10-K

UNITED STATES  

SECURITIES AND EXCHANGE COMMISSION 

Washington, D.C. 20549 

FORM 10-K

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  

For the fiscal year ended December 31, 2019 

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from            to          

Commission File Number: 1-13661 

STOCK YARDS BANCORP, INC.

(Exact name of registrant as specified in its charter)

Kentucky	61-1137529
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1040 East Main Street, Louisville, Kentucky	40206
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (502) 582-2571

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common stock, no par value	SYBT	The NASDAQ Stock Market

Securities registered pursuant to Section 12(g) of the Act:

None 

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  ☐ Yes  ☒ No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.  ☐ Yes  ☒ No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes  ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  ☒ Yes  ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒	Accelerated filer ☐	Non-accelerated filer ☐	Smaller reporting company ☐
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  ☐ Yes  ☒ No

The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which common equity was last sold as of June 30, 2019 (the last business day of the registrant’s most recently completed second fiscal quarter) was $756,982,663.

The number of shares of the registrant’s Common Stock, no par value, outstanding as of February 21, 2020, was 22,637,670.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of Registrant’s definitive Proxy Statement for the Annual Meeting of Shareholders to be held on April 23, 2020 are incorporated by reference into Part III of this Form 10-K.

TABLE OF CONTENTS

PART I:
Item 1.	Business.	4
Item 1A.	Risk Factors.	8
Item 1B.	Unresolved Staff Comments.	13
Item 2.	Properties.	13
Item 3.	Legal Proceedings.	13
Item 4.	Mine Safety Disclosures.	13
PART II:
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.	14
Item 6.	Selected Financial Data.	16
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	18
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk.	54
Item 8.	Financial Statements and Supplementary Data.	54
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.	126
Item 9A.	Controls and Procedures.	126
Item 9B.	Other Information.	128
PART III:
Item 10.	Directors, Executive Officers and Corporate Governance.	128
Item 11.	Executive Compensation.	129
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.	130
Item 13.	Certain Relationships and Related Transactions, and Director Independence.	130
Item 14.	Principal Accounting Fees and Services.	130
PART IV:
Item 15.	Exhibits, Financial Statement Schedules.	130
Item 16.	Form 10-K Summary.	133
Signatures		134

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GLOSSARY OF ABBREVIATIONS AND ACRONYMS

The acronyms and abbreviations identified in alphabetical order below are used throughout this Annual Report on Form 10-K:

Acronym or Term	Definition	Acronym or Term	Definition	Acronym or Term	Definition
ACH	Automated Clearing House	EVP	Executive Vice President	NASDAQ	The NASDAQ Stock Market
AFS	Available for Sale	FASB	Financial Accounting Standards Board	NA	Not Applicable
APIC	Additional paid-in capital	FDIC	Federal Deposit Insurance Corporation	NIM	Net Interest Margin
Allowance	Allowance for Loan and Lease Losses	FFP	Federal Funds Purchased	NM	Not Meaningful
AOCI	Accumulated Other Comprehensive Income	FFS	Federal Funds Sold	OAEM	Other Assets Especially Mentioned
ASC	Accounting Standards Codification	FFTR	Federal Funds Target Rate	OCI	Other Comprehensive Income
ASU	Accounting Standards Update	FHA	Federal Housing Authority	OREO	Other Real Estate Owned
ATM	Automated Teller Machine	FHC	Financial Holding Company	OTTI	Other than Temporary Impairment
AUM	Assets Under Management	FHLB	Federal Home Loan Bank of Cincinnati	PCAOB	Public Company Accounting Oversight Board
Bancorp / the Company	Stock Yards Bancorp, Inc.	FHLMC	Federal Home Loan Mortgage Corporation	PCI	Purchased Credit Impaired
Bank / SYB&T	Stock Yards Bank & Trust Company	FICA	Federal Insurance Contributions Act	Prime	The Wall Street Journal Prime Interest Rate
BOLI	Bank Owned Life Insurance	FNMA	Federal National Mortgage Association	Provision	Provision for Loan and Lease Losses
BP	Basis Point - 1/100th of one percent	FRB	Federal Reserve Bank	PSU	Performance Stock Unit
C&D	Construction and Development	FTE	Fully Tax Equivalent	ROA	Return on Average Assets
C&I	Commercial and Industrial	GAAP	United States Generally Accepted Accounting Principles	ROE	Return on Average Equity
CD	Certificate of Deposit	GLB Act	Gramm-Leach-Bliley Act	RSA	Restricted Stock Award
CDI	Core Deposit Intangible	GNMA	Government National Mortgage Association	RSU	Restricted Stock Unit
CECL	Current Expected Credit Loss	HB	House Bill	SAR	Stock Appreciation Right
CEO	Chief Executive Officer	HELOC	Home Equity Line of Credit	SEC	Securities and Exchange Commission
CFO	Chief Financial Officer	IRS	Internal Revenue Service	SSUAR	Securities Sold Under Agreements to Repurchase
COSO	Committee of Sponsoring Organizations	ITM	Interactive Teller Machine	SVP	Senior Vice President
CRA	Community Reinvestment Act	KBST	King Bancorp Statutory Trust I	TBOC	THE Bank Oldham County
CRE	Commercial Real Estate	KSB	King Bancorp, Inc. and King Southern Bank	TCE	Tangible Common Equity
Dodd-Frank Act	The Dodd-Frank Wall Street Reform and Consumer Protection Act	LIBOR	London Interbank Offered Rate	TCJA	2017 Tax Cut and Jobs Act
DTA	Deferred Tax Asset	Loans	Loans and Leases	TDR	Troubled Debt Restructuring
DTL	Deferred Tax Liability	MBS	Mortgage Backed Securities	TPS	Trust Preferred Securities
EPS	Earnings Per Share	MSA	Metropolitan Statistical Area	VA	U.S. Department of Veterans Affairs
ETR	Effective Tax Rate	MSRs	Mortgage Servicing Rights	WM&T	Wealth Management and Trust

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PART I

Item 1. Business.

Stock Yards Bancorp, Inc., headquartered in Louisville, Kentucky, is the holding company for SYB&T, its sole subsidiary. Bancorp, which was incorporated in 1988 in Kentucky, is registered with, and subject to supervision, regulation and examination by, the Board of Governors of the Federal Reserve System. As Bancorp has no significant operations of its own, its business and that of the Bank are essentially the same. The operations of the Bank are fully reflected in the consolidated financial statements of Bancorp. Accordingly, references to “Bancorp” in this document may encompass both the holding company and the Bank.

The Bank, chartered in 1904, is a state-chartered non-member financial institution that provides services in the Louisville, Kentucky, Indianapolis, Indiana and Cincinnati, Ohio MSAs through 42 full service banking center locations.

Website Access to Reports

Bancorp files reports with the SEC including the Annual Report on Form 10-K, quarterly reports on Form 10-Q, current event reports on Form 8-K, and proxy statements, as well as any amendments to those reports. The SEC maintains an internet site that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC at http://www.sec.gov. Bancorp’s Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to section 13(a) or 15(d) of the Exchange Act are also accessible at no cost on Bancorp’s web site at http://www.syb.com after they are electronically filed with the SEC.

General Business Overview

Bancorp is divided into two reportable segments: Commercial Banking and WM&T:

Commercial Banking provides a full range of loan and deposit products to individual consumers and businesses in all its markets through retail lending, mortgage banking, deposit services, online banking, mobile banking, private banking, commercial lending, treasury management services, merchant services, international banking, correspondent banking and other banking services. The Bank 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 custom-tailored financial planning, investment management, retirement planning, trust and estate services in all markets in which Bancorp operates. The magnitude of WM&T revenue distinguishes Bancorp from other community banks of similar asset size.

Employees

At December 31, 2019, the Bank had 615 full-time equivalent employees. None of Bancorp’s employees are subject to a collective bargaining agreement and Bancorp has never experienced a work stoppage. Employees of the Bank are entitled to participate in a variety of employee benefit programs including a combined employee profit sharing and stock ownership plan. Management of Bancorp strives to be an employer of choice and considers the relationship with employees to be good.

Executive Officers

See Part III, Item 10. “Directors, Executive Officers and Corporate Governance” for information regarding Bancorp’s executive officers.

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Competition

The Bank encounters intense competition in its markets in originating loans, attracting deposits, and selling other banking related financial services. The deregulation of the banking industry, the ability to create financial services holding companies to engage in a wide range of financial services other than banking and the widespread enactment of state laws that permit multi-bank holding companies, as well as the availability of nationwide interstate banking, has created a highly competitive environment for financial institutions. In one or more aspects of the Bank’s business, the Bank competes with local and regional retail and commercial banks, other savings banks, credit unions, finance companies and mortgage companies operating in Kentucky, Indiana and Ohio. Some of the Bank’s competitors are not subject to the same degree of regulatory review and restrictions that apply to Bancorp and the Bank. Many of the Bank’s primary competitors, some of which are affiliated with large bank holding companies or other larger financial based institutions, have substantially greater resources, larger established client bases, higher lending limits, more extensive banking center networks, numerous ATMs or ITMs, and greater advertising and marketing budgets. They may also offer services that the Bank does not currently provide. These competitors attempt to gain market share through their financial product mix, pricing strategies and banking center locations. Legislative developments related to interstate branching and banking in general, by providing large banking institutions easier access to a broader marketplace, can act to create more pressure on smaller financial institutions to consolidate. It is anticipated that competition from both bank and non-bank entities will continue to remain strong in the foreseeable future.

The Bank believes that an emphasis on highly personalized service tailored to individual client needs, together with the local character of the Bank’s business and its “community bank” management philosophy will continue to enhance the Bank’s ability to compete successfully in its markets.

Supervision and Regulation

Bank holding companies and commercial banks are extensively regulated under both federal and state laws. Changes in applicable laws or regulations may have a material effect on the business and prospects of Bancorp.

Bancorp, as a registered bank holding company, is subject to the supervision of and regulation by the Federal Reserve Board under the Bank Holding Company Act of 1956. In addition, Bancorp is subject to the provisions of Kentucky’s banking laws regulating bank acquisitions and certain activities of controlling bank shareholders.

Kentucky and federal banking statutes delineate permissible activities for Kentucky state-chartered banks. Kentucky’s statutes, however, contain a super parity provision for Kentucky chartered banks having one of the top two ratings in its most recent regulatory examination. This provision allows these state banks to engage in any banking activity in which a national bank, a state bank operating in any other state, or a federally chartered thrift could engage. The bank must first obtain a legal opinion specifying the statutory or regulatory provisions that permit the activity.

The Bank is subject to the supervision of the Kentucky Department of Financial Institutions and the FDIC. The FDIC insures the deposits of the Bank to the current maximum of $250,000 per depositor.

The GLB Act allows for affiliations among banks, securities firms and insurance companies by means of FHC. The GLB Act requires that, at the time of establishment of an FHC, all depository institutions within that corporate group must be “well managed” and “well capitalized” and must have received a rating of “satisfactory” or better under its most recent CRA examination. Further, non-banking financial firms (for example an insurance company or securities firm) may establish a FHC and acquire a depository institution. While the distinction between banks and non-banking financial firms has been blurring over recent years, the GLB Act makes it less cumbersome for banks to offer services “financial in nature” but beyond traditional commercial banking activities. Likewise, non-banking financial firms may find it easier to offer services that had, heretofore, been provided primarily by depository institutions. In 2012, management of Bancorp elected to become and became a FHC.

The Dodd-Frank Act was signed into law in 2010 and generally was effective the day after it was signed into law, but different effective dates apply to specific sections of the law. The extensive and complex legislation contained many provisions affecting the banking industry, including but not limited to:

● Creation of a Bureau of Consumer Financial Protection overseeing banks with assets totaling $10 billion or greater while writing and maintaining several regulations that apply to all banks,

● Determination of debit card interchange rates by the Federal Reserve Board,

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● New regulation over derivative instruments,

● Phase outs of certain forms of trust preferred debt and hybrids previously included as bank capital, and

● Increases to FDIC deposit coverage, revised calculations for assessing bank premiums, and numerous other provisions affecting financial institution regulation, oversight of certain non-banking organizations, investor protection.

The CRA requires depository institutions to assist in meeting the credit needs of their market areas consistent with safe and sound banking practice. Under the CRA, each depository institution is required to help meet the credit needs of its market areas by, among other things, providing credit to low- and moderate-income individuals and communities. Depository institutions are periodically examined for compliance with the CRA, and banking regulators take into account CRA ratings when considering approval of certain applications. An unsatisfactory CRA rating could, among other things, result in the denial or delay of corporate applications filed by Bancorp or the Bank for proposed activities such as branch openings or relocations and applications to acquire, merge or consolidate with another banking institution or holding company.

The federal banking regulators have adopted rules limiting the ability of banks and other financial institutions to disclose non-public information about consumers to unaffiliated third parties. These limitations require disclosure of privacy policies to consumers and, in some circumstances, allow consumers to prevent disclosure of certain personal information to an unaffiliated third party. These regulations affect how consumer information is conveyed to outside vendors. The Bank is also subject to regulatory guidelines establishing standards for safeguarding customer information. These guidelines describe the federal banking agencies’ expectations for the creation, implementation and maintenance of an information security program, which would include administrative, technical and physical safeguards appropriate to the size and complexity of the institution and the nature and scope of its activities.

The Bank is subject to the Bank Secrecy Act and the USA Patriot Act. These statutes and related rules and regulations impose requirements and limitations on specified financial transactions and accounts and other relationships intended to guard against money laundering and terrorism financing. Financial institutions must take certain steps to assist government agencies in detecting and preventing money laundering and report certain types of suspicious transactions. Regulatory authorities routinely examine financial institutions for compliance with these obligations, and failure of a financial institution to maintain and implement adequate programs to combat money laundering and terrorist financing, or to comply with relevant laws or regulations, could have serious legal and reputational consequences for the institution, including causing applicable bank regulatory authorities not to approve merger or acquisition transactions when regulatory approval is required or to prohibit such transactions even if approval is not required.

Bancorp and the Bank are subject to capital regulations in accordance with Basel III, as administered by banking regulators. The FRB and FDIC have substantially similar risk-based and leverage ratio guidelines for banking organizations, which are intended to ensure that banking organizations have adequate capital related to the risk levels of assets and off-balance sheet instruments. Under the risk-based guidelines, specific categories of assets are assigned different risk weights based generally on the perceived credit risk of the asset. These risk weights are multiplied by corresponding asset balances to determine a risk-weighted asset base. In addition to the risk-based capital guidelines, the FRB used a leverage ratio as a tool to evaluate the capital adequacy of bank holding companies. The leverage ratio is a company’s Tier 1 Capital divided by its average total consolidated assets (less goodwill and certain other intangible assets).

The federal banking agencies’ risk-based and leverage ratios represent minimum supervisory ratios generally applicable to banking organizations that meet certain specified criteria, assuming that they have the highest regulatory capital rating. Banking organizations not meeting these criteria are required to operate with capital positions above the minimum ratios. FRB guidelines also provide that banking organizations experiencing internal growth or making acquisitions may be expected to maintain strong capital positions above the minimum supervisory levels, without significant reliance on intangible assets. The FDIC may establish higher minimum capital adequacy requirements if, for example, a bank proposes to make an acquisition requiring regulatory approval, has previously warranted special regulatory attention, rapid growth presents supervisory concerns, or, among other factors, has a high susceptibility to interest rate and other types of risk. The Bank is not subject to any such individual minimum regulatory capital requirement.

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Banking regulators have categorized the Bank as well-capitalized. For purposes of prompt corrective action, “well capitalized” banks must have a minimum 6.5% Common Equity Tier 1 Risk-Based Capital ratio, 8.0% Tier 1 Risk-Based Capital ratio, 10.0% Total Risk-Based Capital ratio and 5.0% Tier 1 Leverage ratio. Additionally, in order to avoid limitations on capital distributions, including dividend payments and certain discretionary bonus payments to executive officers, the Company and Bank must hold a capital conservation buffer composed of Common Equity Tier 1 Risk-Based Capital above their minimum risk-based capital requirements. The capital conservation buffer phased in from 2016 through 2019 on the following schedule: a capital conservation buffer of 0.625% effective January 1, 2016; 1.25% effective January 1, 2017; 1.875% effective January 1, 2018; and a fully phased in capital conservation buffer of 2.5% on January 1, 2019.

As of December 31, 2019, Bancorp met the requirements to be considered well-capitalized and is not subject to limitations due to the capital conservation buffer.

Statistical Disclosures 

The statistical disclosures required by Part I Item 1 “Business” are located under Part II Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

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Item 1A. Risk Factors.

FACTORS THAT MAY AFFECT FUTURE RESULTS

An investment in Bancorp’s common stock is subject to risks inherent in its business. Before making an investment decision, you should carefully consider the risks and uncertainties described below together with all of the other information included in this filing. In addition to the risks and uncertainties described below, other risks and uncertainties not currently known to Bancorp or that Bancorp currently deems to be immaterial also may materially and adversely affect its business, financial condition and results of operations in the future. The value or market price of Bancorp’s common stock could decline due to any of these identified or other risks, and an investor could lose all or part of their investment.

There are factors, many beyond Bancorp’s control, which may significantly change the results or expectations of Bancorp. Some of these factors are described below, however, many are described in the other sections of this Annual Report on Form 10-K.

Bancorp’s credit metrics are currently at historically strong levels and this trend could normalize over time.

Over the past several years, Bancorp’s asset quality metrics have trended within a narrow range, exceeding benchmarks and reaching historically strong levels. Bancorp realizes that present asset quality metrics are positive and, recognizing the cyclical nature of the lending business, Bancorp anticipates this trend will likely normalize over time.

Financial condition and profitability depend significantly on local and national economic conditions.

The Company’s success depends on general economic conditions both locally and nationally. A portion of Bancorp’s customer’s ability to repay their obligations is directly tied to local, national or global business dealings. Deterioration in the quality of the credit portfolio could have a material adverse effect on financial condition, results of operations, and ultimately capital.

Financial condition and profitability depend on real estate values in Bancorp’s market area.

Bancorp offers a variety of secured loans, including C&I lines of credit, C&I term loans, real estate, C&D, HELOCs, consumer and other loans. Many of Bancorp’s loans are often secured by real estate primarily in Bancorp’s market areas. In instances where borrowers are unable to repay their loans and there has been deterioration in the value of loan collateral, Bancorp could experience higher loan losses which could have a material adverse effect on financial condition, and results of operations.

If actual loan losses are greater than Bancorp’s assumption for loan losses, earnings could decrease.

Bancorp’s loan customers may not repay their loans according to the terms of these loans, collateral securing payment of these loans may be insufficient to ensure repayment and the wealth of guarantors providing guarantees to support these loans may be insufficient to aid in the repayment of these loans. Accordingly, Bancorp might experience significant credit losses which could have a material adverse effect on operating results. Bancorp makes various assumptions and judgments about the collectability of the loan portfolio, including creditworthiness of borrowers and value of collateral for repayment. In determining the adequacy of the allowance, Bancorp considers, among other factors, an evaluation of economic conditions and Bancorp’s loan loss experience. If Bancorp’s assumptions prove to be incorrect or economic problems are worse than projected, the current allowance may be insufficient to cover loan losses and adjustments may be necessary to allow for different economic conditions or adverse developments in the loan portfolio. Such additions to the allowance, if necessary, could have a material adverse impact on financial results.

Federal and state regulators annually review Bancorp’s allowance and may require an increase in the allowance. If regulatory agencies require any increase in the allowance for which Bancorp had not allocated, it would have a negative effect on financial results.

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Fluctuations in interest rates could reduce profitability.

Bancorp’s primary source of income is from net interest spread, the difference between interest earned on loans and investments and interest paid on deposits and borrowings. Bancorp expects to periodically experience gaps in interest rate sensitivities of Bancorp’s assets and liabilities, meaning that either interest-bearing liabilities will be more sensitive to changes in market interest rates than interest-earning assets, or vice versa. In either event, if market interest rates should move contrary to Bancorp’s position, this gap will work against Bancorp and earnings will be negatively affected.

Many factors affect fluctuation of market interest rates, including, but not limited to the following:

● inflation or deflation

● recession

● a rise in unemployment

● tightening money supply

● international disorder and instability in foreign financial markets

● the FRB’s actions to control interest rates

The FRB increased the FFTR three times in 2017 and four times in 2018 which led to Prime increasing from 3.75% to 5.50%. In 2019, the FFTR was reduced three times with Prime ending the year at 4.75%. Bancorp’s balance sheet is slightly asset sensitive and thus benefits from rising interest rate environments, as the majority of Bancorp’s variable rate loans are tied to Prime with a lesser amount tied to LIBOR. While variable rate loans have re-priced at lower rates Bancorp has responded by decreasing deposit rates on most interest bearing deposit accounts to try and offset the fall in loan pricing.

Market expectations are for the FRB to possibly lower rates one or two additional times in 2020. A continued flat yield curve is widely anticipated, with the possibility of short term rates exceeding longer term rates, resulting in an inverted yield curve. Deposit rates tend to be tied to the short end of the rate curve, while fixed-rate loans are largely priced based upon longer term rates, specifically five-year offerings. A flattening or inverted yield curve may increase Bancorp’s funding costs while limiting rates that can be earned on loans and investments, thereby decreasing net interest income and earnings. Migration of deposits out of Bancorp, as customers pursue higher rates, could impact liquidity and earnings as Bancorp competes for deposits. Changes in the mix of deposits could result in increased average rates paid on deposits, and lower earnings to Bancorp. Bancorp’s asset-liability management strategy, which is designed to mitigate risk from changes in market interest rates, may not be able to prevent changes in interest rates from having a material adverse effect on Bancorp’s results of operations and financial condition.

Bancorp is subject to funding risk.

Funding risk represents dependence Bancorp has on large commercial deposit relationships. Approximately 44% of Bancorp’s total deposits are centralized in accounts with balances $500,000 or greater. Bancorp considers these deposits core funds, as they represent long-standing, full-service relationships and are a testament to Bancorp’s commitment to partner with business clients by providing exemplary service and competitive products. A sudden shift in customer behavior within these deposits resulting in balances being reduced or exiting the Bank altogether could impact Bancorp’s ability to capitalize on growth opportunities and meet current obligations. Bancorp has secondary funding sources to draw upon as needed but the cost of those funds would be higher than typical deposit accounts which would negatively impact the financial condition and results of operations.

Significant stock market volatility could negatively affect Bancorp’s financial results.

Income from WM&T constitutes approximately 46% of non-interest income. Trust AUM are expressed in terms of market value, and a significant portion of fee income is based upon those values. A large majority of WM&T fees are based on market values which generally fluctuate with overall capital markets.

Capital and credit markets experience volatility and disruption from time to time. These conditions place downward pressure on credit availability, credit worthiness and customers’ inclinations to borrow. Prolonged volatility or a significant disruption could negatively impact customers’ ability to seek new loans or to repay existing loans. Personal wealth of many borrowers and guarantors has historically added a source of financial strength to certain loans and would be negatively impacted by severe market declines. Sustained reliance on personal assets to make loan payments would result in deterioration of their liquidity, and could result in loan defaults.

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Competition with other financial institutions could adversely affect profitability.

Bancorp operates in a highly competitive industry that could become even more so as a result of earnings pressure of peer organizations, legislative, regulatory and technological changes and continued consolidation. Bancorp faces vigorous competition in price and structure of financial products from banks and other financial institutions. In recent years, credit unions have expanded their lending mix and now compete heavily with banks in the CRE market. Non-traditional providers high risk tolerance for fixed rate, long-term loans has adversely affected Bancorp’s net loan growth and results of operations. Bancorp also competes with other non-traditional providers of financial services, such as brokerage firms and insurance companies. As internet-based financial services continue to grow in acceptance, Bancorp must remain relevant as a place where consumers and businesses value personal service while other institutions offer these services without human interaction. The variety of sources of competition may reduce or limit margins on banking services, reduce market share and adversely affect results of operations and financial condition.

Bancorp is subject to litigation risk pertaining to fiduciary responsibility

From time to time, customers make claims and take legal action pertaining to our performance of our fiduciary responsibilities. Whether customer claims and legal action related to our performance of our fiduciary responsibilities are founded or unfounded, if such claims and legal actions are not resolved in a manner favorable to us they may result in significant financial liability and/or adversely affect the market perception of us and our products and services as well as impact customer demand for those products and services. Any financial liability or reputational damage could have a material adverse effect on our business, financial condition and results of operations.

Changes in customer use of banks could adversely affect Bancorp’s financial condition and results of operations.

Rapid evolution of non-bank alternatives for initiation and completion of financial transactions puts Bancorp at risk of losing sources of revenue and funding. The ability of customers to pay bills, transfer funds, and purchase assets without utilizing the banking system could result in loss of fee income, deposits, and loans. If Bancorp is unable to continue timely development of competitive new products and services, its business, financial condition and results of operations could be adversely affected.

Bancorp operates in a highly regulated environment and may be adversely affected by changes to or lack of compliance with federal, state and local laws and regulations.

Bancorp is subject to extensive regulation, supervision and examination by federal and state banking authorities. Any change in applicable regulations or federal or state legislation could have a substantial impact on Bancorp and its operations. Additional legislation and regulations may be enacted or adopted in the future that could significantly affect Bancorp’s powers, authority and operations, which could have a material adverse effect on Bancorp’s financial condition and results of operations. If Bancorp’s policies, procedures and systems are deemed deficient, Bancorp would be subject to liability, including fines and regulatory actions, which may include restrictions on the ability to pay dividends and the requirement to obtain regulatory approvals to proceed with certain aspects of Bancorp’s business plan, including branching and acquisition plans.

An extended disruption of vital infrastructure could negatively impact Bancorp’s business, results of operations, and financial condition.

Bancorp’s operations depend upon, among other things, infrastructure, including equipment and facilities. Extended disruption of vital infrastructure by fire, power loss, natural disaster, telecommunications failure, information systems breaches, terrorist activity or the domestic and foreign response to such activity, or other events outside of Bancorp’s control could have a material adverse impact on the financial services industry, the economy as a whole and on Bancorp’s business, results of operations and financial condition. Bancorp’s business continuity plan may not work as intended or may not prevent significant interruption of operations. Occurrence of any failures or interruptions of information systems could damage Bancorp’s reputation, result in loss of customer business, subject Bancorp to additional regulatory scrutiny, or expose Bancorp to civil litigation and possible financial liability, any of which could have an adverse effect on Bancorp’s financial condition and results of operations.

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Security breaches or incidences of fraud could negatively impact Bancorp’s business, results of operations, and financial condition.

Bancorp’s assets which are at risk for cyber-attacks include financial assets and non-public information belonging to customers. Cyber security risks include cyber espionage, blackmail, ransom, theft, and corporate account takeovers. Bancorp employs many preventive and detective controls to protect its assets, and provides mandatory recurring information security training for all employees. Bancorp has invested in multiple preventative tools in an attempt to protect customers from cyber threats and corporate account takeover. Bancorp regularly provides educational information regarding cyber threats to customers. Bancorp utilizes multiple third-party vendors who have access to Bancorp’s assets via electronic media. While Bancorp requires third parties, many of whom are small companies, to have similar or superior controls in place, there is no guarantee that a breach of information could not occur. Activities of the Bank that subject Bancorp to risk of fraud by customers, employees, vendors, or members of the general public include ACH transactions, wire transactions, ATM transactions, checking transactions, credit card transactions and loan originations. Repeated incidences of fraud or a single large occurrence would adversely impact Bancorp’s reputation and results of operations.

Bancorp’s ability to stay current on technological changes in order to compete and meet customer demands is constantly being challenged.

The financial services industry is constantly undergoing rapid technological changes, with frequent introductions of new technology-driven products and services. Future success of Bancorp will depend, in part, upon its ability to address the needs of its customers by using technology to provide products and services that will satisfy customer demands for convenience, as well as to create additional operational efficiencies and greater privacy and security protection for customers and their personal information. Many of Bancorp’s competitors have substantially greater resources to invest in technological improvements. Bancorp may not be able to effectively implement new technology-driven products and services as quickly as competitors or be successful in marketing these products and services to its customers. Bancorp relies on third party providers for many of its technology-driven banking products and services. Some of these companies may be slow to respond with upgrades or enhancements to their products to keep pace with improvements in technology or the introduction of competing products. Failure to successfully keep pace with technological change affecting the financial services industry could impair Bancorp’s ability to effectively compete to retain or acquire new business and could have an adverse impact on its business, financial position, results of operations and liquidity.

Bancorp is dependent upon outside third parties for processing and handling of the Company’s records and data.

Bancorp relies on software developed by third-party vendors to process various transactions. In some cases, Bancorp has contracted with third parties to run their proprietary software on Bancorp’s behalf. While Bancorp performs a review of controls instituted by applicable vendors over these programs in accordance with industry standards and performs testing of user controls, the Company relies on continued maintenance of controls by these third-party vendors, including safeguards over security of client data. Bancorp may incur a temporary disruption in the Company’s ability to conduct business or process transactions, or incur reputational damage, if a third-party vendor fails to adequately maintain internal controls or institute necessary changes to systems. Such a disruption or breach of security could have a material adverse effect on Bancorp’s business. Further, if these third-party service providers experience difficulties, or should terminate their services, and the Company is unable to replace them on a timely basis, Bancorp’s business operations could be interrupted. If an interruption were to continue for a significant period of time, or if Bancorp incurred excessive costs involved with replacing third-party service provider, the Company’s business, financial condition and results of operations could be adversely affected.

Bancorp’s accounting policies and methods are critical to how Bancorp reports its financial condition and results of operations. They require management to make estimates about matters that are uncertain.

Accounting policies and methods are fundamental to how Bancorp records and reports its financial condition and results of operations. Bancorp must exercise judgment in selecting and applying these accounting policies and methods so they comply with GAAP.

Bancorp has identified certain accounting policies as being critical because they require management’s judgment to ascertain the valuations of assets, liabilities, commitments and contingencies. A variety of factors could affect the ultimate value that is obtained either when earning income, recognizing an expense, recovering an asset, or reducing a liability. Bancorp has established detailed policies and control procedures intended to ensure these critical accounting estimates and judgments are well controlled and applied consistently.

11

Policies and procedures are intended to ensure that the process for changing methodologies occurs in an appropriate manner. Because of the uncertainty surrounding Bancorp’s judgments and estimates pertaining to these matters, there can be no assurances that actual results will not differ from those estimates. See the section titled “Critical Accounting Policies” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for more information.

The CECL accounting standard will result in a significant change in how Bancorp recognizes credit losses and may have a material impact on Bancorp’s financial condition or results of operations.

In June 2016, the FASB issued ASU, “Financial Instruments-Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments,” which replaces the current “incurred loss” model for recognizing credit losses with an “expected loss” model. Whereas the incurred loss model delays recognition of loss on financial instruments until it is probable a loss has occurred, the expected loss model will recognize a loss at the time the loan is first added to the balance sheet. As result of this differing methodology, Bancorp expects adoption of the CECL model will materially affect the determination of the allowance and could require a significant increase to the allowance. Any material increase to the required level of loan loss allowance could adversely affect Bancorp’s business, financial condition, and results of operations.

The CECL standard will become effective for Bancorp for fiscal years beginning January 1, 2020. See the section titled “Accounting Standards Updates Issued” for discussion regarding the anticipated one-time cumulative-effect adjustment to the allowance and stockholders’ equity. Interagency guidance issued in December 2018 allows for a three year phase-in of the cumulative-effect adjustment for regulatory capital reporting.

Bancorp may not be able to attract and retain skilled people.

Bancorp’s success depends, in large part, on its ability to attract and retain key people. Competition for the best people in the industry and markets in which Bancorp engages can be intense, and Bancorp may not be able to retain or hire the people wanted or needed. To attract and retain qualified employees, Bancorp must compensate them at market levels. If Bancorp is unable to continue to attract and retain qualified employees, or do so at rates necessary to maintain the Company’s competitive position, Bancorp’s performance, including the Company’s competitive position, could suffer, and, in turn, adversely affect Bancorp’s business, financial condition or results of operations.

Bancorp invests in partnerships that generate federal income tax savings and these may not continue.

Bancorp invests in certain partnerships that yield federal income tax credits resulting in higher net income for Bancorp. These transactions may also include lending to developers, further enhancing profitability of the transaction. These transactions typically involve a very limited number of counterparties. Availability and suitability of these transactions are not particularly predictable and may not continue to be favorable to Bancorp. Recently enacted income tax reform could result in fewer transactions and the extent to which federal income tax credits favorably affect Bancorp’s net income. Therefore, the positive effect on Bancorp’s net income may not continue at levels previously experienced.

The planned phasing out of the LIBOR as a financial benchmark presents risks to the financial instruments originated or held by the Corporation.

The LIBOR is the reference rate used for many of our transactions, including our lending and borrowing, as well as the derivatives that we use to manage risk related to such transactions. LIBOR will cease to exist as a published rate after 2021. The expected discontinuation of LIBOR could have a significant impact on the financial markets and market participants such as Bancorp. As of December 31, 2019, Bancorp had approximately $404 million in variable rate loans with interest rates tied to LIBOR, of which approximately $259 million have maturity dates beyond December 31, 2021. Bancorp’s derivative activities based upon LIBOR include interest rate swap transactions with maturities beyond 2021 with notional amounts totaling approximately $99 million.

The FRB, through the Alternative Reference Rate Committee, has recommended a replacement benchmark rate, the Secured Overnight Financing Rate. All loan and swap contracts extending beyond 2021 will need to be managed effectively to ensure appropriate benchmark rate replacements are provided for and adopted.

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Failure to identify a replacement benchmark rate and/or update data processing systems could result in future interest rate changes not being correctly captured, which could result in interest rate risk not being mitigated as intended, or interest earned being miscalculated, which could adversely impact Bancorp’s business, financial condition, and results of operations. Uncertainty regarding LIBOR and the taking of discretionary actions or negotiations of fall-back provisions could result in pricing volatility, adverse tax or accounting impacts, or additional compliance, legal and operational costs.

Acquisitions could adversely affect Bancorp’s financial condition and results of operations.

An institution that Bancorp acquires may have asset quality issues or contingent liabilities that Bancorp did not discover or fully recognize in the due diligence process, thereby resulting in unanticipated losses. Acquisitions of other institutions also typically require integration of different corporate cultures, loan and deposit products, pricing strategies, data processing systems and other technologies, accounting, internal audit and financial reporting systems, operating systems and internal controls, marketing programs and personnel of the acquired institution. The integration process is complicated and time consuming and could divert Bancorp’s attention from other business concerns and may be disruptive to its clients and clients of the acquired institution. Bancorp’s failure to successfully integrate an acquired institution could result in loss of key clients and employees, and prevent the Company from achieving expected synergies and cost savings. The Company may finance acquisitions with borrowed funds, thereby increasing the Bancorp’s leverage and reducing liquidity, or with potentially dilutive issuances of equity securities.

Item 1B. Unresolved Staff Comments.

None.

Item 2. Properties.

The principal offices of Bancorp are located at 1040 East Main Street, Louisville, Kentucky. Bancorp’s operations center is at a separate location in Louisville. At December 31, 2019, in addition to the main office complex and the operations center, Bancorp owned 24 branch properties, two of which are located on leased land. At that date, Bancorp also leased 18 branch facilities including its WM&T facility. Of the 42 banking locations, 32 are located in the Louisville MSA, five are located in the Indianapolis MSA and five are located in the Cincinnati MSA.

Item 3. Legal Proceedings.

In the ordinary course of operations, Bancorp and the Bank are defendants in various legal proceedings. There is no proceeding pending or, to the knowledge of management, threatened in which an adverse decision could result in a material adverse change in the business or consolidated financial position of Bancorp or the Bank.

Item 4. Mine Safety Disclosures.

NA

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PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Bancorp’s common stock is traded on the NASDAQ under the ticker symbol SYBT. On December 31, 2019, Bancorp had approximately 1,600 shareholders of record, and approximately 6,100 beneficial owners holding shares in nominee or “street” name.

The following table shows information relating to the repurchase of shares of common stock by Bancorp during the three months ended December 31, 2019.

	Total number of shares purchased(1)		Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs		Average price paid per share		Maximum number of shares that may yet be purchased under the plans or programs
October 1 - October 31		206	$	39.99		—	$	—
November 1 - November 30		3,432		40.61		—		—
December 1 - December 31		111		41.14		—		—
Total		3,749	$	40.59		—	$	—		741,196

(1) Activity includes 3,749 shares of stock withheld to pay taxes due upon exercise of SARs and vesting of RSUs and PSUs.

Effective May 22, 2019, Bancorp’s Board of Directors approved a share repurchase program authorizing the repurchase of 1 million shares, or approximately 4% of Bancorp’s total common shares outstanding at that time. Stock repurchases are expected to be made from time to time on the open market or in privately negotiated transactions, subject to applicable securities law. The plan, which will expire in two years unless otherwise extended or completed at an earlier date, does not obligate Bancorp to repurchase any specific dollar amount or number of shares prior to the plan’s expiration. As of December 31, 2019, Bancorp had 741,196 shares that could be repurchased under its current share repurchase program.

There were no equity securities of the registrant sold without registration during the quarter covered by this report.

The following performance graphs and data shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed soliciting material or subject to Regulation 14A of the Exchange Act or incorporated by reference in any filing under the Exchange Act or the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.

The first graph below compares performance of Bancorp’s Common Stock to the Russell 2000 Index, the SNL Midwest Bank Index, and the SNL Bank NASDAQ Index for the last five fiscal years. The graph assumes the value of the investment in Bancorp’s Common Stock and in each index was $100 at December 31, 2014 and that all dividends were reinvested.

In addition to the five-year period required by the SEC, the ten-year period is presented because it provides additional perspective, and Bancorp management believes that longer-term performance is of interest. The ten-year graph assumes the value of the investment in Bancorp’s Common Stock and in each index was $100 at December 31, 2009 and that all dividends were reinvested.

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	Period Ending
Index	12/31/14		12/31/15		12/31/16		12/31/17		12/31/18		12/31/19
Stock Yards Bancorp, Inc.	$	100.00	$	116.39	$	221.89	$	182.02	$	162.74	$	209.44
Russell 2000 Index		100.00		95.59		115.95		132.94		118.30		148.49
SNL Midwest Bank Index		100.00		101.52		135.64		145.76		124.47		161.94
SNL Bank NASDAQ Index		100.00		107.95		149.68		157.58		132.82		166.75

	Period Ending
Index	12/31/09		12/31/10		12/31/11		12/31/12		12/31/13		12/31/14		12/31/15		12/31/16		12/31/17		12/31/18		12/31/19
Stock Yards Bancorp, Inc.	$	100.00	$	118.35	$	102.29	$	115.58	$	169.75	$	182.48	$	212.39	$	404.91	$	332.15	$	296.97	$	382.17
Russell 2000 Index		100.00		126.86		121.56		141.43		196.34		205.95		196.86		238.81		273.78		243.63		305.82
SNL Midwest Bank Index		100.00		124.18		117.30		141.18		193.28		210.12		213.32		285.02		306.28		261.54		340.27
SNL Bank NASDAQ Index		100.00		117.98		104.68		124.77		179.33		185.73		200.50		278.00		292.68		246.69		309.72

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Item 6. Selected Financial Data.

	As of and for the Years Ended December 31
(in thousands except per share data)	2019			2018			2017			2016			2015
Income Statement Data:
Interest income	$	147,765		$	129,773		$	110,899		$	102,207		$	93,235
Interest expense		22,544			15,357			7,246			4,918			4,852
Net interest income		125,221			114,416			103,653			97,289			88,383
Provision for loan and lease losses		1,000			2,705			2,550			3,000			750
Non-interest income		49,790			45,346			44,499			42,920			39,315
Non-interest expenses		98,351			89,509			90,420			80,938			72,828
Income before income tax expense		75,660			67,548			55,182			56,271			54,120
Income tax expense		9,593			12,031			17,139			15,244			16,933
Net income	$	66,067		$	55,517		$	38,043		$	41,027		$	37,187
Per Share Data:
Weighted average shares - Diluted		22,865			22,944			22,983			22,792			22,459
Net income per share - Basic	$	2.92		$	2.45		$	1.69		$	1.84		$	1.68
Net income per share - Diluted		2.89			2.42			1.66			1.80			1.65
Cash dividends declared per share		1.04			0.96			0.80			0.72			0.64
Book value		17.97			16.11			14.71			13.88			12.80
Market value		41.06			32.80			37.70			46.95			25.19
Balance Sheet Data:
Securities available for sale	$	470,738		$	436,995		$	574,524		$	570,074		$	565,876
Loans and leases		2,845,016			2,548,171			2,409,570			2,305,375			2,033,007
Allowance for loan and lease losses		26,791			25,534			24,885			24,007			22,441
Total assets		3,724,197			3,302,924			3,239,646			3,039,481			2,816,801
Deposits		3,133,938			2,794,356			2,578,295			2,520,548			2,371,702
Federal funds purchased		10,887			10,247			161,352			47,374			22,477
Federal Home Loan Bank advances		79,953			48,177			49,458			51,075			43,468
Stockholders' equity		406,297			366,500			333,644			313,872			286,519
Average Balances:
Total assets	$	3,480,998		$	3,159,726		$	3,037,581		$	2,886,396		$	2,573,901
Stockholders’ equity		386,563			347,041			327,798			304,151			274,451
Selected Ratios:
Return on average assets		1.90	%		1.76	%		1.25	%		1.42	%		1.44	%
Return on average stockholders’ equity		17.09			16.00			11.61			13.49			13.55
Average stockholders’ equity to average assets		11.10			10.98			10.79			10.54			10.66
Net interest rate spread		3.50			3.60			3.52			3.51			3.59
Net interest rate margin, fully tax-equivalent		3.81			3.83			3.64			3.59			3.67
Efficiency ratio (FTE)		56.13			55.92			60.61			57.39			56.62
Non-performing loans to total loans and leases		0.42			0.13			0.31			0.29			0.44
Non-performing assets to total assets		0.34			0.13			0.31			0.39			0.48
Net charge offs/(recoveries) to average loans		(0.01	)		0.08			0.07			0.07			0.17
Allowance for loan losses to total loans and leases		0.94			1.00			1.03			1.04			1.10

Share and per share information has been adjusted to reflect the 3 for 2 stock-split in April 2016 effected in the form of a 50% stock dividend.

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Non-GAAP Financial Measures 

The following table provides a reconciliation of total stockholders’ equity in accordance with GAAP to tangible stockholders’ equity, a non-GAAP disclosure. Bancorp provides the TCE per share, a non-GAAP measure, in addition to those defined by banking regulators, because of its widespread use by investors as a means to evaluate capital adequacy:

December 31, (in thousands, except per share data)	2019			2018
Total stockholders' equity - GAAP (a)	$	406,297		$	366,500
Less: Goodwill		(12,513	)		(682	)
Less: Core deposit intangible		(2,285	)		(1,057	)
Tangible common equity - Non-GAAP (c)	$	391,499		$	364,761
Total assets - GAAP (b)	$	3,724,197		$	3,302,924
Less: Goodwill		(12,513	)		(682	)
Less: Core deposit intangible		(2,285	)		(1,057	)
Tangible assets - Non-GAAP (d)	$	3,709,399		$	3,301,185
Total stockholders' equity to total assets - GAAP (a/b)		10.91	%		11.10	%
Tangible common equity to tangible assets - Non-GAAP (c/d)		10.55	%		11.05	%
Total shares outstanding (e)		22,604			22,749
Book value per share - GAAP (a/e)	$	17.97		$	16.11
Tangible common equity per share - Non-GAAP (c/e)		17.32			16.03

The efficiency ratio, a non-GAAP measure, equals total non-interest expenses divided by the sum of net interest income (FTE) and non-interest income. The ratio excludes net gains (losses) on sales, calls, and impairment of investment securities, if applicable. In addition to the efficiency ratio normally presented, Bancorp considers an adjusted efficiency ratio. Bancorp believes this ratio is important because it provides a comparable ratio after eliminating the fluctuation in non-interest expenses related to amortization of investments in tax credit partnerships. The following table reconciles the efficiency ratio calculation to the adjusted efficiency ratio calculation.

Years Ended December 31, (dollars in thousands)	2019			2018			2017
Total non-interest expenses (a)	$	98,351		$	89,509		$	90,420
Less: Amortization of investments in tax credit partnerships		(1,078	)		(1,237	)		(7,124	)
Total adjusted non-interest expenses (c)	$	97,273		$	88,272		$	83,296
Total net interest income, fully tax equivalent	$	125,445		$	114,723		$	104,446
Total non-interest income		49,790			45,346			44,499
Less: Gain/loss on sale of securities		-			-			(232	)
Total revenue (b)	$	175,235		$	160,069		$	149,177
Efficiency ratio, FTE (a) / (b)		56.13	%		55.92	%		60.61	%
Adjusted efficiency ratio, FTE (c) / (b)		55.51	%		55.15	%		55.84	%

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The consolidated financial statements include the accounts of Stock Yards Bancorp, Inc. its wholly-owned subsidiary, Stock Yards Bank & Trust Company, collectively referred to as “Bancorp” or the “Company.” All significant inter-company transactions and accounts have been eliminated in consolidation.

Stock Yards Bancorp, Inc. is a FHC headquartered in Louisville, Kentucky. SYB&T, chartered in 1904, is a state-chartered non-member financial institution that provides services in the Louisville, Kentucky, Indianapolis, Indiana and Cincinnati, Ohio MSAs through 42 full service banking center locations.

Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the consolidated financial statements and accompanying Footnotes presented in Part II Item 8 “Financial Statements and Supplementary Data.”

This report contains forward-looking statements under the Private Securities Litigation Reform Act that involve risks and uncertainties. These forward-looking statements may be identified by the use of words such as “expect”, “anticipate”, “plan”, “foresee”, “believe” or other words with similar meaning. Although Bancorp believes assumptions underlying forward-looking statements contained herein are reasonable, any of these assumptions could be inaccurate. Factors that could cause actual results to differ from results discussed in forward-looking statements include, but are not limited to: economic conditions both generally and more specifically in markets in which Bancorp and its subsidiary operate; competition for Bancorp’s customers from other providers of financial services; government legislation and regulation which change from time to time and over which Bancorp has no control; changes in interest rates; material unforeseen changes in liquidity, deterioration in the real estate market, results of operations or financial condition of Bancorp’s customers; or other risks detailed in Bancorp’s filings with the SEC and Part I Item 1A “Risk Factors,” all of which are difficult to predict and many of which are beyond the control of Bancorp.

Acquisition of King Bancorp, Inc. and its subsidiary King Southern Bank (“KSB”)

On May 1, 2019, Bancorp completed its acquisition of KSB for $28 million in cash. The acquisition expands Bancorp’s market area into nearby Nelson County, Kentucky, while expanding the customer base in Louisville, Kentucky. At May 1, 2019, KSB reported approximately $192 million in total assets, approximately $164 million in loans, and approximately $126 million in deposits. As a result of the acquisition, goodwill totaling $12 million was recorded during the second quarter of 2019, with nominal recast adjustments posted during the third and fourth quarters.

As a result of the completion of the acquisition, Bancorp incurred pre-tax transaction charges totaling $1.3 million during the second quarter of 2019. Net income from the KSB acquisition was accretive to Bancorp’s overall operating results for the third and fourth quarters of 2019.

In connection with the acquisition, Bancorp became the 100% successor owner of King Bancorp Statutory Trust I (“KBST”), an unconsolidated finance subsidiary. As permitted under the terms of KBST’s governing documents, Bancorp redeemed the TPS at the par amount of approximately $4 million on June 17, 2019.

Issued but Not Yet Effective Accounting Standards Updates

For disclosure regarding the impact to Bancorp’s financial statements of issued-but-not-yet-effective ASUs, see the Footnote titled “Basis of Presentation and Summary of Significant Accounting Policies” of Part II Item 8 “Financial Statements and Supplementary Data.”

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Critical Accounting Policies and Estimates

Bancorp’s consolidated financial statements and accompanying footnotes have been prepared in accordance with GAAP. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported periods.

Management continually evaluates its accounting policies and estimates that it uses to prepare the consolidated financial statements. In general, management’s estimates and assumptions are based on historical experience, accounting and regulatory guidance, and information obtained from independent third-party professionals. Actual results may differ from those estimates made by management.

Critical accounting policies are those that management believes are the most important to the portrayal of Bancorp’s financial condition and operating results and require management to make estimates that are difficult, subjective and complex. Most accounting policies are not considered by management to be critical accounting policies. Several factors are considered in determining whether or not a policy is critical in the preparation of the financial statements. These factors include, among other things, whether the estimates have a significant impact on the financial statements, the nature of the estimates, the ability to readily validate the estimates with other information including independent third parties or available pricing, sensitivity of the estimates to changes in economic conditions and whether alternative methods of accounting may be utilized under GAAP. Management has discussed each critical accounting policy and the methodology for the identification and determination of critical accounting policies with Bancorp’s Audit Committee.

Allowance and Provision – An allowance has been established to provide for probable losses on loans that may not be fully repaid. The allowance is increased by provisions charged to expense and decreased by charge-offs, net of recoveries. Loans are typically charged off when management deems them uncollectible and after underlying collateral has been liquidated; however, collection efforts may continue and future recoveries could occur. Periodically, loans are partially charged off to the net realizable value based upon the evaluation of related underlying collateral, including Bancorp’s expectation of resolution.

The provision reflects an allowance methodology driven by risk ratings, historical losses, specific loss allocations, and qualitative factors. Assumptions include many factors, such as changes in borrowers’ financial condition, which can change quickly, or historical loss ratios related to certain loan portfolios, which may or may not be indicative of future losses. In the first quarter of 2019, Bancorp extended the historical period used to capture Bancorp’s historical loss ratios from 32 quarters to 36 quarters. This extension of the historical period was applied to all classes and segments of the loan portfolio. The expansion of the look-back period for the quantitative historical loss rate caused Bancorp to review the overall methodology for the qualitative factors to ensure Bancorp was appropriately capturing the risk not addressed in the quantitative historical loss rate. Management believes the extension of the look-back period is appropriate to capture the impact of a full economic cycle and more accurately represents the current level of risk inherent in the loan portfolio. To the extent that management’s assumptions prove incorrect, results from operations could be materially affected by a higher or lower provision. The accounting policy related to the allowance is applicable to the Commercial Banking segment of Bancorp.

Bancorp’s allowance calculation includes allocations to loan portfolio segments at December 31, 2019 for qualitative factors including, among other factors, local economic and business conditions in each of our primary markets, quality and experience of lending staff and management, exceptions to lending policies, levels of and trends in past due loans and loan classifications, concentrations of credit such as collateral type, trends in portfolio growth, trends in value of underlying collateral for collateral-dependent loans, effect of other external factors such as national economic and business trends, the quality and depth of the loan review function, and management’s judgement of current trends and potential risks. Bancorp utilizes the sum of all allowance amounts derived as described above as the appropriate level of allowance. Changes in criteria used in this evaluation or availability of new information could cause the allowance to be increased or decreased in future periods. In addition, bank regulatory agencies, as part of their examination process, may require adjustments to the allowance based on their judgments and estimates.

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Business Segment Overview

Bancorp is divided into two reportable segments: Commercial Banking and WM&T:

Commercial Banking provides a full range of loan and deposit products to individual consumers and businesses in all its markets through retail lending, mortgage banking, deposit services, online banking, mobile banking, private banking, commercial lending, treasury management services, merchant services, international banking, correspondent banking and other banking services. The Bank 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 custom-tailored financial planning, investment management, retirement planning, trust and estate services in all markets in which Bancorp operates. The magnitude of WM&T revenue distinguishes Bancorp from other community banks of similar asset size.

Overview – Operating Results

The following table presents an overview Bancorp’s financial performance for the years ended December 31, 2019, 2018 and 2017:

Years Ended December 31,										Variance
(dollars in thousands, except per share data)	2019			2018			2017			2019 / 2018			2018 / 2017
Income before income tax expense	$	75,660		$	67,548		$	55,182			12	%		22	%
Net income		66,067			55,517			38,043			19			46
Diluted earnings per share		2.89			2.42			1.66			19			46
ROA		1.90	%		1.76	%		1.25	%		8			41
ROE		17.09	%		16.00	%		11.61	%		7			38

Additional discussion follows under the section titled “Results of Operations.”

General highlights for the year ended December 31, 2019 compared to December 31, 2018:

● In 2019, Bancorp set the following financial records:

o Total revenue, comprising FTE net interest income and non-interest income, of $175.2 million, surpassing the previous record of $160.1 million in 2018

o Net income of $66.1 million surpassing $55.5 million in 2018

o The combination of record loan production and the KSB acquisition boosted the loan portfolio by $297 million, or 12%. Approximately $133 million, or 6%, of the growth related to the acquisition.

o Total deposit growth $340 million

o WM&T AUM of $3.3 billion

o WM&T services income of $22.6 million boosted by record new business generation and strong market performance

o ROA of 1.90%

o ROE of 17.09%

● Bancorp completed the acquisition of KSB on May 1st, adding approximately $164 million in loans and $126 million in deposits. Upon closing, goodwill totaling $12 million was recorded and net income from the acquisition was accretive to overall operating results for the third and fourth quarters of 2019.

● The FRB lowered the FFTR by 25 bps on three (3) separate occasions in 2019 with Prime falling to 4.75%.

● Consistent with changes in Prime, Bancorp lowered the stated rate of most interest-bearing deposit account types during 2019.

● NIM declined 2 bps to 3.81% for 2019 compared to the prior year.

● Net interest income increased $10.8 million, or 9%, for 2019.

● Average loans increased $198 million, or 8%, from December 31, 2018 to December 31, 2019. Bancorp benefited from the KSB acquisition in addition to strong organic loan production and net loan growth in 2019.

● Average interest-bearing deposits increased $237 million, or 12%, from December 31, 2018 to December 31, 2019.

● Sustained sound credit metrics, including net loan loss recoveries for 2019, led to a reduced provision of $1.0 million compared with $2.7 million for 2018.

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● Bancorp’s allowance was 0.94% of total loans at December 31, 2019, compared with 1.00% at December 31, 2018.

● Non-interest income increased $4.4 million, or 10%, during 2019 based on the following:

o Strong market returns, new business generation, and growth in corporate retirement plans led to record WM&T income.

o Debit and credit card revenue continued to benefit from increasing transaction volumes, an expanding customer base and incentives paid by card processors.

o Treasury management fees continued to grow consistent with growth in the commercial deposit base.

o Lower long-term interest rates boosted mortgage banking income in 2019.

o Other non-interest income benefited from significant non-recurring swap fees collected, gain on sale of Visa Class B common stock and proceeds received from a life insurance policy.

● Non-interest expenses increased $8.8 million, or 10%, during 2019 based on the following:

o KSB related deal costs, in addition to ongoing operational expenses tied to banking center expansion, incurred in 2019.

o Growth in full time equivalent employees in addition to higher production and performance based compensation attributable to record 2019 operating results drove the increase in compensation expense.

o Card processing expenses trended upward consistent with revenue growth.

o Employee benefit expense was elevated in 2019 consistent with higher 401(k) match and increased FICA expense.

o Additional community support expense was recorded, as the Company increased its contribution to the Bank’s foundation, established to support various community initiatives, due to outstanding 2019 results.

o In contrast to the above increases, no FDIC insurance expense was recorded for the third and fourth quarters of 2019, as the national FDIC Reserve Ratio reached 1.38%, or the FDIC’s targeted level, triggering the FDIC to release credits to small institutions.

● Bancorp's efficiency ratio, calculated on a FTE basis, for 2019 was 56.13% compared with 55.92% for the same period in 2018.

● The ETR decreased from 17.81% for 2018 to 12.68% for 2019 primarily due to two Kentucky state tax law changes that occurred during the first half of 2019.

Total stockholder’s equity to total assets was 10.91% as of December 31, 2019 compared to 11.10% at December 31, 2018 and 10.30% at December 31, 2017. Total equity increased $40 million in 2019, as record net income of $66.1 million was offset by dividends declared of $24 million, stock repurchases totaling $9 million, changes in AOCI and various stock based compensation.

TCE is a measure of a company's capital which is useful in evaluating the quality and adequacy of capital. Bancorp’s ratio of TCE to total tangible assets was 10.55% as of December 31, 2019, compared with 11.05% at December 31, 2018, and 10.25% at December 31, 2017, with the decline attributable to the second quarter 2019 KSB acquisition. See the section titled “Non-GAAP Financial Measures” for reconcilement of non-GAAP to GAAP measures.

General highlights for the year ended December 31, 2018 compared to December 31, 2017:

● Record total revenue (FTE) of $160.1 million exceeded 2017 by $11 million, or 8%.

● The FRB raised the FFTR by 25 bps on four (4) separate occasions in 2018 with Prime ending at 5.50%.

● NIM improved 19 bps to 3.83% at December 31, 2018 despite a highly competitive lending environment and increasing rates paid on deposits.

● Net interest income increased $10.8 million, or 10%, for 2018.

● Record loan production boosted the loan portfolio by $139 million, or 6%.

● Average loans increased $214 million, or 9%, from December 31, 2017 to December 31, 2018. Interest income on loans increased by $18.5 million, or 19% equally due to strong organic loan production and the increase in interest rates.

● Average deposits increased $86 million, or 3%, from December 31, 2017 to December 31, 2018.

● Higher funding costs on deposits and borrowings and deposit growth during 2018 resulted in increased interest expense of $8.1 million.

● Credit quality metrics improved further over historically solid levels.

● For the year ended December 31, 2018 and 2017, Bancorp recorded provision of $2.7 million and $2.6 million.

● Bancorp’s allowance to total loans at December 31, 2018 and 2017 was 1.00% and 1.03%.

● Non-interest income increased $847,000, or 2%, during 2018 based on the following:

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o WM&T income increased $1.0 million, or 5%, consistent with a rising stock market for most of 2018 and growth in client base.

o Debit and credit card revenue continued to benefit from increasing transaction volume.

o Offsetting the above increases, mortgage banking income declined 20% consistent with the increase in long-term interest rates in 2018.

o Other non-interest income declined $432,000 consistent with the decline in swap fee income.

● Non-interest expenses declined $911,000, or 1%, during 2018 based on the following:

o The $5.9 million, or 83%, decline in amortization of investments in tax credit partnerships drove the overall net decline in non-interest expenses for 2018, as Bancorp experienced reduced investment opportunities related to these investments during the year

o Compensation expense increased year over year based on the increase in full time equivalent employees, higher salaries and increased production and performance based compensation.

o Higher technology and communications expenses related to computer operation additions and improvements.

o Legal and professional fees were elevated in 2018 due to costs associated with the then pending KSB acquisition.

● Bancorp's efficiency ratio, calculated on a FTE basis, for 2018 was 55.92% compared with 60.61% for the same period in 2017.

● Tax expense declined $5.1 million, or 30%, in 2018, as the ETR decreased to 17.81% from 31.06% for 2017 primarily due to TCJA enacted on December 22, 2017 which reduced the marginal federal tax rate from 35% to 21% effective January 1, 2018. The tax reform resulted in higher taxes in 2017 from a one-time $5.9 million charge recorded to re-measure Bancorp’s net DTA. Also, the 2017 ETR included significantly more tax savings from stock-based compensation deductions and federal income tax credits.

Challenges for 2020:

Bancorp has identified the following challenges for fiscal year 2020:

● Goals for fiscal year 2020 include net loan growth at a pace similar to that experienced in 2019, excluding the KSB acquisition. This will be impacted by competition, prevailing interest rates, economic conditions, line of credit utilization and loan prepayments. Bancorp believes there is continued opportunity for loan growth in all three of its markets and Bancorp’s ability to deliver attractive loan growth over the long-term is linked to Bancorp’s overall success.

● NIM compression in 2020 is a concern, as the FRB lowered the FFTR by 25 bps on three separate occasions in 2019, with Prime ending at 4.75%. Unlike the first two rate cuts in 2019, the decline in loan yields could not be fully offset by reductions in deposit rates for the third cut effective October 31^st. Continued FFTR cuts could put pressure on NIM. Additionally, continued yield curve flattening is widely anticipated, with the possibility of short term rates exceeding longer term rates, resulting in an inverted yield curve.

● A flattening or inverted yield curve may increase Bancorp’s funding costs while limiting rates that can be earned on loans and investments, thereby decreasing net interest income and earnings.

● Migration of deposits out of Bancorp, as customers pursue higher rates, could impact liquidity and earnings as Bancorp competes for deposits. Changes in the mix of deposits could result in increased average rates paid on deposits, and lower earnings to Bancorp.

● Bancorp derives significant non-interest income from WM&T services. Most of these fees are based upon the market value of AUM at respective period ends. To continue growth of this income source, Bancorp must attract new customers and retain existing customers. Bancorp believes there is opportunity for growth in its three markets. Growth in market values of AUM and fees is dependent upon positive returns in the overall capital markets. Bancorp has no control over market volatility.

● Technological advances are consistently providing opportunities for Bancorp to consider potential new products and delivery channels. Bancorp’s customers’ demand for innovative and relevant products and services is expected to trend along with changing technology. Bancorp will need to continue to make prudent investments in technology while managing associated risks so as to remain competitive with other financial service providers.

● Over the past several years, Bancorp’s asset quality metrics have trended within a narrow range, exceeding benchmarks and reaching historically strong levels. Bancorp realizes that present asset quality metrics are positive and, recognizing the cyclical nature of the lending business, Bancorp anticipates this trend will likely normalize over time.

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● The CECL accounting standard will result in a significant change in how Bancorp recognizes credit losses. Whereas the incurred loss model delayed recognition of loss on financial instruments until it is probable a loss had occurred, the CECL model will recognize a loss at the time the loan is first added to the balance sheet. As result of this differing methodology, Bancorp expects adoption of the CECL model will materially affect the determination of the allowance.

● Operating results for 2019 included several one-time non-recurring positive items such as: significant state tax benefits, life insurance death benefit proceeds, elevated loan prepayment and swap fees and a gain on sale of Visa Class B stock.

Results of Operations

Net Interest Income

As is the case with most banks, Bancorp’s primary revenue sources are net interest income and fee income from various financial services provided to customers. Net interest income is the difference between interest income earned on loans, investment securities and other interest earning assets less interest expense on deposit accounts and other interest bearing liabilities. Loan volume and interest rates earned on those loans are critical to overall profitability. Similarly, deposit volume is crucial to funding loans and rates paid on deposits directly impact profitability. New business volume is influenced by economic factors including market interest rates, business spending, consumer confidence and competitive conditions within the marketplace. The discussion that follows is based on tax-equivalent interest data.

Comparative information regarding net interest income follows:

As of and for the Years Ended December 31,										Variance
(dollars in thousands)	2019			2018			2017			2019 / 2018			2018 / 2017
Net interest income, FTE	$	125,445		$	114,723		$	104,446			9.3	%		9.8	%
Net interest spread		3.50	%		3.60	%		3.52	%		(10	)bps		8	bps
Net interest margin		3.81	%		3.83	%		3.64	%		(2	)bps		19	bps
Average earning assets	$	3,290,345		$	2,998,526		$	2,872,717			9.7	%		4.4	%
Five year Treasury note rate at year end		1.69	%		2.51	%		2.20	%		-82	bps		31	bps
Average five year Treasury note rate		1.95	%		2.75	%		1.91	%		-80	bps		84	bps
Prime rate at year end		4.75	%		5.50	%		4.50	%		-75	bps		100	bps
Average Prime		5.29	%		4.90	%		4.10	%		39	bps		80	bps
One month LIBOR at year end		1.76	%		2.52	%		1.56	%		-76	bps		96	bps
Average one month LIBOR		2.22	%		2.02	%		1.11	%		20	bps		91	bps

NIM and net interest spread calculations above exclude the sold portion of certain participation loans. These sold loans are on Bancorp’s balance sheet as required by GAAP because Bancorp retains some form of effective control; however, Bancorp receives no interest income on the sold portion. These participation loans sold are excluded, because Bancorp believes it provides a more accurate depiction of the performance of its loan portfolio.

Prime rate, the five year Treasury note rate and the one month LIBOR are included above to provide a general indication of the interest rate environment in which Bancorp operated. Approximately $1 billion, or 38%, of Bancorp’s loans are variable rate, of which 99% are indexed to either Prime or one month LIBOR and generally reprice as those rates change. At inception, most of Bancorp’s fixed rate loans are priced in relation to the five year Treasury note.

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Discussion of 2019 vs 2018:

During the third quarter of 2019, the FRB lowered the FFTR 25 bps twice; effective on August 1st and later during the quarter, effective September 19th. Effective October 31^st, the FRB lowered the FFTR 25 bps once again with Prime ending at 4.75% at December 31, 2019 compared to 5.50% at December 31, 2018.

In response to the August FFTR reduction, Bancorp immediately lowered the stated rate of most interest-bearing deposit account types, in addition to lowering all CD offering rates. With regard to the September FFTR reduction, Bancorp immediately lowered stated rates on most personal money market and larger sweep customers in addition to CD offering rates. Bancorp was able to fully offset the loss in revenue, with the first and second FFTR move not impacting overall NIM. With the October 31^st rate drop, the Bank lowered the stated rate of most interest-bearing deposit account types in addition to subsequently lowering all CD offering rates in early November. Unlike the previous two rate cuts by the FRB, the decline in loan yields could not be fully offset by reductions in deposit rates.

In the first half of 2018, Bancorp raised stated rates paid on money market accounts in addition to launching a targeted CD marketing campaign within its Louisville market to support loan growth in addition to increasing liquidity. The campaign generated over $100 million in CD growth in 2018. In addition, the deposit portfolio assumed from KSB in the second quarter of 2019 was and remains concentrated in higher costing time deposits. While Bancorp has not aggressively pursued deposits since mid-2018, falling interest rates in 2019 have driven an increase in non-interest bearing deposits.

In general, net interest income and NIM have been favorably impacted by elevated loan prepayment fees collected in 2019 with a much lighter impact experienced in the prior year. Offsetting the fee impact, the KSB portfolio mix of earning assets and interest bearing liabilities added during 2019 had a slight negative impact on NIM.

