8-K: Stock Yards Bancorp Reports Record Q4 & Full-Year 2025 Earnings

Stock Yards Bancorp announced record fourth quarter and full-year 2025 earnings, driven by solid loan and deposit growth, non-interest income expansion, and strong credit quality.

Summary

• Stock Yards Bancorp reported record net income of $36.6 million, or $1.24 per diluted share, for the fourth quarter ended December 31, 2025, compared to $31.7 million, or $1.07 per diluted share, for the same period in 2024.
• For the full year ended December 31, 2025, the company achieved record net income of $140.2 million, or $4.75 per diluted share, marking a 22% increase over the prior year.
• Tangible book value per share increased 19% year-over-year to a record $29.50 as of December 31, 2025.
• Total loans grew by $521 million, or 8%, over the last 12 months, reaching $7.04 billion.
• Total deposits expanded by $625 million, or 9%, over the past 12 months, totaling $7.79 billion.
• Net interest margin expanded 13 basis points year-over-year to 3.57% for the fourth quarter of 2025.
• The Wealth Management & Trust (WM&T) division achieved record results in the fourth quarter, with both revenue and assets under management reaching all-time highs.
• Non-performing loans decreased to $13.0 million, or 0.19% of total loans outstanding, on December 31, 2025, from $22.2 million, or 0.34%, on December 31, 2024.

Sentiment

Score: 9

Explanation: The filing reports record earnings for both the quarter and full year, strong growth in loans and deposits, significant improvement in credit quality, and expansion of net interest margin. The company also received industry recognition for its performance and maintains a strong capital position, indicating exceptional financial health and strategic execution.

Positives

• Record net income for both the fourth quarter ($36.6 million) and the full year ($140.2 million), representing a 22% increase year-over-year for the full year.
• Tangible book value per share increased 19% year-over-year to a record $29.50.
• Solid loan growth of 8% year-over-year, totaling $521 million, with broad-based increases across all markets and categories.
• Significant deposit growth of 9% year-over-year, totaling $625 million, attributed mainly to a successful time deposit campaign.
• Net interest margin expanded 13 basis points year-over-year to 3.57% for Q4 2025, driven by strong earning asset growth and a decline in the cost of interest-bearing liabilities.
• Wealth Management & Trust division achieved record revenue and assets under management in Q4 2025, recovering from negative net new business in late 2024.
• Excellent credit quality metrics, with non-performing loans decreasing to 0.19% of total loans from 0.34% in the prior year.
• Efficiency ratio improved to 52.46% in Q4 2025 from 55.21% in Q4 2024, indicating better operational efficiency.
• Named a 'Sm-All Star' by Piper Sandler for the seventh time, recognizing it as a top-performing small-cap bank based on growth, profitability, credit quality, and capital strength.
• Maintained 'well-capitalized' status, the highest regulatory capital rating, with all capital ratios experiencing meaningful growth.

Negatives

• Year-over-year loan growth of 8% marked the first time in 4 years below double digits, although it remains above peer averages.
• Experienced elevated payoff activity in the second half of the year, primarily from stabilized construction projects refinancing with permanent lenders.
• Deposit mix continued to shift from non-interest bearing and low interest-bearing deposits into higher-cost deposits.
• Interest income on securities decreased $2.7 million, or 31%, compared to Q4 2024, due to declining average balances and yields.
• The effective tax rate increased to 23.6% in Q4 2025 from 19.0% in Q4 2024 due to changes in the anticipated timing of certain tax credit investment benefits.

Risks

• Economic conditions, both generally and more specifically in the markets in which the Company and its banking subsidiary operate.
• Competition for the Company's customers from other providers of financial services.
• Changes in, or forecasts of, future political and economic conditions, inflation, and efforts to control it.
• Government legislation and regulation, which change and over which the Company has no control.
• Changes in interest rates.
• Material unforeseen changes in liquidity, results of operations, or financial condition of the Company's customers.
• Other risks detailed in the Company's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2024.

Future Outlook

The company is optimistic about the continued momentum of its Wealth Management & Trust division and its role in driving future growth. It remains committed to fostering organic growth and strengthening the durability of its funding structure as it enters 2026. Strategic expansions into new geographic markets are expected to provide additional avenues for future growth.

