Stock Yards Bancorp Posts Record $43.5 Million Third-Quarter Profit
Key Facts
Stock Yards Bancorp reported on October 28 record earnings of $43.5 million, or $1.40 per diluted share, for the third quarter ended September 30, 2026. Net income was up from $40.1 million, or $1.31 per share, in the second quarter and $36.2 million, or $1.23 per share, a year earlier. Earnings per share also topped analysts’ estimate of $1.33, while revenue was $120.24 million against a consensus estimate of $119.31 million. The company said the result reflected a wider net interest margin, strong credit quality and record noninterest income. The figures put the bank’s business growth and the results of its merger with Field & Main at the forefront of factors affecting the year-over-year comparison.
The net interest margin rose to 3.88%, up 32 basis points from the third quarter of 2025 and 4 basis points from the previous quarter. Net interest income, the company’s largest source of revenue, increased 20% year over year to $92.6 million. That figure included $7.8 million from Field & Main loans, in the first full quarter of activity following the merger. Quarter over quarter, interest income increased $4.8 million, or 5%. The company attributed the margin improvement to expansion in its lending business, as bank results remain sensitive to deposit costs and loan repricing.
Total loans were $7.99 billion on September 30, up $1.06 billion, or 15%, year over year, with growth across multiple sectors and markets. But excluding Field & Main’s portfolio of about $606 million brings 12-month organic loan growth to $453 million, or 6%. The chief executive said loan growth remained positive but came in below expectations because elevated loan payoffs offset some of the new production. He added that payoff activity was likely to remain a near-term headwind, while the lending pipeline was stable entering the fourth quarter. These indicators distinguish the overall increase in loans from organic performance excluding the effect of the merger.
Noninterest income reached a record $27.6 million, up 13% from the third quarter of the previous year. Wealth and trust income rose to a record $12.9 million, up 20% year over year. On the funding side, deposits increased $746 million, or 10%, in the 12 months ended September 30. However, Field & Main’s portfolio accounted for $731 million of deposit balances at period-end, including $130 million in noninterest-bearing deposits. Excluding that portfolio, deposit growth was just $15 million, or less than 1%, while balances fell $96 million, or 1%, from the previous quarter.
Nonperforming loans were $21.9 million, or 0.27% of total loans on September 30, compared with $18.7 million and the same ratio a year earlier. The allowance for credit losses as a percentage of loans was 1.35%, compared with 1.33% on September 30, 2025. The company said strong credit quality contributed to record earnings, alongside a wider net interest margin and noninterest income. In August, the board raised the quarterly cash dividend to $0.33 per share. The dividend was paid on October 1 to shareholders of record on September 21, according to the company’s filing.
The company ended the quarter with assets of $10.26 billion, up $953 million, or 10%, year over year. The chief executive said assets crossed the $10 billion threshold on September 30, and management aims to keep the balance sheet below that level at year-end ahead of officially crossing the threshold in 2027. On the merger front, the company completed the conversion of its core systems in mid-October, after the quarter ended. The chief executive described the conversion as “an important milestone in completing the integration of the two institutions.” The company expects to incur remaining merger-related expenses during the fourth quarter of 2026, most of them related to the systems conversion.
The company’s shares closed at $78.40 on October 27, according to L7 data. The following day, the Federal Reserve kept its target range for the federal funds rate between 3.75% and 4%, in a 10-to-2 vote. Lisa Cook and Beth Hammack voted to raise the range by a quarter of a percentage point. The central bank said inflation remained elevated and that the accumulation of more information would help the committee determine the appropriate policy stance to return inflation to its 2% target in a timely manner. This monetary backdrop came as the company reported a wider net interest margin, while its focus in the fourth quarter turns to a stable lending pipeline and remaining merger costs.