Net interest spread (FTE) and NIM (FTE) were 3.50% and 3.81%, for the year ended December 31, 2019 compared to 3.60% and 3.83% for the same period in 2018. Net interest income (FTE) of $125.4 million for the year ended December 31, 2019 increased $10.7 million, or 9%, from $114.7 million for the same period in 2018, led by growth in average interest earning assets, primarily loans. Total average earning assets increased $292 million, or 10%, to $3.3 billion for the year ended December 31, 2019, as compared with the same period in 2018, with the average rate earned on earnings assets increasing 16 bps to 4.50%. Average loans increased $198 million, or 8%, for the year ended December 31, 2019 compared to the same period in 2018, with the KSB acquisition contributing $102 million, or 52% of the total average increase. The remaining increase stemmed from record year to date organic loan production experienced across all markets. Average balances of FFS, interest bearing due from banks and AFS securities increased $91 million, or 19%, in total for the year ended December 31, 2019, as compared with 2018, as excess overall balance sheet liquidity was deployed into short-term investments.

Total interest income (FTE) increased $17.9 million, or 14%, for the year ended December 31, 2019, as compared with the same period in 2018, to $148.0 million. Approximately $15.9 million of this total increase related to loans (FTE), with the majority of this increase attributed to average balance growth.

Bancorp grew loan balances by $297 million, based in part on the KSB acquisition and record loan production in 2019. Bancorp was successful in growing loans in 2019 despite elevated levels of commercial loan payoffs, resulting largely from construction and land development borrowers moving elsewhere for permanent financing or CRE loans for which collateral was sold. Loan growth during 2019 reflected ongoing expansion in key lending categories such as C&I and owner-owner occupied CRE lending.

Total average interest bearing liabilities increased $202 million, or 10%, to $2.3 billion for the year ended December 31, 2019, as compared with the same period in 2018, with the average cost increasing 26 bps to 1.00%. Average interest bearing liabilities assumed in the KSB acquisition (deposits and FHLB advances) represented $78 million, or 39%, of the total increase. Average interest bearing deposits increased $237 million, or 12%, for the year ended December 31, 2019 compared to the same period in 2018, with approximately $58 million attributable to the KSB acquisition and concentrated in the time deposits category.

Total interest expense increased $7.2 million, or 47%, for the year ended December 31, 2019 compared to the same period in 2018 and was concentrated within interest bearing deposits. Approximately 62% of the total interest bearing deposit change was attributable to rate with fluctuations as follows:

● Largely attributable to the KSB acquisition, the cost of time deposits increased from 1.29% to 2.02%, while the average balance increased $127 million, or 46%.

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● The cost of money markets increased from 0.84% to 1.02%, while the average balance increased $35 million, or 5%.

● The cost of interest bearing demand deposits increased from 0.49% to 0.57%, while the average balance increased $64 million, or 8%.

The average balance of SSUAR decreased $24 million, or 38%, for the year ended December 31, 2019 compared to the same period in 2018, as a significant number of commercial customers migrated from lower yielding collateralized products to higher yielding non-collateralized deposits.

With higher levels of excess balance sheet liquidity in 2019, Bancorp maintained less reliance on short-term borrowing, leading to a $34 million decline in average balance of FFP and a favorable interest expense variance of $618,000.

Average FHLB advances increased $22 million, or 45%, for the year ended December 31, 2019 compared to 2018 based on advances assumed from the KSB acquisition. These advances were retained by Bancorp based upon favorable rates and terms in the overall execution of Bancorp’s asset liability management strategy. Also, as a result of the KSB acquisition, Bancorp assumed a $4 million subordinated note that was redeemed at par prior to the end of the second quarter of 2019.

Bancorp experienced a significant increase in corporate customer deposit balances during the fourth quarter along with seasonal deposits of approximately $90 million. Bancorp anticipates deposit balances to return to normal levels during the first part of 2020. While these accounts are profitable, the excess investment is expected to have a negative effect on NIM for the first part 2020, as short term rates are likely to remain significantly lower than rates for longer term loans. Similarly, $88 million in excess cash balances were also maintained at December 31, 2018 and reduced over the first six months of 2019.

Discussion of 2018 vs 2017:

The FRB increased the FFTR rate four times during 2018 with Prime ending at 5.50% at December 31, 2018.

Bancorp’s net interest income (FTE) increased $10.3 million, or 10%, for the year ended December 31, 2018 compared with the same period in 2017. Despite a competitive lending environment, net interest income was positively impacted by increased loan volume and the total yield earned on loans consistent with the increase in rates. Increased yields on taxable securities also positively impacted net interest income. Declines in balances of most earning asset categories, aside from loans, negatively impacted net interest income. Increases in volume and rates paid on deposits, FFP and other short-term borrowings also negatively impacted net interest income.

In 2018, average loans increased $214 million, or 9%, with strong organic loan production experienced in each of Bancorp’s three markets. Bancorp was able to achieve 6% annual net loan growth in 2018 despite elevated levels of CRE and C&I loan payoffs, resulting from borrowers moving elsewhere for permanent financing and CRE loans for which collateral was sold. Loan growth during 2018 reflected ongoing expansion in key lending categories such as C&I and owner-occupied CRE lending. Utilization rates on lines of credit excluding C&D loans were 51% and 52% as of December 31 2018 and 2017. Average securities AFS decreased $44 million, or 10%, from 2017 to 2018, while average FFS sold and interest bearing due from banks likewise decreased $46 million, or 41%.

The increase in average interest bearing liabilities from 2017 to 2018 occurred primarily in demand deposits, time deposits, and FFP and other short-term borrowings. Average total interest bearing deposit accounts increased $67 million, or 4%, and average non-interest bearing deposit accounts increased $19 million, or 3%, in 2018. Average time deposits increased $42 million, or 17%, in 2018 as Bancorp executed an aggressive strategic deposit gathering campaign in all markets, particularly in the Louisville market. Bancorp also purchased $30 million of brokered deposits in 2018, after having no brokered deposits in 2017. Bancorp continued to utilize fixed rate advances from the FHLB during 2018, as these rates compared favorably to similar term time deposits. Bancorp maintained an average of $49 million in FHLB advances in 2018 which was comparable with 2017. SSUAR averaged $63 million in 2018 compared with $70 million in 2017.

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Average Balance Sheets and Interest Rates – Taxable Equivalent Basis

Years Ended December 31,	2019							2018							2017
(dollars in thousands)	Average Balance		Interest		Average Rate			Average Balance		Interest		Average Rate			Average Balance		Interest		Average Rate
Interest earning assets:
Federal funds sold and interest bearing due from banks	$	136,514	$	2,933		2.15	%	$	67,083	$	1,307		1.95	%	$	113,088	$	1,330		1.18	%
Mortgage loans held for sale		3,836		182		4.74			2,549		166		6.51			3,545		191		5.39
Securities available for sale:
Taxable		413,801		9,291		2.25			377,126		8,492		2.25			406,342		8,030		1.98
Tax-exempt		22,710		570		2.51			37,943		1,006		2.65			52,614		1,558		2.96
Federal Home Loan Bank stock		10,858		548		5.05			9,348		509		5.45			7,016		335		4.77
Loans, net of unearned income		2,702,626		134,465		4.98			2,504,477		118,600		4.74			2,290,112		100,248		4.38
Total interest earning assets		3,290,345		147,989		4.50			2,998,526		130,080		4.34			2,872,717		111,692		3.89
Less allowance for loan losses		27,057							25,130							24,974
Non-interest earning assets:
Cash and due from banks		44,884							42,783							41,621
Premises and equipment, net		63,197							42,773							41,793
Accrued interest receivable and other		109,629							100,774							106,424
Total assets	$	3,480,998						$	3,159,726						$	3,037,581
Interest bearing liabilities:
Deposits:
Interest bearing demand deposits	$	875,897	$	4,951		0.57	%	$	811,748	$	4,008		0.49	%	$	757,023	$	1,574		0.21	%
Savings deposits		166,509		291		0.17			156,212		311		0.20			148,510		179		0.12
Money market deposits		695,411		7,105		1.02			660,222		5,529		0.84			697,182		2,740		0.39
Time deposits		406,176		8,213		2.02			278,888		3,593		1.29			237,368		1,482		0.62
Total interest bearing deposits		2,143,993		20,560		0.96			1,907,070		13,441		0.70			1,840,083		5,975		0.32
Securities sold under agreements to repurchase		38,555		101		0.26			62,580		157		0.25			70,187		134		0.19
Federal funds purchased		11,182		217		1.94			45,293		835		1.84			20,303		182		0.90
Federal Home Loan Bank advances		70,755		1,640		2.32			48,766		924		1.89			50,300		955		1.90
Subordinated note		922		26		2.82			—		—		—			—		—		—
Total interest bearing liabilities		2,265,407		22,544		1.00			2,063,709		15,357		0.74			1,980,873		7,246		0.37
Non-interest bearing liabilities:
Non-interest bearing demand deposits		765,103							703,453							684,044
Accrued interest payable and other		63,925							45,523							44,866
Total liabilities		3,094,435							2,812,685							2,709,783
Stockholders’ equity		386,563							347,041							327,798
Total liabilities and equity	$	3,480,998						$	3,159,726						$	3,037,581
Net interest income			$	125,445						$	114,723						$	104,446
Net interest spread						3.50	%						3.60	%						3.52	%
Net interest margin						3.81	%						3.83	%						3.64	%

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Average Balance Sheets and Interest Rates - Taxable Equivalent Basis - Supplemental Information

● Average loan balances include the principal balance of non-accrual loans, as well as all loan premiums, discounts, fees and costs, and exclude participation loans accounted for as secured borrowings. Participation loans averaged $9 million, $15 million and $19 million for the years ended December 31, 2019, 2018 and 2017.

● Interest income on a FTE basis includes additional amounts of interest income that would have been earned if investments in certain tax-exempt interest earning assets had been made in assets subject to federal taxes yielding the same after-tax income. Interest income on municipal securities and tax-exempt loans has been calculated on a FTE basis using a federal income tax rate of 21% for 2019 and 2018 and 35% for 2017. Approximate tax equivalent adjustments to interest income were $224,000, $307,000 and $793,000 for the years ended December 31, 2019, 2018 and 2017.

● Interest income includes loan fees of $2.0 million, $1.3 million and $1.1 million for the years ended December 31, 2019, 2018 and 2017.

● Net interest income, the most significant component of the Bank's earnings represents total interest income less total interest expense. The level of net interest income is determined by mix and volume of interest earning assets, interest bearing deposits and borrowed funds, and changes in interest rates.

● Net interest spread is the difference between taxable equivalent rates earned on interest earning assets less the cost of interest bearing liabilities.

● NIM represents net interest income on a taxable equivalent basis as a percentage of average interest earning assets. NIM is impacted by both interest rate spread and the level of non-interest bearing sources of funds, primarily consisting of demand deposits and stockholders’ equity.

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The following table illustrates the extent to which changes in interest rates and changes in the volume of interest-earning assets and interest-bearing liabilities impacted Bancorp’s interest income and interest expense during the periods indicated. Information is provided in each category with respect to (i) changes attributable to changes in volume (changes in volume multiplied by prior rate), (ii) changes attributable to changes in rate (changes in rate multiplied by prior volume) and (iii) net change. The changes attributable to the combined impact of volume and rate have been allocated proportionately to the changes due to volume and the changes due to rate. Tax-equivalent adjustments are based on a federal income tax rate of 21% for 2019 and 2018 and 35% for 2017. The change in interest due to both rate and volume has been allocated to the change due to rate and the change due to volume in proportion to the relationship of the absolute dollar amounts of the change in each.

Rate/Volume Analysis - Taxable Equivalent Basis

	Year ended December 31, 2019									Year ended December 31, 2018
	Compared to									Compared to
	Year ended December 31, 2018									Year ended December 31, 2017
	Total Net			Increase (Decrease) Due to						Total Net			Increase (Decrease) Due to
(In thousands)	Change			Rate			Volume			Change			Rate			Volume
Interest income:
Federal funds sold and interest bearing due from banks	$	1,626		$	147		$	1,479		$	(23	)	$	654		$	(677	)
Mortgage loans held for sale		17			(52	)		69			(25	)		35			(60	)
Securities available for sale:
Taxable		799			(25	)		824			462			1,153			(691	)
Tax-exempt		(436	)		(51	)		(385	)		(552	)		(151	)		(401	)
Federal Home Loan Bank stock		39			(39	)		78			174			52			122
Loans, net of unearned income		15,864			6,191			9,673			18,352			8,559			9,793
Total interest income		17,909			6,171			11,738			18,388			10,302			8,086
Interest expense:
Deposits:
Interest bearing demand deposits		943			610			333			2,434			2,312			122
Savings deposits		(20	)		(40	)		20			132			122			10
Money market deposits		1,576			1,269			307			2,789			2,942			(153	)
Time deposits		4,620			2,565			2,055			2,111			1,813			298
Total interest bearing deposits		7,119			4,404			2,715			7,466			7,189			277
Securities sold under agreements to repurchase		(56	)		7			(63	)		23			39			(16	)
Federal funds purchased		(618	)		42			(660	)		653			302			351
Federal Home Loan Bank advances		716			237			479			(31	)		(2	)		(29	)
Subordinated debt		26			—			26			—			—			—
Total interest expense		7,187			4,690			2,497			8,111			7,528			583
Net interest income	$	10,722		$	1,481		$	9,241		$	10,277		$	2,774		$	7,503

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Asset/Liability Management and Interest Rate Risk

Managing interest rate risk is fundamental for the financial services industry. The primary objective of interest rate risk management is to neutralize effects of interest rate changes on net income. By considering both on and off-balance sheet financial instruments, management evaluates interest rate sensitivity with the goal of optimizing net interest income within the constraints of prudent capital adequacy, liquidity needs, market opportunities and customer requirements.

Interest Rate Simulation Sensitivity Analysis

Bancorp uses an earnings simulation model to estimate and evaluate the impact of an immediate change in interest rates on earnings in a one year forecast. The simulation model is designed to reflect dynamics of interest earning assets and interest bearing liabilities. By estimating effects of interest rate fluctuations, the model can approximate interest rate risk exposure. This simulation model is used by management to gauge approximate results given a specific change in interest rates at a given point in time. The model is therefore a tool to indicate earnings trends in given interest rate scenarios and may not indicate actual or expected results.

The December 31, 2019 simulation analysis, which shows interest rate sensitivity, indicates that increases in interest rates of 100 to 200 BPs would have a positive effect on net interest income, and decreases of 100 to 200 BPs in interest rates would have a negative effect on net interest income. The mix of assets and liabilities acquired in the KSB transaction slightly increased Bancorp’s exposure to falling rates. The overall increase in net interest income in the rising rate scenarios is primarily due to variable rate loans and short-term investments repricing more quickly than deposits and short-term borrowings. Asset balances subject to immediate repricing cause an estimated decline in net interest income in down 100 and 200 BP rate scenarios, as rates on non-maturity deposits cannot be lowered sufficiently to offset declining interest income. These estimates are summarized below.

	Change in Rates
	-200	-100			+100			+200
	Basis Points	Basis Points			Basis Points			Basis Points
% Change from base net interest income at December 31, 2019	NA		-4.99	%		2.81	%		5.74	%

Approximately 62% of Bancorp’s loan portfolio has fixed rates with 38% priced at variable rates. Bancorp’s variable rate loans are above their floors and will reprice as rates change.

Periodically, Bancorp enters into interest rate swap transactions with borrowers who desire to hedge exposure to rising interest rates, while at the same time entering into an offsetting interest rate swap, with substantially matching terms, with another approved independent counterparty. These are undesignated derivative instruments and are recognized on the balance sheet at fair value, with changes in fair value recorded in other non-interest income as interest rates fluctuate. Because of matching terms of offsetting contracts, in addition to collateral provisions which mitigate the impact of non-performance risk, changes in fair value subsequent to initial recognition have a minimal effect on earnings, and are therefore not included in the simulation analysis results above. For additional information see the Footnote titled “Assets and Liabilities Measured and Reported at Fair Value.”

In addition, Bancorp uses derivative financial instruments as part of its interest rate risk management, including interest rate swaps. These interest rate swaps designated as cash flow hedges as described in the Footnote titled “Derivative Financial Instruments.” For these derivatives, the effective portion of gains or losses is reported as a component of OCI, and is subsequently reclassified into earnings as an adjustment to interest expense in periods in which the hedged forecasted transaction affects earnings.

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Provision for Loan and Lease Losses

The provision represents a charge to earnings necessary to maintain an allowance that, in management’s evaluation, is adequate to provide coverage for inherent losses on outstanding loans. In determining the provision, management considers many factors. Among these are the quality of the loan portfolio, underlying collateral, previous loss experience, size and composition of the loan portfolio and an assessment of the impact of current economic conditions on borrowers’ ability to pay. The allowance is calculated after considering credit quality factors, and ultimately relies on an overall internal analysis of risk in the loan portfolio. Based on this analysis, the provision is determined and recorded. The provision reflects results of an allowance methodology that is driven by risk ratings, historical losses, specific loan loss allocations and qualitative factors. The provision is reflective a number of factors, including loan balance fluctuations and other quantitative and qualitative considerations. Loans are charged off when deemed uncollectible and a loss is identified or after underlying collateral has been liquidated; however, collection efforts may continue and future recoveries may occur. Periodically, loans may be partially charged off to net realizable value based upon collateral analysis and collection status.

An analysis of the changes in the allowance and selected ratios follows:

Years Ended December 31, (dollars in thousands)	2019			2018			2017
Allowance at the beginning of the period	$	25,534		$	24,885		$	24,007
Provision		1,000			2,705			2,550
Total charge-offs		(684	)		(3,012	)		(2,429	)
Total recoveries		941			956			757
Total net loan (charge-offs)/recoveries		257			(2,056	)		(1,672	)
Allowance at the end of the period	$	26,791		$	25,534		$	24,885
Average loans, net of unearned income	$	2,702,626		$	2,504,477		$	2,290,112
Provision to average loans		0.04	%		0.11	%		0.11	%
Net loan (charge-offs)/recoveries to average loans		0.01	%		-0.08	%		-0.07	%
Allowance to average loans		0.99	%		1.01	%		1.08	%
Allowance to total loans		0.94	%		1.00	%		1.03	%

An analysis of net loan (charge-offs)/recoveries by loan portfolio segment follows:

Years Ended December 31, (in thousands)	2019			2018			2017
Commercial and industrial	$	173		$	(1,850	)	$	(1,580	)
Construction and development, excluding undeveloped land		203			—			—
Undeveloped land		—			—			—
Real estate mortgage		62			(70	)		56
Consumer		(181	)		(136	)		(148	)
Total net loan (charge-offs)/recoveries	$	257		$	(2,056	)	$	(1,672	)

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Discussion of 2019 vs 2018:

Bancorp recorded provision of $1.0 million and $2.7 million for the years ended December 31, 2019 and 2018. Continued strong credit metrics and net recoveries of $257,000 in 2019 resulted in an allowance to total loans of 0.94% as of December 31, 2019, compared with 1.00% as December 31, 2018. The loans acquired in the May 2019 KSB acquisition were marked to market on the acquisition date and as such, did not receive an allowance.

Key indicators of loan quality remained consistent, or better than the prior year with the exception of increased classified balances, defined as OAEM, Substandard, and non-performing loans, which increased $4 million at December 31, 2019 compared to December 31, 2018.

● OAEM classified loans declined $18 million from December 31, 2018 to December 31, 2019, as $16 million in loans were upgraded or paid off, while $8 million in loans were added to the classification and $10 million were downgraded to a substandard classification.

● Substandard loan increased $14 million from December 31, 2018 to December 31, 2019, as two larger relationships were downgraded from OAEM to substandard.

● Substandard non-performing loans increased $9 million from December 31, 2018 to December 31, 2019, mainly due to one large relationship that was downgraded from substandard.

Consistent with Bancorp’s methodology, the historical look-back period was extended from 32 to 36 quarters in the first quarter of 2019 to all classes and segments of the portfolio. Management believes the expansion of the look-back period more accurately represents the current level of risk in the loan portfolio and captures the effects of a full economic cycle. Based on the look-back period extension, the allowance level increased approximately $2.0 million during the first quarter of 2019.

The ratio of non-performing loans to total loans was 0.42% at December 31, 2019, compared with 0.13% at December 31, 2018. Non-performing loans, consisting of TDRs, non-accrual loans, and loans over 90 days past due still accruing, increased to $12 million at December 31, 2019 from $3 million at December 31, 2018, primarily due to one significant C&I relationship that was moved to non-accrual status in the fourth quarter of 2019. The relationship has been evaluated for potential loss, and the Company believes its reserve is adequate at year end. With the exception of this relationship, Bancorp considers the present asset quality metrics to be strong; however, recognizing the cyclical nature of the lending business, this trend will likely normalize over time.

Bancorp’s loan portfolio is diversified with no significant concentrations of credit. Geographically, most loans are extended to borrowers in the MSAs of Louisville, Indianapolis and Cincinnati. The adequacy of the allowance is monitored on an ongoing basis and it is the opinion of management that the balance of the allowance at December 31, 2019 is adequate to absorb probable losses inherent in the loan portfolio as of the financial statement date.

Discussion of 2018 vs 2017:

Bancorp recorded provision of $2.7 million and $2.6 million for the years ended December 31, 2018 and 2017. As a percentage of total loans, the allowance decreased to 1.00% at December 31, 2018 compared to 1.03% at December 31, 2017. Net loan charge-offs totaled 0.08% of average loans for 2018, as compared with 0.07% reported for 2017.

Non-performing loans decreased to $3 million at December 31, 2018 from $7 million at December 31, 2017, consistent with the decline in non-accrual loans. The ratio of non-performing loans to total loans was 0.13% at December 31, 2018, compared with 0.31% at December 31, 2017.

See addition discussion regarding the Allowance and Non-Performing Loans under the section titled “Financial Condition.”

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Non-Interest Income

								Variance						Variance
								2019 / 2018						2018 / 2017
Years Ended December 31, (dollars in thousands)	2019		2018		2017			$			%			$			%
Wealth management and trust services	$	22,643	$	21,536	$	20,505		$	1,107			5	%	$	1,031			5	%
Deposit service charges		5,513		5,759		6,172			(246	)		(4	)		(413	)		(7	)
Debit and credit card income		8,123		6,769		5,979			1,354			20			790			13
Treasury management fees		4,992		4,571		4,297			421			9			274			6
Mortgage banking income		3,090		2,568		3,221			522			20			(653	)		(20	)
Loss on sale of securities AFS		—		—		(232	)		—			—			232			100
Net Investment products sales commissions and fees		1,498		1,677		1,629			(179	)		(11	)		48			3
Bank owned life insurance		1,031		1,129		1,159			(98	)		(9	)		(30	)		(3	)
Other		2,900		1,337		1,769			1,563			117			(432	)		(24	)
Total non-interest income	$	49,790	$	45,346	$	44,499		$	4,444			10	%	$	847			2	%

Discussion of 2019 vs 2018:

Total non-interest income increased $4.4 million, or 10%, for the year ended December 31, 2019 compared to the same period in 2018. Non-interest income comprised 28% of total revenues, defined as net interest income (FTE) and non-interest income, for both the year ended December 31, 2019 and 2018. WM&T services and debit and credit card income comprised 45.5% and 16.3% of Bancorp’s total non-interest income for the year ended December 31, 2019 compared to 47.5% and 14.9% for the same period in 2018.

WM&T Services:

The magnitude of WM&T revenue distinguishes Bancorp from other community banks of similar asset size. Trust AUM, stated at market value, ended 2019 at a record $3.32 billion, a 20% increase compared with $2.77 billion at December 31, 2018. AUM are invested in instruments for which market values can be readily determined, the majority of which are sensitive to market fluctuations, and consist of approximately 63% in equities and 37% in fixed income securities at December 31, 2019. WM&T revenue increased $1.1 million, or 5%, to a record $22.6 million for the year ended December 31, 2019, as compared with the same period in 2018 consistent with increased new business generation, strong market returns and growth in corporate retirement plans.

Recurring fees earned for managing accounts are based on a percentage of market value of AUM and are typically assessed on a monthly basis. Recurring fees, which generally comprise over 97% of the WM&T revenue, increased $973,000, or 5%, for the year ended December 31, 2019, as compared with the same period in 2018. Non-recurring WM&T revenue, most notably executor, insurance, and some employee benefit plan-related fees, and the timing of these revenues, corresponds with the related administrative activities, and is also based on the market value of AUM. Total non-recurring fees increased $134,000, or 23%, for the year ended December 31, 2019, as compared with the same period in 2018. Contracts between WM&T and their clients do not permit performance based fees and accordingly, none of the WM&T revenue is performance based. Management believes the WM&T department will continue to factor significantly in Bancorp’s financial results and provide strategic diversity to revenue streams.

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Detail of WM&T Service Income by Account Type:

Years Ended December 31, (in thousands)	2019		2018		2017
Investment advisory	$	9,072	$	8,395	$	7,464
Personal trust		7164		7,322		7,285
Personal investment retirement		5,324		4,994		4,829
Foundation and endowment		559		552		540
Custody and safekeeping		130		161		152
Brokerage and insurance services		52		53		40
Other		342		59		195
Total wealth management and trust services income	$	22,643	$	21,536	$	20,505

The preceding table demonstrates that WM&T fee revenue is concentrated within investment advisory and personal trust accounts. WM&T fees are based on AUM and tailored for individual accounts and/or relationships with fee structures customized based on account type and other factors with larger relationships paying a lower percentage of AUM in fees. For example, fee structures are in place for investment management, irrevocable trusts, revocable trusts, individual IRAs, and accounts holding only fixed income securities. There are also fee structures for estate settlements, which are non-recurring, and retirement plan services, which typically consist of a one-time conversion fee with recurring AUM fees to follow. Fees are agreed upon at the time the account is opened and any subsequent revisions are communicated via writing to the customer. Fees earned are not performance based nor are they based on investment strategy or transactions.

Trust Assets Under Management:

Trust AUM (not included on balance sheet) grew from $2.77 billion at December 31, 2018 to a record $3.32 billion at December 31, 2019.

Trust Assets Under Management by Account Type:

	2019				2018
December 31, (in thousands)	Managed		Non-managed (1)		Managed		Non-managed (1)
Investment advisory	$	1,347,389	$	21,759	$	1,077,904	$	34,214
Personal trust		617,984		96,506		532,254		80,167
Personal individual retirement		437,193		2,799		344,900		2,363
Corporate retirement		45,097		436,188		47,884		390,619
Foundation and endowment		231,704		1,343		187,492		1,020
Total accounts	$	2,679,367	$	558,595	$	2,190,434	$	508,383
Custody and safekeeping		—		81,850		—		66,058
	$	2,679,367	$	640,445	$	2,190,434	$	574,441
Total managed and non-managed assets	$	3,319,812			$	2,764,875

(1) Non-managed assets represent those for which WM&T does not have investment discretion.

As of December 31, 2019 and 2018, approximately 81% and 79% of AUM were actively managed. The majority of managed assets are in investment advisory, personal trust and agency accounts. Corporate retirement plan accounts primarily consist of participant directed assets and the amount of custody and safekeeping accounts are insignificant.

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Managed Trust Assets Under Management by Class of Investment:

December 31, (in thousands)	2019		2018
Interest bearing deposits	$	145,710	$	139,779
US Treasury and government agency obligations		46,950		53,513
State, county and municipal obligations		136,575		128,057
Money market mutual funds		7,511		8,627
Equity mutual funds		654,569		485,961
Other mutual funds - fixed, balanced, and municipal		339,296		290,352
Other notes and bonds		182,940		155,701
Common and preferred stocks		1,037,695		801,690
Real estate mortgages		332		352
Real estate		51,059		49,840
Other miscellaneous assets (1)		76,730		76,562
Total managed assets	$	2,679,367	$	2,190,434

(1) Includes client directed instruments including rights, warrants, annuities, insurance policies, unit investment trusts, and oil and gas rights.

Managed assets are invested in instruments for which market values can be readily determined, the majority of which are sensitive to market fluctuations, and consist of approximately 63% in equities and 37% in fixed income securities at December 31, 2019. This composition is relatively consistent from period to period and WM&T has no proprietary mutual funds.

Additional Sources of Non-interest income:

Deposit service charges decreased $246,000, or 4%, for the year ended December 31, 2019, as compared with the same period in 2018. Deposit service charge income is primarily driven by changes in customer and transaction volume, which can fluctuate from period to period. Consistent with the industry, Bancorp has experienced a steady decline in fees earned on overdrawn checking accounts. Management expects this source of revenue to continue its slow decline due to anticipated changes in customer behavior, including reduced check volume and ongoing regulatory restrictions.

Debit and credit card income consists of interchange income, ancillary fees and incentives received from card processors. Debit and credit card revenue increased $1.4 million, or 20%, for the year ended December 31, 2019, as compared with the same period in 2018 consistent with increased volume resulting from continued growth in the customer bases. Total debit card income increased $500,000, or 10%, for the year ended December 31, 2019, while credit card income increased $854,000, or 56%, for the same period. In 2019, credit card income included a $47,000 non-recurring fee from its card processor for reaching activity incentive thresholds. This was the first such payment received since the Bank launched this product in mid-2015. Also, 2019 debit card revenue included a similar non-recurring fee of $174,000. No similar non-recurring debit or credit card incentives were received in 2018. Both debit and credit card volume, which are dependent on customer behavior and new accounts, are expected to continue to increase. Bancorp expects a slight decrease in interchange rates as service providers gravitate to lower cost options within the market, however, growth in number of accounts and transaction volume is anticipated to offset the decline in rates.

Treasury management fees primarily consist of fees earned for cash management services provided to commercial customers. This category has been a growing source of revenue for Bancorp, increasing $421,000, or 9%, for the year ended December 31, 2019 compared to 2018. Bancorp anticipates this income category will continue to increase based upon continued customer base growth and the expanding suite of services offered.

Mortgage banking income primarily includes gains on sales of mortgage loans. Bancorp’s mortgage banking department originates residential mortgage loans to be sold in the secondary market, primarily to the FNMA. Interest rates on the loans sold to FNMA are locked with the borrower and investor prior to closing the loans, thus Bancorp bears no interest rate risk related to loans sold. Bancorp offers conventional, VA and FHA financing for purchases and refinances, as well as programs for first-time home buyers. Interest rates on mortgage loans directly impact the volume of business transacted by the mortgage banking department. Mortgage banking revenue increased $522,000, or 20%, for the year ended December 31, 2019 compared to 2018. Mortgage transaction volume began to increase in the second quarter and to a larger extent into the third quarter of 2019, as mortgage rates declined, spurring an increase in refinancing activity. During the third quarter, the ten year treasury rate/ yield curve, which mortgage rates closely follow, began a steep decline leading to the lowest mortgage rates in several years.

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In 2019 and 2018, Bancorp did not sell any securities AFS. Management has the intent and ability to hold all remaining investment securities AFS for the foreseeable future.

Net investment product sales commissions and fees are generated primarily on stock, bond and mutual fund sales, as well as wrap fees on brokerage accounts. Wrap fees are charges for investment programs that bundle together a suite of services, such as brokerage, advisory, research and management, and are based on a percentage of assets. Bancorp deploys its financial advisors primarily through its branch network via an arrangement with a third party broker-dealer, while larger managed accounts are serviced in the Bank’s WM&T department. Net investment product sales commissions and fees decreased $179,000, or 11%, for the year ended December 31, 2019, as compared with the same period in 2018. Advisor turnover in addition to regulatory changes that have lowered commissions on several product offerings have negatively impacted the brokerage department throughout 2019.

BOLI assets represent the cash surrender value of life insurance policies on certain key employees who have provided consent for Bancorp to be the beneficiary of a portion of such policies. The related change in cash surrender value and any death benefits received under the policies are recorded as non-interest income. This income serves to offset the cost of various employee benefits. BOLI income decreased $98,000 in 2019 compared to 2018, as a result of life insurance proceeds received in both periods having reduced the related earning assets in addition to lower crediting rates on those investments.

Other non-interest income increased $1.6 million for the year ended December 31, 2019, as compared with the same period in 2018 primarily due to the following non-recurring items:

● Interest rate swap fees on loans of $788,000 and $119,000 were recognized in 2019 and 2018. Opportunities to earn swap fee income are sporadic due to the specialized nature of these type of transactions.

● Approximately $142,000 and $112,000 in life insurance proceeds (outside of the traditional BOLI program) were recognized in 2019 and 2018.

● Approximately $212,000 was realized during 2019 when Bancorp sold a nominal amount of Visa Class B stock, an illiquid $0 basis investment that was acquired in the TBOC acquisition.

● In 2019, Bancorp recognized $126,000 related to banking center re-location incentivization.

● Approximately $130,000 was received in 2019 related to a historic tax-credit investment tax distribution.

Discussion of 2018 vs 2017:

Total non-interest income increased $847,000, or 2%, for the year ended December 31, 2018 compared to the same period in 2017. Non-interest income comprised 28.3% and 30.4% of total revenues for the year ended December 31, 2018 compared to 2017. WM&T services and debit and credit card income comprised 47.5% and 14.9% of Bancorp’s total non-interest income for the year ended December 31, 2018 compared to 46.1% and 13.4% for the same period in 2017.

WM&T revenue increased $1.0 million, or 5%, for the year ended December 31, 2018, as compared with the same period in 2017 consistent with a rising stock market for most of 2018 and new clients added. Trust AUM, stated at market value, totaled $2.77 billion at December 31, 2018, a 2% or slight decline compared with $2.81 billion at December 31, 2017.

Recurring fees earned for managing trust accounts are based on a percentage of market value of AUM and are typically assessed on a monthly basis. Recurring fees increased $789,000, or 4%, for the year ended December 31, 2018, as compared with the same period in 2017, while total non-recurring fees increased $242,000 for the same period.

Deposit service charges decreased $413,000, or 7%, for 2018 compared with 2017 due to the general market trend of customers transitioning away from fee based accounts towards fee-free checking offerings and a reduction in fees related to overdrawn checking accounts.

Debit and credit card revenue increased $790,000, or 13%, for 2018 compared with 2017 consistent with the growth in the customer base and corresponding card usage. Debit card interchange income increased $386,000, or 8%, in 2018, as compared with 2017. Commercial credit card interchange income increased $376,000, or 34%, year over year based on volume and expansion of the program.

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Treasury management revenue increased $274,000, or 6%, in 2018 compared with 2017 consistent with customer base expansion and as more existing customers took advantage of offered services.

Mortgage banking revenue decreased $653,000, or 20%, in 2018 compared with 2017, as rising interest rates slowed refinancing activity.

In 2017, Bancorp sold an equity security, realizing a loss of $263,000, and one security was called prior to maturity resulting in the receipt of a $31,000 pre-payment penalty.

Net investment product sales commissions and fees increased $48,000, or 3%, in 2018, corresponding to overall brokerage volume.

BOLI income decreased $30,000, or 3%, in 2018 compared to 2017. While BOLI income in 2018 and 2017 included life insurance proceeds of $382,000 and $348,000, overall income declined consistent with decreasing crediting rates on investments.

Other non-interest income decreased $432,000, or 24%, during 2018 compared with 2017. Included in this category is interest rate swap fee income, which totaled $119,000 and $227,000 for 2018 and 2017. This category contains a variety of other income sources, none of which resulted in individually significant variances in comparison.

Non-interest expenses

The following table provides a comparison of components of non-interest expenses for years ended 2019, 2018 and 2017. Below the table is a discussion of significant changes and trends.

							Variance						Variance
							2019 / 2018						2018 / 2017
Years Ended December 31, (dollars in thousands)	2019		2018		2017		$			%			Change			%
Compensation	$	50,319	$	46,104	$	42,581	$	4,215			9	%	$	3,523			8	%
Employee benefits		11,038		10,098		9,987		940			9			111			1
Net occupancy and equipment		8,417		7,653		7,393		764			10			260			4
Technology and communication		9,591		8,897		7,957		694			8			940			12
Marketing and business development		3,627		3,099		2,716		528			17			383			14
Postage, printing and supplies		1,652		1,558		1,475		94			6			83			6
Legal and professional		3,014		2,614		2,393		400			15			221			9
FDIC insurance		245		961		960		(716	)		(75	)		1			0
Amortization of investments in tax credit partnerships		1,078		1,237		7,124		(159	)		(13	)		(5,887	)		(83	)
Capital and deposit based taxes		3,870		3,325		3,440		545			16			(115	)		(3	)
Other		5,500		3,963		4,394		1,537			39			(431	)		(10	)
Total non-interest expenses	$	98,351	$	89,509	$	90,420	$	8,842			10	%	$	(911	)		(1	)%

Discussion of 2019 vs 2018:

Total non-interest expenses increased $8.8 million, or 10%, in 2019 compared to 2018. Compensation and employee benefits comprised 62% and 63% of Bancorp’s total non-interest expenses for 2019 and 2018.

Compensation, which includes salaries, incentives, bonuses, and stock based compensation, increased $4.2 million, or 9%, for 2019 compared to 2018. Consistent with record 2019 results, bonus expense of $5.8 million was recorded during 2019 compared to $4.5 million during 2018. Net full time equivalent employees increased from 591 at December 31, 2018 to 615 at December 31, 2019. While 25 employees were added in connection with the KSB acquisition, 2019 reflects a higher concentration of non-KSB related loan production personnel added. In addition, non-recurring severance and employee retention expense of nearly $500,000 was recorded in 2019 as a result of the KSB acquisition.

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Employee benefits consists of all personnel related expense not included in compensation, with the most significant items being health insurance, payroll taxes, and retirement plan contributions. Employee benefits increased $940,000, or 9%, in 2019 compared with 2018. Growth in full time equivalent employees, increased 401(k) matching contributions, increased FICA expense associated with the growth in compensation and higher employee recruiting costs resulted in the overall increase. Effective January 1, 2019, as a recruitment strategy, Bancorp amended its 401(k) plan to allow employer matching contribution eligibility following 30 days of employment.

Net occupancy and equipment expense primarily includes depreciation, rent, property taxes, utilities and maintenance. Costs of capital asset additions flow through the statement of income over the lives of the assets in the form of depreciation expense. Net occupancy increased $764,000, or 10%, for 2019 compared with 2018. Bancorp opened one branch location during the third quarter of 2019 in Mt. Washington, Kentucky and added five branch locations associated with the KSB acquisition during the second quarter. Bancorp closed three of the acquired branch locations in Louisville during the third quarter of 2019 due to their proximity to existing Bancorp branches. All three buildings and were sold in 2019 resulting in positive re-cast adjustments to goodwill. The KSB locations added $238,000 of additional occupancy and equipment expense for 2019.

Technology and communications expense include ongoing computer software amortization, equipment depreciation, debit and credit card processing expenses and expenditures related to investments in technology needed to maintain and improve the quality of customer delivery channels, information security and internal resources. Technology expense increased $529,000, or 8%, in 2019 compared to 2018 due largely to increases in computer infrastructure upgrades and maintenance costs. KSB related one-time non-recurring expenses totaled $104,000 for 2019. Bancorp outsources processing for debit and credit card operations, which generate significant revenue for the Company. These expenses increase as transaction volume increases, offsetting a portion of corresponding revenue growth. Debit and credit card processing expense increased $165,000, or 7%, for 2019 as compared with 2018, as a result of a growing customer base and increased transaction volume.

Marketing and business development expenses include all costs associated with promoting Bancorp, community support, retaining customers and acquiring new business. Marketing and business development expenses increased $528,000, or 17%, for 2019 as compared with 2018 largely due to increased community support expenses. In connection with record operating results, Bancorp committed to pay $600,000 to the Bank’s foundation, established to support various community initiatives, as of December 31, 2019 compared to $125,000 as of December 31, 2018.

Postage, printing and supplies expenses increased $94,000, or 6%, in 2019 compared to 2018, primarily due to the KSB acquisition.

Legal and professional fees increased $400,000, or 15%, for 2019 compared to 2018. One-time costs associated with the KSB acquisition totaled nearly $867,000 in 2019 compared to $337,000 incurred in late 2018 in anticipation of the acquisition. Additional costs associated with consulting engagements also contributed to the period over period increase.

No FDIC insurance expense was recorded for the third or fourth quarters of 2019, as the national FDIC Reserve Ratio reached 1.38%, triggering the FDIC to release credits to small institutions (less than $10 billion in total consolidated assets). This change was announced in 2016 and it took approximately three years for the threshold to be met and the corresponding credits issued.

Tax credit partnerships generate federal income tax credits, and for each of Bancorp’s investments in tax credit partnerships, the tax benefit, net of related expenses, results in a positive effect on net income. Amounts of credits and corresponding expenses can vary widely depending upon timing and magnitude of the investments. Amortization of investments in tax credit partnership decreased $159,000, or 13%, from 2018 to 2019.

Capital and deposit based taxes increased $545,000, or 16%, in 2019 compared to 2018 in connection with general balance sheet growth and the KSB acquisition.

Other non-interest expenses increased $1.5 million, or 39%, for 2019 compared to 2018 primarily due to the following:

● Expense associated with Bancorp’s growing credit card program, mainly rebates/ rewards, increased $307,000.

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● Core deposit intangible amortization increased $122,000 as a result of the KSB acquisition.

● Miscellaneous losses, most notably fraudulent check losses increased $157,000.

● In connection with the signing of a hosting contract related to Bancorp’s core processing system, assets totaling $347,000 were written off.

● Gains on sales of OREO were higher in 2018 by $109,000.

● Director compensation increased $379,000.

Bancorp’s efficiency ratio for 2019 of 56.13% increased from 55.92% in 2018. Excluding amortization of investments in tax credit partnerships, the adjusted efficiency ratio, a non-GAAP measure, would have been 55.51% and 55.15% for 2019 and 2018. See the section titled “Non-GAAP Financial Measures” for reconcilement of non-GAAP to GAAP measures.

Discussion of 2018 vs 2017:

Total non-interest expenses decreased $911,000, or 1%, in 2018 compared to 2017. Compensation and employee benefits comprised 63% and 58% of Bancorp’s non-interest expenses for 2018 and 2017.

Compensation increased $3.5 million, or 8%, in 2018 compared with 2017. The increases reflected higher salaries, increased production and performance based compensation, including stock compensation, and the addition of personnel associated with growth and operational support. At December 31, 2018, Bancorp had 591 full-time equivalent employees compared with 580 at December 31, 2017.

Employee benefits increased $111,000, or 1%, in 2018 compared with 2017, primarily due to increased health insurance. Bancorp is self-insured, and health insurance costs fluctuate consistent with claims levels.

Net occupancy and equipment expense increased $260,000, or 4%, from 2017 to 2018 associated with increased costs of capital asset additions recognized over lives of the assets in the form of depreciation expense.

Technology and communications expenses increased $940,000, or 12%, from 2017 to 2018 largely due to increases in computer system additions and improvements.

Marketing and business development expenses increased $383,000, or 14%, in 2018 compared with 2017, due to advertising costs associated with deposit gathering campaigns in 2018.

Postage, printing and supplies expenses increased $83,000, or 6%, in 2018 compared with 2017. The increase year over year was comprised of numerous items, none of which were individually significant.

Legal and professional fees increased $221,000 to $2.6 million in 2018 from $2.4 million in 2017 due to costs associated with the anticipated KSB acquisition and out-sourcing assistance for loan review and tax services.

FDIC insurance expense was unchanged from 2017 to 2018.

Amortization of investments in tax credit partnerships decreased $5.9 million for the year ended December 31, 2018 compared with the same period of 2017, as the amounts of credits and corresponding expenses can vary widely depending upon the timing and magnitude of investments.

Capital and deposit based taxes decreased $115,000, or 3%, in 2018, as compared with 2017 as a result of reduced local deposit-based tax expense.

Other non-interest expenses decreased $431,000, or 10%, for the year ended December 31, 2018 compared with the same period of 2017. Expenses for 2017 included a $266,000 liability accrual related to an estimated loss from certain administrative proceedings arising in the course of business.

Bancorp’s efficiency ratio for 2018 of 55.92% decreased from 60.61% in 2017. Excluding amortization of investments in tax credit partnerships, the adjusted efficiency ratio, a non-GAAP measure, would have been 55.15% and 55.84% for 2018 and 2017. See the section titled “Non-GAAP Financial Measures” for reconcilement of non-GAAP to GAAP measures.

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Income Taxes

A comparison of income tax expense and ETR follows:

Years Ended December 31, (dollars in thousands)	2019			2018			2017
Income tax expense	$	9,593		$	12,031		$	17,139
Effective tax rate		12.68	%		17.81	%		31.06	%

Discussion of 2019 vs 2018:

The decline in the ETR from 2018 to 2019 related primarily to the following two Kentucky state tax law changes:

● In March 2019, the Kentucky Legislature passed HB354 requiring financial institutions to transition from a capital based franchise tax to the Kentucky corporate income tax beginning in 2021. Historically, the franchise tax, a component of non-interest expenses, was assessed at 1.1% of net capital and averaged $2.5 million annually over the prior two year-end periods. The Kentucky corporate income tax will be assessed at 5% of Kentucky taxable income and will be included as a component of current and deferred state income tax expense. Associated with this change, predominantly during the first quarter of 2019, Bancorp established a Kentucky state DTA related to existing temporary differences estimated to reverse after the effective date of the law change. Bancorp recorded a corresponding state tax benefit, net of federal tax impact of $1.2 million, or approximately $0.06 per diluted share for 2019. While this is positive in the short-term, Bancorp anticipates an unfavorable impact of approximately $200,000 per year beginning in 2021.

● In April 2019, the Kentucky Legislature passed HB458 allowing entities filing a combined Kentucky income return to share certain tax attributes, including net operating loss carryforwards. The combined filing beginning in 2021 will allow Bancorp’s Holding Company net operating loss carryforwards to offset against net revenue generated by the Bank up to 50% of the Bank’s Kentucky taxable income and reduce Bancorp’s tax liability. Bancorp recorded a state tax benefit, net of federal tax impact of $2.7 million predominantly in the second quarter of 2019, or approximately $0.12 per diluted share for 2019. 

Bancorp invests in certain partnerships that yield federal income tax credits. Taken as a whole, the tax benefit of these investments exceeds amortization expense, resulting in a positive impact on net income. The timing and magnitude of these transactions may vary widely from time to time.

Discussion of 2018 vs 2017:

The decrease in the ETR from 2017 to 2018 was due to the decrease in the federal marginal income tax rate from 35% to 21% effective January 1, 2018, as a result of the TCJA enacted on December 22, 2017. The 2017 ETR was significantly increased by a $5.9 million charge, also due to the TCJA, to revalue Bancorp’s net DTA. The increase was somewhat offset by the positive effects of federal income tax credits and stock-based compensation.

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Financial Condition – December 31, 2019 Compared to December 31, 2018

Overview

Total assets increased $421 million, or 13%, to $3.7 billion at December 31, 2019, from $3.3 billion at December 31, 2018. Average assets increased $321 million, or 10%, to $3.5 billion at December 31, 2019 boosted by a $292 million, or 10%, increase in average interest earning assets. The year over year asset increases reflect increases in loans, cash and cash equivalents, AFS securities, premises and equipment, goodwill and other assets. Bancorp acquired total assets of approximately $192 million on May 1, 2019 in connection with the KSB acquisition and recognized goodwill of approximately $12 million.

Despite significant funding deployed in the form of loans, cash and cash equivalents increased $51 million, or 26%, and AFS securities increased $34 million, or 8%, as seasonal deposits and elevated levels of excess balance sheet liquidity was held in short-term investments at December 31, 2019. Bancorp experienced a significant increase in corporate customer deposit balances during the fourth quarter along with seasonal deposits of approximately $90 million. Bancorp anticipates deposit balances to return to normal levels during the first part of 2020. While these accounts are profitable, the excess investment is expected to have a negative effect on NIM for the first part 2020, as short term rates are likely to remain significantly lower than rates for longer term loans. Similarly, $88 million in excess cash balances were also maintained at December 31, 2018 and reduced over the first six months of 2019.

Loans increased $297 million, or 12%, in 2019 including $134 million in loans acquired in the KSB acquisition. Record loan production experienced subsequent to the first quarter of 2019 contributed to non-acquisition, or legacy, loan growth of $163 million, or 6%, for 2019. Average loans increased $198 million, or 8% in 2019, including $102 million in average loans from the KSB acquisition. Bancorp was successful in growing loans in 2019 despite elevated levels of commercial loan payoffs, resulting largely from construction and land development borrowers moving elsewhere for permanent financing or CRE loans for which collateral was sold. Loan growth during 2019 reflected ongoing expansion in key lending categories such as C&I and owner-owner occupied CRE lending.

Premises and equipment increased $14 million, or 31%, primarily the result of establishing a right of use lease asset upon adopting ASU 2016-02, Leases, in 2019 and the addition of KSB branches.

Total liabilities increased $381 million, or 13%, to $3.3 billion as of December 31, 2019, from $2.9 billion as of December 31, 2018. Average interest bearing liabilities increased $202 million, or 10%, as of December 31, 2019. Bancorp assumed $177 million in liabilities in connection with the KSB acquisition as of May 1, 2019.

Total deposits increased $340 million, or 12%, as of December 31, 2019 with non-interest bearing demand deposits increasing $100 million, or 14%, and interest bearing deposits increasing $240 million, or 12%, based on growth in balances of both new and existing customers. Approximately $188 million in the 2019 deposit growth occurred in the fourth quarter of 2019, with a significant portion of those balances associated with seasonal deposits which were maintained at similar levels compared to December 31, 2018.

SSUAR balances decreased $4 million, or 12%, as customers continued to migrate to higher-yielding, non-collateralized deposits in 2019. FHLB advances increased $32 million, or 66%, as Bancorp retained the fixed rate long term advances assumed from KSB. These advances were retained by Bancorp based upon favorable rates and terms in the overall execution of Bancorp’s asset liability management strategy. Other liabilities increased $14 million, or 29%, largely due to the adoption of ASU 2016-02, Leases, in 2019.

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Securities

The primary purpose of the securities portfolio is to provide another source of interest income, as well as liquidity management. In managing the composition of the balance sheet, Bancorp seeks a balance between earnings sources and credit and liquidity considerations.

Securities AFS include securities that may be sold in response to changes in interest rates, resultant prepayment risk and other factors related to interest rate and prepayment risk changes. Securities AFS for sale are carried at fair value with unrealized gains or losses, net of tax effect, included in stockholders’ equity.

All of Bancorp’s securities are classified as AFS. Carrying value is summarized as follows:

December 31, (in thousands)	2019		2018
U.S. Treasury obligations	$	49,897	$	—
Government sponsored enterprise obligations		209,944		261,039
Mortgage-backed securities – government agencies		193,861		146,277
Obligations of states and political subdivisions		17,036		29,679
	$	470,738	$	436,995

Maturity distribution and weighted average interest rates of debt securities AFS follows:

						After one but					After five but
December 31, 2019	Within one year					within five years					within ten years					After ten years
(Dollars in thousands)	Amount		Rate			Amount		Rate			Amount		Rate			Amount		Rate
U.S. Treasury obligations	$	49,897		1.65	%	$	-		—	%	$	-		—	%	$	-		—	%
Government sponsored enterprise obligations		70,097		1.66			27,870		1.75			2,838		2.12			109,139		2.64
MBS - government agencies		31		1.69			5,104		2.56			39,904		1.99			148,822		2.4
Obligations of states and political subdivisions		9,317		2.22			4,338		1.52			3,381		1.86			—		—
	$	129,342		1.70	%	$	37,312		1.83	%	$	46,123		1.99	%	$	257,961		2.50	%

Actual maturities for mortgage-backed securities may differ from contractual maturities due to prepayments on underlying collateral.

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Loans

Composition of loans, net of deferred fees and costs, by primary loan portfolio class follows:

(in thousands)	2019		2018		2017		2016		2015
Commercial and industrial	$	870,511	$	833,524	$	779,014	$	736,841	$	644,398
Construction and development, excluding undeveloped land		213,822		225,050		195,912		192,348		134,482
Undeveloped land(1)		46,360		30,092		18,988		21,496		21,185
Real estate mortgage:
Commercial investment		736,618		588,610		594,902		538,886		436,989
Owner Occupied commercial		473,783		426,373		398,685		408,292		420,666
1-4 family residential		334,358		276,017		262,110		249,498		226,575
Home equity - first lien		48,620		49,500		57,110		55,325		50,115
Home equity - junior lien		73,477		70,947		63,981		67,519		63,066
Subtotal: Real estate mortgage		1,666,856		1,411,447		1,376,788		1,319,520		1,197,411
Consumer		47,467		48,058		38,868		35,170		35,531
Total Loans(2)	$	2,845,016	$	2,548,171	$	2,409,570	$	2,305,375	$	2,033,007

(1) Consists of land acquired for development by the borrower, but for which no development has yet taken place.

(2) Total loans are presented inclusive of premiums, discounts, and net loan origination fees and costs.

Bancorp’s loan portfolio increased $297 million, or 12%, during 2019 as a result of the KSB acquisition, record organic loan production while being challenged by elevated levels of prepayments and payoffs.

Bancorp occasionally enters into loan participation agreements with other banks to diversify credit risk. For certain sold participation loans, Bancorp has retained effective control of the loans, typically by restricting the participating institutions from pledging or selling their share of the loan without permission from Bancorp. GAAP requires the participated portion of these loans to be recorded as secured borrowings. These participated loans are included in the C&I and real estate mortgage loan totals above, and a corresponding liability is recorded in other liabilities. At December 31, 2019 and 2018, total participated portions of loans of this nature were $8 million and $11 million respectively.

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The following tables detail amounts of loans at December 31, 2019 which, based on remaining scheduled repayments of principal, are due in the periods indicated. Also shown are C&I loans due after one year and C&D loans due after one year, classified according to sensitivity to changes in interest rates.

	Maturing
	Within one		After one but
(in thousands)	year		within five years		After five years		Total
Commercial and industrial	$	291,714	$	450,984	$	127,813	$	870,511
Construction and development including undeveloped land		82,254		100,727		77,201		260,182
Real estate mortgage		193,647		766,818		706,391		1,666,856
Consumer		28,036		18,582		849		47,467
Total loans	$	595,651	$	1,337,111	$	912,254	$	2,845,016

C&I loans maturing after one year:

(in thousands)	Fixed rate		Variable rate
Due after one but within five years	$	236,234	$	214,750
Due after five years		64,988		62,825
	$	301,222	$	277,575

C&D loans including undeveloped land maturing after one year:

(in thousands)	Fixed rate		Variable rate
Due after one but within five years	$	45,019	$	55,708
Due after five years		9,032		68,169
	$	54,051	$	123,877

In the event where Bancorp structures a loan with a maturity exceeding five years (typically CRE loans), an automatic rate adjustment will be set in place at five years from origination date to limit interest rate sensitivity.

LIBOR will cease to exist as a published rate after 2021. As of December 31, 2019, Bancorp had approximately $404 million in variable rate loans with interest rates tied to LIBOR, of which approximately $259 million have maturity dates beyond December 31, 2021. Bancorp’s derivative activities based upon LIBOR include interest rate swap transactions with maturities beyond 2021 with notional amounts totaling approximately $99 million. Bancorp has established a working group, consisting of key stakeholders from throughout the company, to monitor developments relating to LIBOR uncertainty and changes and to guide the Company’s response. This team is currently working to gain an understanding of the specific products, systems, borrowing arrangements and legal agreements that will be impacted by the change.

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Non-performing Loans and Assets

Information summarizing non-performing loans and assets follows:

December 31, (dollars in thousands)	2019			2018			2017			2016			2015
Non-accrual loans	$	11,494		$	2,611		$	6,511		$	5,295		$	7,693
Troubled debt restructurings		34			42			869			974			1,060
Loans past due 90 days or more and still accruing		535			745			2			438			176
Total non-performing loans		12,063			3,398			7,382			6,707			8,929
Other real estate owned		493			1,018			2,640			5,033			4,541
Total non-performing assets	$	12,556		$	4,416		$	10,022		$	11,740		$	13,470
Non-performing loans to total loans		0.42	%		0.13	%		0.31	%		0.29	%		0.44	%
Non-performing assets as to total assets		0.34	%		0.13	%		0.31	%		0.39	%		0.48	%
Allowance to non-performing loans		222	%		751	%		337	%		358	%		251	%

Non-accrual loans in 2015 include $400,000 of TDRs previously on accrual status.

The following table sets forth major classifications of non-accrual loans:

December 31, (in thousands)	2019		2018
Commercial and industrial	$	8,202	$	192
Construction and development, excluding undeveloped land		—		318
Undeveloped land		—		474
Real estate mortgage - commercial investment		740		138
Real estate mortgage - owner occupied commercial		2,278		586
Real estate mortgage - 1-4 family residential		123		760
Home equity		151		143
Consumer		—		—
Total non-accrual loans	$	11,494	$	2,611

Loans are placed in a non-accrual income status when prospects for recovering both principal and accrued interest are considered doubtful or when a default of principal or interest has existed for 90 days or more, unless such a loan is well secured and in the process of collection or renewal. Interest income recorded on non-accrual loans as principal payments was $552,000, $93,000, and $338,000 for 2019, 2018, and 2017. Interest income that would have been recorded if non-accrual loans were on a current basis in accordance with their original terms was $491,000, $391,000, and $159,000 for 2019, 2018, and 2017.

In addition to non-performing loans discussed above, there were loans, which are accruing interest, for which payments were current or less than 90 days past due where borrowers are experiencing elevated financial difficulties. These potential problem loans totaled approximately $37 million and $23 million at December 31, 2019 and 2018. These relationships are monitored closely for possible future inclusion in non-performing loans. Management believes it has adequately reflected credit exposure in these loans in its determination of the allowance.

Non-accrual loans were $11 million, or 0.40%, of total loans outstanding at December 31, 2019 versus $3 million, or 0.13%, of total loans at December 31, 2018. The increase was due to one large C&I relationship that has been evaluated for potential loss and the Company believes its reserve allocation for this relationship is adequate at December 31, 2019.

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Non-performing assets as a percentage of total assets increased 21 bps from 2018 to 2019, primarily due to the aforementioned increase in non-accrual loans. At December 31, 2019 and 2018, the carrying value of OREO was $493,000 and $1.0 million. Bancorp recorded impairment charges on OREO totaling $70,000, $32,000 and $171,000 in 2019, 2018 and 2017.

Loans accounted for as TDRs include modifications from original terms such as those due to bankruptcy proceedings, certain changes to amortization periods or extended suspension of principal payments due to customer financial difficulties. To the extent that Bancorp chooses to work with borrowers by providing reasonable concessions rather than initiating collection, this would result in an increase in loans accounted for as TDRs. TDRs that are in non-accrual status are reported as non-accrual loans. Loans accounted for as TDRs are individually evaluated for impairment and are reported as non-performing loans.

As of December 31, 2019, TDRs consisted of two loans totaling $34,000.

Allowance for Loan and Lease Losses

An allowance has been established to provide for probable losses on loans that may not be fully repaid. The allowance is increased by provisions charged to expense and decreased by charge-offs, net of recoveries. Loans are typically charged- off when management deems them uncollectible and after underlying collateral has been liquidated; however, collection efforts continue and future recoveries may occur. Periodically, loans may be partially charged off to the net realizable value based upon evaluation of related underlying collateral, including Bancorp’s proclivity for resolution.

Bancorp’s lending policies and procedures center on mitigating credit risk and include procedures to identify and measure this risk. These procedures begin with lenders assigning a risk rating to each of their credits and this rating is confirmed in the loan approval process for new and renewed loans. Additionally, risk ratings may be changed at the time in which the borrower’s performance weakens, or other factors are learned in evaluating the borrower’s specific risk. Internal loan review, through a year-round process of examining individually significant obligor relationships, concentrations, and a broad sample of Bancorp’s portfolio, tests the reliability of these risk assessments. Additionally, a review of this process is an integral part of regulatory bank examinations.

Adversely rated credits are included on a classified loan list which incorporates loans requiring closer monitoring due to borrower’s circumstances. Loans are added to the classified loan list when circumstances are detected which might affect the borrower’s ability to comply with terms of the loan. This could include any of the following:

● Delinquency of a scheduled loan payment,

● Deterioration in the borrower’s or guarantor’s financial condition identified in a review of periodic financial statements, which will impair repayment or collection,

● Decrease in value of collateral securing the loan, or

● Change in the economic environment in which the borrower operates.

Classified loans require detailed status reports, including recommended corrective actions, prepared periodically by the responsible loan officer. These reports are reviewed by management. Classified loans are also discussed quarterly with the Risk Committee of the Bank’s Board of Directors.

Changes in loan risk ratings are typically initiated by the responsible loan officer, but may also be initiated by internal loan review or the Bank’s loan committees at any time.

In determining the allowance and related provision, these principal elements are considered:

● Specific allocations are based upon probable losses on individually evaluated impaired loans. These loans are measured based on the present value of future cash flows discounted at the loans’ effective interest rate or at estimated fair value of the loans’ collateral, if applicable. Other objective factors such as payment history and financial condition of the borrower or guarantor may be used as well.

● Allocations for loans not defined as impaired are based on estimates for pools of loans with similar risk based upon Bancorp’s historical net loss percentages by loan type.

● Additional allowance allocations are based on environmental or qualitative factors not necessarily associated with a specific credit or loan category and represent management’s effort to ensure that the overall allowance appropriately reflects changes in trends, conditions and other relevant factors that may cause estimated credit losses to differ from historical experience. Management considers a number of environmental or qualitative factors, including local and general economic business factors, trends and portfolio concentrations.

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Allocation of the allowance by loan category is a result of the analysis above. The same procedures used to determine requirements for the allowance establish the distribution of the allowance by loan category. Distribution of the allowance will change from period to period due to changes in the identified risk in each loan segment, changes in the aggregate loan balances by loan category, and changes in management’s view of the environmental or qualitative factors noted above. Although the allowance is comprised of specific and general allocations, the entire allowance is available to absorb any credit losses.

Historical net loss percentages are updated quarterly based on actual losses experienced by each loan type. Perception of risk with respect to particular loans within the portfolio will change over time as a result of characteristics and performance of those loans, overall economic and market trends, and actual and expected trends in non-performing loans. In the first quarter of 2019, Bancorp extended the historical period used to capture Bancorp’s historical loss ratios from 32 quarters to 36 quarters. This extension of the historical period used to capture Bancorp’s historical loss ratios was applied to all classes and segments of our loan portfolio. Expansion of the look-back period for the quantitative historical loss rate caused us to review the overall methodology for qualitative factors to ensure we were appropriately capturing risk not addressed in the quantitative historical loss rate. Management believes extension of the look-back period is appropriate to capture the impact of a full economic cycle and provides sufficient loss observations to develop a reliable estimate.

Bancorp’s allowance calculation includes allocations to loan portfolio segments at December 31, 2019 for qualitative factors including, among other factors, local economic and business conditions, quality and experience of lending staff and management, exceptions to lending policies, levels of and trends in past due loans and loan classifications, concentrations of credit such as collateral type, trends in portfolio growth, trends in the value of underlying collateral for collateral-dependent loans, effect of other external factors such as national economic and business trends, and the quality and depth of the loan review function. Bancorp utilizes the sum of all allowance amounts derived as described above as the appropriate level of allowance. Changes in criteria used in this evaluation or availability of new information could cause the allowance to be increased or decreased in future periods. Based on this quantitative and qualitative analysis, provisions (reductions) are made to the allowance. Such provisions (reductions) are reflected as a charge against (benefit to) current earnings in Bancorp’s consolidated statements of income.

Adequacy of the allowance is monitored by executive management and reported quarterly to the Audit Committee of the Board of Directors. This committee has approved the overall allowance methodology. In addition, various regulatory agencies, as an integral part of their examination process, periodically review the adequacy of Bancorp’s allowance. Such agencies may require Bancorp to make additional provisions to the allowance based upon their judgments about information available to them at the time of their examinations. As of December 31, 2019, using the current model, management believes that the allowance is adequate to absorb probable inherent losses on existing loans that may become uncollectible.

In June of 2016 FASB issued ASU 2016-13, Classification of Credit Losses on Financial Instruments, which will significantly change the way entities recognize impairment of many financial assets by requiring immediate recognition of estimated credit losses expected to occur over the remaining life of the asset, determined at origination of the relationship. Implementation of this standard, which is required for interim and annual reporting periods beginning after December 15, 2019, could have a significant impact on the level of the allowance, capital as a result of the expected cumulative effect, and on earnings of Bancorp. See “Provision for Loan Losses” for further discussion of the allowance.

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Summary of Loan and Lease Loss Experience

The following table summarizes average loans outstanding, changes in the allowance arising from loans charged off and recoveries on loans previously charged off by loan category and additions to the allowance charged (credited) to expense.

As of and for the Years Ended December, (dollars in thousands)	2019			2018			2017			2016			2015
Average loans (1)	$	2,711,068		$	2,519,936		$	2,308,856		$	2,159,153		$	1,919,201
Balance of allowance - beginning of year	$	25,534		$	24,885		$	24,007		$	22,441		$	24,920
Loans charged off
Commercial and industrial		94			2,404			1,782			1,216			4,065
Construction and development excluding undeveloped land		—			—			—			133			26
Undeveloped land		—			—			—			—			—
Real estate mortgage		38			132			98			576			693
Consumer		552			476			549			568			597
Total loans charged off		684			3,012			2,429			2,493			5,381
Recoveries of loans previously charged off
Commercial and industrial		267			554			202			279			98
Construction and development excluding undeveloped land		203			—			—			21			—
Undeveloped land		—			—			—			—			1,400
Real estate mortgage		100			62			154			342			155
Consumer		371			340			401			417			499
Total recoveries		941			956			757			1,059			2,152
Net loan charged offs/(recoveries)		(257	)		2,056			1,672			1,434			3,229
Provision		1,000			2,705			2,550			3,000			750
Balance of allowance - end of year	$	26,791		$	25,534		$	24,885		$	24,007		$	22,441
Net charge-offs/(recoveries) to average loans		-0.01	%		0.08	%		0.07	%		0.07	%		0.17	%

(1) - Average loans include participation loans accounted for as secured borrowings.

