Company: SYBT
Filing Date: 2025-08-05
Form Type: 10-Q
Source: 0001437749-25-024786
Chunk: 28

Company: Stock Yards Bancorp, Inc.
Filing Date: 2025-08-05
Form: 10-Q
Item: Part I, Item 8
Chunk 28
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			325,613

			Total off balance sheet commitments to extend credit

			$
			2,530,278

			$
			2,438,242

Most commitments to extend credit are an agreement to lend to a customer either unsecured or secured, as long as collateral is available as agreed upon and there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses. Since some of the commitments are expected to expire without being drawn upon, the total commitment amounts do not represent future cash requirements. Bancorp uses the same credit and collateral policies in making commitments and conditional guarantees as for on-balance sheet instruments. 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. However, should the commitments be drawn upon and should our customers default on their resulting obligation to us, our maximum exposure to credit loss, without consideration of collateral, is represented by the contractual amount of those instruments.

The ACL for off balance sheet credit exposures, which is separate from the ACL for loans and recorded in other liabilities on the consolidated balance sheets, was $6.7 million and $6.8 million as of June 30, 2025 and December 31, 2024, respectively. Negative provision (credit to expense) of $75,000 for off balance sheet exposures was recorded for the three and six month periods ended June 30, 2025, as line of credit utilization improved during the first half of 2025, reducing the reserve necessary for line availability.

Provision for credit loss expense for off balance sheet credit exposures of $225,000 and $475,000 was recorded for the three and six month periods ended June 30, 2024, driven largely by the addition of new C&D lines of credit.

Standby letters of credit are conditional commitments issued by Bancorp to guarantee the performance of a customer to a first party beneficiary. Those guarantees are primarily issued to support commercial transactions. Standby letters of credit generally have maturities of one to two years.

Certain commercial customers require confirmation of Bancorp’s letters of credit by other banks since Bancorp does not have a rating by a national rating agency. Terms of the agreements range from one month to a year with certain agreements requiring between one and six months’ notice to cancel. If