Stock Yards Bancorp, Inc. Segments Disclosure

(27) Segments

 

Bancorp’s principal activities are divided into two reportable segments, Commercial Banking and WM&T, which are delineated based on the products and services that each segment offers:

 

Commercial Banking provides a full range of loan and deposit products to individual consumers and businesses 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. Bancorp also offers securities brokerage services via its banking center network through an arrangement with a third party broker-dealer in the Commercial Banking segment. 

 

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

 

Bancorp’s Commercial Banking and WM&T segments overlap a regional reporting structure. These regions are based on the primary geographic markets in which Bancorp operates, specifically Louisville, central, eastern and northern Kentucky, and the Indianapolis, Indiana and Cincinnati, Ohio MSAs. All regions share the same lines of business, including the same products, services and delivery methods, as well as similar customer bases and pricing guidelines.

 

Financial information for each business segment reflects that which is specifically identifiable or allocated based on an internal allocation method. Income taxes are allocated based on the effective federal income tax rate adjusted for any tax-exempt activity. All tax-exempt activity and provision have been allocated fully to the commercial banking segment. Other direct and indirect/allocated expenses include legal and professional fees, advertising and business development costs as well as other miscellaneous expenses. Measurement of performance for business segments is based on the management structure of Bancorp and is not necessarily comparable with similar information for any other financial institution. Information presented is also not necessarily indicative of the segments’ operations if they were independent entities.

 

Bancorp’s chief executive officer is the chief operating decision maker. The financial results by operating segment, including significant expense categories provided to the chief operating decision maker, help measure the profitability of a particular segment and identify trends, evaluate each segment and its impact on consolidated earnings, and enhance decision making processes related to the allocation of Bancorp’s resources. Bancorp evaluates performance and allocates resources based on a reportable segment’s net income.

 

The majority of the net assets of Bancorp are associated with in the Commercial Banking segment. As of December 31, 2025, goodwill totaling $194 million was recorded on Bancorp’s consolidated balance sheets, of which $172 million is attributed to the commercial banking segment and $22 million is attributed to WM&T.

 

WM&T AUM, which the primary driver of WM&T revenue, are not included on the consolidated balance sheets of Bancorp. WM&T AUM totaled $7.64 billion, $7.07 billion and $7.16 billion as of December 31, 2025, 2024 and 2023, respectively.

 

Financial results by operating segment, including significant expense categories provided to the chief operating decision maker, are detailed below:

 

		Commercial
As of and for the Year Ended December 31, 2025 (in thousands)		Banking				WM&T				Total
Interest income		$	466,476			$	1,113			$	467,589
Interest expense			167,277				—				167,277
Net interest income			299,199				1,113				300,312
Provision for credit losses			6,700				—				6,700
Net interest income after provision expense			292,499				1,113				293,612
Non-interest income:
Wealth management and trust services			—				42,808				42,808
All other non-interest income			54,140				—				54,140
Total non-interest income			54,140				42,808				96,948
Non-interest expenses:
Compensation and employee benefits			112,211				19,606				131,817
Net occupancy and equipment			15,549				984				16,533
Technology and communication			17,090				2,205				19,295
Intangible amortization			2,290				1,368				3,658
Other direct and indirect/allocated expenses			38,380				2,681				41,061
Total Non-interest expenses			185,520				26,844				212,364
Income before income tax expense			161,119				17,077				178,196
Income tax expense			34,340				3,706				38,046
Net income		$	126,779			$	13,371			$	140,150

 

		Commercial
As of and for the Year Ended December 31, 2024 (in thousands)		Banking				WM&T				Total
Interest income		$	411,829			$	1,050			$	412,879
Interest expense			155,839				—				155,839
Net interest income			255,990				1,050				257,040
Provision for credit losses			9,725				—				9,725
Net interest income after provision expense			246,265				1,050				247,315
Non-interest income:
Wealth management and trust services			—				42,843				42,843
All other non-interest income			52,387				—				52,387
Total non-interest income			52,387				42,843				95,230
Non-interest expenses:
Compensation and employee benefits			103,933				17,177				121,110
Net occupancy and equipment			14,396				797				15,193
Technology and communication			16,914				2,293				19,207
Intangible amortization			2,965				1,520				4,485
Other direct and indirect/allocated expenses			36,104				2,080				38,184
Total Non-interest expenses			174,312				23,867				198,179
Income before income tax expense			124,340				20,026				144,366
Income tax expense			25,481				4,346				29,827
Net income		$	98,859			$	15,680			$	114,539

 

		Commercial
As of and for the Year Ended December 31, 2023 (in thousands)		Banking				WM&T				Total
Interest income		$	345,988			$	708			$	346,696
Interest expense			99,364				—				99,364
Net interest income			246,624				708				247,332
Provision for credit losses			13,796				—				13,796
Net interest income after provision expense			232,828				708				233,536
Non-interest income:
Wealth management and trust services			—				39,802				39,802
All other non-interest income			52,418				—				52,418
Total non-interest income			52,418				39,802				92,220
Non-interest expenses:
Compensation and employee benefits			93,680				16,647				110,327
Net occupancy and equipment			13,917				2,467				16,384
Technology and communication			15,476				1,842				17,318
Intangible amortization			3,014				1,672				4,686
Other direct and indirect/allocated expenses			37,229				1,885				39,114
Total Non-interest expenses			163,316				24,513				187,829
Income before income tax expense			121,930				15,997				137,927
Income tax expense			26,708				3,471				30,179
Net income		$	95,222			$	12,526			$	107,748