GlobeNewswire Inc | Apr 21, 2021 07:30AM EDT

April 21, 2021

LOUISVILLE, Ky., April 21, 2021 (GLOBE NEWSWIRE) -- Stock Yards Bancorp, Inc. (NASDAQ: SYBT), parent company of Stock Yards Bank & Trust Company, with offices in the Louisville, Indianapolis and Cincinnati metropolitan markets, today reported record earnings for the first quarter ended March 31, 2021. Net income for the first quarter increased 72% to $22.7 million, or $0.99 per diluted share, compared with net income of $13.2 million, or $0.58 per diluted share, for the first quarter of 2020. Strong core deposit growth, as well as significant fee and interest income from the Small Business Administration's (SBA) Paycheck Protection Program (PPP), contributed to record profitability for the quarter.

(dollar amounts in thousands, except per 1Q21 4Q20 1Q20share data)Net interest income $ 37,825 $ 36,252 $ 32,446 Provision for credit loss expense^(6^) (1,475 ) 500 5,925 Non-interest income 13,844 13,698 12,536 Non-interest expenses 24,973 29,029 23,575 Income before income tax expense 28,171 20,421 15,482 Income tax expense 5,461 2,685 2,250 Net income $ 22,710 $ 17,736 $ 13,232 Net income per share, diluted $ 0.99 $ 0.78 $ 0.58 Net interest margin 3.39 % 3.35 % 3.71 %Efficiency ratio^(4^) 48.29 % 58.06 % 52.35 %Tangible common equity to tangible assets^ 8.97 % 9.28 % 10.48 %(1)Annualized return on average equity 20.71 % 16.27 % 13.18 %Annualized return on average assets 1.96 % 1.56 % 1.43 %

Stock Yards again delivered record earnings for the quarter, supported by strong revenue generation, substantial deposit growth, a release of credit loss reserves and controlled operating expenses, said James A. (Ja) Hillebrand, Chairman and Chief Executive Officer. In addition to our financial performance, a highlight of the quarter was the signing of a definitive agreement to acquire Kentucky Bancshares, Inc. This transaction expands our presence into the attractive Central Kentucky market and represents a complementary fit with our organization. The combination of our two companies provides the opportunity to create efficiencies and enhance the value of the combined entity while offering Kentucky Bank customers broader product offerings, increased lending capabilities and an expanded branch delivery system that stretches throughout the Louisville, Indianapolis and Northern Kentucky/Cincinnati metropolitan markets. We remain on track to welcome Kentucky Bank to the Stock Yards family with an anticipated closing date during the second quarter.

Kentucky Bancshares, headquartered in Paris, Kentucky, is the holding company for Kentucky Bank, which operates 19 branches in 11 communities throughout Central Kentucky serving the Lexington, Kentucky metropolitan statistical area and each of its contiguous counties. As of March 31, 2021, Kentucky Bancshares reported approximately $1.3 billion in assets, $766 million in loans, $1.0 billion in deposits and $113 million in tangible common equity.

Another key activity for the first quarter related to the additional COVID-19 stimulus relief, which was signed into law in late 2020, allowing for a second round of PPP funding through May 31, 2021. The program offers new PPP loans for companies that did not receive PPP funds in 2020 in addition to second draw loans targeted at hard-hit businesses that exhausted their initial PPP proceeds. Consistent with the first round, the Company was very active in this program in the first quarter of 2021, closing over 1,600 loans with total originations in excess of $241 million with fee income of nearly $9 million received that will be recognized over the earlier of five years or loan forgiveness. The Company is estimating that approximately 40% of these loans will be forgiven in 2021. As these borrowers are not required to make payments for 10 months, it is probable that a significant portion of the borrowing base will defer forgiveness until early 2022.

Due to an improvement in forecasted economic indicators utilized during the current quarter, we recorded a net benefit of $1.2 million to provision for credit losses for loans during the first quarter. This compares to a $5.6 million provision expense for loans in the first quarter a year ago. We feel that we are well positioned as we navigate through the pandemic, having built up significant loan loss reserves, excluding PPP loans, of 1.68%(2) at March 31, 2021, said Hillebrand.

Additional key factors impacting the first quarter of 2021 results included:

-- Record diluted quarterly EPS exceeding the previous record set in the fourth quarter of 2020. -- COVID-19 related loan deferrals declined significantly to 0.45% of total loans (excluding PPP) at the end of the first quarter of 2021 from 1.24% of total loans three months earlier. -- Average loan balance growth, excluding PPP, totaled $95 million, or 3%, on a linked quarter basis. -- Deposit balances remained at record levels, with additional PPP and federal stimulus payments contributing to strong quarterly deposit growth of $211 million. In total, deposit balances have increased $1.0 billion over the last twelve months. -- Net interest margin (NIM) compressed 32 basis points to 3.39% compared to the first quarter a year ago. NIM continued to be negatively impacted by loan yield contraction accompanied with ongoing excess balance sheet liquidity offset by the positive impact of PPP. -- Despite ongoing contraction in loan yields, net interest income increased $5.4 million, or 17%, over the first quarter of 2020, boosted by $7.0 million in PPP income and a significant decline in cost of funds. -- Non-interest income increased 10% over the first quarter of 2020, reflecting record debit/credit card income and treasury management fees and continued strong mortgage banking income. While slowly rebounding, deposit service charges continue to be impacted by pandemic related stimulus and general changes in customer behavior/spending. -- Non-interest expenses reflected moderate increases in compensation, technology and communication and FDIC insurance premiums. Legal and professional fees reflected $400,000 in expense related to the pending Kentucky Bancshares acquisition. Capital and deposit tax declined significantly, as the Company transitioned to report Kentucky state income tax as a component of tax expense in accordance with the State law change taking effect this quarter.