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The following table sets forth allocation of the allowance to loan categories shown. Although specific allocations exist, the entire allowance is available to absorb losses in any particular loan category.

December 31, (in thousands)	2019		2018		2017		2016		2015
Commercial and industrial	$	12,822	$	11,965	$	11,276	$	10,483	$	8,645
Construction and development, excluding undeveloped land		1,319		1,760		1,724		1,923		1,760
Undeveloped land		786		752		521		684		814
Real estate mortgage		11,764		10,681		11,012		10,573		10,875
Consumer		100		376		352		344		347
Total allowance for loan losses	$	26,791	$	25,534	$	24,885	$	24,007	$	22,441

Changes in the allocation of the allowance from year to year are influenced by the level of net charge-offs in respective categories and other factors including, but not limited to, an evaluation of the impact of current economic conditions and trends, risk allocations tied to specific loans or groups of loans and changes in qualitative allocations. Management believes that allocations for each loan category are reflective of risk inherent in the portfolio.

Selected ratios relating to the allowance follow:

Years Ended December 31,	2019			2018			2017
Provision for loan losses to average loans		0.04	%		0.11	%		0.11	%
Net charge-offs/(recoveries) to average loans		-0.01	%		0.08	%		0.07	%
Allowance for loan losses to average loans		0.99	%		1.01	%		1.08	%
Allowance for loan losses to total loans		0.94	%		1.00	%		1.03	%

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Deposits

Average deposit balances and average rates paid on such deposits for the years indicated are summarized as follows:

	2019					2018					2017
Years Ended December 31, (dollars in thousands)	Average balance		Average rate			Average balance		Average rate			Average balance		Average rate
Non-interest bearing demand deposits	$	765,103		—	%	$	703,453		—	%	$	684,044		—	%
Interest bearing demand deposits		875,897		0.57			811,748		0.49			757,023		0.21
Savings deposits		166,509		0.17			156,212		0.20			148,510		0.12
Money market deposits		695,411		1.02			660,222		0.84			697,182		0.39
Time deposits		406,176		2.02			278,888		1.29			237,368		0.62
Total Deposits	$	2,909,096				$	2,610,523				$	2,524,127

Maturities of time deposits of $250,000 or more at December 31, 2019, are summarized as follows:

(in thousands)
3 months or less	$	14,785
Over 3 through 6 months		9,414
Over 6 through 12 months		33,783
Over 12 months		23,430
	$	81,412

Securities Sold Under Agreement to Repurchase

SSUAR represent excess funds from certain commercial customers as part of a cash management service. These agreements have maturities of one business day from the transaction date. Bancorp considers these a core funding since they represent excess cash balances of relationship business customers.

Information regarding SSUAR follows:

December 31, (dollars in thousands)	2019			2018
Outstanding balance at end of period	$	31,895		$	36,094
Weighted average interest rate at end of period		0.22	%		0.27	%

Years Ended December 31, (dollars in thousands)	2019			2018			2017
Average outstanding balance during the period	$	38,555		$	62,580		$	70,187
Average interest rate during the period		0.26	%		0.25	%		0.19	%
Maximum outstanding at any month end during the period	$	52,599		$	74,725		$	75,365

49

Liquidity

The role of liquidity management is to ensure funds are available to meet depositors’ withdrawal and borrowers’ credit demands while at the same time maximizing profitability. This is accomplished by balancing changes in demand for funds with changes in supply of those funds. Liquidity is provided by short-term liquid assets that can be converted to cash, investment securities AFS, various lines of credit available to Bancorp, and the ability to attract funds from external sources, principally deposits. Management believes it has the ability to increase deposits at any time by offering rates slightly higher than market rate.

Bancorp’s Asset/Liability Committee is comprised of senior management and has direct oversight responsibility for Bancorp’s liquidity position and profile. A combination of reports provided to management details internal liquidity metrics, composition and level of the liquid asset portfolio, timing differences in short-term cash flow obligations, and exposure to contingent draws on Bancorp’s liquidity.

Bancorp’s most liquid assets are comprised of cash and due from banks, FFS, and AFS marketable investment securities. FFS and interest bearing deposits totaled $203 million and $147 million at December 31, 2019 and 2018. FFS normally have overnight maturities while interest bearing deposits in banks are accessible on demand. These investments are used for general daily liquidity purposes. The fair value of the AFS investment portfolio was $471 million and $437 million at December 31, 2019 and 2018. The portfolio includes maturities of approximately $129 million over the next twelve months. Combined with FFS and interest bearing deposits from banks, these offer substantial resources to meet either loan growth or reductions in Bancorp’s deposit funding base. Bancorp pledges portions of its investment securities portfolio to secure public fund deposits, cash balances of certain WM&T accounts, and SSUAR. At December 31, 2019, total investment securities pledged for these purposes comprised 86% of the AFS investment portfolio, leaving $68 million of unpledged securities.

Bancorp has a large base of core customer deposits, defined as time deposits less than or equal to $250,000, demand, savings, money market deposit accounts and excluding brokered deposits. At December 31, 2019, such deposits totaled $3.0 billion and represented 96% of Bancorp’s total deposits. Because these core deposits are less volatile and are often tied to other products of Bancorp through long lasting relationships, they do not place undue pressure on liquidity. However, many of Bancorp’s individual depositors currently maintain historically high balances. These excess balances may be more sensitive to market rates, with potential decreases possibly straining Bancorp’s liquidity position.

As of December 31, 2018 and 2019, Bancorp had brokered deposits totaling $30 million.

Bancorp is a member of the FHLB of Cincinnati. As a member of the FHLB, Bancorp has access to credit products of the FHLB. Bancorp views these borrowings as a potential low cost alternative to brokered deposits. At December 31, 2019 and December 31, 2018, the amount of available credit from the FHLB totaled $599 million and $537 million. See the Footnote titled “FHLB Advances” for additional detail. Also, Bancorp has available FFP lines with correspondent banks totaling $105 million at both December 31, 2019 and 2018.

Over the normal course of business, Bancorp enters into certain forms of off-balance sheet transactions, including unfunded loan commitments and letters of credit. These transactions are managed through Bancorp’s various risk management processes. Management considers both on-balance sheet and off-balance sheet transactions in its evaluation of Bancorp’s liquidity.

Sources and Uses of Cash

Cash flow is provided primarily through financing activities of Bancorp, which include raising deposits and borrowing funds from institutional sources such as advances from FHLB and FFP, as well as scheduled loan repayments. These funds are primarily used to facilitate investment activities of Bancorp, which include making loans and purchasing securities for the investment portfolio. Another important source of cash is net income of the Bank from operating activities. As discussed in the Footnote titled “Commitments and Contingent Liabilities,” as of January 1st of any year, the Bank may pay dividends in an amount equal to the Bank’s net income of the prior two years less any dividends paid for the same two years. Regulatory approval is required for dividends exceeding these amounts. Prior to declaration of dividends, management considers the effect such payments will have on total stockholders’ equity and capital ratios. For more specific information, see the consolidated statement of cash flows in Bancorp’s consolidated financial statements.

50

Commitments

In the normal course of business, Bancorp is party to activities that contain credit, market and operational risk that are not reflected in whole or in part in Bancorp’s consolidated financial statements. Such activities include traditional off-balance sheet credit-related financial instruments, commitments under operating leases and long-term debt.

Bancorp provides customers with off-balance sheet credit support through loan commitments and standby letters of credit. Unused loan commitments increased $335 million as of December 31, 2019 compared to 2018 consistent with growth incurred in the portfolio and a $135 million increase in the loan pipeline. Additional detail regarding credit-related financial instruments, including both commitments to extend credit and letters of credit at December 31, 2019 are as follows:

	Amount of commitment expiration per period
			Less than		1-3		3-5		Over 5
(in thousands)	Total		1 year		years		years		years
Unused loan commitments	$	1,148,740	$	658,131	$	229,974	$	77,782	$	182,853
Standby letters of credit		24,193		21,199		2,860		134		-

Commitments to extend credit are an agreement to lend to a customer 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 necessarily 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. At December 31, 2019 and 2018, Bancorp had accrued $350,000 in other liabilities for its estimate of inherent risks related to unfunded credit commitments.

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.

In addition to owned banking facilities, Bancorp has entered into long-term leasing arrangements for certain branch facilities. Bancorp also has required future payments for a non-qualified defined benefit retirement plan, long-term debt and the maturity of time deposits.

Required payments under such commitments at December 31, 2019 are as follows:

	Payments due by period
			Less than		1-3		3-5		Over 5
(in thousands)	Total		1 year		years		years		years
Time deposit maturities	$	432,217	$	273,568	$	141,405	$	17,143	$	101
Federal Home Loan Bank advances		79,953		55,680		9,197		5,777		9,299
Operating leases(1)		16,181		1,963		3,846		3,753		6,619
Defined benefit retirement plan		3,362		84		—		137		3,141

(1) Includes assumed renewals

51

Capital

Information pertaining to Bancorp’s capital balances and ratios follows:

Years ended December 31, (dollars in thousands except per share data)	2019			2018			2017
Stockholders’ equity	$	406,297		$	366,500		$	333,644
Dividends per share	$	1.04		$	0.96		$	0.80
Dividend payout ratio, based on basic EPS		35.62	%		39.18	%		47.34	%
Tier 1 risk-based capital		12.02			13.00			12.57
Total risk-based capital		12.85			13.91			13.52
Leverage ratio		10.60			11.33			10.70

Bancorp increased its cash dividends declared to stockholders during 2019 to an annual dividend of $1.04, up from $0.96 per share in 2018 and $0.80 in 2017. This represents a payout ratio of 35.62% based on basic EPS and an annual dividend yield of 2.63% based upon an annualized fourth quarter dividend rate and year-end closing stock price.

Effective May, 2019, Bancorp’s Board of Directors approved a share repurchase program authorizing the repurchase of 1 million shares, or approximately 4% of Bancorp’s total common shares outstanding at the time. The plan, which will expire in two years unless otherwise extended or completed at an earlier date, does not obligate Bancorp to repurchase any specific dollar amount or number of shares prior to the plan’s expiration. During 2019, Bancorp repurchased 259,000 shares at a weighted average price per share of $35.46. In addition to a $28 million dividend to the Holding Company during the second quarter of 2019 to consummate the KSB acquisition, the Bank paid up an $18.5 million dividend during the third quarter of 2019 to support the share repurchase program.

Bank holding companies and their subsidiary banks are required by regulators to meet risk-based capital standards. These standards, or ratios, measure the relationship of capital to a combination of balance sheet and off-balance sheet risks. The value of both balance sheet and off-balance sheet items are adjusted to reflect credit risks. See the Footnote titled “Regulatory Matters” for additional detail regarding regulatory capital requirements, as well as capital ratios of Bancorp and the Bank. The Bank exceeds regulatory capital ratios required to be well capitalized. Regulatory framework does not define well capitalized for holding companies. Management considers the effects of growth on capital ratios as it contemplates plans for expansion.

Final rules implementing the Basel III regulatory capital reforms became effective for Bancorp and Bank on January 1, 2015, and included new minimum risk-based capital and leverage ratios. Management believes that as of December 31, 2019, Bancorp met the requirements to be considered well-capitalized under these rules.

One component of equity is AOCI which, for Bancorp, consists of net unrealized gains or losses on AFS securities and hedging instruments, as well as a minimum pension liability, each net of income taxes. AOCI was $677,000 at December 31, 2019 compared with a loss of $5 million on December 31, 2018. The fluctuation in OCI is reflective of the changing interest rate environment during 2019 and corresponding impact upon the valuation of Bancorp’s AFS securities portfolio.

52

Fair Value Measurements

Bancorp follows the provisions of authoritative guidance for fair value measurements. This guidance is definitional and disclosure oriented and addresses how companies should approach measuring fair value when required by GAAP. It prescribes various disclosures about financial statement categories and amounts which are measured at fair value, if such disclosures are not already specified elsewhere in GAAP.

Authoritative guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between participants at the measurement date. The guidance requires fair value measurements to be classified as Level 1 (quoted prices), Level 2 (based on observable inputs) or Level 3 (based on significant unobservable, internally-derived inputs).

Bancorp’s investment securities AFS and interest rate swaps are recorded at fair value on a recurring basis. Other accounts including mortgage loans held for sale, MSRs, impaired loans and OREO may be recorded at fair value on a non-recurring basis, generally in the application of lower of cost or market adjustments or write-downs of specific assets.

The portfolio of investment securities AFS is comprised of U.S. Treasury and other U.S. government obligations, debt securities of U.S. government-sponsored corporations (including mortgage-backed securities), and obligations of state and political subdivisions. U.S. Treasury securities are priced using quoted prices of identical securities in an active market. These measurements are classified as Level 1 in the hierarchy above. All other securities are priced using standard industry models or matrices with various assumptions such as yield curves, volatility, prepayment speeds, default rates, time value, credit rating and market prices for similar instruments. These assumptions are generally observable in the market place and can be derived from or supported by observable data. These measurements are classified as Level 2 in the hierarchy above.

Interest rate swaps are valued using primarily Level 2 inputs. Fair value measurements generally based on benchmark forward yield curves and other relevant observable market data. For purposes of potential valuation adjustments to derivative positions, Bancorp evaluates the credit risk of its counterparties as well as its own credit risk. To date, Bancorp has not realized any losses due to a counterparty’s inability to perform and the change in value of derivative assets and liabilities attributable to credit risk was not significant during 2017, 2018 and 2019.

MSRs, carried in other assets and recorded at fair value upon capitalization, are amortized to correspond with estimated servicing income and are periodically assessed for impairment based on fair value at the reporting date. Fair value is based on a valuation model that calculates the present value of estimated net servicing income. The model incorporates assumptions that market participants would use in estimating future net servicing income. These measurements are classified as Level 3. At December 31, 2019 and 2018, there was no valuation allowance for MSRs, as fair value exceeded carrying value.

Loans are measured for impairment and, if indicated, a specific allocation is established based on the value of underlying collateral. Impaired loans include non-accrual loans and loans accounted for as TDRs. For impaired loans, fair value amounts represent only those impaired loans with specific valuation allowances and collateral dependent impaired loans charged down to their carrying value. At December 31, 2019 and December 31, 2018, carrying value of impaired loans measured at fair value on a non-recurring basis was $7.3 million and $925,000. These measurements are classified as Level 3.

OREO, which is carried in other assets at the lower of cost or fair value, is periodically assessed for impairment based on fair value at the reporting date. Fair value is commonly based on recent real estate appraisals or valuations performed by internal or external parties which use judgments and assumptions that are property-specific and sensitive to changes in the overall economic environment. Appraisals may be further discounted based on management’s historical knowledge and/or changes in market conditions from the date of the most recent appraisal. Many of these inputs are not observable and, accordingly, these measurements are classified as Level 3. OREO is equal to the carrying value of only parcels of OREO for which carrying value equals appraised value. If a parcel of OREO has a carrying value below its appraised value, it is not considered to be carried at fair value. The losses represent write-downs which occurred during the period indicated. At December 31, 2019 and 2018, the carrying value of OREO was $493,000 and $1 million.

See the Footnote titled “Assets and Liabilities Measured and Reported at Fair Value,” for additional detail regarding fair value measurements.

53

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Information required by this item is included in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Form 10-K.

Item 8. Financial Statements and Supplementary Data.

The following consolidated financial statements of Bancorp, and reports of independent registered public accounting firms and management are included below:

54

CONSOLIDATED BALANCE SHEETS

December 31, (in thousands, except share data)

	2019		2018
Assets
Cash and due from banks	$	46,863	$	51,892
Federal funds sold and interest bearing due from banks		202,861		147,047
Cash and cash equivalents		249,724		198,939
Mortgage loans held for sale		8,748		1,675
Securities available for sale (amortized cost of $469,313 in 2019 and $443,742 in 2018)		470,738		436,995
Federal Home Loan Bank stock, at cost		11,316		10,370
Loans and leases		2,845,016		2,548,171
Allowance for loan and lease losses		26,791		25,534
Net loans and leases		2,818,225		2,522,637
Premises and equipment, net		58,618		44,764
Bank owned life insurance		32,557		32,273
Accrued interest receivable		8,534		8,360
Goodwill		12,513		682
Core deposit intangible		2,285		1,057
Other assets		50,939		45,172
Total assets	$	3,724,197	$	3,302,924
Liabilities
Deposits:
Non-interest bearing	$	810,475	$	711,023
Interest bearing		2,323,463		2,083,333
Total deposits		3,133,938		2,794,356
Securities sold under agreements to repurchase		31,895		36,094
Federal funds purchased		10,887		10,247
Federal Home Loan Bank advances		79,953		48,177
Accrued interest payable		640		762
Other liabilities		60,587		46,788
Total liabilities		3,317,900		2,936,424
Commitments and contingent liabilities (footnote 19)		—		—
Stockholders’ equity
Preferred stock, no par value. Authorized 1,000,000 shares; no shares issued or outstanding		—		—
Common stock, no par value. Authorized 40,000,000 shares; issued and outstanding 22,604,000 and 22,749,000 shares in 2019 and 2018		36,207		36,689
Additional paid-in capital		35,714		36,797
Retained earnings		333,699		298,156
Accumulated other comprehensive income (loss)		677		(5,142	)
Total stockholders’ equity		406,297		366,500
Total liabilities and stockholders’ equity	$	3,724,197	$	3,302,924

See accompanying notes to consolidated financial statements.

55

CONSOLIDATED STATEMENTS OF INCOME

Years Ended December 31, (in thousands, except per share data)

	2019		2018		2017
Interest income:
Loans and leases, including fees	$	134,342	$	118,467	$	99,924
Federal funds sold and interest bearing due from banks		2,933		1,307		1,330
Mortgage loans held for sale		182		166		191
Securities available for sale
Taxable		9,839		9,001		8,365
Tax-exempt		469		832		1,089
Total interest income		147,765		129,773		110,899
Interest expense:
Deposits		20,560		13,441		5,975
Securities sold under agreements to repurchase and other short-term borrowings		318		992		316
Federal Home Loan Bank advances		1,640		924		955
Subordinated debentures		26		—		—
Total interest expense		22,544		15,357		7,246
Net interest income		125,221		114,416		103,653
Provision for loan and lease losses		1,000		2,705		2,550
Net interest income after provision		124,221		111,711		101,103
Non-interest income:
Wealth management and trust services		22,643		21,536		20,505
Deposit service charges		5,513		5,759		6,172
Debit and credit card income		8,123		6,769		5,979
Treasury management fees		4,992		4,571		4,297
Mortgage banking income		3,090		2,568		3,221
Loss on sale of securities available for sale		—		—		(232	)
Net investment product sales commissions and fees		1,498		1,677		1,629
Bank owned life insurance		1,031		1,129		1,159
Other		2,900		1,337		1,769
Total non-interest income		49,790		45,346		44,499
Non-interest expenses:
Compensation		50,319		46,104		42,581
Employee benefits		11,038		10,098		9,987
Net occupancy and equipment		8,417		7,653		7,393
Technology and communication		9,591		8,897		7,957
Marketing and business development		3,627		3,099		2,716
Postage, printing and supplies		1,652		1,558		1,475
Legal and professional		3,014		2,614		2,393
FDIC insurance		245		961		960
Amortization of investments in tax credit partnerships		1,078		1,237		7,124
Capital and deposit based taxes		3,870		3,325		3,440
Other		5,500		3,963		4,394
Total non-interest expenses		98,351		89,509		90,420
Income before income tax expense		75,660		67,548		55,182
Income tax expense		9,593		12,031		17,139
Net income	$	66,067	$	55,517	$	38,043
Net income per share, basic	$	2.92	$	2.45	$	1.69
Net income per share, diluted	$	2.89	$	2.42	$	1.66
Weighted average outstanding shares:
Basic		22,598		22,619		22,532
Diluted		22,865		22,944		22,983

See accompanying notes to consolidated financial statements.

56

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Years Ended December 31, (in thousands)

	2019			2018			2017
Net income	$	66,067		$	55,517		$	38,043
Other comprehensive income:
Change in unrealized gain (loss) on AFS debt securities		8,172			(3,865	)		(1,252	)
Change in fair value of derivatives used in cashflow hedge		(567	)		220			321
Minimum pension liability adjustment		(207	)		219			(79	)
Reclassification adjustment for net gain (loss) on AFS debt securities recognized in earnings		—			—			232
Total other comprehensive income (loss) before income tax expense		7,398			(3,426	)		(778	)
Tax effect		1,579			(720	)		(347	)
Total other comprehensive income (loss), net of tax		5,819			(2,706	)		(431	)
Comprehensive income	$	71,886		$	52,811		$	37,612

See accompanying notes to consolidated financial statements.

57

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

Years Ended December 31, 2019, 2018 and 2017

													Accumulated
	Common stock						Additional						other			Total
	Number of						paid-in			Retained			comprehensive			stockholders'
(in thousands, except per share data)	shares			Amount			capital			earnings			income (loss)			equity
Balance, January 1, 2017		22,617		$	36,250		$	26,682		$	252,439		$	(1,499	)	$	313,872
2017 Activity:
Net income		—			—			—			38,043			—			38,043
Net change in accumulated other comprehensive income		—			—			—			—			(431	)		(431	)
Stock compensation expense		—			—			2,892			—			—			2,892
Stock issued for share-based awards, net of withholdings to satisfy employee tax obligations		69			231			2,500			(5,336	)		—			(2,605	)
Cash dividends declared, $0.80 per share		—			—			—			(18,127	)		—			(18,127	)
Shares repurchased or cancelled		(7	)		(24	)		(150	)		174			—			—
Balance, December 31, 2017		22,679		$	36,457		$	31,924		$	267,193		$	(1,930	)	$	333,644
Balance, January 1, 2018		22,679		$	36,457		$	31,924		$	267,193		$	(1,930	)	$	333,644
2018 Activity:
Net income		—			—			—			55,517			—			55,517
Net change in accumulated other comprehensive income		—			—			—			—			(2,706	)		(2,706	)
Stock compensation expense		—			—			4,027			—			—			4,027
Reclassification adjustment - ASU 2018-02		—			—			—			506			(506	)		—
Stock issued for share-based awards, net of withholdings to satisfy employee tax obligations		75			249			987			(3,394	)		—			(2,158	)
Cash dividends declared, $0.96 per share		—			—			—			(21,824	)		—			(21,824	)
Shares repurchased or cancelled		(5	)		(17	)		(141	)		158			—			—
																	-
Balance, December 31, 2018		22,749		$	36,689		$	36,797		$	298,156		$	(5,142	)	$	366,500
Balance, January 1, 2019		22,749		$	36,689		$	36,797		$	298,156		$	(5,142	)	$	366,500
2019 Activity:
Net income		—			—			—			66,067			—			66,067
Net change in accumulated other comprehensive income		—			—			—			—			5,819			5,819
Stock compensation expense		—			—			3,578			—			—			3,578
Repurchase of common stock		(259	)		(861	)		(8,303	)		—			—			(9,164	)
Stock issued for share-based awards, net of withholdings to satisfy employee tax obligations		116			385			3,701			(7,010	)		—			(2,924	)
Cash dividends declared, $1.04 per share		—			—			—			(23,579	)		—			(23,579	)
Shares repurchased or cancelled		(2	)		(6	)		(59	)		65			—			—
Balance, December 31, 2019		22,604		$	36,207		$	35,714		$	333,699		$	677		$	406,297

See accompanying notes to consolidated financial statements.

58

CONSOLIDATED STATEMENTS OF CASH FLOWS

Years Ended December 31, (in thousands)

	2019			2018			2017
Operating activities:
Net income	$	66,067		$	55,517		$	38,043
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan and lease losses		1,000			2,705			2,550
Depreciation, amortization and accretion, net		4,880			5,782			13,640
Deferred income tax (benefit) expense		(5,852	)		(268	)		3,971
Loss on sale of securities available for sale		—			—			232
Gain on other investment activities		—			(113	)		(92	)
Gain on sales of mortgage loans held for sale		(1,907	)		(1,443	)		(1,989	)
Origination of mortgage loans held for sale		(108,020	)		(71,807	)		(97,623	)
Proceeds from sale of mortgage loans held for sale		102,854			74,539			99,861
Bank owned life insurance income		(1,030	)		(1,129	)		(1,159	)
Loss on the disposal of premises and equipment		372			56			—
Loss (gain) on the sale of other real estate owned		7			(102	)		(39	)
Stock compensation expense		3,578			4,027			2,892
Excess tax benefits from share-based compensation arrangements		(812	)		(549	)		(1,463	)
Net change in accrued interest receivable and other assets		(2,786	)		(582	)		(13,848	)
Net change in accrued interest payable and other liabilities		85			(744	)		8,700
Net cash provided by operating activities		58,436			65,889			53,676
Investing activities:
Purchases of securities available for sale		(702,441	)		(768,407	)		(661,086	)
Proceeds from sales of securities available for sale		12,427			—			421
Proceeds from maturities and paydowns of securities available for sale		678,039			901,512			652,411
Purchase of Federal Home Loan Bank stock		—			(2,724	)		(2,254	)
Proceeds from redemption of Federal Home Loan Bank stock		591			—			955
Proceeds from redemption of acquired Federal Reserve Bank stock		490			—			—
Proceeds from redemption of interest bearing due from banks		1,761			—			—
Net change in loans		(131,734	)		(137,835	)		(105,867	)
Purchases of premises and equipment		(5,098	)		(7,057	)		(2,786	)
Proceeds from sales of premises and equipment		2,907			230			—
Proceeds from surrender of acquired bank owned life insurance		3,431			—			—
Proceeds from bank owned life insurance mortality benefit		1,878			—			977
Other investment activities		(2,766	)		(1,184	)		92
Proceeds from sales of other real estate owned		2,028			3,895			2,432
Cash for acquisition, net of cash acquired		(24,686	)		—			—
Net cash used in investing activities		(163,173	)		(11,570	)		(114,705	)
Financing activities:
Net change in deposits		213,913			216,061			57,747
Net change in securities sold under agreements to repurchase and federal funds purchased		(5,125	)		(185,484	)		116,856
Proceeds from Federal Home Loan Bank advances		120,000			120,000			120,000
Repayments of Federal Home Loan Bank advances		(131,726	)		(121,281	)		(121,617	)
Repayment of acquired bank holding company line of credit		(2,300	)		—			—
Redemption of acquired bank subordinated debentures		(3,609	)		—			—
Repurchase of common stock		(11,817	)		(2,004	)		(2,389	)
Share repurchases related to compensation plans		(272	)		(154	)		(216	)
Cash dividends paid		(23,542	)		(21,766	)		(18,077	)
Net cash provided by financing activities		155,522			5,372			152,304
Net change in cash and cash equivalents		50,785			59,691			91,275
Cash and cash equivalents at beginning of period		198,939			139,248			47,973
Cash and cash equivalents at end of period	$	249,724		$	198,939		$	139,248

(continued)

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CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

Years Ended December 31, (in thousands)

	2019		2018		2017
Supplemental cash flow information:
Cash paid during the period for:
Income tax payments, net of refunds	$	13,938	$	7,227	$	15,838
Cash paid for interest		22,666		14,827		7,158
Supplemental non-cash activity:
Initial recognition of right-of-use lease assets	$	16,747	$	—	$	—
Initial recognition operating lease liabilities		18,067		—		—
Loans purchased and not settled		—		4,992		—
Transfers from loans to real estate acquired in settlement of loans		1,160		2,170		—
Liabilities assumed in conjunction with KSB acquisition:
Fair value of assets acquired	$	204,613	$	—	$	—
Cash paid in acquisition		28,000		—		—
Liabilities assumed	$	176,613	$	—	$	—

See accompanying notes to consolidated financial statements.

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FOOTNOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) Basis of Presentation and Summary of Significant Accounting Policies

Principles of Consolidation and Nature of Operations – The consolidated financial statements include the accounts of Stock Yards Bancorp, Inc. and its wholly-owned subsidiary, SYB&T. All significant inter-company transactions and accounts have been eliminated in consolidation. All companies are collectively referred to as “Bancorp” or the “Company.” Bancorp has evaluated subsequent events for recognition or disclosure up to the date on which financial statements were issued and determined there were none.

The Bank, chartered in 1904, is a Louisville, Kentucky-based, state-chartered non-member financial institution that provides services in the Louisville, Kentucky, Indianapolis, Indiana and Cincinnati, Ohio MSAs through 42 full service banking center locations.

As a result of its acquisition of KSB on May 1, 2019, Bancorp became the 100% successor owner of KBST, an unconsolidated finance subsidiary. As permitted under the terms of KBST’s governing documents, Bancorp redeemed the TPS at the par amount of approximately $4 million in June, 2019.

Bancorp is divided into two reportable segments: Commercial Banking and WM&T:

Commercial Banking provides a full range of loan and deposit products to individual consumers and businesses in all its markets through retail lending, mortgage banking, deposit services, online banking, mobile banking, private banking, commercial lending, treasury management services, merchant services, international banking, correspondent banking and other banking services. The Bank 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 custom-tailored financial planning, investment management, retirement planning, trust and estate services in all markets in which Bancorp operates. The magnitude of WM&T revenue distinguishes Bancorp from other community banks of similar asset size.

Basis of Financial Statement Presentation and Use of Estimates – The consolidated financial statements of Bancorp and its subsidiary have been prepared in conformity with GAAP and conform to predominant practices within the banking industry. In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect reported amounts of certain assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of related revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates particularly susceptible to significant change relate to determination of the allowance, and income tax assets, liabilities and expense.

Cash Equivalents and Cash Flows – Cash and cash equivalents include cash and due from banks, FFS and interest bearing due from banks as segregated in the accompanying consolidated balance sheets.

Securities – All of Bancorp’s debt securities are AFS. Equity securities, if held, are carried at fair value with changes in fair value recorded in net income. Securities AFS include securities that may be sold in response to changes in interest rates, resultant prepayment risk and other factors related to interest rate and prepayment risk changes. Securities AFS are carried at fair value with unrealized gains or losses, net of tax effect, included in stockholders’ equity. Amortization of premiums and accretion of discounts are recorded using the interest method over the expected life of the security. Gains or losses on sales of securities are computed on a specific identification basis. Declines in fair value of investment securities AFS (with certain exceptions noted below) that are deemed to be other-than-temporary are charged to earnings as a realized loss, and a new cost basis for the securities is established. In evaluating OTTI, management considers the length of time and extent to which fair value has been less than cost, financial condition and near-term prospects of the issuer, and the intent and ability of Bancorp to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value in the near term. Declines in fair value of debt securities below amortized cost are deemed to be other-than-temporary in circumstances where: (1) Bancorp has the intent to sell a security; (2) it is more likely than not that Bancorp will be required to sell the security before recovery of its amortized cost basis; or (3) Bancorp does not expect to recover the entire amortized cost basis of the security. If Bancorp intends to sell a security or if it is more likely than not that Bancorp will be required to sell the security before recovery, an OTTI write-down is recognized in earnings equal to the difference between the security’s amortized cost basis and its fair value. If Bancorp does not intend to sell the security or it is not more likely than not that it will be required to sell the security before recovery, the OTTI write-down is separated into an amount representing credit loss, which is recognized in earnings, and an amount related to all other factors, which is recognized in OCI. Declines in value judged to be other-than-temporary are included in other non-interest expense in the consolidated statements of income. See the Footnote titled “Securities Available for Sale” for additional information.

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Accounting for Business Acquisitions — Bancorp accounts for acquisitions in accordance with the acquisition method as outlined in ASC Topic 805, Business Combinations. The acquisition method requires: a) identification of the entity that obtains control of the acquiree; b) determination of the acquisition date; c) recognition and measurement of the identifiable assets acquired and liabilities assumed, and any non-controlling interest in the acquiree; and d) recognition and measurement of goodwill or bargain purchase gain.

Identifiable assets acquired, liabilities assumed, and any non-controlling interest in acquirees are generally recognized at their acquisition-date (“day-one”) fair values based on the requirements of ASC Topic 820, Fair Value Measurements and Disclosures. The measurement period for day-one fair values begins on the acquisition date and ends the earlier of: (a) the day management believes it has all the information necessary to determine day-one fair values; or (b) one year following the acquisition date. In many cases, the determination of day-one fair values requires management to make estimates about discount rates, future expected cash flows, market conditions and other future events that are highly complex and subjective in nature and subject to recast adjustments, which are retrospective adjustments to reflect new information existing at the acquisition date affecting day-one fair values. More specifically, these recast adjustments may be made, as market value data, such as valuations, are received by the Bank. Increases or decreases to day-one fair values are reflected with a corresponding increase or decrease to bargain purchase gain or goodwill.

Acquisition related costs are expensed as incurred unless those costs are related to issuing debt or equity securities used to finance the acquisition.

Mortgage Loans Held for Sale – Mortgage loans held for sale are initially recorded at the lower of cost or market value on an individual loan basis. The sales prices of all of these loans are covered by investor commitments.

Loans – Loans are stated at the unpaid principal balance plus deferred loan origination fees, net of deferred loan costs. Loan fees, net of any costs, are deferred and amortized over the life of the related loan on an effective yield basis. Interest income on loans is recorded on the accrual basis except for those loans in a non-accrual income status. Loans are placed in a non-accrual income status when prospects for recovering both principal and accrued interest are considered doubtful or when a default of principal or interest has existed for 90 days or more unless such loan is well secured and in the process of collection. When a loan is placed on non-accrual status, any interest previously accrued but not yet collected is reversed against current income. No interest income is recorded while a loan is on non-accrual until principal has been fully collected. Non-accrual loans may be returned to accrual status once prospects for recovering both principal and accrued interest are reasonably assured. Loans are accounted for as TDRs when Bancorp, for economic or legal reasons related to the debtor’s financial difficulties, grants a concession to the debtor that it would not otherwise consider. If a loan is restructured at a market rate for a new loan with comparable risk, no principal forgiveness has been granted, and the loan is not impaired based on the terms specified by the restructuring agreement, it shall be removed from TDR status generally after six months of performance.

Loans are classified as impaired when it is probable Bancorp will be unable to collect interest and principal according to terms of the loan agreement. These loans are measured at the estimated fair value of the loans’ collateral, if applicable, or on the present value of future cash flows discounted at the loans’ effective interest rate. Impaired loans consist of loans in non-accrual status and loans accounted for as TDRs.

Loans purchased in a business acquisition are accounted for using one of the following accounting standards:

●  ASC Topic 310-20, Non Refundable Fees and Other Costs, is used to value loans that have not demonstrated post origination credit quality deterioration and the acquirer expects to collect all contractually required payments from the borrower. For these loans, the difference between the loan’s day-one fair value and amortized cost would be amortized or accreted into income using the interest method.

● ASC Topic 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality, is used to value PCI loans. For these loans, it is probable the acquirer will be unable to collect all contractually required payments from the borrower. Under ASC Topic 310-30, the expected cash flows that exceed the initial investment in the loan, or fair value, represent the “accretable yield,” which is recognized as interest income on a level-yield basis over the expected cash flow periods of the loans. Additionally, the difference between contractual cash flows and expected cash flows of PCI loans is referred to as the “non-accretable discount.”

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Allowance – The allowance is management’s estimate of probable losses inherent in the loan portfolio as of the balance sheet date. Loan losses are charged against the allowance when management believes uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance.

Bancorp’s allowance methodology is driven by risk ratings, historical losses, and qualitative factors. Assumptions include many factors such as changes in borrowers’ financial condition or historical loss ratios related to certain loan portfolios which may or may not be indicative of future losses. To the extent that management’s assumptions prove incorrect, the results from operations could be materially affected by a higher or lower provision.

Consistent with Bancorp’s methodology, the historical look-back period was extended from 32 to 36 quarters in the first quarter of 2019 to all classes and segments of the portfolio. This extension of the historical period used to capture Bancorp’s historical loss ratios was applied to all classes and segments of the loan portfolio. Expansion of the look-back period for the quantitative historical loss rate caused us to review the overall methodology for the qualitative factors to ensure that Bancorp appropriately captures the risk not addressed in the quantitative historical loss rate. Based on the look-back period extension, the allowance level increased approximately $2.0 million during the first quarter of 2019. Management believes extension of the look-back period is appropriate to capture the impact of a full economic cycle and provides sufficient loss observations to develop a reliable estimate. Management will continue to evaluate appropriateness of the look-back period based on the status of the economic cycle.

Bancorp’s allowance calculation includes allocations to loan portfolio segments for qualitative factors including, among other factors, local economic and business conditions, the quality and experience of lending staff and management, exceptions to lending policies, levels of and trends in past due loans and loan classifications, concentrations of credit such as collateral type, trends in portfolio growth, trends in the value of underlying collateral for collateral-dependent loans, effect of other external factors such as the national economic and business trends, and the quality and depth of the loan review function. Bancorp utilizes the sum of all allowance amounts derived as described above as the appropriate level of allowance. Changes in the criteria used in this evaluation or the availability of new information could cause the allowance to be increased or decreased in future periods.

Based on this quantitative and qualitative analysis, provisions, or reductions are made to the allowance. Such provisions or reductions are reflected as a charge against or benefit to current earnings in Bancorp’s consolidated statements of income.

The adequacy of the allowance is monitored by executive management and reported quarterly to the Audit Committee of the Board of Directors. This committee has approved the overall methodology. Various regulatory agencies, as an integral part of their examination process, periodically review the adequacy of Bancorp’s allowance. Such agencies may require Bancorp to make additional provisions to the allowance based upon their judgments about information available to them at the time of their examinations.

The accounting policy related to the allowance is applicable to the Commercial Banking segment of Bancorp.

Premises and Equipment – Premises and equipment are carried at cost, less accumulated depreciation and amortization. Depreciation of premises and equipment is computed using straight-line methods over the estimated useful lives of the assets ranging from 3 to 40 years. Leasehold improvements are amortized on the straight-line method over terms of the related leases, including expected renewals, or over the useful lives of the improvements, whichever is shorter. Maintenance and repairs are expensed as incurred while major additions and improvements are capitalized.

FHLB Stock — Bancorp is a member of the FHLB system. Members are required to own a certain amount of stock based on the level of borrowings and other factors and may invest in additional amounts. FHLB stock is carried at cost, classified as a restricted security and annually evaluated for impairment. Because this stock is viewed as a long-term investment, impairment is based on ultimate recovery of par value. Both cash and stock dividends are recorded as interest income.

Goodwill and Other Intangible Assets — Goodwill resulting from business acquisitions represents the excess of the fair value of the consideration transferred, plus the fair value of any non-controlling interests in the acquiree, over the fair value of the net assets assumed as of the acquisition date. Goodwill and intangible assets acquired in a purchase combination and determined to have an indefinite useful life are not amortized, but tested annually or more frequently if events and circumstances exist that indicate that a goodwill impairment test should be performed.

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Bancorp has selected September 30th as the date to perform its annual goodwill impairment test. Intangible assets with definite useful lives are amortized over their estimated useful lives to their estimated residual values. Goodwill is the only intangible asset with an indefinite life on the Bank’s balance sheet.

All goodwill is attributable to the Commercial Banking segment with the KSB portion expected to be deductible for tax purposes. Based on its assessment, Bancorp believes its goodwill balance at December 31, 2019 and 2018 was not impaired and is properly recorded in the consolidated financial.

Other intangible assets consist of CDI assets arising from business acquisitions. CDI assets are initially measured at fair value and then amortized on an accelerated method over their estimated useful lives.

Other Assets — BOLI and other life insurance policies are carried at net realizable value, which considers applicable surrender charges. Also, Bancorp maintains life insurance policies in conjunction with its non-qualified defined benefit and non-qualified compensation plans.

OREO is carried at the lower of cost or estimated fair value minus estimated selling costs. Any write downs to fair value at the date of acquisition are charged to the allowance. In certain situations, improvements to prepare assets for sale are capitalized if those costs increase the estimated fair value of the asset. Expenses incurred in maintaining assets, write downs to reflect subsequent declines in value, and realized gains or losses are reflected in operations and are included in non-interest income and expense.

MSRs are amortized in proportion to and over the period of estimated net servicing income, considering appropriate prepayment assumptions and are evaluated quarterly for impairment by comparing the carrying value to fair value.

Off Balance Sheet Financial Instruments — Financial instruments include off-balance sheet credit instruments, such as commitments to fund loans and standby letters of credit. The face amount for these items represents the exposure to loss, before considering client collateral or ability to repay. Such financial instruments are recorded upon funding. Instruments such as standby letters of credit are considered financial guarantees and are recorded at fair value.

Derivatives — Bancorp uses derivative financial instruments as part of its interest rate risk management, including interest rate swaps. GAAP establishes accounting and reporting standards for derivative instruments and hedging activities. As required by GAAP, Bancorp’s interest rate swaps are recognized as other assets and liabilities in the consolidated balance sheet at fair value. Accounting for changes in fair value of derivatives depends on the intended use of the derivative and the resulting designation. Derivatives used to hedge exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. To qualify for hedge accounting, Bancorp must comply with detailed rules and documentation requirements at inception of the hedge, and hedge effectiveness is assessed at inception and periodically throughout the life of each hedging relationship. Hedge ineffectiveness, if any, is measured periodically throughout the life of the hedging relationship.

For derivatives designated as cash flow hedges, the effective portion of changes in fair value of the derivative is initially reported in OCI and subsequently reclassified to interest income or expense when the hedged transaction affects earnings, while the ineffective portion of changes in fair value of derivative, if any, is recognized immediately in other noninterest income. Bancorp assesses effectiveness of each hedging relationship by comparing cumulative changes in cash flows of the derivative hedging instrument with cumulative changes in cash flows of the designated hedged item or transaction. No component of the change in the fair value of the hedging instrument is excluded from the assessment of hedge effectiveness.

Periodically, Bancorp enters into an interest rate swap transaction with a borrower, who desires to hedge exposure to rising interest rates, while at the same time entering into an offsetting interest rate swap, with substantially matching terms, with another approved independent counterparty. Because of matching terms of offsetting contracts and collateral provisions mitigating any non-performance risk, changes in fair value subsequent to initial recognition have an insignificant effect on earnings. Because these derivative instruments have not been designated as hedging instruments, the derivative instruments are recognized on the consolidated balance sheet at fair value, with changes in fair value, due to changes in prevailing interest rates, recorded in other noninterest income.

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Bancorp had no fair value hedging relationships at December 31, 2019 or 2018. Bancorp does not use derivatives for trading or speculative purposes. See the Footnote titled “Derivative Financial Instruments” for additional discussion.

Transfers of Financial Assets — Transfers of financial assets are accounted for as sales when control over the assets has been relinquished. Control over transferred assets is deemed to be surrendered when the assets have been isolated from Bancorp, the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets and Bancorp does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity.

Stock-Based Compensation — For all awards, stock-based compensation expense is recognized over the period in which it is earned based on the grant-date fair value of the portion of stock-based payment awards that are ultimately expected to vest, reduced for estimated forfeitures. GAAP requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

Income Taxes — Income tax expense is the total of the current year income tax due or refundable and the change in DTAs and DTLs. DTAs and DTLs are the expected future tax amounts for the temporary differences between carrying amounts and tax bases of assets and liabilities, computed using enacted tax rates. A valuation allowance, if needed, reduces DTAs to the amount expected to be realized.

A tax position is recognized as a benefit only if it is “more-likely-than-not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more-likely-than-not” test, no tax benefit is recorded.

Bancorp recognizes interest and/or penalties related to income tax matters in income tax expense.

Bancorp periodically invests in certain partnerships with customers that yield historic tax credits, which are accounted for using the flow through method, which approximates the equity method, and/or low-income housing tax credits as well as tax deductible losses, which are accounted for using the effective yield method for older transactions or proportional amortization method for more recent transactions. The tax benefit of these investments exceeds amortization expense associated with them, resulting in a positive impact on net income.

Net Income per Share — Basic net income per common share is determined by dividing net income by the weighted average number of shares of common stock outstanding. Diluted net income per share is determined by dividing net income by the weighted average number of shares of common stock outstanding plus the weighted average number of shares that would be issued upon exercise of dilutive options and SARs, assuming proceeds are used to repurchase shares under the treasury stock method.

Comprehensive Income — Comprehensive income is defined as the change in equity (net assets) of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. For Bancorp, this includes net income, changes in unrealized gains and losses on AFS investment securities and cash flow hedging instruments, net of reclassification adjustments and taxes, and minimum pension liability adjustments, net of taxes.

Loss Contingencies — Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable, and an amount or range of loss can be reasonably estimated. Management does not believe there are any outstanding matters that would have a material effect on the financial statements.

Restrictions on Cash and Cash Equivalents — Bancorp is required by the FRB to maintain average reserve balances. Cash and due from banks on the consolidated balance sheet included $11 million in required reserve balances at December 31, 2019.

Dividend Restrictions — Banking regulations require maintaining certain capital levels and may limit the dividends paid by the Bank to the Holding Company or by the Holding Company to shareholders.

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Fair Value of Financial Instruments — Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in the Footnote titled “Assets and Liabilities Measured and Reported at Fair Value” in this section of the filing. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect the estimates.

Revenue from contracts with Customers — On January 1, 2018, Bancorp adopted ASU 2014-09, Revenue from Contracts with Customers and all subsequent amendments to the ASU (collectively, “ASC 606”). While this update modified guidance for recognizing revenue, it did not have a material impact on the timing or presentation of Bancorp’s revenue. The majority of Bancorp’s revenue comes from interest income and other sources, including loans, leases, securities, and derivatives, which are not subject to ASC 606. Bancorp’s services that fall within the scope of ASC 606 are presented within non-interest income and are recognized as revenue as Bancorp satisfies its obligation to its customer.

Segment Information — Bancorp provides a broad range of financial services to individuals, corporations and others through its 42 full service banking locations as of December 31, 2019. These services include loan and deposit services, cash management services, securities brokerage activities, mortgage origination and WM&T activities. Bancorp’s operations are considered by management to be aggregated in two reportable operating segments: Commercial Banking and WM&T.

Reclassifications — Certain amounts presented in prior periods have been reclassified to conform to the current period presentation. These reclassifications had no impact on previously reported prior periods’ net income or shareholders’ equity.

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Accounting Standards Updates Issued

ASU. No.	Topic	Nature of Update	Date Adopted	Method of Adoption	Financial Statement Impact
2016-13	Financial Instruments - Credit Losses (Topic 326)	Amends guidance on reporting credit losses for assets held at amortized-cost basis and available-for-sale debt securities.	January 1, 2020	Modified-retrospective approach	ASU 2016-13 along with subsequent codification updates, requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts and requires enhanced disclosures related to the significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an organization’s portfolio. In addition, the ASU amends the accounting for credit losses on AFS securities and purchased financial assets with credit deterioration. Bancorp currently expects the adoption of the ASU will result in a increase to the allowance between $7.5 and $8.5 million. As Bancorp is currently finalizing the execution of its implementation controls and processes, the ultimate impact of the adoption of the ASU as of January 1, 2020 could differ from our current expectation. Bancorp expects no change related to accounting for credit losses on AFS securities and other financial assets. Interagency guidance issued in December 2018 allows for a three year phase-in of the cumulative-effect adjustment for regulatory capital reporting. The adoption of the ASU is not expected to have a significant impact upon Bancorp's regulatory capital ratios.
2019-04	Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments	Clarifies and improves areas of guidance related to the recently issued standards on credit losses, hedging, and recognition and measurement.	Based on areas amended	Based on areas amended	Immaterial
2019-05	Financial Instruments - Credit Losses (Topic 326): Targeted Transition Relief	Provides the fair value option for certain instruments within the scope of Subtopic 326-20	January 1, 2020	Modified-retrospective approach	Immaterial
2019-11	Financial Instruments - Credit Losses (Topic 326): Codification Improvements	Affects narrow aspects of the guidance issued in ASU 2016-13	January 1, 2020	Conformed to the adoption of ASU 2016-13 above	Immaterial

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Accounting Standards Updates Issued (continued)

ASU. No.	Topic	Nature of Update	Date Adopted	Method of Adoption	Financial Statement Impact
2019-01	Lease (Topic 842): Codification Improvements	Aligns fair value guidance for certain lessors with that of existing guidance (Issue 1) and requires lessors within the scope of Topic 942, Financial Services—Depository and Lending, to present all “principal payments received under leases” within investing activities (Issue 2). The ASU exempts lessees and lessors from having to provide certain interim disclosures in the fiscal year in which a company adopts the new leases standard (Issue 3).	Issue 1 and 2 January 1, 2020; Issue 3 January 1, 2019	Prospectively	Immaterial
2019-07	Codification Updates to SEC Sections	Amends certain SEC sections within the FASB Codification to update and simplify disclosure.	Upon adoption of the FASB codification	NA	Immaterial
2019-12	Income Taxes (Topic 7400): Simplifying the Accounting for Income Taxes	Includes several narrow focused simplifications.	January 1, 2020	Modified-retrospective approach	Immaterial

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Accounting Standards Updates Adopted in 2019

ASU. No.	Topic	Nature of Update	Date Adopted	Method of Adoption	Financial Statement Impact
2016-02	Leases (Topic 842)	Most leases are considered operating leases, which are not accounted for on the lessees’ balance sheets. The significant change under this ASU is that those operating leases will be recorded on the balance sheet.	January 1, 2019	Modified-retrospective approach, which includes a number of optional practical expedients	Bancorp adopted on January 1, 2019 and recorded a $17 million of right-of-use lease asset and a $18 million of operating lease liability on its balance sheet. This ASU did not have a meaningful impact on Bancorp's performance metrics, including regulatory capital ratios and ROA. Additionally, Bancorp does not believe that the adoption of this ASU by its customers will have a significant impact on Bancorp's ability to underwrite credit when client financial statements are presented inclusive of the requirements of this ASU. See Footnote 6 in this section of the filing regarding disclosures by the Company to comply with this ASU.
2018-10	Codification Improvements to Leases (Topic 842)	Affects narrow aspects of the guidance issued in ASU 2016-02	January 1, 2019	Conformed to the adoption of ASU 2016-02 above	See Footnote 6 in this section of the filing regarding disclosures by Bancorp to comply to this ASU.
2018-11	Targeted Improvements to Leases (Topic 842)	Provides an additional (and optional) transition method to adopt ASU 2016-02 and provides a practical expedient to not separate non-lease components from the associated lease component under certain circumstances.	January 1, 2019	Conformed to the adoption of ASU 2016-02 above	Immaterial
2017-12	Derivatives and Hedging (Topic 815)	The amendments in this ASU make certain targeted improvements to simplify the application of hedge accounting.	January 1, 2019	Prospectively	Immaterial

(2) Restrictions on Cash and Due from Banks

At December 31, 2019 and 2018, Bancorp’s interest-bearing cash accounts and non-interest bearing deposits held at other financial institutions exceeded the $250,000 federally insured limits by approximately $89 million and $1 million. Each correspondent bank’s financial performance and market rating are reviewed on a quarterly basis to ensure Bancorp has deposits only at institutions providing minimal risk for those exceeding federally insured limits. Additionally, at December 31, 2019 and 2018, Bancorp had approximately $113 million and $143 million at the FHLB and FRB, which are government-sponsored entities not insured by the FDIC. Bancorp is required to maintain an average reserve balance in cash or with the FRB relating to customer deposits. The amount of those required reserve balances was approximately $11 million and $9 million at December 31, 2019 and 2018, respectively, and is included in FFS and interest bearing due from banks in the consolidated balance sheet.

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(3) Acquisition of KSB

On May 1, 2019, Bancorp completed its acquisition of KSB, for $28 million in cash. The acquisition expands Bancorp’s market area into nearby Nelson County, Kentucky, while growing its customer base in Louisville, Kentucky.

The following table provides a summary of the assets acquired and liabilities assumed as recorded by KSB, the previously reported preliminary fair value adjustments necessary to adjust those acquired assets and assumed liabilities to fair value, recast adjustments to those previously reported preliminary fair values, and the fair values of those assets and liabilities as recorded by Bancorp. As provided for under GAAP, management has up to 12 months following the date of acquisition to finalize the fair values of the acquired assets and assumed liabilities. The preliminary fair value adjustments and the preliminary resultant fair values shown in the following table continue to be evaluated by management and may be subject to further recast adjustments.

	May 1, 2019
	As Recorded			Fair Value				Recast				As Recorded
(in thousands)	by King			Adjustments (1)				Adjustments (1)				by Bancorp
Assets acquired:
Cash and due from banks	$	3,316		$	—			$	—			$	3,316
Interest bearing due from banks		1,761			—				—				1,761
Securities available for sale		12,404			23		a		—				12,427
Federal Home Loan Bank stock, at cost		1,517			—				—				1,517
Federal Reserve Bank stock, at cost		490			—				—				490
Loans		165,744			(1,597	)	b		(118	)	b		164,029
Allowance for loan losses		(1,812	)		1,812		b		—				—
Net loans		163,932			215				(118	)			164,029
Premises and equipment, net		4,358			(1,328	)	c		431		c		3,461
Bank owned life insurance		3,431			—				—				3,431
Core deposit intangible		—			1,519		d		—				1,519
Other real estate owned		325			(325	)	e		—				—
Other assets and accrued interest receivable		867			(36	)	f		—				831
Total assets acquired	$	192,401		$	68			$	313			$	192,782
Liabilities assumed:
Deposits
Non-interest bearing	$	24,939		$	—			$	—			$	24,939
Interest bearing		100,839			(252	)	g		—				100,587
Total deposits		125,778			(252	)			—				125,526
Federal funds purchased		1,566			—				—				1,566
Federal Home Loan Bank advances		43,718			(419	)	h		—				43,299
Subordinated Note		3,609			—				—				3,609
Holding Company line of credit		2,300			—				—				2,300
Other liabilities and accrued interest payable		313			—				—				313
Total liabilities assumed		177,284			(671	)			—				176,613
Net assets acquired	$	15,117		$	739			$	313			$	16,169
Cash consideration paid													(28,000	)
Goodwill												$	11,831

(1) - Bancorp’s acquisition of KSB closed on May 1, 2019. The fair value adjustments reported are preliminary estimates based on information obtained subsequent to May 1, 2019 and through December 31, 2019. Management is continuing to evaluate each of its estimates and may provide additional recast adjustments in future periods based on this continuing evaluation. To the extent that additional recast adjustments are posted in future periods, the resultant fair values and the amount of goodwill recorded by Bancorp will change.

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Explanation of preliminary fair value adjustments:

a. Reflects the fair value adjustment based on Bancorp’s evaluation of the acquired investment portfolio.

b. Reflects the fair value adjustment based on Bancorp’s evaluation of the acquired loan portfolio and to eliminate KSB’s recorded allowance.

c. Reflects the fair value adjustment based on Bancorp’s evaluation of the premises and equipment acquired.

d. Reflects the fair value adjustment for the core deposit intangible asset recorded as a result of the acquisition.

e. Reflects the fair value adjustment based upon Bancorp’s evaluation of the foreclosed real estate acquired.

f. Reflects the write-off of a miscellaneous other asset.

g. Reflects the fair value adjustment based on Bancorp’s evaluation of the assumed time deposits.

h. Reflects the fair value adjustment based upon Bancorp’s evaluation of the assumed FHLB advances.

Goodwill of approximately $12 million, which is the excess of the acquisition consideration over the fair value of net assets acquired, was recorded in the KSB acquisition as the result of expected operational synergies and other factors. This goodwill is attributable to Bancorp’s Commercial Banking segment and is expected to be deductible for tax purposes. To the extent that management revises any of the above fair value adjustments as a result of its continuing evaluation, the amount of goodwill recorded will change.

Based upon the proximity to existing branch locations, Bancorp closed and ultimately sold three acquired full service branch locations in 2019, while retaining the associated customer relationships. Goodwill was recast based on these sales.

Prior year pro-forma financial statements are not presented due to the immateriality of the transaction. Revenue (defined as net interest income and non-interest income) attributed to KSB totaled $4.0 million for the year ended December 31, 2019.

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(4) Securities Available for Sale

All of Bancorp’s securities are classified as AFS. Amortized cost, unrealized gains and losses, and fair value of these securities follow:

(in thousands)	Amortized		Unrealized
December 31, 2019	cost		Gains		Losses			Fair value
U.S. Treasury and other U.S. government obligations	$	49,887	$	10	$	-		$	49,897
Government sponsored enterprise obligations		208,933		1,189		(178	)		209,944
Mortgage backed securities - government agencies		193,574		1,243		(956	)		193,861
Obligations of states and political subdivisions		16,919		117		—			17,036
Total securities available for sale	$	469,313	$	2,559	$	(1,134	)	$	470,738
December 31, 2018
Government sponsored enterprise obligations	$	264,234	$	156	$	(3,351	)	$	261,039
Mortgage backed securities - government agencies		149,748		282		(3,753	)		146,277
Obligations of states and political subdivisions		29,760		107		(188	)		29,679
Total securities available for sale	$	443,742	$	545	$	(7,292	)	$	436,995

At December 31, 2019 and 2018, there were no holdings of debt securities of any one issuer, other than the U.S. government and its agencies, in an amount greater than 10% of stockholders’ equity.

There were no gains or losses on sales or calls of securities for the years ended December 31, 2019 and 2018. In 2017, a corporate equity security was sold for a loss of $263,000 and a security was called with a $31,000 pre-payment penalty realized.

Securities acquired from KSB, totaling $12 million, were sold immediately following the acquisition with no gain or loss realized in the income statement.

A summary of securities AFS by contractual maturity follows:

(in thousands)	Amortized cost		Fair value
Due within 1 year	$	129,251	$	129,311
Due after 1 year but within 5 years		32,124		32,208
Due after 5 years but within 10 years		6,162		6,219
Due after 10 years		108,202		109,139
Mortgage backed securities - government agencies		193,574		193,861
Total securities available for sale	$	469,313	$	470,738

Actual maturities may differ from contractual maturities because some issuers have the right to call or prepay obligations with or without prepayment penalties. The investment portfolio includes MBSs, which are guaranteed by agencies such as FHLMC, FNMA, and GNMA. These securities differ from traditional debt securities primarily in that they may have uncertain principal payment dates and are priced based on estimated prepayment rates on the underlying collateral.

Securities with a carrying value of $403 million and $355 million were pledged at December 31, 2019 and 2018, to secure accounts of commercial depositors in cash management accounts, public deposits, and uninsured cash balances for WM&T accounts.

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Securities with unrealized losses at December 31, 2019 and 2018, aggregated by investment category and length of time securities have been in a continuous unrealized loss position follows:

	Less than 12 months					12 months or more					Total
(in thousands)	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
December 31, 2019	value		losses			value		losses			value		losses
Government sponsored enterprise obligations	$	16,503	$	(107	)	$	11,492	$	(71	)	$	27,995	$	(178	)
Mortgage-backed securities - government agencies		81,664		(496	)		32,453		(460	)		114,117		(956	)
Total temporarily impaired securities	$	98,167	$	(603	)	$	43,945	$	(531	)	$	142,112	$	(1,134	)
December 31, 2018
Government sponsored enterprise obligations	$	96,740	$	(38	)	$	149,320	$	(3,313	)	$	246,060	$	(3,351	)
Mortgage-backed securities - government agencies		3,108		(5	)		120,848		(3,748	)		123,956		(3,753	)
Obligations of states and political subdivisions		814		(1	)		17,639		(187	)		18,453		(188	)
Total temporarily impaired securities	$	100,662	$	(44	)	$	287,807	$	(7,248	)	$	388,469	$	(7,292	)

Applicable dates for determining when securities are in an unrealized loss position are December 31, 2019 and 2018. As such, it is possible that a security had a market value lower than its amortized cost on other days during the past twelve months, but is not in the “Less than 12 months” category above.

Investment securities are evaluated for OTTI on at least a quarterly basis and more frequently when economic or market conditions warrant such an evaluation to determine whether a decline in value below amortized cost is other-than-temporary. The term “other-than-temporary” is not intended to indicate that the decline is permanent, but indicates that the prospects for a near-term recovery of value are not necessarily favorable, or that there is a general lack of evidence to support a realizable value equal to or greater than the carrying value of the investment. Once a decline in value is determined to be other-than-temporary, the value of the security is reduced and a corresponding charge to earnings is recognized for the anticipated credit losses.

Unrealized losses on Bancorp’s investment securities portfolio have not been recognized as an expense because the securities are of high credit quality, and the decline in fair values is due to changes in the prevailing interest rate environment since the purchase date. Fair value is expected to recover as securities reach maturity and/or the interest rate environment returns to conditions similar to when these securities were purchased. These investments consist of 54 and 117 separate investment positions as of December 31, 2019 and 2018. Because management does not intend to sell the securities, and it is not likely that Bancorp will be required to sell the investments before recovery of their amortized cost, which may be at maturity, Bancorp does not consider these securities to be other-than-temporarily impaired at December 31, 2019.

FHLB stock represents an investment held by Bancorp which is not readily marketable and is carried at cost adjusted for identified impairment. Impairment is evaluated on an annual basis as of September 30th. No impairment has been recorded in the past and not future impairment is expected. Holdings of FHLB stock are required for access to FHLB advances.

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(5) Loans

Composition of loans by primary loan portfolio class follows:

December 31, (in thousands)	2019		2018
Commercial and industrial	$	870,511	$	833,524
Construction and development, excluding undeveloped land(1)		213,822		225,050
Undeveloped land		46,360		30,092
Real estate mortgage:
Commercial investment		736,618		588,610
Owner occupied commercial		473,783		426,373
1-4 family residential		334,358		276,017
Home equity - first lien		48,620		49,500
Home equity - junior lien		73,477		70,947
Subtotal: Real estate mortgage		1,666,856		1,411,447
Consumer		47,467		48,058
Total loans(2)	$	2,845,016	$	2,548,171

(1) Consists of land acquired for development by the borrower, but for which no development has yet taken place.

(2) Total loans are presented inclusive of premiums, discounts, and net loan origination fees and costs.

Fees and costs of originating loans are deferred at origination and amortized over the life of the loan. Loan balances reported herein include deferred loan origination fees, net of deferred loan costs. At December 31, 2019 and 2018, net deferred loan origination costs exceeded deferred loan origination fees, resulting in net negative balances of $564,000 and $592,000.

Bancorp’s credit exposure is diversified with secured and unsecured loans to individuals and businesses. No specific industry concentration exceeds 10% of loans outstanding. While Bancorp has a diversified loan portfolio, a customer’s ability to honor contracts is somewhat dependent upon the economic stability and/or industry in which that customer does business. Loans outstanding and related unfunded commitments are primarily concentrated within Bancorp’s current market areas, which encompass the Louisville, Indianapolis and Cincinnati MSAs.

Bancorp occasionally enters into loan participation agreements with other banks in the ordinary course of business to diversify credit risk. For certain sold participation loans, Bancorp has retained effective control of the loans, typically by restricting the participating institutions from pledging or selling their share of the loan without permission from Bancorp. GAAP requires the participated portion of these loans to be recorded as secured borrowings. The participated portions of these loans are included in the C&I totals above with a corresponding liability reflected in other liabilities. At December 31, 2019 and 2018, the total participated portions of loans of this nature were $8 million and $11 million respectively.

Loans to directors and their related interests, including loans to companies for which directors are principal owners and executive officers are presented in the following table.

Years ended December 31, (in thousands)	2019			2018
Balance as of January 1	$	52,687		$	629
Effect of change in composition of directors and executive officers		—			51,415
Repayment of term loans		(184	)		—
Changes in balances of revolving lines of credit		(9,279	)		643
Balance as of December 31	$	43,224		$	52,687

Loans totaling $0 and $500,000 to directors and executive officers were past due as of December 31, 2019 and 2018.

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The following table summarizes loans acquired in Bancorp’s May 1, 2019 KSB acquisition, recast as of December 31, 2019.

	May 1, 2019
	Contractual		Non-accretable			Accretable			Acquisition-day
(in thousands)	receivable		amount			amount			fair value
Commercial and industrial	$	8,249	$	—		$	(23	)	$	8,226
Construction and development		10,764		—			43			10,807
Raw Land		7,974		—			43			8,017
Real estate mortgage:
Commercial real estate		84,219		—			(456	)		83,763
1-4 family residential		50,556		—			322			50,878
Home equity - first lien		196		—			3			199
Home equity - junior lien		679		—			5			684
Subtotal: Real estate mortgage		135,650		—			(126	)		135,524
Consumer		1,528		—			(73	)		1,455
Total loans ASC 310-20		164,165		—			(136	)		164,029
Commercial and industrial
Construction and development		—		—			—			—
Raw Land		—		—			—			—
Real estate mortgage:
Commercial real estate		1,351		(1,351	)		—			—
1-4 family residential		228		(228	)		—			—
Home equity - first lien		—		—			—			—
Home equity - junior lien		—		—			—			—
Subtotal: Real estate mortgage		1,579		(1,579	)		—			—
Consumer		—		—			—			—
Total loans ASC 310 purchased- credit-impaired loans		1,579		(1,579	)		—			—
Total loans	$	165,744	$	(1,579	)	$	(136	)	$	164,029

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PCI Loans

The Bank acquired PCI loans on May 1, 2019 related to the KSB acquisition and also during 2013 associated with the TBOC acquisition. PCI loans are accounted for under ASC 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality. As provided for under GAAP, management has up to 12 months following the date of acquisition to finalize the fair values of the acquired assets.

Management utilized the following criteria in determining which loans were classified as PCI loans for its KSB acquisition:

● Loans classified by management as substandard, doubtful or loss

● Loans classified as non-accrual when acquired

● Loans past due 90 days or more when acquired

● Loans for which management assigned a non-accretable mark

The following table presents loans acquired during 2019 for which it was probable at acquisition date that all contractually required payments would not be collected:

December 31, (in thousands)	2019
Contractually-required principal	$	1,579
Non-accretable amount		(1,579	)
Accretable amount		—
Carrying value of loans	$	-

The following table presents a rollforward of the accretable amount on all PCI loans:

Years ended December 31, (in thousands)	2019			2018
Balance, beginning of period	$	(69	)	$	(106	)
Transfers between non-accretable and accretable		—			—
Net accretion into interest income on loans, including loan fees		69			37
Balance, end of period	$	-		$	(69	)

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Credit Quality Indicators

Consistent with regulatory guidance, Bancorp categorizes loans into credit risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information and current economic trends. Pass-rated loans included all risk-rated loans other than those classified as OAEM, substandard, and doubtful, which are defined below:

● OAEM: Loans classified as OAEM have potential weaknesses requiring management's heightened attention. These potential weaknesses may result in deterioration of repayment prospects for the loan or of Bancorp's credit position at some future date.

