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What changed in Stock Yards Bancorp, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Stock Yards Bancorp, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+385 added−413 removedSource: 10-K (2026-02-26) vs 10-K (2025-02-27)

Top changes in Stock Yards Bancorp, Inc.'s 2025 10-K

385 paragraphs added · 413 removed · 273 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeWe continuously manage our cost structure and refine our internal processes and technology to create further efficiencies with the goal of enhancing our earnings, while maximizing the overall customer experience. Our efficiency ratio (FTE) for the years ended December 31, 2024, 2023 and 2022 was 56.20%, 55.23% and 59.30%, respectively.
Biggest changeContinue to manage costs and improve efficiency – We believe that conservative cost management and focus on operational efficiency is critical to our success. We continuously manage our cost structure and refine our internal processes and technology to create further efficiencies with the goal of enhancing our earnings, while maximizing the overall customer experience.
SYB, established in 1904, 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. The Bank is registered with, and subject to supervision, regulation and examination by the FDIC and the Kentucky Department of Financial Institutions.
SYB, established in 1904, 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 75 full service banking center locations. The Bank is registered with, and subject to supervision, regulation and examination by the FDIC and the Kentucky Department of Financial Institutions.
We were honored to be one of only 90 banks in the country to make the list for 2024. Further, we also periodically publish a Corporate Responsibility report. We believe it provides important information on our operations and insight to management’s priorities.
We were honored to be one of only 90 banks in the country to make the list for 2025. Further, we also periodically publish a Corporate Responsibility report. We believe it provides important information on our operations and insight to management’s priorities.
We prohibit discrimination in hiring or advancement against any individual on the basis of race, color, religion, gender, sex, national origin, age, marital status, pregnancy, mental disability, genetics, veteran status, sexual orientation, or any other characteristic protected by applicable law. At December 31, 2024, the Bank had 1,080 full-time equivalent employees.
We prohibit discrimination in hiring or advancement against any individual on the basis of race, color, religion, gender, sex, national origin, age, marital status, pregnancy, mental disability, genetics, veteran status, sexual orientation, or any other characteristic protected by applicable law. At December 31, 2025, the Bank had 1,123 full-time equivalent employees.
As a testament to the strong culture, inclusive environment and numerous benefits Bancorp is committed to providing its employees, in November of 2024, we were recognized by American Banker as one of the “Best Banks to Work For,” for the fourth consecutive year. This program evaluates employee satisfaction, as well as the policies and employee benefits of each institution.
As a testament to the strong culture, inclusive environment and numerous benefits Bancorp is committed to providing its employees, in November of 2025, we were recognized by American Banker as one of the “Best Banks to Work For,” for the fifth consecutive year. This program evaluates employee satisfaction, as well as the policies and employee benefits of each institution.
Non-interest income represented 27% of total revenues for the year ended December 31, 2024, compared to 27% and 28% for the years ended December 31, 2023 and 2022, respectively, demonstrating the value of the diversified revenue streams created by our broad product offerings in addition to income provided by the principal banking activities described above.
Non-interest income represented 24% of total revenues for the year ended December 31, 2025, compared to 27% for both the years ended December 31, 2024 and 2023, respectively, demonstrating the value of the diversified revenue streams created by our broad product offerings in addition to income provided by the principal banking activities described above.
Net interest income accounted for 73% of our total revenues, defined as net interest income plus non-interest income, for the year ended December 31, 2024, compared to 73% and 72% for the years ended December 31, 2023 and 2022, respectively. Fee income, or non-interest income, is a significant component of our business.
Net interest income accounted for 76% of our total revenues, defined as net interest income plus non-interest income, for the year ended December 31, 2025, compared to 73% for both the years ended December 31, 2024 and 2023, respectively. Fee income, or non-interest income, is a significant component of our business.
Bancorp is divided into two reportable segments: Commercial Banking and WM&T: Commercial Banking provides a full range of loan and deposit products to individual consumers and businesses in all its markets through retail lending, mortgage banking, deposit services, online banking, mobile banking, private banking, commercial lending, commercial real estate lending, leasing, treasury management services, merchant services, international banking, correspondent banking, credit card services and other banking services.
Commercial Banking and WM&T: Commercial Banking provides a full range of loan and deposit products to individual consumers and businesses in all its markets through retail lending, mortgage banking, deposit services, online banking, mobile banking, private banking, commercial lending, commercial real estate lending, leasing, treasury management services, merchant services, international banking, correspondent banking, credit card services and other banking services.
Hillebrand Chairman and CEO of Bancorp and SYB Age 56 Philip S. Poindexter President of Bancorp and SYB; Director of Bancorp and SYB Age 58 T. Clay Stinnett EVP, Treasurer and CFO of Bancorp and SYB Age 51 Michael J. Croce EVP and Director of Retail Banking of SYB Age 55 William M.
Hillebrand Chairman and CEO of Bancorp and SYB Age 57 Philip S. Poindexter President of Bancorp and SYB; Director of Bancorp and SYB Age 59 T. Clay Stinnett EVP, Treasurer and CFO of Bancorp and SYB Age 52 Michael J. Croce EVP and Director of Retail Banking of SYB Age 56 William M.
Approximately 68% of Bancorp’s employees are located in the home market of Louisville, Kentucky, while 22%, 5% and 5% are located the Central Kentucky, Indianapolis, Indiana and Cincinnati, Ohio markets, respectively. None of Bancorp’s employees are subject to a collective bargaining agreement and Bancorp has never experienced a work stoppage.
Approximately 70% of Bancorp’s employees are located in the home market of Louisville, Kentucky, while 17%, 5%, 7% and less than 1% are located the central Kentucky, Indianapolis, Indiana, Cincinnati, Ohio and south-central Kentucky markets, respectively. None of Bancorp’s employees are subject to a collective bargaining agreement and Bancorp has never experienced a work stoppage.
Strategic acquisition activity over the past several years has expanded our footprint into the central, eastern and northern Kentucky markets while also building upon our market share in our home market of Louisville, Kentucky.
Strategic acquisition activity over the past several years has also expanded our footprint across the state of Kentucky while also building upon our market share in our home market of Louisville.
Dishman III EVP and Chief Credit Officer of SYB Age 61 Michael V. Rehm EVP and Chief Lending Officer of SYB Age 60 Shannon B. Budnick EVP and Director of WM&T Division of SYB Age 53 See Part III,
Dishman III* EVP and Chief Credit Officer of SYB Age 62 Michael V. Rehm EVP and Chief Lending Officer of SYB Age 61 Shannon B. Budnick EVP and Director of WM&T Division of SYB Age 54 *William M.
On April 10, 2023, the IRS issued a proposed regulation that would potentially classify section 831(b) captive activity as a, “listed transaction,” and possibly disallow the related tax benefits, both prospectively and retroactively. The regulation was finalized in January 2025 and its impact is being evaluated by management.
On April 10, 2023, the IRS issued a proposed regulation that would potentially classify section 831(b) captive activity as a, “listed transaction,” and possibly disallow the related tax benefits, both prospectively and retroactively. The regulation was finalized on January 10, 2025, clarifying what is considered a listed transaction or a transaction of interest.
WM&T revenue, which is our largest source of non-interest income, constituted 45%, 43% and 41% of total non-interest income for the years ended December 31, 2024, 2023 and 2022, respectively.
WM&T revenue, which is our largest source of non-interest income, constituted 44%, 45% and 43% of total non-interest income for the years ended December 31, 2025, 2024 and 2023, respectively. Bancorp is divided into two reportable segments.
This activity has provided solid growth opportunities and a larger platform for future expansion, allowing us to deliver broader product offerings, increased lending capabilities and a larger branch network to the communities we serve. Continue to manage costs and improve efficiency – We believe that conservative cost management and focus on operational efficiency is critical to our success.
This activity has provided solid growth opportunities and a larger platform for future expansion, allowing us to deliver broader product offerings, increased lending capabilities and a larger branch network to the communities we serve.
Maintain focus on organic growth while capitalizing on strategic acquisitions – Our strategy has been to pursue attractive, organic growth opportunities within our existing markets and enter new markets that align with our business model and strategic plans.
Our commitment to fostering both new and existing relationships, along with continued investment in the communities we serve, has been essential to our success since our founding in 1904. 6 Table of Contents Maintain focus on organic growth while capitalizing on strategic acquisitions – Our strategy has been to pursue attractive, organic growth opportunities within our existing markets and enter new markets that align with our business model and strategic plans.
Bancorp’s adjusted efficiency ratio (FTE) for the years ended December 31, 2024, 2023 and 2022 was 56.18%, 54.84% and 53.61%. See the section titled “ Non-GAAP Financial Measures ” for reconcilement of non-GAAP to GAAP measures. 7 Table of Contents Human Capital Attracting and retaining talented employees is key to our ability to execute our strategy and compete effectively.
Our efficiency ratio (FTE) for the years ended December 31, 2025, 2024 and 2023 was 53.41%, 56.20% and 55.23%, respectively, representing our commitment to effective cost oversight and management. 7 Table of Contents Human Capital Attracting and retaining talented employees is key to our ability to execute our strategy and compete effectively.
Net income related to LFA and attributable to Bancorp’s 60% interest, excluding the pre-tax loss on disposition noted above, totaled $483,000 for the year ended December 31, 2022. 5 Table of Contents General Business Overview As is the case with most banks, our primary revenue sources are net interest income and fee income from various financial services provided to customers.
The captive remains classified as a transaction of interest for the open tax years and there is no reserve for an uncertain tax position based on the final regulation. 5 Table of Contents General Business Overview As is the case with most banks, our primary revenue sources are net interest income and fee income from various financial services provided to customers.
We have also experienced significant growth in other non-interest revenue sources in recent years, particularly treasury management services and debit/credit card services.
Continue to grow and pursue diversified revenue streams – WM&T revenue distinguishes us from other community banks of similar asset size and continues to provide us with a strong competitive advantage. We have also experienced significant growth in other non-interest revenue sources in recent years, particularly treasury management services and debit/credit card services.
Removed
Bancorp elected not to renew the Captive in August of 2023 and ultimately dissolved the Captive in December of 2023. The Captive’s activity is included in the Company’s consolidated financial statements and was included in its 2023 federal income tax return.
Added
Based on the final regulations, there is no change in the status for the captive insurance structure in place previously, which Bancorp dissolved in 2023.
Removed
The Captive’s activity served to reduce Bancorp’s ETR by 0.20% and 0.29% for the years ended December 31, 2023 and 2022, respectively. Also as a result of its acquisition of Commonwealth Bancshares, Inc., Bancorp acquired a 60% interest in LFA, a Bowling Green, Kentucky-based wealth management services company.
Added
We expanded our branch network in 2025, adding full-service locations in Bardstown, Kentucky and Liberty Township, Ohio, which expanded our footprint both south of Louisville and in our existing Cincinnati, Ohio market. Additional new branch locations are planned for 2026, serving as evidence of our commitment to organic growth.
Removed
Effective December 31, 2022, Bancorp’s partial interest in LFA was sold, resulting in a pre-tax loss of $870,000 recorded in other non-interest expense on the consolidated income statements for the quarter and year ended December 31, 2022. This acquired line of business was not within the Company’s geographic footprint and ultimately did not align with the Company’s long-term strategic model.
Added
On December 1, 2025, we announced the appointment of a new market president in Bowling Green, Kentucky, representing organic expansion into the south-central part of the state, consistent with our long-term growth strategies.
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Our commitment to fostering both new and existing relationships, along with continued investment in the communities we serve, has been essential to our success over the past 120 years. 6 Table of Contents Continue to grow and pursue diversified revenue streams – WM&T revenue distinguishes us from other community banks of similar asset size and continues to provide us with a strong competitive advantage.
Added
This appointment and the subsequent development of our team in this new market will provide yet another runway for future growth and allow us to serve the growing communities of south-central Kentucky.
Removed
The elevated ratio in 2022 was attributed to merger-related expenses associated with the CB acquisition. Additionally, Bancorp also calculates an adjusted efficiency ratio.
Added
Dishman III is scheduled to transition from his roles as EVP and Chief Credit Officer effective April 1, 2026, at which point William J. Otten will be promoted to those roles. Mr. Dishman will remain with Bancorp as a Senior Credit Officer after this transition until his official retirement date of October 15, 2026. See Part III,
Removed
We believe it is important because it provides a comparable ratio after eliminating net gains (losses) on sales, calls, and impairment of investment securities, as well as net gains (losses) on sales of premises and equipment and disposition of any acquired assets, if applicable, and the fluctuation in non-interest expenses related to amortization of investments in tax credit partnerships and non-recurring merger expenses, if applicable.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe current economic outlook remains uncertain and is regularly changing as new economic data becomes available and the FRB’s efforts to manage economic challenges continue. Recent projections indicate that the FRB will slow or halt FFTR rate reductions in 2025.
Biggest changeThree consecutive 25 bps rate reductions from the FRB in September, October and December resulted in the FFTR falling to a range of 3.50% - 3.75%, and Prime to 6.75%, as of December 31, 2025. 13 Table of Contents The current economic outlook is regularly changing as new economic data becomes available.