Hillebrand added, In March, we were one of 30 financial institutions recognized in the inaugural Hovde High Performer List based on our prior year results. Criteria to be admitted included market capitalization below $1 billion, above median average pre-provision ROA, loan and deposit growth, and tangible book value growth. In their screening methodology, Hovde eliminated 261 financial institutions, or nearly 90% of the potential class of banks and thrifts that trade on major exchanges. This recognition is an honor and a testament to the dedication of our employees, who continue to work diligently to support the communities we serve.

Results of Operations First Quarter 2021 Compared with First Quarter 2020

Net interest income the Companys largest source of revenue increased $5.4 million, or 17%, to $37.8 million, driven primarily by PPP loan fees and a significant decline in cost of funds.

-- Total interest income rose $2.6 million, or 7%, to $39.5 million, primarily due to a 10% increase in interest income on loans resulting from strong PPP income partly offset by continued yield contraction. -- With regard to the first round of PPP lending, as of March 31, 2021, approximately 41% of total loan originations (in terms of dollars) had been forgiven by the SBA and another 21% have been submitted for forgiveness. With regard to fee income, approximately 73% of the $19.5 million in fee income received has been recognized life to date. Round one PPP borrowers are required to begin making payments in July, which will likely accelerate forgiveness submissions for this round of PPP. -- Interest expense declined $2.7 million, or 62%, to $1.7 million. Interest expense on deposits decreased $2.5 million, or 62%, as the cost of interest bearing deposits declined to 0.22% in the first quarter of 2021 from 0.69% in the first quarter a year ago. While average interest bearing deposit balances surged $499 million, or 22%, the Company significantly benefited from the strategic lowering of stated deposit rates in early 2020 in tandem with the Federal Reserves short-term interest rate moves and the corresponding lowering of CD offering rates. -- NIM decreased 32 basis points to 3.39% for the first quarter of 2021 from 3.71% in the first quarter a year ago. NIM contraction was primarily driven by lower interest rates, coupled with higher levels of excess balance sheet liquidity. The Company has maintained significantly higher levels of balance sheet liquidity driven in part by the funding of PPP loans through deposit growth. During the quarter, the PPP loan portfolio and the related fee income had a 21 basis point positive impact to NIM, while excess liquidity had a 14 basis point negative impact.

Due to continued improvement in the unemployment forecast combined with minimal net charge-offs and solid traditional credit metrics including and excluding PPP loans, the Bank recorded a $1.2 million net benefit to provision for credit losses for loans in the first quarter of 2021. In addition, a $275,000 net benefit was recorded to provision for credit losses for off balance sheet exposures consistent with improvement in underlying CECL model factors.

Non-interest income increased $1.3 million, or 10%, to $13.8 million.

-- Wealth management and trust income totaled $6.2 million for the first quarter of 2021 and slightly exceeded the first quarter a year ago. Despite a meaningful decline in non-recurring estate fees, significant growth in assets under management and record market performance served to elevate asset-based fees. -- Retail deposit service charges decreased $339,000, or 26%, primarily related to a decline in non-sufficient funds fees collected. Stimulus checks, more lucrative unemployment compensation, diminished pandemic spending and PPP funding have all had a sustained impact upon our customers spending and savings behavior. -- Debit/credit card income increased $293,000, or 15%. Growth trends in both portfolios remain positive with debit card business benefitting from a significant increase in signature, or in person, payment presentment. -- Treasury management fees increased by $256,000, or 20%, driven by increased transaction volume, new product sales and customer base expansion. In addition, calling efforts to existing customers have led to significant increases in online services, reporting, ACH origination, remote deposit and fraud mitigation services. -- Mortgage banking revenue increased $598,000, or 71%, to $1.4 million for the first quarter of 2021. While rising mortgage rates, tight housing supply and diminishing affordability driven by surging housing prices will likely weigh on the enthusiasm of home buyers in the months ahead, the pipeline of viable loans going into the second quarter of 2021 was strong, with incoming applications remaining steady.

Non-interest expenses increased $1.4 million, or 6%, to $25.0 million.

