across all interest-earning asset categories

• Dropped

  Balance sheet expansion stemming from both organic growth and the full year impact of acquisition-related activity for the year ended December 31, 2023 compared to the prior year

• Dropped

  Total average interest earning assets increased $316 million, or 5%, to $7.30 billion for the year ended December 31, 2023, as compared to year ended December 31, 2022, with the average rate earned on total interest earning assets increasing 114 bps to 4.75%

• Dropped

  Total interest income (FTE) increased $94.7 million, or 37%, to $347.2 million for the year ended December 31, 2023, as compared to the year ended December 31, 2022

• Dropped

  Total average interest bearing liabilities increased $513.2 million, or 11%, to $5.05 billion for the year ended December 31, 2023 compared with the year ended December 31, 2022, with the total average cost increasing 157 bps to 1.97%

• Dropped

  Average subordinated debentures totaled $26.6 million for the year ended December 31, 2023. The subordinated debentures were added as a result of the CB acquisition during the first quarter of 2022

• Dropped

  Total interest bearing deposit expense increased $65.2 million, mainly as a result aforementioned deposit rate increases, resulting in a 140 bps increase in the cost of interest bearing deposits for the year ended December 31, 2023 compared to the prior year

• Dropped

  5,508 232 4.21 6,822 211 3.09 8,835 190 2.15

• Dropped

  $ 8,376,739 $ 7,775,574 $ 7,438,880

• Dropped

  5,712,522 155,839 2.73 5,052,106 99,364 1.97 4,538,911 18,269 0.40

• Dropped

  Supplemental Information - Total Company Average Balance Sheets and Interest Rates (FTE)

• Dropped

  The fair market value adjustment on investment securities resulting from ASC 320, Investments – Debt and Equity Securities is included as a component of other assets

• Dropped

  66,006 30,211 35,795 94,697 70,987 23,710

• Dropped

  Asset/Liability Management and Interest Rate Risk

• Dropped

  Interest Rate Simulation Sensitivity Analysis

• Dropped

  % Change from base net interest income at December 31, 2024

• Dropped

  Provision for Credit Losses

• Dropped

  Acquired PCD loans (goodwill adjustment)

• Dropped

  Provision for credit losses on loans - acquired loans

• Dropped

  Net loan (charge-offs) recoveries to average total loans (1)

• Dropped

  Provision expense for credit losses on loans of $8.8 million was recorded for the year ended December 31, 2024, which was driven mainly by strong loan growth, net charge offs of $1.2 million, and to a much lesser extent, an improved unemployment forecast and other factors within the CECL model

• Dropped

  Provision for credit loss expense for off balance sheet credit exposures of $1.3 million was recorded for the year ended December 31, 2023, driven largely by the addition of new C&D and C&I lines of credit. The ACL for off balance sheet credit exposures totaled $5.9 million as of December 31, 2023

• Dropped

  Loss on sale of securities AFS

• Dropped

  $ 95,230 $ 92,220 $ 89,149 $ 3,010 3 % $ 3,071 3 %

• Dropped

  Contracts between WM&T and their customers do not permit performance-based fees and accordingly, none of the WM&T revenue is performance based. Management believes the WM&T department will continue to factor significantly in Bancorp’s financial results and provide strategic diversity to revenue streams

• Dropped

  $ 42,843 $ 39,802 $ 36,111

• Dropped

  (1) Non-managed assets represent those for which the WM&T department does not hold investment discretion

• Dropped

  Common trust funds and collective investment funds

• Dropped

  Includes client directed instruments such as rights, warrants, annuities, insurance policies, unit investment trusts, and oil and gas rights

• Dropped

  Losses on the sale of premises and equipment totaling $100,000 were recorded for the year ended December 31, 2024 and were the result of sales/disposals of various nominal fixed assets. Activity for the prior year was the result of the sale of an acquired property in addition to other merger-related disposal activity

• Dropped

  Deposit service charges, which consist of non-sufficient funds charges and to a lesser extent, other activity based charges, increased $580,000, or 7%, for the year ended December 31, 2023, as compared with the prior year