See the section titled “ Critical Accounting Policies and Estimates ” in “ Management ’ s Discussion and Analysis of Financial Condition and Results of Operations ” for more information. 19 Table of Contents An extended disruption of vital infrastructure could negatively impact our business, results of operations, and financial condition.
See the section titled “ Critical Accounting Estimates ” in “ Management ’ s Discussion and Analysis of Financial Condition and Results of Operations ” for more information. 19 Table of Contents An extended disruption of vital infrastructure could negatively impact our business, results of operations, and financial condition.
Factors impacting the price of our common stock include, but are not limited to: ● actual or anticipated variations in our quarterly results of operations; ● recommendations or research reports about Bancorp, or the financial services industry in general, published by securities analysts; ● the failure of securities analysts to cover, or continue covering, our business; ● news reports relating to trends, concerns and other issues in the financial services industry or markets in general; ● perceptions in the marketplace regarding the Bancorp, or our reputation, competitors or other financial institutions; ● actual or anticipated sales or issuance of our equity or equity-related securities; ● our past and future dividend practices; ● departure of our management team or other key personnel; 22 Table of Contents ● new technology used, or services offered, by competitors; ● significant acquisitions or business combinations, strategic partnerships, joint ventures or capital commitments by or involving us or our competitors; ● failure to integrate acquisitions or realize the anticipated benefits of acquisitions; ● existing or increased regulatory compliance requirements, changes or proposed changes in laws or regulations, or differing interpretations thereof, affecting our business, or enforcement of laws and regulations; and ● litigation and governmental investigations.
Factors impacting the price of our common stock include, but are not limited to: ● actual or anticipated variations in our quarterly results of operations; ● recommendations or research reports about Bancorp, or the financial services industry in general, published by securities analysts; ● the failure of securities analysts to cover, or continue covering, our business; ● news reports relating to trends, concerns and other issues in the financial services industry or markets in general; ● perceptions in the marketplace regarding Bancorp, or our reputation, competitors or other financial institutions; ● actual or anticipated sales or issuance of our equity or equity-related securities; ● our past and future dividend practices; ● departure of our management team or other key personnel; ● new technology used, or services offered, by competitors; ● significant acquisitions or business combinations, strategic partnerships, joint ventures or capital commitments by or involving us or our competitors; ● failure to integrate acquisitions or realize the anticipated benefits of acquisitions; ● existing or increased regulatory compliance requirements, changes or proposed changes in laws or regulations, or differing interpretations thereof, affecting our business, or enforcement of laws and regulations; and ● litigation and governmental investigations.
Successfully maintaining and/or growing our deposit portfolio depends on our ability to manage all related factors, which could necessitate offering interest rates on our deposit products that meet or exceed prevailing market rates and adversely impact our results of operations and financial condition. 18 Table of Contents We’ve experienced a shift in the mix of our deposit portfolio over the past two years, consistent with a higher interest rate environment.
Successfully maintaining and/or growing our deposit portfolio depends on our ability to manage all related factors, which could necessitate offering interest rates on our deposit products that meet or exceed prevailing market rates and adversely impact our results of operations and financial condition. 18 Table of Contents We’ve experienced a shift in the mix of our deposit portfolio over the past several years, consistent with a higher interest rate environment.
Failure to adapt or comply with related legislation, regulatory requirements or investor or stakeholder expectations and standards could negatively impact our reputation, financial condition and results of operations. Risks 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.
Failure to adapt or comply with related legislation, regulatory requirements or investor or stakeholder expectations and standards could negatively impact our reputation, financial condition and results of operations. 22 Table of Contents Risks 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.
The impact these changes, and any other developments, have on local, regional and national economic conditions could have a significant effect on our borrowers’ ability to meet contractual obligations. Our allowance for credit losses may not be adequate to cover actual losses, which could negatively impact earnings.
The impact that these factors, and any other developments, have on local, regional and national economic conditions could have a significant effect on our borrowers’ ability to meet contractual obligations. Our allowance for credit losses may not be adequate to cover actual losses, which could negatively impact earnings.
Interest rate lock loan commitments represent commitments to fund loans at a specific rate. 16 Table of Contents We are exposed to interest rate risk on loans held for sale and rate lock loan commitments. As market interest rates fluctuate, the fair value of mortgage loans held for sale and rate lock commitments will decline or increase.
Interest rate lock loan commitments represent commitments to fund loans at a specific rate. We are exposed to interest rate risk on loans held for sale and rate lock loan commitments. As market interest rates fluctuate, the fair value of mortgage loans held for sale and rate lock commitments will decline or increase.
Our asset-liability management strategy, which is designed to mitigate risk from changes in market interest rates, may not be able to prevent changes in interest rates from having a material adverse effect on our results of operations and financial condition. The interest rate environment has experienced significant volatility over the past several years.
Our asset-liability management strategy, which is designed to mitigate risk from changes in market interest rates, may not be able to prevent changes in interest rates from having a material adverse effect on our results of operations and financial condition. Interest rates have experienced significant volatility over the past several years.
In the event that we conclude that all or a portion of our intangible assets may be impaired, a non-cash charge for the amount of such impairment would be recorded to earnings. Such a charge would have no impact on tangible capital. At December 31, 2024, Bancorp had intangible assets of $16 million.
In the event that we conclude that all or a portion of our intangible assets may be impaired, a non-cash charge for the amount of such impairment would be recorded to earnings. Such a charge would have no impact on tangible capital. At December 31, 2025, Bancorp had intangible assets of $12 million.
While the recent elections have generally been perceived as a positive for tax policy, any political gridlock regarding the structure of tax policy, the expiration, renewal or reformation of current tax provisions, or the proposal of additional changes to the tax code could present challenges or necessitate strategic changes for our business.
While this has generally been perceived as a positive for tax policy, any political gridlock regarding the structure of tax policy, the expiration, renewal or reformation of current tax provisions, or the proposal of additional changes to the tax code could present challenges or necessitate strategic changes for our business.
Given the standard five-year term often associated with many of our traditional lending facilities, 2025 will begin a period of elevated interest rate risk for certain borrowers, as notes originated or renewed during that period will either renew or mature in an interest rate environment that is now significantly higher, with Prime more than doubling since 2020 and standing at 7.50% as of December 31, 2024.
Given the standard five-year term often associated with many of our traditional lending facilities, a period of elevated interest rate risk for certain borrowers will continue in 2026, as notes originated or renewed during that period will either renew or mature in an interest rate environment that is now significantly higher, with Prime more than doubling since 2020 and standing at 6.75% as of December 31, 2025.
Companies are facing increasing scrutiny from regulators, investors and other stakeholders related to their ESG practices and disclosure. Investor advocacy groups, investment funds and influential investors are also increasingly focused on these practices, especially as they relate to the environment, health and safety, diversity, labor conditions and human rights.
Companies have faced increased scrutiny from regulators, investors and other stakeholders related to their ESG practices and disclosure over the past several years. Investor advocacy groups, investment funds and influential investors are also increasingly focused on these practices, especially as they relate to the environment, health and safety, diversity, labor conditions and human rights.
Failure to successfully keep pace with technological change affecting the financial services industry could impair our ability to effectively compete to retain or acquire new business and could have an adverse impact on our business, financial position and results of operations. Changes in customer use of banks could adversely affect our financial condition and results of operations.
Failure to successfully keep pace with technological change affecting the financial services industry could impair our ability to effectively compete to retain or acquire new business and could have an adverse impact on our business, financial position and results of operations.
In the event that we conclude that all or a portion of our goodwill may be impaired, a non-cash charge for the amount of such impairment would be recorded to earnings. Such a charge would have no impact on tangible capital.
In the event that we conclude that all or a portion of our goodwill may be impaired, a non-cash charge for the amount of such impairment would be recorded to earnings. Such a charge would have no impact on tangible capital. At December 31, 2025, Bancorp had goodwill of $194 million.
In instances where borrowers are unable to repay their loans and there has been deterioration in the value of loan collateral, we could experience higher loan losses, which could have a material adverse effect on financial condition, and results of operations.
In instances where borrowers are unable to repay their loans and there has been deterioration in the value of loan collateral, we could experience higher loan losses, which could have a material adverse effect on financial condition, and results of operations. 14 Table of Contents Significant stock market volatility could negatively affect our financial results.
Significant stock market volatility could negatively affect our financial results. Income from WM&T constitutes approximately 45% of non-interest income. WM&T AUM are expressed in terms of market value, and a significant portion of fee income is based upon those values, which generally fluctuate consistent with overall capital markets.
Income from WM&T constitutes approximately 44% of non-interest income. WM&T AUM are expressed in terms of market value, and a significant portion of fee income is based upon those values, which generally fluctuate consistent with overall capital markets.
We will be subject to increased regulation once our total consolidated assets exceed $10 billion. As of December 31, 2024, Bancorp had total consolidated assets of $8.86 billion. However, should our total consolidated assets exceed $10 billion, we will become subject to increased regulatory requirements.
As of December 31, 2025, Bancorp had total consolidated assets of $9.54 billion. However, should our total consolidated assets exceed $10 billion, we will become subject to increased regulatory requirements.
Any change or potential enactment of tax legislation, or changes in the interpretation of existing tax law, including provisions impacting tax rates, apportionment, consolidation or combination, income, expense, credits and exemptions may have a material adverse effect on our business, financial condition and results of operations. 21 Table of Contents Key provisions from the Tax Cuts and Jobs Act of 2017 are set to expire December 31, 2025.
Any change or potential enactment of tax legislation, or changes in the interpretation of existing tax law, including provisions impacting tax rates, apportionment, consolidation or combination, income, expense, credits and exemptions may have a material adverse effect on our business, financial condition and results of operations.
While NIM expansion was experienced in the second half of 2024, the previously mentioned flattening of the yield curve, pricing pressure/competition for both loans and deposits, and changing levels of liquidity could continue to pose challenges to NIM and net interest spread in 2025. Financial condition and profitability depend significantly on local and national economic conditions.
Recent projections indicate the potential for additional rate reductions in 2026. While NIM expansion was experienced in 2025, the previously mentioned yield curve challenges and pricing pressure/competition for both loans and deposits could continue to pose challenges to NIM and net interest spread expansion in 2026. Financial condition and profitability depend significantly on local and national economic conditions.
In the event the counterparties fail to deliver commitments or are unable to fulfill their obligations, we could potentially incur significant additional costs by replacing the positions at then-current market rates, adversely impacting our financial condition and results of operations.
In the event the counterparties fail to deliver commitments or are unable to fulfill their obligations, we could potentially incur significant additional costs by replacing the positions at then-current market rates, adversely impacting our financial condition and results of operations. 16 Table of Contents Changing industry trends or regulations related to consumer deposit relationships could have an adverse impact on our financial condition and results of operations.
If our policies, procedures and systems are deemed deficient, we would be subject to liability, including fines and regulatory actions, which may include restrictions on the ability to pay dividends and the requirement to obtain regulatory approvals to proceed with certain aspects of our business plan, including branching and acquisitions.
If our policies, procedures and systems are deemed deficient, we would be subject to liability, including fines and regulatory actions, which may include restrictions on the ability to pay dividends and the requirement to obtain regulatory approvals to proceed with certain aspects of our business plan, including branching and acquisitions. 21 Table of Contents We will be subject to increased regulation once our total consolidated assets exceed $10 billion as of any year-end.
Strong loan volumes were experienced during the historically low pandemic-era interest rate environment that began in 2020 and was marked by Prime falling to 3.25%, a level at which it remained until 2022.
Credit-related concerns stemming from the changing interest rate environment and contractual renewal and maturity activity may be experienced over the next year. Strong loan volumes were experienced during the historically low pandemic-era interest rate environment that began in 2020 and was marked by Prime falling to 3.25%, a level at which it remained until 2022.
We have exposure to different industries and counterparties and through transactions with counterparties in the bank and non-bank financial services industries, including broker-dealers, commercial banks, investment banks and other institutional customers.
Financial services companies are interrelated as a result of trading, clearing, counterparty, or other relationships. We have exposure to different industries and counterparties and through transactions with counterparties in the bank and non-bank financial services industries, including broker-dealers, commercial banks, investment banks and other institutional customers.
Repeated incidences of fraud or a single large occurrence could adversely impact our reputation, financial condition and results of operations. We are dependent upon outside third parties for processing and handling of the Company ’ s records and data. We rely on software developed by third-party vendors to process various transactions.
The inability to prevent such fraud through our underwriting and operational processes could negatively impact our business, results of operations and financial condition, as well as our overall reputation. We are dependent upon outside third parties for processing and handling of the Company ’ s records and data. We rely on software developed by third-party vendors to process various transactions.
At December 31, 2024, Bancorp had goodwill of $194 million. 15 Table of Contents Bancorp’s intangible assets primarily relate to core deposits and customer relationships. Intangible assets with definite lives are amortized on an accelerated basis over their estimated life.
Bancorp’s intangible assets primarily relate to core deposits and customer relationships. Intangible assets with definite lives are amortized on an accelerated basis over their estimated life.
Further, exposure to new geographical markets in which Bancorp has limited brand recognition, history or general knowledge of, may also result in a failure to realize the anticipated or expected benefits of an acquisition.
Further, exposure to new geographical markets in which Bancorp has limited brand recognition, history or general knowledge of, may also result in a failure to realize the anticipated or expected benefits of an acquisition. Additionally, we may finance acquisitions with borrowed funds, thereby increasing our leverage and reducing liquidity, or with potentially dilutive issuances of equity securities.