-- Compensation expense increased $594,000, or 5%, primarily due to annual merit-based salary increases, an increase in full time equivalent employees, and increased incentive compensation, partially offset by an expense reduction attributable to the origination of PPP loans. -- Employee benefits increased $94,000, or 3%, primarily due to elevated 401(k) and payroll tax expenses, which was partially offset by lower health insurance expense. -- Technology and communication expense for the first quarter of 2021 increased $283,000, or 14%, consistent with expanded data storage and increased expenses related to the hosted core system. -- Marketing and business development expense, which includes all costs associated with promoting the Bank, community investment, retaining customers and acquiring new business, has remained significantly below historic levels consistent with reduced travel and customer entertainment expense related to the pandemic. -- Legal and professional fees reflected approximately $400,000 in expense related to the pending Kentucky Bancshares acquisition.

Financial Condition March 31, 2021 Compared with March 31, 2020

Total loans increased $698 million, or 24%, to $3.6 billion. Excluding the PPP loan portfolio, total loans increased $85 million, or 3%, during the year, with $128 million of growth in the commercial real estate portfolio and $45 million of growth in residential real estate loans, partially offset by a $114 million decrease in the commercial and industrial portfolio tied to line of credit usage. Similar to what was experienced in the second quarter of 2020, a portion of the Companys customer base that received second round PPP funding have utilized their excess liquidity to pay down operating lines.

In an effort to deploy excess balance sheet liquidity, the Company continued its strategy of expanding the investment portfolio, growing total investment securities by a net $226 million, or 51%, over the past twelve months.

Asset quality, which has trended within a narrow range over the past several years, has remained strong. During the first quarter of 2021, the Company recorded net loan charge-offs of $6,000, compared to net loan charge-offs of $54,000 in the first quarter of 2020. Non-performing loans were $14.3 million, or 0.47%(2), of total loans (excluding PPP) outstanding compared to $6.0 million, or 0.21%, of total loans outstanding at March 31, 2020. Approximately $10 million of the non-accrual loan balance at March 31, 2021 and December 31, 2020 relates to one commercial real estate relationship that was placed on non-accrual status during the second quarter of 2020.

Total deposits increased $1.0 billion, or 31%, from March 31, 2020 to March 31, 2021, with non-interest bearing deposits representing $511 million of the increase. The mix of deposits has also improved with higher-cost time deposits declining $55 million over the past twelve months. Both period end and average deposit balances ended at record levels at March 31, 2021. Federal programs such as the PPP and stimulus checks have boosted deposit balances.

At March 31, 2021, the Company remained well capitalized, the highest regulatory capital rating for financial institutions. Total equity to assets was 9.25% and the tangible common equity ratio was 8.97%(1) at March 31, 2021, compared to 10.83% and 10.48%(1), respectively, at March 31, 2020, with the decline attributable to the January 1, 2020 CECL adoption, loan growth and a $12 million accumulated other comprehensive equity decline associated with the late first quarter increase in bond yields.

In March 2021, the Board of Directors continued the dividend rate of $0.27 per common share initially set in November 2019. The Company will continue to evaluate dividend rate increases in relation to maintaining strong capital levels.

No shares were repurchased in the first quarter of 2021 and approximately 741,000 shares remain eligible for repurchase under the current buy-back plan which expires in May 2021.

Results of Operations First Quarter 2021 Compared with Fourth Quarter 2020

Net interest income increased $1.6 million, or 4%, over the prior quarter to $37.8 million, led by loan growth, PPP fee recognition and the continued decline in cost of funds.

Due to continued improvement in the unemployment forecast combined with minimal net charge-offs and solid traditional credit metrics including and excluding PPP loans, the Company recorded a $1.2 million benefit to provision for credit losses for loans in the first quarter of 2021, compared to $1.4 million provision for credit loss expense for loans in the prior quarter. In addition, consistent with improvement in underlying CECL model factors, a net benefit was recorded to provision for credit losses for off balance sheet exposures of $275,000 and $900,000 in the first quarter of 2021 and fourth quarter of 2020, respectively.

Non-interest income increased $146,000 to $13.8 million. Increases in wealth management and trust service fees, debit/credit card income and higher treasury management fees more than offset a modest first quarter reduction in mortgage banking income.

Non-interest expenses decreased $4.1 million, or 14%, to $25.0 million.

-- Compensation expense decreased $1.2 million, to $12.8 million compared with the fourth quarter of 2020 due to higher fourth quarter incentive compensation expense and deferred expenses associated with the latest round of PPP loans originated in the current quarter. -- Employee benefits increased $1.1 million primarily due to higher health insurance expense, 401(k) expense and payroll tax expenses. -- The fourth quarter of 2020 reflected the completion of a large tax credit project and elevated amortization of investment in tax credit partnership expense, with a corresponding offset to tax expense spread proportionately over the year. -- Capital and deposit tax expense declined significantly, as the Company transitioned to report Kentucky state income tax as a component of tax expense.

Financial Condition March 31, 2021, Compared with December 31, 2020

Total assets increased $185 million on a linked quarter basis to $4.8 billion, reflecting significant increases in both loans and investment securities.

