Stock Yards Bancorp | research notes

Stock Yards Bancorp: A Community Banking Powerhouse in the Midwest

Introduction

Stock Yards Bancorp, Inc. (NASDAQ: SYBT) is a leading financial institution headquartered in Louisville, Kentucky. With over $2 billion in assets, Stock Yards Bancorp operates a network of 16 full-service banking branches and three mortgage lending offices in Kentucky, Indiana, and Tennessee.

History and Founding

Stock Yards Bancorp was founded in 1903 as the South Side Deposit Bank in Louisville's Stock Yards neighborhood. In 1971, it became Stock Yards Bank & Trust Company, and in 1999, it merged with Liberty National Bancorp to form Stock Yards Bancorp, Inc.

Community Focus

Stock Yards Bancorp prides itself on its strong community ties. The company is committed to supporting local businesses, organizations, and individuals. It actively participates in community events, contributes to charitable causes, and provides financial education programs.

Banking Services

Stock Yards Bancorp offers a comprehensive range of banking products and services, including:

• Personal and business checking and savings accounts
• Certificates of deposit and money market accounts
• Commercial and real estate lending
• Credit cards and debit cards
• Online and mobile banking
• Investment and financial planning services

Financial Performance

Stock Yards Bancorp has consistently maintained a strong financial performance. The company has grown its earnings and assets steadily over the years. In 2022, Stock Yards Bancorp reported record net income of $24.6 million.

Expansion and Growth

Stock Yards Bancorp has a strategic expansion plan to enhance its market presence. In recent years, it has acquired several banks and loan portfolios, including Farmers State Bank of Union County in 2021. The company is also actively looking for new branch locations to expand its reach.

Investment Considerations

Stock Yards Bancorp's stock is publicly traded on the NASDAQ exchange. Investors may find the company attractive due to its:

• Strong financial performance
• Conservative lending practices
• Community-focused approach
• Growth potential through expansion

Conclusion

Stock Yards Bancorp is a well-respected and financially sound community banking institution in the Midwest. With its strong commitment to serving its customers and communities, the company is well-positioned for continued growth and success in the years to come.

Business Model of Stock Yards Bancorp

Stock Yards Bancorp is a multi-state bank holding company that primarily focuses on commercial banking services in the Midwest. Its business model involves:

• Commercial Banking: Providing a range of lending, deposit, cash management, and other banking services to small and mid-sized businesses.
• Mortgage Banking: Originating and servicing residential and commercial mortgages.
• Wealth Management: Offering investment advisory and wealth planning services to individuals and businesses.
• Other Financial Services: Including insurance, merchant processing, and equipment leasing.

Advantages over Competitors

Stock Yards Bancorp enjoys several advantages over its competitors:

• Local Focus and Expertise: The company has a strong presence in the Midwest, with branches in Indiana, Illinois, Michigan, and Wisconsin. Its local knowledge and relationships with businesses and communities give it a competitive edge.
• Customer-Centric Approach: Stock Yards Bancorp prioritizes customer satisfaction and tailors its banking solutions to meet the specific needs of its clients.
• Strong Financial Performance: The company has a history of consistent financial performance, with strong earnings, asset quality, and capital ratios.
• Digital Banking Capabilities: Stock Yards Bancorp offers a robust suite of digital banking services, including online and mobile banking, remote deposit capture, and mobile payments.
• Community Involvement: The company is actively involved in supporting local businesses, organizations, and initiatives, which enhances its reputation and builds trust with customers.
• Data Analytics and Technology: Stock Yards Bancorp uses data analytics and technology to gain insights into customer behavior, identify growth opportunities, and improve its risk management practices.
• Acquisition Strategy: The company has a history of acquiring smaller banks to expand its geographic reach and customer base.

These advantages enable Stock Yards Bancorp to differentiate itself in the competitive banking market and build a loyal customer base.

Stock Yards Bancorp, Inc.

Business Overview

Stock Yards Bancorp, Inc. (SYBT) is a bank holding company with headquarters in Chicago, Illinois. Its primary subsidiary, Stock Yards Bank & Trust Company, provides a range of financial services to individuals, businesses, and municipalities throughout the Chicago metropolitan area and surrounding counties in Illinois, Indiana, and Wisconsin.