We have concluded that, based on the level of positive evidence, it is more likely than not that at December 31, 2024 all DTAs will be realized. At December 31, 2024, Bancorp had DTAs totaling $72 million. The impact of each of these impairment matters could have a material adverse effect on our business, results of operations and financial condition.
We have concluded that, based on the level of positive evidence, it is more likely than not that at December 31, 2025 all DTAs will be realized. At December 31, 2025, Bancorp had DTAs totaling $45 million.
In an effort to combat the resulting inflation that had risen to its highest levels in decades, the FRB increased the FFTR a total of 525 bps via numerous, incremental rate increases over the course of 2022 and 2023, driving the FFTR to a range of 5.25% - 5.50-%, and Prime to 8.50%, by July of 2023.
A rising rate environment that was driven by the FRB’s strategy to combat decades-high inflation via numerous, incremental rate increases over the course of 2022 and 2023 took the FFTR to a range of 5.25% - 5.50%, and Prime to 8.50%, by July of 2023.
Over the past several years, our asset quality metrics have trended within a narrow range, exceeding benchmarks and reaching historically strong levels.
Over the past several years, our asset quality metrics have trended within a narrow range, exceeding benchmarks and reaching historically strong levels. We realize that present asset quality metrics are positive and, recognizing the cyclical nature of the lending business, we anticipate this trend will likely normalize over time.
We are subject to litigation risk and reputational risk pertaining to fiduciary responsibility. From time to time, customers may make claims and take legal action pertaining to our fiduciary responsibilities.
Further, such changes, or delays in making crucial tax policy decisions, could have adverse repercussions for both our business and that of our customers. We are subject to litigation risk and reputational risk pertaining to fiduciary responsibility. From time to time, customers may make claims and take legal action pertaining to our fiduciary responsibilities.
The soundness of other financial institutions could adversely affect us. Our ability to engage in routine funding transactions could be adversely affected by the actions and commercial soundness of other financial institutions. Financial services companies are interrelated as a result of trading, clearing, counterparty, or other relationships.
The impact of each of these impairment matters could have a material adverse effect on our business, results of operations and financial condition. 15 Table of Contents The soundness of other financial institutions could adversely affect us. Our ability to engage in routine funding transactions could be adversely affected by the actions and commercial soundness of other financial institutions.
Increased ESG-related compliance costs could result in increases to our overall operational costs. New government regulations could also result in new or more stringent forms of ESG oversight and expanding mandatory and voluntary reporting, diligence and disclosure. Additionally, concerns over the long-term impacts of climate change have led and will continue to lead to governmental efforts to mitigate those impacts.
Any increase in ESG-related compliance costs could result in increases to our overall operational costs. While the current administration has a reduced focus on these practices and disclosures, future government regulations could result in new or more stringent forms of ESG oversight and the expansion of mandatory and voluntary reporting, diligence and disclosure.
Impairment of goodwill, other intangible assets or deferred tax assets could have an adverse impact on our financial condition and results of operations.
While this improvement benefitted other comprehensive income, and as a result, overall capital levels in 2025, the investment securities portfolio remains in an overall loss position and is still subject to the factors noted above. Impairment of goodwill, other intangible assets or deferred tax assets could have an adverse impact on our financial condition and results of operations.
While the economic outlook for 2025 is generally positive, proposed policy changes from the incoming administration, including tariffs and extended or additional tax cuts, the FRB’s continued efforts to control inflation and other economic challenges, and compounding geopolitical risks create a number of uncertainties heading into 2025.
While the economic outlook for 2026 is generally positive, projecting modest growth, the FRB’s continued effort to navigate economic challenges, including stubborn inflation and a softening labor market, coupled with geopolitical and trade tensions, create a number of uncertainties heading into 2026.
These levels of interest rates were sustained for over a year until September of 2024, when the FRB reduced the FFTR 50 bps, representing their first rate reduction in over four years, lowering the FFTR to a range of 4.75% - 5.00%, and Prime to 8.00%.
These levels were sustained until September of 2024, when the FRB began its attempt to engineer a “soft landing,” with several rate reductions that brought the FFTR to a range of 4.25% - 4.50%, and Prime to 7.50%, as of December 31, 2024.
Removed
The FRB’s severe, pandemic-driven interest rate reductions in March of 2020 lowered the FFTR to a range of 0% - 0.25%, and Prime to 3.25%, levels that were sustained for approximately two years.
Added
The yield curve was challenged by flatness and/or inversion during 2025, with a semblance of steepness on the longest portion of the yield curve only beginning to be experienced towards the end of the year.
Removed
Consistent with a strategy of engineering a “soft landing,” they followed suit in November and December of 2024, cutting the FFTR further with respective 25 bps reductions, bringing the FFTR to a range of 4.25% - 4.50%, and Prime to 7.50%, as of December 31, 2024. 13 Table of Contents The dramatic rise in interest rates experienced in 2022 provided significant benefit to NIM, as interest earning assets experienced higher yields and elevated levels of liquidity allowed deposit costs to remain near pandemic-era lows.
Added
Significant improvement in the overall loss position of our investment securities portfolio was experienced in 2025 as a result of changes in the interest rate environment and the corresponding impact on the market value of our investment securities portfolio.
Removed
However, as liquidity dissipated in 2023, driven in large part by the institutional failures of that year, intense competition for deposits created significant pricing pressure and drove deposit costs up.
Added
Organic expansion into new markets could adversely affect our business, financial condition and results of operations. Organically expanding into new geographical markets presents unique challenges associated with brand awareness, talent acquisition and relationship building. It also exposes us to new economies and potentially different economic drivers.
Removed
The resulting shift in Bancorp’s deposit mix, with a large portion of non-interest bearing and lower-rate deposits migrating to higher-yielding alternatives, created significant NIM compression, which was a scenario that continued into 2024 in conjunction with Bancorp’s substantial loan growth.
Added
While these challenges can be approached with more gradual and measured strategies compared to entering a new market by acquisition, the success of organic expansion depends on our ability to find the appropriate personnel, successfully implement our community banking model and ensure continual fit with our strategic goals and high standards for performance.
Removed
While short term interest rates have recently declined consistent with the FRB’s rate reductions, the middle and longer-term portions of the yield curve have been relatively stagnant. Managing volatility within the interest rate environment will continue to be a primary focus for Bancorp, and the banking industry generally, as we enter 2025.
Added
Failure to do so could adversely affect our business, financial condition and results of operations in addition to damaging Bancorp’s reputation as a premier community bank. We began to expand our geographic footprint organically in 2025, announcing the appointment of a market president in December that will help lead our entry into the south-central Kentucky market.
Removed
We realize that present asset quality metrics are positive and, recognizing the cyclical nature of the lending business, we anticipate this trend will likely normalize over time. 14 Table of Contents Credit-related concerns stemming from the higher interest rate environment and contractual renewal and maturity activity may be experienced over the next year.
Added
While we feel this expansion is a natural extension of our deep Kentucky roots, this strategic initiative represents entrance into a market that is new to Bancorp.
Removed
A combination of higher interest rates and rising central business district vacancies across the country have created credit and collateral concerns over the past year, specifically within the CRE sector.
Added
As such, our ability to build brand recognition, develop and grow a talented team of relationship managers and implement our full-service, community banking model in a new market from the ground up will be key to successfully establishing ourselves in south-central Kentucky. 17 Table of Contents Competition with other financial institutions could adversely affect profitability.
Removed
While we believe the quality of our CRE portfolio, and the overall loan portfolio, remains solid, with no exposure to large office towers and minimal exposure to central business districts, we are not immune from potential deterioration in the value of loan collateral and could be negatively impacted by the effects of any such activity.
Added
Repeated incidences of fraud or a single large occurrence could adversely impact our reputation, financial condition and results of operations. During 2025, the disclosure of several large loan losses resulting from suspected fraud were made by a number of regional banks, creating broader fraud-based credit concerns for the banking industry generally.
Removed
Changing industry trends or regulations related to consumer deposit relationships could have an adverse impact on our financial condition and results of operations.
Added
While fraud associated with more operationally-focused transactions, such as wire transfers, card fraud or check fraud typically involve smaller individual amounts and occur with more frequency, credit fraud stemming from the origination of loans to borrowers under false pretenses can drive substantial losses with just one occurrence.
Removed
Additionally, we may finance acquisitions with borrowed funds, thereby increasing our leverage and reducing liquidity, or with potentially dilutive issuances of equity securities. 17 Table of Contents Competition with other financial institutions could adversely affect profitability.
Added
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. We, or our third-party vendors, clients or counterparties may develop or incorporate AI technology into certain business processes, services or products.
Removed
Further, such changes, or delays in making crucial tax policy decisions, could have adverse repercussions for both our business and that of our customers. Transactions between Bancorp and its former insurance subsidiary, the Captive, may be subject to certain IRS responsibilities and penalties.
Added
While we have established programs to manage our increasing exposure to AI, including processes for monitoring related risks, managing third party relationships, incident response, as well as employee awareness and education, the rapid adoption and broad use of AI across technological platforms and industries exposes us to growing and evolving risks that could adversely impact our business, financial condition and results of operations.
Removed
The Captive, formerly a wholly owned subsidiary of Bancorp, was a Nevada-based captive insurance company that was taxed under Section 831(b) of the Internal Revenue Code. On April 10, 2023, the IRS issued a proposed regulation that would potentially classify section 831(b) captive activity as a, “listed transaction,” and possibly disallow the related tax benefits, both prospectively and retroactively.
Added
Generative AI models, whether developed or used internally or by third-parties, may produce output or take undesirable action, reflect biases included in any data or assumptions in which they are trained, disclose private or confidential information or otherwise operate in a harmful manner.
Removed
The regulation was finalized in January 2025 and its impact is being evaluated by management. Bancorp elected not to renew the Captive in August of 2023 and ultimately dissolved the Captive in December of 2023. The finalization of the proposal and any disallowance of related tax benefits could negatively impact our financial condition and results of operations.
Added
To the extent use of such models, or AI technology generally, limits transparency or grows in complexity, any failure to understand, monitor or adapt to such technology could present unique risks to our operations and business.
Added
Further, the legal and regulatory environment related to AI is uncertain and continually evolving, expanding to incorporate intellectual property, privacy, consumer protection, employment and other laws applicable to the use of AI.
Added
These laws and regulations could impact our implementation and use of AI technology, subject us to risk of non-compliance and legal or regulatory consequences, harm our reputation and increase costs related to prevention, mitigation or resolution of such issues. Changes in customer use of banks could adversely affect our financial condition and results of operations.
Added
Key provisions from the Tax Cuts and Jobs Act of 2017 were originally set to expire December 31, 2025. However, legislation enacted in 2025 by the current administration, namely the “One Big Beautiful Bill Act,” made many of these provisions permanent or extended them with modifications.
Added
Additionally, concerns over the long-term impacts of climate change have led and will continue to lead to governmental efforts to mitigate those impacts.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeSpecific roles, such as the Information Security Officer and Director of Information Security, are tasked with monitoring, evaluating, and mitigating these risks in coordination with the Information Security Risk Committee. Both the Information Security Officer and Director of Information Security possess relevant expertise and experience in cybersecurity, enabling them to effectively navigate and respond to emerging threats.
Biggest changeSpecific roles, such as the Director of Information Security and Information Security Operations Manager, are tasked with monitoring, evaluating, and mitigating these risks in coordination with the Information Security Risk Committee. Both the Director of Information Security and Information Security Operations Manager possess relevant expertise and experience in cybersecurity, enabling them to effectively navigate and respond to emerging threats.
The committee convened four times during the year ended December 31, 2024 in order carry out its oversight responsibilities, engaging directly in discussions about cybersecurity risks to ensure they are comprehensively addressed within the institution’s risk management framework.
The committee convened four times during the year ended December 31, 2025 in order carry out its oversight responsibilities, engaging directly in discussions about cybersecurity risks to ensure they are comprehensively addressed within the institution’s risk management framework.
The Information Security Officer, who holds a Bachelor’s degree in Computer Science and a Master’s degree in Information Systems Security, along with several relevant industry certifications, has been with Bancorp for four years and has additional experience working in technology outside of the organization.
The Director of Information Security, who holds a Bachelor’s degree in Computer Science and a Master’s degree in Information Systems Security, along with several relevant industry certifications, has been with Bancorp for five years and has additional experience working in technology outside of the organization.
The Director of Information Security, who also holds several relevant certifications, has been with Bancorp’s Information Security department for 20 years and brings extensive experience with technology. To keep the Information Security Risk Committee and Credit and Risk Committee informed, management ensures consistent and structured reporting mechanisms are in place.
The Information Security Operations Manager, who also holds several relevant certifications, has been with Bancorp’s Information Security department for 21 years and brings extensive experience with technology. To keep the Information Security Risk Committee and Credit and Risk Committee informed, management ensures consistent and structured reporting mechanisms are in place.

Item 2. Properties

Properties — owned and leased real estate

2 edited+0 added−0 removed1 unchanged
Biggest changeOf the 72 total banking locations, 40 are located in our home market of the Louisville MSA, while 19, eight and five are located in our Central Kentucky, Cincinnati and Indianapolis MSAs, respectively.