Total loans increased $104 million on a linked quarter basis to $3.6 billion at quarter end and the deployment of excess liquidity led to a $85 million increase in securities. Total line of credit usage decreased to 37% as of March31, 2021, from 38% at December 31, 2020. Commercial and industrial line usage decreased to 26% as of March 31, 2021, compared to 28% at December 31, 2020.

Total deposits increased $211 million, or 5%, on a linked quarter basis due to higher deposit levels consistent with growth in balances with both existing and new customers. Federal programs such as the PPP, stimulus checks and increased unemployment benefits have boosted deposit balances during the quarter. Additionally, economic uncertainty surrounding the pandemic has resulted in a portion of the customer base maintaining generally higher deposit balances.

About the Company

Louisville, Kentucky-based Stock Yards Bancorp, Inc., with $4.8 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 Companys common shares trade on The NASDAQ Stock Market under the symbol SYBT.

This report contains forward-looking statements under the Private Securities Litigation Reform Act that involve risks and uncertainties. Although the Companys management believes the assumptions underlying the forward-looking statements contained herein are reasonable, any of these assumptions could be inaccurate. Therefore, there can be no assurance the forward-looking statements included herein will prove to be accurate. Factors that could cause actual results to differ from those discussed in forward-looking statements include, but are not limited to: the possibility that any of the anticipated benefits of the proposed Kentucky Bancshares merger will not be realized or will not be realized within the expected time period; the risk that integration of Kentucky Bancshares operations with those of Stock Yards will be materially delayed or will be more costly or difficult than expected; diversion of management's attention from ongoing business operations and opportunities due to the merger; the challenges of integrating and retaining key employees; the effect of the announcement of the merger on the combined company's respective customer and employee relationships and operating results; the possibility that the merger may be more expensive to complete than anticipated, including as a result of unexpected factors or events; dilution caused by Stock Yards issuance of additional shares of Stock Yards common stock in connection with the merger; the magnitude and duration of the COVID-19 pandemic and its impact on the global economy and financial market conditions and the business, results of operations and financial condition of the combined company; economic conditions both generally and more specifically in the markets in which the Company and its subsidiary operates; competition for the Companys customers from other providers of financial services; government legislation and regulation, which change and over which the Company has no control; changes in interest rates; material unforeseen changes in liquidity, results of operations, or financial condition of the Companys customers; the effects of government stimulus programs such as the Consolidated Appropriations Act; the effects of the FRBs benchmark interest rate cuts on liquidity and margins; the potential adverse effects of the coronavirus or any other pandemic on the ability of borrowers to satisfy their obligations to the Company, the level of the Companys non-performing assets, the demand for the Companys loans or its other products and services, other aspects of the Companys business and operations, and financial markets and economic growth, and other risks detailed in the Companys 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 Companys Form 10-K for the year ended December31, 2020.