Financial Performance

Stock Yards Bancorp has a strong financial track record, characterized by consistent profitability and stable growth. Key financial highlights from the company's recent annual report include:

• Total assets: $2.4 billion
• Net income: $47.4 million
• Return on assets (ROA): 1.03%
• Return on equity (ROE): 10.2%
• Net interest margin: 3.58%

Outlook

Strengths:

• Strong local market presence: Stock Yards Bank & Trust Company has a long-standing presence in the Chicago metropolitan area, with 23 branches and additional loan production offices.
• Diversified loan portfolio: The company's loan portfolio is balanced across commercial, residential, and consumer lending, reducing risk.
• Strong customer satisfaction: Stock Yards Bank & Trust Company consistently receives high marks for customer service.
• Efficient operations: The company has a well-controlled cost structure, enabling it to maintain healthy profitability.

Opportunities:

• Expansion into neighboring markets: Stock Yards Bancorp has the potential to expand its footprint into neighboring counties and states through acquisitions or organic growth.
• Increased lending activity: Economic growth in the Chicago metropolitan area and surrounding regions provides opportunities for increased loan demand.
• Technology advancements: The company can leverage technology to improve its customer experience and efficiency.

Challenges:

• Competition: Stock Yards Bancorp faces competition from larger regional banks and national financial institutions.
• Regulatory environment: The banking industry is subject to a complex and evolving regulatory landscape, which can increase compliance costs and affect business operations.
• Interest rate dynamics: Changes in interest rates can impact the company's net interest margin and profitability.

Analyst Consensus

Analysts have a positive outlook on Stock Yards Bancorp. The consensus analyst rating is "Buy," with an average price target of $35 per share, which represents an upside potential of approximately 15% from current levels (as of February 2023).

Overall Assessment

Stock Yards Bancorp is a well-positioned community bank with a strong financial foundation and opportunities for continued growth. Its presence in a growing market, diversified loan portfolio, and commitment to customer service provide a solid platform for future success. However, the company faces competition and regulatory challenges that it must navigate effectively to maintain its strong performance.

Similar Companies to Stock Yards Bancorp

1. First Midwest Bancorp (FMBI)

• Homepage: https://www.firstmidwest.com/
• Why customers may like it: Large regional bank with a strong financial track record and a commitment to community banking. Offers a wide range of financial products and services, including personal and business banking, wealth management, and insurance.

2. Old National Bancorp (ONB)

• Homepage: https://www.oldnational.com/
• Why customers may like it: Mid-sized bank with a focus on Indiana, Kentucky, and Michigan. Known for its strong lending relationships and commitment to customer service. Offers a full suite of banking products and services.

3. BMO Harris Bank (BMO)

• Homepage: https://www.bmoharris.com/
• Why customers may like it: One of the largest banks in the United States, with a strong presence in the Midwest. Offers a wide range of financial services, including personal and business banking, wealth management, and investment banking.

4. Huntington Bancshares (HBAN)

• Homepage: https://www.huntington.com/
• Why customers may like it: Regional bank with a focus on Ohio, Michigan, and other states in the Midwest. Known for its financial strength and commitment to community banking. Offers a variety of financial products and services.

5. Fifth Third Bancorp (FITB)

• Homepage: https://www.53.com/
• Why customers may like it: Large regional bank with a focus on the Midwest and Southeast. Offers a broad range of financial products and services, including retail banking, commercial banking, and wealth management.

6. PNC Financial Services Group (PNC)

• Homepage: https://www.pnc.com/
• Why customers may like it: One of the largest banks in the United States, with a wide range of financial services, including consumer banking, corporate and institutional banking, and wealth management. Known for its innovative products and strong customer service.

Stock Yards Bancorp History

1893:

• Stock Yards Savings Bank is established in the Union Stock Yards district of Chicago.

1901:

• The bank becomes a state-chartered bank.

1912:

• The bank opens its first branch outside of the Stock Yards district.

1920s:

• Stock Yards Savings Bank expands rapidly, opening branches throughout Chicago and the surrounding suburbs.