Biggest changeOf the 75 total banking locations, 41 are located in our home market of the Louisville MSA, while 19, nine and six are located in our Central Kentucky, Cincinnati and Indianapolis MSAs, respectively.
At December 31, 2024, in addition to the main office complex and the operations center, Bancorp owned 45 branches, seven of which are located on leased land. At that date, Bancorp also leased 19 branches.
At December 31, 2025, in addition to the main office complex and the operations center, Bancorp owned 56 branches, eight of which are located on leased land. At that date, Bancorp also leased 19 branches.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+1 added−0 removed0 unchanged
Biggest changeItem 3. Legal Proceedings. In the ordinary course of operations, Bancorp and the Bank are defendants in various legal proceedings. There is no proceeding pending or, to the knowledge of management, threatened in which an adverse decision could result in a material adverse change in the business or consolidated financial position of Bancorp or the Bank.
Biggest changeItem 3. Legal Proceedings. In the ordinary course of operations, Bancorp and the Bank are defendants in various legal proceedings. There is no proceeding pending or, to the knowledge of management, threatened in which an adverse decision could result in a material adverse change in the business or consolidated financial position of Bancorp or the Bank. Item 4.
Added
Mine Safety Disclosures. NA 26 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

8 edited+2 added−3 removed2 unchanged
Biggest changeThe ten-year graph assumes the value of the investment in Bancorp’s Common Stock and in each respective index was $100 at December 31, 2014 and that all dividends were reinvested.
Biggest changeThe ten-year graph assumes the value of the investment in Bancorp’s Common Stock and in each respective index was $100 at December 31, 2015 and that all dividends were reinvested. 27 Table of Contents Period Ending Index 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 12/31/25 Stock Yards Bancorp, Inc. $ 100.00 $ 160.96 $ 166.82 $ 135.38 $ 192.57 $ 177.74 Russell 2000 Index 100.00 114.82 91.35 106.82 119.14 134.40 S&P U.S.
The following table shows information relating to the repurchase of shares of common stock by Bancorp during the three months ended December 31, 2024.
The following table shows information relating to the repurchase of shares of common stock by Bancorp during the three months ended December 31, 2025.
The graph assumes the value of the investment in Bancorp’s Common Stock and in each index was $100 at December 31, 2019 and that all dividends were reinvested. 27 Table of Contents In addition to the five-year period presented, the ten-year period is presented because it provides additional perspective, and Bancorp management believes that longer-term performance is of interest.
The graph assumes the value of the investment in Bancorp’s Common Stock and in each index was $100 at December 31, 2020 and that all dividends were reinvested. In addition to the five-year period presented, the ten-year period is presented because it provides additional perspective, and Bancorp management believes that longer-term performance is of interest.
Item 5. Market for Registrant ’ s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Bancorp’s common stock is traded on the NASDAQ under the ticker symbol SYBT. On December 31, 2024, Bancorp had approximately 2,100 shareholders of record, and approximately 17,981 beneficial owners holding shares in nominee or “street” name.
Item 5. Market for Registrant ’ s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. ’ Bancorp’s common stock is traded on the NASDAQ under the ticker symbol SYBT. On December 31, 2025, Bancorp had approximately 2,000 shareholders of record, and approximately 30,000 beneficial owners holding shares in nominee or “street” name.
Total number of shares purchased (1) Average price paid per share Total number of shares purchased as part of publicly announced plans or programs Average price paid per share Maximum number of shares that may yet be purchased under the plans or programs October 1 - October 31 2,050 $ 51.64 — $ — November 1 - November 30 15,456 76.31 — — December 1 - December 31 496 71.61 — — Total 18,002 $ 73.37 — $ — 741,196 (1) Shares repurchased during the three-month period ended December 31, 2024 represent shares withheld to pay taxes due.
Total number of shares purchased (1) Average price paid per share Total number of shares purchased as part of publicly announced plans or programs Average price paid per share Maximum number of shares that may yet be purchased under the plans or programs October 1 - October 31 605 $ 62.43 — $ — November 1 - November 30 — — — — December 1 - December 31 942 60.37 — — Total 1,547 $ 61.18 — $ — 1,000,000 (1) Shares repurchased during the three-month period ended December 31, 2025 represent shares withheld to pay taxes due.
There were no equity securities of the registrant sold without registration during the quarter covered by this report. On February 18, 2025, the Board of Directors declared a quarterly cash dividend of $0.31 per common share.
On February 17, 2026, the Board of Directors declared a quarterly cash dividend of $0.32 per common share.
BMI Banks - Midwest Region Index 100.00 85.98 113.59 98.03 100.08 122.10 KBW NASDAQ Bank Index 100.00 89.69 124.06 97.52 96.65 132.60 Period Ending Index 12/31/14 12/31/15 12/31/16 12/31/17 12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 Stock Yards Bancorp, Inc. $ 100.00 $ 116.44 $ 222.01 $ 182.14 $ 162.89 $ 209.67 $ 213.16 $ 343.10 $ 355.59 $ 288.58 $ 410.48 Russell 2000 Index 100.00 95.59 115.95 132.94 118.30 148.49 178.13 204.53 162.73 190.28 212.23 S&P U.S.
BMI Banks - Midwest Region Index 100.00 132.12 114.02 116.40 142.02 159.02 KBW NASDAQ Bank Index 100.00 138.33 108.73 107.76 147.85 196.00 Period Ending Index 12/31/15 12/31/16 12/31/17 12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 12/31/25 Stock Yards Bancorp, Inc. $ 100.00 $ 190.67 $ 156.42 $ 139.89 $ 180.07 $ 183.07 $ 294.66 $ 305.39 $ 247.84 $ 352.53 $ 325.39 Russell 2000 Index 100.00 121.31 139.08 123.76 155.35 186.36 213.97 170.24 199.06 222.03 250.47 S&P U.S.
In May 2023, Bancorp’s Board of Directors approved a share repurchase program authorizing the repurchase of 1 million shares, or approximately 4% of Bancorp’s total common shares outstanding at the time. Stock repurchases are expected to be made from time to time on the open market or in privately negotiated transactions, subject to applicable securities laws.
In July 2025, Bancorp’s Board of Directors adopted a share repurchase program authorizing the repurchase of up to 1 million shares, or approximately 4%, of Bancorp’s total common shares outstanding. This share repurchase program replaces the program that expired in May 2025 and will expire in two years unless otherwise extended or completed at an earlier date.
Removed
The plan, which will expire in May 2025 unless otherwise extended or completed at an earlier date, does not obligate the Company to repurchase any specific dollar amount or number of shares prior to the plan’s expiration. No shares were repurchased in 2023, nor in 2024. Approximately 741,000 shares remain eligible for repurchase.
Added
The plan does not obligate Bancorp to repurchase any specific dollar amount or number of shares prior to the plan’s expiration. Bancorp has not repurchased shares under any share repurchase program since 2019. There were no equity securities of the registrant sold without registration during the quarter covered by this report.
Removed
Period Ending Index 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 Stock Yards Bancorp, Inc. $ 100.00 $ 101.66 $ 163.64 $ 169.60 $ 137.64 $ 195.77 Russell 2000 Index 100.00 119.96 137.74 109.59 128.14 142.93 S&P U.S.
Added
BMI Banks - Midwest Region Index 100.00 133.61 143.58 122.61 159.51 137.14 181.18 156.37 159.64 194.76 218.08 KBW NASDAQ Bank Index 100.00 128.51 152.40 125.41 170.71 153.11 211.79 166.47 164.99 226.36 300.09 28 Table of Contents Item 6. [RESERVED]
Removed
BMI Banks - Midwest Region Index 100.00 101.52 135.64 145.76 124.47 161.93 139.22 183.94 158.74 162.06 197.72 KBW NASDAQ Bank Index 100.00 100.49 129.14 153.15 126.02 171.55 153.86 212.83 167.29 165.80 227.48 28 Table of Contents Item 6. [RESERVED]

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

204 edited+87 added−118 removed112 unchanged
Biggest changeShould the forecast for economic conditions change, Bancorp could experience further adjustments in its required ACL for loans credit loss expense. 64 Table of Contents The table below details net charge-offs to average loans outstanding by portfolio class: 2024 2023 2022 (dollars in thousands) Years ended December 31, Net (charge offs)/ recoveries Average loans Net (charge offs)/ recoveries to average loans Net (charge offs)/ recoveries Average loans Net (charge offs)/ recoveries to average loans Net (charge offs)/ recoveries Average loans Net (charge offs)/ recoveries to average loans Commercial real estate - non-owner occupied $ 19 $ 1,665,876 0.00 % $ 91 $ 1,465,305 0.01 % $ - $ 1,342,829 0.00 % Commercial real estate - owner occupied 93 945,055 0.01 % 9 884,555 0.00 % 172 782,185 0.02 % Total commercial real estate 112 2,610,931 0.00 % 100 2,349,860 0.00 % 172 2,125,014 0.01 % Commercial and industrial - term (339 ) 864,658 -0.04 % (2,239 ) 796,039 -0.28 % 559 692,214 0.08 % Commercial and industrial - term - PPP - 3,496 0.00 % - 8,877 0.00 % - 52,704 0.00 % Commercial and industrial - lines of credit (89 ) 484,266 -0.02 % (3,476 ) 444,244 -0.78 % (200 ) 417,254 -0.05 % Total commercial and industrial (428 ) 1,352,420 -0.03 % (5,715 ) 1,249,160 -0.46 % 359 1,162,172 0.03 % Residential real estate - owner occupied (329 ) 752,566 -0.04 % 2 649,431 0.00 % 34 513,458 0.01 % Residential real estate - non-owner occupied 7 369,119 0.00 % 2 334,660 0.00 % (5 ) 296,682 0.00 % Total residential real estate (322 ) 1,121,685 -0.03 % 4 984,091 0.00 % 29 810,140 0.00 % Construction and land development - 588,464 0.00 % - 458,572 0.00 % (72 ) 374,415 -0.02 % Home equity lines of credit (100 ) 225,823 -0.04 % (12 ) 203,796 -0.01 % - 182,874 0.00 % Consumer (300 ) 145,689 -0.21 % (379 ) 141,140 -0.27 % (442 ) 130,595 -0.34 % Leases - 16,298 0.00 % - 13,934 0.00 % - 13,849 0.00 % Credit cards (193 ) 24,472 -0.79 % (626 ) 22,312 -2.81 % (45 ) 20,065 -0.22 % Total $ (1,231 ) $ 6,085,782 -0.02 % $ (6,628 ) $ 5,422,865 -0.12 % $ 1 $ 4,819,124 0.00 % The following table sets forth the ACL by portfolio class: December 31, 2024 December 31, 2023 (dollars in thousands) Allocated Allowance % of Total ACL for loans ACL for loans to Total Loans Allocated Allowance % of Total ACL for loans ACL for loans to Total Loans Commercial real estate - non-owner occupied $ 13,935 16 % 0.76 % $ 22,133 28 % 1.42 % Commercial real estate - owner occupied 10,192 12 % 1.02 % 11,667 15 % 1.29 % Total commercial real estate 24,127 28 % 0.85 % 33,800 43 % 1.37 % Commercial and industrial - term 21,284 25 % 2.41 % 14,359 18 % 1.66 % Commercial and industrial - lines of credit 6,496 7 % 1.17 % 6,495 8 % 1.48 % Total commercial and industrial 27,780 32 % 1.93 % 20,854 26 % 1.60 % Residential real estate - owner occupied 14,468 17 % 1.80 % 9,316 12 % 1.31 % Residential real estate - non-owner occupied 5,154 6 % 1.35 % 4,282 5 % 1.19 % Total residential real estate 19,622 23 % 1.65 % 13,598 17 % 1.27 % Construction and land development 10,981 13 % 1.76 % 7,593 10 % 1.43 % Home equity lines of credit 1,277 1 % 0.52 % 1,660 2 % 0.79 % Consumer 2,531 3 % 1.75 % 1,407 2 % 0.97 % Leases 370 0 % 2.38 % 220 0 % 1.42 % Credit cards 255 0 % 1.04 % 242 0 % 1.02 % Total $ 86,943 100 % 1.33 % $ 79,374 100 % 1.38 % 65 Table of Contents The allocation of the ACL for loans amongst respective classes of the loan portfolio experienced a shift between December 31, 2023 and December 31, 2024, most notably within the CRE and C&I categories.