• Dropped

  BOLI income increased $656,000, or 41%, for the year ended December 31, 2023 compared to the prior year, which was attributed mainly to the additional $30 million BOLI investment made in 2022, in addition to general market appreciation within the policy plans during the year

• Dropped

  Loss on disposition of LFA

• Dropped

  Total non-interest expenses increased $10.4 million, or 6%, for the year ended December 31, 2024 compared to the same period of 2023. Compensation and employee benefits comprised 61% of Bancorp’s total non-interest expenses for the year ended December 31, 2024, compared to 59% for the same period of 2023

• Dropped

  FDIC insurance expense increased $628,000, or 16%, for the year ended December 31, 2024, as compared to the same period of 2023, consistent with Bancorp’s growth in addition to changes in loan mix, as higher assessments are levied on C&D lending concentrations, a segment which grew as a percentage of total loans

• Dropped

  Employee benefits increased $1.9 million, or 11%, for the year ended December 31, 2023 compared to the prior year, consistent with the overall increase in full time equivalent employees previously noted

• Dropped

  Debit and credit card processing expense increased $572,000, or 10%, for the year ended December 31, 2023 compared to the prior year, consistent with the increase in transaction volume and customer base expansion resulting from both organic growth and the full year impact of acquisition-related activity

• Dropped

  Legal and professional fees increased $1.0 million, or 34%, for the year ended December 31, 2023 compared to the prior year. The increase related to compliance-related consulting projects associated with Bancorp approaching $10 billion in total assets

• Dropped

  Amortization expense associated with tax credit investments increased $941,000 for the year ended December 31, 2023 compared to the prior year stemming from Bancorp’s investment in several larger tax credit projects during 2023

• Dropped

  Other non-interest expenses increased $869,000, or 8%, for the year ended December 31, 2023 compared to the prior year, the most notable drivers being increased card reward expense, higher fraud and theft-related expenses and other ancillary expenses tied to Bancorp’s growth over the past year

• Dropped

  Tax-exempt interest income earned on loans and investment securities reduced the ETR by 0.43% and 0.50% for the years ended December 31, 2024 and 2023, respectively

• Dropped

  The ETR for the year ended December 31, 2023 and 2022 was reduced by 0.34% and increased by 0.34%, respectively, based on tax credit activity

• Dropped

  Cash and Cash Equivalents

• Dropped

  The primary purpose of the investment securities portfolio is to provide another source of interest income, as well as a tool for liquidity management. In managing the composition of the balance sheet, Bancorp seeks a balance between earnings sources, credit and liquidity considerations

• Dropped

  Government sponsored enterprise obligations

• Dropped

  Total loans increased $749 million, or 13%, from December 31, 2023 to December 31, 2024. While the substantial loan growth experienced during 2024 was well-spread across loan categories, CRE , C&D and C&I lines of credit stood out, with growth of 15%, 17% and 26%, respectively

• Dropped

  $ 1,213,924 $ 2,842,928 $ 1,506,739 $ 956,811 $ 6,520,402 100 %

• Dropped

  Non-performing Loans and Assets

• Dropped

  In total, non-performing assets as of December 31, 2024 were comprised of 125 loans ranging in individual amounts up to $4.5 million and one residential real estate property held as OREO

• Dropped

  Commercial and industrial - lines of credit

• Dropped

  Allowance for Credit Losses on Loans

• Dropped

  The ACL for loans calculation and resulting credit loss expense is significantly impacted by changes in forecasted economic conditions. Should the forecast for economic conditions change, Bancorp could experience further adjustments in its required ACL for loans credit loss expense

• Dropped

  Commercial and industrial - term - PPP

• Dropped

  Construction and land development

• Dropped

  $ (1,231 ) $ 6,085,782 -0.02 % $ (6,628 ) $ 5,422,865 -0.12 % $ 1 $ 4,819,124 0.00 %