1930s:

• The bank suffers during the Great Depression, but remains solvent.

1950s and 1960s:

• Stock Yards Savings Bank continues to expand its operations and acquires several smaller banks.

1970s:

• The bank rebrands as Stock Yards Savings and Loan Association.
• The bank faces financial challenges due to rising interest rates and the savings and loan crisis.

1980s:

• Stock Yards Savings and Loan Association is acquired by Old Kent Financial Corporation.

1990s:

• Old Kent Financial Corporation acquires Citizens Banking Corporation and rebrands as Fifth Third Bancorp.

2000s:

• Fifth Third Bancorp expands its operations into new markets, including Kentucky, Michigan, and Ohio.
• The bank acquires several other banks, including LaSalle Bank and Old National Bancorp.

2010s:

• Fifth Third Bancorp continues to acquire smaller banks and expand its market share.

2020s:

• In 2023, Fifth Third Bancorp acquires State Bank Financial Corporation.

Today, Stock Yards Bancorp operates as a wholly-owned subsidiary of Fifth Third Bancorp, providing financial services to individuals and businesses in the Midwest and Southeast regions of the United States.

2023

• January:
  • Stock Yards Bancorp reports 4Q22 net income of $37.4 million, with record EPS of $1.10
  • Company announces plan to open new loan production office in Fort Wayne, Indiana

2022

• October:
  • Stock Yards Bancorp completes acquisition of Old National Bancorp, expanding its footprint into Indiana and Michigan
• July:
  • Company announces plans to acquire Old National Bancorp in a $1.3 billion deal
• April:
  • Stock Yards Bancorp reports 1Q22 net income of $33.1 million, up 15% year-over-year

2021

• December:
  • Stock Yards Bancorp reports 4Q21 net income of $29.7 million, up 23% year-over-year
• October:
  • Company acquires Capital Bank & Trust, strengthening its presence in Kentucky
• July:
  • Stock Yards Bancorp completes offering of $150 million in common stock

Exceptional Banking Experience with Stock Yards Bancorp

As a long-time customer of Stock Yards Bancorp, I am delighted to share my overwhelmingly positive experience with this exceptional financial institution. From the moment I opened my account, I have been consistently impressed by their unwavering commitment to customer satisfaction.

Personalized Service with a Personal Touch

Stock Yards Bancorp truly understands the importance of personalized banking. My dedicated relationship manager, [Relationship Manager's Name], has always gone above and beyond to meet my financial needs. They take the time to get to know me and provide tailored advice and solutions that align with my specific goals.

Innovative Banking Products and Services

This bank offers a comprehensive suite of banking products and services that cater to every aspect of my financial life. From checking and savings accounts with competitive interest rates to convenient mobile banking and online bill pay, I have seamless access to my finances at my fingertips.

Cutting-Edge Technology and Security

Stock Yards Bancorp embraces the latest technology to provide customers with a secure and user-friendly banking experience. Their mobile app is intuitive and feature-rich, allowing me to manage my accounts, make payments, and view my transaction history with ease. I also feel confident knowing that my financial information is protected by industry-leading security measures.

Community Involvement and Support

Beyond banking services, Stock Yards Bancorp actively participates in the communities it serves. They support local businesses, host financial literacy workshops, and contribute to charitable causes. Their commitment to giving back demonstrates their passion for making a positive impact.

A True Partner in Financial Well-being

Throughout my journey with Stock Yards Bancorp, I have always felt supported and empowered in managing my finances. Their team of knowledgeable professionals has provided me with sound guidance and has helped me achieve my financial goals.

5-Star Recommendation

Without hesitation, I highly recommend Stock Yards Bancorp to anyone seeking a banking experience that exceeds expectations. Their exceptional service, innovative products, and unwavering commitment to customer satisfaction make them the ideal choice for all your financial needs.

Unlock Financial Empowerment with Stock Yards Bancorp

Are you seeking a trusted financial partner to guide you towards a secure and prosperous financial future? Look no further than Stock Yards Bancorp.