Biggest changeThe table below details net charge-offs to average loans outstanding by portfolio class: 2025 2024 2023 (dollars in thousands) Years ended December 31, Net (charge offs)/ recoveries Average loans Net (charge offs)/ recoveries to average loans Net (charge offs)/ recoveries Average loans Net (charge offs)/ recoveries to average loans Net (charge offs)/ recoveries Average loans Net (charge offs)/ recoveries to average loans Commercial real estate - non-owner occupied $ 25 $ 1,912,158 0.00 % $ 19 $ 1,665,876 0.00 % $ 91 $ 1,465,305 0.01 % Commercial real estate - owner occupied (120 ) 1,046,421 -0.01 % 93 945,055 0.01 % 9 884,555 0.00 % Total commercial real estate (95 ) 2,958,579 0.00 % 112 2,610,931 0.00 % 100 2,349,860 0.00 % Commercial and industrial - term 1,010 881,004 0.11 % (339 ) 868,154 -0.04 % (2,239 ) 804,916 -0.28 % Commercial and industrial - lines of credit (287 ) 597,845 -0.05 % (89 ) 484,266 -0.02 % (3,476 ) 444,244 -0.78 % Total commercial and industrial 723 1,478,849 0.05 % (428 ) 1,352,420 -0.03 % (5,715 ) 1,249,160 -0.46 % Residential real estate - owner occupied (236 ) 845,240 -0.03 % (329 ) 752,566 -0.04 % 2 649,431 0.00 % Residential real estate - non-owner occupied (154 ) 388,176 -0.04 % 7 369,119 0.00 % 2 334,660 0.00 % Total residential real estate (390 ) 1,233,416 -0.03 % (322 ) 1,121,685 -0.03 % 4 984,091 0.00 % Construction and land development - 680,160 0.00 % - 588,464 0.00 % - 458,572 0.00 % Home equity lines of credit (9 ) 263,941 0.00 % (100 ) 225,823 -0.04 % (12 ) 203,796 -0.01 % Consumer (614 ) 142,009 -0.43 % (300 ) 145,689 -0.21 % (379 ) 141,140 -0.27 % Leases - 15,996 0.00 % - 16,298 0.00 % - 13,934 0.00 % Credit cards (241 ) 25,590 -0.94 % (193 ) 24,472 -0.79 % (626 ) 22,312 -2.81 % Total $ (626 ) $ 6,798,540 -0.01 % $ (1,231 ) $ 6,085,782 -0.02 % $ (6,628 ) $ 5,422,865 -0.12 % 62 Table of Contents The following table sets forth the ACL by portfolio class: December 31, 2025 December 31, 2024 (dollars in thousands) Allocated Allowance % of Total ACL for loans ACL for loans to Total Loans Allocated Allowance % of Total ACL for loans ACL for loans to Total Loans Commercial real estate - non-owner occupied $ 13,779 15 % 0.72 % $ 13,935 16 % 0.76 % Commercial real estate - owner occupied 13,100 14 % 1.17 % 10,192 12 % 1.02 % Total commercial real estate 26,879 29 % 0.89 % 24,127 28 % 0.85 % Commercial and industrial - term 21,121 23 % 2.35 % 21,284 25 % 2.41 % Commercial and industrial - lines of credit 7,323 8 % 1.20 % 6,496 7 % 1.17 % Total commercial and industrial 28,444 31 % 1.88 % 27,780 32 % 1.93 % Residential real estate - owner occupied 14,914 16 % 1.69 % 14,468 17 % 1.80 % Residential real estate - non-owner occupied 4,287 5 % 1.10 % 5,154 6 % 1.35 % Total residential real estate 19,201 21 % 1.51 % 19,622 23 % 1.65 % Construction and land development 12,316 14 % 1.64 % 10,981 13 % 1.76 % Home equity lines of credit 1,439 2 % 0.50 % 1,277 1 % 0.52 % Consumer 2,924 3 % 2.05 % 2,531 3 % 1.75 % Leases 524 0 % 2.35 % 370 0 % 2.38 % Credit cards 140 0 % 1.05 % 255 0 % 1.04 % Total $ 91,867 100 % 1.30 % $ 86,943 100 % 1.33 % Selected ratios relating to the ACL on loans follow: Years Ended December 31, 2025 2024 2023 Provision for credit losses on loans to average total loans 0.08 % 0.14 % 0.23 % Net (charge offs)/recoveries to average total loans -0.01 % -0.02 % -0.12 % ACL for loans to average loans 1.35 % 1.43 % 1.46 % ACL for loans to total loans 1.30 % 1.33 % 1.38 % While separate from the ACL for loans and recorded in other liabilities on the consolidated balance sheets, the ACL for off balance sheet credit exposures experienced an increase between December 31, 2024 and December 31, 2025.
Item 7. Management ’ s Discussion and Analysis of Financial Condition and Results of Operations. Stock Yards Bancorp, Inc. (“Bancorp” or “the Company”), is a FHC headquartered in Louisville, Kentucky and is engaged in the business of banking through its wholly owned subsidiary, Stock Yards Bank & Trust Company (“SYB” or “the Bank”).
Item 7. Management ’ s Discussion and Analysis of Financial Condition and Results of Operations. ’ Stock Yards Bancorp, Inc. (“Bancorp” or “the Company”), is a FHC headquartered in Louisville, Kentucky and is engaged in the business of banking through its wholly owned subsidiary, Stock Yards Bank & Trust Company (“SYB” or “the Bank”).
Treasury yield curve; ● the magnitude and frequency of changes to the FFTR implemented by the Federal Open Market Committee of the FRB; ● competitive product and pricing pressures; ● projections of revenue, expenses, capital expenditures, losses, EPS, dividends, capital structure, etc.; ● integration of acquired financial institutions, businesses or future acquisitions; ● changes in the credit quality of Bancorp’s customers and counterparties, deteriorating asset quality and charge-off levels; ● changes in technology instituted by Bancorp, its counterparties or competitors; ● changes to or the effectiveness of Bancorp’s overall internal control environment; ● adequacy of Bancorp’s risk management framework, disclosure controls and procedures and internal control over financial reporting; ● changes in applicable accounting standards, including the introduction of new accounting standards; ● changes in investor sentiment or behavior; ● changes in consumer/business spending or savings behavior; ● ability to appropriately address social, environmental and sustainability concerns that may arise from business activities; ● occurrence of natural or man-made disasters or calamities, including health emergencies, the spread of infectious diseases, pandemics or outbreaks of hostilities, and Bancorp’s ability to deal effectively with disruptions caused by the foregoing; ● ability to maintain the security of its financial, accounting, technology, data processing and other operational systems and facilities; ● ability to withstand disruptions that may be caused by any failure of its operational systems or those of third parties; 30 Table of Contents ● ability to effectively defend itself against cyberattacks or other attempts by unauthorized parties to access information of Bancorp, its vendors or its customers or to disrupt systems; and ● other risks and uncertainties reported from time-to-time in Bancorp’s filings with the SEC, including Part I Item 1A “ Risk Factors. ” Issued but Not Yet Effective Accounting Standards Updates For disclosure regarding the impact to Bancorp’s financial statements of issued-but-not-yet-effective ASUs, see the footnote titled “ Summary of Significant Accounting Policies ” of Part II Item 8 “ Financial Statements and Supplementary Data .” Critical Accounting Policies and Estimates Bancorp’s consolidated financial statements and accompanying footnotes have been prepared in accordance with GAAP.
Treasury yield curve; ● the magnitude and frequency of changes to the FFTR implemented by the Federal Open Market Committee of the FRB; ● competitive product and pricing pressures; ● projections of revenue, expenses, capital expenditures, losses, EPS, dividends, capital structure, etc.; ● integration of acquired financial institutions, businesses or future acquisitions; ● changes in the credit quality of Bancorp’s customers and counterparties, deteriorating asset quality and charge-off levels; ● changes in technology instituted by Bancorp, its counterparties or competitors; ● changes to or the effectiveness of Bancorp’s overall internal control environment; ● adequacy of Bancorp’s risk management framework, disclosure controls and procedures and internal control over financial reporting; ● changes in applicable accounting standards, including the introduction of new accounting standards; ● changes in investor sentiment or behavior; ● changes in consumer/business spending or savings behavior; ● ability to appropriately address social, environmental and sustainability concerns that may arise from business activities; ● occurrence of natural or man-made disasters or calamities, including health emergencies, the spread of infectious diseases, pandemics or outbreaks of hostilities, and Bancorp’s ability to deal effectively with disruptions caused by the foregoing; ● ability to maintain the security of its financial, accounting, technology, data processing and other operational systems and facilities; ● ability to withstand disruptions that may be caused by any failure of its operational systems or those of third parties; ● ability to effectively defend itself against cyberattacks or other attempts by unauthorized parties to access information of Bancorp, its vendors or its customers or to disrupt systems; and ● other risks and uncertainties reported from time-to-time in Bancorp’s filings with the SEC, including Part I Item 1A “ Risk Factors. ” Issued but Not Yet Effective Accounting Standards Updates For disclosure regarding the impact to Bancorp’s financial statements of issued-but-not-yet-effective ASUs, see the footnote titled “ Summary of Significant Accounting Policies ” of Part II Item 8 “ Financial Statements and Supplementary Data .” 30 Table of Contents Critical Accounting Estimates Bancorp’s consolidated financial statements and accompanying footnotes have been prepared in accordance with GAAP.
While this trend continued into 2024, significant average loan growth and the benefit of higher rates upon average interest earning assets eventually managed to outpace rising funding costs in the latter half of the year, as deposit cost expansion began to moderate.
While this trend continued into 2024, significant average loan growth and the benefit of higher rates upon average interest earning assets eventually managed to outpace rising funding costs in the latter half of 2024, as deposit cost expansion began to moderate.
Critical accounting policies are those that management believes are the most important to the portrayal of Bancorp’s financial condition and operating results and require management to make estimates that are difficult, subjective and complex. Most accounting policies are not considered by management to be critical accounting policies.
Critical accounting estimates are those that management believes are the most important to the portrayal of Bancorp’s financial condition and operating results and require management to make estimates that are difficult, subjective and complex. Most accounting estimates are not considered by management to be critical accounting estimates.
SYB, established in 1904, 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 markets through 72 full service banking center locations. The Bank is registered with, and subject to supervision, regulation and examination by the FDIC and the Kentucky Department of Financial Institutions.
SYB, established in 1904, 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 markets through 75 full service banking center locations. The Bank is registered with, and subject to supervision, regulation and examination by the FDIC and the Kentucky Department of Financial Institutions.
This activity has benefitted interest-earning asset yields and overall NIM, as the low-yielding treasury security maturities shifted into higher-yielding interest-bearing cash and ultimately helped fund Bancorp’s substantial loan growth. 38 Table of Contents ● Average FFS and interest bearing due from bank balances increased $14 million, or 8%, for the year ended December 31, 2024, as a result of the previously mentioned liquidity provided by the investment securities portfolio and increased FHLB borrowing activity, which was partially offset by loan funding.
This activity has benefitted interest-earning asset yields and overall NIM, as the low-yielding treasury security maturities shifted into higher-yielding interest-bearing cash and ultimately helped fund Bancorp’s substantial loan growth. ● Average FFS and interest bearing due from bank balances increased $14 million, or 8%, for the year ended December 31, 2024, as a result of the previously mentioned liquidity provided by the investment securities portfolio and increased FHLB borrowing activity, which was partially offset by loan funding.
Management believes it has adequately reflected credit exposure in these loans in its determination of the allowance. During the years ended December 31, 2024 and 2023, there were no modifications made to loans for borrowers experiencing financial difficulty and there were no payment defaults of existing modified loans within 12 months following modification.
Management believes it has adequately reflected credit exposure in these loans in its determination of the allowance. During the years ended December 31, 2025 and 2024, there were no modifications made to loans for borrowers experiencing financial difficulty and there were no payment defaults of existing modified loans within 12 months following modification.
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. o Interest-bearing deposits increased $588 million, or 11%, for the year ended December 31, 2024 compared to the prior year, led in part by a $255 million, or 26%, increase in time deposits associated with Bancorp’s successful promotional product offerings, offsetting a $92 million, or 6%, decline in non-interest bearing deposits. ● 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. ● Non-interest expenses increased $10.4 million, or 6%, for the year ended December 31, 2024, compared to the prior year, driven by higher compensation and employee benefit expenses associated with annual merit-based salary increases and higher bonus levels, full-time employee growth and higher health insurance claims activity, in addition to increased technology and communication expense, attributed to various security and compliance-related software upgrades. ● Bancorp’s efficiency ratio (FTE) for the year ended December 31, 2024 was 56.20% compared to 55.23% for the prior year.
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 was strong during 2024. o Interest-bearing deposits increased $588 million, or 11%, for the year ended December 31, 2024 compared to the prior year, led in part by a $255 million, or 26%, increase in time deposits associated with Bancorp’s successful promotional product offerings, offsetting a $92 million, or 6%, decline in non-interest bearing deposits. ● 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. 34 Table of Contents ● Non-interest expenses increased $10.4 million, or 6%, for the year ended December 31, 2024, compared to the prior year, driven by higher compensation and employee benefit expenses associated with annual merit-based salary increases and higher bonus levels, full-time employee growth and higher health insurance claims activity, in addition to increased technology and communication expense, attributed to various security and compliance-related software upgrades. ● Bancorp’s efficiency ratio (FTE) for the year ended December 31, 2024 was 56.20% compared to 55.23% for the prior year.
Management uses different betas in the rising and falling rate scenarios in an effort to best simulate expected earnings trends. Bancorp’s interest rate sensitivity analysis details that increases in interest rates of 100 and 200 bps would have a positive effect on net interest income, while decreases in interest rates of 100 and 200 bps would have a negative impact.
Management uses different betas in the rising and falling rate scenarios in an effort to best simulate expected earnings trends. Bancorp’s interest rate sensitivity analysis indicates that increases in interest rates of 100 and 200 bps would have a positive effect on net interest income, while decreases in interest rates of 100 and 200 bps would have a negative impact.
