Company: SYBT
Filing Date: 2025-08-05
Form Type: 10-Q
Source: 0001437749-25-024786
Chunk: 22

Company: Stock Yards Bancorp, Inc.
Filing Date: 2025-08-05
Form: 10-Q
Item: Part I, Item 8
Chunk 22
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)

			(0.70
			)

			Tax Credits

			(2.54
			)

			(1.51
			)

			(2.62
			)

			(1.10
			)

			Tax exempt interest income

			(0.33
			)

			(0.45
			)

			(0.34
			)

			(0.50
			)

			Other, net

			0.97

			(0.14
			)

			0.55

			(0.50
			)

			Effective tax rate

			20.77
			
			%

			21.75
			
			%

			20.42
			%

			21.60
			%

Current state income tax expense for 2025 and 2024 represents tax owed to the states of Kentucky, Indiana and Illinois. Ohio state taxes are based on bank capital levels and are recorded as other non-interest expense.

On April 10, 2023, the IRS issued a proposed regulation that would potentially classify section 831(b) captive activity as a “listed transaction,” and 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. 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. 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.

GAAP provides guidance on financial statement recognition and measurement of tax positions taken, or expected to be taken, in tax returns. If recognized, tax benefits would reduce tax expense and accordingly, increase net income. The amount of unrecognized tax benefits may increase or decrease in the future for various reasons including adding amounts for current year tax positions, expiration of open income tax returns due to statutes of limitation, changes in management’s judgment about the level of uncertainty, status of examination, litigation and legislative activity and addition or elimination of uncertain tax positions. As of June 30, 2025 and December 31, 2024, the gross amount of unrecognized tax benefits was immaterial to Bancorp’s consolidated financial statements. Federal income tax returns are subject to examination