Stock Yards Bancorp, Inc.Financial Information (unaudited)First Quarter 2021 Earnings Release(In thousands unless otherwise noted) Three Months Ended March 31, Income Statement Data 2021 2020 Net interest income, fully tax $ 37,874 $ 32,494 equivalent (3)Interest income: Loans $ 37,000 $ 33,749 Federal funds sold and interest 66 531 bearing due from banksMortgage loans held for sale 64 61 Securities 2,388 2,541 Total interest income 39,518 36,882 Interest expense: Deposits 1,510 3,962 Securities sold under agreements to repurchase andother short-term borrowings 7 45 Federal Home Loan Bank (FHLB) 176 429 advancesTotal interest expense 1,693 4,436 Net interest income 37,825 32,446 Provision for credit losses (6) (1,475 ) 5,925 Net interest income after 39,300 26,521 provision for credit lossesNon-interest income: Wealth management and trust 6,248 6,218 servicesDeposit service charges 944 1,283 Debit and credit card income 2,273 1,980 Treasury management fees 1,540 1,284 Mortgage banking income 1,444 846 Net investment product sales 464 466 commissions and feesBank owned life insurance 161 179 Other 770 280 Total non-interest income 13,844 12,536 Non-interest expenses: Compensation 12,827 12,233 Employee benefits 3,261 3,167 Net occupancy and equipment 2,045 1,831 Technology and communication 2,346 2,063 Debit and credit card processing 705 656 Marketing and business 524 560 developmentPostage, printing and supplies 409 441 Legal and professional 862 623 FDIC Insurance 405 129 Amortization of investments in 31 36 tax credit partnershipsCapital and deposit based taxes 458 1,030 Other 1,100 806 Total non-interest expenses 24,973 23,575 Income before income tax expense 28,171 15,482 Income tax expense 5,461 2,250 Net income $ 22,710 $ 13,232 Net income per share - Basic $ 1.00 $ 0.59 Net income per share - Diluted 0.99 0.58 Cash dividend declared per share 0.27 0.27 Weighted average shares - Basic 22,622 22,516 Weighted average shares - 22,865 22,736 Diluted March 31, Balance Sheet Data 2021 2020 Loans $ 3,635,156 $ 2,937,366 Allowance for credit losses on 50,714 42,143 loansTotal assets 4,794,075 3,784,586 Non-interest bearing deposits 1,370,183 858,883 Interest bearing deposits 2,829,779 2,339,995 FHLB advances 24,180 69,191 Stockholders' equity 443,232 409,702 Total shares outstanding 22,781 22,665 Book value per share (1) $ 19.46 $ 18.08 Tangible common equity per share 18.82 17.43 (1)Market value per share 51.06 28.93 Stock Yards Bancorp, Inc.Financial Information (unaudited)First Quarter 2021 Earnings Release Three Months Ended March 31, Average Balance Sheet Data 2021 2020 Federal funds sold and interest $ 235,370 $ 168,563 bearing due from banksMortgage loans held for sale 14,618 4,953 Available for sale debt 661,175 449,610 securitiesFHLB stock 10,640 11,284 Loans 3,605,760 2,891,668 Total interest earning assets 4,527,563 3,526,078 Total assets 4,710,836 3,710,119 Interest bearing deposits 2,815,986 2,316,774 Total deposits 4,094,179 3,120,242 Securities sold under agreementto repurchase and other short 56,536 43,739 term borrowingsFHLB advances 29,270 73,939 Total interest bearing 2,901,792 2,434,452 liabilitiesTotal stockholders' equity 444,821 403,702 Performance Ratios Annualized return on average 1.96 % 1.43 % assetsAnnualized return on average 20.71 % 13.18 % equityNet interest margin, fully tax 3.39 % 3.71 % equivalentNon-interest income to total 26.77 % 27.84 % revenue, fully tax equivalentEfficiency ratio, fully tax 48.29 % 52.35 % equivalent (4) Capital Ratios Total stockholders' equity to 9.25 % 10.83 % total assets (1)Tangible common equity to 8.97 % 10.48 % tangible assets (1)Average stockholders' equity to 9.44 % 10.88 % average assetsTotal risk-based capital 13.39 % 12.75 % Common equity tier 1 risk-based 12.32 % 11.81 % capitalTier 1 risk-based capital 12.32 % 11.81 % Leverage 9.46 % 10.78 % Loan Segmentation Commercial real estate - $ 876,523 $ 799,284 non-owner occupiedCommercial real estate - owner 527,316 476,534 occupiedCommercial and industrial 769,773 883,868 Commercial and industrial - PPP 612,885 - Residential real estate - owner 262,516 219,221 occupiedResidential real estate - 136,380 134,734 non-owner occupiedConstruction and land 281,815 246,040 developmentHome equity lines of credit 91,233 107,121 Consumer 51,058 44,939 Leases 14,115 15,476 Credit cards - commercial 11,542 10,149 Total loans and leases $ 3,635,156 $ 2,937,366 Asset Quality Data Non-accrual loans $ 12,913 $ 4,235 Troubled debt restructurings 15 52 Loans past due 90 days or more 1,377 1,762 and still accruingTotal non-performing loans 14,305 6,049 Other real estate owned 281 493 Total non-performing assets $ 14,586 $ 6,542 Non-performing loans to total 0.39 % 0.21 % loans (2)Non-performing assets to total 0.30 % 0.17 % assetsAllowance for credit losses on 1.40 % 1.43 % loans to total loans (2)Allowance for credit losses on 1.41 % 1.46 % loans to average loansAllowance for credit losses on 355 % 697 % loans to non-performing loansNet (charge-offs) recoveries $ (6 ) $ (54 ) Net (charge-offs) recoveries to 0.00 % 0.00 % average loans (5)