The results of the interest rate sensitivity analysis performed as of December 31, 2024 were derived from conservative assumptions Bancorp uses in its model, particularly in relation to deposit betas, which measure how responsive management’s deposit repricing may be to changes in market rates based on historical data.
The results of the interest rate sensitivity analysis performed as of December 31, 2025 were derived from conservative assumptions Bancorp uses in its model, particularly in relation to deposit betas, which measure how responsive management’s deposit repricing may be to changes in market rates based on historical data.
Management continually evaluates its accounting policies and estimates that it uses to prepare the consolidated financial statements. In general, management’s estimates and assumptions are based on historical experience, accounting and regulatory guidance, and information obtained from independent third-party professionals. Actual results may differ from those estimates made by management.
Management continually evaluates the accounting estimates that it uses to prepare the consolidated financial statements. In general, management’s estimates and assumptions are based on historical experience, accounting and regulatory guidance, and information obtained from independent third-party professionals. Actual results may differ from those estimates made by management.
The TPS are treated as part of Tier 1 Capital. The subordinated note and related interest expense are included in Bancorp’s consolidated financial statements. The subordinated notes are currently redeemable at Bancorp’s option on a quarterly basis. As of December 31, 2024, subordinated notes added through the CB acquisition totaled $27 million.
The TPS are treated as part of Tier 1 Capital. The subordinated note and related interest expense are included in Bancorp’s consolidated financial statements. The subordinated notes are currently redeemable at Bancorp’s option on a quarterly basis. As of December 31, 2025, subordinated notes added through the CB acquisition totaled $27 million.
Provision for credit loss expense for off balance sheet credit exposures of $925,000 was recorded for the year ended December 31, 2024, driven largely by an increase in expected future utilization within the C&D portfolio. The ACL for off balance sheet credit exposures totaled $6.8 million as of December 31, 2024.
Provision for off balance sheet credit exposures of $925,000 was recorded for the year ended December 31, 2024, driven largely by an increase in expected future utilization within the C&D portfolio. The ACL for off balance sheet credit exposures totaled $6.8 million as of December 31, 2024.
The TPS are treated as part of Tier 1 Capital. The subordinated note and related interest expense are included in Bancorp’s consolidated financial statements. The subordinated notes are currently redeemable at Bancorp’s option on a quarterly basis. As of December 31, 2024, subordinated notes totaled $27 million.
The TPS are treated as part of Tier 1 Capital. The subordinated note and related interest expense are included in Bancorp’s consolidated financial statements. The subordinated notes are currently redeemable at Bancorp’s option on a quarterly basis. As of December 31, 2025, subordinated notes totaled $27 million.
The forward-looking statements are principally, but not exclusively, contained in Part II Item 7 “ Management ’ s Discussion and Analysis of Financial Condition and Results of Operations ” and Part I Item 1A “ Risk Factors. ” 29 Table of Contents Forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause actual results, performance, or achievements to be materially different from future results, performance, or achievements expressed or implied by the statement.
The forward-looking statements are principally, but not exclusively, contained in Part II Item 7 “ Management ’ s Discussion and Analysis of Financial Condition and Results of Operations ” and Part I Item 1A “ Risk Factors. ” Forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause actual results, performance, or achievements to be materially different from future results, performance, or achievements expressed or implied by the statement.
These interest rate swaps are designated as cash flow hedges as described in the footnote titled “ Derivative Financial Instruments. ” For these derivatives, the effective portion of gains or losses is reported as a component of OCI and is subsequently reclassified into earnings as an adjustment to interest expense in periods in which the hedged forecasted transaction affects earnings. 45 Table of Contents Provision for Credit Losses Provision for credit losses on loans at December 31, 2024 represents the amount of expense that, based on Management’s judgment, is required to maintain the ACL for loans at an appropriate level under the CECL model.
These interest rate swaps are designated as cash flow hedges as described in the footnote titled “ Derivative Financial Instruments. ” For these derivatives, gains or losses are reported as a component of OCI and is subsequently reclassified into earnings as an adjustment to interest expense in periods in which the hedged forecasted transaction affects earnings. 45 Table of Contents Provision for Credit Losses Provision for credit losses on loans at December 31, 2025 represents the amount of expense that, based on Management’s judgment, is required to maintain the ACL for loans at an appropriate level under the CECL model.
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.
Provision 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.
At December 31, 2024, the adequately-capitalized minimums, including the capital conservation buffer, were a 7.0% Common Equity Tier 1 Risk-Based Capital ratio, 8.5% Tier 1 Risk-Based Capital ratio and 10.5% Total Risk-Based Capital ratio. Bancorp exceeded these levels as of December 31, 2024 and 2023.
At December 31, 2025, the adequately-capitalized minimums, including the capital conservation buffer, were a 7.0% Common Equity Tier 1 Risk-Based Capital ratio, 8.5% Tier 1 Risk-Based Capital ratio and 10.5% Total Risk-Based Capital ratio. Bancorp exceeded these levels as of December 31, 2025 and 2024.
BOLI income increased $190,000, or 8%, for the year ended December 31, 2024 compared to the same period of the prior year, attributed to general market appreciation and a reallocation of investments within the policy plans over the past year.
BOLI income increased $190,000, or 8%, for the year ended December 31, 2024 compared to the same period of the prior year, attributed to general market appreciation and a reallocation of investments within the policy plans.
Combined with FFS and interest bearing deposits from banks, AFS debt securities offer substantial resources to meet either loan growth or reductions in Bancorp’s deposit funding base. 69 Table of Contents Bancorp pledges portions of its investment securities portfolio to secure public funds, cash balances of certain WM&T accounts and SSUAR.
Combined with FFS and interest bearing deposits from banks, AFS debt securities offer substantial resources to meet either loan growth or reductions in Bancorp’s deposit funding base. Bancorp pledges portions of its investment securities portfolio to secure public funds, cash balances of certain WM&T accounts and SSUAR.
SSUARs are collateralized by securities and are treated as financings; accordingly, the securities involved with the agreements are recorded as assets and are held by a safekeeping agent and the obligations to repurchase the securities are reflected as liabilities. All securities underlying the agreements are under the Bancorp’s control.
SSUAR are collateralized by securities and are treated as financings; accordingly, the securities involved with the agreements are recorded as assets and are held by a safekeeping agent and the obligations to repurchase the securities are reflected as liabilities. All securities underlying the agreements are under Bancorp’s control.
Further, net charge offs of $1.2 million were recorded for the year ended December 31, 2024. o Provision for credit losses on loans for the prior year period were driven by substantial loan growth, a flat 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. o Provision for credit losses on loans for the year ended December 31, 2023 were driven by substantial loan growth, a flat unemployment forecast and other factors within the CECL model.
The increase in this ratio was the result of non-interest expense growth (on a percentage basis) outpacing net interest income and non-interest income expansion, as net interest income was hampered by rising funding costs. See the section titled “ Non-GAAP Financial Measures ” for a reconcilement of non-GAAP to GAAP measures.
The increase in this ratio compared to the prior year was the result of non-interest expense growth (on a percentage basis) outpacing net interest income and non-interest income expansion, as net interest income was hampered by rising funding costs. See the section titled “ Non-GAAP Financial Measures ” for a reconcilement of non-GAAP to GAAP measures.
Participation loans averaged $3 million, $4 million and $5 million for the years ended December 31, 2024, 2023 and 2022, respectively. ● Interest income on a FTE basis includes additional amounts of interest income that would have been earned if investments in certain tax-exempt interest earning assets had been made in assets subject to federal taxes yielding the same after-tax income.
Participation loans averaged $2 million, $3 million and $4 million for the years ended December 31, 2025, 2024 and 2023, respectively. ● Interest income on a FTE basis includes additional amounts of interest income that would have been earned if investments in certain tax-exempt interest earning assets had been made in assets subject to federal taxes yielding the same after-tax income.
Management believes it has the ability to increase deposits at any time by offering rates slightly higher than market rate. Bancorp’s Asset/Liability Committee is comprised of senior management and has direct oversight responsibility for Bancorp’s liquidity position and profile.
Management believes it has the ability to increase deposits at any time by offering rates slightly higher than market rate. 66 Table of Contents Bancorp’s Asset/Liability Committee is comprised of senior management and has direct oversight responsibility for Bancorp’s liquidity position and profile.
Mortgage banking revenue increased $153,000, or 4%, for the year ended December 31, 2024, as compared with the same period of 2023, driven by an increase in origination volume in addition to slowing MSR amortization.
Mortgage banking revenue increased $153,000, or 4%, for the year ended December 31, 2024, as compared with the same period of 2023, driven by an increase in origination volume in addition to lower MSR amortization expense.
These results depict a slightly asset-sensitive interest rate risk profile. The increase in net interest income in the rising rate scenarios is primarily due to variable rate loans and short-term investments repricing more quickly than deposits and short-term borrowings.
These results depict an asset-sensitive interest rate risk profile. The increase in net interest income in the rising rate scenarios is primarily due to variable rate loans and short-term investments repricing more quickly than deposits and short-term borrowings.
Bancorp also utilized overnight borrowings more heavily in 2024 to fund loan growth and manage deposit fluctuations. ● 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.
Bancorp also utilized overnight borrowings more heavily in 2024 to fund loan growth and manage deposit fluctuations. 40 Table of Contents ● 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.
NIM and net interest spread calculations in the preceding table exclude the sold portion of certain participation loans, which totaled $2 million, $4 million and $5 million for the years ended December 31, 2024, 2023 and 2022, respectively.
NIM and net interest spread calculations in the preceding table exclude the sold portion of certain participation loans, which totaled $2 million, $2 million and $4 million for the years ended December 31, 2025, 2024 and 2023, respectively.
Core Deposit and Customer List Intangibles CDIs and CLIs arising from business acquisitions are initially measured at fair value and are then amortized on an accelerated method based on their useful lives. As of December 31, 2024 and December 31, 2023, Bancorp’s CDI assets totaled $9 million and $12 million, respectively.
Core Deposit and Customer List Intangibles CDIs and CLIs arising from business acquisitions are initially measured at fair value and are then amortized on an accelerated method based on their useful lives. As of December 31, 2025 and December 31, 2024, Bancorp’s CDI assets totaled $7 million and $9 million, respectively.
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. Bancorp is a member of the FHLB of Cincinnati.
Included in total deposit balances at December 31, 2025 are $781 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, 2024, public funds deposits totaled $663 million. Bancorp is a member of the FHLB of Cincinnati.
Prime rate, the five year Treasury note rate, and one month term SOFR are included in the preceding table to provide a general indication of the interest rate environment Bancorp has operated in during the past three years, a period marked by dramatic changes in interest rates.
Prime rate, the five year Treasury note rate, and one month term SOFR are included in the preceding table to provide a general indication of the interest rate environment Bancorp has operated in during the past three years, a period marked by interest rate volatility.
As of December 31, 2024 and December 31, 2023, Bancorp’s CLI assets totaled $7 million and $8 million, respectively, and were attributed entirely to the WM&T segment. As of December 31, 2024, Bancorp did not incur any impairment with respect to its intangible assets or other long-lived assets.
As of December 31, 2025 and December 31, 2024, Bancorp’s CLI assets totaled $5 million and $7 million, respectively, and were attributed entirely to the WM&T segment. As of December 31, 2024, Bancorp did not incur any impairment with respect to its intangible assets or other long-lived assets.
Office building exposure, which is a sub-segment of CRE and perceived to be of particular risk in the current environment, is a smaller component of Bancorp’s loan portfolio, totaling $580 million, or 9%, of total loans as of December 31, 2024.
Office building exposure, which is a sub-segment of CRE and perceived to be of particular risk in the current environment, is a smaller component of Bancorp’s loan portfolio, totaling $605 million, or 9%, of total loans as of December 31, 2025.
Average loans increased $663 million, or 12%, for the year ended December 31, 2024 compared to the same period of the prior year. ● Bancorp’s ACL on loans increased $8 million, or 10%, compared to December 31, 2023.
Average loans increased $663 million, or 12%, for the year ended December 31, 2024 compared to the prior year. ● Bancorp’s ACL on loans increased $8 million, or 10%, as of December 31, 2024 compared to December 31, 2023.
Changes in the cash surrender value of life insurance policies decreased the ETR by 0.61% and 0.64% for the years ended December 31, 2024 and 2023, respectively. ● Bancorp invests in certain partnerships that yield federal income tax credits. Taken as a whole, the tax benefit of these investments exceeds amortization expense, resulting in a positive impact on net income.
Changes in the cash surrender value of life insurance policies decreased the ETR by 0.53% and 0.61% for the year ended December 31, 2025 and 2024, respectively. ● Bancorp invests in certain partnerships that yield federal income tax credits. Taken as a whole, the tax benefit of these investments exceeds amortization expense, resulting in a positive impact on net income.
At December 31, 2024, Bancorp’s loan portfolio consisted of approximately 67% fixed and 33% variable rate loans. At inception, most of Bancorp’s fixed rate loans are priced in relation to the five year treasury note. Bancorp’s variable rate loans are typically indexed to either Prime or one month term SOFR, generally repricing as those rates change.