• Dropped

  $ 86,943 100 % 1.33 % $ 79,374 100 % 1.38 %

• Dropped

  Net (charge offs)/recoveries to average total loans

• Dropped

  Premises held for sale totaling $2.3 million and $2.5 million was recorded on Bancorp’s consolidated balance sheets as of December 31, 2024 and December 31, 2023, which consists of three undeveloped parcels of land, a former administrative building and one former branch location

• Dropped

  Core Deposit and Customer List Intangibles

• Dropped

  Other Assets and Other Liabilities

• Dropped

  Total deposits increased $496 million, or 7%, from December 31, 2023 to December 31, 2024. Interest bearing deposits increased $588 million, or 11%, outpacing the $92 million, or 6%, decrease in non-interest bearing deposits, as depositors continued shifting into higher-yielding alternatives in the current environment

• Dropped

  $ 6,658,033 $ 6,371,732 $ 6,438,606

• Dropped

  Securities Sold Under Agreement to Repurchase

• Dropped

  Federal Funds Purchased and Other Short-Term Borrowing

• Dropped

  Included in total deposit balances at December 31, 2024 are $663 million in public funds generally comprised of accounts with local government agencies and public school districts in the markets in which Bancorp operates. At December 31, 2023, public funds deposits totaled $613 million

• Dropped

  In addition to owned banking facilities, Bancorp has entered into long-term leasing arrangements for certain branch facilities. Bancorp also has required future payments for a non-qualified defined benefit retirement plan, time deposit maturities and other obligations

• Dropped

  Non-GAAP Financial Measures

• Dropped

  Less: Amortization of investments in tax credit partnerships

• Dropped

  Less: Loss on sale of securities

• Dropped

  Financial Statements and Supplementary Data

• Dropped

  Years Ended December 31, (in thousands, except per share data)

• Dropped

  Loss on sale of securities AFS debt securities

• Dropped

  Less net income attributed to non-controlling interest

• Dropped

  $ 114,539 $ 107,748 $ 93,294

• Dropped

  Reclassification adjustment for loss realized on AFS debt securities

• Dropped

  Less comprehensive income attributed to non-controlling interest

• Dropped

  26,596 $ 49,501 $ 243,107 $ 391,201 $ (7,940 ) $ 675,869 $ - $ 675,869

• Dropped

  Stock compensation expense

• Dropped

  Cash dividends declared, $1.14 per share

• Dropped

  Disposition of non-controlling interest

• Dropped

  Other comprehensive income

• Dropped

  Cash dividends declared, $1.18 per share

• Dropped

  29,329 $ 58,602 $ 385,955 $ 506,344 $ (92,798 ) $ 858,103 $ - $ 858,103

• Dropped

  Reclassification adjustment - ASU 2023-02

• Dropped

  Cash dividends declared, $1.22 per share

• Dropped

  (Gain)/loss on the sale of other real estate owned

• Dropped

  Proceeds from sales of acquired available for sale debt securities

• Dropped

  Purchases of held to maturity debt securities

• Dropped

  Purchase of bank owned life insurance

• Dropped

  Proceeds from the disposition of LFA

• Dropped

  Purchase of loans from broker

• Dropped

  (677,057 ) (424,049 ) (384,425 )

• Dropped

  Cash disbursements to non-controlling interest

• Dropped

  Loans transferred to OREO

• Dropped

  Common stock issued in acquisition

• Dropped

  (1) Summary of Significant Accounting Policies

• Dropped

  Established in 1904, SYB is a state-chartered non-member financial institution that provides services in Louisville, central, eastern and northern Kentucky, as well as the Indianapolis, Indiana and Cincinnati, Ohio metropolitan markets through 72 full service banking center locations

• Dropped

  WM&T provides investment management, financial & retirement planning and trust & estate services, as well as retirement plan management for businesses and corporations in all markets in which Bancorp operates. The magnitude of WM&T revenue distinguishes Bancorp from other community banks of similar asset size

• Dropped

  Cash and Cash Equivalents – Cash and cash equivalents include cash and due from banks, FFS and interest bearing due from banks as segregated in the accompanying consolidated balance sheets