● Substandard: Loans classified as substandard are inadequately protected by the paying capacity of the obligor or of collateral pledged, if any. Loans so classified have well-defined weaknesses that jeopardize ultimate repayment of the debt. Default is a distinct possibility if the deficiencies are not corrected.

● Substandard non-performing: Loans classified as substandard non-performing have all the characteristics of substandard loans and have been placed on non-accrual status or have been accounted for as TDRs. Loans are placed on non-accrual status when prospects for recovering both principal and accrued interest are considered doubtful or when a default of principal or interest has existed for 90 days or more.

● Doubtful: Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or repayment in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable.

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Internally assigned risk grades of loans by loan portfolio class classification category follows:

(in thousands)							Substandard				Total
December 31, 2019	Pass		OAEM		Substandard		Non-performing		Doubtful		Loans
Commercial and industrial	$	840,105	$	704	$	21,500	$	8,202	$	—	$	870,511
Construction and development, excluding undeveloped land		213,822		—		—		—		—		213,822
Undeveloped land		46,360		—		—		—		—		46,360
Real estate mortgage:
Commercial investment		722,747		6,459		6,275		1,137		—		736,618
Owner occupied commercial		460,981		1,375		9,050		2,377		—		473,783
1-4 family residential		332,294		1,701		122		241		—		334,358
Home equity - first lien		48,620		—		—		—		—		48,620
Home equity - junior lien		73,273		—		17		187		—		73,477
Subtotal: Real estate mortgage		1,637,915		9,535		15,464		3,942		—		1,666,856
Consumer		47,429		—		38		—		—		47,467
Total	$	2,785,631	$	10,239	$	37,002	$	12,144	$	—	$	2,845,016

(in thousands)							Substandard				Total
December 31, 2018	Pass		OAEM		Substandard		Non-performing		Doubtful		Loans
Commercial and industrial	$	803,073	$	11,516	$	18,703	$	232	$	—	$	833,524
Construction and development, excluding undeveloped land		220,532		4,200		—		318		—		225,050
Undeveloped land		29,618		—		—		474		—		30,092
Real estate mortgage:
Commercial investment		586,543		1,815		15		237		—		588,610
Owner occupied commercial		411,722		9,030		4,500		1,121		—		426,373
1-4 family residential		273,537		1,544		162		774		—		276,017
Home equity - first lien		49,500		—		—		—		—		49,500
Home equity - junior lien		70,437		249		19		242		—		70,947
Subtotal: Real estate mortgage		1,391,739		12,638		4,696		2,374		—		1,411,447
Consumer		48,058		—		—		—		—		48,058
Total	$	2,493,020	$	28,354	$	23,399	$	3,398	$	—	$	2,548,171

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The following tables present the activity in the allowance by loan portfolio class:

	Type of loan
				Construction
				and development,
	Commercial			excluding
	and			undeveloped			Undeveloped		Real estate
(in thousands)	industrial			land			land		mortgage			Consumer			Total
Balance, January 1, 2019	$	11,965		$	1,760		$	752	$	10,681		$	376		$	25,534
Provision (credit)		684			(644	)		34		1,021			(95	)		1,000
Charge-offs		(94	)		—			—		(38	)		(552	)		(684	)
Recoveries		267			203			—		100			371			941
Balance, December 31, 2019	$	12,822		$	1,319		$	786	$	11,764		$	100		$	26,791

	Type of loan
				Construction
				and development,
	Commercial			excluding
	and			undeveloped		Undeveloped		Real estate
(in thousands)	industrial			land		land		mortgage			Consumer			Total
Balance, January 1, 2018	$	11,276		$	1,724	$	521	$	11,012		$	352		$	24,885
Provision (credit)		2,539			36		231		(261	)		160			2,705
Charge-offs		(2,404	)		—		—		(132	)		(476	)		(3,012	)
Recoveries		554			—		—		62			340			956
Balance, December 31, 2018	$	11,965		$	1,760	$	752	$	10,681		$	376		$	25,534

	Type of loan
				Construction
				and development,
	Commercial			excluding
	and			undeveloped			Undeveloped			Real estate
(in thousands)	industrial			land			land			mortgage			Consumer			Total
Balance, January 1, 2017	$	10,483		$	1,923		$	684		$	10,573		$	344		$	24,007
Provision (credit)		2,373			(199	)		(163	)		383			156			2,550
Charge-offs		(1,782	)		—			—			(98	)		(549	)		(2,429	)
Recoveries		202			—			—			154			401			757
Balance, December 31, 2017	$	11,276		$	1,724		$	521		$	11,012		$	352		$	24,885

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The considerations by Bancorp in computing its allowance are determined based on the various risk characteristics of each loan segment. Relevant risk characteristics are as follows:

● C&I: Loans in this category are made to businesses. Generally these loans are secured by assets of the business and repayment is expected from cash flows of the business. A decline in the strength of the business or a weakened economy and decreased consumer and/or business spending may have an effect on the credit quality in this loan category.

● C&D, excluding undeveloped land: Loans in this category primarily include owner-occupied and investment C&D loans and commercial development projects. In most cases, C&D loans require only interest to be paid during the construction period. Upon completion or stabilization, C&D loans generally convert to permanent financing in the real estate mortgage segment, requiring principal amortization. Repayment of development loans is derived from sale of lots or units. Credit risk is affected by construction delays, cost overruns, market conditions and availability of permanent financing; to the extent such permanent financing is not being provided by Bancorp.

● Undeveloped land: Loans in this category are secured by land acquired for development by the borrower, but for which no development has yet taken place. Credit risk is primarily dependent upon the financial strength of the borrower, but can also be affected by market conditions and time to sell lots at an adequate price in the future. Credit risk is also affected by availability of permanent financing, including to the end user, to the extent such permanent financing is not being provided by Bancorp.

● Real estate mortgage: Loans in this category are made to and secured by owner-occupied residential real estate, owner-occupied real estate used for business purposes, and income-producing investment properties. Underlying properties are generally located in Bancorp's primary market areas. For owner occupied residential and owner-occupied CRE, repayment is dependent on financial strength of the borrower. A decline in the strength of the business, weakened economy, unemployment, decreased consumer and/or business spending and real estate prices may have an effect on the credit quality in this loan category. For income-producing investment properties, repayment is dependent on financial strength of tenants, and to a lesser extent the borrowers’ financial strength. Cash flows of income producing investment properties may be adversely impacted by a downturn in the economy as reflected by increased vacancy rates, which in turn, will have an effect on credit quality and property values.

● Consumer: Loans in this category may be either secured or unsecured and repayment is dependent on credit quality of the individual borrower and, if applicable, adequacy of collateral securing the loan. Therefore, the overall health of the economy, including unemployment rates, as well as home and securities prices, will have a significant effect on credit quality in this loan category.

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The following table presents the recorded investment in non-accrual and loans past due 90-days-or-more and still accruing interest:

					Past Due 90-Days-or-More
	Non-accrual				and Still Accruing Interest
(in thousands)	December 31, 2019		December 31, 2018		December 31, 2019		December 31, 2018
Commercial and industrial	$	8,202	$	192	$	—	$	12
Construction and development, excluding undeveloped land		—		318		—		—
Undeveloped land		—		474		—		—
Real estate mortgage:
Commercial investment		740		138		396		99
Owner occupied commercial		2,278		586		—		535
1-4 family residential		123		760		104		—
Home equity - first lien		—		—		—		—
Home equity - junior lien		151		143		35		99
Subtotal: Real estate mortgage		3,292		1,627		535		733
Consumer		—		—		—		—
Total loans	$	11,494	$	2,611	$	535	$	745

In the course of working with borrowers, Bancorp may elect to restructure the contractual terms of certain loans. TDRs occur when, for economic, legal, or other reasons related to a borrower’s financial difficulties, Bancorp grants a concession to the borrower that it would not otherwise consider. Bancorp did not recognize new TDRs, nor did any TDRs default, in years ended December 31, 2019 and 2018. Detail of outstanding TDRs included in total non-performing loans follows:

	December 31, 2019						December 31, 2018
			Specific		Additional				Specific		Additional
			reserve		commitment				reserve		commitment
(in thousands)	Balance		allocation		to lend		Balance		allocation		to lend
Commercial and industrial	$	21	$	21	$	—	$	28	$	28	$	—
1-4 family residential		13		13		—		14		14		—
Total TDRs	$	34	$	34	$	—	$	42	$	42	$	—

Impaired loans include non-accrual loans and loans past due 90 days-or-more accruing interest in addition to a nominal amount TDRs, which continue to accrue interest.

As of December 31, 2019 formal foreclosure proceedings were in process on 1-4 family residential mortgage loans with a total recorded investment of $239,000, as compared with $528,000 as of December 31, 2018.

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The following tables present the balance in the recorded investment in loans and by portfolio loan class and based on impairment evaluation method:

(in thousands)	Loans								Allowance
December 31, 2019	Loans individually evaluated for impairment		Loans collectively evaluated for impairment		Loans acquired with deteriorated credit quality		Total loans		Loans individually evaluated for impairment		Loans collectively evaluated for impairment		Loans acquired with deteriorated credit quality		Total allowance
Commercial and industrial	$	8,223	$	862,288	$	—	$	870,511	$	1,150	$	11,672	$	—	$	12,822
Construction and development, excluding undeveloped land		—		213,822		—		213,822		—		1,319		—		1,319
Undeveloped land		—		46,360		—		46,360		—		786		—		786
Real estate mortgage		3,307		1,663,549		—		1,666,856		13		11,751		—		11,764
Consumer		—		47,467		—		47,467		—		100		—		100
Total	$	11,530	$	2,833,486	$	—	$	2,845,016	$	1,163	$	25,628	$	—	$	26,791

(in thousands)	Loans								Allowance
December 31, 2018	Loans individually evaluated for impairment		Loans collectively evaluated for impairment		Loans acquired with deteriorated credit quality		Total loans		Loans individually evaluated for impairment		Loans collectively evaluated for impairment		Loans acquired with deteriorated credit quality		Total allowance
Commercial and industrial	$	220	$	833,304	$	—	$	833,524	$	28	$	11,937	$	—	$	11,965
Construction and development, excluding undeveloped land		318		224,732		—		225,050		—		1,760		—		1,760
Undeveloped land		474		29,618		—		30,092		—		752		—		752
Real estate mortgage		1,641		1,409,806		—		1,411,447		14		10,667		—		10,681
Consumer		—		48,058		—		48,058		—		376		—		376
Total	$	2,653	$	2,545,518	$	—	$	2,548,171	$	42	$	25,492	$	—	$	25,534

82

The following table’s present loans individually evaluated for impairment by loan portfolio class:

	As of						Twelve Months Ended
	December 31, 2019						December 31, 2019
			Unpaid				Average		Interest
	Recorded		principal		Related		recorded		income
(in thousands)	investment		balance		allowance		investment		recognized
Impaired loans with no related allowance:
Commercial and industrial	$	174	$	174	$	—	$	166	$	—
Construction and development, excluding undeveloped land		—		—		—		64		—
Undeveloped land		—		—		—		95		—
Real estate mortgage
Commercial investment		741		741		—		448		—
Owner occupied commercial		2,278		2,736		—		1,437		—
1-4 family residential		124		124		—		516		—
Home equity - first lien		—		—		—		—		—
Home equity - junior lien		151		151		—		293		—
Subtotal: Real estate mortgage		3,294		3,752		—		2,694		—
Consumer		—		—		—		—		—
Subtotal	$	3,468	$	3,926	$	—	$	3,019	$	—
Impaired loans with an allowance:
Commercial and industrial	$	8,049	$	8,049	$	1,150	$	1,631	$	—
Construction and development, excluding undeveloped land		—		—		—		—		—
Undeveloped land		—		—		—		—		—
Real estate mortgage
Commercial investment		—		—		—		—		—
Owner occupied commercial		—		—		—		—		—
1-4 family residential		13		13		13		13		—
Home equity - first lien		—		—		—		—		—
Home equity - junior lien		—		—		—		—		—
Subtotal: Real estate mortgage		13		13		13		13		—
Consumer		—		—		—		—		—
Subtotal	$	8,062	$	8,062	$	1,163	$	1,644	$	—
Total:
Commercial and industrial	$	8,223	$	8,223	$	1,150	$	1,797	$	—
Construction and development, excluding undeveloped land		—		—		—		64		—
Undeveloped land		—		—		—		95		—
Real estate mortgage
Commercial investment		741		741		—		448		—
Owner occupied commercial		2,278		2,736		—		1,437		—
1-4 family residential		137		137		13		529		—
Home equity - first lien		—		—		—		—		—
Home equity - junior lien		151		151		—		293		—
Subtotal: Real estate mortgage		3,307		3,765		13		2,707		—
Consumer		—		—		—		—		—
Total impaired loans	$	11,530	$	11,988	$	1,163	$	4,663	$	—

83

	As of						Twelve Months Ended
	December 31, 2018						December 31, 2018
			Unpaid				Average		Interest
	Recorded		principal		Related		recorded		income
(in thousands)	investment		balance		allowance		investment		recognized
Impaired loans with no related allowance:
Commercial and industrial	$	192	$	707	$	—	$	161	$	—
Construction and development, excluding undeveloped land		318		489		—		437		—
Undeveloped land		474		506		—		474		—
Real estate mortgage
Commercial investment		138		138		—		35		—
Owner occupied commercial		586		1,023		—		1,503		—
1-4 family residential		760		760		—		1,242		—
Home equity - first lien		—		—		—		—		—
Home equity - junior lien		143		143		—		73		—
Subtotal: Real estate mortgage		1,627		2,064		—		2,853		—
Consumer		—		—		—		23		—
Subtotal	$	2,611	$	3,766	$	—	$	3,948	$	—
Impaired loans with an allowance:
Commercial and industrial	$	28	$	28	$	28	$	1,851	$	2
Construction and development, excluding undeveloped land		—		—		—		—		—
Undeveloped land		—		—		—		24		—
Real estate mortgage
Commercial investment		—		—		—		—		—
Owner occupied commercial		—		—		—		897		—
1-4 family residential		14		14		14		14		1
Home equity - first lien		—		—		—		—		—
Home equity - junior lien		—		—		—		—		—
Subtotal: Real estate mortgage		14		14		14		911		1
Consumer		—		—		—		—		—
Subtotal	$	42	$	42	$	42	$	2,786	$	3
Total:
Commercial and industrial	$	220	$	735	$	28	$	2,012	$	2
Construction and development, excluding undeveloped land		318		489		—		437		—
Undeveloped land		474		506		—		498		—
Real estate mortgage
Commercial investment		138		138		—		35		—
Owner occupied commercial		586		1,023		—		2,400		—
1-4 family residential		774		774		14		1,256		1
Home equity - first lien		—		—		—		—		—
Home equity - junior lien		143		143		—		73		—
Subtotal: Real estate mortgage		1,641		2,078		14		3,764		1
Consumer		—		—		—		23		—
Total impaired loans	$	2,653	$	3,808	$	42	$	6,734	$	3

84

	As of						Twelve Months Ended
	December 31, 2017						December 31, 2017
			Unpaid				Average		Interest
	Recorded		principal		Related		recorded		income
(in thousands)	investment		balance		allowance		investment		recognized
Impaired loans with no related allowance:
Commercial and industrial	$	1,142	$	2,202	$	—	$	411	$	—
Construction and development, excluding undeveloped land		664		834		—		559		—
Undeveloped land		474		506		—		425		—
Real estate mortgage
Commercial investment		52		53		—		110		—
Owner occupied commercial		3,332		3,789		—		1,678		—
1-4 family residential		1,637		1,657		—		935		—
Home equity - first lien		—		—		—		—		—
Home equity - junior lien		31		31		—		186		—
Subtotal: Real estate mortgage		5,052		5,530		—		2,909		—
Consumer		—		—		—		—		—
Subtotal	$	7,332	$	9,072	$	—	$	4,304	$	—
Impaired loans with an allowance:
Commercial and industrial	$	34	$	34	$	34	$	1,882	$	78
Construction and development, excluding undeveloped land		—		—		—		—		—
Undeveloped land		—		—		—		48		—
Real estate mortgage
Commercial investment		—		—		—		—		—
Owner occupied commercial		—		—		—		—		—
1-4 family residential		14		14		14		5		—
Home equity - first lien		—		—		—		—		—
Home equity - junior lien		—		—		—		—		—
Subtotal: Real estate mortgage		14		14		14		5		—
Consumer		—		—		—		46		—
Subtotal	$	48	$	48	$	48	$	1,981	$	78
Total:
Commercial and industrial	$	1,176	$	2,236	$	34	$	2,293	$	78
Construction and development, excluding undeveloped land		664		834		—		559		—
Undeveloped land		474		506		—		473		—
Real estate mortgage
Commercial investment		52		53		—		110		—
Owner occupied commercial		3,332		3,789		—		1,678		—
1-4 family residential		1,651		1,671		14		940		—
Home equity - first lien		—		—		—		—		—
Home equity - junior lien		31		31		—		186		—
Subtotal: Real estate mortgage		5,066		5,544		14		2,914		—
Consumer		—		—		—		46		—
Total impaired loans	$	7,380	$	9,120	$	48	$	6,285	$	78

Differences between recorded investment amounts and unpaid principal balance amounts less related allowance are due to partial charge-offs which have occurred over the lives of certain loans.

85

Interest paid on impaired or non-accrual loans that was used to reduce principal was $552,000, $93,000 and $338,000 in 2019, 2018 and 2017. Interest income that would have been recorded if non-accrual loans were on a current basis in accordance with their original terms was $491,000, $391,000 and $159,000 in 2019, 2018 and 2017. No interest income was recognized on a cash basis in 2019, 2018, or 2017.

The following table presents the aging of the recorded investment in loans by portfolio class:

							90 or More
							Days Past Due
(in thousands)			30-59 Days		60-89 days		(includes all		Total		Total
December 31, 2019	Current		Past Due		Past Due		non-accrual)		Past Due		Loans
Commercial and industrial	$	861,860	$	253	$	194	$	8,204	$	8,651	$	870,511
Construction and development, excluding undeveloped land		213,766		6		50		—		56		213,822
Undeveloped land		46,360		—		—		—		—		46,360
Real estate mortgage:
Commercial investment		735,387		94		—		1,137		1,231		736,618
Owner occupied commercial		470,951		467		86		2,279		2,832		473,783
1-4 family residential		332,718		1,368		33		239		1,640		334,358
Home equity - first lien		48,441		179		—		—		179		48,620
Home equity - junior lien		72,995		196		100		186		482		73,477
Subtotal: Real estate mortgage		1,660,492		2,304		219		3,841		6,364		1,666,856
Consumer		47,379		84		4		—		88		47,467
Total	$	2,829,857	$	2,647	$	467	$	12,045	$	15,159	$	2,845,016

							90 or More
							Days Past Due
(in thousands)			30-59 Days		60-89 days		(includes all		Total		Total
December 31, 2018	Current		Past Due		Past Due		non-accrual)		Past Due		Loans
Commercial and industrial	$	832,923	$	197	$	200	$	204	$	601	$	833,524
Construction and development, excluding undeveloped land		224,732		—		—		318		318		225,050
Undeveloped land		29,552		66		—		474		540		30,092
Real estate mortgage:
Commercial investment		586,884		1,382		107		237		1,726		588,610
Owner occupied commercial		421,143		2,732		1,377		1,121		5,230		426,373
1-4 family residential		274,547		374		336		760		1,470		276,017
Home equity - first lien		49,321		179		—		—		179		49,500
Home equity - junior lien		70,467		182		56		242		480		70,947
Subtotal: Real estate mortgage		1,402,362		4,849		1,876		2,360		9,085		1,411,447
Consumer		48,058		—		—		—		—		48,058
Total	$	2,537,627	$	5,112	$	2,076	$	3,356	$	10,544	$	2,548,171

86

(6) Premises and Equipment

A summary of premises and equipment follows:

December 31, (in thousands)	2019			2018
Land	$	10,241		$	9,664
Buildings and improvements		50,809			47,726
Furniture and equipment		22,032			21,793
Construction in progress		623			1,051
Right-of-use operating lease asset		12,737			-
		96,442			80,234
Accumulated depreciation and amortization		(37,824	)		(35,470	)
Total premises and equipment	$	58,618		$	44,764

Depreciation expense related to premises and equipment was $4.2 million in 2019, $3.7 million in 2018 and $3.5 million in 2017.

Bancorp acquired five banking centers in its May 1, 2019 KSB acquisition. Based upon the proximity to existing branch locations, Bancorp closed and ultimately sold three of these locations in 2019, while retaining the associated customer relationships. Goodwill was recast based upon these sales.

The right-of-use lease asset and operating lease liability were recorded in premises and equipment and other liabilities on the consolidated balance sheet upon the adoption of ASU 2016-02, Leases in the first quarter of 2019.

Bancorp has operating leases for various branch locations with terms remaining from three months to 14 years, some of which include options to extend the leases in five year increments. Options reasonably expected to be exercised are included in determination of the right of use asset. Bancorp elected the practical expedient to expense short-term lease expense associated with leases with original terms 12 months or less. Bancorp elected not to separate non-lease components from lease components for its operating leases.

87

Balance sheet, income statement, and cash flow detail regarding operating leases follows:

(dollars in thousands)	December 31, 2019
Balance Sheet
Operating lease right-of-use asset	$	12,737
Operating lease liability		14,369
Weighted average remaining lease term		9.38
Weighted average discount rate		2.46	%
Maturities of lease liabilities:
One year or less	$	1,964
Year 2		1,915
Year 3		1,930
Year 4		1,972
Year 5		1,781
Greater than 5 years		6,619
Total lease payments	$	16,181
Less imputed interest		1,812
Total	$	14,369

	Year Ended
(In thousands)	December 31, 2019
Income Statement
Components of lease expense:
Operating lease cost	$	1,870
Variable lease cost		152
Less sublease income		54
Total lease cost	$	1,968
(In thousands)
Cash flow Statement
Supplemental cash flow information:
Operating cash flows from operating leases	$	1,656

As of December 31, 2019 Bancorp had not entered into any lease agreements that had yet to commence.

88

(7) Goodwill and Core Deposit Intangibles

Goodwill, recorded on the acquisition date of an entity, represents $11.8 million related to the May 1, 2019 KSB acquisition and $682,000 related to the 1996 purchase of a bank in southern Indiana. As provided for under GAAP, management has up to 12 months following the date of acquisition to finalize the fair values of the acquired assets and assumed liabilities. During this measurement period, Bancorp may record subsequent recast adjustments to goodwill for provisional amounts recorded at the acquisition date.

GAAP requires that goodwill and intangible assets with indefinite useful lives not be amortized, but instead be tested for impairment at least annually. Impairment exists when a reporting unit’s carrying value of goodwill exceeds its fair value. Bancorp’s annual goodwill impairment test is conducted as of September 30^th of each year or more often as situations dictate. The goodwill balance at December 31, 2019 and 2018 relates entirely to the Commercial Banking segment of Bancorp. At December 31, 2019, Bancorp’s Commercial Banking reporting unit had positive equity and Bancorp elected to perform a qualitative assessment to determine if it was more-likely-than-not that the fair value of the reporting unit exceeded its carrying value, including goodwill. The qualitative assessment indicated that it was not more-likely-than-not that the carrying value of the reporting unit exceeded its fair value. Therefore, Bancorp did not complete the two-step impairment test as of December 31, 2019.

Changes in the carrying value of goodwill follows:

December 31, (in thousands)	2019			2018
Balance at beginning of period	$	682		$	682
Goodwill acquired		12,144			—
Recast adjustments		(313	)		—
Impairment		—			—
Balance at end of period	$	12,513		$	682

Bancorp recorded CDI assets of $1.5 million and $2.5 million in association with its May 1, 2019 KSB and 2013 TBOC acquisitions. See the Footnote titled “Acquisition of KSB” for additional detail.

Changes in the net carrying amount of CDI assets follow:

Years ended December 31, (in thousands)	2019			2018			2017
Balance, beginning of period	$	1,057		$	1,225		$	1,405
Additions		1,519			—			—
Amortized to expense		(291	)		(168	)		(180	)
Balance, end of period	$	2,285		$	1,057		$	1,225

Future CDI amortization expense is estimated as follows:

(in thousands)
2020	$	323
2021		302
2022		295
2023		259
2024		241
Beyond 2024		865
Total future payments	$	2,285

89

(8) Other Assets

A summary of major components of other assets follows:

December 31, (in thousands)	2019		2018
Cash surrender value of life insurance other than BOLI	$	16,145	$	15,029
Net deferred tax asset		14,466		10,193
Investments in tax credit related ventures		6,248		4,537
Prepaid assets		2,812		3,072
Trust fee receivable		2,171		1,939
Mortgage servicing rights		1,372		1,022
Other real estate owned		493		1,018
Other		7,232		8,362
Total other assets	$	50,939	$	45,172

Bancorp maintains life insurance policies other than BOLI in conjunction with its non-qualified defined benefit retirement and non-qualified compensation plans.

MSRs, a component of other assets, are initially recognized at fair value when mortgage loans are sold with servicing retained. The MSRs are amortized in proportion to and over the period of estimated net servicing income, considering appropriate prepayment assumptions. MSRs are evaluated quarterly for impairment by comparing carrying value to fair value. Estimated fair values of MSRs at December 31, 2019 and December 31, 2018 were $3 million and $4 million. Total outstanding principal balances of loans serviced by Bancorp were $327 million and $328 million at December 31, 2019 and December 31, 2018.

Changes in the net carrying amount of MSRs are shown in the following table.

Years ended December 31, (in thousands)	2019			2018			2017
Balance, beginning of period	$	1,022		$	875		$	921
Additions		506			302			225
Amortized to expense		(156	)		(155	)		(271	)
Balance, end of period	$	1,372		$	1,022		$	875

90

(9) Income Taxes

Components of income tax expense (benefit) from operations were as follows:

Years Ended December 31, (in thousands)	2019			2018			2017
Current income tax expense:
Federal	$	14,673		$	11,567		$	12,622
State		772			732			546
Total current income tax expense		15,445			12,299			13,168
Deferred income tax expense (benefit) :
Federal		(746	)		(52	)		3,783
State		(2,872	)		(289	)		(4	)
Total deferred income tax expense (benefit)		(3,618	)		(341	)		3,779
Change in valuation allowance		(2,234	)		73			192
Total income tax expense	$	9,593		$	12,031		$	17,139

Components of income tax (benefit) expense recorded directly to stockholders’ equity were as follows:

Years Ended December 31, (in thousands)	2019			2018			2017
Unrealized (loss) gain on securities available for sale	$	1,757		$	(812	)	$	(531	)
Reclassification adjustment for securities losses realized in income		—			—			81
Unrealized gain on derivatives		(120	)		46			112
Minimum pension liability adjustment		(58	)		46			(9	)
Total income tax (benefit) expense recorded directly to stockholders' equity	$	1,579		$	(720	)	$	(347	)

An analysis of the difference between statutory and ETRs from operations follows:

Years Ended December 31,	2019			2018			2017
U.S. federal statutory income tax rate		21.0	%		21.0	%		35.0	%
Kentucky state income tax enactments		(5.2	)		—			—
Net deferred tax asset remeasurement		—			(0.5	)		10.8
Excess tax benefits from stock-based compensation arrangements		(1.0	)		(0.8	)		(2.6	)
Increase in cash surrender value of life insurance		(0.9	)		(0.4	)		(1.5	)
Tax credits		(1.9	)		(1.8	)		(14.4	)
Tax exempt interest income		(0.3	)		(0.4	)		(1.2	)
Amortization/impairment of investments in tax credit partnerships		0.3			0.4			3.4
State income taxes, net of federal benefit		0.7			0.8			0.7
Other, net		—			(0.5	)		0.9
Effective tax rate		12.7	%		17.8	%		31.1	%

91

Currently, state income tax expense represents tax owed to the state of Indiana. Kentucky and Ohio state bank taxes are currently based on capital levels, and are recorded as other non-interest expense.

In March 2019, the Kentucky Legislature passed HB354 requiring financial institutions to transition from a capital based franchise tax to the Kentucky corporate income tax beginning in 2021. Historically, the franchise tax, a component of non-interest expenses, was assessed at 1.1% of net capital and averaged $2.5 million annually over the prior two year-end periods. The Kentucky corporate income tax will be assessed at 5% of Kentucky taxable income and will be included as a component of current and deferred state income tax expense. Associated with this change, predominantly during the first quarter of 2019, Bancorp established a Kentucky state DTA related to existing temporary differences estimated to reverse after the effective date of the law change. Bancorp recorded a corresponding state tax benefit, net of federal tax impact of $1.2 million, or approximately $0.06 per diluted share for 2019. While this is positive in the short-term, Bancorp anticipates an unfavorable impact of approximately $200,000 per year beginning in 2021.

In April 2019, the Kentucky Legislature passed HB458 allowing entities filing a combined Kentucky income return to share certain tax attributes, including net operating loss carryforwards. The combined filing beginning in 2021 will allow Bancorp’s Holding Company net operating loss carryforwards to offset against net revenue generated by the Bank up to 50% of the Bank’s Kentucky taxable income and reduce Bancorp’s tax liability. Bancorp recorded a state tax benefit, net of federal tax impact of $2.7 million, predominantly in the second quarter of 2019, or approximately $0.12 per diluted share for 2019. The losses are expected to be utilized when Bancorp begins filing a combined Kentucky income tax return. A valuation allowance is maintained for the loss that will expire in 2020.

The TCJA was enacted on December 22, 2017 and reduced the federal corporate tax rate from 35% to 21%, effective January 1, 2018. Bancorp incurred a charge of $5.9 million to income tax expense during 2017 representing the decrease in value of its net DTA upon enactment of the TCJA.

In December 2017, the SEC released SAB 118 to address any uncertainty or diversity of views in practice in accounting for the income tax effects of tax reform in situations where a registrant does not have the necessary information available, prepared or analyzed in reasonable detail to complete this accounting in the reporting period that includes the enactment date. SAB 118 allowed a measurement period not to extend beyond one year from the tax reform’s enactment date to complete the necessary accounting.

92

The effects of temporary differences that gave rise to significant portions of DTAs and DTLs follows:

December 31, (in thousands)	2019			2018
Deferred tax assets
Allowance for loan loss	$	6,633		$	5,567
Deferred compensation		5,758			4,703
Operating lease liability		3,427			—
State net operating loss		2,550			2,201
Accrued expenses		1,486			968
Securities		—			756
Investments in tax credit partnerships		655			543
Loans		501			434
Other assets		228			181
Write-downs and costs associated with other real estate owned		22			7
Total deferred tax assets		21,260			15,360
Deferred tax liabilities
Property and equipment		1,054			1,154
Right-of-use operating lease asset		3,154			—
Securities		748			—
Loan costs		767			632
Mortgage servicing rights		299			193
Leases		266			336
Core deposit intangible		202			230
Other liabilities		183			267
Total deferred tax liabilities		6,673			2,812
Valuation allowance		(121	)		(2,355	)
Net deferred tax asset	$	14,466		$	10,193

A valuation allowance is recognized for a DTA if, based on the weight of available evidence, it is more likely than not that some portion of the entire DTA will not be realized. Ultimate realization of DTAs is dependent upon generation of future taxable income during periods in which those temporary differences become deductible. Management considers scheduled reversal of DTLs, projected future taxable income and tax planning strategies in making this assessment. Based upon the level of historical taxable income and projection for future taxable income over periods which the temporary differences resulting in remaining DTAs are deductible, management believes it is more likely than not that Bancorp will realize the benefits of these deductible differences, net of the valuation allowance, at December 31, 2019.

Realization of DTAs associated with investment in tax credit partnerships is dependent upon generating sufficient taxable capital gain income prior to their expiration and net operating losses that will not be utilized prior to their expiration. A valuation allowance of $121,000 and $2.4 million reflects management’s estimate of the temporary deductible differences that may expire prior to their utilization and has been recorded as of December 31, 2019 and 2018. The losses are expected to be utilized when Bancorp begins filing a combined Kentucky income tax return with the Bank. A valuation allowance is maintained for the loss that will expire in 2020. The loss carryforward is $64.7 million and expires over varying periods through 2039.

Kentucky DTAs amounts and the related valuation allowance for Bancorp’s net operating losses were previously reported as net due to a full valuation allowance and immaterial amounts. The 2018 amounts reported herein have been revised to report the items gross.

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 December 31, 2019 and 2018, the gross amount of unrecognized tax benefits was immaterial to Bancorp’s consolidated financial statements. Federal and state income tax returns are subject to examination for the years after 2015.

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(10) Deposits

The composition of the Bank’s deposits follows:

December 31, (in thousands)	2019		2018
Non-interest bearing demand deposits	$	810,475	$	711,023
Interest bearing deposits:
Interest bearing demand		979,595		892,867
Savings		169,622		155,007
Money market		742,029		688,744
Time deposits of $250,000 or more		81,412		55,182
Other time deposits		350,805		291,533
Total time deposits(1)		432,217		346,715
Total interest bearing deposits		2,323,463		2,083,333
Total deposits	$	3,133,938	$	2,794,356

(1) Includes $30 million in brokered deposits as of December 31, 2019 and 2018.

Deposits totaling $126 million were acquired on May 1, 2019, associated with the KSB acquisition.

Interest expense related to certificates of deposit and other time deposits in denominations of $250,000 or more was $1.3 million, $431,000 and $161,000, for the years ended December 31, 2019, 2018 and 2017.

At December 31, 2019, the scheduled maturities of all time deposits were as follows:

(in thousands)
2020	$	273,568
2021		129,676
2022		11,729
2023		10,049
2024		7,094
2025 and thereafter		101
Total time deposits	$	432,217

Deposits of directors and their associates, including deposits of companies for which directors are principal owners, and executive officers were $81 million and $42 million at December 31, 2019 and 2018, respectively.

At December 31, 2019 and 2018, Bancorp had $692,000 and $886,000 of deposits accounts in overdraft status and thus have been reclassified to loans on the accompanying consolidated balance sheets.

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(11) Securities Sold Under Agreements to Repurchase

SSUAR are a funding source of Bancorp and are primarily used by commercial customers in conjunction with collateralized corporate cash management accounts. Such repurchase agreements are considered financing agreements and mature within one business day from the transaction date. At December 31, 2019, all of these financing arrangements had overnight maturities and were secured by government sponsored enterprise obligations and government agency mortgage-backed securities which were owned and controlled by Bancorp.

Information regarding SSUAR follows:

December 31, (Dollars in thousands)	2019			2018
Outstanding balance at end of period	$	31,895		$	36,094
Weighted average interest rate at end of period		0.22	%		0.27	%

Years Ended December 31, (dollars in thousands)	2019			2018			2017
Average outstanding balance during the period	$	38,555		$	62,580		$	70,187
Average interest rate during the period		0.26	%		0.25	%		0.19	%
Maximum outstanding at any month end during the period	$	52,599		$	74,725		$	75,365

(12) FHLB Advances

Bancorp had outstanding 57 separate advances totaling $80 million as of December 31, 2019, as compared with 14 separate advances totaling $48 million as of December 31, 2018. As a result of the KSB acquisition, Bancorp assumed 46 advances totaling $43 million, with maturities ranging from 2019 to 2028. These advances were discounted to fair value as of the acquisition date. See the Note titled “Acquisition of KSB” in this section of the filing for additional detail. As of December 31, 2019, for 15 advances totaling $50 million, all of which are non-callable, interest payments are due monthly, with principal due at maturity. For the remaining advances, principal and interest payments are due monthly based on an amortization schedule.

The following is a summary of the contractual maturities and average effective rates of outstanding advances:

(dollars in thousands)	December 31, 2019					December 31, 2018
Maturity			Weighted average					Weighted average
Year	Advance		Fixed Rate			Advance		Fixed Rate
2020	$	50,004		1.99		$	1,691		2.23
2021		2,400		2.52			215		2.12
2023		456		1.00			—		—
2024		2,023		2.36			2,240		2.36
2025		3,774		2.41			4,626		2.42
2026		8,156		1.96			8,185		1.99
2027		7,445		1.73			—		—
2028		5,695		2.32			1,220		1.49
Total	$	79,953		2.02	%	$	18,177		2.14	%

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Payments based on amortization schedules over the next five years are as follows:

(dollars in thousands)
Year
2020	$	55,680
2021		6,004
2022		3,193
2023		2,655
2024		3,122
2025 and beyond		9,299

FHLB advances are collateralized by certain CRE and residential real estate mortgage loans under a blanket mortgage collateral pledge agreement and FHLB stock. Bancorp views these advances to be an effective alternative to brokered deposits to fund loan growth. At December 31, 2019, and 2018, the amount of available credit from the FHLB totaled $599 million and $537 million. Bancorp also had $105 million in FFP lines available from correspondent banks at both December 31, 2019 and 2018.

(13) Other Comprehensive Income (Loss)

The following table illustrates activity within the balances in AOCI by component, and is shown for the years ended December 31, 2019, 2018, and 2017.

	Net unrealized			Net unrealized			Minimum
	gains (losses)			gains (losses)			pension
	on securities			on cash			liability
(in thousands)	available for sale			flow hedges			adjustment			Total
Balance, January 1, 2017	$	(1,211	)	$	(16	)	$	(272	)	$	(1,499	)
Net current period other comprehensive income (loss)		(721	)		209			(70	)		(582	)
Amounts reclassifed from AOCI		151			—			—			151
Balance, December 31, 2017 (1)	$	(1,781	)	$	193		$	(342	)	$	(1,930	)
Balance, January 1, 2018	$	(1,781	)	$	193		$	(342	)	$	(1,930	)
Net current period other comprehensive income (loss)		(3,053	)		174			173			(2,706	)
Reclassification adjustment for adoption of ASU 2018-02		(496	)		41			(51	)		(506	)
Balance, December 31, 2018	$	(5,330	)	$	408		$	(220	)	$	(5,142	)
Balance, January 1, 2019	$	(5,330	)	$	408		$	(220	)	$	(5,142	)
Net current period other comprehensive income (loss)		6,415			(445	)		(151	)		5,819
Balance, December 31, 2019	$	1,085		$	(37	)	$	(371	)	$	677

(1) December 31, 2017 AOCI component balances reflect a correction of incorrectly reported year-end balances in the Footnote titled “Other Comprehensive Income (Loss)” of the 2017 Form 10-K, which were presented as $(2,278), $234, and $(392) for securities AFS, cash flow hedges, and minimum pension liability, respectively.

The above table includes $506,000 reclassification from AOCI to retained earnings related to the adoption of ASU 2018-02 in the first quarter of 2018. ASU 2018-02 provided for the reclassification of tax effects stranded in OCI as a result of the 2017 TCJA into retained earnings. The TCJA reduced the US Federal statutory corporate income tax rate from 35% to 21% effective January 1, 2018. As a result, Bancorp was required to re-measure its net DTAs at the lower rate and recognize the adjustment through income tax expense in 2017. The adjustment through income tax expense left items presented in AOCI, for which the related income tax effects were originally recognized in OCI, unadjusted for the new tax rate.

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The following table illustrates activity within the reclassifications out of AOCI:

Details of accumulated								Affected line item in
other comprehensive	Amount reclassified from accumulated							the consolidated
income (loss) components	other comprehensive income (loss)							statements of income
(in thousands)
For the years ended December 31,	2019		2018		2017
Unrealized gains (losses) on securities available for sale:
Realized loss on sale of securities available for sale	$	—	$	—	$	(232	)	Loss on sale of securities
Effect of income taxes		—		—		81		Income tax expense
Reclassification, net of income taxes	$	—	$	—	$	(151	)

(14) Preferred Stock and Common Stock

Bancorp has a class of preferred stock (no par value; 1,000,000 shares authorized); the relative rights, preferences and other terms of the class or any series within the class will be determined by the Board of Directors prior to any issuance. None of this stock has been issued to date.

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(15) Net Income per Share

The following table reflects net income (numerator) and average shares outstanding (denominator) for basic and diluted net income per share computations:

Years Ended December 31, (in thousands, except per share data)	2019		2018		2017
Net income	$	66,067	$	55,517	$	38,043
Weighted average shares outstanding - basic		22,598		22,619		22,532
Dilutive securities		267		325		451
Weighted average shares outstanding - diluted		22,865		22,944		22,983
Net income per share - basic	$	2.92	$	2.45	$	1.69
Net income per share - diluted	$	2.89	$	2.42	$	1.66

Certain SARs that were excluded from the EPS calculation because their impact was antidilutive follows:

Years Ended December 31, (in thousands)	2019		2018
Antidilutive SARs		199		146

(16) Employee Benefit Plans

Bancorp has a combined employee stock ownership and profit sharing plan. The plan is a defined contribution plan and is available to all employees meeting certain eligibility requirements. In general, for employees who work more than 1,000 hours per year, Bancorp matches employee contributions up to 6% of the employee’s salary, and contributes an amount of Bancorp stock equal to 2% of the employee’s salary. Employer matching expenses related to contributions to the plan for 2019, 2018, and 2017 were $2.6 million, $2.2 million and $2.0 million and are recorded on the consolidated statements of income within employee benefits. Employee and employer contributions are made in accordance with the terms of the plan. As of December 31, 2019 and 2018, the KSOP held 508,000 and 568,000 shares of Bancorp stock, respectively.

In addition Bancorp has non-qualified plans into which directors and certain senior officers may defer director fees or salary/incentives. Bancorp matched certain executives’ deferrals into the senior officers’ plan amounting to approximately $241,000, $250,000 and $232,000 in 2019, 2018 and 2017. At December 31, 2019 and 2018, the amounts included in other liabilities in the consolidated financial statements for this plan were $10.1 million and $8.6 million. The total was comprised primarily of participants’ contributions, and represented the fair value of mutual fund investments directed by plan participants.

Bancorp sponsors an unfunded, non-qualified, defined benefit retirement plan for three key officers (one current and two retired), and has no plans to increase the number of or the benefits to participants. All participants are fully vested and based on 25 years of service. Bancorp uses a December 31 measurement date for this plan. The accumulated benefit obligation for the plan included in other liabilities in the consolidated financial statements was $2.3 million and $2.1 million as of December 31, 2019 and December 31, 2018. Actuarially determined pension costs are expensed and accrued over the service period and benefits are paid from Bancorp’s assets. Bancorp maintains life insurance policies, for which it is the beneficiary, for defined benefit plan participants and certain former executives. Income from these policies serves to offset costs of benefits. The liability for Bancorp’s plan met the benefit obligation as of December 31, 2019 and 2018. Net periodic benefit cost was immaterial for all periods.

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Benefits expected to be paid in each year from 2020 to 2024 and beyond are listed in the table below.

(in thousands)
2020	$	84
2021		—
2022		—
2023		—
2024		137
Beyond 2024		3,141
Total future payments	$	3,362

Expected benefits to be paid are based on the same assumptions used to measure Bancorp’s benefit obligation at December 31, 2019. There are no obligations for other post-retirement and post-employment benefits.

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(17) Stock-Based Compensation

The fair value of all stock-based awards granted, net of estimated forfeitures, is recognized as compensation expense over the respective service period.

At Bancorp's 2015 Annual Meeting of Shareholders, shareholders approved the 2015 Omnibus Equity Compensation Plan and authorized the shares available from the expiring 2005 plan for future awards under the 2015 plan. In 2018 shareholders approved an additional 500,000 shares for issuance under the plan. As of December 31, 2019, there were 547,000 shares available for future awards. The 2005 Stock Incentive Plan expired in April 2015 and SARs granted under this plan expire as late as 2025. The 2015 Stock Incentive Plan has no defined expiration date.

Stock Options – Bancorp had no stock options outstanding as of December 31, 2019 and 2018.

SAR Grants – SARs granted have a vesting schedule of 20% per year and expire ten years after the grant date unless forfeited due to employment termination.

Fair values of SARs are estimated at the date of grant using the Black-Scholes option pricing model, a leading formula for calculating such value. The model requires the input of assumptions, changes to which can materially affect the fair value estimate. The following assumptions were used in SAR valuations at the grant date in each year:

	2019			2018			2017
Dividend yield		2.54	%		2.56	%		2.72	%
Expected volatility		20.39	%		20.17	%		19.47	%
Risk free interest rate		2.52	%		2.96	%		2.29	%
Expected life of SARs (years)	7.2			7.0			7.0

Dividend yield and expected volatility are based on historical information for Bancorp corresponding to the expected life of SARs granted. Expected volatility is the volatility of underlying shares for the expected term calculated on a monthly basis. The risk free interest rate is the implied yield currently available on U.S. Treasury issues with a remaining term equal to the expected life of the awards. The expected life of SARs is based on actual experience of past like-term SARs. Bancorp evaluates historical exercise and post-vesting termination behavior when determining the expected life.

RSA Grants – RSAs granted to officers vest over five years. For all grants prior to 2015, grantees are entitled to dividend payments during the vesting period. For grants in 2015 and forward, forfeitable dividends are deferred until shares are vested. Fair value of RSAs is equal to the market value of the shares on the date of grant.

PSU Grants – PSUs vest based upon service and a three-year performance period, which begins January 1 of the first year of the performance period. Because grantees are not entitled to dividend payments during the performance period, the fair value of these PSUs is estimated based upon the market value of the underlying shares on the date of grant, adjusted for non-payment of dividends. Grants require a one year post-vesting holding period and the fair value of such grants incorporates a liquidity discount related to the holding period of 4.1%, 4.3% and 5.1% for 2019, 2018, and 2017.

RSU Grants – RSUs are only granted to non-employee directors, are time-based and vest 12 months after grant date. Because grantees are entitled to deferred dividend payments at the end of the vesting period, fair value of the RSUs equals market value of underlying shares on the date of grant.

In the first quarters of 2019 and 2018, Bancorp awarded 9,834 and 6,525 RSUs to non-employee directors of Bancorp with a grant date fair value of $330,000 and $247,000.

Bancorp utilized cash of $272,000 and $154,000 during 2019 and 2018 for the purchase of shares upon the vesting of RSUs.

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Bancorp has recognized stock-based compensation expense for SARs, RSAs, and PSUs within compensation expense, and RSUs for directors within other non-interest expense, as follows:

	Year Ended December 31, 2019
(in thousands)	Stock Appreciation Rights			Restricted Stock Awards			Restricted Stock Units			Performance Stock Units			Total
Expense	$	345		$	1,185		$	329		$	1,719		$	3,578
Deferred tax benefit		(72	)		(249	)		(69	)		(361	)		(751	)
Total net expense	$	273		$	936		$	260		$	1,358		$	2,827

	Year Ended December 31, 2018
(in thousands)	Stock Appreciation Rights			Restricted Stock Awards			Restricted Stock Units			Performance Stock Units			Total
Expense	$	379		$	1,100		$	248		$	2,300		$	4,027
Deferred tax benefit		(80	)		(231	)		(52	)		(483	)		(846	)
Total net expense	$	299		$	869		$	196		$	1,817		$	3,181

	Year Ended December 31, 2017
(in thousands)	Stock Appreciation Rights			Restricted Stock Awards			Restricted Stock Units			Performance Stock Units			Total
Expense	$	280		$	1,032		$	219		$	1,361		$	2,892
Deferred tax benefit		(59	)		(216	)		(46	)		(286	)		(607	)
Total net expense	$	221		$	816		$	173		$	1,075		$	2,285

Beginning in 2017 Bancorp’s adopted ASU 2016-09 which changed the way excess tax benefits and deficiencies related to stock-based compensation were recorded. Prior to 2017, these were recorded directly to APIC and, thus did not affect earnings. Beginning in 2017, these were recorded as a tax expense/benefit on the income statement. These benefits resulted in $812,000, $549,000 and $1.5 million increases in net income for 2019, 2018 and 2017. This tax benefit is not reflected in the above tables.

Detail of unrecognized stock-based compensation expense follows:

(in thousands) Year ended	Stock Appreciation Rights		Restricted Stock Awards		Restricted Stock Units		Performance Stock Units		Total
2020	$	306	$	1,035	$	2	$	853	$	2,196
2021		248		816		—		462		1,526
2022		193		547		—		—		740
2023		118		302		—		—		420
2024		11		24		—		—		35
2025		—		—		—		—		-
Total estimated expense	$	876	$	2,724	$	2	$	1,315	$	4,917

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The following table summarizes SARs activity and related information:

													Weighted
							Weighted				Weighted		average
							average		Aggregate		average		remaining
				Exercise			exercise		intrinsic		fair		contractual
(in thousands, except per share and years)	SARs			price			price		value(1)		value		life (in years)
Outstanding, January 1, 2017		735		$14.02	-	$33.08	$	17.78	$	21,443	$	3.26		5.5
Granted		46		40.00	-	40.00		40.00		—		6.34
Exercised		(77	)	14.02	-	17.89		15.41		1,855		3.18
Forfeited		—			-			-		—		—
Outstanding, December 31, 2017		704		$14.02	-	$40.00	$	19.51	$	12,923	$	3.47		5.1
Outstanding, January 1, 2018		704		$14.02	-	$40.00	$	19.51	$	12,923	$	3.47		5.1
Granted		100		35.90	-	39.32		37.75		—		6.07
Exercised		(73	)	14.02	-	19.37		15.32		1,654		3.43
Forfeited		—			-			-		—		—
Outstanding, December 31, 2018		731		$14.02	-	$40.00	$	22.42	$	8,422	$	3.83		5.2
Outstanding, January 1, 2019		731		$14.02	-	$40.00	$	22.42	$	8,422	$	3.83		5.2
Granted		53		36.65	-	38.18		37.01		213		6.24
Exercised		(143	)	14.02	-	22.96		15.99		3,025		3.47
Forfeited		—			-			-		—		—
Outstanding, December 31, 2019		641		$14.02	-	$40.00	$	25.06	$	10,250	$	4.10		5.3
Vested and exercisable		439		$14.02	-	$40.00	$	20.53	$	9,017	$	3.42		4.0
Unvested		202		22.96	-	40.00		34.93		1,233		5.59		7.9
Outstanding, December 31, 2019		641		$14.02	-	$40.00	$	25.06	$	10,250	$	4.10		5.3
Vested during 2019		91		$19.37	-	$40.00	$	28.80	$	1,110	$	4.66

(1) - Intrinsic value for SARs is defined as the amount by which the current market price of the underlying stock exceeds the exercise or grant price.

SARs outstanding by expiration year follows:

(in thousands, except per share data)
Expiration	SARs Outstanding		SARs Exercisable		Weighted Average Exercise Price
2020		3		3	$	14.02
2021		27		27		15.88
2022		108		108		15.25
2023		80		80		15.26
2024		73		73		19.37
2025		63		49		23.00
2026		88		55		25.84
2027		46		21		40.00
2028		100		23		37.75
2029		53		—		37.01
		641		439	$	25.06

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The following table summarizes activity for RSAs granted to officers:

				Grant date
				weighted
(in thousands, except per share data)	RSAs			average cost
Unvested at January 1, 2017		145		$	21.57
Shares awarded		29			44.85
Restrictions lapsed and shares released		(47	)		19.79
Shares forfeited		(8	)		25.18
Unvested at December 31, 2017		119		$	27.62
Unvested at January 1, 2018		119		$	27.62
Shares awarded		40			35.89
Restrictions lapsed and shares released		(44	)		23.62
Shares forfeited		(5	)		31.35
Unvested at December 31, 2018		110		$	32.09
Unvested at January 1, 2019		110		$	32.09
Shares awarded		40			34.88
Restrictions lapsed and shares released		(40	)		28.74
Shares forfeited		(2	)		35.36
Unvested at December 31, 2019		108		$	34.31

Shares expected to be awarded for PSUs granted to executive officers of Bancorp, the three-year performance period for which began January 1 of the award year are as follows:

Grant Year	Vesting Period in Years	Fair Value		Expected Shares to be Awarded
2017	3	$	35.66	61,893
2018	3		31.54	50,352
2019	3		32.03	43,603

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Bancorp has no equity compensation plans which have not been approved by shareholders. The following table provides detail of the number of shares to be issued upon exercise of outstanding stock-based awards and remaining shares available for future issuance under Bancorp’s equity compensation plan as of December 31, 2019.

	Number of				Shares
	shares to be		Weighted		available for
	issued upon		average		future
Plan category (in thousands)	exercising/vesting		exercise price		issuance (a)
Equity compensation plans approved by security holders:
Stock Appreciation Rights	(b)		(b)			547
Restricted Stock Awards		108		N/A	(a)
Restricted Stock Units		10		N/A	(a)
Performance Stock Units	(c)			N/A	(a)
Total shares		118				547

(a) Under the 2015 Omnibus Equity Compensation Plan, shares of stock are authorized for issuance as incentive and non-qualified stock options, SARs, RSAs, and RSUs.

(b) At December 31, 2019, approximately 641,000 SARs were outstanding at a weighted average grant price of $25.06. The number of shares to be issued upon exercise will be determined based on the difference between the grant price and the market price at the date of exercise.

(c) The number of shares to be issued is dependent upon Bancorp achieving certain predefined performance targets and ranges from zero shares to approximately 196,000 shares. As of December 31, 2019, the expected shares to be awarded are approximately 156,000.

(18) Dividends

Bancorp’s principal source of cash revenue is dividends paid to it as the sole shareholder of the Bank. At any balance sheet date, the Bank’s regulatory dividend restriction represents the Bank’s net income of the current year plus the prior two years less any dividends paid for the same time period. At December 31, 2019, the Bank may pay an amount equal to $52 million in dividends to Bancorp without regulatory approval subject to ongoing capital requirements of the Bank.

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(19) Commitments and Contingent Liabilities

As of December 31, 2019 and 2018, Bancorp had various commitments outstanding that arose in the normal course of business, such as unused commitments or lines of credit and commitments made to lend in the future, which are properly not reflected in the consolidated financial statements. Total off balance sheet commitments to extend credit follows:

December 31, (in thousands)	2019		2018
Commercial and industrial	$	416,195	$	309,920
Construction and development		240,503		179,364
Home equity lines of credit		155,920		147,907
Credit cards		26,439		20,003
Overdrafts		32,715		21,751
Letters of credit		24,193		20,891
Other		40,083		33,369
Future loan commitments		236,885		101,399
Total off balance sheet commitments to extend credit	$	1,172,933	$	834,604

Commitments to extend credit are an agreement to lend to a customer 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 necessarily 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. At December 31, 2019 and 2018, Bancorp had accrued $350,000 in other liabilities for its estimate of inherent risks related to unfunded credit commitments.

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 an event of default on all contracts had occurred at December 31, 2019, Bancorp would have been required to make payments of approximately $2.6 million, or the maximum amount payable under those contracts. No payments have ever been required as a result of default on these contracts. These agreements are normally secured by collateral acceptable to Bancorp, which limits credit risk associated with the agreements.

As of December 31, 2019, in the normal course of business, there were pending legal actions and proceedings in which claims for damages are asserted. Management, after discussion with legal counsel, believes the ultimate result of these legal actions and proceedings will not have a material adverse effect on the consolidated financial position or results of operations of Bancorp.

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(20) Assets and Liabilities Measured and Reported at Fair Value

Fair value represents the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values:

●     Level 1: Valuation is based upon quoted (unadjusted) prices for identical instruments traded in active markets.

●     Level 2: Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.

●     Level 3: Valuation is generated from model-based techniques that use significant assumptions not observable in the market. These unobservable assumptions would reflect internal estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques could include pricing models, discounted cash flows and other similar techniques.

Authoritative guidance requires maximization of use of observable inputs and minimization of use of unobservable inputs in fair value measurements. Where there exists limited or no observable market data, Bancorp derives its own estimates by generally considering characteristics of the asset/liability, the current economic and competitive environment and other factors. For this reason, results cannot be determined with precision and may not be realized on an actual sale or immediate settlement of the asset or liability.

Bancorp’s AFS securities portfolio and interest rate swaps are recorded at fair value on a recurring basis.

All AFS securities are priced using standard industry models or matrices with various assumptions such as yield curves, volatility, prepayment speeds, default rates, time value, credit rating and market prices for similar instruments. These assumptions are observable in the market place and can be derived from or supported by observable data. These measurements are classified as Level 2.

Fair value measurements for interest rate swaps are based on benchmark forward yield curves and other relevant observable market data. For purposes of potential valuation adjustments to derivative positions, Bancorp evaluates the credit risk of its counterparties as well as its own credit risk. To date, Bancorp has not realized any losses due to counterparty’s inability to perform and the change in value of derivative assets and liabilities attributable to credit risk was not significant during the reporting period. Interest rate swaps are valued using primarily Level 2 inputs.

MSRs, impaired loans and OREO are recorded at fair value on a non-recurring basis, generally in the application of lower of cost or market adjustments or write-downs of specific assets.

106

Carrying values of assets measured at fair value on a recurring basis follows:

(in thousands)	Fair value at December 31, 2019
Assets	Total		Level 1		Level 2		Level 3
Securities available for sale:
U.S. Treasury and other U.S. government obligations	$	49,897	$	49,897	$	—	$	—
Government sponsored enterprise obligations		209,944		—		209,944		—
Mortgage backed securities - government agencies		193,861		—		193,861		—
Obligations of states and political subdivisions		17,036		—		17,036		—
Total securities available for sale		470,738		49,897		420,841		—
Interest rate swaps		2,696		—		2,696		—
Total assets	$	473,434	$	49,897	$	423,537	$	—
Liabilities
Interest rate swaps	$	2,767	$	—	$	2,767	$	—

(in thousands)	Fair value at December 31, 2018
Assets	Total		Level 1		Level 2		Level 3
Securities available for sale:
Government sponsored enterprise obligations	$	261,039	$	—	$	261,039	$	—
Mortgage backed securities - government agencies		146,277		—		146,277		—
Obligations of states and political subdivisions		29,679		—		29,679		—
Total securities available for sale		436,995		—		436,995		—
Interest rate swaps		1,035		—		1,035		—
Total assets	$	438,030	$	—	$	438,030	$	—
Liabilities
Interest rate swaps	$	543	$	—	$	543	$	—

For the securities portfolio, Bancorp monitors the valuation technique used by pricing agencies to ascertain when transfers between levels have occurred. The nature of other assets and liabilities measured at fair value is such that transfers in and out of any level are expected to be rare. For the year ended December 31, 2019, there were no transfers between Levels 1, 2, or 3.

Bancorp had no financial instruments classified within Level 3 of the valuation hierarchy for assets and liabilities measured at fair value on a recurring basis at December 31, 2019 or 2018.

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Discussion of assets measured at fair value on a non-recurring basis follows:

MSRs – On at least a quarterly basis, MSRs are evaluated for impairment based upon the fair value of the MSRs as compared to carrying amount. Fair value is based on a valuation model that calculates the present value of estimated net servicing income. The model incorporates assumptions that market participants would use in estimating future net servicing income. These measurements are classified as Level 3. At December 31, 2019 and 2018, there was no valuation allowance for MSRs, as the fair value exceeded the cost. Accordingly, the MSRs are not included in the following tabular disclosure for December 31, 2019 or 2018.

Impaired loans – Collateral-dependent impaired loans generally include loans that have received partial charge-downs or specific reserve allocations needed to record the loan at fair value. Fair value is commonly based on recent real estate appraisals or other sources of valuations based upon the underlying collateral. Fair value of impaired loans was primarily measured based on the value of collateral securing these loans. Impaired loans are classified within Level 3 of the fair value hierarchy. Collateral may be real estate and/or business assets including equipment, inventory, and/or accounts receivable. Bancorp typically determines the value of real estate collateral based on independent appraisals performed by qualified licensed appraisers. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Appraised values are discounted for costs to sell and may be discounted further based on management’s historical knowledge, changes in market conditions from the date of the most recent appraisal, and/or management’s expertise and knowledge of the customer and the customer’s business. Such discounts by management are subjective and are typically significant unobservable inputs for determining fair value. For other assets, Bancorp relies on both internal and third party assessments of asset value, based on information provided by the borrower, following methodologies similar to those described for real estate. As of December 31, 2019, total impaired collateral dependent loans charged down to their fair value and impaired loans with a valuation allowance were $8.4 million and the specific allowance totaled $1.2 million, resulting in a fair value of $7.3 million, compared with total collateral dependent loans charged down to their fair value and impaired loans with a valuation allowance of $967,000, and the specific allowance allocation totaling $42,000, resulting in a fair value of $925,000 at December 31, 2018. Losses represent charge offs and changes in specific allowances for the periods indicated.

OREO – Assets acquired through or instead of loan foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. These assets are subsequently accounted for at lower of cost or fair value less estimated costs to sell. Fair value is commonly based on recent real estate appraisals or valuations performed by internal or external parties which use judgments and assumptions that are property-specific and sensitive to changes in the overall economic environment. Appraisals may be further discounted based on management’s historical knowledge and/or changes in market conditions from the date of the most recent appraisal. Many of these inputs are not observable and, accordingly, these measurements are classified as Level 3. For OREO in the following table, fair value is the carrying value of only parcels of OREO which have a carrying value equal to appraised value. Losses represent write-downs which occurred during the period indicated. At December 31, 2019 and 2018, carrying value of OREO was $493,000 and $1 million.

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Below are carrying values of assets measured at fair value on a non-recurring basis.

	Fair value at December 31, 2019								Losses
(in thousands)	Total		Level 1		Level 2		Level 3		Recorded
Impaired loans	$	7,253	$	—	$	—	$	7,253	$	(20	)
Other real estate owned		493		—		—		493		(70	)

	Fair value at December 31, 2018								Losses
(in thousands)	Total		Level 1		Level 2		Level 3		Recorded
Impaired loans	$	925	$	—	$	—	$	925	$	(514	)
Other real estate owned		239		—		—		239		(32	)

For Level 3 assets measured at fair value on a non-recurring basis, the significant unobservable inputs used in the fair value measurements are presented below.

December 31, 2019
(dollars in thousands)	Fair Value		Valuation Technique	Unobservable Inputs	Weighted Average
Impaired loans - collateral dependent	$	7,253	Appraisal	Appraisal discounts		60.3	%
Other real estate owned		493	Appraisal	Appraisal discounts		17.1

December 31, 2018
(dollars in thousands)	Fair Value		Valuation Technique	Unobservable Inputs	Weighted Average
Impaired loans - collateral dependent	$	925	Appraisal	Appraisal discounts		9.9	%
Other real estate owned		239	Appraisal	Appraisal discounts		22.0

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(21) Disclosure of Financial Instruments Not Reported at Fair Value

GAAP requires disclosure of the fair value of financial assets and liabilities, including those financial assets and financial liabilities that are not measured and reported at fair value on a recurring basis or nonrecurring basis. Carrying amounts, estimated fair values, and placement in the fair value hierarchy of Bancorp’s financial instruments are as follows:

(In thousands)	Carrying
December 31, 2019	amount		Fair value		Level 1		Level 2		Level 3
Assets
Cash and cash equivalents	$	249,724	$	249,724	$	249,724	$	—	$	—
Mortgage loans held for sale		8,748		8,923		—		8,923		—
Federal Home Loan Bank stock		11,316		11,316		—		11,316		—
Loans, net		2,818,225		2,841,767		—		—		2,841,767
Accrued interest receivable		8,534		8,534		8,534		—		—
Liabilities
Non-interest bearing deposits	$	810,475	$	810,475	$	810,475	$	—	$	—
Transaction deposits		1,891,246		1,891,246		—		1,891,246		—
Time deposits		432,217		434,927		—		434,927		—
Securities sold under agreement to repurchase		31,895		31,895		—		31,895		—
Federal funds purchased		10,887		10,887		—		10,887		—
FHLB advances		79,953		80,906		—		80,906		—
Accrued interest payable		640		640		640		—		—

(In thousands)	Carrying
December 31, 2018	amount		Fair value		Level 1		Level 2		Level 3
Assets
Cash and cash equivalents	$	198,939	$	198,939	$	198,939	$	—	$	—
Mortgage loans held for sale		1,675		1,743		—		1,743		—
Federal Home Loan Bank stock		10,370		10,370		—		10,370		—
Loans, net		2,522,637		2,508,587		—		—		2,508,587
Accrued interest receivable		8,360		8,360		8,360		—		—
Liabilities
Non-interest bearing deposits	$	711,023	$	711,023	$	711,023	$	—	$	—
Transaction deposits		1,736,618		1,736,618		—		1,736,618		—
Time deposits		346,715		345,273		—		345,273		—
Securities sold under agreement to repurchase		36,094		36,094		—		36,094		—
Federal funds purchased		10,247		10,247		—		10,247		—
FHLB advances		48,177		47,227		—		47,227		—
Accrued interest payable		762		762		762		—		—

Fair value estimates are made at a specific point in time based on relevant market information and information about financial instruments. Because no market exists for a significant portion of Bancorp’s financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Therefore, calculated fair value estimates in many instances cannot be substantiated by comparison to independent markets and, in many cases, may not be realizable in a current sale of the instrument. Changes in assumptions could significantly affect estimates.

110

(22) Derivative Financial Instruments

Periodically, Bancorp enters into interest rate swap transactions with borrowers who desire to hedge exposure to rising interest rates, while at the same time entering into an offsetting interest rate swap, with substantially matching terms, with another approved independent counterparty. These are undesignated derivative instruments and are recognized on the balance sheet at fair value. Because of matching terms of offsetting contracts and collateral provisions mitigating any non-performance risk, changes in fair value subsequent to initial recognition have an insignificant effect on earnings. Exchanges of cash flows related to undesignated interest rate swap agreements were offsetting and therefore had no effect on Bancorp’s earnings or cash flows.