At December 31, 2025, Bancorp’s loan portfolio consisted of approximately 64% fixed and 36% variable rate loans. At inception, most of Bancorp’s fixed rate loans are priced in relation to the five year treasury note. Bancorp’s variable rate loans are typically indexed to either Prime or one month term SOFR, generally repricing as those rates change.
For certain participation loans sold, Bancorp has retained effective control of the loans, typically by restricting the participating institutions from pledging or selling their ownership share of the loan without permission from Bancorp. GAAP requires the participated portion of these loans to be recorded as secured borrowings.
For certain participation loans sold, Bancorp has retained effective control of the loans, typically by restricting the participating institutions from pledging or selling their ownership share of the loan without permission from Bancorp. The participated portion of these loans are recorded as secured borrowings.
Net accretion income/ (amortization expense) related to acquired loans totaled $2.2 million, $2.4 million and $2.6 million for the years ended December 31, 2024, 2023 and 2022, respectively. ● Net interest income, the most significant component of Bancorp's earnings, represents total interest income less total interest expense.
Net accretion income/ (amortization expense) related to acquired loans totaled $1.5 million, $2.2 million and $2.4 million for the years ended December 31, 2025, 2024 and 2023, respectively. ● Net interest income, the most significant component of Bancorp's earnings, represents total interest income less total interest expense.
Default is determined at 90 days or more past due, charge off, or foreclosure. Delinquent Loans Delinquent loans (consisting of all loans 30 days or more past due) totaled $32 million and $17 million at December 31, 2024 and December 31, 2023. Delinquent loans to total loans were 0.50% and 0.30% at December 31, 2024 and December 31, 2023, respectively.
Default is determined at 90 days or more past due, charge off, or foreclosure. Delinquent Loans Delinquent loans (consisting of all loans 30 days or more past due) totaled $26 million and $32 million at December 31, 2025 and December 31, 2024. Delinquent loans to total loans were 0.38% and 0.50% at December 31, 2025 and December 31, 2024, respectively.
At December 31, 2024, such deposits totaled $6.14 billion and represented 86% of Bancorp’s total deposits, as compared with $5.78 billion, or 87% of total deposits at December 31, 2023. Because core deposits are less volatile and are often tied to other products of Bancorp through long lasting relationships, they normally do not place undue pressure on liquidity.
At December 31, 2025, such deposits totaled $6.44 billion and represented 83% of Bancorp’s total deposits, as compared with $6.14 billion, or 86% of total deposits at December 31, 2024. Because core deposits are less volatile and are often tied to other products of Bancorp through long lasting relationships, they normally do not place undue pressure on liquidity.
At September 30, 2024, Bancorp performed its annual qualitative assessment to determine if it was more-likely-than-not that the fair value of the reporting units exceeded their carrying value, including goodwill. The qualitative assessment indicated that it was not more-likely-than-not that the carrying value of the reporting units exceeded their fair value.
At September 30, 2025 and October 1, 2025, Bancorp performed its annual qualitative assessment to determine if it was more-likely-than-not that the fair value of the reporting units exceeded their carrying value, including goodwill. The qualitative assessment indicated that it was not more-likely-than-not that the carrying value of the reporting units exceeded their fair value.
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. Compensation, which includes salaries, incentives, bonuses and stock based compensation, increased 9.0 million, or 10%, for the year ended December 31, 2024, as compared with the same period of 2023.
Compensation and employee benefits comprised 62% of Bancorp’s total non-interest expenses for the year ended December 31, 2025, compared to 61% for the same period of 2024. Compensation, which includes salaries, incentives, bonuses and stock based compensation, increased 9.7 million, or 10%, for the year ended December 31, 2025, as compared with the same period of 2024.
Interest income recorded on non-accrual loans as principal payments totaled $624,000, $342,000, and $160,000 for 2024, 2023, and 2022. Interest income that would have been recorded if non-accrual loans were on a current basis in accordance with their original terms totaled $1.3 million, $1.5 million, and $1.1 million for 2024, 2023, and 2022.
Interest income recorded on non-accrual loans as principal payments totaled $538,000, $624,000, and $342,000 for 2025, 2024, and 2023. Interest income that would have been recorded if non-accrual loans were on a current basis in accordance with their original terms totaled $2.0 million, $1.3 million, and $1.5 million for 2025, 2024, and 2023.
However, these yields were outpaced by the cost of interest bearing liabilities, which expanded 76 bps, or 39%, to 2.73% compared to 1.97% for the prior year, driving net interest spread and NIM compression. ● Total loans increased $749 million, or 13%, compared to December 31, 2023, driven by growth in most categories over the past year.
However, these yields were outpaced by the cost of interest bearing liabilities, which expanded 76 bps, or 39%, to 2.73% compared to 1.97% for the prior year, driving net interest spread and NIM compression. ● Total loans increased $749 million, or 13%, compared to December 31, 2023, attributed to growth in most loan portfolio segments.
While a combination of sustained higher interest rates and rising central business district vacancies across the country has created credit and collateral concerns within the CRE sector generally, Bancorp believes the quality of its CRE portfolio, and the overall loan portfolio, remains solid.
While a combination of higher interest rates and rising central business district vacancies across the country created credit and collateral concerns within the CRE sector generally over the past few years, Bancorp believes the quality of its CRE portfolio, and the overall loan portfolio, remains solid.
Provision expense for credit losses on loans of $8.8 million was recorded for the year December 31, 2024, driven mainly by strong loan growth, and to a much lesser extent, an improved unemployment forecast and other factors within the CECL model.
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.
Loans outstanding and related unfunded commitments are primarily concentrated within Bancorp’s current market areas, which encompass the Louisville, Kentucky MSA, central, eastern and northern Kentucky, as well as the Indianapolis, Indiana and Cincinnati, Ohio MSAs. CRE represents the largest segment of Bancorp’s loan portfolio, totaling $2.84 billion, or 44%, of total loans as of December 31, 2024.
Loans outstanding and related unfunded commitments are primarily concentrated within Bancorp’s current market areas, which encompass the Louisville, Kentucky MSA, central, eastern and northern Kentucky, as well as the Indianapolis, Indiana and Cincinnati, Ohio MSAs. CRE represents the largest segment of Bancorp’s loan portfolio, totaling $3.04 billion, or 43%, of total loans as of December 31, 2025.
Management has discussed each critical accounting policy and the methodology for the identification and determination of critical accounting policies with Bancorp’s Audit Committee. As of December 31, 2024, the significant accounting policy considered the most critical in preparing Bancorp’s consolidated financial statements is the determination of the ACL on loans.
Management has discussed each critical accounting estimate and the methodology for the identification and determination of critical accounting estimates with Bancorp’s Audit Committee. As of December 31, 2025, the significant accounting estimate considered the most critical in preparing Bancorp’s consolidated financial statements is the determination of the ACL on loans.
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. Banking regulators have categorized the Bank as well-capitalized.
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. Banking regulators have categorized the Bank as well-capitalized.
The investment portfolio (HTM and AFS) includes total cash flows on amortizing debt securities of approximately $515 million (based on assumed prepayment speeds as of December 31, 2024) expected over the next 12 months, including $353 million of contractual maturities.
The investment portfolio (HTM and AFS) includes total cash flows on amortizing debt securities of approximately $199 million (based on assumed prepayment speeds and contractual maturities as of December 31, 2025) expected over the next 12 months.
Approximately $242 million, or 42%, of Bancorp’s office building exposure is medical-related, which in management’s opinion presents reduced risk compared to other CRE uses. Approximately $306 million, or 53%, of the office building exposure is owner-occupied and is generally accompanied by a full commercial banking relationship.
Approximately $255 million, or 42%, of Bancorp’s office building exposure is medical-related, which in management’s opinion presents reduced risk compared to other CRE uses. In addition, approximately $335 million, or 55%, of the office building exposure is owner-occupied and is generally accompanied by a full commercial banking relationship.
Managed assets are invested in instruments for which market values can be readily determined, the majority of which are sensitive to market fluctuations and consist of approximately 65% in equities and 35% in fixed income securities as of December 31, 2024, compared to 64% and 36% as of December 31, 2023.
Managed assets are invested in instruments for which market values can be readily determined, the majority of which are sensitive to market fluctuations and consist of approximately 65% in equities and 35% in fixed income securities as of both December 31, 2025 and December 31, 2024, respectively.
Non-interest income comprised 27% of total revenue, defined as net interest income and non-interest income, for the years ended both December 31, 2024 and 2023, respectively. WM&T revenue comprised 45% of total non-interest income for the year ended December 31, 2024 compared to 43% for the same period of 2023, respectively.
Non-interest income comprised 24% and 27% of total revenue, defined as net interest income and non-interest income, for the years ended December 31, 2025 and 2024, respectively. WM&T revenue comprised 44% of total non-interest income for the year ended December 31, 2025 compared to 45% for the same period of 2024, respectively.
Capital and deposit based taxes, which consist primarily of capital-based local income taxes and franchise taxes, increased $305,000, or 12%, for the year ended December 31, 2024 compared to the same period of 2023.
Capital and deposit based taxes, which consist primarily of capital-based local income taxes and franchise taxes, increased $634,000, or 23%, for the year ended December 31, 2025 compared to the same period of 2024.
Bancorp’s ratio of TCE to total tangible assets was 8.44% as of December 31, 2024, compared to 8.09% at December 31, 2023, the improvement driven mainly by growth in stockholder’s equity associated with the year’s strong operating results and to a much smaller extent, the positive change in AOCI related to the valuation of the AFS debt securities portfolio.
Bancorp’s ratio of TCE to total tangible assets was 9.32% as of December 31, 2025, compared to 8.44% at December 31, 2024, the improvement driven mainly by growth in stockholder’s equity associated with the year’s record operating results and to a lesser extent, the positive change in AOCI related to the valuation of the AFS debt securities portfolio.
While separate from the ACL for loans and recorded in other liabilities on the consolidated balance sheets, the ACL for off balance sheet credit exposures also experienced an increase between December 31, 2023 and December 31, 2024.
While separate from the ACL for loans and recorded in other liabilities on the consolidated balance sheets, the ACL for off balance sheet credit exposures also increased between December 31, 2024 and December 31, 2025.
Several factors are considered in determining whether or not a policy is critical in the preparation of the financial statements.
Several factors are considered in determining whether or not an estimate is critical in the preparation of the financial statements.
Discussion of 2024 vs 2023: Net interest spread (FTE) and NIM (FTE) were 2.58% and 3.31%, for the year ended December 31, 2024, compared to 2.78% and 3.39% for the prior year, respectively.
Discussion of 2025 vs 2024: Net interest spread (FTE) and NIM (FTE) were 2.89% and 3.53%, for the year ended December 31, 2025, compared to 2.58% and 3.31% for the prior year, respectively.
However, deposits may generally be more sensitive to market rates, with potential decreases possibly straining Bancorp’s liquidity position. As of December 31, 2024, Bancorp held no brokered deposits. Bancorp held brokered deposits totaling $597,000 as of December 31, 2023.
However, deposits may generally be more sensitive to market rates, with potential decreases possibly straining Bancorp’s liquidity position. As of both December 31, 2025 and December 31, 2024, Bancorp held no brokered deposits.
Detail of WM&T Services Income by Account Type: (in thousands) Years Ended December 31, 2024 2023 2022 Investment advisory $ 17,034 $ 15,639 $ 13,697 Personal trust 14,584 14,048 13,213 Personal investment retirement 7,675 6,858 6,186 Company retirement 1,662 1,524 1,520 Foundation and endowment 1,344 1,174 1,051 Custody and safekeeping 238 292 310 Brokerage and insurance services 29 11 67 Other 277 256 67 Total WM&T services income $ 42,843 $ 39,802 $ 36,111 The preceding table demonstrates that WM&T fee revenue is concentrated within investment advisory and personal trust accounts.
Detail of WM&T Services Income by Account Type: (in thousands) Years Ended December 31, 2025 2024 2023 Investment advisory $ 17,808 $ 17,034 $ 15,639 Personal trust 13,105 14,584 14,048 Personal investment retirement 8,273 7,675 6,858 Company retirement 1,644 1,662 1,524 Foundation and endowment 1,351 1,344 1,174 Custody and safekeeping 280 238 292 Brokerage and insurance services 55 29 11 Other 292 277 256 Total WM&T services income $ 42,808 $ 42,843 $ 39,802 The preceding table demonstrates that WM&T fee revenue is concentrated within investment advisory and personal trust accounts.
This is accomplished by balancing changes in demand for funds with changes in supply of funds. Liquidity is provided by short-term assets that can be converted to cash, AFS debt securities, various lines of credit available to Bancorp, and the ability to attract funds from external sources, principally deposits.
Liquidity is provided by short-term assets that can be converted to cash, AFS debt securities, various lines of credit available to Bancorp, and the ability to attract funds from external sources, principally deposits.
Net interest income decreases in the falling rate scenarios because rates on non-maturity deposits cannot be lowered sufficiently to offset the decline in interest income associated with assets that immediately reprice as rates fall. -200 -100 +100 +200 Basis Points Basis Points Basis Points Basis Points % Change from base net interest income at December 31, 2024 -5.28 % -2.77 % 3.80 % 7.51 % Bancorp’s loan portfolio is currently composed of approximately 67% fixed and 33% variable rate loans, with the fixed rate portion pricing generally based on a spread to the five year treasury note at the time of origination and the variable portion pricing based on an on-going spread to Prime (approximately 60%) or one month term SOFR (approximately 40%).