• Dropped

  Changes in the ACL for AFS debt securities are recorded as expense. Losses are charged against the ACL for AFS debt securities when management believes the uncollectability of an AFS debt security is confirmed or when either of the criteria regarding intent or requirement to sell is met

• Dropped

  Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income over the life of the loan without anticipating prepayments

• Dropped

  ACL – Loans – Under the CECL model, the ACL on loans represents a valuation allowance estimated at each balance sheet date in accordance with GAAP that is deducted from the loans’ amortized cost basis to represent the net amount expected to be collected on the loan portfolio

• Dropped

  Home Equity Lines of Credit – Similar to residential real estate above, however these are revolving (open-ended) lines of credit

• Dropped

  Credit Cards – Represents revolving short-term loans to businesses and, to a lesser extent, consumers

• Dropped

  Premises held for sale are carried at the lower of fair value or cost, less accumulated depreciation and amortization. Premises held for sale represent properties owned by Bancorp that are currently listed for sale due mainly to location overlap and/or lack of necessity stemming from acquisition-related activity

• Dropped

  Other Assets – BOLI and other life insurance policies are carried at net realizable value, which considers applicable surrender charges. Also, Bancorp maintains life insurance policies in conjunction with its non-qualified defined benefit and non-qualified compensation plans

• Dropped

  Bancorp recognizes interest and/or penalties related to income tax matters in income tax expense, if any

• Dropped

  Dividend Restriction – Banking regulations require maintaining certain capital levels and may limit the dividends paid by the Bank to the Holding Company or by the Holding Company to shareholders

• Dropped

  Accounting Standards Updates – Generally, if an issued but not yet effective ASU with an expected immaterial impact to Bancorp has been disclosed in prior SEC filings, it will not be re-disclosed

• Dropped

  (2) Cash and Due from Banks

• Dropped

  $ 439,837 $ 1 $ (31,319 ) $ 408,519

• Dropped

  Debt Securities by Contractual Maturity

• Dropped

  $ 1,114,961 $ 990,114 $ 370,171 $ 341,357

• Dropped

  Securities with a carrying value of $852 million and $991 million were pledged at December 31, 2024 and 2023, respectively, to secure accounts of commercial depositors in cash management accounts, public deposits and uninsured cash balances for WM&T accounts

• Dropped

  Unrealized and Unrecognized Loss Analysis on Debt Securities

• Dropped

  Mortgage-backed securities - government agencies

• Dropped

  $ 455 $ (1 ) $ 407,798 $ (31,318 ) $ 408,253 $ (31,319 )

• Dropped

  (4) Loans and ACL for Loans

• Dropped

  Fees and costs of originating loans are deferred at origination and amortized over the life of the loan. At December 31, 2024 and 2023, net deferred loan origination fees exceeded deferred loan origination costs, resulting in a net reduction of loan balances totaling $3 million and $2 million, respectively

• Dropped

  Loans with carrying amounts of $3.48 billion and $3.15 billion were pledged to secure FHLB borrowing capacity at December 31, 2024 and December 31, 2023, respectively

• Dropped

  $ 53,898 $ 9,950 $ 9,682 $ (2,307 ) $ 2,308 $ 73,531

• Dropped

  Residential real estate - non-owner occupied

• Dropped

  Home equity lines of credit

• Dropped

  Commercial real estate - owner occupied

• Dropped

  For the years ended December 31, 2024 and 2023, no interest income was recognized on loans on non-accrual status

• Dropped

  There have been no significant changes to the types of collateral securing Bancorp’s collateral dependent loans

• Dropped

  OAEM – Loans classified as OAEM have potential weaknesses requiring management's heightened attention. These potential weaknesses may result in deterioration of repayment prospects for the loan or of Bancorp's credit position at some future date