Your Gateway to Exceptional Banking

At Stock Yards Bancorp, we are committed to providing our customers with a comprehensive suite of banking solutions tailored to their unique needs:

• Personal Banking: Manage your daily finances seamlessly with checking and savings accounts, debit cards, and mobile banking.
• Business Banking: Empower your business with tailored solutions, including commercial loans, treasury services, and cash management.
• Wealth Management: Secure your financial legacy and achieve your investment goals with our expert wealth management services.
• Trust and Estate: Preserve and manage your assets for the benefit of future generations with our comprehensive trust and estate planning services.

Our Commitment to You

We believe in building long-lasting relationships with our customers. That's why we go above and beyond to:

• Provide personalized service: Our dedicated team of financial professionals will work closely with you to understand your unique situation and create customized solutions.
• Foster financial literacy: We offer educational resources and workshops to empower our customers with the knowledge they need to make informed financial decisions.
• Support our community: Stock Yards Bancorp is deeply rooted in our community, and we are committed to giving back through volunteerism and charitable donations.

Experience the Stock Yards Bancorp Difference

Join the growing number of individuals and businesses who trust Stock Yards Bancorp for their financial well-being. Visit our website today to:

• Learn more about our products and services
• Open an account
• Schedule a consultation with a financial advisor

Unlock Your Financial Potential Today

Don't wait any longer to take control of your financial future. Visit the Stock Yards Bancorp website now:

[Stock Yards Bancorp Website Link]

Main Supplier (Upstream Service Provider) of Stock Yards Bancorp

Stock Yards Bancorp, Inc. (NASDAQ: SYBT) is a bank holding company headquartered in Louisville, Kentucky. The company's primary business is providing banking and financial services to individuals, businesses, and government entities in Kentucky, Indiana, and Ohio.

The main supplier (upstream service provider) of Stock Yards Bancorp is FIS (NYSE: FIS). FIS is a global provider of financial technology solutions, including core banking systems, payments processing, and risk management. FIS provides Stock Yards Bancorp with a range of services, including:

• Core banking system: FIS provides Stock Yards Bancorp with its core banking system, which is the central platform for managing customer accounts, transactions, and other banking operations.
• Payments processing: FIS provides Stock Yards Bancorp with its payments processing services, which enable the bank to process electronic payments, such as ACH transfers, wire transfers, and debit card transactions.
• Risk management: FIS provides Stock Yards Bancorp with its risk management services, which help the bank to identify, assess, and manage financial risks.

FIS is a major supplier to Stock Yards Bancorp and plays a critical role in the bank's ability to provide banking and financial services to its customers.

Website:

• FIS: https://www.fisglobal.com/

Stock Yards Bancorp's main customer base consists of small and medium-sized businesses, as well as consumers in the Louisville, Kentucky metropolitan area. The company's loan portfolio is primarily focused on commercial and industrial loans, with a significant portion of its deposits coming from consumer savings and checking accounts.

Here are some of the main customer segments of Stock Yards Bancorp:

Small and Medium-Sized Businesses (SMBs): SMBs are a major target market for Stock Yards Bancorp. The company offers a range of financial products and services tailored to the needs of SMBs, including business loans, lines of credit, and cash management services.

Consumers: Stock Yards Bancorp also serves a large number of consumers in the Louisville area. The company offers a variety of consumer banking products and services, including checking and savings accounts, mortgages, and personal loans.

Non-Profit Organizations: Stock Yards Bancorp has a strong commitment to supporting non-profit organizations in the Louisville community. The company provides financial products and services to a variety of non-profit organizations, including loans, lines of credit, and deposit accounts.

Here are some examples of Stock Yards Bancorp's customers:

• Norton Healthcare: A large healthcare provider in the Louisville area.
• University of Louisville: A major research university in Louisville.
• KFC: A global fast-food chain headquartered in Louisville.
• Brown-Forman: A leading spirits and wine company based in Louisville.
• Louisville Water Company: The public water utility for the Louisville area.

Stock Yards Bancorp's website is https://www.stockyardsbancorp.com/.

Key Revenue Streams of Stock Yards Bancorp, Inc.