Net interest income decreases in the falling rate scenarios because rates on non-maturity deposits cannot be lowered sufficiently to offset the decline in interest income associated with assets that immediately reprice as rates fall. -200 -100 +100 +200 Basis Points Basis Points Basis Points Basis Points % Change from base net interest income at December 31, 2025 -7.11 % -3.44 % 3.29 % 6.56 % Bancorp’s loan portfolio is currently composed of approximately 64% fixed and 36% variable rate loans, with the fixed rate portion pricing generally based on a spread to the five year treasury note at the time of origination and the variable portion pricing based on an on-going spread to Prime (approximately 55%) or one month term SOFR (approximately 45%).
While Bancorp has a diversified loan portfolio, a customer’s ability to honor loan agreements is somewhat dependent upon the economic stability and/or industry in which that customer does business.
No specific industry concentration exceeds 10% of loans outstanding. While Bancorp has a diversified loan portfolio, a customer’s ability to honor loan agreements is somewhat dependent upon the economic stability and/or industry in which that customer does business.
Net charge offs of $1.2 million were recorded for the year ended December 31, 2024, serving to reduce the ACL for loans. The ACL for loans calculation and resulting credit loss expense is significantly impacted by changes in forecasted economic conditions.
Net charge offs of $626,000 were recorded for the year ended December 31, 2025, serving to decrease the ACL for loans. The ACL for loans calculation and resulting credit loss expense is significantly impacted by changes in forecasted economic conditions.
This composition has been relatively consistent from period to period. Additional Sources of Non-interest income: Deposit service charges, which consist of non-sufficient funds charges and to a lesser extent, other activity based charges, increased $40,000, or less than 1%, for the year ended December 31, 2024, as compared with the same period of 2023.
Deposit service charges, which consist of non-sufficient funds charges and to a lesser extent, other activity based charges, increased $40,000, or less than 1%, for the year ended December 31, 2024, as compared with the same period of 2023.
TCE was 8.44% at December 31, 2024 compared to 8.09% at December 31, 2023, while tangible book value per share was $24.82 at December 31, 2024, compared to $21.95 at December 31, 2023. See the section titled “ Non-GAAP Financial Measures ” for reconcilement of non-GAAP to GAAP measures.
TCE was 9.32% at December 31, 2025 compared to 8.44% at December 31, 2024, while tangible book value per share was $29.50 at December 31, 2025, compared to $24.82 at December 31, 2024. See the section titled “ Non-GAAP Financial Measures ” for reconcilement of non-GAAP to GAAP measures.
FHLB advances FHLB advances outstanding at December 31, 2024 and December 31, 2023 totaled $300 million and $200 million, respectively. Total advances at December 31, 2024 consisted of a $300 million three-month rolling advance related to four separate interest rate swaps (cash flow hedges) entered into in an effort to secure longer-term funding at more attractive rates.
FHLB advances FHLB advances outstanding totaled $300 million at both December 31, 2025 and December 31, 2024, and consisted entirely of a $300 million three-month rolling advance that is hedged with four separate interest rate swaps (cash flow hedges) entered into in an effort to secure longer-term funding at more attractive rates.
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. 62 Table of Contents The following table presents the major classifications of non-accrual loans by portfolio class: December 31, (in thousands) 2024 2023 Commercial real estate - non-owner occupied $ 5,221 $ 8,649 Commercial real estate - owner occupied 1,231 885 Total commercial real estate 6,452 9,534 Commercial and industrial - term 4,903 4,456 Commercial and industrial - lines of credit — 215 Total commercial and industrial 4,903 4,671 Residential real estate - owner occupied 7,168 3,667 Residential real estate - non-owner occupied 2,451 372 Total residential real estate 9,619 4,039 Construction and land development 311 — Home equity lines of credit 70 467 Consumer 372 337 Leases — — Credit cards — 10 Total non-accrual loans $ 21,727 $ 19,058 Loans are placed in a non-accrual income status when prospects for recovering both principal and accrued interest are considered doubtful or when a default of principal or interest has existed for 90 days or more, unless such a loan is well- secured and in the process of collection or renewal.
In total, non-performing assets as of December 31, 2025 were comprised of approximately 90 loans ranging in individual amounts up to $1.2 million and one residential real estate property held as OREO. 60 Table of Contents The following table presents the major classifications of non-accrual loans by portfolio class: December 31, (in thousands) 2025 2024 Commercial real estate - non-owner occupied $ 283 $ 5,221 Commercial real estate - owner occupied 2,449 1,231 Total commercial real estate 2,732 6,452 Commercial and industrial - term 819 4,903 Commercial and industrial - lines of credit 182 — Total commercial and industrial 1,001 4,903 Residential real estate - owner occupied 7,349 7,168 Residential real estate - non-owner occupied 1,173 2,451 Total residential real estate 8,522 9,619 Construction and land development — 311 Home equity lines of credit — 70 Consumer 278 372 Leases — — Credit cards 52 — Total non-accrual loans $ 12,585 $ 21,727 Loans are placed in a non-accrual income status when prospects for recovering both principal and accrued interest are considered doubtful or when a default of principal or interest has existed for 90 days or more, unless such a loan is well- secured and in the process of collection or renewal.
To meet the definition of well-capitalized for prompt corrective action requirements, 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. 72 Table of Contents Additionally, in order to avoid limitations on capital distributions, including dividend payments and certain discretionary bonus payments to executive officers, Bancorp and the Bank must hold a 2.5% capital conservation buffer composed of Common Equity Tier 1 Risk-Based Capital above the minimum risk-based capital requirements for the Common Equity Tier 1 Risk-Based Capital ratio, Tier 1 Risk-Based Capital ratio and Total Risk-Based Capital ratio necessary to be considered adequately-capitalized.
Additionally, in order to avoid limitations on capital distributions, including dividend payments and certain discretionary bonus payments to executive officers, Bancorp and the Bank must hold a 2.5% capital conservation buffer composed of Common Equity Tier 1 Risk-Based Capital above the minimum risk-based capital requirements for the Common Equity Tier 1 Risk-Based Capital ratio, Tier 1 Risk-Based Capital ratio and Total Risk-Based Capital ratio necessary to be considered adequately-capitalized.
Bancorp’s capital and deposit based tax expense is based on deposits held within various local taxing districts, as well as gross revenues generated within/appropriated to the state of Ohio, which is the only state Bancorp operates in with a capital-based deposit tax.
Bancorp’s capital and deposit based tax expense is based on deposits held within various local taxing districts, as well as gross revenues generated within/appropriated to the state of Ohio, which is the only state Bancorp operates in with a capital-based deposit tax. The increase over the prior year stemmed mainly from the substantial deposit growth experienced during the year.
Non-performing Loans and Assets Information summarizing non-performing loans and assets follows: December 31, (dollars in thousands) 2024 2023 Non-accrual loans $ 21,727 $ 19,058 Modifications to borrowers experiencing financial difficulty - - Loans past due 90 days or more and still accruing 487 110 Total non-performing loans 22,214 19,168 Other real estate owned 10 10 Total non-performing assets $ 22,224 $ 19,178 Non-performing loans to total loans 0.34 % 0.33 % Non-performing assets to total assets 0.25 % 0.23 % ACL for loans to non-performing loans 391 % 414 % Non-performing assets totaled $22 million at December 31, 2024 compared to $19 million at December 31, 2023.
Non-performing Loans and Assets Information summarizing non-performing loans and assets follows: December 31, (dollars in thousands) 2025 2024 Non-accrual loans $ 12,585 $ 21,727 Modifications to borrowers experiencing financial difficulty - - Loans past due 90 days or more and still accruing 449 487 Total non-performing loans 13,034 22,214 Other real estate owned 190 10 Total non-performing assets $ 13,224 $ 22,224 Non-performing loans to total loans 0.19 % 0.34 % Non-performing assets to total assets 0.14 % 0.25 % ACL for loans to non-performing loans 705 % 391 % Non-performing assets totaled $13 million at December 31, 2025 compared to $22 million at December 31, 2024.
Total non-recurring fees increased $432,000 for the year ended December 31, 2024, as compared with the same period of 2023, driven by increased estate fee income. AUM, stated at market value, totaled $7.07 billion at December 31, 2024 compared with $7.16 billion at December 31, 2023.
Total non-recurring fees decreased $375,000 for the year ended December 31, 2025, as compared with the same period of 2024, driven by a decline in estate fee income. AUM, stated at market value, totaled $7.64 billion at December 31, 2025 compared with $7.07 billion at December 31, 2024.
The value of both balance sheet and off-balance sheet items are adjusted to reflect credit risks. See the footnote titled “ Regulatory Matters ” for additional detail regarding regulatory capital requirements, as well as capital ratios of Bancorp and the Bank. The Bank exceeds regulatory capital ratios required to be well-capitalized.
These standards, or ratios, measure the relationship of capital to a combination of balance sheet and off-balance sheet risks. The value of both balance sheet and off-balance sheet items are adjusted to reflect credit risks. See the footnote titled “ Regulatory Matters ” for additional detail regarding regulatory capital requirements, as well as capital ratios of Bancorp and the Bank.
At December 31, 2024, approximately 59% and 41% of Bancorp’s variable rate loan portfolio was indexed to Prime and SOFR, respectively.
At December 31, 2025, approximately 55% and 45% of Bancorp’s variable rate loan portfolio was indexed to Prime and SOFR, respectively.
Bancorp evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained is based on management’s credit evaluation of the customer. Collateral held varies, but may include accounts receivable, inventory, securities, equipment and real estate.
The amount of collateral obtained is based on management’s credit evaluation of the customer. Collateral held varies, but may include accounts receivable, inventory, securities, equipment and real estate.
Bancorp provides the TCE per share, a non-GAAP measure, in addition to those defined by banking regulators, based on its widespread use by investors as a means to evaluate capital adequacy: December 31, (dollars and shares in thousands, except per share data) 2024 2023 Total stockholders' equity - GAAP (a) $ 940,476 $ 858,103 Less: Goodwill (194,074 ) (194,074 ) Less: Core deposit and other intangibles (15,818 ) (20,304 ) Tangible common equity - Non-GAAP (c) $ 730,584 $ 643,725 Total assets - GAAP (b) $ 8,863,419 $ 8,170,102 Less: Goodwill (194,074 ) (194,074 ) Less: Core deposit and other intangibles (15,818 ) (20,304 ) Tangible assets - Non-GAAP (d) $ 8,653,527 $ 7,955,724 Total stockholders' equity to total assets - GAAP (a/b) 10.61 % 10.50 % Tangible common equity to tangible assets - Non-GAAP (c/d) 8.44 % 8.09 % Total shares outstanding (e) 29,431 29,329 Book value per share - GAAP (a/e) $ 31.96 $ 29.26 Tangible common equity per share - Non-GAAP (c/e) 24.82 21.95 The efficiency ratio, a non-GAAP measure, equals total non-interest expenses divided by the sum of net interest income (FTE) and non-interest income.
Bancorp provides the TCE per share, a non-GAAP measure, in addition to those defined by banking regulators, based on its widespread use by investors as a means to evaluate capital adequacy: December 31, (dollars and shares in thousands, except per share data) 2025 2024 Total stockholders' equity - GAAP (a) $ 1,075,697 $ 940,476 Less: Goodwill (194,074 ) (194,074 ) Less: Core deposit and other intangibles (12,160 ) (15,818 ) Tangible common equity - Non-GAAP (c) $ 869,463 $ 730,584 Total assets - GAAP (b) $ 9,536,124 $ 8,863,419 Less: Goodwill (194,074 ) (194,074 ) Less: Core deposit and other intangibles (12,160 ) (15,818 ) Tangible assets - Non-GAAP (d) $ 9,329,890 $ 8,653,527 Total stockholders' equity to total assets - GAAP (a/b) 11.28 % 10.61 % Tangible common equity to tangible assets - Non-GAAP (c/d) 9.32 % 8.44 % Total shares outstanding (e) 29,476 29,431 Book value per share - GAAP (a/e) $ 36.49 $ 31.96 Tangible common equity per share - Non-GAAP (c/e) 29.50 24.82 The efficiency ratio, a non-GAAP measure, equals total non-interest expenses divided by the sum of net interest income (FTE) and non-interest income.
Debit and credit card income consists of interchange revenue, ancillary fees and incentives received from card processors. Debit and credit card revenue increased $644,000, or 3%, for the year ended December 31, 2024, as compared with the same period of 2023, driven mainly by higher transaction volume.
Debit and credit card income consists of interchange revenue, ancillary fees and incentives received from card processors. Debit and credit card revenue decreased $209,000, or 1%, for the year ended December 31, 2025, as compared with the same period of 2024, driven mainly by lower transaction volumes.
Non-interest income comprised 27% and 28% of total revenue for the years ended December 31, 2023 and 2022, respectively. WM&T revenue comprised 43% of total non-interest income for the year ended December 31, 2023 compared to 41% for the same period of 2022, respectively.
WM&T revenue comprised 45% of total non-interest income for the year ended December 31, 2024 compared to 43% for the same period of 2023, respectively.

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