• Dropped

  $ - $ - $ - $ - $ - $ - $ - $ -

• Dropped

  Substandard non-performing

• Dropped

  $ 80,717 $ 66,330 $ 72,580 $ 70,585 $ 41,874 $ 47,578 $ - $ 379,664

• Dropped

  $ - $ - $ - $ - $ - $ - $ 246,336 $ 246,336

• Dropped

  $ 22,895 $ 18,200 $ 12,822 $ 6,294 $ 1,095 $ 1,023 $ 81,943 $ 144,272

• Dropped

  $ 4,935 $ 5,439 $ 1,864 $ 1,462 $ 597 $ 3 $ - $ 14,300

• Dropped

  $ - $ - $ - $ - $ - $ - $ 24,540 $ 24,540

• Dropped

  $ (1,054 ) $ (618 ) $ (573 ) $ (119 ) $ (9 ) $ (52 ) $ (351 ) $ (2,776 )

• Dropped

  $ 30,553 $ 22,409 $ 3,232 $ 348 $ 8,931 $ 1,783 $ 356,237 $ 423,493

• Dropped

  $ 170,446 $ 178,088 $ 175,561 $ 86,105 $ 24,354 $ 70,213 $ - $ 704,767

• Dropped

  $ 83,913 $ 84,278 $ 77,868 $ 49,555 $ 31,325 $ 30,546 $ - $ 357,485

• Dropped

  $ 157,832 $ 239,807 $ 69,131 $ 34,591 $ 478 $ 3,711 $ 15,623 $ 521,173

• Dropped

  $ - $ - $ - $ - $ - $ - $ 210,886 $ 210,886

• Dropped

  $ 30,823 $ 18,399 $ 10,148 $ 2,832 $ 1,931 $ 1,765 $ 79,105 $ 145,003

• Dropped

  $ 6,801 $ 3,442 $ 3,117 $ 1,723 $ 155 $ 265 $ - $ 15,503

• Dropped

  $ - $ - $ - $ - $ - $ - $ 23,622 $ 23,622

• Dropped

  $ (1,998 ) $ (756 ) $ (66 ) $ (136 ) $ (78 ) $ (152 ) $ (4,326 ) $ (7,512 )

• Dropped

  Modifications to Borrowers Experiencing Financial Difficulty

• Dropped

  (5) Premises & Equipment and Premises Held for Sale

• Dropped

  Depreciation expense related to premises and equipment was $6.6 million in 2024, $7.7 million in 2023 and $6.5 million in 2022, respectively

• Dropped

  In addition to the premises and equipment detailed above, premises held for sale totaling $2.3 million was also recorded on Bancorp’s consolidated balance sheets as of December 31, 2024, which consists of three undeveloped parcels of land, a former administrative building and one former branch location

• Dropped

  As of December 31, 2024 and 2023, goodwill totaled $194 million, of which $172 million was attributed to the commercial banking segment and $22 million was attributed to WM&T

• Dropped

  Note: The acquisition of The Bank Oldham County in 2013 resulted in a bargain purchase gain

• Dropped

  Bancorp recorded initial CDI assets of $13 million, $4 million, $2 million and $3 million in association with the acquisition of CB in 2022, KB in 2021, KSB in 2019 and TBOC in 2013, respectively

• Dropped

  As a result of the CB acquisition, Bancorp also recorded an initial intangible asset totaling $14 million associated with the customer list of the acquired WM&T business. Similar to CDI assets, this intangible asset also amortizes over its estimated useful life

• Dropped

  Bancorp maintains life insurance policies other than BOLI in conjunction with its non-qualified defined benefit retirement and non-qualified compensation plans

• Dropped

  Years Ended December 31, (in thousands)

• Dropped

  $ 29,827 $ 30,179 $ 27,190

• Dropped

  $ 642 $ 7,341 $ (35,197 )

• Dropped

  Amortization of investment in tax credit partnerships

• Dropped

  Current state income tax expense for 2024, 2023 and 2022 represents tax owed to the states of Kentucky, Indiana and Illinois. Ohio state taxes are based on capital levels and are recorded as other non-interest expense

• Dropped

  December 31, (in thousands)

• Dropped

  Bancorp’s investments in tax credit partnerships, including the related unfunded contributions, totaled $185 million and $175 million as of December 31, 2024 and December 31, 2023, respectively, and are included in other assets on the condensed consolidated balance sheets