1. Net Interest Income

• Description: Difference between interest earned on loans and investments and interest paid on deposits and borrowings.
• Estimated Annual Revenue: $109.6 million (2023)

2. Loan Fee Income

• Description: Fees charged for originating, processing, and servicing loans.
• Estimated Annual Revenue: $17.0 million (2023)

3. Service Charges on Deposit Accounts

• Description: Fees charged to customers for maintaining deposit accounts, such as monthly maintenance fees and overdraft fees.
• Estimated Annual Revenue: $11.5 million (2023)

4. Trust and Investment Services

• Description: Fees and commissions earned from managing trust accounts, advising clients, and providing investment services.
• Estimated Annual Revenue: $7.1 million (2023)

5. Mortgage Banking

• Description: Income generated from originating, servicing, and selling residential and commercial mortgages.
• Estimated Annual Revenue: $4.3 million (2023)

6. Insurance

• Description: Commissions earned from selling insurance products to customers through partnerships with insurance companies.
• Estimated Annual Revenue: $2.4 million (2023)

7. Other Income

• Description: Income from non-core activities, such as gains on investments and foreign exchange transactions.
• Estimated Annual Revenue: $4.7 million (2023)

Total Estimated Annual Revenue for 2023: $156.6 million

Key Partners of Stock Yards Bancorp, Inc.

Stock Yards Bancorp, Inc. (NASDAQ: SYBT) is a bank holding company headquartered in Louisville, Kentucky. The company's primary subsidiary is Stock Yards Bank & Trust Company. Stock Yards Bancorp has a network of over 20 banking centers in Kentucky and Indiana.

Stock Yards Bancorp's key partners include:

• Independent Community Bankers of America (ICBA): ICBA is a trade association that represents community banks in the United States. Stock Yards Bancorp is a member of ICBA and participates in its advocacy and education programs.
• Federal Deposit Insurance Corporation (FDIC): The FDIC is a federal agency that insures deposits up to $250,000 at FDIC-member banks. Stock Yards Bancorp is a member of the FDIC and its deposits are insured up to the maximum amount allowed by law.
• Federal Reserve Bank of St. Louis (FRB-St. Louis): The FRB-St. Louis is one of 12 regional Federal Reserve Banks in the United States. Stock Yards Bancorp is a member of the FRB-St. Louis and participates in its monetary policy and economic development programs.
• Kentucky Bankers Association (KBA): The KBA is a trade association that represents banks in Kentucky. Stock Yards Bancorp is a member of the KBA and participates in its advocacy and education programs.
• Indiana Bankers Association (IBA): The IBA is a trade association that represents banks in Indiana. Stock Yards Bancorp is a member of the IBA and participates in its advocacy and education programs.

These key partners provide Stock Yards Bancorp with a number of benefits, including:

• Access to industry resources and expertise
• Advocacy on legislative and regulatory issues
• Education and training opportunities
• Networking opportunities
• Insurance and other financial products and services

Stock Yards Bancorp's key partners are an essential part of the company's success. By working together, these partners help Stock Yards Bancorp to provide its customers with the best possible banking experience.

Websites:

• Stock Yards Bancorp, Inc.
• Independent Community Bankers of America
• Federal Deposit Insurance Corporation
• Federal Reserve Bank of St. Louis
• Kentucky Bankers Association
• Indiana Bankers Association

Stock Yards Bancorp, Inc.

Key Cost Structure

Stock Yards Bancorp, Inc. (NASDAQ: SYBT) is a bank holding company that provides a range of financial products and services to individuals, small businesses, and corporations in the Chicago metropolitan area. The company's key cost structure includes:

1. Interest Expense

Interest expense is the cost of borrowing money from depositors and other lenders. It is the largest expense for Stock Yards Bancorp, accounting for approximately 50% of total expenses. In 2021, the company's interest expense was $139.9 million.

2. Salaries and Benefits

Salaries and benefits are the second-largest expense for Stock Yards Bancorp, accounting for approximately 25% of total expenses. In 2021, the company's salaries and benefits expense was $70.1 million.

3. Occupancy Expense

Occupancy expense includes the cost of rent, utilities, and maintenance for the company's offices and branches. It is the third-largest expense for Stock Yards Bancorp, accounting for approximately 10% of total expenses. In 2021, the company's occupancy expense was $28.0 million.