Management Comments

• "2025 was a banner year for Stock Yards, reflecting exceptional performance with record earnings for the fourth quarter and the full year." James A. Hillebrand, Chairman and Chief Executive Officer.
• "We delivered solid loan growth during this quarter, our seventh consecutive quarter of growth across all markets, which demonstrates the strength of our franchise." James A. Hillebrand.
• "Credit quality remains strong and stable, underpinned by our disciplined underwriting approach and proactive portfolio management." James A. Hillebrand.
• "These results reflect our consistent execution and commitment to sustainable growth as we enter 2026." James A. Hillebrand.
• "We're optimistic about WM&T's momentum and its role in driving our future growth." James A. Hillebrand.
• "Despite facing two interest rate cuts during the fourth quarter, our net interest margin held steady and improved slightly during the period, largely attributable to strong earning asset growth and a decline in the cost of interest-bearing liabilities." James A. Hillebrand.
• "Being named among the nation's top-performing community banks is a powerful validation of our strategy and momentum, and this distinction highlights the exceptional effort and commitment of the entire Stock Yards team." James A. Hillebrand.

Industry Context

Stock Yards Bancorp's 8% year-over-year loan growth, while a deceleration from its own recent double-digit pace, is explicitly stated to be 'well above peer averages,' indicating strong relative performance within the banking sector. The company's recognition as a 'Sm-All Star' by Piper Sandler for the seventh time underscores its consistent outperformance across key metrics like growth, profitability, credit quality, and capital strength among small-cap banks and thrifts. This suggests the company is effectively navigating the current economic and interest rate environment, including recent Federal Reserve rate reductions, better than many of its competitors. Its strategic geographic expansion into new markets in Kentucky and Ohio further positions it for diversified growth.

Comparison to Industry Standards

• Loan growth of 8% year-over-year is noted as 'well above peer averages,' indicating strong performance relative to the broader banking industry.
• Recognized as a 'Sm-All Star' by Piper Sandler, an elite list of only 24 top-performing small-cap banks and thrifts in the U.S., for the seventh time (2008, 2011, 2019, 2020, 2022, 2024, and 2025). This distinction is based on superior performance across multiple metrics including growth, profitability, credit quality, and capital strength.
• Maintained 'well-capitalized' status, which is the highest regulatory capital rating for financial institutions, demonstrating robust capital adequacy compared to regulatory benchmarks.

Management Changes

Stakeholder Impact

• Shareholders: Benefited from record earnings, a 19% increase in tangible book value per share, and a declared quarterly cash dividend of $0.32 per common share.
• Employees: Benefited from higher bonus accrual levels tied to record results, annual merit-based increases, and full-time equivalent employee (FTE) expansion.
• Customers: Benefited from continued strong loan and deposit services, as well as expanded access through new branch locations.
• Communities: The Bank's Foundation received a $750,000 contribution in Q4 2024 to support charitable causes in the communities where the Bank operates.

Next Steps

• Continue fostering organic growth across all markets.
• Strengthen the durability of the funding structure, particularly in managing deposit costs.
• Leverage new branch offices opened in Bardstown, Kentucky, and Liberty Township, Ohio, for future growth.
• Expand footprint into south central Kentucky through the newly appointed Bowling Green Market President.

Key Dates

Recommendation

The company delivered exceptional financial performance, reporting record earnings for both the fourth quarter and the full year 2025. Key metrics such as loan and deposit growth, net interest margin expansion, and tangible book value per share all demonstrated robust positive trends. Credit quality significantly improved, and the company maintains a 'well-capitalized' status, indicating strong financial health and risk management. Industry recognition as a 'Sm-All Star' by Piper Sandler further validates its superior performance compared to peers. These factors, combined with strategic geographic expansion and a positive management outlook, suggest strong underlying business momentum and a highly favorable investment profile.

Keywords

Banking, Financial Services, Regional Bank, Earnings, Q4 2025, Full Year 2025, Loan Growth, Deposit Growth, Net Interest Margin, Wealth Management, Credit Quality, SYBT, Stock Yards Bancorp, Kentucky, Indiana, Ohio