• Dropped

  Amortization expense in other non-interest expense

• Dropped

  Interest expense related to time deposits in denominations of $250,000 or more was $9.5 million, $5.1 million and $472,000 for the years ended December 31, 2024, 2023 and 2022, respectively

• Dropped

  (11) Securities Sold Under Agreements to Repurchase

• Dropped

  (12) Subordinated Debentures

• Dropped

  (13) FHLB Advances and Other Borrowings

• Dropped

  (14) Accumulated Other Comprehensive Income (Loss)

• Dropped

  (16) Net Income per Share

• Dropped

  (17) Employee Benefit Plans

• Dropped

  The fair value of all stock-based awards granted, net of estimated forfeitures, is recognized as compensation expense over the respective service period

• Dropped

  SAR Grants – SARs granted have a vesting schedule of 20% per year and expire ten years after the grant date unless forfeited due to termination of employment

• Dropped

  Bancorp utilized cash of $203,000 and $175,000 during 2024 and 2023, respectively, for the purchase of shares upon the vesting of RSUs

• Dropped

  $ 297 $ 1,084 $ 262 $ 1,827 $ 3,470

• Dropped

  $ 975 $ 4,105 $ 1 $ 1,874 $ 6,955

• Dropped

  Aggregate intrinsic value for SARs is defined as the amount by which the current market price of the underlying stock exceeds the exercise or grant price

• Dropped

  At December 31, 2024, approximately 340,000 SARs were outstanding at a weighted average grant price of $43.41. The number of shares to be issued upon exercise will be determined based on the difference between the grant price and the market price at the date of exercise

• Dropped

  (20) Commitments and Contingent Liabilities

• Dropped

  (21) Assets and Liabilities Measured and Reported at Fair Value

• Dropped

  Level 1 – Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date

• Dropped

  Level 3 – Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability

• Dropped

  Mortgage loans held for sale - The fair value of mortgage loans held for sale is determined using quoted secondary market prices (Level 2 inputs)

• Dropped

  Interest rate swap agreements – Interest rate swaps are valued using valuations received from the relevant dealer counterparty. These valuations consider multiple observable market inputs, including interest rate yield curves, time value and volatility factors (Level 2 inputs)

• Dropped

  Obligations of states and political subdivisions

• Dropped

  $ 198,215 $ 810,933 $ — $ 1,009,148

• Dropped

  $ 116,269 $ 926,273 $ — $ 1,042,542

• Dropped

  Bancorp had no financial instruments classified within Level 3 of the valuation hierarchy for assets and liabilities measured at fair value on a recurring basis at December 31, 2024 or 2023. There were no transfers into or out of Level 3 of the fair value hierarchy during 2024 or 2023

• Dropped

  There were no liabilities measured at fair value on a non-recurring basis at December 31, 2024 and December 31, 2023

• Dropped

  (22) Disclosure of Financial Instruments Not Reported at Fair Value

• Dropped

  Effective March 31, 2022, Bancorp began carrying mortgages originated and intended for sale in the secondary market at fair value, as determined by outstanding commitments from investors

• Dropped

  Loans held for sale acquired

• Dropped

  Change in mortgage servicing rights valuation allowance

• Dropped

  $ 11,333 $ 13,082 $ 15,219

• Dropped

  Total outstanding principal balances of loans serviced for others were $1.82 billion and $1.93 billion at December 31, 2024 and December 31, 2023, respectively

• Dropped

  $ 6,199 $ 6,286 $ 5,965 $ 6,056

• Dropped

  (24) Derivative Financial Instruments

• Dropped

  $ 8,589 $ 5,133 $ 8,589 $ 5,142

• Dropped

  Banking regulators have categorized the Bank as well-capitalized. To meet the definition of well-capitalized, a bank must have a minimum 6.5% Common Equity Tier 1 Risk-Based Capital ratio, 8.0% Tier 1 Risk-Based Capital ratio, 10.0% Total Risk-Based Capital ratio and 5.0% Tier 1 Leverage ratio