Stock YardsBancorp, Inc.Financial Information(unaudited)First Quarter2021 Earnings Release Quarterly ComparisonIncome Statement 3/31/21 12/31/20 9/30/20 6/30/20 3/31/20Data Net interestincome, fully $ 37,874 $ 36,301 $ 33,768 $ 33,573 $ 32,494 tax equivalent(3)Net interest $ 37,825 $ 36,252 $ 33,695 $ 33,528 $ 32,446 incomeProvision forcredit losses (1,475 ) 500 4,968 7,025 5,925 (6)Net interestincome after 39,300 35,752 28,727 26,503 26,521 provision forcredit lossesNon-interest income:Wealthmanagement and 6,248 5,805 5,657 5,726 6,218 trust servicesDeposit service 944 1,080 998 800 1,283 chargesDebit and credit 2,273 2,219 2,218 2,063 1,980 card incomeTreasury 1,540 1,506 1,368 1,249 1,284 management feesMortgage banking 1,444 1,708 1,979 1,622 846 incomeNet investmentproduct sales 464 487 431 391 466 commissions andfeesBank owned life 161 166 172 176 179 insuranceOther 770 727 220 595 280 Totalnon-interest 13,844 13,698 13,043 12,622 12,536 incomeNon-interest expenses:Compensation 12,827 14,072 13,300 11,763 12,233 Employee 3,261 2,173 2,853 2,871 3,167 benefitsNet occupancy 2,045 2,137 2,177 2,037 1,831 and equipmentTechnology and 2,346 2,347 2,323 1,999 2,063 communicationDebit and credit 705 698 649 603 656 card processingMarketing andbusiness 524 835 523 465 560 developmentPostage,printing and 409 423 472 442 441 suppliesLegal and 862 597 544 628 623 professionalFDIC Insurance 405 323 435 330 129 Amortization ofinvestments in 31 2,955 52 53 36 tax creditpartnershipsCapital anddeposit based 458 1,055 1,076 1,225 1,030 taxesOther 1,100 1,414 1,242 993 806 Totalnon-interest 24,973 29,029 25,646 23,409 23,575 expensesIncome beforeincome tax 28,171 20,421 16,124 15,716 15,482 expenseIncome tax 5,461 2,685 1,591 2,348 2,250 expenseNet income $ 22,710 $ 17,736 $ 14,533 $ 13,368 $ 13,232 Net income per $ 1.00 $ 0.79 $ 0.64 $ 0.59 $ 0.59 share - BasicNet income per 0.99 0.78 0.64 0.59 0.58 share - DilutedCash dividenddeclared per 0.27 0.27 0.27 0.27 0.27 share Weighted average 22,622 22,593 22,582 22,560 22,516 shares - BasicWeighted average 22,865 22,794 22,802 22,739 22,736 shares - Diluted Quarterly ComparisonBalance Sheet 3/31/21 12/31/20 9/30/20 6/30/20 3/31/20Data Cash and due $ 43,061 $ 43,179 $ 49,517 $ 46,362 $ 47,662 from banksFederal fundssold and 289,920 274,766 241,486 178,032 206,849 interest bearingdue from banksMortgage loans 6,579 22,547 23,611 17,364 8,141 held for saleAvailable forsale debt 672,167 586,978 429,184 485,249 445,813 securitiesFHLB stock 10,228 11,284 11,284 11,284 11,284 Loans 3,635,156 3,531,596 3,472,481 3,464,077 2,937,366 Allowance forcredit losses on 50,714 51,920 50,501 47,708 42,143 loansTotal assets 4,794,075 4,608,629 4,365,129 4,334,533 3,784,586 Non-interest 1,370,183 1,187,057 1,180,001 1,205,253 858,883 bearing depositsInterest bearing 2,829,779 2,801,577 2,574,517 2,521,903 2,339,995 depositsSecurities soldunder agreements 51,681 47,979 40,430 42,722 32,366 to repurchaseFederal funds 8,642 11,464 9,179 8,401 9,747 purchasedFHLB advances 24,180 31,639 56,536 61,432 69,191 Stockholders' 443,232 440,701 428,598 420,231 409,702 equityTotal shares 22,781 22,692 22,692 22,667 22,665 outstandingBook value per $ 19.46 $ 19.42 $ 18.89 $ 18.54 $ 18.08 share (1)Tangible commonequity per share 18.82 18.78 18.25 17.89 17.43 (1)Market value per 51.06 40.48 34.04 40.20 28.93 share Capital Ratios Totalstockholders' 9.25 % 9.56 % 9.82 % 9.69 % 10.83 %equity to totalassets (1)Tangible commonequity to 8.97 % 9.28 % 9.52 % 9.39 % 10.48 %tangible assets(1)Averagestockholders' 9.44 % 9.61 % 9.85 % 9.66 % 10.88 %equity toaverage assetsTotal risk-based 13.39 % 13.36 % 13.79 % 13.50 % 12.75 %capitalCommon equitytier 1 12.32 % 12.23 % 12.61 % 12.39 % 11.81 %risk-basedcapitalTier 1risk-based 12.32 % 12.23 % 12.61 % 12.39 % 11.81 %capitalLeverage 9.46 % 9.57 % 9.70 % 9.50 % 10.78 % Stock YardsBancorp, Inc.Financial Information(unaudited)First Quarter2021 Earnings Release Quarterly ComparisonAverage Balance 3/31/21 12/31/20 9/30/20 6/30/20 3/31/20Sheet Data Federal fundssold and $ 235,370 $ 271,277 $ 194,100 $ 285,617 $ 168,563 interest bearingdue from banksMortgage loans 14,618 28,951 28,520 18,010 4,953 held for saleAvailable forsale debt 661,175 510,677 442,089 412,368 449,610 securitiesLoans 3,605,760 3,483,298 3,444,407 3,396,767 2,891,668 Total interest 4,527,563 4,305,487 4,120,400 4,124,046 3,526,078 earning assetsTotal assets 4,710,836 4,512,874 4,325,500 4,317,430 3,710,119 Interest bearing 2,815,986 2,689,103 2,521,838 2,500,315 2,316,774 depositsTotal deposits 4,094,179 3,888,247 3,707,845 3,713,451 3,120,242 Securities soldunder agreement 56,536 55,825 49,709 49,940 43,739 to repurchaseFHLB advances 29,270 48,771 59,487 63,896 73,939 Total interestbearing 2,901,792 2,793,699 2,631,034 2,614,151 2,434,452 liabilitiesTotalstockholders' 444,821 433,596 426,049 416,920 403,702 equity Performance RatiosAnnualizedreturn on 1.96 % 1.56 % 1.34 % 1.25 % 1.43 %average assetsAnnualizedreturn on 20.71 % 16.27 % 13.57 % 12.90 % 13.18 %average equityNet interestmargin, fully 3.39 % 3.35 % 3.26 % 3.27 % 3.71 %tax equivalentNon-interestincome to total 26.77 % 27.40 % 27.86 % 27.32 % 27.84 %revenue, fullytax equivalentEfficiencyratio, fully tax 48.29 % 58.06 % 54.79 % 50.67 % 52.35 %equivalent (4) Loans SegmentationCommercial realestate - $ 876,523 $ 833,470 $ 828,328 $ 815,464 $ 799,284 non-owneroccupiedCommercial realestate - owner 527,316 508,672 492,825 472,457 476,534 occupiedCommercial and 769,773 802,422 731,850 764,480 883,868 industrialCommercial and 612,885 550,186 642,056 630,082 - industrial - PPPResidential realestate - owner 262,516 239,191 211,984 215,891 219,221 occupiedResidential realestate - 136,380 140,930 143,149 139,121 134,734 non-owneroccupiedConstruction and 281,815 291,764 257,875 255,447 246,040 land developmentHome equity 91,233 95,366 97,150 103,672 107,121 lines of creditConsumer 51,058 44,606 44,161 43,758 44,939 Leases 14,115 14,786 13,981 14,843 15,476 Credit cards - 11,542 10,203 9,122 8,862 10,149 commercialTotal loans and $ 3,635,156 $ 3,531,596 $ 3,472,481 $ 3,464,077 $ 2,937,366 leases Asset Quality DataNon-accrual $ 12,913 $ 12,514 $ 12,358 $ 14,262 $ 4,235 loansTroubled debt 15 16 18 45 52 restructuringsLoans past due90 days or more 1,377 649 1,152 48 1,762 and stillaccruingTotalnon-performing 14,305 13,179 13,528 14,355 6,049 loansOther real 281 281 612 493 493 estate ownedTotalnon-performing $ 14,586 $ 13,460 $ 14,140 $ 14,848 $ 6,542 assetsNon-performingloans to total 0.39 % 0.37 % 0.39 % 0.41 % 0.21 %loans (2)Non-performingassets to total 0.30 % 0.29 % 0.32 % 0.34 % 0.17 %assetsAllowance forcredit losses on 1.40 % 1.47 % 1.45 % 1.38 % 1.43 %loans to totalloans (2)Allowance forcredit losses on 1.41 % 1.49 % 1.47 % 1.40 % 1.46 %loans to averageloansAllowance forcredit losses onloans to 355 % 394 % 373 % 332 % 697 %non-performingloansNet(charge-offs) $ (6 ) $ 19 $ (1,625 ) $ 15 $ (54 )recoveriesNet(charge-offs)recoveries to 0.00 % 0.00 % -0.05 % 0.00 % 0.00 %average loans(5) Other InformationTotal assetsunder management $ 3,989 $ 3,852 $ 3,414 $ 3,204 $ 2,961 (in millions)Full-timeequivalent 638 641 626 620 618 employees (1) - The following table provides a reconciliation of total stockholders?equity in accordance with U.S. Generally Accepted Accounting Principles(?GAAP?) to tangible stockholders? equity, a non-GAAP disclosure. Bancorpprovides the tangible book value per share, a non-GAAP measure, in addition tothose defined by banking regulators, because of its widespread use by investorsas a means to evaluate capital adequacy:

Quarterly Comparison(In thousands,except per share 3/31/21 12/31/20 9/30/20 6/30/20 3/31/20data) Totalstockholders' $ 443,232 $ 440,701 $ 428,598 $ 420,231 $ 409,702 equity - GAAP(a)Less: Goodwill (12,513 ) (12,513 ) (12,513 ) (12,513 ) (12,513 )Less: Coredeposit (1,885 ) (1,962 ) (2,042 ) (2,122 ) (2,203 )intangibleTangible commonequity - $ 428,834 $ 426,226 $ 414,043 $ 405,596 $ 394,986 Non-GAAP (c) Total assets - $ 4,794,075 $ 4,608,629 $ 4,365,129 $ 4,334,533 $ 3,784,586 GAAP (b)Less: Goodwill (12,513 ) (12,513 ) (12,513 ) (12,513 ) (12,513 )Less: Coredeposit (1,885 ) (1,962 ) (2,042 ) (2,122 ) (2,203 )intangibleTangible assets $ 4,779,677 $ 4,594,154 $ 4,350,574 $ 4,319,898 $ 3,769,870 - Non-GAAP (d) Totalstockholders'equity to total 9.25 % 9.56 % 9.82 % 9.69 % 10.83 %assets - GAAP (a/b)Tangible commonequity to 8.97 % 9.28 % 9.52 % 9.39 % 10.48 %tangible assets- Non-GAAP (c/d) Total shares 22,781 22,692 22,692 22,667 22,665 outstanding (e) Book value pershare - GAAP (a/ $ 19.46 $ 19.42 $ 18.89 $ 18.54 $ 18.08 e)Tangible commonequity per share 18.82 18.78 18.25 17.89 17.43 - Non-GAAP (c/e) (2) - Allowance for credit losses on loans to total non-PPP loans representsthe allowance for credit losses on loans, divided by total loans less PPPloans. Non-performing loans to total non-PPP loans represents non-performingloans, divided by total loans less PPP loans. Bancorp believes these non-GAAPdisclosures are important because they provide a comparable ratio aftereliminating the PPP loans, which are fully guaranteed by the U.S. SBA and havenot been allocated for within the allowance for credit losses on loans and arenot at risk of non-performance.