Interest rate swap agreements derive their value from underlying interest rates. These transactions involve both credit and market risk. Notional amounts are amounts on which calculations, payments, and the value of the derivative are based. Notional amounts do not represent direct credit exposures. Direct credit exposure is limited to the net difference between the calculated amounts to be received and paid, if any. Bancorp is exposed to credit-related losses in the event of nonperformance by counterparties to these agreements. Bancorp mitigates the credit risk of its financial contracts through credit approvals, limits, collateral, and monitoring procedures, and does not expect any counterparties to fail their obligations.

Bancorp had outstanding undesignated interest rate swap contracts as follows:

	Receiving				Paying
	December 31,		December 31,		December 31,		December 31,
(dollars in thousands)	2019		2018		2019		2018
Notional amount	$	99,000	$	55,505	$	99,000	$	55,505
Weighted average maturity (years)		8.2		8.0		8.2		8.0
Fair value	$	2,696	$	519	$	2,767	$	543

In 2015, Bancorp entered into an interest rate swap to hedge cash flows of a $20 million rolling fixed-rate three-month FHLB borrowing. The swap began December 9, 2015 and matures December 6, 2020. In 2016, Bancorp entered into an interest rate swap to hedge cash flows of a $10 million rolling fixed-rate three-month FHLB borrowing. The swap began December 6, 2016 and ends December 6, 2021. For purposes of hedging, rolling fixed rate advances are considered to be floating rate liabilities. Interest rate swaps involve exchange of Bancorp’s floating rate interest payments for fixed rate swap payments on underlying principal amounts. These swaps were designated, and qualified, for cash-flow hedge accounting. For derivative instruments that are designated and qualify as cash flow hedging instruments, the effective portion of gains or losses is reported as a component of OCI, and is subsequently reclassified into earnings as an adjustment to interest expense in periods in which the hedged forecasted transaction affects earnings.

The following table details Bancorp’s derivative position designated as a cash flow hedge, and the fair values:

							Fair value
(dollars in thousands)				Pay fixed			December 31,
Notional		Maturity	Receive (variable) index	swap rate			2019			2018
$	10,000	12/6/2021	US 3 Month LIBOR		1.89	%	$	(45	)	$	193
	20,000	12/6/2020	US 3 Month LIBOR		1.79			(6	)		323
$	30,000				1.82		$	(51	)	$	516

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(23) Regulatory Matters

Bancorp and the Bank are subject to capital regulations in accordance with Basel III, as administered by banking regulators. Regulatory agencies measure capital adequacy within a framework that makes capital requirements, in part, dependent on the individual risk profiles of financial institutions. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on Bancorp’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Holding Company and the Bank must meet specific capital guidelines that involve quantitative measures of Bancorp’s assets, liabilities and certain off-balance sheet items, as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators regarding components, risk weightings and other factors.

Banking regulators have categorized the Bank as well-capitalized. For prompt corrective action, the regulations in accordance with Basel III define “well capitalized” as a 6.5% Common Equity Tier 1 Risk-Based Capital ratio, an 8.0% Tier 1 Risk-Based Capital ratio, a 10.0% Total Risk-Based Capital ratio and a 5.0% Tier 1 Leverage ratio. Additionally, in order to avoid limitations on capital distributions, including dividend payments and certain discretionary bonus payments to executive officers, Bancorp and Bank must hold a capital conservation buffer composed of Common Equity Tier 1 Risk-Based Capital above their minimum risk-based capital requirements. The capital conservation buffer phased in from 2016 to 2019 on the following schedule: a capital conservation buffer of 0.625% effective January 1, 2016; 1.25% effective January 1, 2017; 1.875% effective January 1, 2018; and a fully phased in capital conservation buffer of 2.5% on January 1, 2019.

Bancorp continues to exceed the regulatory requirements for all calculations. Bancorp and the Bank intend to maintain a capital position that meets or exceeds the “well-capitalized” requirements as defined by the FRB and the FDIC, in addition to the capital conservation buffer.

112

The following table sets forth Bancorp’s and the Bank’s risk based capital amounts and ratios:

(dollars in thousands)	Actual					Minimum for adequately capitalized					Minimum for well capitalized
December 31, 2019	Amount		Ratio			Amount		Ratio			Amount		Ratio
Total risk-based capital (1)
Consolidated	$	418,460		12.85	%	$	260,448		8.00	%	NA		NA
Bank		396,299		12.20			259,823		8.00		$	324,778		10.00	%
Common equity tier 1 risk-based capital
Consolidated		391,319		12.02			146,502		4.50		NA		NA
Bank		369,158		11.37			146,150		4.50			211,106		6.50
Tier 1 risk-based capital (1)
Consolidated		391,319		12.02			195,336		6.00		NA		NA
Bank		369,158		11.37			194,867		6.00			259,823		8.00
Leverage (2)
Consolidated		391,319		10.60			147,733		4.00		NA		NA
Bank		369,158		10.67			138,392		4.00			172,990		5.00

(dollars in thousands)	Actual					Minimum for adequately capitalized					Minimum for well capitalized
December 31, 2018	Amount		Ratio			Amount		Ratio			Amount		Ratio
Total risk-based capital (1)
Consolidated	$	396,019		13.91	%	$	227,714		8.00	%	NA		NA
Bank		385,637		13.56			227,462		8.00		$	284,327		10.00	%
Common equity tier 1 risk-based capital
Consolidated		370,135		13.00			128,089		4.50		NA		NA
Bank		359,753		12.65			127,947		4.50			184,813		6.50
Tier 1 risk-based capital (1)
Consolidated		370,135		13.00			170,785		6.00		NA		NA
Bank		359,753		12.65			170,596		6.00			227,462		8.00
Leverage (2)
Consolidated		370,135		11.33			130,698		4.00		NA		NA
Bank		359,753		11.02			130,569		4.00			163,211		5.00

(1) Ratio is computed in relation to risk-weighted assets.

(2) Ratio is computed in relation to average assets.

NA – Regulatory framework does not define “well capitalized” for holding companies.

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(24) Stock Yards Bancorp, Inc. (parent company only)

Condensed Balance Sheets
	December 31,
(in thousands)	2019		2018
Assets
Cash on deposit with subsidiary bank	$	14,714	$	7,655
Investment in and receivable from subsidiaries		384,136		356,118
Other assets		7,821		3,147
Total assets	$	406,671	$	366,920
Liabilities and stockholders' equity
Other liabilities	$	374	$	420
Total stockholders’ equity		406,297		366,500
Total liabilities and stockholders’ equity	$	406,671	$	366,920

Condensed Statements of Income
	Years ended December 31,
(in thousands)	2019			2018			2017
Income - dividends and interest from subsidiaries	$	72,119		$	21,403		$	18,160
Other income		2			12			82
Less expenses		4,935			4,818			3,255
Income before income taxes and equity in undistributed net income of subsidiary		67,186			16,597			14,987
Income tax benefit		(4,683	)		(1,713	)		(1,985	)
Income before equity in undistributed net income of subsidiary		71,869			18,310			16,972
Equity in undistributed net income of subsidiary		(5,802	)		37,207			21,071
Net income	$	66,067		$	55,517		$	38,043
Comprehensive Income	$	71,886		$	52,811		$	37,612

114

Condensed Statements of Cash Flows
	Years ended December 31
(in thousands)	2019			2018			2017
Operating activities
Net income	$	66,067		$	55,517		$	38,043
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in undistributed net income of subsidiaries		5,802			(37,207	)		(21,071	)
Gain on sale of fixed assets		—			(10	)		—
Change in receivable from subsidiaries
Stock compensation expense		3,578			4,027			2,892
Excess tax benefits from stock- based compensation arrangements		(812	)		(549	)		(1,463	)
Depreciation, amortization and accretion, net		—			—			4
Proceeds from liquidation of private investment fund		—			—			(81	)
Change in other assets		(3,863	)		(1,080	)		5,943
Change in other liabilities		(81	)		220			10
Net cash provided by operating activities		70,691			20,918			24,277
Investing activities
Proceeds from sale of fixed assets		—			13			—
Cash for acquisition		(28,000	)		—			—
Proceeds from liquidation of private investment fund		—			—			81
Net cash provided by (used in) investing activities		(28,000	)		13			81
Financing activities
Repurchase of common stock		(11,817	)		(2,004	)		(2,389	)
Share repurchases related to compensation plans		(272	)		(154	)		(216	)
Cash dividends paid		(23,543	)		(21,766	)		(18,077	)
Net cash used in financing activities		(35,632	)		(23,924	)		(20,682	)
Net increase (decrease) in cash		7,059			(2,993	)		3,676
Cash at beginning of year		7,655			10,648			6,972
Cash at end of year	$	14,714		$	7,655		$	10,648

(25) Segments

Bancorp’s principal activities include Commercial Banking and WM&T. Commercial Banking provides a full range of loan and deposit products to individual consumers and businesses. Commercial Banking also includes Bancorp’s mortgage origination and investment products sales activity. WM&T provides financial management services including investment management, trust and estate administration, and retirement plan services.

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. Measurement of performance of 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.

Principally, all of the net assets of Bancorp are involved in the Commercial Banking segment. Goodwill of $12.5 million, of which $682,000 relates to a bank acquisition in 1996 and $11.8 million related to the May 2019 KSB acquisition, has been assigned to the Commercial Banking segment. Assets assigned to WM&T primarily consist of net premises and equipment.

115

Selected financial information by business segment follows:

	Commercial
As of and for the Year ended December 31, 2019 (in thousands)	Banking		WM&T		Total
Net interest income	$	124,902	$	319	$	125,221
Provision for loan and leases		1,000		—		1,000
Wealth management and trust services		—		22,643		22,643
All other non-interest income		27,147		—		27,147
Non-interest expenses		85,642		12,709		98,351
Income before income tax expense		65,407		10,253		75,660
Income tax expense		7,368		2,225		9,593
Net income	$	58,039	$	8,028	$	66,067
Total assets	$	3,720,502	$	3,695	$	3,724,197

	Commercial
As of and for the Year ended December 31, 2018 (in thousands)	Banking		WM&T		Total
Net interest income	$	114,161	$	255	$	114,416
Provision for loan and leases		2,705		—		2,705
Wealth management and trust services		—		21,536		21,536
All other non-interest income		23,810		—		23,810
Non-interest expenses		76,963		12,546		89,509
Income before income tax expense		58,303		9,245		67,548
Income tax expense		10,025		2,006		12,031
Net income	$	48,278	$	7,239	$	55,517
Total assets	$	3,299,169	$	3,755	$	3,302,924

	Commercial
As of and for the Year ended December 31, 2017 (in thousands)	Banking		WM&T		Total
Net interest income	$	103,352	$	301	$	103,653
Provision for loan and leases		2,550		—		2,550
Wealth management and trust services		—		20,505		20,505
All other non-interest income		23,994		—		23,994
Non-interest expenses		78,181		12,239		90,420
Income before income tax expense		46,615		8,567		55,182
Income tax expense		14,080		3,059		17,139
Net income	$	32,535	$	5,508	$	38,043
Total assets	$	3,237,656	$	1,990	$	3,239,646

116

(26) Quarterly Operating Results (unaudited)

A summary of quarterly operating results follows:

	2019
(in thousands except per share data)	4th quarter		3rd quarter		2nd quarter		1st quarter
Interest income	$	37,795	$	37,973	$	36,968	$	35,029
Interest expense		5,075		5,903		6,194		5,372
Net interest income		32,720		32,070		30,774		29,657
Provision for loan and lease losses		-		400		-		600
Net interest income after provision		32,720		31,670		30,774		29,057
Non-interest income		13,161		13,304		12,263		11,062
Non-interest expenses		26,291		23,957		25,464		22,639
Income before income taxes		19,590		21,017		17,573		17,480
Income tax expense		2,941		3,783		1,030		1,839
Net income	$	16,649	$	17,234	$	16,543	$	15,641
Basic earnings per share	$	0.74	$	0.76	$	0.73	$	0.69
Diluted earnings per share	$	0.73	$	0.76	$	0.72	$	0.68

	2018
(in thousands except per share data)	4th quarter		3rd quarter		2nd quarter		1st quarter
Interest income	$	35,004	$	33,021	$	32,004	$	29,744
Interest expense		5,092		4,500		3,330		2,435
Net interest income		29,912		28,521		28,674		27,309
Provision for loan and lease losses		-		735		1,235		735
Net interest income after provision		29,912		27,786		27,439		26,574
Non-interest income		11,576		11,426		11,435		10,909
Non-interest expenses		24,565		21,781		22,136		21,027
Income before income taxes		16,923		17,431		16,738		16,456
Income tax expense		2,265		3,555		3,159		3,052
Net income	$	14,658	$	13,876	$	13,579	$	13,404
Basic earnings per share	$	0.65	$	0.61	$	0.60	$	0.59
Diluted earnings per share	$	0.64	$	0.60	$	0.59	$	0.58

	2017
(in thousands except per share data)	4th quarter		3rd quarter		2nd quarter		1st quarter
Interest income	$	29,098	$	28,120	$	27,026	$	26,655
Interest expense		2,069		1,947		1,781		1,449
Net interest income		27,029		26,173		25,245		25,206
Provision for loan and lease losses		900		150		600		900
Net interest income after provision		26,129		26,023		24,645		24,306
Non-interest income		11,407		10,945		11,525		10,622
Non-interest expenses		27,048		21,168		21,209		20,995
Income before income taxes		10,488		15,800		14,961		13,933
Income tax expense		5,542		4,096		4,359		3,142
Net income	$	4,946	$	11,704	$	10,602	$	10,791
Basic earnings per share	$	0.22	$	0.52	$	0.47	$	0.48
Diluted earnings per share	$	0.22	$	0.51	$	0.46	$	0.47

Note: The sum of EPS of each of the quarter may not add to the year-to-date amount reported in Bancorp’s consolidated financial statements due to rounding.

117

(27) Revenue from contracts with customers

Bancorp adopted ASU 2014-09, Revenue from Contracts with Customers and all related amendments (ASC 606), which created a single framework for recognizing revenue from contracts with customers that fall within its scope and revised when it is appropriate to recognize a gain (loss) from the transfer of nonfinancial assets, effective January 1, 2018 using the full retrospective method. Bancorp recognizes revenue upon satisfying a performance obligation as services are rendered to a customer. All of Bancorp’s revenue from contracts with customers in the scope of ASC 606 is recognized within non-interest income. The only impact to financial statement presentation was reclassification from expense to contra income costs incurred to obtain and fulfill contracts associated with investment product sales. All periods presented in these financial statements have been adjusted to reflect the reclassification. The table below presents Bancorp’s sources of non-interest income. Items outside the scope of ASC 606 are noted as such.

	Year Ended December 31, 2019
(in thousands)	Commercial		WM&T		Total
Wealth management and trust services	$	—	$	22,643	$	22,643
Deposit service charges		5,513		—		5,513
Debit and credit card income		8,123		—		8,123
Treasury management fees		4,992		—		4,992
Mortgage banking income(1)		3,090		—		3,090
Net investment product sales commissions and fees		1,498		—		1,498
Bank owned life insurance(1)		1,031		—		1,031
Other(2)		2,900		—		2,900
Total non-interest income	$	27,147	$	22,643	$	49,790

	Year Ended December 31, 2018
(in thousands)	Commercial		WM&T		Total
Wealth management and trust services	$	—	$	21,536	$	21,536
Deposit service charges		5,759		—		5,759
Debit and credit card income		6,769		—		6,769
Treasury management fees		4,571		—		4,571
Mortgage banking income(1)		2,568		—		2,568
Net investment product sales commissions and fees		1,677		—		1,677
Bank owned life insurance(1)		1,129		—		1,129
Other(2)		1,337		—		1,337
Total non-interest income	$	23,810	$	21,536	$	45,346

	Year Ended December 31, 2017
(in thousands)	Commercial			WM&T		Total
Wealth management and trust services	$	—		$	20,505	$	20,505
Deposit service charges		6,172			—		6,172
Debit and credit card income		5,979			—		5,979
Treasury management fees		4,297			—		4,297
Mortgage banking income(1)		3,221			—		3,221
Loss on sale of securities		(232	)		—		(232	)
Net investment product sales commissions and fees		1,629			—		1,629
Bank owned life insurance(1)		1,159			—		1,159
Other(2)		1,769			—		1,769
Total non-interest income	$	23,994		$	20,505	$	44,499

(1) Outside of the scope of ASC 606.

(2) Outside of the scope of ASC 606, with the exception of safe deposit fees which were nominal for all periods.

118

Revenue sources within the scope of ASC 606 are discussed below:

Bancorp earns fees from its deposit customers for transactions-based, account management, and overdraft services. Transaction-based fees, which include services such as ATM use fees, stop payments fees, and ACH fees, are recognized at the time the transaction is executed as that is when the company fulfills the performance obligation. Account management fees are earned over the course of a month and charged in the month in which the services are provided. Overdraft fees are recognized at the point in time that the overdraft occurs. Deposit service charges are withdrawn from customer’s account balances.

Treasury management transaction fees are recognized at the time the transaction is executed as that is when the company fulfills the performance obligation. Account management fees are earned over the course of a month and charged in the month in which the services are provided. Treasury management fees are withdrawn from customer’s account balances.

WM&T provides customers fiduciary and investment management services as agreed upon in asset management contracts. The contracts require WM&T to provide a series of distinct services for which fees are earned over time. The contracts are cancellable upon demand with fees typically based upon the asset value of investments. Revenue is accrued and recognized monthly based upon month-end asset values and collected from the customer predominately in the following month except for a small percentage of fees collected quarterly. Incentive compensation related to WM&T activities is considered a cost of obtaining the contract. Contracts between WM&T and clients do not permit performance based fees and accordingly, none of the fees earned by WM&T are performance based. Trust fees receivable as of December 31, 2019 were $2.1 million compared with $1.9 million as of December 31, 2018.

Investment products sales commissions and fees represent the Bank’s share of transaction fees and wrap fees resulting from investment services and programs provided through an agent relationship with a third party broker-dealer. Transaction fees are assessed at the time of the transaction. Those fees are collected and recognized on a monthly basis. Trailing fees are based upon market value and are assessed, collected, and recognized on a quarterly basis. Because the Bank acts as an agent in arranging the relationship between the customer and third party provider, and does not control the services rendered, investment product sales commissions and fees are reported net of related costs, including nominal incentive compensation, and trading activity charges of $516,000 and $544,000 for the years ended December 31, 2019 and 2018.

Debit and credit card revenue primarily consists of debit and credit card interchange income. Interchange income represents fees assessed within the payment card system for acceptance of card based transactions. Interchange fees are assessed as the performance obligation is satisfied, which is at the point in time the card transaction is authorized. Revenue is collected and recognized daily through the payment network settlement process.

Bancorp did not establish any contract assets or liabilities as a result of adopting ASC 606, nor were any recognized during 2019.

Bancorp’s revenue on the consolidated statement of income is categorized by product type, which effectively depicts how the nature, timing, and extent of cash flows are affected by economic factors.

119

Report of Independent Registered Public Accounting Firm

Audit Committee, Board of Directors and Stockholders

Stock Yards Bancorp, Inc.

Louisville, Kentucky

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Stock Yards Bancorp, Inc. (the “Company”) as of December 31, 2019 and 2018, the related consolidated statements of income, comprehensive income, changes in stockholders’ equity and cash flows for the years then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework) and our report dated February 28, 2020, expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosures to which it relates.

Allowance for Loan Losses

As described in Note 5 to the consolidated financial statements, the Company’s consolidated allowance for loan and lease losses (ALLL) was $26.8 million at December 31, 2019. The ALLL is an estimate of probable credit losses related to specifically identified loans and for losses inherent in the portfolio that have been incurred as of the balance sheet date. The determination of the ALLL requires management to exercise significant judgment and consider numerous subjective factors, including determining qualitative factors utilized to adjust historical loss rates, risk grading loans, identifying loan impairments, among others. As disclosed by management, different assumptions and conditions could result in a materially different amount for the ALLL.

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We identified the valuation of the ALLL as a critical audit matter. Auditing the allowance for loan losses involves a high degree of subjectivity in evaluating management's estimates, such as evaluating management's assessment of economic conditions and other environmental factors used to adjust historical loss rates, evaluating the adequacy of specific allowances associated with impaired loans and assessing the appropriateness of loan grades.

How We Addressed the Matter in Our Audit

The primary procedures we performed to address this critical audit matter included:

● Testing the design and operating effectiveness of controls, including those related to technology, over the ALLL including data completeness and accuracy, classifications of loans by loan segment, verification of historical loss data and calculated loss rates, the establishment of qualitative adjustments, credit ratings and risk classification of loans and establishment of specific reserves on impaired loans including purchased loans that have experienced further credit deterioration and management’s review and disclosure controls over the ALLL balance;

● Testing of completeness and accuracy of the information utilized in the ALLL;

● Testing the model's computational accuracy;

● Evaluating the qualitative adjustment to the historical loss rates, including assessing the basis for the adjustments and the reasonableness of the significant assumptions;

● Testing the internal loan review functions and evaluating the accuracy of loan grades;

● Evaluating the appropriateness of loan grades and assessing the reasonableness of specific reserves on impaired loans;

● Evaluating the overall reasonableness of assumptions used by considering the past performance of the Company and evaluating to trends identified within peer groups.

● Reviewing subsequent events and considering whether they support or contradict the Company’s assessment.

Emphasis of Matter

As discussed in Note 1 to the consolidated financial statements, the Company has changed its method of accounting for leases in 2019 due to the adoption of Topic 842.

/s/ BKD, LLP

We have served as the Company’s auditor since 2018.

Indianapolis, Indiana

February 28, 2020

Name of Engagement Executive: Michael S. Moore

Federal Employer Identification Number: 44-0160260

121

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders
Stock Yards Bancorp, Inc.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated statements of income, comprehensive income, changes in stockholders’ equity, and cash flows of Stock Yards Bancorp, Inc. and subsidiary (the Company) for the year ended December 31, 2017 and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the results of its operations and its cash flows of the Company for the year ended December 31, 2017, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provide a reasonable basis for our opinion.

/s/ KPMG LLP

We served as the Company’s auditor from 1988 to 2018.

Louisville, Kentucky

March 13, 2018

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Management’s Report on Consolidated Financial Statements

The accompanying consolidated financial statements and other financial data were prepared by the management of Stock Yards Bancorp, Inc. (Bancorp), which has the responsibility for the integrity of the information presented. The consolidated financial statements have been prepared in conformity with GAAP and, as such, include amounts that are the best estimates and judgments of management with consideration given to materiality.

Management is further responsible for maintaining a system of internal controls designed to provide reasonable assurance that the books and records reflect the transactions of Bancorp and that its established policies and procedures are carefully followed. Management believes that Bancorp’s system, taken as a whole, provides reasonable assurance that transactions are executed in accordance with management’s general or specific authorization; transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain accountability for assets; access to assets is permitted only in accordance with management’s general or specific authorization, and the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

Management also seeks to assure the objectivity and integrity of Bancorp’s financial data by the careful selection and training of qualified personnel, an internal audit function and organizational arrangements that provide an appropriate division of responsibility.

BKD LLP, the independent registered public accounting firm that audited the consolidated financial statements of Bancorp included in this Annual Report on Form 10-K, has issued a report on Bancorp’s internal control over financial reporting as of December 31, 2019. The report expresses an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting as of December 31, 2019.

The Board of Directors provides its oversight role for the consolidated financial statements through the Audit Committee. The Audit Committee meets periodically with management, the internal auditors, and the independent auditors, each on a private basis, to review matters relating to financial reporting, the internal control systems, and the scope and results of audit efforts. The internal and independent auditors have unrestricted access to the Audit Committee, with and without the presence of management, to discuss accounting, auditing, and financial reporting matters. The Audit Committee also recommends the appointment of the independent auditors to the Board of Directors, and ultimately has sole authority to appoint or replace the independent auditors.

/s/ James A. Hillebrand

James A. Hillebrand

CEO

/s/ T. Clay Stinnett

T. Clay Stinnett

EVP and CFO

123

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None

Item 9A. Controls and Procedures.

Disclosure Controls and Procedures

Bancorp maintains disclosure controls and procedures designed to ensure that it is able to collect the information it is required to disclose in the reports it files with the SEC, and to record, process, summarize and disclose this information within the time periods specified in the rules of the SEC. Based on their evaluation of Bancorp’s disclosure controls and procedures which took place as of December 31, 2019, the CEO and CFO believe that these controls and procedures are effective to ensure that Bancorp is able to collect, process and disclose the information it is required to disclose in the reports it files with the SEC within the required time periods.

Based on the evaluation of Bancorp’s disclosure controls and procedures by the CEO and CFO; no changes occurred during the fiscal quarter ended December 31, 2019 in Bancorp’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, Bancorp’s internal control over financial reporting.

124

Management’s Report on Internal Control Over Financial Reporting

The management of Stock Yards Bancorp, Inc. and subsidiary (Bancorp) is responsible for establishing and maintaining adequate internal control over financial reporting. Bancorp’s internal control over financial reporting is a process designed under the supervision of Bancorp’s CEO and CFO, and effected by Bancorp’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance GAAP. This process includes those policies and procedures that:

● Pertain to the maintenance of records, that in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of Bancorp;

● Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of Bancorp are being made only in accordance with authorizations of management and directors of Bancorp; and

● Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of Bancorp’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate.

Management has assessed the effectiveness of its internal control over financial reporting as of December 31, 2019, based on the control criteria established in a report entitled Internal Control – Integrated Framework (2013), issued by the COSO. Based on such assessment, management has concluded that Bancorp’s internal control over financial reporting is effective as of December 31, 2019.

BKD LLP, the independent registered public accounting firm that audited the consolidated financial statements of Bancorp included in this Annual Report on Form 10-K, has also audited Bancorp’s internal control over financial reporting as of December 31, 2019. Their report expressed an unqualified opinion on the effectiveness of Bancorp’s internal control over financial reporting as of December 31, 2019.

/s/ James A. Hillebrand

James A. Hillebrand

CEO

/s/ T. Clay Stinnett

T. Clay Stinnett

EVP and CFO

125

Report of Independent Registered Public Accounting Firm

Audit Committee, Board of Directors and Stockholders

Stock Yards Bancorp, Inc.

Louisville, Kentucky

Opinion on the Internal Control Over Financial Reporting

We have audited Stock Yards Bancorp, Inc.’s (the “Company”) internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control – Integrated Framework: (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control – Integrated Framework: (2013) issued by COSO.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheet of the Company as of December 31, 2019 and 2018 and the related consolidated statements of income, comprehensive income, changes in stockholders’ equity and cash flows for the years then ended and our report dated February 28, 2020, expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

126

Definitions and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

/s/ BKD, LLP

Indianapolis, Indiana

February 28, 2020

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Item 9B. Other Information.

None

PART III

Item 10. Directors, Executive Officers and Corporate Governance.

Information regarding the directors and executive officers of Bancorp is incorporated herein by reference to the discussion under the headings, “ITEM 1. ELECTION OF ELEVEN DIRECTORS,” and “SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE” in Bancorp’s Proxy Statement to be filed with the SEC for the 2020 Annual Meeting of Shareholders (“Proxy Statement”)

Information regarding the Audit Committee is incorporated herein by reference to the discussion under the heading, “BOARD OF DIRECTORS’ MEETINGS AND COMMITTEES” in Bancorp’s Proxy Statement.

Information regarding principal occupation of Bancorp directors follows:

Paul J. Bickel III – President, U.S. Specialties

J. McCauley Brown – Retired Vice President, Brown-Forman Corporation

David P. Heintzman – Chairman of the Board and Retired CEO, Stock Yards Bancorp, Inc. and Stock Yards Bank & Trust Company

Donna Heitzman – Retired Portfolio Manager, KKR Prisma Capital

Carl G. Herde – Vice President/Finance, Kentucky Hospital Association

James A. Hillebrand – CEO, Stock Yards Bancorp, Inc. and Stock Yards Bank & Trust Company

Richard A. Lechleiter – President, Catholic Education Foundation of Louisville

Stephen M. Priebe – President, Hall Contracting of Kentucky

John L. Schutte – CEO, GeriMed, Inc.

Norman Tasman – President, Tasman Industries Inc. and Tasman Hide Processing Inc.

Kathy C. Thompson – Senior EVP, Stock Yards Bancorp, Inc. and Stock Yards Bank & Trust Company and Manager of the Bank’s WM&T Division

The Board of Directors of Bancorp has adopted a code of ethics for its CEO and financial executives included under Exhibit 14.

The following table lists the names and ages as of December 31, 2019 of all current executive officers of Bancorp and the Bank. Each executive officer is appointed by Bancorp’s Board of Directors to serve at the discretion of the Board.

There is no arrangement or understanding between any executive officer of Bancorp or the Bank and any other person(s) pursuant to which he/she was or is to be selected as an officer.

128

Name and Age of Executive Officer	Position and Offices with Bancorp and/or the Bank
James A. Hillebrand Age 51	CEO and Director of Bancorp and the Bank
Philip S. Poindexter Age 53	President of Bancorp and the Bank
Kathy C. Thompson Age 58	Senior EVP and Director of Bancorp and the Bank
T. Clay Stinnett Age 46	EVP, Treasurer and CFO of Bancorp and the Bank
William M. Dishman III Age 56	EVP and Chief Risk Officer of the Bank
Michael J. Croce Age 50	EVP and Director of Retail Banking of the Bank
Michael V. Rehm Age 55	EVP and Chief Lending Officer of the Bank

Mr. Hillebrand was appointed CEO of Bancorp and the Bank in October 2018. Prior thereto, he served as President of Bancorp and the Bank since 2008. Prior thereto, he served as EVP and Director of Private Banking of the Bank since 2005. From 2000 to 2004, he served as SVP of Private Banking. Mr. Hillebrand joined the Bank in 1996.

Mr. Poindexter was appointed President of Bancorp and the Bank in October 2018. Prior thereto, he served as Chief Lending Officer of the Bank since 2008. Prior thereto, he served as EVP of the Bank and Director of Commercial Banking. Mr. Poindexter joined the Bank in 2004.

Ms. Thompson was appointed Senior EVP of Bancorp and the Bank in 2006. Prior thereto, she served as EVP of Bancorp and the Bank. She joined the Bank in 1992 as Manager of the WM&T Department.

Mr. Stinnett was appointed EVP, Treasurer and CFO of Bancorp and the Bank in April 2019. Prior thereto, he served as EVP and Chief Strategic Officer of Bancorp and the Bank since 2011. Prior thereto, he served as SVP and Chief Strategic Officer of the Bank since 2005. Mr. Stinnett joined the Bank in 2000.

Mr. Dishman joined the Bank as EVP and Chief Risk Officer in 2009.

Mr. Croce was appointed EVP of the Bank and Director of Retail Banking in 2014. Prior thereto, he served as SVP of the Bank and Division Manager of Business Banking. Mr. Croce joined the Bank in 2004.

Mr. Rehm was appointed EVP and Chief Lending Officer of the Bank in October 2018. Prior thereto, he served as SVP of the Bank and Division Manager of Commercial Lending. Mr. Rehm joined the Bank in 2006.

Item 11. Executive Compensation.

The information required by this Item is incorporated herein by reference to the discussion under the heading, “EXECUTIVE COMPENSATION AND OTHER INFORMATION – REPORT ON EXECUTIVE COMPENSATION” in Bancorp’s Proxy Statement.

Information regarding the Compensation Committee is incorporated herein by reference to the discussion under the heading, “TRANSACTIONS WITH MANAGEMENT AND OTHERS” in Bancorp’s Proxy Statement. The report of the Compensation Committee shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed soliciting material or subject to Regulation 14A of the Exchange Act or incorporated by reference in any filing under the Exchange Act or the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.

129

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The information required by this item is incorporated herein by reference to the discussion under the headings, “ITEM 1. ELECTION OF ELEVEN DIRECTORS” and “DELINQUENT SECTION 16(a) REPORTS,” in Bancorp’s Proxy Statement.

The information required by this item concerning equity compensation plan information is included in the Footnote titled “Stock Based Compensation” of the Footnotes to Consolidated Financial Statements.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

The information required by this item is incorporated herein by reference to the discussion under the headings, “ITEM 1. ELECTION OF ELEVEN DIRECTORS” and “TRANSACTIONS WITH MANAGEMENT AND OTHERS,” in Bancorp’s Proxy Statement.

Item 14. Principal Accounting Fees and Services.

The information required by this item is incorporated herein by reference to the discussion under the sub heading “Independent Registered Public Accounting Firm” under the heading, “REPORT OF THE AUDIT COMMITTEE” in Bancorp’s Proxy Statement.

PART IV

Item 15.  Exhibits, Financial Statement Schedules.

(a) (1)     Financial Statements:

Consolidated Balance Sheets – December 31, 2019 and 2018

Consolidated Statements of Income - years ended December 31, 2019, 2018 and 2017

Consolidated Statements of Comprehensive Income - years ended December 31, 2019, 2018 and 2017

Consolidated Statements of Changes in Stockholders’ Equity - years ended December 31, 2019, 2018 and 2017

Consolidated Statements of Cash Flows - years ended December 31, 2019, 2018 and 2017

Footnotes to Consolidated Financial Statements

Reports of Independent Registered Public Accounting Firms

(a) (2)     Financial Statement Schedules:

 Financial statement schedules are omitted because the information is NA.

(a) (3)     Exhibits:

3.1	Second Amended and Restated Articles of Incorporation of S.Y. Bancorp, Inc., filed with the Secretary of State of Kentucky on April 25, 2013. Exhibit 3.1 to Form 8-K filed April 25, 2013, is incorporated by reference herein.
3.2	Articles of Amendment to the Second Amended and Restated Articles of Incorporation to change the name of the company to Stock Yards Bancorp, Inc., filed with the Secretary of State of Kentucky on April 23, 2014. Exhibit 3.1 to Form 8-K filed April 25, 2014, is incorporated by reference herein.
3.3	Articles of Amendment to the Second Amended and Restated Articles of Incorporation to increase the number of authorized shares of common stock and adopt majority voting in uncontested director elections, filed with the Secretary of State of Kentucky on April 23, 2015. Exhibit 3.1 to Form 8-K filed April 27, 2015, is incorporated by reference herein.

130

3.4	Bylaws of Bancorp as currently in effect. Exhibit 3.1 to Form 8-K/A filed October 1, 2018, is incorporated by reference herein.
4.1	Description of Stock Yards Bancorp, Inc. Securities
10.1*	Stock Yards Bank & Trust Company Executive Nonqualified Deferred Compensation Plan (as Amended and Restated in 2009), as filed as Exhibit 10.4 to Form 8-K filed on December 19, 2008, is incorporated by reference herein.
10.2*	Stock Yards Bank & Trust Company Director Nonqualified Deferred Compensation Plan (as Amended and Restated in 2009), as filed as Exhibit 10.3 to Form 8-K filed on December 19, 2008, is incorporated by reference herein.
10.3*	Form of Stock Yards Bank & Trust Company Executive Nonqualified Deferred Compensation Plan Employer Contribution Agreement, as filed as Exhibit 10.3 to Form 8-K filed on October 23, 2006, is incorporated by reference herein.
10.4*	Stock Yards Bank & Trust Company 2009 Restated Senior Officers Security Plan Exhibit 10.1 to Form 8-K filed December 19, 2008, is incorporated by reference herein.
10.5*	Form of Change in Control Severance Agreement (Dishman, Stinnett and Croce), as filed as Exhibit 10.5 to Form 8-K filed January 28, 2010, is incorporated by reference herein.
10.6*	S.Y. Bancorp, Inc. 2005 Stock Incentive Plan, as filed as Exhibit 10.1 to Form 8-K filed May 2, 2005, is incorporated by reference herein.
10.7*	Amendment No. 1 to S. Y. Bancorp, Inc. 2005 Stock Incentive Plan, as filed as Exhibit 10.1 to Form 8-K filed on April 22, 2010, is incorporated by reference herein.
10.8*	Form of Employer Contribution Agreement, Nancy Davis, Participant, as filed as Exhibit 10.4 to Form 8-K filed on October 23, 2006, is incorporated by reference herein.
10.9*	Terms of Restricted Stock Program, as filed as Exhibit 10.1 to Form 8-K filed on February 26, 2007, is incorporated by reference herein.
10.10*	Form of Restricted Stock Agreement (3 year vesting), as filed as Exhibit 10.2 to Form 8-K filed on February 26, 2007, is incorporated by reference herein.
10.11*	Form of Stock Option Grant and Agreement (6 months vesting), as filed as Exhibit 10.1 to Form 8-K filed on January 19, 2006, is incorporated by reference herein.
10.12*	Form of Stock Option Grant and Agreement (5 year vesting), as filed as Exhibit 10.2 to Form 8-K filed on January 19, 2006, is incorporated by reference herein.
10.13*	Form of Stock Appreciation Right Grant Agreement (6 month vesting), as filed as Exhibit 10.1 to Form 8-K filed on February 22, 2008, is incorporated by reference herein.
10.14*	Form of Stock Appreciation Right Grant Agreement (5 year vesting), as filed as Exhibit 10.2 to Form 8-K filed on February 22, 2008, is incorporated by reference herein.
10.15*	Form of Indemnification Agreement between Stock Yards Bank & Trust Company, S.Y. Bancorp, Inc. and each member of the Board of Directors. Exhibit 10.3 to Annual Report on Form 10-K for the year ended December 31, 2001, of Bancorp is incorporated by reference herein.
10.16*	Form of Restricted Stock Award Agreement (5 year vesting) between S.Y. Bancorp, Inc. and each recipient of restricted stock. Exhibit 10.21 to Annual Report on Form 10-K for the year ended December 31, 2010, of Bancorp is incorporated by reference herein.
10.17*	Form of Director Restricted Stock Award Agreement (1 year vesting) between S.Y. Bancorp, Inc. and each member of the Board of Directors. Exhibit 10.22 to Annual Report on Form 10-K for the year ended December 31, 2010, of Bancorp is incorporated by reference herein.
10.18*	Amendment No. 2 to the S. Y. Bancorp, Inc. 2005 Stock Incentive Plan, as filed as Exhibit 10.1 to Form 8-K filed on April 22, 2011, is incorporated by reference herein.
10.19*	Form of S.Y. Bancorp, Inc. Restricted Stock Unit Grant Agreement for grants prior to 2014, as filed as Exhibit 10.2 to Form 8-K filed on April 22, 2011, is incorporated by reference herein.
10.20*	Form of Stock Appreciation Right Grant Agreement (5 year vesting) between S.Y. Bancorp, Inc. and each recipient of stock appreciation rights. Exhibit 10.25 to Annual Report on Form 10-K for the year ended December 31, 2012, of Bancorp is incorporated by reference herein.
10.21*	Form of S.Y. Bancorp, Inc. Restricted Stock Unit Grant Agreement 2012 and Amendment thereto, as filed as Exhibit 10.1 to Form 8-K filed on March 20, 2013, is incorporated by reference herein.
10.22*	Form of Annual Cash Incentive Plan, as filed as Exhibit 10.1 to Form 8-K filed on April 26, 2013, is incorporated by reference herein.

10.23* Amendment No. 3 to the S. Y. Bancorp, Inc. 2005 Stock Incentive Plan, as filed as Exhibit 10.1 to Form 8-K filed on November 22, 2013, is incorporated by reference herein.

131

10.24*	Amendment No. 1 to the Director Nonqualified Deferred Compensation Plan, as filed as Exhibit 10.2 to Form 8-K filed on November 22, 2013, is incorporated by reference herein.
10.25*	Form of Director Restricted Stock Unit Award Agreement, as filed as Exhibit 10.3 to Form 8-K filed on November 22, 2013, is incorporated by reference herein.
10.26*	Form of Amended and Restated Change in Control Severance Agreement (for David Heintzman, Ja Hillebrand, Kathy Thompson and Nancy Davis), as filed as Exhibit 10.1 to Form 8-K filed on December 17, 2013, is incorporated by reference herein.
10.27*	Form of Annual Cash Bonus Plan (as amended December 16, 2013), as filed as Exhibit 10.2 to Form 8-K filed on December 17, 2013, is incorporated by reference herein.
10.28*	Form of Restricted Stock Unit Grant Agreement for grants awarded 2014 and later, as filed as Exhibit 10.3 to Form 8-K filed on December 17, 2013, is incorporated by reference herein.
10.29*	Form of Amendment No. 1 Stock Yards Bank & Trust Company Executive Nonqualified Deferred Compensation Plan, as filed as Exhibit 10.1 to Form 8-K filed on December 18, 2014, is incorporated by reference herein.
10.30*	Form of Amendment No. 2 Stock Yards Bank & Trust Company Director Nonqualified Deferred Compensation Plan, as filed as Exhibit 10.2 to Form 8-K filed on December 18, 2014, is incorporated by reference herein.
10.31*	Form of Restricted Stock Unit Grant Agreement as filed as Exhibit 10.1 to Form 8-K filed on March 19, 2015, is incorporated by reference herein.
10.32*	Amendment to Form of Restricted Stock Unit Grant Agreement as filed as Exhibit 10.1 to Form 8-K/A filed on March 19, 2015, is incorporated by reference herein.
10.33*	Stock Yards Bancorp, Inc. 2015 Omnibus Equity Compensation Plan, as filed as Exhibit 10.1 to Form 8K, on April 27, 2015 is incorporated by reference herein.
10.34*	Form of Performance-Vested Stock Units Agreement, as filed as Exhibit 10.1 to Form 8-K filed on March 17, 2016, is incorporated by reference herein.
10.35*	Form of Stock Appreciation Rights Agreement, as filed as Exhibit 10.2 to Form 8-K filed on March 17, 2016, is incorporated by reference herein.
10.36*	Form of Performance-Vested Stock Unit Grant Agreement, as filed as Exhibit 10.1 to Form 8-K filed on March 27, 2017, is incorporated by reference herein.
10.37B*	Amendment No. 1 to the Stock Yards Bancorp 2015 Omnibus Equity Compensation Plan, as filed as Exhibit 10.37 to Form 10-K filed on March 13, 2018, is incorporated by reference herein.
10.38*	Amendment No. 2 to the Stock Yards Bancorp 2015 Omnibus Equity Compensation Plan, as filed as Exhibit 10.1 to Form 8-K filed on May 1, 2018, is incorporated by reference herein.
10.39*	Executive Transition Agreement by and among David P. Heintzman, Stock Yards Bancorp, Inc., and Stock Yards Bank & Trust Company, as filed as Exhibit 10.1 to Form 8-K filed on May 29, 2018, is incorporated by reference herein.
10.40*	Amended and Restated Change in Control Severance Agreement between Stock Yards Bank & Trust Company and Phillip S. Poindexter, as filed as Exhibit 10.2 to Form 8-K filed on May 29, 2018, is incorporated by reference herein.
10.41*	Form of Stock Appreciation Rights Grant Agreement, as filed as Exhibit 10.1 to Form 8-K filed on October 5, 2018, is incorporated by reference herein.
10.42*	Executive Transition Agreement by and among Nancy B. Davis, Stock Yards Bancorp, Inc., and Stock Yards Bank & Trust Company, as filed as Exhibit 10.1 to Form 8-K filed on November 23, 2018 is incorporated by reference herein.
14	Code of Ethics for the CEO and Financial Executives
21	Subsidiary of the Registrant
23.1	Consent of BKD LLP
23.2	Consent of KPMG LLP
31.1	Certification pursuant to Section 302 of the Sarbanes-Oxley Act by James A Hillebrand
31.2	Certification pursuant to Section 302 of the Sarbanes-Oxley Act by T. Clay Stinnett
32.1**	Certification pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by James A. Hillebrand
32.2**	Certification pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by T. Clay Stinnett

132

101

The following financial statements from the Stock Yards Bancorp, Inc. December 31, 2019 Annual Report on Form 10-K, filed on February 28, 2020, formatted in inline eXtensible Business Reporting Language (XBRL): (1)  Consolidated Balance Sheets (2)  Consolidated Statements of Income (3)  Consolidated Statements of Comprehensive Income (4)  Consolidated Statements of Changes in Stockholders’ Equity (5)  Consolidated Statements of Cash Flows (6)  Footnotes to Consolidated Financial Statements

104

The cover page from Stock Yards Bancorp Inc.’s Annual Report on Form 10-K for the year ended December 31, 2019, formatted in inline XBRL and contained in Exhibit 101.

* Indicates matters related to executive compensation or other management contracts.

** This certification shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section, nor shall it be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.

(b)      Exhibits:

The exhibits listed in response to Item 15(a) 3 are filed or furnished as part of this report.

(c)      Financial Statement Schedules:

None.

Item 16. Form 10-K Summary

NA

133

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: February 28, 2020	STOCK YARDS BANCORP, INC. (Registrant)
	By:	/s/ James A. Hillebrand
		James A. Hillebrand
		CEO

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

/s/ James A. Hillebrand	CEO and Director	February 28, 2020
James A. Hillebrand	(principal executive officer)
/s/ T. Clay Stinnett	EVP and CFO	February 28, 2020
T. Clay Stinnett	(principal financial officer)
/s/ Michael B. Newton	SVP and Principal Accounting Officer	February 28, 2020
Michael B. Newton
/s/ David P. Heintzman	Chairman of the Board	February 28, 2020
David P. Heintzman
/s/ Paul J. Bickel III	Director	February 28, 2020
Paul J. Bickel III
/s/ J. McCauley Brown	Director	February 28, 2020
J. McCauley Brown
/s/ Donna L. Heitzman	Director	February 28, 2020
Donna L. Heitzman
/s/ Carl G. Herde	Director	February 28, 2020

Carl G. Herde
/s/ Richard A. Lechleiter	Director	February 28, 2020
Richard A. Lechleiter
/s/ Stephen M. Priebe	Director	February 28, 2020
Stephen M. Priebe
/s/ John L. Schutte	Director	February 28, 2020
John L. Schutte
/s/ Norman Tasman	Director	February 28, 2020
Norman Tasman
/s/ Kathy C. Thompson	Senior EVP and Director	February 28, 2020
Kathy C. Thompson

134

EX-4.1

EXHIBIT 4.1 

DESCRIPTION OF SECURITIES REGISTERED PURSUANT TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934

 Stock Yards Bancorp, Inc. (“Stock Yards,” “we” or “our”) has one class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended, our common stock, no par value per share. The following description of our common stock is a summary of the material terms of our Amended and Restated Articles of Incorporation, as amended (the “Articles of Incorporation”) and our Bylaws (the “Bylaws”) and includes all material information with respect to the rights and privileges associated with ownership of our common stock. For a complete description, we refer you to the more detailed provisions of our Articles of Incorporation and Bylaws, each of which is incorporated by reference as an exhibit to this Annual Report on Form 10-K of which this Exhibit 4.1 is a part, and any applicable provisions of relevant law, including the Kentucky Business Corporation Act and federal laws and regulations governing bank holding companies.

Authorized Capital Stock

Pursuant to our Articles of Incorporation, we have authority to issue up to 40,000,000 shares of common stock, no par value per share, and 1,000,000 shares of preferred stock. Our board of directors may issue shares of the preferred stock from time to time, in one or more series, without shareholder approval. The board of directors may determine the preferences, limitations and relative rights, to the extent permitted by Kentucky law, of any class, or series within a class, of preferred stock that it designates. No shares of preferred stock are currently outstanding.

Voting Rights 

The holders of our common stock have the right to one vote per share on all matters which require their vote and do not have the right to cumulate votes in the election of directors. Our Articles of Incorporation and Bylaws require majority voting for the election of directors in uncontested elections. This means that the director nominees in an uncontested election for directors must receive a number of votes cast “for” his or her election that exceeds the number of votes cast “against.” If the number of nominees exceeds the number of directors to be elected, the directors are elected by a plurality of the votes cast.

Dividend Rights

Holders of our common stock are entitled to receive and share equally in dividends, if, as, and when such dividends are declared by our board of directors out of assets legally available for such purpose, subject to the rights of holders of any class or series of preferred stock which may then be outstanding.

Redemption, Conversion and Preemptive Rights

Shares of our common stock are not redeemable and do not have subscription, conversion or preemptive rights. There are no redemption or sinking fund provisions available to the common stock.

Liquidation Rights

If we liquidate, dissolve or wind up our business, subject to the rights of our creditors and the holders of any outstanding shares of preferred stock having a preference in liquidation, we will distribute our remaining assets to our common shareholders in proportion to the number of shares that each common shareholder holds.

Certain Anti-Takeover Matters

Our Articles of Incorporation and Bylaws contain a number of provisions that may be deemed to have an anti-takeover effect and may delay, deter or prevent a tender offer or takeover attempt that a shareholder might consider in its best interest, including those attempts that might result in a premium over the market price for the shareholders' shares. These provisions include:

Business Combinations. Our Articles of Incorporation require that, before certain types of business combination transactions involving Stock Yards and a person who beneficially owns 20% or more of the outstanding voting securities of Stock Yards (an "interested shareholder"), may be completed, the proposed transaction must first be recommended by our board of directors and approved by (i) the holders of at least 80% of the voting power of all outstanding voting securities of Stock Yards, voting together as a single class, and (ii) two-thirds of the outstanding voting power of our stock other than the voting securities owned by the interested shareholder who is a party to the transaction, voting together as a single class. A business combination includes, among other things, a merger, asset sale or a transaction resulting in a financial benefit to the interested shareholder. These special voting requirements do not apply to a business combination with an interested shareholder if the transaction is either approved by a majority of our directors who are not affiliated with the interested shareholder or the proposed transaction meets certain minimum price requirements specified in the Articles of Incorporation. In addition, Stock Yards is prohibited from engaging in a business combination transaction with an interested shareholder for a period of three years after the date of the transaction or event in which the person became an interested shareholder, unless prior to the time the person became an interested shareholder, a majority of the disinterested members of our board of directors approved either the proposed business combination or the transaction that results in the person becoming an interested shareholder. These provisions of our Articles of Incorporation are intended to deter abusive takeover tactics and to help assure that all shareholders of Stock Yards will be treated equally in a possible acquisition transaction. They may have the effect of encouraging a party or parties interested in acquiring Stock Yards to negotiate in advance with our board of directors because the shareholder approval requirement would be avoided if a majority of the directors then in office approve the proposed business combination transaction.

Advance Notice Requirements for Shareholder Proposals and Director Nominations.     Our Bylaws establish an advance notice procedure with regard to the nomination, other than by or at the direction of the board of directors, of candidates for election as directors and with regard to certain matters to be brought before an annual meeting of our shareholders. In general, notice must be received by Stock Yards not less than 90 days prior to the first anniversary of the preceding year's annual meeting and must contain certain specified information concerning the person to be nominated or the matter to be brought before the meeting and concerning the shareholder submitting the proposal.

Removal of Directors Only for Cause.     Our Articles of Incorporation limit the right of its shareholders to remove directors from office to those circumstances meeting the definition of "cause" under the Articles of Incorporation. Cause means a director's participation in any transaction in which his or her financial interests conflict with those of Stock Yards or our shareholders; any act or omission not in good faith or which involves intentional misconduct or a knowing violation of law; or the participation by the director in any transaction from which he or she derived an improper personal benefit.

Authorized But Unissued Shares.     Our authorized but unissued shares of common stock and preferred stock are available for future issuance without shareholder approval, subject to limitations imposed by the Nasdaq Stock Market. We may use these additional shares for a variety of corporate purposes, including future public offerings to raise additional capital, acquisitions and employee benefit plans. The existence of authorized but unissued and unreserved common stock and preferred stock could render more difficult or discourage an attempt to obtain control of Stock Yards by means of a proxy contest, tender offer, merger or otherwise.

Listing

Our common stock is listed on the Nasdaq Global Select Market under the symbol "SYBT."

Transfer Agent

The transfer agent for our common stock is Computershare Investor Services LLC.

EX-14

EXHIBIT 14

Code of Ethics for the Chief Executive Officer and Financial Executives

Stock Yards Bancorp, Inc. and Stock Yards Bank & Trust Company are strongly committed to conducting business with honesty and integrity and in compliance with all applicable laws and regulations. Senior financial officers hold an important position in our corporate governance structure because of their role in balancing, protecting and preserving the interests of all of our stakeholders. This Code of Ethics for the Chief Executive Officer and Financial Executives contains specific principles to which the Chief Executive Officer, President, Chief Financial Officer, Controller and other financial, accounting and treasury officers (the “Financial Officers”) are expected to adhere. This Code of Ethics is intended to supplement the general corporate code of conduct.

This code is intended to be our Code of Ethics for Senior Financial Officers pursuant to the provisions of Section 406 of the Sarbanes-Oxley Act of 2002 and related rules of the Securities and Exchange Commission.

All Financial Officers will:

1. Act with honesty and integrity, avoiding actual or apparent conflicts of interest in personal and professional relationships.

2. Provide our stakeholders with information that is accurate, complete, objective, relevant, timely and understandable.

3. Comply with rules and regulations of federal, state, provincial and local governments, and other appropriate private and public regulatory agencies.

4. Act in good faith, responsibly, with due care, competence and diligence, without misrepresenting material facts or allowing one’s independent judgment to be subordinated.

5. Respect the confidentiality of information acquired in the course of one’s work except when authorized or otherwise legally obligated to disclose. Confidential information acquired in the course of one’s work will not be used for personal advantage.

6. Share knowledge and maintain skills important and relevant to our stakeholders’ needs.

7. Proactively promote ethical behavior as a responsible partner among peers in one’s work environment.

8. Achieve responsible use of and control over all assets and resources employed or entrusted to us.

9. Report known or suspected violations of this Code in accordance with all applicable rules of procedure.

10. Be held accountable for adhering to this Code.

11. Not unduly or fraudulently influence, coerce, manipulate or mislead any authorized audit or interfere with any auditor engaged in the performance of an internal or independent audit of our financial statements or accounting books and records.

We will promptly disclose the nature of any amendment (other than administrative or non-substantive amendments) to or waiver from this Code of Ethics as may be required by applicable rules of the Securities and Exchange Commission and the NASDAQ.

EX-21

EXHIBIT 21

Stock Yards Bancorp, Inc. - Subsidiary

Stock Yards Bank & Trust Company, a Kentucky Banking Corporation

1040 East Main Street 

Louisville, KY 40206

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the Registration Statements on Form S-8 (File Nos. 333-128809 and 333-96742) and Form S-3 (File No. 033-96744) of Stock Yards Bancorp, Inc. (the “Company”) of our reports dated February 28, 2020, on our audits of the consolidated financial statements of the Company as of December 31, 2019 and 2018, and for the years then ended, which report is included in this Annual Report on Form 10-K. We also consent to the incorporation by reference of our report dated February 28, 2020, on our audit of the internal control over financial reporting of the Company as of December 31, 2019, which report is included in this Annual Report on Form 10-K.

/s/ BKD, LLP

Indianapolis, Indiana

February 28, 2020

EX-23.2

 Exhibit 23.2

Consent of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders
Stock Yards Bancorp, Inc.:

We consent to the incorporation by reference in registration statements Nos. 333-128809 and 333-96742 on Form S-8 and No. 333-96744 on Form S-3 of Stock Yards Bancorp, Inc. of our report dated March 13, 2018, with respect to the consolidated statements of income, comprehensive income, changes in stockholders’ equity, and cash flows of Stock Yards Bancorp, Inc. and subsidiary (the Company) as of December 31, 2017, and the related notes, which report appears in the December 31, 2019 annual report on Form 10-K of Stock Yards Bancorp, Inc.

/s/ KPMG LLP

Louisville, Kentucky

February 28, 2020

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT

I, James A. Hillebrand, certify that:

1. I have reviewed this annual report on Form 10-K of Stock Yards Bancorp, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal controls over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 28, 2020	By:	/s/ James A. Hillebrand
		James A. Hillebrand  CEO

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT

I, T. Clay Stinnett, certify that: 

1. I have reviewed this annual report on Form 10-K of Stock Yards Bancorp, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal controls over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 28, 2020	By:	/s/ T. Clay Stinnett
		T. Clay Stinnett, EVP, Treasurer and CFO

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with this annual report of Stock Yards Bancorp, Inc. on Form 10-K for the period ending December 31, 2019 (the “Report”), we, the undersigned, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of our knowledge and belief: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Stock Yards Bancorp, Inc. as of and for the periods presented in the Report.

Date: February 28, 2020	By:	/s/ James A. Hillebrand
		James A. Hillebrand
		CEO

A signed original of this written statement required by section 906 has been provided to Stock Yards Bancorp, Inc. and will be retained by Stock Yards Bancorp, Inc. and furnished to the SEC or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with this annual report of Stock Yards Bancorp, Inc. on Form 10-K for the period ending December 31, 2019 (the “Report”), we, the undersigned, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of our knowledge and belief: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Stock Yards Bancorp, Inc. as of and for the periods presented in the Report.

Date: February 28, 2020	By:	/s/ T. Clay Stinnett
		T. Clay Stinnett
		EVP, Treasurer and CFO

A signed original of this written statement required by section 906 has been provided to Stock Yards Bancorp, Inc. and will be retained by Stock Yards Bancorp, Inc. and furnished to the SEC or its staff upon request.

XML

Note 2 - Restrictions on Cash and Due From Banks

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Restrictions on Cash and Due from Banks Disclosure [Text Block]

(2) Restrictions on Cash and Due from Banks

At December 31, 2019 and 2018, Bancorp’s interest-bearing cash accounts and non-interest bearing deposits held at other financial institutions exceeded the $250,000 federally insured limits by approximately $89 million and $1 million. Each correspondent bank’s financial performance and market rating are reviewed on a quarterly basis to ensure Bancorp has deposits only at institutions providing minimal risk for those exceeding federally insured limits. Additionally, at December 31, 2019 and 2018, Bancorp had approximately $113 million and $143 million at the FHLB and FRB, which are government-sponsored entities not insured by the FDIC. Bancorp is required to maintain an average reserve balance in cash or with the FRB relating to customer deposits. The amount of those required reserve balances was approximately $11 million and $9 million at December 31, 2019 and 2018, respectively, and is included in FFS and interest bearing due from banks in the consolidated balance sheet.

XML

Note 6 - Premises and Equipment

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Property, Plant and Equipment Disclosure [Text Block]

(6) Premises and Equipment

A summary of premises and equipment follows:

December 31, (in thousands)	2019			2018
Land	$	10,241		$	9,664
Buildings and improvements		50,809			47,726
Furniture and equipment		22,032			21,793
Construction in progress		623			1,051
Right-of-use operating lease asset		12,737			-
		96,442			80,234
Accumulated depreciation and amortization		(37,824	)		(35,470	)
Total premises and equipment	$	58,618		$	44,764

Depreciation expense related to premises and equipment was $4.2 million in 2019, $3.7 million in 2018 and $3.5 million in 2017.

Bancorp acquired five banking centers in its May 1, 2019 KSB acquisition. Based upon the proximity to existing branch locations, Bancorp closed and ultimately sold three of these locations in 2019, while retaining the associated customer relationships. Goodwill was recast based upon these sales.

The right-of-use lease asset and operating lease liability were recorded in premises and equipment and other liabilities on the consolidated balance sheet upon the adoption of ASU 2016-02, Leases in the first quarter of 2019.

Bancorp has operating leases for various branch locations with terms remaining from three months to 14 years, some of which include options to extend the leases in five year increments. Options reasonably expected to be exercised are included in determination of the right of use asset. Bancorp elected the practical expedient to expense short-term lease expense associated with leases with original terms 12 months or less. Bancorp elected not to separate non-lease components from lease components for its operating leases.

Balance sheet, income statement, and cash flow detail regarding operating leases follows:

(dollars in thousands)	December 31, 2019
Balance Sheet
Operating lease right-of-use asset	$	12,737
Operating lease liability		14,369
Weighted average remaining lease term		9.38
Weighted average discount rate		2.46	%
Maturities of lease liabilities:
One year or less	$	1,964
Year 2		1,915
Year 3		1,930
Year 4		1,972
Year 5		1,781
Greater than 5 years		6,619
Total lease payments	$	16,181
Less imputed interest		1,812
Total	$	14,369

	Year Ended
(In thousands)	December 31, 2019
Income Statement
Components of lease expense:
Operating lease cost	$	1,870
Variable lease cost		152
Less sublease income		54
Total lease cost	$	1,968
(In thousands)
Cash flow Statement
Supplemental cash flow information:
Operating cash flows from operating leases	$	1,656

As of December 31, 2019 Bancorp had not entered into any lease agreements that had yet to commence.

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Note 10 - Deposits

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Deposit Liabilities Disclosures [Text Block]

(10) Deposits

The composition of the Bank’s deposits follows:

December 31, (in thousands)	2019		2018
Non-interest bearing demand deposits	$	810,475	$	711,023
Interest bearing deposits:
Interest bearing demand		979,595		892,867
Savings		169,622		155,007
Money market		742,029		688,744
Time deposits of $250,000 or more		81,412		55,182
Other time deposits		350,805		291,533
Total time deposits(1)		432,217		346,715
Total interest bearing deposits		2,323,463		2,083,333
Total deposits	$	3,133,938	$	2,794,356

(1) Includes $30 million in brokered deposits as of December 31, 2019 and 2018.

Deposits totaling $126 million were acquired on May 1, 2019, associated with the KSB acquisition.

Interest expense related to certificates of deposit and other time deposits in denominations of $250,000 or more was $1.3 million, $431,000 and $161,000, for the years ended December 31, 2019, 2018 and 2017.

At December 31, 2019, the scheduled maturities of all time deposits were as follows:

(in thousands)
2020	$	273,568
2021		129,676
2022		11,729
2023		10,049
2024		7,094
2025 and thereafter		101
Total time deposits	$	432,217

Deposits of directors and their associates, including deposits of companies for which directors are principal owners, and executive officers were $81 million and $42 million at December 31, 2019 and 2018, respectively.

At December 31, 2019 and 2018, Bancorp had $692,000 and $886,000 of deposits accounts in overdraft status and thus have been reclassified to loans on the accompanying consolidated balance sheets.

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Note 3 - Acquisition of KSB (Tables)

12 Months Ended

Dec. 31, 2019

Notes Tables

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block]

	May 1, 2019
	As Recorded			Fair Value				Recast				As Recorded
(in thousands)	by King			Adjustments (1)				Adjustments (1)				by Bancorp
Assets acquired:
Cash and due from banks	$	3,316		$	—			$	—			$	3,316
Interest bearing due from banks		1,761			—				—				1,761
Securities available for sale		12,404			23		a		—				12,427
Federal Home Loan Bank stock, at cost		1,517			—				—				1,517
Federal Reserve Bank stock, at cost		490			—				—				490
Loans		165,744			(1,597	)	b		(118	)	b		164,029
Allowance for loan losses		(1,812	)		1,812		b		—				—
Net loans		163,932			215				(118	)			164,029
Premises and equipment, net		4,358			(1,328	)	c		431		c		3,461
Bank owned life insurance		3,431			—				—				3,431
Core deposit intangible		—			1,519		d		—				1,519
Other real estate owned		325			(325	)	e		—				—
Other assets and accrued interest receivable		867			(36	)	f		—				831
Total assets acquired	$	192,401		$	68			$	313			$	192,782
Liabilities assumed:
Deposits
Non-interest bearing	$	24,939		$	—			$	—			$	24,939
Interest bearing		100,839			(252	)	g		—				100,587
Total deposits		125,778			(252	)			—				125,526
Federal funds purchased		1,566			—				—				1,566
Federal Home Loan Bank advances		43,718			(419	)	h		—				43,299
Subordinated Note		3,609			—				—				3,609
Holding Company line of credit		2,300			—				—				2,300
Other liabilities and accrued interest payable		313			—				—				313
Total liabilities assumed		177,284			(671	)			—				176,613
Net assets acquired	$	15,117		$	739			$	313			$	16,169
Cash consideration paid													(28,000	)
Goodwill												$	11,831

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Note 25 - Segments

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

(25) Segments

Bancorp’s principal activities include Commercial Banking and WM&T. Commercial Banking provides a full range of loan and deposit products to individual consumers and businesses. Commercial Banking also includes Bancorp’s mortgage origination and investment products sales activity. WM&T provides financial management services including investment management, trust and estate administration, and retirement plan services.

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. Measurement of performance of 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.

Principally, all of the net assets of Bancorp are involved in the Commercial Banking segment. Goodwill of $12.5 million, of which $682,000 relates to a bank acquisition in 1996 and $11.8 million related to the May 2019 KSB acquisition, has been assigned to the Commercial Banking segment. Assets assigned to WM&T primarily consist of net premises and equipment.