• Dropped

  Bancorp continues to exceed the regulatory requirements for all calculations. Bancorp and the Bank intend to maintain a capital position that meets or exceeds the “well-capitalized” requirements as defined by the FRB and the FDIC, in addition to the capital conservation buffer

• Dropped

  Less income attributed to non-controlling interest

• Dropped

  $ 114,539 $ 107,748 $ 92,972

• Dropped

  Decrease (increase) in receivable from subsidiaries

• Dropped

  Net cash used in investing activities

• Dropped

  Subordinated debentures acquired

• Dropped

  WM&T AUM, which the primary driver of WM&T revenue, are not included on the consolidated balance sheets of Bancorp. WM&T AUM totaled $7.07 billion, $7.16 billion and $6.59 billion as of December 31, 2024, 2023 and 2022, respectively

• Dropped

  Wealth management and trust services

• Dropped

  (28) Revenue from Contracts with Customers

• Dropped

  Gain (loss) on sale of securities (1)

• Dropped

  (2) Outside of the scope of ASC 606, with the exception of safe deposit fees which were nominal for all periods

• Dropped

  Opinion on the Consolidated Financial Statements

• Dropped

  We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud

• Dropped

  Allowances for Credit Losses on Loans

• Dropped

  How We Addressed the Matter in Our Audit

• Dropped

  Management’s Report on Consolidated Financial Statements

• Dropped

  Management also seeks to assure the objectivity and integrity of Bancorp’s financial data by the careful selection and training of qualified personnel, an internal audit function and organizational arrangements that provide an appropriate division of responsibility

• Dropped

  Disclosure Controls and Procedures

• Dropped

  Management’s Report on Internal Control over Financial Reporting

• Dropped

  Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of Bancorp’s assets that could have a material effect on the financial statements

• Dropped

  Opinion on the Internal Control over Financial Reporting

• Dropped

  Definitions and Limitations of Internal Control over Financial Reporting

• Dropped

  Item 9B. Other Information

• Dropped

  Item 10. Directors, Executive Officers and Corporate Governance

• Dropped

  Information regarding the Audit Committee is incorporated herein by reference to the discussion under the headings, “CORPORATE GOVERNANCE – COMMITTEES OF THE BOARD,” and “REPORT OF THE AUDIT COMMITTEE,” in Bancorp’s Proxy Statement

• Dropped

  The Board of Directors of Bancorp has adopted a code of ethics for its CEO and financial executives included under Exhibit 14

• Dropped

  The information required by this Item is incorporated herein by reference to the discussion under the heading, “EXECUTIVE COMPENSATION AND OTHER INFORMATION – REPORT ON EXECUTIVE COMPENSATION” in Bancorp’s Proxy Statement

• Dropped

  Item 13. Certain Relationships and Related Transactions, and Director Independence

• Dropped

  Item 15. Exhibits and Financial Statement Schedules

• Dropped

  Financial statement schedules are omitted because the information is NA

• Dropped

  Articles of Amendment to the Second Amended and Restated Articles of Incorporation to change the name of the company to Stock Yards Bancorp, Inc., filed with the Secretary of State of Kentucky on April 23, 2014. Exhibit 3.1 to Form 8-K filed April 25, 2014, is incorporated by reference herein

• Dropped

  Annual Report on Form 10-K, filed on February 27, 2025, formatted in inline eXtensible

• Dropped

  The cover page from Stock Yards Bancorp Inc.’s Annual Report on Form 10-K for the year ended December 31, 2024, formatted in inline XBRL and contained in Exhibit 101

• Dropped

  The exhibits listed in response to Item 15(a) 3 are filed or furnished as part of this report

All 36 risk factors

Headings as the filing states them, in filing order.

Other Stock Yards Bancorp 10-Ks

• FY2024 10-K risk factors

  255 risks

  The company faces primary risks from interest rate volatility, deposit pricing pressure, and credit quality fluctuations in its loan portfolio.

  Filed Feb 27, 2025

About this page

The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.