Quarterly Comparison(Dollars in 3/31/21 12/31/20 9/30/20 6/30/20 3/31/20thousands) Total Loans - $ 3,635,156 $ 3,531,596 $ 3,472,481 $ 3,464,077 $ 2,937,366 GAAP (a)Less: PPP loans (612,885 ) (550,186 ) (642,056 ) (630,082 ) - Total non-PPPLoans - Non-GAAP 3,022,271 2,981,410 2,830,425 2,833,995 2,937,366 (b) Allowance forcredit losses on $ 50,714 $ 51,920 $ 50,501 $ 47,708 $ 42,143 loans (c)Non-performing 14,305 13,179 13,528 14,355 6,049 loans (d) Allowance forcredit losses onloans to total 1.40 % 1.47 % 1.45 % 1.38 % 1.43 %loans - GAAP (c/a)Allowance forcredit losses onloans to total 1.68 % 1.74 % 1.78 % 1.68 % 1.43 %loans - Non-GAAP(c/b) Non-performingloans to total 0.39 % 0.37 % 0.39 % 0.41 % 0.21 %loans - GAAP (d/a)Non-performingloans to total 0.47 % 0.44 % 0.48 % 0.51 % 0.21 %loans - Non-GAAP(d/b) (3) - Interest income on a FTE basis includes the additional amount of interestincome that would have been earned if investments in certain tax-exemptinterest earning assets had been made in assets subject to federal, state andlocal taxes yielding the same after-tax income. (4) - The efficiency ratio, a non-GAAP measure, equals total non-interestexpenses divided by the sum of net interest income (FTE) and non-interestincome. The ratio excludes net gains (losses) on sales, calls, and impairmentof investment securities, if applicable. In addition to the efficiency ratiopresented, Bancorp considers an adjusted efficiency ratio to be importantbecause it provides a comparable ratio after eliminating the fluctuation innon-interest expenses related to amortization of investments in tax creditpartnerships. The calculations below reflect the reclassification of creditloss expense for off-balance sheet exposures from non-interest expense toprovision for credit losses, as described in footnote 6 below.

Quarterly Comparison(Dollars in 3/31/21 12/31/20 9/30/20 6/30/20 3/31/20thousands) Totalnon-interest $ 24,973 $ 29,029 $ 25,646 $ 23,409 $ 23,575 expenses - GAAP(a)Less:Amortization ofinvestments in (31 ) (2,955 ) (52 ) (53 ) (36 )tax creditpartnershipsTotalnon-interest $ 24,942 $ 26,074 $ 25,594 $ 23,356 $ 23,539 expenses -Non-GAAP (c) Total netinterest income, $ 37,874 $ 36,301 $ 33,768 $ 33,573 $ 32,494 fully taxequivalentTotalnon-interest 13,844 13,698 13,043 12,622 12,536 incomeLess: Gain/losson sale of - - - - - securitiesTotal revenue - $ 51,718 $ 49,999 $ 46,811 $ 46,195 $ 45,030 GAAP (b) Efficiency ratio 48.29 % 58.06 % 54.79 % 50.67 % 52.35 %- GAAP (a/b)Efficiency ratio 48.23 % 52.15 % 54.68 % 50.56 % 52.27 %- Non-GAAP (c/b) (5) - Quarterlynet(charge-offs)recoveries to average loansratios are notannualized. (6) - Effective for the three month period ended March 31, 2020, the Companyhas reclassified credit loss expense for off-balance sheet exposures fromnon-interest expense to provision for credit losses and combined this with theprovision for losses on loans on the face of the income statement. Theefficiency ratios and adjusted efficiency ratios calculated above in footnote 4reflect this reclassification.

Quarterly Comparison(in thousands) 3/31/21 12/31/20 9/30/20 6/30/20 3/31/20 Provision forcredit losses - $ (1,200 ) $ 1,400 $ 4,418 $ 5,550 $ 5,550 loansProvision forcredit losses - (275 ) (900 ) 550 1,475 375 off balancesheet exposuresTotal provisionfor credit (1,475 ) 500 4,968 7,025 5,925 losses

Contact: T. Clay StinnettExecutive Vice President, Treasurer and Chief Financial Officer(502) 625-0890