Company: SYBT
Filing Date: 2025-11-05
Form Type: 10-Q
Source: 0001437749-25-033206
Chunk: 74

Company: Stock Yards Bancorp, Inc.
Filing Date: 2025-11-05
Form: 10-Q
Item: Part I, Item 8
Chunk 74
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 treasury note. Bancorp’s variable rate loans are typically indexed to either Prime or one month term SOFR, repricing as those rates change. At September 30, 2025, approximately 55% and 45% of Bancorp’s variable rate loan portfolio was indexed to Prime and SOFR, respectively.

Prime rate, the five year treasury note rate and one month term SOFR are included in the preceding tables to provide a general indication of the interest rate environment in which Bancorp has operated during the past 12 months. The FRB increased the FFTR a total of 100 bps in 2023 via four separate 25 bps rate hikes, two of which occurred during the first quarter of 2023. These increases took the FFTR to a range of 5.25% - 5.50%, and Prime to 8.50%, in July of 2023. Interest rates remained at these levels until September 2024, when the FRB implemented its first rate reduction in over four years, beginning its attempt to avoid recession and pilot a “soft landing,” with three separate decreases of the FFTR over the final four months of 2024, ultimately lowering the FFTR a total of 100 bps to a range of 4.25% - 4.50%, and Prime to 7.50%, as of December 31, 2024. The FFTR and Prime rate remained at these levels through mid-September 2025, when the FRB reduced the FFTR 25 bps to 4.00% - 4.25%, ultimately taking Prime to 7.25%.

Recent projections indicate the likelihood for additional rate reductions in the fourth quarter of 2025 and the first half of 2026. As a result, pricing pressure/competition for both loans and deposits could increase in the coming quarters.

Net Interest Income (FTE) – Three months ended September 30, 2025 compared to September 30, 2024:

Net interest spread (FTE) and NIM (FTE) were 2.90% and 3.56%, for the three months ended September 30, 2025, compared to 2.57% and 3.33% for the same period in 2024, respectively.

Net interest income (FTE) increased $12.1 million, or 19%, for the three months ended September 30, 2025 compared to the same period of