Selected financial information by business segment follows:

	Commercial
As of and for the Year ended December 31, 2019 (in thousands)	Banking		WM&T		Total
Net interest income	$	124,902	$	319	$	125,221
Provision for loan and leases		1,000		—		1,000
Wealth management and trust services		—		22,643		22,643
All other non-interest income		27,147		—		27,147
Non-interest expenses		85,642		12,709		98,351
Income before income tax expense		65,407		10,253		75,660
Income tax expense		7,368		2,225		9,593
Net income	$	58,039	$	8,028	$	66,067
Total assets	$	3,720,502	$	3,695	$	3,724,197

	Commercial
As of and for the Year ended December 31, 2018 (in thousands)	Banking		WM&T		Total
Net interest income	$	114,161	$	255	$	114,416
Provision for loan and leases		2,705		—		2,705
Wealth management and trust services		—		21,536		21,536
All other non-interest income		23,810		—		23,810
Non-interest expenses		76,963		12,546		89,509
Income before income tax expense		58,303		9,245		67,548
Income tax expense		10,025		2,006		12,031
Net income	$	48,278	$	7,239	$	55,517
Total assets	$	3,299,169	$	3,755	$	3,302,924

	Commercial
As of and for the Year ended December 31, 2017 (in thousands)	Banking		WM&T		Total
Net interest income	$	103,352	$	301	$	103,653
Provision for loan and leases		2,550		—		2,550
Wealth management and trust services		—		20,505		20,505
All other non-interest income		23,994		—		23,994
Non-interest expenses		78,181		12,239		90,420
Income before income tax expense		46,615		8,567		55,182
Income tax expense		14,080		3,059		17,139
Net income	$	32,535	$	5,508	$	38,043
Total assets	$	3,237,656	$	1,990	$	3,239,646

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Note 22 - Derivative Financial Instruments (Details Textual) - Cash Flow Hedging [Member] - Designated as Hedging Instrument [Member] - USD ($) $ in Millions	Dec. 31, 2016	Dec. 31, 2015
Interest Rate Swap, Maturing December 6, 2020 [Member]
Derivative Liability, Notional Amount		$ 20
Interest Rate Swap, Maturing December 6, 2021 [Member]
Derivative Liability, Notional Amount	$ 10

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Note 20 - Assets and Liabilities Measured and Reported at Fair Value - Assets Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Securities available-for-sale	$ 470,738	$ 436,995
Securities available for sale (amortized cost of $469,313 in 2019 and $443,742 in 2018)	470,738	436,995
US Government-sponsored Enterprises Debt Securities [Member]
Securities available-for-sale	209,944	261,039
Securities available for sale (amortized cost of $469,313 in 2019 and $443,742 in 2018)	209,944	261,039
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]
Securities available-for-sale	193,861	146,277
Securities available for sale (amortized cost of $469,313 in 2019 and $443,742 in 2018)	193,861	146,277
US States and Political Subdivisions Debt Securities [Member]
Securities available-for-sale	17,036	29,679
Securities available for sale (amortized cost of $469,313 in 2019 and $443,742 in 2018)	17,036	29,679
Fair Value, Recurring [Member]
Securities available-for-sale	470,738	436,995
Securities available for sale (amortized cost of $469,313 in 2019 and $443,742 in 2018)	470,738	436,995
Interest rate swaps	2,696	1,035
Total assets	473,434	438,030
Interest rate swaps	2,767	543
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Securities available-for-sale	49,897	0
Securities available for sale (amortized cost of $469,313 in 2019 and $443,742 in 2018)	49,897	0
Interest rate swaps	0	0
Total assets	49,897	0
Interest rate swaps	0	0
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Securities available-for-sale	420,841	436,995
Securities available for sale (amortized cost of $469,313 in 2019 and $443,742 in 2018)	420,841	436,995
Interest rate swaps	2,696	1,035
Total assets	423,537	438,030
Interest rate swaps	2,767	543
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Securities available-for-sale	0	0
Securities available for sale (amortized cost of $469,313 in 2019 and $443,742 in 2018)	0	0
Interest rate swaps	0	0
Total assets	0	0
Interest rate swaps	0	0
Fair Value, Recurring [Member] | US Treasury and Government [Member]
Securities available-for-sale	49,897
Securities available for sale (amortized cost of $469,313 in 2019 and $443,742 in 2018)	49,897
Fair Value, Recurring [Member] | US Treasury and Government [Member] | Fair Value, Inputs, Level 1 [Member]
Securities available-for-sale	49,897
Securities available for sale (amortized cost of $469,313 in 2019 and $443,742 in 2018)	49,897
Fair Value, Recurring [Member] | US Treasury and Government [Member] | Fair Value, Inputs, Level 2 [Member]
Securities available-for-sale	0
Securities available for sale (amortized cost of $469,313 in 2019 and $443,742 in 2018)	0
Fair Value, Recurring [Member] | US Treasury and Government [Member] | Fair Value, Inputs, Level 3 [Member]
Securities available-for-sale	0
Securities available for sale (amortized cost of $469,313 in 2019 and $443,742 in 2018)	0
Fair Value, Recurring [Member] | US Government-sponsored Enterprises Debt Securities [Member]
Securities available-for-sale	209,944	261,039
Securities available for sale (amortized cost of $469,313 in 2019 and $443,742 in 2018)	209,944	261,039
Fair Value, Recurring [Member] | US Government-sponsored Enterprises Debt Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Securities available-for-sale	0	0
Securities available for sale (amortized cost of $469,313 in 2019 and $443,742 in 2018)	0	0
Fair Value, Recurring [Member] | US Government-sponsored Enterprises Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Securities available-for-sale	209,944	261,039
Securities available for sale (amortized cost of $469,313 in 2019 and $443,742 in 2018)	209,944	261,039
Fair Value, Recurring [Member] | US Government-sponsored Enterprises Debt Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Securities available-for-sale	0	0
Securities available for sale (amortized cost of $469,313 in 2019 and $443,742 in 2018)	0	0
Fair Value, Recurring [Member] | Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]
Securities available-for-sale	193,861	146,277
Securities available for sale (amortized cost of $469,313 in 2019 and $443,742 in 2018)	193,861	146,277
Fair Value, Recurring [Member] | Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member] | Fair Value, Inputs, Level 1 [Member]
Securities available-for-sale	0	0
Securities available for sale (amortized cost of $469,313 in 2019 and $443,742 in 2018)	0	0
Fair Value, Recurring [Member] | Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member] | Fair Value, Inputs, Level 2 [Member]
Securities available-for-sale	193,861	146,277
Securities available for sale (amortized cost of $469,313 in 2019 and $443,742 in 2018)	193,861	146,277
Fair Value, Recurring [Member] | Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member] | Fair Value, Inputs, Level 3 [Member]
Securities available-for-sale	0	0
Securities available for sale (amortized cost of $469,313 in 2019 and $443,742 in 2018)	0	0
Fair Value, Recurring [Member] | US States and Political Subdivisions Debt Securities [Member]
Securities available-for-sale	17,036	29,679
Securities available for sale (amortized cost of $469,313 in 2019 and $443,742 in 2018)	17,036	29,679
Fair Value, Recurring [Member] | US States and Political Subdivisions Debt Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Securities available-for-sale	0	0
Securities available for sale (amortized cost of $469,313 in 2019 and $443,742 in 2018)	0	0
Fair Value, Recurring [Member] | US States and Political Subdivisions Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Securities available-for-sale	17,036	29,679
Securities available for sale (amortized cost of $469,313 in 2019 and $443,742 in 2018)	17,036	29,679
Fair Value, Recurring [Member] | US States and Political Subdivisions Debt Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Securities available-for-sale	0	0
Securities available for sale (amortized cost of $469,313 in 2019 and $443,742 in 2018)	$ 0	$ 0

XML

Note 20 - Assets and Liabilities Measured and Reported at Fair Value (Tables)

12 Months Ended

Dec. 31, 2019

Notes Tables

Fair Value, Assets Measured on Recurring Basis [Table Text Block]

(in thousands)	Fair value at December 31, 2019
Assets	Total		Level 1		Level 2		Level 3
Securities available for sale:
U.S. Treasury and other U.S. government obligations	$	49,897	$	49,897	$	—	$	—
Government sponsored enterprise obligations		209,944		—		209,944		—
Mortgage backed securities - government agencies		193,861		—		193,861		—
Obligations of states and political subdivisions		17,036		—		17,036		—
Total securities available for sale		470,738		49,897		420,841		—
Interest rate swaps		2,696		—		2,696		—
Total assets	$	473,434	$	49,897	$	423,537	$	—
Liabilities
Interest rate swaps	$	2,767	$	—	$	2,767	$	—

(in thousands)	Fair value at December 31, 2018
Assets	Total		Level 1		Level 2		Level 3
Securities available for sale:
Government sponsored enterprise obligations	$	261,039	$	—	$	261,039	$	—
Mortgage backed securities - government agencies		146,277		—		146,277		—
Obligations of states and political subdivisions		29,679		—		29,679		—
Total securities available for sale		436,995		—		436,995		—
Interest rate swaps		1,035		—		1,035		—
Total assets	$	438,030	$	—	$	438,030	$	—
Liabilities
Interest rate swaps	$	543	$	—	$	543	$	—

Fair Value Measurements, Nonrecurring [Table Text Block]

	Fair value at December 31, 2019								Losses
(in thousands)	Total		Level 1		Level 2		Level 3		Recorded
Impaired loans	$	7,253	$	—	$	—	$	7,253	$	(20	)
Other real estate owned		493		—		—		493		(70	)

	Fair value at December 31, 2018								Losses
(in thousands)	Total		Level 1		Level 2		Level 3		Recorded
Impaired loans	$	925	$	—	$	—	$	925	$	(514	)
Other real estate owned		239		—		—		239		(32	)

Fair Value, Assets and Liabilities Measured on Nonrecurring Basis, Valuation Techniques [Table Text Block]

December 31, 2019
(dollars in thousands)	Fair Value		Valuation Technique	Unobservable Inputs	Weighted Average
Impaired loans - collateral dependent	$	7,253	Appraisal	Appraisal discounts		60.3	%
Other real estate owned		493	Appraisal	Appraisal discounts		17.1

December 31, 2018
(dollars in thousands)	Fair Value		Valuation Technique	Unobservable Inputs	Weighted Average
Impaired loans - collateral dependent	$	925	Appraisal	Appraisal discounts		9.9	%
Other real estate owned		239	Appraisal	Appraisal discounts		22.0

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Note 24 - Stock Yards Bancorp, Inc. (Parent Company Only) (Tables)

12 Months Ended

Dec. 31, 2019

Notes Tables

Condensed Balance Sheet [Table Text Block]

Condensed Balance Sheets
	December 31,
(in thousands)	2019		2018
Assets
Cash on deposit with subsidiary bank	$	14,714	$	7,655
Investment in and receivable from subsidiaries		384,136		356,118
Other assets		7,821		3,147
Total assets	$	406,671	$	366,920
Liabilities and stockholders' equity
Other liabilities	$	374	$	420
Total stockholders’ equity		406,297		366,500
Total liabilities and stockholders’ equity	$	406,671	$	366,920

Condensed Income Statement [Table Text Block]

Condensed Statements of Income
	Years ended December 31,
(in thousands)	2019			2018			2017
Income - dividends and interest from subsidiaries	$	72,119		$	21,403		$	18,160
Other income		2			12			82
Less expenses		4,935			4,818			3,255
Income before income taxes and equity in undistributed net income of subsidiary		67,186			16,597			14,987
Income tax benefit		(4,683	)		(1,713	)		(1,985	)
Income before equity in undistributed net income of subsidiary		71,869			18,310			16,972
Equity in undistributed net income of subsidiary		(5,802	)		37,207			21,071
Net income	$	66,067		$	55,517		$	38,043
Comprehensive Income	$	71,886		$	52,811		$	37,612

Condensed Cash Flow Statement [Table Text Block]

Condensed Statements of Cash Flows
	Years ended December 31
(in thousands)	2019			2018			2017
Operating activities
Net income	$	66,067		$	55,517		$	38,043
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in undistributed net income of subsidiaries		5,802			(37,207	)		(21,071	)
Gain on sale of fixed assets		—			(10	)		—
Change in receivable from subsidiaries
Stock compensation expense		3,578			4,027			2,892
Excess tax benefits from stock- based compensation arrangements		(812	)		(549	)		(1,463	)
Depreciation, amortization and accretion, net		—			—			4
Proceeds from liquidation of private investment fund		—			—			(81	)
Change in other assets		(3,863	)		(1,080	)		5,943
Change in other liabilities		(81	)		220			10
Net cash provided by operating activities		70,691			20,918			24,277
Investing activities
Proceeds from sale of fixed assets		—			13			—
Cash for acquisition		(28,000	)		—			—
Proceeds from liquidation of private investment fund		—			—			81
Net cash provided by (used in) investing activities		(28,000	)		13			81
Financing activities
Repurchase of common stock		(11,817	)		(2,004	)		(2,389	)
Share repurchases related to compensation plans		(272	)		(154	)		(216	)
Cash dividends paid		(23,543	)		(21,766	)		(18,077	)
Net cash used in financing activities		(35,632	)		(23,924	)		(20,682	)
Net increase (decrease) in cash		7,059			(2,993	)		3,676
Cash at beginning of year		7,655			10,648			6,972
Cash at end of year	$	14,714		$	7,655		$	10,648

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Note 5 - Loans - Aging of the Recorded Investment in Loans (Details) - USD ($) $ in Thousands		Dec. 31, 2019	Dec. 31, 2018
Current		$ 2,829,857	$ 2,537,627
Past due		15,159	10,544
Loans	[1]	2,845,016	2,548,171
Financial Asset, 30 to 59 Days Past Due [Member]
Past due		2,647	5,112
Financial Asset, 60 to 89 Days Past Due [Member]
Past due		467	2,076
Financial Asset, Equal to or Greater than 90 Days Past Due [Member]
Past due		12,045	3,356
Commercial and Industrial Portfolio Segment [Member]
Current		861,860	832,923
Past due		8,651	601
Loans		870,511	833,524
Commercial and Industrial Portfolio Segment [Member] | Financial Asset, 30 to 59 Days Past Due [Member]
Past due		253	197
Commercial and Industrial Portfolio Segment [Member] | Financial Asset, 60 to 89 Days Past Due [Member]
Past due		194	200
Commercial and Industrial Portfolio Segment [Member] | Financial Asset, Equal to or Greater than 90 Days Past Due [Member]
Past due		8,204	204
Construction and Development Excluding Undeveloped Land Portfolio Segment [Member]
Current		213,766	224,732
Past due		56	318
Loans	[2]	213,822	225,050
Construction and Development Excluding Undeveloped Land Portfolio Segment [Member] | Financial Asset, 30 to 59 Days Past Due [Member]
Past due		6	0
Construction and Development Excluding Undeveloped Land Portfolio Segment [Member] | Financial Asset, 60 to 89 Days Past Due [Member]
Past due		50	0
Construction and Development Excluding Undeveloped Land Portfolio Segment [Member] | Financial Asset, Equal to or Greater than 90 Days Past Due [Member]
Past due		0	318
Undevelopment Land Portfolio Segment [Member]
Current		46,360	29,552
Past due		0	540
Loans		46,360	30,092
Undevelopment Land Portfolio Segment [Member] | Financial Asset, 30 to 59 Days Past Due [Member]
Past due		0	66
Undevelopment Land Portfolio Segment [Member] | Financial Asset, 60 to 89 Days Past Due [Member]
Past due		0	0
Undevelopment Land Portfolio Segment [Member] | Financial Asset, Equal to or Greater than 90 Days Past Due [Member]
Past due		0	474
Real Estate Mortgage Portfolio Segment [Member]
Current		1,660,492	1,402,362
Past due		6,364	9,085
Loans		1,666,856	1,411,447
Real Estate Mortgage Portfolio Segment [Member] | Commercial Investment [Member]
Current		735,387	586,884
Past due		1,231	1,726
Loans		736,618	588,610
Real Estate Mortgage Portfolio Segment [Member] | Owner Occupied Commercial [Member]
Current		470,951	421,143
Past due		2,832	5,230
Loans		473,783	426,373
Real Estate Mortgage Portfolio Segment [Member] | One to Four Family Residential [Member]
Current		332,718	274,547
Past due		1,640	1,470
Loans		334,358	276,017
Real Estate Mortgage Portfolio Segment [Member] | Home Equity First Lien [Member]
Current		48,441	49,321
Past due		179	179
Loans		48,620	49,500
Real Estate Mortgage Portfolio Segment [Member] | Home Equity Junior Lien [Member]
Current		72,995	70,467
Past due		482	480
Loans		73,477	70,947
Real Estate Mortgage Portfolio Segment [Member] | Financial Asset, 30 to 59 Days Past Due [Member]
Past due		2,304	4,849
Real Estate Mortgage Portfolio Segment [Member] | Financial Asset, 30 to 59 Days Past Due [Member] | Commercial Investment [Member]
Past due		94	1,382
Real Estate Mortgage Portfolio Segment [Member] | Financial Asset, 30 to 59 Days Past Due [Member] | Owner Occupied Commercial [Member]
Past due		467	2,732
Real Estate Mortgage Portfolio Segment [Member] | Financial Asset, 30 to 59 Days Past Due [Member] | One to Four Family Residential [Member]
Past due		1,368	374
Real Estate Mortgage Portfolio Segment [Member] | Financial Asset, 30 to 59 Days Past Due [Member] | Home Equity First Lien [Member]
Past due		179	179
Real Estate Mortgage Portfolio Segment [Member] | Financial Asset, 30 to 59 Days Past Due [Member] | Home Equity Junior Lien [Member]
Past due		196	182
Real Estate Mortgage Portfolio Segment [Member] | Financial Asset, 60 to 89 Days Past Due [Member]
Past due		219	1,876
Real Estate Mortgage Portfolio Segment [Member] | Financial Asset, 60 to 89 Days Past Due [Member] | Commercial Investment [Member]
Past due		0	107
Real Estate Mortgage Portfolio Segment [Member] | Financial Asset, 60 to 89 Days Past Due [Member] | Owner Occupied Commercial [Member]
Past due		86	1,377
Real Estate Mortgage Portfolio Segment [Member] | Financial Asset, 60 to 89 Days Past Due [Member] | One to Four Family Residential [Member]
Past due		33	336
Real Estate Mortgage Portfolio Segment [Member] | Financial Asset, 60 to 89 Days Past Due [Member] | Home Equity First Lien [Member]
Past due		0	0
Real Estate Mortgage Portfolio Segment [Member] | Financial Asset, 60 to 89 Days Past Due [Member] | Home Equity Junior Lien [Member]
Past due		100	56
Real Estate Mortgage Portfolio Segment [Member] | Financial Asset, Equal to or Greater than 90 Days Past Due [Member]
Past due		3,841	2,360
Real Estate Mortgage Portfolio Segment [Member] | Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Commercial Investment [Member]
Past due		1,137	237
Real Estate Mortgage Portfolio Segment [Member] | Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Owner Occupied Commercial [Member]
Past due		2,279	1,121
Real Estate Mortgage Portfolio Segment [Member] | Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | One to Four Family Residential [Member]
Past due		239	760
Real Estate Mortgage Portfolio Segment [Member] | Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Home Equity First Lien [Member]
Past due		0	0
Real Estate Mortgage Portfolio Segment [Member] | Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Home Equity Junior Lien [Member]
Past due		186	242
Consumer Portfolio Segment [Member]
Current		47,379	48,058
Past due		88	0
Loans		47,467	48,058
Consumer Portfolio Segment [Member] | Financial Asset, 30 to 59 Days Past Due [Member]
Past due		84	0
Consumer Portfolio Segment [Member] | Financial Asset, 60 to 89 Days Past Due [Member]
Past due		4	0
Consumer Portfolio Segment [Member] | Financial Asset, Equal to or Greater than 90 Days Past Due [Member]
Past due		$ 0	$ 0

[1] Total loans are presented inclusive of premiums, discounts, and net loan origination fees and costs.

[2] Consists of land acquired for development by the borrower, but for which no development has yet taken place.

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Note 8 - Other Assets - Changes in the Net Carrying Amount of MSRs (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Balance, beginning of period	$ 1,022	$ 875	$ 921
Additions	506	302	225
Amortized to expense	(156)	(155)	(271)
Balance, end of period	$ 1,372	$ 1,022	$ 875

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Note 12 - FHLB Advances - Contractual Maturities and Average Effective Rates of Outstanding Advances (Details) - USD ($)	Dec. 31, 2019	Dec. 31, 2018
2021	$ 6,004,000
2022	3,193,000
2023	2,655,000
Advances from Federal Home Loan Banks, Total	79,953,000	$ 48,177,000
Federal Home Loan Bank Advances Outstanding [Member]
2021	$ 50,004,000
Fixed rate, 2020	1.99%
2022	$ 2,400,000	$ 1,691,000
Fixed rate, 2020	2.52%	2.23%
2023		$ 215,000
Fixed rate, 2021		2.12%
Advance, 2023	$ 456,000	$ 0
Fixed rate, 2023	1.00%	0.00%
Advance, 2024	$ 2,023,000
Fixed rate, 2024	2.36%
Advance, 2024	$ 3,774,000	$ 2,240,000
Fixed rate, 2024	2.41%	2.36%
Advance, 2025	$ 8,156,000	$ 4,626,000
Fixed rate, 2025	1.96%	2.42%
Advance, 2026	$ 7,445,000	$ 8,185,000
Fixed rate, 2026	1.73%	1.99%
Advance, 2027	$ 5,695,000	$ 0
Fixed rate, 2027	2.32%	0.00%
Advance, 2028		$ 1,220,000
Fixed rate, 2028		1.49%
Advances from Federal Home Loan Banks, Total	$ 79,953,000	$ 18,177,000
Fixed rate	2.02%	2.14%

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Note 13 - Other Comprehensive Income (Loss) - Reclassifications Out of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended												12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Income tax expense	$ 2,941	$ 3,783	$ 1,030	$ 1,839	$ 2,265	$ 3,555	$ 3,159	$ 3,052	$ 5,542	$ 4,096	$ 4,359	$ 3,142	$ 9,593	$ 12,031	$ 17,139
Reclassification out of Accumulated Other Comprehensive Income [Member]
Income tax expense													0	0	81
Reclassification, net of income taxes													0	0	(151)
Reclassification out of Accumulated Other Comprehensive Income [Member] | AOCI, Accumulated Gain (Loss), Debt Securities, Available-for-sale, Parent [Member]
Realized loss on sale of securities available for sale													$ 0	$ 0	$ (232)

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Note 7 - Goodwill and Core Deposit Intangibles - Changes in the Net Carrying Amount of Core Deposit Intangibles (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Balance, beginning of period	$ 1,057
Balance, end of period	2,285	$ 1,057
Core Deposits [Member]
Balance, beginning of period	1,057	1,225	$ 1,405
Finite-lived Intangible Assets Acquired	1,519	0	0
Amortized to expense	(291)	(168)	(180)
Balance, end of period	$ 2,285	$ 1,057	$ 1,225

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Note 5 - Loans - Allowance for Loan Losses by Portfolio Segment and Based on Impairment Evaluation Method (Details) - USD ($) $ in Thousands		3 Months Ended												12 Months Ended
		Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2019	Dec. 31, 2018
Balance					$ 25,534				$ 24,885				$ 24,007	$ 25,534	$ 24,885	$ 24,007
Provision for loan and lease losses		$ 0	$ 400	$ 0	600	$ 0	$ 735	$ 1,235	735	$ 900	$ 150	$ 600	900	1,000	2,705	2,550
Charge-offs														(684)	(3,012)	(2,429)
Recoveries														941	956	757
Balance		26,791				25,534				24,885				26,791	25,534	24,885
Loans individually evaluated for impairment																	$ 11,530	$ 2,653
Loans collectively evaluated for impairment																	2,833,486	2,545,518
Loans	[1]																2,845,016	2,548,171
Allowance for loans individually evaluated for impairment																	1,163	42
Allowance for loans collectively evaluated for impairment																	25,628	25,492
Allowance for loan losses		26,791			25,534	25,534			24,885	24,885			24,007	25,534	24,885	24,007	26,791	25,534
Financial Asset Acquired with Credit Deterioration [Member]
Balance					0									0
Balance		0				0								0	0
Loans																	0	0
Allowance for loan losses		0			0	0								0	0		0	0
Commercial and Industrial Portfolio Segment [Member]
Balance					11,965				11,276				10,483	11,965	11,276	10,483
Provision for loan and lease losses														684	2,539	2,373
Charge-offs														(94)	(2,404)	(1,782)
Recoveries														267	554	202
Balance		12,822				11,965				11,276				12,822	11,965	11,276
Loans individually evaluated for impairment																	8,223	220
Loans collectively evaluated for impairment																	862,288	833,304
Loans																	870,511	833,524
Allowance for loans individually evaluated for impairment																	1,150	28
Allowance for loans collectively evaluated for impairment																	11,672	11,937
Allowance for loan losses		12,822			11,965	11,965			11,276	11,276			10,483	12,822	11,276	10,483	12,822	11,965
Commercial and Industrial Portfolio Segment [Member] | Financial Asset Acquired with Credit Deterioration [Member]
Balance					0									0
Balance		0				0								0	0
Loans																	0	0
Allowance for loan losses		0			0	0								0	0		0	0
Construction and Development Excluding Undeveloped Land Portfolio Segment [Member]
Balance					1,760				1,724				1,923	1,760	1,724	1,923
Provision for loan and lease losses														(644)	36	(199)
Charge-offs														0	0	0
Recoveries														203	0	0
Balance		1,319				1,760				1,724				1,319	1,760	1,724
Loans individually evaluated for impairment																	0	318
Loans collectively evaluated for impairment																	213,822	224,732
Loans	[2]																213,822	225,050
Allowance for loans individually evaluated for impairment																	0	0
Allowance for loans collectively evaluated for impairment																	1,319	1,760
Allowance for loan losses		1,319			1,760	1,760			1,724	1,724			1,923	1,319	1,724	1,923	1,319	1,760
Construction and Development Excluding Undeveloped Land Portfolio Segment [Member] | Financial Asset Acquired with Credit Deterioration [Member]
Balance					0									0
Balance		0				0								0	0
Loans																	0	0
Allowance for loan losses		0			0	0								0	0		0	0
Undevelopment Land Portfolio Segment [Member]
Balance					752				521				684	752	521	684
Provision for loan and lease losses														34	231	(163)
Charge-offs														0	0	0
Recoveries														0	0	0
Balance		786				752				521				786	752	521
Loans individually evaluated for impairment																	0	474
Loans collectively evaluated for impairment																	46,360	29,618
Loans																	46,360	30,092
Allowance for loans individually evaluated for impairment																	0	0
Allowance for loans collectively evaluated for impairment																	786	752
Allowance for loan losses		786			752	752			521	521			684	786	521	684	786	752
Undevelopment Land Portfolio Segment [Member] | Financial Asset Acquired with Credit Deterioration [Member]
Balance					0									0
Balance		0				0								0	0
Loans																	0	0
Allowance for loan losses		0			0	0								0	0		0	0
Real Estate Mortgage Portfolio Segment [Member]
Balance					10,681				11,012				10,573	10,681	11,012	10,573
Provision for loan and lease losses														1,021	(261)	383
Charge-offs														(38)	(132)	(98)
Recoveries														100	62	154
Balance		11,764				10,681				11,012				11,764	10,681	11,012
Loans individually evaluated for impairment																	3,307	1,641
Loans collectively evaluated for impairment																	1,663,549	1,409,806
Loans																	1,666,856	1,411,447
Allowance for loans individually evaluated for impairment																	13	14
Allowance for loans collectively evaluated for impairment																	11,751	10,667
Allowance for loan losses		11,764			10,681	10,681			11,012	11,012			10,573	11,764	11,012	10,573	11,764	10,681
Real Estate Mortgage Portfolio Segment [Member] | Financial Asset Acquired with Credit Deterioration [Member]
Balance					0									0
Balance		0				0								0	0
Loans																	0	0
Allowance for loan losses		0			0	0								0	0		0	0
Consumer Portfolio Segment [Member]
Balance					376				352				344	376	352	344
Provision for loan and lease losses														(95)	160	156
Charge-offs														(552)	(476)	(549)
Recoveries														371	340	401
Balance		100				376				352				100	376	352
Loans individually evaluated for impairment																	0	0
Loans collectively evaluated for impairment																	47,467	48,058
Loans																	47,467	48,058
Allowance for loans individually evaluated for impairment																	0	0
Allowance for loans collectively evaluated for impairment																	100	376
Allowance for loan losses		100			376	376			$ 352	$ 352			$ 344	100	352	$ 344	100	376
Consumer Portfolio Segment [Member] | Financial Asset Acquired with Credit Deterioration [Member]
Balance					0									0
Balance		0				0								0	0
Loans																	0	0
Allowance for loan losses		$ 0			$ 0	$ 0								$ 0	$ 0		$ 0	$ 0

[1] Total loans are presented inclusive of premiums, discounts, and net loan origination fees and costs.

[2] Consists of land acquired for development by the borrower, but for which no development has yet taken place.

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Note 5 - Loans - Loans Acquired in King Acquisition (Details) - USD ($) $ in Thousands		12 Months Ended
	May 01, 2019	Dec. 31, 2019	Dec. 31, 2018
Non-accretable amount		$ 0	$ 0
King Bancorp Inc. [Member]
Contractual receivable	$ 165,744
Non-accretable amount	(1,579)
Accretable amount	(136)
Acquisition-day Fair Value	164,029
King Bancorp Inc. [Member] | Financial Asset Acquired and No Credit Deterioration [Member]
Contractual receivable	164,165
Non-accretable amount	0
Accretable amount	(136)
Acquisition-day Fair Value	164,029
King Bancorp Inc. [Member] | Financial Asset Acquired with Credit Deterioration [Member]
Contractual receivable	1,579
Non-accretable amount	(1,579)
Accretable amount	0
Acquisition-day Fair Value	0
Commercial and Industrial Portfolio Segment [Member] | King Bancorp Inc. [Member] | Financial Asset Acquired and No Credit Deterioration [Member]
Contractual receivable	8,249
Non-accretable amount	0
Accretable amount	(23)
Acquisition-day Fair Value	8,226
Construction and Development Excluding Undeveloped Land Portfolio Segment [Member] | King Bancorp Inc. [Member] | Financial Asset Acquired and No Credit Deterioration [Member]
Contractual receivable	10,764
Non-accretable amount	0
Accretable amount	43
Acquisition-day Fair Value	10,807
Construction and Development Excluding Undeveloped Land Portfolio Segment [Member] | King Bancorp Inc. [Member] | Financial Asset Acquired with Credit Deterioration [Member]
Contractual receivable	0
Non-accretable amount	0
Accretable amount	0
Acquisition-day Fair Value	0
Undevelopment Land Portfolio Segment [Member] | King Bancorp Inc. [Member] | Financial Asset Acquired and No Credit Deterioration [Member]
Contractual receivable	7,974
Non-accretable amount	0
Accretable amount	43
Acquisition-day Fair Value	8,017
Undevelopment Land Portfolio Segment [Member] | King Bancorp Inc. [Member] | Financial Asset Acquired with Credit Deterioration [Member]
Contractual receivable	0
Non-accretable amount	0
Accretable amount	0
Acquisition-day Fair Value	0
Real Estate Mortgage Portfolio Segment [Member] | King Bancorp Inc. [Member] | Financial Asset Acquired and No Credit Deterioration [Member]
Contractual receivable	135,650
Non-accretable amount	0
Accretable amount	(126)
Acquisition-day Fair Value	135,524
Real Estate Mortgage Portfolio Segment [Member] | King Bancorp Inc. [Member] | Financial Asset Acquired and No Credit Deterioration [Member] | Commercial Real Estate [Member]
Contractual receivable	84,219
Non-accretable amount	0
Accretable amount	(456)
Acquisition-day Fair Value	83,763
Real Estate Mortgage Portfolio Segment [Member] | King Bancorp Inc. [Member] | Financial Asset Acquired and No Credit Deterioration [Member] | One to Four Family Residential [Member]
Contractual receivable	50,556
Non-accretable amount	0
Accretable amount	322
Acquisition-day Fair Value	50,878
Real Estate Mortgage Portfolio Segment [Member] | King Bancorp Inc. [Member] | Financial Asset Acquired and No Credit Deterioration [Member] | Home Equity First Lien [Member]
Contractual receivable	196
Non-accretable amount	0
Accretable amount	3
Acquisition-day Fair Value	199
Real Estate Mortgage Portfolio Segment [Member] | King Bancorp Inc. [Member] | Financial Asset Acquired and No Credit Deterioration [Member] | Home Equity Junior Lien [Member]
Contractual receivable	679
Non-accretable amount	0
Accretable amount	5
Acquisition-day Fair Value	684
Real Estate Mortgage Portfolio Segment [Member] | King Bancorp Inc. [Member] | Financial Asset Acquired with Credit Deterioration [Member]
Contractual receivable	1,579
Non-accretable amount	(1,579)
Accretable amount	0
Acquisition-day Fair Value	0
Real Estate Mortgage Portfolio Segment [Member] | King Bancorp Inc. [Member] | Financial Asset Acquired with Credit Deterioration [Member] | Commercial Real Estate [Member]
Contractual receivable	1,351
Non-accretable amount	(1,351)
Accretable amount	0
Acquisition-day Fair Value	0
Real Estate Mortgage Portfolio Segment [Member] | King Bancorp Inc. [Member] | Financial Asset Acquired with Credit Deterioration [Member] | One to Four Family Residential [Member]
Contractual receivable	228
Non-accretable amount	(228)
Accretable amount	0
Acquisition-day Fair Value	0
Real Estate Mortgage Portfolio Segment [Member] | King Bancorp Inc. [Member] | Financial Asset Acquired with Credit Deterioration [Member] | Home Equity First Lien [Member]
Contractual receivable	0
Non-accretable amount	0
Accretable amount	0
Acquisition-day Fair Value	0
Real Estate Mortgage Portfolio Segment [Member] | King Bancorp Inc. [Member] | Financial Asset Acquired with Credit Deterioration [Member] | Home Equity Junior Lien [Member]
Contractual receivable	0
Non-accretable amount	0
Accretable amount	0
Acquisition-day Fair Value	0
Consumer Portfolio Segment [Member] | King Bancorp Inc. [Member] | Financial Asset Acquired and No Credit Deterioration [Member]
Contractual receivable	1,528
Non-accretable amount	0
Accretable amount	(73)
Acquisition-day Fair Value	1,455
Consumer Portfolio Segment [Member] | King Bancorp Inc. [Member] | Financial Asset Acquired with Credit Deterioration [Member]
Contractual receivable	0
Non-accretable amount	0
Accretable amount	0
Acquisition-day Fair Value	$ 0

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Note 16 - Employee Benefit Plans (Details Textual)	12 Months Ended
	Dec. 31, 2019 USD ($) shares	Dec. 31, 2019 USD ($) shares	Dec. 31, 2018 USD ($) shares	Dec. 31, 2017 USD ($)
Defined Contribution Plan, Employer Matching Contribution, Percent of Employees' Gross Pay	6.00%
Defined Benefit Plan, Employer Additional Contribution of Stock, Percent	2.00%
Defined Contribution Plan, Cost		$ 2,600,000	$ 2,200,000	$ 2,000,000.0
Defined Contribution Plan, Shares, Held in Employee Stock Ownership and Profit Sharing Plan | shares	508,000	508,000	568,000
Deferred Compensation Arrangement with Individual, Contributions by Employer		$ 241,000	$ 250,000	$ 232,000
Deferred Compensation Arrangement with Individual, Recorded Liability	$ 10,100,000	10,100,000	$ 8,600,000
Defined Benefit Plan, Number of Employees Covered			3
Defined Benefit Plan, Number of Retired Employees Covered			1
Deferred Compensation Arrangement with Individual, Requisite Service Period			25 years
Defined Benefit Plan, Accumulated Benefit Obligation	$ 2,300,000	$ 2,300,000	$ 2,100,000

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Note 6 - Premises and Equipment - Summary of Premises and Equipment (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Premises and equipment, gross	$ 96,442	$ 80,234
Right-of-use operating lease asset	12,737	0
Accumulated depreciation and amortization	(37,824)	(35,470)
Total premises and equipment	58,618	44,764
Land [Member]
Premises and equipment, gross	10,241	9,664
Building and Building Improvements [Member]
Premises and equipment, gross	50,809	47,726
Furniture and Equipment [Member]
Premises and equipment, gross	22,032	21,793
Construction in Progress [Member]
Premises and equipment, gross	$ 623	$ 1,051

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Note 13 - Other Comprehensive Income (Loss) (Tables)

12 Months Ended

Dec. 31, 2019

Notes Tables

Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]

	Net unrealized			Net unrealized			Minimum
	gains (losses)			gains (losses)			pension
	on securities			on cash			liability
(in thousands)	available for sale			flow hedges			adjustment			Total
Balance, January 1, 2017	$	(1,211	)	$	(16	)	$	(272	)	$	(1,499	)
Net current period other comprehensive income (loss)		(721	)		209			(70	)		(582	)
Amounts reclassifed from AOCI		151			—			—			151
Balance, December 31, 2017 (1)	$	(1,781	)	$	193		$	(342	)	$	(1,930	)
Balance, January 1, 2018	$	(1,781	)	$	193		$	(342	)	$	(1,930	)
Net current period other comprehensive income (loss)		(3,053	)		174			173			(2,706	)
Reclassification adjustment for adoption of ASU 2018-02		(496	)		41			(51	)		(506	)
Balance, December 31, 2018	$	(5,330	)	$	408		$	(220	)	$	(5,142	)
Balance, January 1, 2019	$	(5,330	)	$	408		$	(220	)	$	(5,142	)
Net current period other comprehensive income (loss)		6,415			(445	)		(151	)		5,819
Balance, December 31, 2019	$	1,085		$	(37	)	$	(371	)	$	677

Reclassification out of Accumulated Other Comprehensive Income [Table Text Block]

Details of accumulated								Affected line item in
other comprehensive	Amount reclassified from accumulated							the consolidated
income (loss) components	other comprehensive income (loss)							statements of income
(in thousands)
For the years ended December 31,	2019		2018		2017
Unrealized gains (losses) on securities available for sale:
Realized loss on sale of securities available for sale	$	—	$	—	$	(232	)	Loss on sale of securities
Effect of income taxes		—		—		81		Income tax expense
Reclassification, net of income taxes	$	—	$	—	$	(151	)

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Note 9 - Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Notes Tables

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]

Years Ended December 31, (in thousands)	2019			2018			2017
Current income tax expense:
Federal	$	14,673		$	11,567		$	12,622
State		772			732			546
Total current income tax expense		15,445			12,299			13,168
Deferred income tax expense (benefit) :
Federal		(746	)		(52	)		3,783
State		(2,872	)		(289	)		(4	)
Total deferred income tax expense (benefit)		(3,618	)		(341	)		3,779
Change in valuation allowance		(2,234	)		73			192
Total income tax expense	$	9,593		$	12,031		$	17,139

Schedule of Income Tax Expense Benefit, Recorded Directly to Stockholders Equity [Table Text Block]

Years Ended December 31, (in thousands)	2019			2018			2017
Unrealized (loss) gain on securities available for sale	$	1,757		$	(812	)	$	(531	)
Reclassification adjustment for securities losses realized in income		—			—			81
Unrealized gain on derivatives		(120	)		46			112
Minimum pension liability adjustment		(58	)		46			(9	)
Total income tax (benefit) expense recorded directly to stockholders' equity	$	1,579		$	(720	)	$	(347	)

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

Years Ended December 31,	2019			2018			2017
U.S. federal statutory income tax rate		21.0	%		21.0	%		35.0	%
Kentucky state income tax enactments		(5.2	)		—			—
Net deferred tax asset remeasurement		—			(0.5	)		10.8
Excess tax benefits from stock-based compensation arrangements		(1.0	)		(0.8	)		(2.6	)
Increase in cash surrender value of life insurance		(0.9	)		(0.4	)		(1.5	)
Tax credits		(1.9	)		(1.8	)		(14.4	)
Tax exempt interest income		(0.3	)		(0.4	)		(1.2	)
Amortization/impairment of investments in tax credit partnerships		0.3			0.4			3.4
State income taxes, net of federal benefit		0.7			0.8			0.7
Other, net		—			(0.5	)		0.9
Effective tax rate		12.7	%		17.8	%		31.1	%

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

December 31, (in thousands)	2019			2018
Deferred tax assets
Allowance for loan loss	$	6,633		$	5,567
Deferred compensation		5,758			4,703
Operating lease liability		3,427			—
State net operating loss		2,550			2,201
Accrued expenses		1,486			968
Securities		—			756
Investments in tax credit partnerships		655			543
Loans		501			434
Other assets		228			181
Write-downs and costs associated with other real estate owned		22			7
Total deferred tax assets		21,260			15,360
Deferred tax liabilities
Property and equipment		1,054			1,154
Right-of-use operating lease asset		3,154			—
Securities		748			—
Loan costs		767			632
Mortgage servicing rights		299			193
Leases		266			336
Core deposit intangible		202			230
Other liabilities		183			267
Total deferred tax liabilities		6,673			2,812
Valuation allowance		(121	)		(2,355	)
Net deferred tax asset	$	14,466		$	10,193

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Note 24 - Stock Yards Bancorp, Inc. (Parent Company Only) - Condensed Balance Sheets (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Assets
Cash on deposit with subsidiary bank	$ 46,863	$ 51,892
Other assets	50,939	45,172
Total assets	3,724,197	3,302,924	$ 3,239,646
Liabilities and stockholders' equity
Other liabilities	60,587	46,788
Stockholders' Equity Attributable to Parent, Ending Balance	406,297	366,500	$ 333,644	$ 313,872
Total liabilities and stockholders’ equity	3,724,197	3,302,924
Parent Company [Member]
Assets
Cash on deposit with subsidiary bank	14,714	7,655
Investment in and receivable from subsidiaries	384,136	356,118
Other assets	7,821	3,147
Total assets	406,671	366,920
Liabilities and stockholders' equity
Other liabilities	374	420
Stockholders' Equity Attributable to Parent, Ending Balance	406,297	366,500
Total liabilities and stockholders’ equity	$ 406,671	$ 366,920

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Note 25 - Segments - Financial Information by Business Segment (Details) - USD ($) $ in Thousands	3 Months Ended												12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Net interest income	$ 32,720	$ 32,070	$ 30,774	$ 29,657	$ 29,912	$ 28,521	$ 28,674	$ 27,309	$ 27,029	$ 26,173	$ 25,245	$ 25,206	$ 125,221	$ 114,416	$ 103,653
Provision for loan and leases	0	400	0	600	0	735	1,235	735	900	150	600	900	1,000	2,705	2,550
Non-interest income													22,643	21,536	20,505
All other non-interest income													27,147	23,810	23,994
Non-interest expenses	26,291	23,957	25,464	22,639	24,565	21,781	22,136	21,027	27,048	21,168	21,209	20,995	98,351	89,509	90,420
Income before income tax expense	19,590	21,017	17,573	17,480	16,923	17,431	16,738	16,456	10,488	15,800	14,961	13,933	75,660	67,548	55,182
Income tax expense	2,941	3,783	1,030	1,839	2,265	3,555	3,159	3,052	5,542	4,096	4,359	3,142	9,593	12,031	17,139
Net income	16,649	$ 17,234	$ 16,543	$ 15,641	14,658	$ 13,876	$ 13,579	$ 13,404	4,946	$ 11,704	$ 10,602	$ 10,791	66,067	55,517	38,043
Total assets	3,724,197				3,302,924				3,239,646				3,724,197	3,302,924	3,239,646
Commercial Banking [Member]
Net interest income													124,902	114,161	103,352
Provision for loan and leases													1,000	2,705	2,550
Non-interest income													0	0	0
All other non-interest income													27,147	23,810	23,994
Non-interest expenses													85,642	76,963	78,181
Income before income tax expense													65,407	58,303	46,615
Income tax expense													7,368	10,025	14,080
Net income													58,039	48,278	32,535
Total assets	3,720,502				3,299,169				3,237,656				3,720,502	3,299,169	3,237,656
Investment Management and Trust [Member]
Net interest income													319	255	301
Provision for loan and leases													0	0	0
Non-interest income													22,643	21,536	20,505
All other non-interest income													0	0	0
Non-interest expenses													12,709	12,546	12,239
Income before income tax expense													10,253	9,245	8,567
Income tax expense													2,225	2,006	3,059
Net income													8,028	7,239	5,508
Total assets	$ 3,695				$ 3,755				$ 1,990				$ 3,695	$ 3,755	$ 1,990

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Note 9 - Income Taxes (Details Textual) - USD ($)	1 Months Ended		3 Months Ended		12 Months Ended
	Apr. 30, 2019	Mar. 31, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Jan. 01, 2021
Income Tax Expense (Benefit), Continuing Operations, Adjustment of Deferred Tax (Asset) Liability			$ 2,700,000	$ (1,200,000)
Income Tax Expense (Benefit), Continuing Operations, Adjustment to Per Diluted Share			$ 0.12	$ 0.06
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent					21.00%	21.00%	35.00%
Tax Cuts and Jobs Act, Income Tax Expense (Benefit), Total							$ 5,900,000
Deferred Tax Assets, Valuation Allowance, Total					$ 121,000	$ 2,355,000
Operating Loss Carryforwards, Total					$ 64,700,000
Open Tax Year					2016 2017 2018 2019
Forecast [Member]
Unrecognized Deferred Tax Asset that Would Impact Income Tax Expense (Benefit)								$ 200,000
State and Local Jurisdiction [Member] | Kentucky Department of Revenue [Member]
Franchise Tax as Percent of Net Capital		1.10%
Average Franchise Tax Over Two Year-end Periods		$ 2,500,000
State Corporate Income Tax as Percent of Earnings Before Income Tax Expense	50.00%	5.00%

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Note 18 - Dividends (Details Textual) $ in Millions	12 Months Ended
	Dec. 31, 2019 USD ($)
Regulatory Dividend Restrictions, Period Considered for Deduction of Dividend Already Paid for, Net Income	2 years
Statutory Accounting Practices, Statutory Amount Available for Dividend Payments without Regulatory Approval	$ 52

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Note 1 - Basis of Presentation and Summary of Significant Accounting Policies (Details Textual) $ in Thousands	1 Months Ended	3 Months Ended	12 Months Ended
	Jun. 30, 2019 USD ($)	Mar. 31, 2019 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Jan. 01, 2020 USD ($)	May 01, 2019	Jan. 01, 2019 USD ($)
Repayments of Subordinated Debt, Total			$ 3,609	$ (0)	$ (0)
Number of Operating Segments			2
Allowance for Loan and Lease Losses, Period Increase (Decrease), Total		$ 2,000
Cash Reserve Deposit Required and Made			$ 11,000
Operating Lease, Right-of-Use Asset			$ 12,737	$ 0
Accounting Standards Update 2016-02 [Member]
Operating Lease, Right-of-Use Asset								$ 17,000
Operating Lease, Liability, Total								$ 18,000
Minimum [Member]
Property, Plant and Equipment, Useful Life			3 years
Minimum [Member] | Accounting Standards Update 2016-13 [Member] | Subsequent Event [Member]
Debt Securities, Available-for-sale, Allowance for Credit Loss, Ending Balance						$ 7,500
Maximum [Member]
Property, Plant and Equipment, Useful Life			40 years
Maximum [Member] | Accounting Standards Update 2016-13 [Member] | Subsequent Event [Member]
Debt Securities, Available-for-sale, Allowance for Credit Loss, Ending Balance						$ 8,500
Subordinated Notes Assumed in the king Acquisition [Member]
Repayments of Subordinated Debt, Total	$ 4,000
KBST [Member]
Noncontrolling Interest, Ownership Percentage by Parent							100.00%

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Note 4 - Securities Available for Sale (Details Textual)		9 Months Ended	12 Months Ended
	May 01, 2019 USD ($)	Sep. 30, 2017 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)
Available-for-sale Securities, Gross Realized Gain (Loss), Total		$ 31,000	$ 0	$ 0	$ (263,000)
Proceeds from Sale of Debt Securities, Available-for-sale	$ 12,000,000
Debt Securities, Available-for-sale, Realized Gain (Loss), Total	$ 0
Debt Securities, Available-for-sale, Unrealized Loss Position, Number of Positions			54	117
Other than Temporary Impairment Losses, Investments, Portion Recognized in Earnings, Net, Total			$ 0
Equity Securities without Readily Determinable Fair Value, Impairment Loss, Cumulative Amount			0
Collateral Pledged [Member]
Debt Securities, Available-for-sale, Restricted			$ 403,000,000	$ 355,000,000

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Note 9 - Income Taxes - Deferred Tax Assets and Deferred Tax Liabilities (Details) - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Allowance for loan loss	$ 6,633,000	$ 5,567,000
Deferred compensation	5,758,000	4,703,000
Operating lease liability	3,427,000	0
State net operating loss	2,550,000	2,201,000
Accrued expenses	1,486,000	968,000
Securities	0	756,000
Investments in tax credit partnerships	655,000	543,000
Loans	501,000	434,000
Other assets	228,000	181,000
Write-downs and costs associated with other real estate owned	22,000	7,000
Total deferred tax assets	21,260,000	15,360,000
Property and equipment	1,054,000	1,154,000
Right-of-use operating lease asset	3,154,000	0
Securities	748,000	0
Loan costs	767,000	632,000
Mortgage servicing rights	299,000	193,000
Leases	266,000	336,000
Core deposit intangible	202,000	230,000
Other liabilities	183,000	267,000
Total deferred tax liabilities	6,673,000	2,812,000
Valuation allowance	(121,000)	(2,355,000)
Net deferred tax asset	$ 14,466,000	$ 10,193,000

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Note 17 - Stock-based Compensation - Options and SARS Outstanding (Details) shares in Thousands	Dec. 31, 2019 $ / shares shares
Number of SARs outstanding (in shares)	641
SARs exercisable (in shares)	439
Weighted average exercise price of SARs outstanding (in dollars per share) | $ / shares	$ 25.06
Stock Options and Stock Appreciation Rights SARs Expiring in 2020 [Member]
Number of SARs outstanding (in shares)	3
SARs exercisable (in shares)	3
Weighted average exercise price of SARs outstanding (in dollars per share) | $ / shares	$ 14.02
Stock Options and Stock Appreciation Rights SARs Expiring in 2021 [Member]
Number of SARs outstanding (in shares)	27
SARs exercisable (in shares)	27
Weighted average exercise price of SARs outstanding (in dollars per share) | $ / shares	$ 15.88
Stock Options and Stock Appreciation Rights SARs Expiring in 2022 [Member]
Number of SARs outstanding (in shares)	108
SARs exercisable (in shares)	108
Weighted average exercise price of SARs outstanding (in dollars per share) | $ / shares	$ 15.25
Stock Options and Stock Appreciation Rights SARs Expiring in 2023 [Member]
Number of SARs outstanding (in shares)	80
SARs exercisable (in shares)	80
Weighted average exercise price of SARs outstanding (in dollars per share) | $ / shares	$ 15.26
Stock Options and Stock Appreciation Rights SARs Expiring in 2024 [Member]
Number of SARs outstanding (in shares)	73
SARs exercisable (in shares)	73
Weighted average exercise price of SARs outstanding (in dollars per share) | $ / shares	$ 19.37
Stock Options and Stock Appreciation Rights SARs Expiring in 2025 [Member]
Number of SARs outstanding (in shares)	63
SARs exercisable (in shares)	49
Weighted average exercise price of SARs outstanding (in dollars per share) | $ / shares	$ 23.00
Stock Options and Stock Appreciation Rights SARs Expiring in 2026 [Member]
Number of SARs outstanding (in shares)	88
SARs exercisable (in shares)	55
Weighted average exercise price of SARs outstanding (in dollars per share) | $ / shares	$ 25.84
Stock Appreciation Rights SARs Expiring in 2027 [Member]
Number of SARs outstanding (in shares)	46
SARs exercisable (in shares)	21
Weighted average exercise price of SARs outstanding (in dollars per share) | $ / shares	$ 40.00
Stock Appreciation Rights SARs Expiring in 2028 [Member]
Number of SARs outstanding (in shares)	100
SARs exercisable (in shares)	23
Weighted average exercise price of SARs outstanding (in dollars per share) | $ / shares	$ 37.75
Stock Appreciation Rights SARs Expiring in 2029 [Member]
Number of SARs outstanding (in shares)	53
SARs exercisable (in shares)	0
Weighted average exercise price of SARs outstanding (in dollars per share) | $ / shares	$ 37.01

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Note 17 - Stock-based Compensation - Fair Value Assumptions (Details) - Stock Appreciation Rights (SARs) [Member]	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Dividend yield	2.54%	2.56%	2.72%
Expected volatility	20.39%	20.17%	19.47%
Risk free interest rate	2.52%	2.96%	2.29%
Expected life of SARs (Year)	7 years 2 months 12 days	7 years	7 years

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Note 11 - Securities Sold Under Agreements to Repurchase - Securities Sold Under Agreements to Repurchase (Details) - Securities Sold under Agreements to Repurchase [Member] - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Outstanding balance at end of period	$ 31,895	$ 36,094
Weighted average interest rate at end of period	0.22%	0.27%
Average outstanding balance during the period	$ 38,555	$ 62,580	$ 70,187
Average interest rate during the period	0.26%	0.25%	0.19%
Maximum outstanding at any month end during the period	$ 52,599	$ 74,725	$ 75,365

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Note 5 - Loans (Details Textual) Pure in Thousands	12 Months Ended
	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)
Loans and Leases Receivable, Deferred Expense Income	$ 564,000	$ 592,000
Loans and Leases Receivable, Collateral for Secured Borrowings	8,000,000	11,000,000
Financing Receivable, Past Due	$ 15,159,000	$ 10,544,000
Financing Receivable, Modifications, Number of Contracts	0	0
Mortgage Loans in Process of Foreclosure, Amount	$ 239,000	$ 528,000
Impaired or Nonaccrual Financing Receivable, Interest Received Used to Reduce Principal	552,000	93,000	$ 338,000
Loans and Leases Receivable, Impaired, Interest Lost on Nonaccrual Loans	491,000	391,000	159,000
Impaired Financing Receivable, Interest Income, Cash Basis Method, Total	$ 0	$ 0	$ 0
Financing Receivable, Troubled Debt Restructuring, Subsequent Default, Number of Contracts	0	0
Directors and Executive Officers [Member]
Financing Receivable, Past Due	$ 0	$ 500,000

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Note 14 - Preferred Stock and Common Stock

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Preferred Stock [Text Block]

(14) Preferred Stock and Common Stock

Bancorp has a class of preferred stock (no par value; 1,000,000 shares authorized); the relative rights, preferences and other terms of the class or any series within the class will be determined by the Board of Directors prior to any issuance. None of this stock has been issued to date.

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Consolidated Statements of Changes in Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	AOCI Attributable to Parent [Member]		Total
Balance (in shares) at Dec. 31, 2016	22,617
Balance at Dec. 31, 2016	$ 36,250	$ 26,682	$ 252,439	$ (1,499)		$ 313,872
Net income	0	0	38,043	0		38,043
Net change in accumulated other comprehensive income	0	0	0	(431)		(431)
Stock compensation expense	$ 0	2,892	0	0		2,892
Stock issued for share-based awards, net of withholdings to satisfy employee tax obligations (in shares)	69
Stock issued for share-based awards, net of withholdings to satisfy employee tax obligations	$ 231	2,500	(5,336)	0		(2,605)
Cash dividends declared	$ 0	0	(18,127)	0		(18,127)
Shares repurchased or cancelled (in shares)	(7)
Shares repurchased or cancelled	$ (24)	(150)	174	0		0
Balance (in shares) at Dec. 31, 2017	22,679
Balance at Dec. 31, 2017	$ 36,457	31,924	267,193	(1,930)	[1]	333,644
Net income	0	0	55,517	0		55,517
Net change in accumulated other comprehensive income	0	0	0	(2,706)		(2,706)
Stock compensation expense	$ 0	4,027	0	0		4,027
Stock issued for share-based awards, net of withholdings to satisfy employee tax obligations (in shares)	75
Stock issued for share-based awards, net of withholdings to satisfy employee tax obligations	$ 249	987	(3,394)	0		(2,158)
Cash dividends declared	$ 0	0	(21,824)	0		(21,824)
Shares repurchased or cancelled (in shares)	(5)
Shares repurchased or cancelled	$ (17)	(141)	158	0		0
Reclassification adjustment - ASU 2018-02	$ 0	0	506	(506)		0
Balance (in shares) at Dec. 31, 2018	22,749
Balance at Dec. 31, 2018	$ 36,689	36,797	298,156	(5,142)		366,500
Net income	0	0	66,067	0		66,067
Net change in accumulated other comprehensive income	0	0	0	5,819		5,819
Stock compensation expense	$ 0	3,578	0	0		3,578
Stock issued for share-based awards, net of withholdings to satisfy employee tax obligations (in shares)	116
Stock issued for share-based awards, net of withholdings to satisfy employee tax obligations	$ 385	3,701	(7,010)	0		(2,924)
Cash dividends declared	$ 0	0	(23,579)	0		(23,579)
Shares repurchased or cancelled (in shares)	(2)
Shares repurchased or cancelled	$ (6)	(59)	65	0		0
Repurchase of common stock (in shares)	(259)
Repurchase of common stock	$ (861)	(8,303)	0	0		(9,164)
Balance (in shares) at Dec. 31, 2019	22,604
Balance at Dec. 31, 2019	$ 36,207	$ 35,714	$ 333,699	$ 677		$ 406,297

[1] December 31, 2017 AOCI component balances reflect a correction of incorrectly reported year-end balances in the Footnote titled "Other Comprehensive Income (Loss)" of the 2017 Form 10-K, which were presented as $(2,278), $234, and $(392) for securities AFS, cash flow hedges, and minimum pension liability, respectively.

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Consolidated Balance Sheets - USD ($) $ in Thousands		Dec. 31, 2019	Dec. 31, 2018
Assets
Cash and due from banks		$ 46,863	$ 51,892
Federal funds sold and interest bearing due from banks		202,861	147,047
Cash and cash equivalents		249,724	198,939
Mortgage loans held for sale		8,748	1,675
Securities available for sale (amortized cost of $469,313 in 2019 and $443,742 in 2018)		470,738	436,995
Federal Home Loan Bank stock, at cost		11,316	10,370
Loans and leases	[1]	2,845,016	2,548,171
Allowance for loan and lease losses		26,791	25,534
Net loans and leases		2,818,225	2,522,637
Premises and equipment, net		58,618	44,764
Bank owned life insurance		32,557	32,273
Accrued interest receivable		8,534	8,360
Goodwill		12,513	682
Core deposit intangible		2,285	1,057
Other assets		50,939	45,172
Total assets		3,724,197	3,302,924
Liabilities
Non-interest bearing		810,475	711,023
Interest bearing		2,323,463	2,083,333
Total deposits		3,133,938	2,794,356
Securities sold under agreements to repurchase		31,895	36,094
Federal funds purchased		10,887	10,247
Federal Home Loan Bank advances		79,953	48,177
Accrued interest payable		640	762
Other liabilities		60,587	46,788
Total liabilities		3,317,900	2,936,424
Commitments and contingent liabilities (footnote 19)		0	0
Stockholders’ equity
Preferred stock, no par value. Authorized 1,000,000 shares; no shares issued or outstanding		0	0
Common stock, no par value. Authorized 40,000,000 shares; issued and outstanding 22,604,000 and 22,749,000 shares in 2019 and 2018		36,207	36,689
Additional paid-in capital		35,714	36,797
Retained earnings		333,699	298,156
Accumulated other comprehensive income (loss)		677	(5,142)
Total stockholders’ equity		406,297	366,500
Total liabilities and stockholders’ equity		$ 3,724,197	$ 3,302,924

[1] Total loans are presented inclusive of premiums, discounts, and net loan origination fees and costs.

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Note 18 - Dividends

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Restrictions on Dividends, Loans and Advances [Text Block]

(18) Dividends

Bancorp’s principal source of cash revenue is dividends paid to it as the sole shareholder of the Bank. At any balance sheet date, the Bank’s regulatory dividend restriction represents the Bank’s net income of the current year plus the prior two years less any dividends paid for the same time period. At December 31, 2019, the Bank may pay an amount equal to $52 million in dividends to Bancorp without regulatory approval subject to ongoing capital requirements of the Bank.

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Note 24 - Stock Yards Bancorp, Inc. (Parent Company Only) - Condensed Statements of Income (Details) - USD ($) $ in Thousands	3 Months Ended												12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Income before income taxes and equity in undistributed net income of subsidiary	$ 19,590	$ 21,017	$ 17,573	$ 17,480	$ 16,923	$ 17,431	$ 16,738	$ 16,456	$ 10,488	$ 15,800	$ 14,961	$ 13,933	$ 75,660	$ 67,548	$ 55,182
Income tax benefit	2,941	3,783	1,030	1,839	2,265	3,555	3,159	3,052	5,542	4,096	4,359	3,142	9,593	12,031	17,139
Net income	$ 16,649	$ 17,234	$ 16,543	$ 15,641	$ 14,658	$ 13,876	$ 13,579	$ 13,404	$ 4,946	$ 11,704	$ 10,602	$ 10,791	66,067	55,517	38,043
Comprehensive Income													71,886	52,811	37,612
Parent Company [Member]
Income - dividends and interest from subsidiaries													72,119	21,403	18,160
Other income													2	12	82
Less expenses													4,935	4,818	3,255
Income before income taxes and equity in undistributed net income of subsidiary													67,186	16,597	14,987
Income tax benefit													(4,683)	(1,713)	(1,985)
Income before equity in undistributed net income of subsidiary													71,869	18,310	16,972
Equity in undistributed net income of subsidiary													(5,802)	37,207	21,071
Net income													66,067	55,517	38,043
Comprehensive Income													$ 71,886	$ 52,811	$ 37,612

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Note 26 - Quarterly Operating Results (Unaudited) - Quarterly Operating Results (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended												12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Interest income	$ 37,795	$ 37,973	$ 36,968	$ 35,029	$ 35,004	$ 33,021	$ 32,004	$ 29,744	$ 29,098	$ 28,120	$ 27,026	$ 26,655	$ 147,765	$ 129,773	$ 110,899
Interest expense	5,075	5,903	6,194	5,372	5,092	4,500	3,330	2,435	2,069	1,947	1,781	1,449	22,544	15,357	7,246
Net interest income	32,720	32,070	30,774	29,657	29,912	28,521	28,674	27,309	27,029	26,173	25,245	25,206	125,221	114,416	103,653
Provision for loan and lease losses	0	400	0	600	0	735	1,235	735	900	150	600	900	1,000	2,705	2,550
Net interest income after provision	32,720	31,670	30,774	29,057	29,912	27,786	27,439	26,574	26,129	26,023	24,645	24,306	124,221	111,711	101,103
Non-interest income	13,161	13,304	12,263	11,062	11,576	11,426	11,435	10,909	11,407	10,945	11,525	10,622	49,790	45,346	44,499
Non-interest expenses	26,291	23,957	25,464	22,639	24,565	21,781	22,136	21,027	27,048	21,168	21,209	20,995	98,351	89,509	90,420
Income before income taxes and equity in undistributed net income of subsidiary	19,590	21,017	17,573	17,480	16,923	17,431	16,738	16,456	10,488	15,800	14,961	13,933	75,660	67,548	55,182
Income tax benefit	2,941	3,783	1,030	1,839	2,265	3,555	3,159	3,052	5,542	4,096	4,359	3,142	9,593	12,031	17,139
Net income	$ 16,649	$ 17,234	$ 16,543	$ 15,641	$ 14,658	$ 13,876	$ 13,579	$ 13,404	$ 4,946	$ 11,704	$ 10,602	$ 10,791	$ 66,067	$ 55,517	$ 38,043
Basic earnings per share (in dollars per share)	$ 0.74	$ 0.76	$ 0.73	$ 0.69	$ 0.65	$ 0.61	$ 0.60	$ 0.59	$ 0.22	$ 0.52	$ 0.47	$ 0.48	$ 2.92	$ 2.45	$ 1.69
Diluted earnings per share (in dollars per share)	$ 0.73	$ 0.76	$ 0.72	$ 0.68	$ 0.64	$ 0.60	$ 0.59	$ 0.58	$ 0.22	$ 0.51	$ 0.46	$ 0.47	$ 2.89	$ 2.42	$ 1.66

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Note 12 - FHLB Advances (Tables)

12 Months Ended

Dec. 31, 2019

Notes Tables

Schedule of Maturities and Average Effective Interest Rates of Federal Home Loan Bank Advances Disclosure [Table Text Block]

(dollars in thousands)	December 31, 2019					December 31, 2018
Maturity			Weighted average					Weighted average
Year	Advance		Fixed Rate			Advance		Fixed Rate
2020	$	50,004		1.99		$	1,691		2.23
2021		2,400		2.52			215		2.12
2023		456		1.00			—		—
2024		2,023		2.36			2,240		2.36
2025		3,774		2.41			4,626		2.42
2026		8,156		1.96			8,185		1.99
2027		7,445		1.73			—		—
2028		5,695		2.32			1,220		1.49
Total	$	79,953		2.02	%	$	18,177		2.14	%

Federal Home Loan Bank, Advances [Table Text Block]

(dollars in thousands)
Year
2020	$	55,680
2021		6,004
2022		3,193
2023		2,655
2024		3,122
2025 and beyond		9,299

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Note 8 - Other Assets (Tables)

12 Months Ended

Dec. 31, 2019

Notes Tables

Schedule of Other Assets [Table Text Block]

December 31, (in thousands)	2019		2018
Cash surrender value of life insurance other than BOLI	$	16,145	$	15,029
Net deferred tax asset		14,466		10,193
Investments in tax credit related ventures		6,248		4,537
Prepaid assets		2,812		3,072
Trust fee receivable		2,171		1,939
Mortgage servicing rights		1,372		1,022
Other real estate owned		493		1,018
Other		7,232		8,362
Total other assets	$	50,939	$	45,172

Schedule of Finite-Lived Intangible Assets [Table Text Block]

Years ended December 31, (in thousands)	2019			2018			2017
Balance, beginning of period	$	1,022		$	875		$	921
Additions		506			302			225
Amortized to expense		(156	)		(155	)		(271	)
Balance, end of period	$	1,372		$	1,022		$	875

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Note 17 - Stock-based Compensation - SARs Activity (Details) - Stock Appreciation Rights (SARs) [Member] - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands		12 Months Ended
		Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Unvested (in shares)		731	704	735
Outstanding, aggregate intrinsic value	[1]	$ 8,422	$ 12,923	$ 21,443
Unvested, grant date weighted average cost (in dollars per share)		$ 3.83	$ 3.47	$ 3.26
Outstanding, weighted average remaining contractual life (Year)		5 years 3 months 18 days	5 years 2 months 12 days	5 years 1 month 6 days	5 years 6 months
Awarded (in shares)		53	100	46
Granted, aggregate intrinsic value	[1]	$ 213	$ 0	$ 0
Fair value at grant date (in dollars per share)		$ 6.24	$ 6.07	$ 6.34
Exercised (in shares)		(143)	(73)	(77)
Exercised, aggregate intrinsic value	[1]	$ 3,025	$ 1,654	$ 1,855
Exercised weighted average fair value (in dollars per share)		$ 3.47	$ 3.43	$ 3.18
Forfeited, exercise price (in dollars per share)		$ 0	$ 0	$ 0
Forfeited (in shares)		0	0
Unvested (in shares)		641	731	704	735
Outstanding, exercise price (in dollars per share)		$ 25.06
Outstanding, aggregate intrinsic value	[1]	$ 10,250	$ 8,422	$ 12,923	$ 21,443
Unvested, grant date weighted average cost (in dollars per share)		$ 4.10	$ 3.83	$ 3.47	$ 3.26
Vested and exercisable (in shares)		439
Vested and exercisable, aggregate intrinsic value	[1]	$ 9,017
Vested and exercisable, weighted average fair value (in dollars per share)		$ 3.42
Vested and exercisable, weighted average remaining contractual life (Year)		4 years
Unvested (in shares)		202
Unvested, aggregate intrinsic value	[1]	$ 1,233
Unvested, weighted average fair value (in dollars per share)		$ 5.59
Unvested, weighted average remaining contractual life (Year)		7 years 10 months 24 days
Vested during 2019 (in shares)		91
Vested, aggregate intrinsic value	[1]	$ 1,110
Vested, weighted average fair value (in dollars per share)		$ 4.66
Minimum [Member]
Outstanding, exercise price (in dollars per share)		14.02	14.02	14.02
Granted, exercise price (in dollars per share)		36.65	35.90	40.00
Exercised, exercise price (in dollars per share)		14.02	14.02	14.02
Outstanding, exercise price (in dollars per share)		14.02	14.02	14.02	14.02
Vested and exercisable, exercise price (in dollars per share)		14.02
Unvested, exercise price (in dollars per share)		22.96
Vested, exercise price (in dollars per share)		19.37
Maximum [Member]
Outstanding, exercise price (in dollars per share)		40.00	40.00	33.08
Granted, exercise price (in dollars per share)		38.18	39.32	40.00
Exercised, exercise price (in dollars per share)		22.96	19.37	17.89
Outstanding, exercise price (in dollars per share)		40.00	40.00	40.00	33.08
Vested and exercisable, exercise price (in dollars per share)		40.00
Unvested, exercise price (in dollars per share)		40.00
Vested, exercise price (in dollars per share)		40.00
Weighted Average [Member]
Outstanding, exercise price (in dollars per share)		22.42	19.51	17.78
Granted, exercise price (in dollars per share)		37.01	37.75	40.00
Exercised, exercise price (in dollars per share)		15.99	15.32	15.41
Forfeited, exercise price (in dollars per share)		0	0	0
Outstanding, exercise price (in dollars per share)		25.06	$ 22.42	$ 19.51	$ 17.78
Vested and exercisable, exercise price (in dollars per share)		20.53
Unvested, exercise price (in dollars per share)		34.93
Vested, exercise price (in dollars per share)		$ 28.80

[1] Intrinsic value for SARs is defined as the amount by which the current market price of the underlying stock exceeds the exercise or grant price.