4. Other Operating Expenses

Other operating expenses include a variety of costs, such as marketing, technology, and legal expenses. It is the fourth-largest expense for Stock Yards Bancorp, accounting for approximately 15% of total expenses. In 2021, the company's other operating expenses were $42.3 million.

Estimated Annual Cost

The total estimated annual cost for Stock Yards Bancorp's key cost structure is approximately $280.3 million. This estimate is based on the company's 2021 financial statements and assumes that its cost structure will remain relatively stable in the future.

Additional Information

In addition to its key cost structure, Stock Yards Bancorp also incurs a number of other costs, such as taxes, loan losses, and FDIC assessments. These costs are not included in the key cost structure above, but they can have a significant impact on the company's profitability.

Sales Channels

Stock Yards Bancorp, Inc. (SYB) is a bank holding company headquartered in Louisville, Kentucky. SYB's primary sales channels are:

Branch Locations:

• SYB operates 51 branch locations in Kentucky, Indiana, and Ohio.
• Branches provide a full range of banking services, including retail and commercial lending, deposit accounts, and financial planning.
• Estimated annual sales through branches: $1.5 billion

Online and Mobile Banking:

• SYB offers online and mobile banking services to its customers.
• Customers can access their accounts, make transactions, and apply for loans and other services remotely.
• Estimated annual sales through online and mobile banking: $750 million

Commercial Lending:

• SYB provides commercial lending services to businesses of all sizes.
• Loans include term loans, lines of credit, and equipment financing.
• Estimated annual sales through commercial lending: $1 billion

Investment Services:

• SYB offers investment services through its subsidiary, Stock Yards Investment Services.
• Services include brokerage, financial planning, and asset management.
• Estimated annual sales through investment services: $500 million

Other Sales Channels:

• Mortgage Lending: SYB provides mortgage lending services through its subsidiary, Stock Yards Mortgage Company.
• Insurance Services: SYB offers insurance products, such as homeowners, auto, and life insurance, through its subsidiary, Stock Yards Insurance Agency.
• Trust Services: SYB provides trust and estate planning services through its subsidiary, Stock Yards Trust Company.

Estimated Total Annual Sales

Based on the estimated sales figures for each sales channel, the total estimated annual sales for Stock Yards Bancorp, Inc. are approximately $3.75 billion.

Customer Segments of Stock Yards Bancorp, Inc.

Stock Yards Bancorp, Inc. is a bank holding company with approximately $3.9 billion in assets and 51 banking centers across Illinois, Indiana, Wisconsin, and Iowa. The company offers a range of banking and financial services to individuals, businesses, and municipalities.

Stock Yards Bancorp's customer segments include:

• Consumers: This segment includes individuals who use the company's banking services for personal purposes, such as checking and savings accounts, loans, and mortgages. Consumers represent the largest customer segment for Stock Yards Bancorp, accounting for approximately 60% of total revenue.
• Small businesses: This segment includes businesses with annual revenue of less than $10 million. Stock Yards Bancorp offers a range of products and services to small businesses, including business checking and savings accounts, loans, and lines of credit. Small businesses represent approximately 25% of total revenue.
• Commercial businesses: This segment includes businesses with annual revenue of $10 million or more. Stock Yards Bancorp provides commercial businesses with a range of products and services, including corporate banking, treasury management, and commercial loans. Commercial businesses represent approximately 15% of total revenue.

Estimated Annual Sales by Customer Segment

Based on the company's financial statements, the estimated annual sales by customer segment for 2022 are as follows:

• Consumers: $2.3 billion
• Small businesses: $950 million
• Commercial businesses: $575 million

Total Estimated Annual Sales: $3.825 billion

It is important to note that these estimates are based on the company's financial statements and may not reflect the actual sales for 2022. The company's actual sales may vary depending on a number of factors, including economic conditions, interest rates, and competition.

Value Proposition of Stock Yards Bancorp

Stock Yards Bancorp, Inc. is a bank holding company that provides banking services to individuals and businesses in the Chicago metropolitan area. The company's value proposition is based on its:

• Strong customer focus: Stock Yards Bancorp is committed to providing its customers with a high level of personal service. The company's employees are knowledgeable and experienced, and they are always willing to go the extra mile to help customers meet their financial needs.
• Wide range of products and services: Stock Yards Bancorp offers a wide range of products and services to meet the needs of its customers. These products and services include:
  • Personal banking: Checking accounts, savings accounts, money market accounts, certificates of deposit, and personal loans.
  • Business banking: Business checking accounts, business savings accounts, business money market accounts, commercial loans, and lines of credit.
  • Wealth management: Investment management, financial planning, and trust services.
• Competitive rates: Stock Yards Bancorp offers competitive rates on its products and services. The company's rates are always competitive with other banks in the Chicago metropolitan area.
• Convenient locations: Stock Yards Bancorp has a network of convenient locations throughout the Chicago metropolitan area. The company's locations are easy to access and offer a variety of services.
• Strong financial performance: Stock Yards Bancorp is a financially strong company. The company has a history of profitability and growth.

Benefits of Banking with Stock Yards Bancorp

There are many benefits to banking with Stock Yards Bancorp. These benefits include:

• Personal service: Stock Yards Bancorp's employees are committed to providing its customers with a high level of personal service.
• Wide range of products and services: Stock Yards Bancorp offers a wide range of products and services to meet the needs of its customers.
• Competitive rates: Stock Yards Bancorp offers competitive rates on its products and services.
• Convenient locations: Stock Yards Bancorp has a network of convenient locations throughout the Chicago metropolitan area.
• Strong financial performance: Stock Yards Bancorp is a financially strong company.

Stock Yards Bancorp, Inc. (NASDAQ: SYBT)

Company Overview:

Stock Yards Bancorp, Inc. is a bank holding company headquartered in Louisville, Kentucky. It operates through its primary subsidiary, Stock Yards Bank & Trust Company, which provides a range of banking services to individuals, businesses, and government entities in Kentucky and Indiana.

Risk Factors:

Credit Risk:

• Concentration of Commercial Loans: The bank has a significant concentration of commercial loans, which exposes it to the risk of loss in the event of a downturn in the local economy.
• Exposure to Nonperforming Loans: The bank has experienced an increase in nonperforming loans, which could lead to further losses and impact its financial performance.
• Credit Deterioration: Economic downturns or changes in industry conditions could lead to credit deterioration and an increase in loan losses.

Market Risk:

• Interest Rate Risk: The bank's earnings and capital are sensitive to changes in interest rates. Rising interest rates could reduce net interest margin and increase funding costs.
• Equity Market Risk: The bank has exposure to equity market risk through its investment portfolio and its publicly traded common stock. Fluctuations in equity markets could impact its financial results.

Operational Risk:

• Cybersecurity Threats: The bank faces increasing cybersecurity threats, which could lead to data breaches, financial losses, and reputational damage.
• Compliance Risk: The bank is subject to numerous regulatory requirements, and failure to comply could result in penalties, fines, or other sanctions.
• Technology Risk: The bank's reliance on technology systems exposes it to operational risks, including system outages, software errors, and infrastructure failures.

Liquidity Risk:

• Deposit Fluctuations: The bank's deposits are subject to fluctuations, which could affect its liquidity position.
• Loan Demand: Declining loan demand or an inability to meet customer needs could reduce the bank's earnings and impact its financial stability.

Other Risk Factors:

• Competition: The bank operates in a competitive banking market, which could put pressure on its margins and market share.
• Regulatory Environment: Changes in the regulatory environment, including new laws and regulations, could impact the bank's operations and financial performance.
• Economic Conditions: Economic downturns or slowdowns could negatively impact the bank's credit quality, earnings, and capital levels.

Mitigation Strategies:

Stock Yards Bancorp takes steps to mitigate these risks, including:

• Diversifying its loan portfolio
• Maintaining adequate loan loss reserves
• Implementing robust cybersecurity measures
• Complying with all applicable regulations
• Monitoring market conditions and adjusting its strategies accordingly
• Maintaining sufficient liquidity and capital levels