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Note 17 - Stock-based Compensation (Details Textual) - USD ($)		3 Months Ended		12 Months Ended
		Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized					500,000
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant				547,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Ending Balance				0	0
Proceeds (Used for) and Received from Settlement of Stock Awards				$ 272,000	$ 154,000
Share-based Payment Arrangement, Expense, Tax Benefit				$ 751,000	846,000	$ 607,000
Common Stock, Capital Shares Reserved for Future Issuance				118,000
Share-based Compensation Arrangement by Share-based Payment Award, Expected Shares to be Awarded				156,000
Accounting Standards Update 2016-09 [Member]
Share-based Payment Arrangement, Expense, Tax Benefit				$ 812,000	$ 549,000	$ 1,500,000
Stock Appreciation Rights (SARs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant	[1]			547,000
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period				10 years
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period				53,000	100,000	46,000
Share-based Payment Arrangement, Expense, Tax Benefit				$ 72,000	$ 80,000	$ 59,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Outstanding, Exercise Price				$ 25.06
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding, Number, Ending Balance				641,000
Stock Appreciation Rights (SARs) [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Outstanding, Exercise Price				$ 14.02	$ 14.02	$ 14.02	$ 14.02
Stock Appreciation Rights (SARs) [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Outstanding, Exercise Price				$ 40.00	$ 40.00	$ 40.00	$ 33.08
Stock Appreciation Rights (SARs) [Member] | Share-based Payment Arrangement, Tranche One [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage				20.00%
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period				5 years
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period				40,000	40,000	29,000
Share-based Payment Arrangement, Expense, Tax Benefit				$ 249,000	$ 231,000	$ 216,000
Common Stock, Capital Shares Reserved for Future Issuance				108,000
Performance Shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period				3 years
Sharebased Compensation Arrangement by Share-based Payment Award Post Vesting Holding Period				1 year
Share-based Compensation Arrangement by Share-based Payment Award Liquidity Discount				4.10%	4.30%	5.10%
Share-based Payment Arrangement, Expense, Tax Benefit				$ 361,000	$ 483,000	$ 286,000
Performance Shares [Member] | Minimum [Member]
Common Stock, Capital Shares Reserved for Future Issuance				0
Performance Shares [Member] | Maximum [Member]
Common Stock, Capital Shares Reserved for Future Issuance				196,000
Restricted Stock Units (RSUs) [Member]
Share-based Payment Arrangement, Expense, Tax Benefit				$ 69,000	$ 52,000	$ 46,000
Common Stock, Capital Shares Reserved for Future Issuance				10,000
Restricted Stock Units (RSUs) [Member] | Director [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period				12 months
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period		9,834	6,525
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Fair Value Granted		$ 330,000	$ 247,000

[1] Under the 2015 Omnibus Equity Compensation Plan, shares of stock are authorized for issuance as incentive and non-qualified stock options, SARs, RSAs, and RSUs.

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Note 12 - FHLB Advances (Details Textual) $ in Thousands	12 Months Ended
	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	May 01, 2019 USD ($)
Federal Home Loan Bank, Number of Separate Advances	57	14
Advances from Federal Home Loan Banks, Total	$ 79,953	$ 48,177
Federal Home Loan Bank, Number of Separate Advances Principal Due at Maturity	15
Advances From Federal Home Loan Banks, Principal Due at Maturity	$ 50,000
Federal Home Loan Bank, Advances, General Debt Obligations, Maximum Amount Available	599,000	537,000
Correspondent Banks [Member]
Federal Funds Corresponding Banks Maximum Amount Available	$ 105,000	$ 105,000
King Bancorp Inc. [Member]
Federal Home Loan Bank, Number of Separate Advances	46
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Federal Home Loan Bank Advances	$ 43,000		$ 43,299

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Note 5 - Loans - Loans by Loan Portfolio Class (Details) - USD ($) $ in Thousands		Dec. 31, 2019	Dec. 31, 2018
Loans	[1]	$ 2,845,016	$ 2,548,171
Commercial and Industrial Portfolio Segment [Member]
Loans		870,511	833,524
Construction and Development Excluding Undeveloped Land Portfolio Segment [Member]
Loans	[2]	213,822	225,050
Undevelopment Land Portfolio Segment [Member]
Loans		46,360	30,092
Real Estate Mortgage Portfolio Segment [Member]
Loans		1,666,856	1,411,447
Real Estate Mortgage Portfolio Segment [Member] | Commercial Investment [Member]
Loans		736,618	588,610
Real Estate Mortgage Portfolio Segment [Member] | Owner Occupied Commercial [Member]
Loans		473,783	426,373
Real Estate Mortgage Portfolio Segment [Member] | One to Four Family Residential [Member]
Loans		334,358	276,017
Real Estate Mortgage Portfolio Segment [Member] | Home Equity First Lien [Member]
Loans		48,620	49,500
Real Estate Mortgage Portfolio Segment [Member] | Home Equity Junior Lien [Member]
Loans		73,477	70,947
Consumer Portfolio Segment [Member]
Loans		$ 47,467	$ 48,058

[1] Total loans are presented inclusive of premiums, discounts, and net loan origination fees and costs.

[2] Consists of land acquired for development by the borrower, but for which no development has yet taken place.

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Note 9 - Income Taxes - Components of Income Tax Expense (Benefit) from Operations (Details) - USD ($) $ in Thousands	3 Months Ended												12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Current income tax expense:
Federal													$ 14,673	$ 11,567	$ 12,622
State													772	732	546
Total current income tax expense													15,445	12,299	13,168
Deferred income tax expense (benefit) :
Federal													(746)	(52)	3,783
State													(2,872)	(289)	(4)
Total deferred income tax expense (benefit)													(3,618)	(341)	3,779
Change in valuation allowance													(2,234)	73	192
Total income tax expense	$ 2,941	$ 3,783	$ 1,030	$ 1,839	$ 2,265	$ 3,555	$ 3,159	$ 3,052	$ 5,542	$ 4,096	$ 4,359	$ 3,142	$ 9,593	$ 12,031	$ 17,139

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Note 17 - Share-based Compensation - Number of Shares to Be Issued Upon Exercise of Outstanding Stock-based Awards (Details)	Dec. 31, 2019 shares
Expected shares to be awarded (in shares)	547,000
Number of shares to be issued upon exercise (in shares)	118,000
Stock Appreciation Rights (SARs) [Member]
Expected shares to be awarded (in shares)	547,000	[1]
Restricted Stock [Member]
Number of shares to be issued upon exercise (in shares)	108,000
Restricted Stock Units (RSUs) [Member]
Number of shares to be issued upon exercise (in shares)	10,000

[1] Under the 2015 Omnibus Equity Compensation Plan, shares of stock are authorized for issuance as incentive and non-qualified stock options, SARs, RSAs, and RSUs.

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Note 2 - Restrictions on Cash and Due From Banks (Details Textual) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Cash, Uninsured Amount	$ 89	$ 1
Federal Home Loan Bank Stock and Federal Reserve Bank Stock, Total	113	143
Restricted Cash and Cash Equivalents, Total	$ 11	$ 9

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Note 4 - Securities Available for Sale - Available-for-sale Securities (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Securities available for sale, amortized cost	$ 469,313	$ 443,742
Securities available-for-sale, unrealized gains	2,559	545
Securities available-for-sale, unrealized losses	(1,134)	(7,292)
Securities available-for-sale, fair value	470,738	436,995
US Treasury Securities [Member]
Securities available for sale, amortized cost	49,887
Securities available-for-sale, unrealized gains	10
Securities available-for-sale, unrealized losses	0
Securities available-for-sale, fair value	49,897
US Government-sponsored Enterprises Debt Securities [Member]
Securities available for sale, amortized cost	208,933	264,234
Securities available-for-sale, unrealized gains	1,189	156
Securities available-for-sale, unrealized losses	(178)	(3,351)
Securities available-for-sale, fair value	209,944	261,039
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]
Securities available for sale, amortized cost	193,574	149,748
Securities available-for-sale, unrealized gains	1,243	282
Securities available-for-sale, unrealized losses	(956)	(3,753)
Securities available-for-sale, fair value	193,861	146,277
US States and Political Subdivisions Debt Securities [Member]
Securities available for sale, amortized cost	16,919	29,760
Securities available-for-sale, unrealized gains	117	107
Securities available-for-sale, unrealized losses	0	(188)
Securities available-for-sale, fair value	$ 17,036	$ 29,679

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Note 10 - Deposits (Details Textual) - USD ($)		12 Months Ended
	May 01, 2019	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Interest-bearing Domestic Deposit, Brokered		$ 30,000,000	$ 30,000,000
Interest Expense, Time Deposits, 250,000 or More		1,300,000	431,000	$ 161,000
Related Party Deposit Liabilities		81,000,000	42,000,000
Deposit Liabilities Reclassified as Loans Receivable		$ 692,000	$ 886,000
King Bancorp Inc. [Member]
Finite-lived Intangible Assets Acquired	$ 126,000,000

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Note 15 - Net Income Per Share

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Earnings Per Share [Text Block]

(15) Net Income per Share

The following table reflects net income (numerator) and average shares outstanding (denominator) for basic and diluted net income per share computations:

Years Ended December 31, (in thousands, except per share data)	2019		2018		2017
Net income	$	66,067	$	55,517	$	38,043
Weighted average shares outstanding - basic		22,598		22,619		22,532
Dilutive securities		267		325		451
Weighted average shares outstanding - diluted		22,865		22,944		22,983
Net income per share - basic	$	2.92	$	2.45	$	1.69
Net income per share - diluted	$	2.89	$	2.42	$	1.66

Certain SARs that were excluded from the EPS calculation because their impact was antidilutive follows:

Years Ended December 31, (in thousands)	2019		2018
Antidilutive SARs		199		146

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Consolidated Statements of Changes in Stockholders' Equity (Parentheticals) - $ / shares	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Retained Earnings [Member]
Cash dividends declared (in dollars per share)	$ 1.04	$ 0.96	$ 0.80

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Consolidated Balance Sheets (Parentheticals) - USD ($) $ / shares in Thousands, $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Securities available for sale, amortized cost	$ 469,313	$ 443,742
Preferred stock, par value (in dollars per share)	$ 0	$ 0
Preferred stock, shares authorized (in shares)	1,000,000	1,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0	$ 0
Common stock, shares authorized (in shares)	40,000,000	40,000,000
Common stock, shares issued (in shares)	22,604,000	22,749,000
Common stock, shares outstanding (in shares)	22,604,000	22,749,000

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Note 19 - Commitments and Contingent Liabilities

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

(19) Commitments and Contingent Liabilities

As of December 31, 2019 and 2018, Bancorp had various commitments outstanding that arose in the normal course of business, such as unused commitments or lines of credit and commitments made to lend in the future, which are properly not reflected in the consolidated financial statements. Total off balance sheet commitments to extend credit follows:

December 31, (in thousands)	2019		2018
Commercial and industrial	$	416,195	$	309,920
Construction and development		240,503		179,364
Home equity lines of credit		155,920		147,907
Credit cards		26,439		20,003
Overdrafts		32,715		21,751
Letters of credit		24,193		20,891
Other		40,083		33,369
Future loan commitments		236,885		101,399
Total off balance sheet commitments to extend credit	$	1,172,933	$	834,604

Commitments to extend credit are an agreement to lend to a customer 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 necessarily 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. At December 31, 2019 and 2018, Bancorp had accrued $350,000 in other liabilities for its estimate of inherent risks related to unfunded credit commitments.

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 an event of default on all contracts had occurred at December 31, 2019, Bancorp would have been required to make payments of approximately $2.6 million, or the maximum amount payable under those contracts. No payments have ever been required as a result of default on these contracts. These agreements are normally secured by collateral acceptable to Bancorp, which limits credit risk associated with the agreements.

As of December 31, 2019, in the normal course of business, there were pending legal actions and proceedings in which claims for damages are asserted. Management, after discussion with legal counsel, believes the ultimate result of these legal actions and proceedings will not have a material adverse effect on the consolidated financial position or results of operations of Bancorp.

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Note 11 - Securities Sold Under Agreements to Repurchase

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Repurchase Agreements, Resale Agreements, Securities Borrowed, and Securities Loaned Disclosure [Text Block]

(11) Securities Sold Under Agreements to Repurchase

SSUAR are a funding source of Bancorp and are primarily used by commercial customers in conjunction with collateralized corporate cash management accounts. Such repurchase agreements are considered financing agreements and mature within one business day from the transaction date. At December 31, 2019, all of these financing arrangements had overnight maturities and were secured by government sponsored enterprise obligations and government agency mortgage-backed securities which were owned and controlled by Bancorp.

Information regarding SSUAR follows:

December 31, (Dollars in thousands)	2019			2018
Outstanding balance at end of period	$	31,895		$	36,094
Weighted average interest rate at end of period		0.22	%		0.27	%

Years Ended December 31, (dollars in thousands)	2019			2018			2017
Average outstanding balance during the period	$	38,555		$	62,580		$	70,187
Average interest rate during the period		0.26	%		0.25	%		0.19	%
Maximum outstanding at any month end during the period	$	52,599		$	74,725		$	75,365

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Note 3 - Acquisition of KSB

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Business Combination Disclosure [Text Block]

(3) Acquisition of KSB

On May 1, 2019, Bancorp completed its acquisition of KSB, for $28 million in cash. The acquisition expands Bancorp’s market area into nearby Nelson County, Kentucky, while growing its customer base in Louisville, Kentucky.

The following table provides a summary of the assets acquired and liabilities assumed as recorded by KSB, the previously reported preliminary fair value adjustments necessary to adjust those acquired assets and assumed liabilities to fair value, recast adjustments to those previously reported preliminary fair values, and the fair values of those assets and liabilities as recorded by Bancorp. As provided for under GAAP, management has up to 12 months following the date of acquisition to finalize the fair values of the acquired assets and assumed liabilities. The preliminary fair value adjustments and the preliminary resultant fair values shown in the following table continue to be evaluated by management and may be subject to further recast adjustments.

	May 1, 2019
	As Recorded			Fair Value				Recast				As Recorded
(in thousands)	by King			Adjustments (1)				Adjustments (1)				by Bancorp
Assets acquired:
Cash and due from banks	$	3,316		$	—			$	—			$	3,316
Interest bearing due from banks		1,761			—				—				1,761
Securities available for sale		12,404			23		a		—				12,427
Federal Home Loan Bank stock, at cost		1,517			—				—				1,517
Federal Reserve Bank stock, at cost		490			—				—				490
Loans		165,744			(1,597	)	b		(118	)	b		164,029
Allowance for loan losses		(1,812	)		1,812		b		—				—
Net loans		163,932			215				(118	)			164,029
Premises and equipment, net		4,358			(1,328	)	c		431		c		3,461
Bank owned life insurance		3,431			—				—				3,431
Core deposit intangible		—			1,519		d		—				1,519
Other real estate owned		325			(325	)	e		—				—
Other assets and accrued interest receivable		867			(36	)	f		—				831
Total assets acquired	$	192,401		$	68			$	313			$	192,782
Liabilities assumed:
Deposits
Non-interest bearing	$	24,939		$	—			$	—			$	24,939
Interest bearing		100,839			(252	)	g		—				100,587
Total deposits		125,778			(252	)			—				125,526
Federal funds purchased		1,566			—				—				1,566
Federal Home Loan Bank advances		43,718			(419	)	h		—				43,299
Subordinated Note		3,609			—				—				3,609
Holding Company line of credit		2,300			—				—				2,300
Other liabilities and accrued interest payable		313			—				—				313
Total liabilities assumed		177,284			(671	)			—				176,613
Net assets acquired	$	15,117		$	739			$	313			$	16,169
Cash consideration paid													(28,000	)
Goodwill												$	11,831

(1) - Bancorp’s acquisition of KSB closed on May 1, 2019. The fair value adjustments reported are preliminary estimates based on information obtained subsequent to May 1, 2019 and through December 31, 2019. Management is continuing to evaluate each of its estimates and may provide additional recast adjustments in future periods based on this continuing evaluation. To the extent that additional recast adjustments are posted in future periods, the resultant fair values and the amount of goodwill recorded by Bancorp will change.

Explanation of preliminary fair value adjustments:

a. Reflects the fair value adjustment based on Bancorp’s evaluation of the acquired investment portfolio.

b. Reflects the fair value adjustment based on Bancorp’s evaluation of the acquired loan portfolio and to eliminate KSB’s recorded allowance.

c. Reflects the fair value adjustment based on Bancorp’s evaluation of the premises and equipment acquired.

d. Reflects the fair value adjustment for the core deposit intangible asset recorded as a result of the acquisition.

e. Reflects the fair value adjustment based upon Bancorp’s evaluation of the foreclosed real estate acquired.

f. Reflects the write-off of a miscellaneous other asset.

g. Reflects the fair value adjustment based on Bancorp’s evaluation of the assumed time deposits.

h. Reflects the fair value adjustment based upon Bancorp’s evaluation of the assumed FHLB advances.

Goodwill of approximately $12 million, which is the excess of the acquisition consideration over the fair value of net assets acquired, was recorded in the KSB acquisition as the result of expected operational synergies and other factors. This goodwill is attributable to Bancorp’s Commercial Banking segment and is expected to be deductible for tax purposes. To the extent that management revises any of the above fair value adjustments as a result of its continuing evaluation, the amount of goodwill recorded will change.

Based upon the proximity to existing branch locations, Bancorp closed and ultimately sold three acquired full service branch locations in 2019, while retaining the associated customer relationships. Goodwill was recast based on these sales.

Prior year pro-forma financial statements are not presented due to the immateriality of the transaction. Revenue (defined as net interest income and non-interest income) attributed to KSB totaled $4.0 million for the year ended December 31, 2019.

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Note 7 - Goodwill and Core Deposit Intangibles

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

(7) Goodwill and Core Deposit Intangibles

Goodwill, recorded on the acquisition date of an entity, represents $11.8 million related to the May 1, 2019 KSB acquisition and $682,000 related to the 1996 purchase of a bank in southern Indiana. As provided for under GAAP, management has up to 12 months following the date of acquisition to finalize the fair values of the acquired assets and assumed liabilities. During this measurement period, Bancorp may record subsequent recast adjustments to goodwill for provisional amounts recorded at the acquisition date.

GAAP requires that goodwill and intangible assets with indefinite useful lives not be amortized, but instead be tested for impairment at least annually. Impairment exists when a reporting unit’s carrying value of goodwill exceeds its fair value. Bancorp’s annual goodwill impairment test is conducted as of September 30^th of each year or more often as situations dictate. The goodwill balance at December 31, 2019 and 2018 relates entirely to the Commercial Banking segment of Bancorp. At December 31, 2019, Bancorp’s Commercial Banking reporting unit had positive equity and Bancorp elected to perform a qualitative assessment to determine if it was more-likely-than-not that the fair value of the reporting unit exceeded its carrying value, including goodwill. The qualitative assessment indicated that it was not more-likely-than-not that the carrying value of the reporting unit exceeded its fair value. Therefore, Bancorp did not complete the two-step impairment test as of December 31, 2019.

Changes in the carrying value of goodwill follows:

December 31, (in thousands)	2019			2018
Balance at beginning of period	$	682		$	682
Goodwill acquired		12,144			—
Recast adjustments		(313	)		—
Impairment		—			—
Balance at end of period	$	12,513		$	682

Bancorp recorded CDI assets of $1.5 million and $2.5 million in association with its May 1, 2019 KSB and 2013 TBOC acquisitions. See the Footnote titled “Acquisition of KSB” for additional detail.

Changes in the net carrying amount of CDI assets follow:

Years ended December 31, (in thousands)	2019			2018			2017
Balance, beginning of period	$	1,057		$	1,225		$	1,405
Additions		1,519			—			—
Amortized to expense		(291	)		(168	)		(180	)
Balance, end of period	$	2,285		$	1,057		$	1,225

Future CDI amortization expense is estimated as follows:

(in thousands)
2020	$	323
2021		302
2022		295
2023		259
2024		241
Beyond 2024		865
Total future payments	$	2,285

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Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2019

Accounting Policies [Abstract]

Consolidation, Policy [Policy Text Block]

Principles of Consolidation and Nature of Operations – The consolidated financial statements include the accounts of Stock Yards Bancorp, Inc. and its wholly-owned subsidiary, SYB&T. All significant inter-company transactions and accounts have been eliminated in consolidation. All companies are collectively referred to as “Bancorp” or the “Company.” Bancorp has evaluated subsequent events for recognition or disclosure up to the date on which financial statements were issued and determined there were none.

The Bank, chartered in 1904, is a Louisville, Kentucky-based, state-chartered non-member financial institution that provides services in the Louisville, Kentucky, Indianapolis, Indiana and Cincinnati, Ohio MSAs through 42 full service banking center locations.

As a result of its acquisition of KSB on May 1, 2019, Bancorp became the 100% successor owner of KBST, an unconsolidated finance subsidiary. As permitted under the terms of KBST’s governing documents, Bancorp redeemed the TPS at the par amount of approximately $4 million in June, 2019.

Bancorp is divided into two reportable segments: Commercial Banking and WM&T:

Commercial Banking provides a full range of loan and deposit products to individual consumers and businesses in all its markets through retail lending, mortgage banking, deposit services, online banking, mobile banking, private banking, commercial lending, treasury management services, merchant services, international banking, correspondent banking and other banking services. The Bank 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 custom-tailored financial planning, investment management, retirement planning, trust and estate services in all markets in which Bancorp operates. The magnitude of WM&T revenue distinguishes Bancorp from other community banks of similar asset size.

Basis of Financial Presentation and Use of Estimates [Policy Text Block]

Basis of Financial Statement Presentation and Use of Estimates – The consolidated financial statements of Bancorp and its subsidiary have been prepared in conformity with GAAP and conform to predominant practices within the banking industry. In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect reported amounts of certain assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of related revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates particularly susceptible to significant change relate to determination of the allowance, and income tax assets, liabilities and expense.

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash Equivalents and Cash Flows – Cash and cash equivalents include cash and due from banks, FFS and interest bearing due from banks as segregated in the accompanying consolidated balance sheets.

Investment, Policy [Policy Text Block]

Securities – All of Bancorp’s debt securities are AFS. Equity securities, if held, are carried at fair value with changes in fair value recorded in net income. Securities AFS include securities that may be sold in response to changes in interest rates, resultant prepayment risk and other factors related to interest rate and prepayment risk changes. Securities AFS are carried at fair value with unrealized gains or losses, net of tax effect, included in stockholders’ equity. Amortization of premiums and accretion of discounts are recorded using the interest method over the expected life of the security. Gains or losses on sales of securities are computed on a specific identification basis. Declines in fair value of investment securities AFS (with certain exceptions noted below) that are deemed to be other-than-temporary are charged to earnings as a realized loss, and a new cost basis for the securities is established. In evaluating OTTI, management considers the length of time and extent to which fair value has been less than cost, financial condition and near-term prospects of the issuer, and the intent and ability of Bancorp to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value in the near term. Declines in fair value of debt securities below amortized cost are deemed to be other-than-temporary in circumstances where: (1) Bancorp has the intent to sell a security; (2) it is more likely than not that Bancorp will be required to sell the security before recovery of its amortized cost basis; or (3) Bancorp does not expect to recover the entire amortized cost basis of the security. If Bancorp intends to sell a security or if it is more likely than not that Bancorp will be required to sell the security before recovery, an OTTI write-down is recognized in earnings equal to the difference between the security’s amortized cost basis and its fair value. If Bancorp does not intend to sell the security or it is not more likely than not that it will be required to sell the security before recovery, the OTTI write-down is separated into an amount representing credit loss, which is recognized in earnings, and an amount related to all other factors, which is recognized in OCI. Declines in value judged to be other-than-temporary are included in other non-interest expense in the consolidated statements of income. See the Footnote titled “Securities Available for Sale” for additional information.

Business Combinations Policy [Policy Text Block]

Accounting for Business Acquisitions — Bancorp accounts for acquisitions in accordance with the acquisition method as outlined in ASC Topic 805, Business Combinations. The acquisition method requires: a) identification of the entity that obtains control of the acquiree; b) determination of the acquisition date; c) recognition and measurement of the identifiable assets acquired and liabilities assumed, and any non-controlling interest in the acquiree; and d) recognition and measurement of goodwill or bargain purchase gain.

Identifiable assets acquired, liabilities assumed, and any non-controlling interest in acquirees are generally recognized at their acquisition-date (“day-one”) fair values based on the requirements of ASC Topic 820, Fair Value Measurements and Disclosures. The measurement period for day-one fair values begins on the acquisition date and ends the earlier of: (a) the day management believes it has all the information necessary to determine day-one fair values; or (b) one year following the acquisition date. In many cases, the determination of day-one fair values requires management to make estimates about discount rates, future expected cash flows, market conditions and other future events that are highly complex and subjective in nature and subject to recast adjustments, which are retrospective adjustments to reflect new information existing at the acquisition date affecting day-one fair values. More specifically, these recast adjustments may be made, as market value data, such as valuations, are received by the Bank. Increases or decreases to day-one fair values are reflected with a corresponding increase or decrease to bargain purchase gain or goodwill.

Acquisition related costs are expensed as incurred unless those costs are related to issuing debt or equity securities used to finance the acquisition.

Financing Receivable, Held-for-sale [Policy Text Block]

Mortgage Loans Held for Sale – Mortgage loans held for sale are initially recorded at the lower of cost or market value on an individual loan basis. The sales prices of all of these loans are covered by investor commitments.

Financing Receivable [Policy Text Block]

Loans – Loans are stated at the unpaid principal balance plus deferred loan origination fees, net of deferred loan costs. Loan fees, net of any costs, are deferred and amortized over the life of the related loan on an effective yield basis. Interest income on loans is recorded on the accrual basis except for those loans in a non-accrual income status. Loans are placed in a non-accrual income status when prospects for recovering both principal and accrued interest are considered doubtful or when a default of principal or interest has existed for 90 days or more unless such loan is well secured and in the process of collection. When a loan is placed on non-accrual status, any interest previously accrued but not yet collected is reversed against current income. No interest income is recorded while a loan is on non-accrual until principal has been fully collected. Non-accrual loans may be returned to accrual status once prospects for recovering both principal and accrued interest are reasonably assured. Loans are accounted for as TDRs when Bancorp, for economic or legal reasons related to the debtor’s financial difficulties, grants a concession to the debtor that it would not otherwise consider. If a loan is restructured at a market rate for a new loan with comparable risk, no principal forgiveness has been granted, and the loan is not impaired based on the terms specified by the restructuring agreement, it shall be removed from TDR status generally after six months of performance.

Loans are classified as impaired when it is probable Bancorp will be unable to collect interest and principal according to terms of the loan agreement. These loans are measured at the estimated fair value of the loans’ collateral, if applicable, or on the present value of future cash flows discounted at the loans’ effective interest rate. Impaired loans consist of loans in non-accrual status and loans accounted for as TDRs.

Loans purchased in a business acquisition are accounted for using one of the following accounting standards:

●  ASC Topic 310-20, Non Refundable Fees and Other Costs, is used to value loans that have not demonstrated post origination credit quality deterioration and the acquirer expects to collect all contractually required payments from the borrower. For these loans, the difference between the loan’s day-one fair value and amortized cost would be amortized or accreted into income using the interest method.

● ASC Topic 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality, is used to value PCI loans. For these loans, it is probable the acquirer will be unable to collect all contractually required payments from the borrower. Under ASC Topic 310-30, the expected cash flows that exceed the initial investment in the loan, or fair value, represent the “accretable yield,” which is recognized as interest income on a level-yield basis over the expected cash flow periods of the loans. Additionally, the difference between contractual cash flows and expected cash flows of PCI loans is referred to as the “non-accretable discount.”

Loans and Leases Receivable, Allowance for Loan Losses Policy [Policy Text Block]

Allowance – The allowance is management’s estimate of probable losses inherent in the loan portfolio as of the balance sheet date. Loan losses are charged against the allowance when management believes uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance.

Bancorp’s allowance methodology is driven by risk ratings, historical losses, and qualitative factors. Assumptions include many factors such as changes in borrowers’ financial condition or historical loss ratios related to certain loan portfolios which may or may not be indicative of future losses. To the extent that management’s assumptions prove incorrect, the results from operations could be materially affected by a higher or lower provision.

Consistent with Bancorp’s methodology, the historical look-back period was extended from 32 to 36 quarters in the first quarter of 2019 to all classes and segments of the portfolio. This extension of the historical period used to capture Bancorp’s historical loss ratios was applied to all classes and segments of the loan portfolio. Expansion of the look-back period for the quantitative historical loss rate caused us to review the overall methodology for the qualitative factors to ensure that Bancorp appropriately captures the risk not addressed in the quantitative historical loss rate. Based on the look-back period extension, the allowance level increased approximately $2.0 million during the first quarter of 2019. Management believes extension of the look-back period is appropriate to capture the impact of a full economic cycle and provides sufficient loss observations to develop a reliable estimate. Management will continue to evaluate appropriateness of the look-back period based on the status of the economic cycle.

Bancorp’s allowance calculation includes allocations to loan portfolio segments for qualitative factors including, among other factors, local economic and business conditions, the quality and experience of lending staff and management, exceptions to lending policies, levels of and trends in past due loans and loan classifications, concentrations of credit such as collateral type, trends in portfolio growth, trends in the value of underlying collateral for collateral-dependent loans, effect of other external factors such as the national economic and business trends, and the quality and depth of the loan review function. Bancorp utilizes the sum of all allowance amounts derived as described above as the appropriate level of allowance. Changes in the criteria used in this evaluation or the availability of new information could cause the allowance to be increased or decreased in future periods.

Based on this quantitative and qualitative analysis, provisions, or reductions are made to the allowance. Such provisions or reductions are reflected as a charge against or benefit to current earnings in Bancorp’s consolidated statements of income.

The adequacy of the allowance is monitored by executive management and reported quarterly to the Audit Committee of the Board of Directors. This committee has approved the overall methodology. Various regulatory agencies, as an integral part of their examination process, periodically review the adequacy of Bancorp’s allowance. Such agencies may require Bancorp to make additional provisions to the allowance based upon their judgments about information available to them at the time of their examinations.

The accounting policy related to the allowance is applicable to the Commercial Banking segment of Bancorp.

Property, Plant and Equipment, Policy [Policy Text Block]

Premises and Equipment – Premises and equipment are carried at cost, less accumulated depreciation and amortization. Depreciation of premises and equipment is computed using straight-line methods over the estimated useful lives of the assets ranging from 3 to 40 years. Leasehold improvements are amortized on the straight-line method over terms of the related leases, including expected renewals, or over the useful lives of the improvements, whichever is shorter. Maintenance and repairs are expensed as incurred while major additions and improvements are capitalized.

Federal Home Loan Bank Stock [Policy Text Block]

FHLB Stock — Bancorp is a member of the FHLB system. Members are required to own a certain amount of stock based on the level of borrowings and other factors and may invest in additional amounts. FHLB stock is carried at cost, classified as a restricted security and annually evaluated for impairment. Because this stock is viewed as a long-term investment, impairment is based on ultimate recovery of par value. Both cash and stock dividends are recorded as interest income.

Goodwill and Intangible Assets, Policy [Policy Text Block]

Goodwill and Other Intangible Assets — Goodwill resulting from business acquisitions represents the excess of the fair value of the consideration transferred, plus the fair value of any non-controlling interests in the acquiree, over the fair value of the net assets assumed as of the acquisition date. Goodwill and intangible assets acquired in a purchase combination and determined to have an indefinite useful life are not amortized, but tested annually or more frequently if events and circumstances exist that indicate that a goodwill impairment test should be performed.

Bancorp has selected September 30th as the date to perform its annual goodwill impairment test. Intangible assets with definite useful lives are amortized over their estimated useful lives to their estimated residual values. Goodwill is the only intangible asset with an indefinite life on the Bank’s balance sheet.

All goodwill is attributable to the Commercial Banking segment with the KSB portion expected to be deductible for tax purposes. Based on its assessment, Bancorp believes its goodwill balance at December 31, 2019 and 2018 was not impaired and is properly recorded in the consolidated financial.

Other intangible assets consist of CDI assets arising from business acquisitions. CDI assets are initially measured at fair value and then amortized on an accelerated method over their estimated useful lives.

Other Assets [Policy Text Block]

Other Assets — BOLI and other life insurance policies are carried at net realizable value, which considers applicable surrender charges. Also, Bancorp maintains life insurance policies in conjunction with its non-qualified defined benefit and non-qualified compensation plans.

OREO is carried at the lower of cost or estimated fair value minus estimated selling costs. Any write downs to fair value at the date of acquisition are charged to the allowance. In certain situations, improvements to prepare assets for sale are capitalized if those costs increase the estimated fair value of the asset. Expenses incurred in maintaining assets, write downs to reflect subsequent declines in value, and realized gains or losses are reflected in operations and are included in non-interest income and expense.

MSRs are amortized in proportion to and over the period of estimated net servicing income, considering appropriate prepayment assumptions and are evaluated quarterly for impairment by comparing the carrying value to fair value.

Off-Balance-Sheet Credit Exposure, Policy [Policy Text Block]

Off Balance Sheet Financial Instruments — Financial instruments include off-balance sheet credit instruments, such as commitments to fund loans and standby letters of credit. The face amount for these items represents the exposure to loss, before considering client collateral or ability to repay. Such financial instruments are recorded upon funding. Instruments such as standby letters of credit are considered financial guarantees and are recorded at fair value.

Derivatives, Policy [Policy Text Block]

Derivatives — Bancorp uses derivative financial instruments as part of its interest rate risk management, including interest rate swaps. GAAP establishes accounting and reporting standards for derivative instruments and hedging activities. As required by GAAP, Bancorp’s interest rate swaps are recognized as other assets and liabilities in the consolidated balance sheet at fair value. Accounting for changes in fair value of derivatives depends on the intended use of the derivative and the resulting designation. Derivatives used to hedge exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. To qualify for hedge accounting, Bancorp must comply with detailed rules and documentation requirements at inception of the hedge, and hedge effectiveness is assessed at inception and periodically throughout the life of each hedging relationship. Hedge ineffectiveness, if any, is measured periodically throughout the life of the hedging relationship.

For derivatives designated as cash flow hedges, the effective portion of changes in fair value of the derivative is initially reported in OCI and subsequently reclassified to interest income or expense when the hedged transaction affects earnings, while the ineffective portion of changes in fair value of derivative, if any, is recognized immediately in other noninterest income. Bancorp assesses effectiveness of each hedging relationship by comparing cumulative changes in cash flows of the derivative hedging instrument with cumulative changes in cash flows of the designated hedged item or transaction. No component of the change in the fair value of the hedging instrument is excluded from the assessment of hedge effectiveness.

Periodically, Bancorp enters into an interest rate swap transaction with a borrower, who desires to hedge exposure to rising interest rates, while at the same time entering into an offsetting interest rate swap, with substantially matching terms, with another approved independent counterparty. Because of matching terms of offsetting contracts and collateral provisions mitigating any non-performance risk, changes in fair value subsequent to initial recognition have an insignificant effect on earnings. Because these derivative instruments have not been designated as hedging instruments, the derivative instruments are recognized on the consolidated balance sheet at fair value, with changes in fair value, due to changes in prevailing interest rates, recorded in other noninterest income.

Bancorp had no fair value hedging relationships at December 31, 2019 or 2018. Bancorp does not use derivatives for trading or speculative purposes. See the Footnote titled “Derivative Financial Instruments” for additional discussion.

Transfers and Servicing of Financial Assets, Policy [Policy Text Block]

Transfers of Financial Assets — Transfers of financial assets are accounted for as sales when control over the assets has been relinquished. Control over transferred assets is deemed to be surrendered when the assets have been isolated from Bancorp, the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets and Bancorp does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity.

Share-based Payment Arrangement [Policy Text Block]

Stock-Based Compensation — For all awards, stock-based compensation expense is recognized over the period in which it is earned based on the grant-date fair value of the portion of stock-based payment awards that are ultimately expected to vest, reduced for estimated forfeitures. GAAP requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

Income Tax, Policy [Policy Text Block]

Income Taxes — Income tax expense is the total of the current year income tax due or refundable and the change in DTAs and DTLs. DTAs and DTLs are the expected future tax amounts for the temporary differences between carrying amounts and tax bases of assets and liabilities, computed using enacted tax rates. A valuation allowance, if needed, reduces DTAs to the amount expected to be realized.

A tax position is recognized as a benefit only if it is “more-likely-than-not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more-likely-than-not” test, no tax benefit is recorded.

Bancorp recognizes interest and/or penalties related to income tax matters in income tax expense.

Bancorp periodically invests in certain partnerships with customers that yield historic tax credits, which are accounted for using the flow through method, which approximates the equity method, and/or low-income housing tax credits as well as tax deductible losses, which are accounted for using the effective yield method for older transactions or proportional amortization method for more recent transactions. The tax benefit of these investments exceeds amortization expense associated with them, resulting in a positive impact on net income.

Earnings Per Share, Policy [Policy Text Block]

Net Income per Share — Basic net income per common share is determined by dividing net income by the weighted average number of shares of common stock outstanding. Diluted net income per share is determined by dividing net income by the weighted average number of shares of common stock outstanding plus the weighted average number of shares that would be issued upon exercise of dilutive options and SARs, assuming proceeds are used to repurchase shares under the treasury stock method.

Comprehensive Income, Policy [Policy Text Block]

Comprehensive Income — Comprehensive income is defined as the change in equity (net assets) of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. For Bancorp, this includes net income, changes in unrealized gains and losses on AFS investment securities and cash flow hedging instruments, net of reclassification adjustments and taxes, and minimum pension liability adjustments, net of taxes.

Loss Contingency [Policy Text Block]

Loss Contingencies — Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable, and an amount or range of loss can be reasonably estimated. Management does not believe there are any outstanding matters that would have a material effect on the financial statements.

Cash and Cash Equivalents, Restricted Cash and Cash Equivalents, Policy [Policy Text Block]

Restrictions on Cash and Cash Equivalents — Bancorp is required by the FRB to maintain average reserve balances. Cash and due from banks on the consolidated balance sheet included $11 million in required reserve balances at December 31, 2019.

Policyholders' Dividend [Policy Text Block]

Dividend Restrictions — Banking regulations require maintaining certain capital levels and may limit the dividends paid by the Bank to the Holding Company or by the Holding Company to shareholders.

Fair Value of Financial Instruments, Policy [Policy Text Block]

Fair Value of Financial Instruments — Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in the Footnote titled “Assets and Liabilities Measured and Reported at Fair Value” in this section of the filing. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect the estimates.

Revenue [Policy Text Block]

Revenue from contracts with Customers — On January 1, 2018, Bancorp adopted ASU 2014-09, Revenue from Contracts with Customers and all subsequent amendments to the ASU (collectively, “ASC 606”). While this update modified guidance for recognizing revenue, it did not have a material impact on the timing or presentation of Bancorp’s revenue. The majority of Bancorp’s revenue comes from interest income and other sources, including loans, leases, securities, and derivatives, which are not subject to ASC 606. Bancorp’s services that fall within the scope of ASC 606 are presented within non-interest income and are recognized as revenue as Bancorp satisfies its obligation to its customer.

Segment Reporting, Policy [Policy Text Block]

Segment Information — Bancorp provides a broad range of financial services to individuals, corporations and others through its 42 full service banking locations as of December 31, 2019. These services include loan and deposit services, cash management services, securities brokerage activities, mortgage origination and WM&T activities. Bancorp’s operations are considered by management to be aggregated in two reportable operating segments: Commercial Banking and WM&T.

Reclassification, Policy [Policy Text Block]

Reclassifications — Certain amounts presented in prior periods have been reclassified to conform to the current period presentation. These reclassifications had no impact on previously reported prior periods’ net income or shareholders’ equity.

New Accounting Pronouncements, Policy [Policy Text Block]

Accounting Standards Updates Issued

ASU. No.	Topic	Nature of Update	Date Adopted	Method of Adoption	Financial Statement Impact
2016-13	Financial Instruments - Credit Losses (Topic 326)	Amends guidance on reporting credit losses for assets held at amortized-cost basis and available-for-sale debt securities.	January 1, 2020	Modified-retrospective approach	ASU 2016-13 along with subsequent codification updates, requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts and requires enhanced disclosures related to the significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an organization’s portfolio. In addition, the ASU amends the accounting for credit losses on AFS securities and purchased financial assets with credit deterioration. Bancorp currently expects the adoption of the ASU will result in a increase to the allowance between $7.5 and $8.5 million. As Bancorp is currently finalizing the execution of its implementation controls and processes, the ultimate impact of the adoption of the ASU as of January 1, 2020 could differ from our current expectation. Bancorp expects no change related to accounting for credit losses on AFS securities and other financial assets. Interagency guidance issued in December 2018 allows for a three year phase-in of the cumulative-effect adjustment for regulatory capital reporting. The adoption of the ASU is not expected to have a significant impact upon Bancorp's regulatory capital ratios.
2019-04	Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments	Clarifies and improves areas of guidance related to the recently issued standards on credit losses, hedging, and recognition and measurement.	Based on areas amended	Based on areas amended	Immaterial
2019-05	Financial Instruments - Credit Losses (Topic 326): Targeted Transition Relief	Provides the fair value option for certain instruments within the scope of Subtopic 326-20	January 1, 2020	Modified-retrospective approach	Immaterial
2019-11	Financial Instruments - Credit Losses (Topic 326): Codification Improvements	Affects narrow aspects of the guidance issued in ASU 2016-13	January 1, 2020	Conformed to the adoption of ASU 2016-13 above	Immaterial

Accounting Standards Updates Issued (continued)

ASU. No.	Topic	Nature of Update	Date Adopted	Method of Adoption	Financial Statement Impact
2019-01	Lease (Topic 842): Codification Improvements	Aligns fair value guidance for certain lessors with that of existing guidance (Issue 1) and requires lessors within the scope of Topic 942, Financial Services—Depository and Lending, to present all “principal payments received under leases” within investing activities (Issue 2). The ASU exempts lessees and lessors from having to provide certain interim disclosures in the fiscal year in which a company adopts the new leases standard (Issue 3).	Issue 1 and 2 January 1, 2020; Issue 3 January 1, 2019	Prospectively	Immaterial
2019-07	Codification Updates to SEC Sections	Amends certain SEC sections within the FASB Codification to update and simplify disclosure.	Upon adoption of the FASB codification	NA	Immaterial
2019-12	Income Taxes (Topic 7400): Simplifying the Accounting for Income Taxes	Includes several narrow focused simplifications.	January 1, 2020	Modified-retrospective approach	Immaterial

Accounting Standards Updates Adopted in 2019

ASU. No.	Topic	Nature of Update	Date Adopted	Method of Adoption	Financial Statement Impact
2016-02	Leases (Topic 842)	Most leases are considered operating leases, which are not accounted for on the lessees’ balance sheets. The significant change under this ASU is that those operating leases will be recorded on the balance sheet.	January 1, 2019	Modified-retrospective approach, which includes a number of optional practical expedients	Bancorp adopted on January 1, 2019 and recorded a $17 million of right-of-use lease asset and a $18 million of operating lease liability on its balance sheet. This ASU did not have a meaningful impact on Bancorp's performance metrics, including regulatory capital ratios and ROA. Additionally, Bancorp does not believe that the adoption of this ASU by its customers will have a significant impact on Bancorp's ability to underwrite credit when client financial statements are presented inclusive of the requirements of this ASU. See Footnote 6 in this section of the filing regarding disclosures by the Company to comply with this ASU.
2018-10	Codification Improvements to Leases (Topic 842)	Affects narrow aspects of the guidance issued in ASU 2016-02	January 1, 2019	Conformed to the adoption of ASU 2016-02 above	See Footnote 6 in this section of the filing regarding disclosures by Bancorp to comply to this ASU.
2018-11	Targeted Improvements to Leases (Topic 842)	Provides an additional (and optional) transition method to adopt ASU 2016-02 and provides a practical expedient to not separate non-lease components from the associated lease component under certain circumstances.	January 1, 2019	Conformed to the adoption of ASU 2016-02 above	Immaterial
2017-12	Derivatives and Hedging (Topic 815)	The amendments in this ASU make certain targeted improvements to simplify the application of hedge accounting.	January 1, 2019	Prospectively	Immaterial

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Note 24 - Stock Yards Bancorp, Inc. (Parent Company Only)

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Condensed Financial Information of Parent Company Only Disclosure [Text Block]

(24) Stock Yards Bancorp, Inc. (parent company only)

Condensed Balance Sheets
	December 31,
(in thousands)	2019		2018
Assets
Cash on deposit with subsidiary bank	$	14,714	$	7,655
Investment in and receivable from subsidiaries		384,136		356,118
Other assets		7,821		3,147
Total assets	$	406,671	$	366,920
Liabilities and stockholders' equity
Other liabilities	$	374	$	420
Total stockholders’ equity		406,297		366,500
Total liabilities and stockholders’ equity	$	406,671	$	366,920

Condensed Statements of Income
	Years ended December 31,
(in thousands)	2019			2018			2017
Income - dividends and interest from subsidiaries	$	72,119		$	21,403		$	18,160
Other income		2			12			82
Less expenses		4,935			4,818			3,255
Income before income taxes and equity in undistributed net income of subsidiary		67,186			16,597			14,987
Income tax benefit		(4,683	)		(1,713	)		(1,985	)
Income before equity in undistributed net income of subsidiary		71,869			18,310			16,972
Equity in undistributed net income of subsidiary		(5,802	)		37,207			21,071
Net income	$	66,067		$	55,517		$	38,043
Comprehensive Income	$	71,886		$	52,811		$	37,612

Condensed Statements of Cash Flows
	Years ended December 31
(in thousands)	2019			2018			2017
Operating activities
Net income	$	66,067		$	55,517		$	38,043
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in undistributed net income of subsidiaries		5,802			(37,207	)		(21,071	)
Gain on sale of fixed assets		—			(10	)		—
Change in receivable from subsidiaries
Stock compensation expense		3,578			4,027			2,892
Excess tax benefits from stock- based compensation arrangements		(812	)		(549	)		(1,463	)
Depreciation, amortization and accretion, net		—			—			4
Proceeds from liquidation of private investment fund		—			—			(81	)
Change in other assets		(3,863	)		(1,080	)		5,943
Change in other liabilities		(81	)		220			10
Net cash provided by operating activities		70,691			20,918			24,277
Investing activities
Proceeds from sale of fixed assets		—			13			—
Cash for acquisition		(28,000	)		—			—
Proceeds from liquidation of private investment fund		—			—			81
Net cash provided by (used in) investing activities		(28,000	)		13			81
Financing activities
Repurchase of common stock		(11,817	)		(2,004	)		(2,389	)
Share repurchases related to compensation plans		(272	)		(154	)		(216	)
Cash dividends paid		(23,543	)		(21,766	)		(18,077	)
Net cash used in financing activities		(35,632	)		(23,924	)		(20,682	)
Net increase (decrease) in cash		7,059			(2,993	)		3,676
Cash at beginning of year		7,655			10,648			6,972
Cash at end of year	$	14,714		$	7,655		$	10,648

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Note 21 - Disclosure of Financial Instruments Not Reported at Fair Value (Tables)

12 Months Ended

Dec. 31, 2019

Notes Tables

Fair Value, by Balance Sheet Grouping [Table Text Block]

(In thousands)	Carrying
December 31, 2019	amount		Fair value		Level 1		Level 2		Level 3
Assets
Cash and cash equivalents	$	249,724	$	249,724	$	249,724	$	—	$	—
Mortgage loans held for sale		8,748		8,923		—		8,923		—
Federal Home Loan Bank stock		11,316		11,316		—		11,316		—
Loans, net		2,818,225		2,841,767		—		—		2,841,767
Accrued interest receivable		8,534		8,534		8,534		—		—
Liabilities
Non-interest bearing deposits	$	810,475	$	810,475	$	810,475	$	—	$	—
Transaction deposits		1,891,246		1,891,246		—		1,891,246		—
Time deposits		432,217		434,927		—		434,927		—
Securities sold under agreement to repurchase		31,895		31,895		—		31,895		—
Federal funds purchased		10,887		10,887		—		10,887		—
FHLB advances		79,953		80,906		—		80,906		—
Accrued interest payable		640		640		640		—		—

(In thousands)	Carrying
December 31, 2018	amount		Fair value		Level 1		Level 2		Level 3
Assets
Cash and cash equivalents	$	198,939	$	198,939	$	198,939	$	—	$	—
Mortgage loans held for sale		1,675		1,743		—		1,743		—
Federal Home Loan Bank stock		10,370		10,370		—		10,370		—
Loans, net		2,522,637		2,508,587		—		—		2,508,587
Accrued interest receivable		8,360		8,360		8,360		—		—
Liabilities
Non-interest bearing deposits	$	711,023	$	711,023	$	711,023	$	—	$	—
Transaction deposits		1,736,618		1,736,618		—		1,736,618		—
Time deposits		346,715		345,273		—		345,273		—
Securities sold under agreement to repurchase		36,094		36,094		—		36,094		—
Federal funds purchased		10,247		10,247		—		10,247		—
FHLB advances		48,177		47,227		—		47,227		—
Accrued interest payable		762		762		762		—		—

XML

Note 25 - Segments (Tables)

12 Months Ended

Dec. 31, 2019

Notes Tables

Schedule of Segment Reporting Information, by Segment [Table Text Block]

	Commercial
As of and for the Year ended December 31, 2019 (in thousands)	Banking		WM&T		Total
Net interest income	$	124,902	$	319	$	125,221
Provision for loan and leases		1,000		—		1,000
Wealth management and trust services		—		22,643		22,643
All other non-interest income		27,147		—		27,147
Non-interest expenses		85,642		12,709		98,351
Income before income tax expense		65,407		10,253		75,660
Income tax expense		7,368		2,225		9,593
Net income	$	58,039	$	8,028	$	66,067
Total assets	$	3,720,502	$	3,695	$	3,724,197

	Commercial
As of and for the Year ended December 31, 2018 (in thousands)	Banking		WM&T		Total
Net interest income	$	114,161	$	255	$	114,416
Provision for loan and leases		2,705		—		2,705
Wealth management and trust services		—		21,536		21,536
All other non-interest income		23,810		—		23,810
Non-interest expenses		76,963		12,546		89,509
Income before income tax expense		58,303		9,245		67,548
Income tax expense		10,025		2,006		12,031
Net income	$	48,278	$	7,239	$	55,517
Total assets	$	3,299,169	$	3,755	$	3,302,924

	Commercial
As of and for the Year ended December 31, 2017 (in thousands)	Banking		WM&T		Total
Net interest income	$	103,352	$	301	$	103,653
Provision for loan and leases		2,550		—		2,550
Wealth management and trust services		—		20,505		20,505
All other non-interest income		23,994		—		23,994
Non-interest expenses		78,181		12,239		90,420
Income before income tax expense		46,615		8,567		55,182
Income tax expense		14,080		3,059		17,139
Net income	$	32,535	$	5,508	$	38,043
Total assets	$	3,237,656	$	1,990	$	3,239,646

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Note 21 - Disclosure of Financial Instruments Not Reported at Fair Value - Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands		Dec. 31, 2019	Dec. 31, 2018
Cash and cash equivalents		$ 249,724	$ 198,939
Accrued interest receivable		8,534	8,360
Non-interest bearing		810,475	711,023
Time deposits	[1]	432,217	346,715
Accrued interest payable		640	762
Reported Value Measurement [Member]
Cash and cash equivalents		249,724	198,939
Mortgage loans held for sale		8,748	1,675
Federal Home Loan Bank stock		11,316	10,370
Loans, net		2,818,225	2,522,637
Accrued interest receivable		8,534	8,360
Non-interest bearing		810,475	711,023
Transaction deposits		1,891,246	1,736,618
Time deposits		432,217	346,715
Securities sold under agreement to repurchase		31,895	36,094
Federal funds purchased		10,887	10,247
FHLB advances		79,953	48,177
Accrued interest payable		640	762
Estimate of Fair Value Measurement [Member]
Cash and cash equivalents		249,724	198,939
Mortgage loans held for sale		8,923	1,743
Federal Home Loan Bank stock		11,316	10,370
Loans, net		2,841,767	2,508,587
Accrued interest receivable		8,534	8,360
Non-interest bearing		810,475	711,023
Transaction deposits		1,891,246	1,736,618
Time deposits		434,927	345,273
Securities sold under agreement to repurchase		31,895	36,094
Federal funds purchased		10,887	10,247
FHLB advances		80,906	47,227
Accrued interest payable		640	762
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 1 [Member]
Cash and cash equivalents		249,724	198,939
Mortgage loans held for sale		0	0
Federal Home Loan Bank stock		0	0
Loans, net		0	0
Accrued interest receivable		8,534	8,360
Non-interest bearing		810,475	711,023
Transaction deposits		0	0
Time deposits		0	0
Securities sold under agreement to repurchase		0	0
Federal funds purchased		0	0
FHLB advances		0	0
Accrued interest payable		640	762
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 2 [Member]
Cash and cash equivalents		0	0
Mortgage loans held for sale		8,923	1,743
Federal Home Loan Bank stock		11,316	10,370
Loans, net		0	0
Accrued interest receivable		0	0
Non-interest bearing		0	0
Transaction deposits		1,891,246	1,736,618
Time deposits		434,927	345,273
Securities sold under agreement to repurchase		31,895	36,094
Federal funds purchased		10,887	10,247
FHLB advances		80,906	47,227
Accrued interest payable		0	0
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 3 [Member]
Cash and cash equivalents		0	0
Mortgage loans held for sale		0	0
Federal Home Loan Bank stock		0	0
Loans, net		2,841,767	2,508,587
Accrued interest receivable		0	0
Non-interest bearing		0	0
Transaction deposits		0	0
Time deposits		0	0
Securities sold under agreement to repurchase		0	0
Federal funds purchased		0	0
FHLB advances		0	0
Accrued interest payable		$ 0	$ 0

[1] Includes $30 million in brokered deposits as of December 31, 2019 and 2018.

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Note 20 - Assets and Liabilities Measured and Reported at Fair Value (Details Textual) - USD ($)	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Impaired Financing Receivable, Related Allowance	$ 1,163,000	$ 42,000	$ 48,000
Impaired Financing Receivable, with Related Allowance, Recorded Investment	8,062,000	42,000	$ 48,000
Other Real Estate, Foreclosed Assets, and Repossessed Assets, Total	493,000	1,000,000
Impaired Loans [Member] | Appraisal Discount Method [Member]
Assets, Fair Value Disclosure	7,300,000	925,000
Impaired Financing Receivable, Related Allowance	1,200,000	42,000
Impaired Financing Receivable, with Related Allowance, Recorded Investment	8,400,000	967,000
Mortgage Servicing Rights [Member]
Impaired Financing Receivable, Related Allowance	0	0
Fair Value, Recurring [Member]
Assets, Fair Value Disclosure	473,434,000	438,030,000
Fair Value, Inputs, Level 3 [Member] | Fair Value, Recurring [Member]
Assets, Fair Value Disclosure	0	0
Financial and Nonfinancial Liabilities, Fair Value Disclosure	$ 0	$ (0)

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Note 7 - Goodwill and Core Deposit Intangibles - Carrying Value of Goodwill (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Balance at beginning of period	$ 682	$ 682
Goodwill acquired	12,144	0
Recast adjustments	(313)	0
Impairment	0	0
Balance at end of period	$ 12,513	$ 682

XML

Note 5 - Loans - Internally Assigned Risk Grades of Loans (Details) - USD ($) $ in Thousands		Dec. 31, 2019	Dec. 31, 2018
Loans	[1]	$ 2,845,016	$ 2,548,171
Commercial and Industrial Portfolio Segment [Member]
Loans		870,511	833,524
Construction and Development Excluding Undeveloped Land Portfolio Segment [Member]
Loans	[2]	213,822	225,050
Undevelopment Land Portfolio Segment [Member]
Loans		46,360	30,092
Real Estate Mortgage Portfolio Segment [Member]
Loans		1,666,856	1,411,447
Real Estate Mortgage Portfolio Segment [Member] | Commercial Investment [Member]
Loans		736,618	588,610
Real Estate Mortgage Portfolio Segment [Member] | Owner Occupied Commercial [Member]
Loans		473,783	426,373
Real Estate Mortgage Portfolio Segment [Member] | One to Four Family Residential [Member]
Loans		334,358	276,017
Real Estate Mortgage Portfolio Segment [Member] | Home Equity First Lien [Member]
Loans		48,620	49,500
Real Estate Mortgage Portfolio Segment [Member] | Home Equity Junior Lien [Member]
Loans		73,477	70,947
Consumer Portfolio Segment [Member]
Loans		47,467	48,058
Pass [Member]
Loans		2,785,631	2,493,020
Pass [Member] | Commercial and Industrial Portfolio Segment [Member]
Loans		840,105	803,073
Pass [Member] | Construction and Development Excluding Undeveloped Land Portfolio Segment [Member]
Loans		213,822	220,532
Pass [Member] | Undevelopment Land Portfolio Segment [Member]
Loans		46,360	29,618
Pass [Member] | Real Estate Mortgage Portfolio Segment [Member]
Loans		1,637,915	1,391,739
Pass [Member] | Real Estate Mortgage Portfolio Segment [Member] | Commercial Investment [Member]
Loans		722,747	586,543
Pass [Member] | Real Estate Mortgage Portfolio Segment [Member] | Owner Occupied Commercial [Member]
Loans		460,981	411,722
Pass [Member] | Real Estate Mortgage Portfolio Segment [Member] | One to Four Family Residential [Member]
Loans		332,294	273,537
Pass [Member] | Real Estate Mortgage Portfolio Segment [Member] | Home Equity First Lien [Member]
Loans		48,620	49,500
Pass [Member] | Real Estate Mortgage Portfolio Segment [Member] | Home Equity Junior Lien [Member]
Loans		73,273	70,437
Pass [Member] | Consumer Portfolio Segment [Member]
Loans		47,429	48,058
Special Mention [Member]
Loans		10,239	28,354
Special Mention [Member] | Commercial and Industrial Portfolio Segment [Member]
Loans		704	11,516
Special Mention [Member] | Construction and Development Excluding Undeveloped Land Portfolio Segment [Member]
Loans		0	4,200
Special Mention [Member] | Undevelopment Land Portfolio Segment [Member]
Loans		0	0
Special Mention [Member] | Real Estate Mortgage Portfolio Segment [Member]
Loans		9,535	12,638
Special Mention [Member] | Real Estate Mortgage Portfolio Segment [Member] | Commercial Investment [Member]
Loans		6,459	1,815
Special Mention [Member] | Real Estate Mortgage Portfolio Segment [Member] | Owner Occupied Commercial [Member]
Loans		1,375	9,030
Special Mention [Member] | Real Estate Mortgage Portfolio Segment [Member] | One to Four Family Residential [Member]
Loans		1,701	1,544
Special Mention [Member] | Real Estate Mortgage Portfolio Segment [Member] | Home Equity First Lien [Member]
Loans		0	0
Special Mention [Member] | Real Estate Mortgage Portfolio Segment [Member] | Home Equity Junior Lien [Member]
Loans		0	249
Special Mention [Member] | Consumer Portfolio Segment [Member]
Loans		0	0
Substandard [Member] | Performing Financial Instruments [Member]
Loans		37,002	23,399
Substandard [Member] | Nonperforming Financial Instruments [Member]
Loans		12,144	3,398
Substandard [Member] | Commercial and Industrial Portfolio Segment [Member] | Performing Financial Instruments [Member]
Loans		21,500	18,703
Substandard [Member] | Commercial and Industrial Portfolio Segment [Member] | Nonperforming Financial Instruments [Member]
Loans		8,202	232
Substandard [Member] | Construction and Development Excluding Undeveloped Land Portfolio Segment [Member] | Performing Financial Instruments [Member]
Loans		0	0
Substandard [Member] | Construction and Development Excluding Undeveloped Land Portfolio Segment [Member] | Nonperforming Financial Instruments [Member]
Loans		0	318
Substandard [Member] | Undevelopment Land Portfolio Segment [Member] | Performing Financial Instruments [Member]
Loans		0	0
Substandard [Member] | Undevelopment Land Portfolio Segment [Member] | Nonperforming Financial Instruments [Member]
Loans		0	474
Substandard [Member] | Real Estate Mortgage Portfolio Segment [Member] | Performing Financial Instruments [Member]
Loans		15,464	4,696
Substandard [Member] | Real Estate Mortgage Portfolio Segment [Member] | Performing Financial Instruments [Member] | Commercial Investment [Member]
Loans		6,275	15
Substandard [Member] | Real Estate Mortgage Portfolio Segment [Member] | Performing Financial Instruments [Member] | Owner Occupied Commercial [Member]
Loans		9,050	4,500
Substandard [Member] | Real Estate Mortgage Portfolio Segment [Member] | Performing Financial Instruments [Member] | One to Four Family Residential [Member]
Loans		122	162
Substandard [Member] | Real Estate Mortgage Portfolio Segment [Member] | Performing Financial Instruments [Member] | Home Equity First Lien [Member]
Loans		0	0
Substandard [Member] | Real Estate Mortgage Portfolio Segment [Member] | Performing Financial Instruments [Member] | Home Equity Junior Lien [Member]
Loans		17	19
Substandard [Member] | Real Estate Mortgage Portfolio Segment [Member] | Nonperforming Financial Instruments [Member]
Loans		3,942	2,374
Substandard [Member] | Real Estate Mortgage Portfolio Segment [Member] | Nonperforming Financial Instruments [Member] | Commercial Investment [Member]
Loans		1,137	237
Substandard [Member] | Real Estate Mortgage Portfolio Segment [Member] | Nonperforming Financial Instruments [Member] | Owner Occupied Commercial [Member]
Loans		2,377	1,121
Substandard [Member] | Real Estate Mortgage Portfolio Segment [Member] | Nonperforming Financial Instruments [Member] | One to Four Family Residential [Member]
Loans		241	774
Substandard [Member] | Real Estate Mortgage Portfolio Segment [Member] | Nonperforming Financial Instruments [Member] | Home Equity First Lien [Member]
Loans		0	0
Substandard [Member] | Real Estate Mortgage Portfolio Segment [Member] | Nonperforming Financial Instruments [Member] | Home Equity Junior Lien [Member]
Loans		187	242
Substandard [Member] | Consumer Portfolio Segment [Member] | Performing Financial Instruments [Member]
Loans		38	0
Substandard [Member] | Consumer Portfolio Segment [Member] | Nonperforming Financial Instruments [Member]
Loans		0	0
Doubtful [Member]
Loans		0	0
Doubtful [Member] | Commercial and Industrial Portfolio Segment [Member]
Loans		0	0
Doubtful [Member] | Construction and Development Excluding Undeveloped Land Portfolio Segment [Member]
Loans		0	0
Doubtful [Member] | Undevelopment Land Portfolio Segment [Member]
Loans		0	0
Doubtful [Member] | Real Estate Mortgage Portfolio Segment [Member]
Loans		0	0
Doubtful [Member] | Real Estate Mortgage Portfolio Segment [Member] | Commercial Investment [Member]
Loans		0	0
Doubtful [Member] | Real Estate Mortgage Portfolio Segment [Member] | Owner Occupied Commercial [Member]
Loans		0	0
Doubtful [Member] | Real Estate Mortgage Portfolio Segment [Member] | One to Four Family Residential [Member]
Loans		0	0
Doubtful [Member] | Real Estate Mortgage Portfolio Segment [Member] | Home Equity First Lien [Member]
Loans		0	0
Doubtful [Member] | Real Estate Mortgage Portfolio Segment [Member] | Home Equity Junior Lien [Member]
Loans		0	0
Doubtful [Member] | Consumer Portfolio Segment [Member]
Loans		$ 0	$ 0

[1] Total loans are presented inclusive of premiums, discounts, and net loan origination fees and costs.

[2] Consists of land acquired for development by the borrower, but for which no development has yet taken place.

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Note 5 - Loans - Loans to Directors and Their Associates (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Loans and leases receivable, balance	$ 52,687	$ 629
Effect of change in composition of directors and executive officers	0	51,415
Repayment of term loans	(184)	0
Changes in balances of revolving lines of credit	(9,279)	643
Loans and leases receivable, balance	$ 43,224	$ 52,687

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Note 16 - Employee Benefit Plans - Benefits Expected to Be Paid (Details) $ in Thousands	Dec. 31, 2019 USD ($)
2020	$ 84
2021	0
2022	0
2023	0
2024	137
Beyond 2024	3,141
Total future payments	$ 3,362

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Note 6 - Premises and Equipment (Details Textual) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Depreciation, Total	$ 4.2	$ 3.7	$ 3.5

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Note 5 - Loans - Loans Individually Evaluated for Impairment (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Loans with no related allowance recorded, recorded investment	$ 3,468	$ 2,611	$ 7,332
Loans with no related allowance recorded, unpaid principal balance	3,926	3,766	9,072
Loans with no related allowance recorded, average recorded investment	3,019	3,948	4,304
Loans with no related allowance recorded, interest income recognized	0	0	0
Loans with an allowance recorded, recorded investment	8,062	42	48
Loans with an allowance recorded, unpaid principal balance	8,062	42	48
Related allowance	1,163	42	48
Loans with an allowance recorded, average recorded investment	1,644	2,786	1,981
Loans with an allowance recorded, interest income recognized	0	3	78
Recorded investment	11,530	2,653	7,380
Unpaid principal balance	11,988	3,808	9,120
Average recorded investment	4,663	6,734	6,285
Interest income recognized	0	3	78
Commercial and Industrial Portfolio Segment [Member]
Loans with no related allowance recorded, recorded investment	174	192	1,142
Loans with no related allowance recorded, unpaid principal balance	174	707	2,202
Loans with no related allowance recorded, average recorded investment	166	161	411
Loans with no related allowance recorded, interest income recognized	0	0	0
Loans with an allowance recorded, recorded investment	8,049	28	34
Loans with an allowance recorded, unpaid principal balance	8,049	28	34
Related allowance	1,150	28	34
Loans with an allowance recorded, average recorded investment	1,631	1,851	1,882
Loans with an allowance recorded, interest income recognized	0	2	78
Recorded investment	8,223	220	1,176
Unpaid principal balance	8,223	735	2,236
Average recorded investment	1,797	2,012	2,293
Interest income recognized	0	2	78
Construction and Development Excluding Undeveloped Land Portfolio Segment [Member]
Loans with no related allowance recorded, recorded investment	0	318	664
Loans with no related allowance recorded, unpaid principal balance	0	489	834
Loans with no related allowance recorded, average recorded investment	64	437	559
Loans with no related allowance recorded, interest income recognized	0	0	0
Loans with an allowance recorded, recorded investment	0	0	0
Loans with an allowance recorded, unpaid principal balance	0	0	0
Related allowance	0	0	0
Loans with an allowance recorded, average recorded investment	0	0	0
Loans with an allowance recorded, interest income recognized	0	0	0
Recorded investment	0	318	664
Unpaid principal balance	0	489	834
Average recorded investment	64	437	559
Interest income recognized	0	0	0
Undevelopment Land Portfolio Segment [Member]
Loans with no related allowance recorded, recorded investment	0	474	474
Loans with no related allowance recorded, unpaid principal balance	0	506	506
Loans with no related allowance recorded, average recorded investment	95	474	425
Loans with no related allowance recorded, interest income recognized	0	0	0
Loans with an allowance recorded, recorded investment	0	0	0
Loans with an allowance recorded, unpaid principal balance	0	0	0
Related allowance	0	0	0
Loans with an allowance recorded, average recorded investment	0	24	48
Loans with an allowance recorded, interest income recognized	0	0	0
Recorded investment	0	474	474
Unpaid principal balance	0	506	506
Average recorded investment	95	498	473
Interest income recognized	0	0	0
Real Estate Mortgage Portfolio Segment [Member]
Loans with no related allowance recorded, recorded investment	3,294	1,627	5,052
Loans with no related allowance recorded, unpaid principal balance	3,752	2,064	5,530
Loans with no related allowance recorded, average recorded investment	2,694	2,853	2,909
Loans with no related allowance recorded, interest income recognized	0	0	0
Loans with an allowance recorded, recorded investment	13	14	14
Loans with an allowance recorded, unpaid principal balance	13	14	14
Related allowance	13	14	14
Loans with an allowance recorded, average recorded investment	13	911	5
Loans with an allowance recorded, interest income recognized	0	1	0
Recorded investment	3,307	1,641	5,066
Unpaid principal balance	3,765	2,078	5,544
Average recorded investment	2,707	3,764	2,914
Interest income recognized	0	1	0
Real Estate Mortgage Portfolio Segment [Member] | Commercial Investment [Member]
Loans with no related allowance recorded, recorded investment	741	138	52
Loans with no related allowance recorded, unpaid principal balance	741	138	53
Loans with no related allowance recorded, average recorded investment	448	35	110
Loans with no related allowance recorded, interest income recognized	0	0	0
Loans with an allowance recorded, recorded investment	0	0	0
Loans with an allowance recorded, unpaid principal balance	0	0	0
Related allowance	0	0	0
Loans with an allowance recorded, average recorded investment	0	0	0
Loans with an allowance recorded, interest income recognized	0	0	0
Recorded investment	741	138	52
Unpaid principal balance	741	138	53
Average recorded investment	448	35	110
Interest income recognized	0	0	0
Real Estate Mortgage Portfolio Segment [Member] | Owner Occupied Commercial [Member]
Loans with no related allowance recorded, recorded investment	2,278	586	3,332
Loans with no related allowance recorded, unpaid principal balance	2,736	1,023	3,789
Loans with no related allowance recorded, average recorded investment	1,437	1,503	1,678
Loans with no related allowance recorded, interest income recognized	0	0	0
Loans with an allowance recorded, recorded investment	0	0	0
Loans with an allowance recorded, unpaid principal balance	0	0	0
Related allowance	0	0	0
Loans with an allowance recorded, average recorded investment	0	897	0
Loans with an allowance recorded, interest income recognized	0	0	0
Recorded investment	2,278	586	3,332
Unpaid principal balance	2,736	1,023	3,789
Average recorded investment	1,437	2,400	1,678
Interest income recognized	0	0	0
Real Estate Mortgage Portfolio Segment [Member] | One to Four Family Residential [Member]
Loans with no related allowance recorded, recorded investment	124	760	1,637
Loans with no related allowance recorded, unpaid principal balance	124	760	1,657
Loans with no related allowance recorded, average recorded investment	516	1,242	935
Loans with no related allowance recorded, interest income recognized	0	0	0
Loans with an allowance recorded, recorded investment	13	14	14
Loans with an allowance recorded, unpaid principal balance	13	14	14
Related allowance	13	14	14
Loans with an allowance recorded, average recorded investment	13	14	5
Loans with an allowance recorded, interest income recognized	0	1	0
Recorded investment	137	774	1,651
Unpaid principal balance	137	774	1,671
Average recorded investment	529	1,256	940
Interest income recognized	0	1	0
Real Estate Mortgage Portfolio Segment [Member] | Home Equity First Lien [Member]
Loans with no related allowance recorded, recorded investment	0	0	0
Loans with no related allowance recorded, unpaid principal balance	0	0	0
Loans with no related allowance recorded, average recorded investment	0	0	0
Loans with no related allowance recorded, interest income recognized	0	0	0
Loans with an allowance recorded, recorded investment	0	0	0
Loans with an allowance recorded, unpaid principal balance	0	0	0
Related allowance	0	0	0
Loans with an allowance recorded, average recorded investment	0	0	0
Loans with an allowance recorded, interest income recognized	0	0	0
Recorded investment	0	0	0
Unpaid principal balance	0	0	0
Average recorded investment	0	0	0
Interest income recognized	0	0	0
Real Estate Mortgage Portfolio Segment [Member] | Home Equity Junior Lien [Member]
Loans with no related allowance recorded, recorded investment	151	143	31
Loans with no related allowance recorded, unpaid principal balance	151	143	31
Loans with no related allowance recorded, average recorded investment	293	73	186
Loans with no related allowance recorded, interest income recognized	0	0	0
Loans with an allowance recorded, recorded investment	0	0	0
Loans with an allowance recorded, unpaid principal balance	0	0	0
Related allowance	0	0	0
Loans with an allowance recorded, average recorded investment	0	0	0
Loans with an allowance recorded, interest income recognized	0	0	0
Recorded investment	151	143	31
Unpaid principal balance	151	143	31
Average recorded investment	293	73	186
Interest income recognized	0	0	0
Consumer Portfolio Segment [Member]
Loans with no related allowance recorded, recorded investment	0	0	0
Loans with no related allowance recorded, unpaid principal balance	0	0	0
Loans with no related allowance recorded, average recorded investment	0	23	0
Loans with no related allowance recorded, interest income recognized	0	0	0
Loans with an allowance recorded, recorded investment	0	0	0
Loans with an allowance recorded, unpaid principal balance	0	0	0
Related allowance	0	0	0
Loans with an allowance recorded, average recorded investment	0	0	46
Loans with an allowance recorded, interest income recognized	0	0	0
Recorded investment	0	0	0
Unpaid principal balance	0	0	0
Average recorded investment	0	23	46
Interest income recognized	$ 0	$ 0	$ 0

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Note 8 - Other Assets - Summary of Major Components of Other Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Cash surrender value of life insurance other than BOLI	$ 16,145	$ 15,029
Net deferred tax asset	14,466	10,193
Investments in tax credit related ventures	6,248	4,537
Prepaid assets	2,812	3,072
Trust fee receivable	2,171	1,939
Mortgage servicing rights	1,372	1,022	$ 875	$ 921
Other real estate owned	493	1,018
Other	7,232	8,362
Total other assets	$ 50,939	$ 45,172

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Note 12 - FHLB Advances - Future Minimum Payments (Details) $ in Thousands	Dec. 31, 2019 USD ($)
2020	$ 55,680
2021	6,004
2022	3,193
2023	2,655
2024	3,122
2025 and beyond	$ 9,299

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Note 14 - Preferred Stock and Common Stock (Details Textual) - $ / shares $ / shares in Thousands	Dec. 31, 2019	Dec. 31, 2018
Preferred Stock, No Par Value	$ 0	$ 0
Preferred Stock, Shares Authorized	1,000,000	1,000,000
Preferred Stock, Shares Issued, Total	0	0

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Note 17 - Stock-based Compensation - Restricted Stock (Details) - Restricted Stock [Member] - $ / shares shares in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Unvested (in shares)	110	119	145
Unvested, grant date weighted average cost (in dollars per share)	$ 32.09	$ 27.62	$ 21.57
Awarded (in shares)	40	40	29
Fair value at grant date (in dollars per share)	$ 34.88	$ 35.89	$ 44.85
Restrictions lapsed and shares released (in shares)	(40)	(44)	(47)
Restrictions lapsed and shares released, grant date weighted average cost (in dollars per share)	$ 28.74	$ 23.62	$ 19.79
Forfeited (in shares)	(2)	(5)	(8)
Shares forfeited, grant date weighted average cost (in dollars per share)	$ 35.36	$ 31.35	$ 25.18
Unvested (in shares)	108	110	119
Unvested, grant date weighted average cost (in dollars per share)	$ 34.31	$ 32.09	$ 27.62

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Note 17 - Stock-based Compensation - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Expense	$ 3,578	$ 4,027	$ 2,892
Deferred tax benefit	(751)	(846)	(607)
Total net expense	2,827	3,181	2,285
Stock Appreciation Rights (SARs) [Member]
Expense	345	379	280
Deferred tax benefit	(72)	(80)	(59)
Total net expense	273	299	221
Restricted Stock [Member]
Expense	1,185	1,100	1,032
Deferred tax benefit	(249)	(231)	(216)
Total net expense	936	869	816
Restricted Stock Units (RSUs) [Member]
Expense	329	248	219
Deferred tax benefit	(69)	(52)	(46)
Total net expense	260	196	173
Performance Shares [Member]
Expense	1,719	2,300	1,361
Deferred tax benefit	(361)	(483)	(286)
Total net expense	$ 1,358	$ 1,817	$ 1,075

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Note 9 - Income Taxes - Difference Between Statutory and Effective Tax Rates (Details)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
U.S. federal statutory income tax rate	21.00%	21.00%	35.00%
Kentucky state income tax enactments	(5.20%)	0.00%	0.00%
Net deferred tax asset remeasurement	0.00%	(0.50%)	10.80%
Excess tax benefits from stock-based compensation arrangements	(1.00%)	(0.80%)	(2.60%)
Increase in cash surrender value of life insurance	(0.90%)	(0.40%)	(1.50%)
Tax credits	(1.90%)	(1.80%)	(14.40%)
Tax exempt interest income	(0.30%)	(0.40%)	(1.20%)
Amortization/impairment of investments in tax credit partnerships	0.30%	0.40%	3.40%
State income taxes, net of federal benefit	0.70%	0.80%	0.70%
Other, net	0.00%	(0.50%)	0.90%
Effective tax rate	12.70%	17.80%	31.10%

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Note 3 - Acquisition of KSB - Summary of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands		May 01, 2019	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Goodwill, Ending Balance			$ 12,513	$ 682	$ 682
King Bancorp Inc. [Member]
Securities available for sale		$ 12,427
Federal Home Loan Bank stock, at cost		1,517
Federal Reserve Bank stock, at cost		490
Loans		164,029
Allowance for loan losses		0
Net loans		164,029
Premises and equipment, net		3,461
Bank owned life insurance		3,431
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles		1,519
Other real estate owned		0
Other assets and accrued interest receivable		831
Total assets acquired		192,782
Non-interest bearing		24,939
Interest bearing	[1],[2]	100,587
Total deposits		125,526
Federal funds purchased		1,566
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Federal Home Loan Bank Advances		43,299	43,000
Other liabilities and accrued interest payable		313
Total liabilities assumed		176,613
Net assets acquired		16,169
Cash consideration paid		(28,000)
Goodwill, Ending Balance		11,831	$ 12,000
King Bancorp Inc. [Member] | Subordinated Debt [Member]
Long-term debt		3,609
King Bancorp Inc. [Member] | Line of Credit [Member]
Long-term debt		2,300
King Bancorp Inc. [Member] | As Recorded By Acquiree [Member]
Securities available for sale		12,404
Federal Home Loan Bank stock, at cost		1,517
Federal Reserve Bank stock, at cost		490
Loans		165,744
Allowance for loan losses		(1,812)
Net loans		163,932
Premises and equipment, net		4,358
Bank owned life insurance		3,431
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles		0
Other real estate owned		325
Other assets and accrued interest receivable		867
Total assets acquired		192,401
Non-interest bearing		24,939
Interest bearing	[1],[2]	100,839
Total deposits		125,778
Federal funds purchased		1,566
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Federal Home Loan Bank Advances		43,718
Other liabilities and accrued interest payable		313
Total liabilities assumed		177,284
Net assets acquired		15,117
King Bancorp Inc. [Member] | As Recorded By Acquiree [Member] | Subordinated Debt [Member]
Long-term debt		3,609
King Bancorp Inc. [Member] | As Recorded By Acquiree [Member] | Line of Credit [Member]
Long-term debt		2,300
King Bancorp Inc. [Member] | As Adjusted By Acuirer [Member]
Securities available for sale	[1],[3]	23
Federal Home Loan Bank stock, at cost	[1]	0
Federal Reserve Bank stock, at cost	[1]	0
Loans	[1],[4]	(1,597)
Allowance for loan losses	[1],[4]	1,812
Net loans	[1]	215
Premises and equipment, net	[1],[5]	(1,328)
Bank owned life insurance	[1]	0
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles	[1],[6]	1,519
Other real estate owned	[1],[7]	(325)
Other assets and accrued interest receivable	[1],[8]	(36)
Total assets acquired	[1]	68
Non-interest bearing	[1]	0
Interest bearing	[1],[2]	(252)
Total deposits		(252)
Federal funds purchased	[1]	0
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Federal Home Loan Bank Advances	[1],[9]	(419)
Other liabilities and accrued interest payable	[1]	0
Total liabilities assumed	[1]	(671)
Net assets acquired	[1]	739
King Bancorp Inc. [Member] | As Adjusted By Acuirer [Member] | Subordinated Debt [Member]
Long-term debt	[1]	0
King Bancorp Inc. [Member] | As Adjusted By Acuirer [Member] | Line of Credit [Member]
Long-term debt	[1]	0
King Bancorp Inc. [Member] | Recast Adjustment [Member]
Securities available for sale		0
Federal Home Loan Bank stock, at cost		0
Federal Reserve Bank stock, at cost		0
Loans	[4]	(118)
Allowance for loan losses		0
Net loans		(118)
Premises and equipment, net	[5]	431
Bank owned life insurance		0
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles		0
Other real estate owned		0
Other assets and accrued interest receivable		0
Total assets acquired		313
Non-interest bearing		0
Interest bearing	[1],[2]	0
Total deposits		0
Federal funds purchased		0
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Federal Home Loan Bank Advances		0
Other liabilities and accrued interest payable		0
Total liabilities assumed		0
Net assets acquired		313
King Bancorp Inc. [Member] | Recast Adjustment [Member] | Subordinated Debt [Member]
Long-term debt		0
King Bancorp Inc. [Member] | Recast Adjustment [Member] | Line of Credit [Member]
Long-term debt		0
King Bancorp Inc. [Member] | Cash [Member]
Cash and equivalents		3,316
King Bancorp Inc. [Member] | Cash [Member] | As Recorded By Acquiree [Member]
Cash and equivalents		3,316
King Bancorp Inc. [Member] | Cash [Member] | As Adjusted By Acuirer [Member]
Cash and equivalents	[1]	0
King Bancorp Inc. [Member] | Cash [Member] | Recast Adjustment [Member]
Cash and equivalents		0
King Bancorp Inc. [Member] | Interest-bearing Deposits [Member]
Cash and equivalents		1,761
King Bancorp Inc. [Member] | Interest-bearing Deposits [Member] | As Recorded By Acquiree [Member]
Cash and equivalents		1,761
King Bancorp Inc. [Member] | Interest-bearing Deposits [Member] | As Adjusted By Acuirer [Member]
Cash and equivalents	[1]	0
King Bancorp Inc. [Member] | Interest-bearing Deposits [Member] | Recast Adjustment [Member]
Cash and equivalents		$ 0

[1] Bancorp's acquisition of KSB closed on May 1, 2019. The fair value adjustments reported are preliminary estimates based on information obtained subsequent to May 1, 2019 and through December 31, 2019. Management is continuing to evaluate each of its estimates and may provide additional recast adjustments in future periods based on this continuing evaluation. To the extent that additional recast adjustments are posted in future periods, the resultant fair values and the amount of goodwill recorded by Bancorp will change.

[2] Reflects the fair value adjustment based on the Bancorp's evaluation of the assumed time deposits.

[3] Reflects the fair value adjustment based on Bancorp's evaluation of the acquired investment portfolio.

[4] Reflects the fair value adjustment based on Bancorp's evaluation of the acquired loan portfolio and to eliminate KSB's recorded allowance.

[5] Reflects the fair value adjustment based on Bancorp's evaluation of the premises and equipment acquired.

[6] Reflects the fair value adjustment for the core deposit intangible asset recorded as a result of the acquisition.

[7] Reflects the fair value adjustment based upon Bancorp's evaluation of the foreclosed real estate acquired.

[8] Reflects the write-off of a miscellaneous other asset.

[9] Reflects the fair value adjustment based upon Bancorp's evaluation of the assumed FHLB advances.

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Note 4 - Securities Available for Sale - Securities With Unrealized Losses (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Sep. 30, 2019	Dec. 31, 2018
Securities available-for-sale, less than 12 months, fair value	$ 98,167		$ 100,662
Securities available-for-sale, less than 12 months, unrealized losses	(603)		(44)
Securities available-for-sale, 12 months or more, fair value	43,945		287,807
Securities available-for-sale, 12 months or more, unrealized losses	(531)		(7,248)
Securities available-for-sale, fair value	142,112		388,469
Securities available-for-sale, unrealized losses	(1,134)		(7,292)
US Government-sponsored Enterprises Debt Securities [Member]
Securities available-for-sale, less than 12 months, fair value	16,503		96,740
Securities available-for-sale, less than 12 months, unrealized losses	(107)		(38)
Securities available-for-sale, 12 months or more, fair value	11,492		149,320
Securities available-for-sale, 12 months or more, unrealized losses	(71)		(3,313)
Securities available-for-sale, fair value	27,995		246,060
Securities available-for-sale, unrealized losses	(178)		(3,351)
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]
Securities available-for-sale, less than 12 months, fair value	81,664		3,108
Securities available-for-sale, less than 12 months, unrealized losses	(496)		(5)
Securities available-for-sale, 12 months or more, fair value	32,453		120,848
Securities available-for-sale, 12 months or more, unrealized losses	(460)		(3,748)
Securities available-for-sale, fair value	114,117		123,956
Securities available-for-sale, unrealized losses	$ (956)		$ (3,753)
US States and Political Subdivisions Debt Securities [Member]
Securities available-for-sale, less than 12 months, fair value		$ 814
Securities available-for-sale, less than 12 months, unrealized losses		(1)
Securities available-for-sale, 12 months or more, fair value		17,639
Securities available-for-sale, 12 months or more, unrealized losses		(187)
Securities available-for-sale, fair value		18,453
Securities available-for-sale, unrealized losses		$ (188)

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Note 10 - Deposits - Maturities of Time Deposits (Details) - USD ($) $ in Thousands		Dec. 31, 2019	Dec. 31, 2018
2020		$ 273,568
2021		129,676
2022		11,729
2023		10,049
2024		7,094
2025 and thereafter		101
Total time deposits	[1]	$ 432,217	$ 346,715

[1] Includes $30 million in brokered deposits as of December 31, 2019 and 2018.

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Note 15 - Net Income Per Share (Tables)

12 Months Ended

Dec. 31, 2019

Notes Tables

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

Years Ended December 31, (in thousands, except per share data)	2019		2018		2017
Net income	$	66,067	$	55,517	$	38,043
Weighted average shares outstanding - basic		22,598		22,619		22,532
Dilutive securities		267		325		451
Weighted average shares outstanding - diluted		22,865		22,944		22,983
Net income per share - basic	$	2.92	$	2.45	$	1.69
Net income per share - diluted	$	2.89	$	2.42	$	1.66

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block]

Years Ended December 31, (in thousands)	2019		2018
Antidilutive SARs		199		146

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Note 23 - Regulatory Matters - Risk Based Capital Amounts and Ratios (Details) - USD ($) $ in Thousands		Dec. 31, 2019	Dec. 31, 2018
Total risk-based capital, actual amount	[1]	$ 418,460	$ 396,019
Total risk-based capital, actual ratio	[1]	12.85%	13.91%
Total risk-based capital, minimum for adequately capitalized amount	[1]	$ 260,448	$ 227,714
Total risk-based capital, minimum for adequately capitalized ratio	[1]	8.00%	8.00%
Common Equity Tier 1 risk-based capital, actual amount		$ 391,319	$ 370,135
Common Equity Tier 1 risk-based capital, actual ratio		12.02%	13.00%
Common Equity Tier 1 risk-based capital, minimum for adequately capitalized amount		$ 146,502	$ 128,089
Common Equity Tier 1 risk-based capital, minimum for adequately capitalized ratio		4.50%	4.50%
Tier 1 risk-based capital, actual amount	[1]	$ 391,319	$ 370,135
Tier 1 risk-based capital, actual ratio	[1]	12.02%	13.00%
Tier 1 risk-based capital, minimum for adequately capitalized amount	[1]	$ 195,336	$ 170,785
Tier 1 risk-based capital, minimum for adequately capitalized ratio	[1]	6.00%	6.00%
Leverage, actual amount	[2]	$ 391,319	$ 370,135
Leverage, actual ratio	[2]	10.60%	11.33%
Leverage, minimum for adequately capitalized amount	[2]	$ 147,733	$ 130,698
Leverage, minimum for adequately capitalized ratio	[2]	4.00%	4.00%
Subsidiaries [Member]
Total risk-based capital, actual amount	[1]	$ 396,299	$ 385,637
Total risk-based capital, actual ratio	[1]	12.20%	13.56%
Total risk-based capital, minimum for adequately capitalized amount	[1]	$ 259,823	$ 227,462
Total risk-based capital, minimum for adequately capitalized ratio	[1]	8.00%	8.00%
Total risk-based capital, minimum for well capitalized amount	[1]	$ 324,778	$ 284,327
Total risk-based capital, minimum for well capitalized ratio	[1]	10.00%	10.00%
Common Equity Tier 1 risk-based capital, actual amount		$ 369,158	$ 359,753
Common Equity Tier 1 risk-based capital, actual ratio		11.37%	12.65%
Common Equity Tier 1 risk-based capital, minimum for adequately capitalized amount		$ 146,150	$ 127,947
Common Equity Tier 1 risk-based capital, minimum for adequately capitalized ratio		4.50%	4.50%
Common Equity Tier 1 risk-based capital, minimum for well capitalized amount		$ 211,106	$ 184,813
Common Equity Tier 1 risk-based capital, minimum for well capitalized ratio		6.50%	6.50%
Tier 1 risk-based capital, actual amount	[1]	$ 369,158	$ 359,753
Tier 1 risk-based capital, actual ratio	[1]	11.37%	12.65%
Tier 1 risk-based capital, minimum for adequately capitalized amount	[1]	$ 194,867	$ 170,596
Tier 1 risk-based capital, minimum for adequately capitalized ratio	[1]	6.00%	6.00%
Tier 1 risk-based capital, minimum for well capitalized amount	[1]	$ 259,823	$ 227,462
Tier 1 risk-based capital, minimum for well capitalized ratio	[1]	8.00%	8.00%
Leverage, actual amount	[2]	$ 369,158	$ 359,753
Leverage, actual ratio	[2]	10.67%	11.02%
Leverage, minimum for adequately capitalized amount	[2]	$ 138,392	$ 130,569
Leverage, minimum for adequately capitalized ratio	[2]	4.00%	4.00%
Leverage, minimum for well capitalized amount	[2]	$ 172,990	$ 163,211
Leverage, minimum for well capitalized ratio	[2]	5.00%	5.00%

[1] Ratio is computed in relation to risk-weighted assets.

[2] Ratio is computed in relation to average assets.

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Note 25 - Segments (Details Textual) - USD ($)	Dec. 31, 2019	May 01, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 1996
Goodwill, Ending Balance	$ 12,513,000		$ 682,000	$ 682,000
King Bancorp Inc. [Member]
Goodwill, Ending Balance	12,000,000	$ 11,831,000
Commercial Banking [Member] | Indiana Bank [Member]
Goodwill, Ending Balance					$ 682,000
Commercial Banking [Member] | Operating Segments [Member]
Goodwill, Ending Balance	$ 12,500,000
Commercial Banking [Member] | Operating Segments [Member] | Indiana Bank [Member]
Goodwill, Ending Balance					$ 682,000
Commercial Banking [Member] | Operating Segments [Member] | King Bancorp Inc. [Member]
Goodwill, Ending Balance		$ 11,800,000

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Note 10 - Deposits (Tables)

12 Months Ended

Dec. 31, 2019

Notes Tables

Deposit Liabilities, Type [Table Text Block]

December 31, (in thousands)	2019		2018
Non-interest bearing demand deposits	$	810,475	$	711,023
Interest bearing deposits:
Interest bearing demand		979,595		892,867
Savings		169,622		155,007
Money market		742,029		688,744
Time deposits of $250,000 or more		81,412		55,182
Other time deposits		350,805		291,533
Total time deposits(1)		432,217		346,715
Total interest bearing deposits		2,323,463		2,083,333
Total deposits	$	3,133,938	$	2,794,356

Time Deposit Maturities [Table Text Block]

(in thousands)
2020	$	273,568
2021		129,676
2022		11,729
2023		10,049
2024		7,094
2025 and thereafter		101
Total time deposits	$	432,217

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Note 6 - Premises and Equipment (Tables)

12 Months Ended

Dec. 31, 2019

Notes Tables

Property, Plant and Equipment [Table Text Block]

December 31, (in thousands)	2019			2018
Land	$	10,241		$	9,664
Buildings and improvements		50,809			47,726
Furniture and equipment		22,032			21,793
Construction in progress		623			1,051
Right-of-use operating lease asset		12,737			-
		96,442			80,234
Accumulated depreciation and amortization		(37,824	)		(35,470	)
Total premises and equipment	$	58,618		$	44,764

Detail Regarding Operating Leases of Lessee [Table Text Block]

(dollars in thousands)	December 31, 2019
Balance Sheet
Operating lease right-of-use asset	$	12,737
Operating lease liability		14,369
Weighted average remaining lease term		9.38
Weighted average discount rate		2.46	%
Maturities of lease liabilities:
One year or less	$	1,964
Year 2		1,915
Year 3		1,930
Year 4		1,972
Year 5		1,781
Greater than 5 years		6,619
Total lease payments	$	16,181
Less imputed interest		1,812
Total	$	14,369

	Year Ended
(In thousands)	December 31, 2019
Income Statement
Components of lease expense:
Operating lease cost	$	1,870
Variable lease cost		152
Less sublease income		54
Total lease cost	$	1,968
(In thousands)
Cash flow Statement
Supplemental cash flow information:
Operating cash flows from operating leases	$	1,656

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Note 27 - Revenue From Contracts With Customers - Revenue by Operating Segment (Details) - USD ($) $ in Thousands		3 Months Ended												12 Months Ended
		Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Non-interest income														$ 22,643	$ 21,536	$ 20,505
Mortgage banking income	[1]													3,090	2,568	3,221
Bank owned life insurance	[1]													1,031	1,129	1,159
Other	[2]													2,900	1,337	1,769
Non-interest income		$ 13,161	$ 13,304	$ 12,263	$ 11,062	$ 11,576	$ 11,426	$ 11,435	$ 10,909	$ 11,407	$ 10,945	$ 11,525	$ 10,622	49,790	45,346	44,499
Loss on sale of securities														0	0	(232)
Commercial Banking [Member]
Non-interest income														0	0	0
Mortgage banking income	[1]													3,090	2,568	3,221
Bank owned life insurance	[1]													1,031	1,129	1,159
Other	[2]													2,900	1,337	1,769
Non-interest income														27,147	23,810	23,994
Loss on sale of securities																(232)
WM&T [Member]
Mortgage banking income	[1]													0	0	0
Bank owned life insurance	[1]													0	0	0
Other	[2]													0	0	0
Non-interest income														22,643	21,536	20,505
Loss on sale of securities																0
Fiduciary and Trust [Member]
Non-interest income														22,643	21,536	20,505
Fiduciary and Trust [Member] | Commercial Banking [Member]
Non-interest income														0	0	0
Fiduciary and Trust [Member] | WM&T [Member]
Non-interest income														22,643	21,536	20,505
Deposit Account [Member]
Non-interest income														5,513	5,759	6,172
Deposit Account [Member] | Commercial Banking [Member]
Non-interest income														5,513	5,759	6,172
Deposit Account [Member] | WM&T [Member]
Non-interest income														0	0	0
Credit and Debit Card [Member]
Non-interest income														8,123	6,769	5,979
Credit and Debit Card [Member] | Commercial Banking [Member]
Non-interest income														8,123	6,769	5,979
Credit and Debit Card [Member] | WM&T [Member]
Non-interest income														0	0	0
Treasury Management [Member]
Non-interest income														4,992	4,571	4,297
Treasury Management [Member] | Commercial Banking [Member]
Non-interest income														4,992	4,571	4,297
Treasury Management [Member] | WM&T [Member]
Non-interest income														0	0	0
Product Sales Commissions and Fees [Member]
Non-interest income														1,498	1,677	1,629
Product Sales Commissions and Fees [Member] | Commercial Banking [Member]
Non-interest income														1,498	1,677	1,629
Product Sales Commissions and Fees [Member] | WM&T [Member]
Non-interest income														$ 0	$ 0	$ 0

[1] Outside of the scope of ASC 606

[2] Outside of the scope of ASC 606, with the exception of safe deposit fees which were nominal for all periods.

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Note 13 - Other Comprehensive Income (Loss)

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Comprehensive Income (Loss) Note [Text Block]

(13) Other Comprehensive Income (Loss)

The following table illustrates activity within the balances in AOCI by component, and is shown for the years ended December 31, 2019, 2018, and 2017.

	Net unrealized			Net unrealized			Minimum
	gains (losses)			gains (losses)			pension
	on securities			on cash			liability
(in thousands)	available for sale			flow hedges			adjustment			Total
Balance, January 1, 2017	$	(1,211	)	$	(16	)	$	(272	)	$	(1,499	)
Net current period other comprehensive income (loss)		(721	)		209			(70	)		(582	)
Amounts reclassifed from AOCI		151			—			—			151
Balance, December 31, 2017 (1)	$	(1,781	)	$	193		$	(342	)	$	(1,930	)
Balance, January 1, 2018	$	(1,781	)	$	193		$	(342	)	$	(1,930	)
Net current period other comprehensive income (loss)		(3,053	)		174			173			(2,706	)
Reclassification adjustment for adoption of ASU 2018-02		(496	)		41			(51	)		(506	)
Balance, December 31, 2018	$	(5,330	)	$	408		$	(220	)	$	(5,142	)
Balance, January 1, 2019	$	(5,330	)	$	408		$	(220	)	$	(5,142	)
Net current period other comprehensive income (loss)		6,415			(445	)		(151	)		5,819
Balance, December 31, 2019	$	1,085		$	(37	)	$	(371	)	$	677

(1) December 31, 2017 AOCI component balances reflect a correction of incorrectly reported year-end balances in the Footnote titled “Other Comprehensive Income (Loss)” of the 2017 Form 10-K, which were presented as $(2,278), $234, and $(392) for securities AFS, cash flow hedges, and minimum pension liability, respectively.

The above table includes $506,000 reclassification from AOCI to retained earnings related to the adoption of ASU 2018-02 in the first quarter of 2018. ASU 2018-02 provided for the reclassification of tax effects stranded in OCI as a result of the 2017 TCJA into retained earnings. The TCJA reduced the US Federal statutory corporate income tax rate from 35% to 21% effective January 1, 2018. As a result, Bancorp was required to re-measure its net DTAs at the lower rate and recognize the adjustment through income tax expense in 2017. The adjustment through income tax expense left items presented in AOCI, for which the related income tax effects were originally recognized in OCI, unadjusted for the new tax rate.

The following table illustrates activity within the reclassifications out of AOCI:

Details of accumulated								Affected line item in
other comprehensive	Amount reclassified from accumulated							the consolidated
income (loss) components	other comprehensive income (loss)							statements of income
(in thousands)
For the years ended December 31,	2019		2018		2017
Unrealized gains (losses) on securities available for sale:
Realized loss on sale of securities available for sale	$	—	$	—	$	(232	)	Loss on sale of securities
Effect of income taxes		—		—		81		Income tax expense
Reclassification, net of income taxes	$	—	$	—	$	(151	)

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Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Net income	$ 66,067	$ 55,517	$ 38,043
Other comprehensive income:
Change in unrealized gain (loss) on AFS debt securities	8,172	(3,865)	(1,252)
Change in fair value of derivatives used in cashflow hedge	(567)	220	321
Minimum pension liability adjustment	(207)	219	(79)
Reclassification adjustment for net gain (loss) on AFS debt securities recognized in earnings	0	0	232
Total other comprehensive income (loss) before income tax expense	7,398	(3,426)	(778)
Tax effect	1,579	(720)	(347)
Total other comprehensive income (loss), net of tax	5,819	(2,706)	(431)
Comprehensive income	$ 71,886	$ 52,811	$ 37,612

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Document And Entity Information - USD ($)	12 Months Ended
	Dec. 31, 2019	Feb. 21, 2020	Jun. 30, 2019
Document Information [Line Items]
Entity Central Index Key	0000835324
Entity Registrant Name	Stock Yards Bancorp, Inc.
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2019
Document Type	10-K
Document Annual Report	true
Document Period End Date	Dec. 31, 2019
Document Transition Report	false
Entity File Number	1-13661
Entity Incorporation, State or Country Code	KY
Entity Tax Identification Number	61-1137529
Entity Address, Address Line One	1040 East Main Street
Entity Address, City or Town	Louisville
Entity Address, State or Province	KY
Entity Address, Postal Zip Code	40206
City Area Code	502
Local Phone Number	582-2571
Title of 12(b) Security	Common stock, no par value
Trading Symbol	SYBT
Security Exchange Name	NASDAQ
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Public Float			$ 756,982,663
Entity Common Stock, Shares Outstanding		22,637,670

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Note 17 - Stock-based Compensation

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Share-based Payment Arrangement [Text Block]

(17) Stock-Based Compensation

The fair value of all stock-based awards granted, net of estimated forfeitures, is recognized as compensation expense over the respective service period.

At Bancorp's 2015 Annual Meeting of Shareholders, shareholders approved the 2015 Omnibus Equity Compensation Plan and authorized the shares available from the expiring 2005 plan for future awards under the 2015 plan. In 2018 shareholders approved an additional 500,000 shares for issuance under the plan. As of December 31, 2019, there were 547,000 shares available for future awards. The 2005 Stock Incentive Plan expired in April 2015 and SARs granted under this plan expire as late as 2025. The 2015 Stock Incentive Plan has no defined expiration date.

Stock Options – Bancorp had no stock options outstanding as of December 31, 2019 and 2018.

SAR Grants – SARs granted have a vesting schedule of 20% per year and expire ten years after the grant date unless forfeited due to employment termination.

Fair values of SARs are estimated at the date of grant using the Black-Scholes option pricing model, a leading formula for calculating such value. The model requires the input of assumptions, changes to which can materially affect the fair value estimate. The following assumptions were used in SAR valuations at the grant date in each year:

	2019			2018			2017
Dividend yield		2.54	%		2.56	%		2.72	%
Expected volatility		20.39	%		20.17	%		19.47	%
Risk free interest rate		2.52	%		2.96	%		2.29	%
Expected life of SARs (years)	7.2			7.0			7.0

Dividend yield and expected volatility are based on historical information for Bancorp corresponding to the expected life of SARs granted. Expected volatility is the volatility of underlying shares for the expected term calculated on a monthly basis. The risk free interest rate is the implied yield currently available on U.S. Treasury issues with a remaining term equal to the expected life of the awards. The expected life of SARs is based on actual experience of past like-term SARs. Bancorp evaluates historical exercise and post-vesting termination behavior when determining the expected life.

RSA Grants – RSAs granted to officers vest over five years. For all grants prior to 2015, grantees are entitled to dividend payments during the vesting period. For grants in 2015 and forward, forfeitable dividends are deferred until shares are vested. Fair value of RSAs is equal to the market value of the shares on the date of grant.

PSU Grants – PSUs vest based upon service and a three-year performance period, which begins January 1 of the first year of the performance period. Because grantees are not entitled to dividend payments during the performance period, the fair value of these PSUs is estimated based upon the market value of the underlying shares on the date of grant, adjusted for non-payment of dividends. Grants require a one year post-vesting holding period and the fair value of such grants incorporates a liquidity discount related to the holding period of 4.1%, 4.3% and 5.1% for 2019, 2018, and 2017.

RSU Grants – RSUs are only granted to non-employee directors, are time-based and vest 12 months after grant date. Because grantees are entitled to deferred dividend payments at the end of the vesting period, fair value of the RSUs equals market value of underlying shares on the date of grant.

In the first quarters of 2019 and 2018, Bancorp awarded 9,834 and 6,525 RSUs to non-employee directors of Bancorp with a grant date fair value of $330,000 and $247,000.

Bancorp utilized cash of $272,000 and $154,000 during 2019 and 2018 for the purchase of shares upon the vesting of RSUs.

Bancorp has recognized stock-based compensation expense for SARs, RSAs, and PSUs within compensation expense, and RSUs for directors within other non-interest expense, as follows:

	Year Ended December 31, 2019
(in thousands)	Stock Appreciation Rights			Restricted Stock Awards			Restricted Stock Units			Performance Stock Units			Total
Expense	$	345		$	1,185		$	329		$	1,719		$	3,578
Deferred tax benefit		(72	)		(249	)		(69	)		(361	)		(751	)
Total net expense	$	273		$	936		$	260		$	1,358		$	2,827

	Year Ended December 31, 2018
(in thousands)	Stock Appreciation Rights			Restricted Stock Awards			Restricted Stock Units			Performance Stock Units			Total
Expense	$	379		$	1,100		$	248		$	2,300		$	4,027
Deferred tax benefit		(80	)		(231	)		(52	)		(483	)		(846	)
Total net expense	$	299		$	869		$	196		$	1,817		$	3,181

	Year Ended December 31, 2017
(in thousands)	Stock Appreciation Rights			Restricted Stock Awards			Restricted Stock Units			Performance Stock Units			Total
Expense	$	280		$	1,032		$	219		$	1,361		$	2,892
Deferred tax benefit		(59	)		(216	)		(46	)		(286	)		(607	)
Total net expense	$	221		$	816		$	173		$	1,075		$	2,285

Beginning in 2017 Bancorp’s adopted ASU 2016-09 which changed the way excess tax benefits and deficiencies related to stock-based compensation were recorded. Prior to 2017, these were recorded directly to APIC and, thus did not affect earnings. Beginning in 2017, these were recorded as a tax expense/benefit on the income statement. These benefits resulted in $812,000, $549,000 and $1.5 million increases in net income for 2019, 2018 and 2017. This tax benefit is not reflected in the above tables.

Detail of unrecognized stock-based compensation expense follows:

(in thousands) Year ended	Stock Appreciation Rights		Restricted Stock Awards		Restricted Stock Units		Performance Stock Units		Total
2020	$	306	$	1,035	$	2	$	853	$	2,196
2021		248		816		—		462		1,526
2022		193		547		—		—		740
2023		118		302		—		—		420
2024		11		24		—		—		35
2025		—		—		—		—		-
Total estimated expense	$	876	$	2,724	$	2	$	1,315	$	4,917

The following table summarizes SARs activity and related information:

													Weighted
							Weighted				Weighted		average
							average		Aggregate		average		remaining
				Exercise			exercise		intrinsic		fair		contractual
(in thousands, except per share and years)	SARs			price			price		value(1)		value		life (in years)
Outstanding, January 1, 2017		735		$14.02	-	$33.08	$	17.78	$	21,443	$	3.26		5.5
Granted		46		40.00	-	40.00		40.00		—		6.34
Exercised		(77	)	14.02	-	17.89		15.41		1,855		3.18
Forfeited		—			-			-		—		—
Outstanding, December 31, 2017		704		$14.02	-	$40.00	$	19.51	$	12,923	$	3.47		5.1
Outstanding, January 1, 2018		704		$14.02	-	$40.00	$	19.51	$	12,923	$	3.47		5.1
Granted		100		35.90	-	39.32		37.75		—		6.07
Exercised		(73	)	14.02	-	19.37		15.32		1,654		3.43
Forfeited		—			-			-		—		—
Outstanding, December 31, 2018		731		$14.02	-	$40.00	$	22.42	$	8,422	$	3.83		5.2
Outstanding, January 1, 2019		731		$14.02	-	$40.00	$	22.42	$	8,422	$	3.83		5.2
Granted		53		36.65	-	38.18		37.01		213		6.24
Exercised		(143	)	14.02	-	22.96		15.99		3,025		3.47
Forfeited		—			-			-		—		—
Outstanding, December 31, 2019		641		$14.02	-	$40.00	$	25.06	$	10,250	$	4.10		5.3
Vested and exercisable		439		$14.02	-	$40.00	$	20.53	$	9,017	$	3.42		4.0
Unvested		202		22.96	-	40.00		34.93		1,233		5.59		7.9
Outstanding, December 31, 2019		641		$14.02	-	$40.00	$	25.06	$	10,250	$	4.10		5.3
Vested during 2019		91		$19.37	-	$40.00	$	28.80	$	1,110	$	4.66

(1) - Intrinsic value for SARs is defined as the amount by which the current market price of the underlying stock exceeds the exercise or grant price.

SARs outstanding by expiration year follows:

(in thousands, except per share data)
Expiration	SARs Outstanding		SARs Exercisable		Weighted Average Exercise Price
2020		3		3	$	14.02
2021		27		27		15.88
2022		108		108		15.25
2023		80		80		15.26
2024		73		73		19.37
2025		63		49		23.00
2026		88		55		25.84
2027		46		21		40.00
2028		100		23		37.75
2029		53		—		37.01
		641		439	$	25.06

The following table summarizes activity for RSAs granted to officers:

				Grant date
				weighted
(in thousands, except per share data)	RSAs			average cost
Unvested at January 1, 2017		145		$	21.57
Shares awarded		29			44.85
Restrictions lapsed and shares released		(47	)		19.79
Shares forfeited		(8	)		25.18
Unvested at December 31, 2017		119		$	27.62
Unvested at January 1, 2018		119		$	27.62
Shares awarded		40			35.89
Restrictions lapsed and shares released		(44	)		23.62
Shares forfeited		(5	)		31.35
Unvested at December 31, 2018		110		$	32.09
Unvested at January 1, 2019		110		$	32.09
Shares awarded		40			34.88
Restrictions lapsed and shares released		(40	)		28.74
Shares forfeited		(2	)		35.36
Unvested at December 31, 2019		108		$	34.31

Shares expected to be awarded for PSUs granted to executive officers of Bancorp, the three-year performance period for which began January 1 of the award year are as follows:

Grant Year	Vesting Period in Years	Fair Value		Expected Shares to be Awarded
2017	3	$	35.66	61,893
2018	3		31.54	50,352
2019	3		32.03	43,603

Bancorp has no equity compensation plans which have not been approved by shareholders. The following table provides detail of the number of shares to be issued upon exercise of outstanding stock-based awards and remaining shares available for future issuance under Bancorp’s equity compensation plan as of December 31, 2019.

	Number of				Shares
	shares to be		Weighted		available for
	issued upon		average		future
Plan category (in thousands)	exercising/vesting		exercise price		issuance (a)
Equity compensation plans approved by security holders:
Stock Appreciation Rights	(b)		(b)			547
Restricted Stock Awards		108		N/A	(a)
Restricted Stock Units		10		N/A	(a)
Performance Stock Units	(c)			N/A	(a)
Total shares		118				547

(a) Under the 2015 Omnibus Equity Compensation Plan, shares of stock are authorized for issuance as incentive and non-qualified stock options, SARs, RSAs, and RSUs.

(b) At December 31, 2019, approximately 641,000 SARs were outstanding at a weighted average grant price of $25.06. The number of shares to be issued upon exercise will be determined based on the difference between the grant price and the market price at the date of exercise.

(c) The number of shares to be issued is dependent upon Bancorp achieving certain predefined performance targets and ranges from zero shares to approximately 196,000 shares. As of December 31, 2019, the expected shares to be awarded are approximately 156,000.

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Note 1 - Basis of Presentation and Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Significant Accounting Policies [Text Block]

(1) Basis of Presentation and Summary of Significant Accounting Policies

Principles of Consolidation and Nature of Operations – The consolidated financial statements include the accounts of Stock Yards Bancorp, Inc. and its wholly-owned subsidiary, SYB&T. All significant inter-company transactions and accounts have been eliminated in consolidation. All companies are collectively referred to as “Bancorp” or the “Company.” Bancorp has evaluated subsequent events for recognition or disclosure up to the date on which financial statements were issued and determined there were none.

The Bank, chartered in 1904, is a Louisville, Kentucky-based, state-chartered non-member financial institution that provides services in the Louisville, Kentucky, Indianapolis, Indiana and Cincinnati, Ohio MSAs through 42 full service banking center locations.

As a result of its acquisition of KSB on May 1, 2019, Bancorp became the 100% successor owner of KBST, an unconsolidated finance subsidiary. As permitted under the terms of KBST’s governing documents, Bancorp redeemed the TPS at the par amount of approximately $4 million in June, 2019.

Bancorp is divided into two reportable segments: Commercial Banking and WM&T:

Commercial Banking provides a full range of loan and deposit products to individual consumers and businesses in all its markets through retail lending, mortgage banking, deposit services, online banking, mobile banking, private banking, commercial lending, treasury management services, merchant services, international banking, correspondent banking and other banking services. The Bank 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 custom-tailored financial planning, investment management, retirement planning, trust and estate services in all markets in which Bancorp operates. The magnitude of WM&T revenue distinguishes Bancorp from other community banks of similar asset size.

Basis of Financial Statement Presentation and Use of Estimates – The consolidated financial statements of Bancorp and its subsidiary have been prepared in conformity with GAAP and conform to predominant practices within the banking industry. In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect reported amounts of certain assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of related revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates particularly susceptible to significant change relate to determination of the allowance, and income tax assets, liabilities and expense.

Cash Equivalents and Cash Flows – Cash and cash equivalents include cash and due from banks, FFS and interest bearing due from banks as segregated in the accompanying consolidated balance sheets.

Securities – All of Bancorp’s debt securities are AFS. Equity securities, if held, are carried at fair value with changes in fair value recorded in net income. Securities AFS include securities that may be sold in response to changes in interest rates, resultant prepayment risk and other factors related to interest rate and prepayment risk changes. Securities AFS are carried at fair value with unrealized gains or losses, net of tax effect, included in stockholders’ equity. Amortization of premiums and accretion of discounts are recorded using the interest method over the expected life of the security. Gains or losses on sales of securities are computed on a specific identification basis. Declines in fair value of investment securities AFS (with certain exceptions noted below) that are deemed to be other-than-temporary are charged to earnings as a realized loss, and a new cost basis for the securities is established. In evaluating OTTI, management considers the length of time and extent to which fair value has been less than cost, financial condition and near-term prospects of the issuer, and the intent and ability of Bancorp to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value in the near term. Declines in fair value of debt securities below amortized cost are deemed to be other-than-temporary in circumstances where: (1) Bancorp has the intent to sell a security; (2) it is more likely than not that Bancorp will be required to sell the security before recovery of its amortized cost basis; or (3) Bancorp does not expect to recover the entire amortized cost basis of the security. If Bancorp intends to sell a security or if it is more likely than not that Bancorp will be required to sell the security before recovery, an OTTI write-down is recognized in earnings equal to the difference between the security’s amortized cost basis and its fair value. If Bancorp does not intend to sell the security or it is not more likely than not that it will be required to sell the security before recovery, the OTTI write-down is separated into an amount representing credit loss, which is recognized in earnings, and an amount related to all other factors, which is recognized in OCI. Declines in value judged to be other-than-temporary are included in other non-interest expense in the consolidated statements of income. See the Footnote titled “Securities Available for Sale” for additional information.

Accounting for Business Acquisitions — Bancorp accounts for acquisitions in accordance with the acquisition method as outlined in ASC Topic 805, Business Combinations. The acquisition method requires: a) identification of the entity that obtains control of the acquiree; b) determination of the acquisition date; c) recognition and measurement of the identifiable assets acquired and liabilities assumed, and any non-controlling interest in the acquiree; and d) recognition and measurement of goodwill or bargain purchase gain.

Identifiable assets acquired, liabilities assumed, and any non-controlling interest in acquirees are generally recognized at their acquisition-date (“day-one”) fair values based on the requirements of ASC Topic 820, Fair Value Measurements and Disclosures. The measurement period for day-one fair values begins on the acquisition date and ends the earlier of: (a) the day management believes it has all the information necessary to determine day-one fair values; or (b) one year following the acquisition date. In many cases, the determination of day-one fair values requires management to make estimates about discount rates, future expected cash flows, market conditions and other future events that are highly complex and subjective in nature and subject to recast adjustments, which are retrospective adjustments to reflect new information existing at the acquisition date affecting day-one fair values. More specifically, these recast adjustments may be made, as market value data, such as valuations, are received by the Bank. Increases or decreases to day-one fair values are reflected with a corresponding increase or decrease to bargain purchase gain or goodwill.

Acquisition related costs are expensed as incurred unless those costs are related to issuing debt or equity securities used to finance the acquisition.

Mortgage Loans Held for Sale – Mortgage loans held for sale are initially recorded at the lower of cost or market value on an individual loan basis. The sales prices of all of these loans are covered by investor commitments.

Loans – Loans are stated at the unpaid principal balance plus deferred loan origination fees, net of deferred loan costs. Loan fees, net of any costs, are deferred and amortized over the life of the related loan on an effective yield basis. Interest income on loans is recorded on the accrual basis except for those loans in a non-accrual income status. Loans are placed in a non-accrual income status when prospects for recovering both principal and accrued interest are considered doubtful or when a default of principal or interest has existed for 90 days or more unless such loan is well secured and in the process of collection. When a loan is placed on non-accrual status, any interest previously accrued but not yet collected is reversed against current income. No interest income is recorded while a loan is on non-accrual until principal has been fully collected. Non-accrual loans may be returned to accrual status once prospects for recovering both principal and accrued interest are reasonably assured. Loans are accounted for as TDRs when Bancorp, for economic or legal reasons related to the debtor’s financial difficulties, grants a concession to the debtor that it would not otherwise consider. If a loan is restructured at a market rate for a new loan with comparable risk, no principal forgiveness has been granted, and the loan is not impaired based on the terms specified by the restructuring agreement, it shall be removed from TDR status generally after six months of performance.

Loans are classified as impaired when it is probable Bancorp will be unable to collect interest and principal according to terms of the loan agreement. These loans are measured at the estimated fair value of the loans’ collateral, if applicable, or on the present value of future cash flows discounted at the loans’ effective interest rate. Impaired loans consist of loans in non-accrual status and loans accounted for as TDRs.

Loans purchased in a business acquisition are accounted for using one of the following accounting standards:

●  ASC Topic 310-20, Non Refundable Fees and Other Costs, is used to value loans that have not demonstrated post origination credit quality deterioration and the acquirer expects to collect all contractually required payments from the borrower. For these loans, the difference between the loan’s day-one fair value and amortized cost would be amortized or accreted into income using the interest method.

● ASC Topic 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality, is used to value PCI loans. For these loans, it is probable the acquirer will be unable to collect all contractually required payments from the borrower. Under ASC Topic 310-30, the expected cash flows that exceed the initial investment in the loan, or fair value, represent the “accretable yield,” which is recognized as interest income on a level-yield basis over the expected cash flow periods of the loans. Additionally, the difference between contractual cash flows and expected cash flows of PCI loans is referred to as the “non-accretable discount.”

Allowance – The allowance is management’s estimate of probable losses inherent in the loan portfolio as of the balance sheet date. Loan losses are charged against the allowance when management believes uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance.

Bancorp’s allowance methodology is driven by risk ratings, historical losses, and qualitative factors. Assumptions include many factors such as changes in borrowers’ financial condition or historical loss ratios related to certain loan portfolios which may or may not be indicative of future losses. To the extent that management’s assumptions prove incorrect, the results from operations could be materially affected by a higher or lower provision.

Consistent with Bancorp’s methodology, the historical look-back period was extended from 32 to 36 quarters in the first quarter of 2019 to all classes and segments of the portfolio. This extension of the historical period used to capture Bancorp’s historical loss ratios was applied to all classes and segments of the loan portfolio. Expansion of the look-back period for the quantitative historical loss rate caused us to review the overall methodology for the qualitative factors to ensure that Bancorp appropriately captures the risk not addressed in the quantitative historical loss rate. Based on the look-back period extension, the allowance level increased approximately $2.0 million during the first quarter of 2019. Management believes extension of the look-back period is appropriate to capture the impact of a full economic cycle and provides sufficient loss observations to develop a reliable estimate. Management will continue to evaluate appropriateness of the look-back period based on the status of the economic cycle.

Bancorp’s allowance calculation includes allocations to loan portfolio segments for qualitative factors including, among other factors, local economic and business conditions, the quality and experience of lending staff and management, exceptions to lending policies, levels of and trends in past due loans and loan classifications, concentrations of credit such as collateral type, trends in portfolio growth, trends in the value of underlying collateral for collateral-dependent loans, effect of other external factors such as the national economic and business trends, and the quality and depth of the loan review function. Bancorp utilizes the sum of all allowance amounts derived as described above as the appropriate level of allowance. Changes in the criteria used in this evaluation or the availability of new information could cause the allowance to be increased or decreased in future periods.

Based on this quantitative and qualitative analysis, provisions, or reductions are made to the allowance. Such provisions or reductions are reflected as a charge against or benefit to current earnings in Bancorp’s consolidated statements of income.

The adequacy of the allowance is monitored by executive management and reported quarterly to the Audit Committee of the Board of Directors. This committee has approved the overall methodology. Various regulatory agencies, as an integral part of their examination process, periodically review the adequacy of Bancorp’s allowance. Such agencies may require Bancorp to make additional provisions to the allowance based upon their judgments about information available to them at the time of their examinations.

The accounting policy related to the allowance is applicable to the Commercial Banking segment of Bancorp.

Premises and Equipment – Premises and equipment are carried at cost, less accumulated depreciation and amortization. Depreciation of premises and equipment is computed using straight-line methods over the estimated useful lives of the assets ranging from 3 to 40 years. Leasehold improvements are amortized on the straight-line method over terms of the related leases, including expected renewals, or over the useful lives of the improvements, whichever is shorter. Maintenance and repairs are expensed as incurred while major additions and improvements are capitalized.

FHLB Stock — Bancorp is a member of the FHLB system. Members are required to own a certain amount of stock based on the level of borrowings and other factors and may invest in additional amounts. FHLB stock is carried at cost, classified as a restricted security and annually evaluated for impairment. Because this stock is viewed as a long-term investment, impairment is based on ultimate recovery of par value. Both cash and stock dividends are recorded as interest income.

Goodwill and Other Intangible Assets — Goodwill resulting from business acquisitions represents the excess of the fair value of the consideration transferred, plus the fair value of any non-controlling interests in the acquiree, over the fair value of the net assets assumed as of the acquisition date. Goodwill and intangible assets acquired in a purchase combination and determined to have an indefinite useful life are not amortized, but tested annually or more frequently if events and circumstances exist that indicate that a goodwill impairment test should be performed.

Bancorp has selected September 30th as the date to perform its annual goodwill impairment test. Intangible assets with definite useful lives are amortized over their estimated useful lives to their estimated residual values. Goodwill is the only intangible asset with an indefinite life on the Bank’s balance sheet.

All goodwill is attributable to the Commercial Banking segment with the KSB portion expected to be deductible for tax purposes. Based on its assessment, Bancorp believes its goodwill balance at December 31, 2019 and 2018 was not impaired and is properly recorded in the consolidated financial.

Other intangible assets consist of CDI assets arising from business acquisitions. CDI assets are initially measured at fair value and then amortized on an accelerated method over their estimated useful lives.

Other Assets — BOLI and other life insurance policies are carried at net realizable value, which considers applicable surrender charges. Also, Bancorp maintains life insurance policies in conjunction with its non-qualified defined benefit and non-qualified compensation plans.

OREO is carried at the lower of cost or estimated fair value minus estimated selling costs. Any write downs to fair value at the date of acquisition are charged to the allowance. In certain situations, improvements to prepare assets for sale are capitalized if those costs increase the estimated fair value of the asset. Expenses incurred in maintaining assets, write downs to reflect subsequent declines in value, and realized gains or losses are reflected in operations and are included in non-interest income and expense.

MSRs are amortized in proportion to and over the period of estimated net servicing income, considering appropriate prepayment assumptions and are evaluated quarterly for impairment by comparing the carrying value to fair value.

Off Balance Sheet Financial Instruments — Financial instruments include off-balance sheet credit instruments, such as commitments to fund loans and standby letters of credit. The face amount for these items represents the exposure to loss, before considering client collateral or ability to repay. Such financial instruments are recorded upon funding. Instruments such as standby letters of credit are considered financial guarantees and are recorded at fair value.

Derivatives — Bancorp uses derivative financial instruments as part of its interest rate risk management, including interest rate swaps. GAAP establishes accounting and reporting standards for derivative instruments and hedging activities. As required by GAAP, Bancorp’s interest rate swaps are recognized as other assets and liabilities in the consolidated balance sheet at fair value. Accounting for changes in fair value of derivatives depends on the intended use of the derivative and the resulting designation. Derivatives used to hedge exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. To qualify for hedge accounting, Bancorp must comply with detailed rules and documentation requirements at inception of the hedge, and hedge effectiveness is assessed at inception and periodically throughout the life of each hedging relationship. Hedge ineffectiveness, if any, is measured periodically throughout the life of the hedging relationship.

For derivatives designated as cash flow hedges, the effective portion of changes in fair value of the derivative is initially reported in OCI and subsequently reclassified to interest income or expense when the hedged transaction affects earnings, while the ineffective portion of changes in fair value of derivative, if any, is recognized immediately in other noninterest income. Bancorp assesses effectiveness of each hedging relationship by comparing cumulative changes in cash flows of the derivative hedging instrument with cumulative changes in cash flows of the designated hedged item or transaction. No component of the change in the fair value of the hedging instrument is excluded from the assessment of hedge effectiveness.

Periodically, Bancorp enters into an interest rate swap transaction with a borrower, who desires to hedge exposure to rising interest rates, while at the same time entering into an offsetting interest rate swap, with substantially matching terms, with another approved independent counterparty. Because of matching terms of offsetting contracts and collateral provisions mitigating any non-performance risk, changes in fair value subsequent to initial recognition have an insignificant effect on earnings. Because these derivative instruments have not been designated as hedging instruments, the derivative instruments are recognized on the consolidated balance sheet at fair value, with changes in fair value, due to changes in prevailing interest rates, recorded in other noninterest income.

Bancorp had no fair value hedging relationships at December 31, 2019 or 2018. Bancorp does not use derivatives for trading or speculative purposes. See the Footnote titled “Derivative Financial Instruments” for additional discussion.

Transfers of Financial Assets — Transfers of financial assets are accounted for as sales when control over the assets has been relinquished. Control over transferred assets is deemed to be surrendered when the assets have been isolated from Bancorp, the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets and Bancorp does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity.

Stock-Based Compensation — For all awards, stock-based compensation expense is recognized over the period in which it is earned based on the grant-date fair value of the portion of stock-based payment awards that are ultimately expected to vest, reduced for estimated forfeitures. GAAP requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

Income Taxes — Income tax expense is the total of the current year income tax due or refundable and the change in DTAs and DTLs. DTAs and DTLs are the expected future tax amounts for the temporary differences between carrying amounts and tax bases of assets and liabilities, computed using enacted tax rates. A valuation allowance, if needed, reduces DTAs to the amount expected to be realized.

A tax position is recognized as a benefit only if it is “more-likely-than-not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more-likely-than-not” test, no tax benefit is recorded.

Bancorp recognizes interest and/or penalties related to income tax matters in income tax expense.

Bancorp periodically invests in certain partnerships with customers that yield historic tax credits, which are accounted for using the flow through method, which approximates the equity method, and/or low-income housing tax credits as well as tax deductible losses, which are accounted for using the effective yield method for older transactions or proportional amortization method for more recent transactions. The tax benefit of these investments exceeds amortization expense associated with them, resulting in a positive impact on net income.

Net Income per Share — Basic net income per common share is determined by dividing net income by the weighted average number of shares of common stock outstanding. Diluted net income per share is determined by dividing net income by the weighted average number of shares of common stock outstanding plus the weighted average number of shares that would be issued upon exercise of dilutive options and SARs, assuming proceeds are used to repurchase shares under the treasury stock method.

Comprehensive Income — Comprehensive income is defined as the change in equity (net assets) of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. For Bancorp, this includes net income, changes in unrealized gains and losses on AFS investment securities and cash flow hedging instruments, net of reclassification adjustments and taxes, and minimum pension liability adjustments, net of taxes.

Loss Contingencies — Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable, and an amount or range of loss can be reasonably estimated. Management does not believe there are any outstanding matters that would have a material effect on the financial statements.

Restrictions on Cash and Cash Equivalents — Bancorp is required by the FRB to maintain average reserve balances. Cash and due from banks on the consolidated balance sheet included $11 million in required reserve balances at December 31, 2019.

Dividend Restrictions — Banking regulations require maintaining certain capital levels and may limit the dividends paid by the Bank to the Holding Company or by the Holding Company to shareholders.

Fair Value of Financial Instruments — Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in the Footnote titled “Assets and Liabilities Measured and Reported at Fair Value” in this section of the filing. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect the estimates.

Revenue from contracts with Customers — On January 1, 2018, Bancorp adopted ASU 2014-09, Revenue from Contracts with Customers and all subsequent amendments to the ASU (collectively, “ASC 606”). While this update modified guidance for recognizing revenue, it did not have a material impact on the timing or presentation of Bancorp’s revenue. The majority of Bancorp’s revenue comes from interest income and other sources, including loans, leases, securities, and derivatives, which are not subject to ASC 606. Bancorp’s services that fall within the scope of ASC 606 are presented within non-interest income and are recognized as revenue as Bancorp satisfies its obligation to its customer.

Segment Information — Bancorp provides a broad range of financial services to individuals, corporations and others through its 42 full service banking locations as of December 31, 2019. These services include loan and deposit services, cash management services, securities brokerage activities, mortgage origination and WM&T activities. Bancorp’s operations are considered by management to be aggregated in two reportable operating segments: Commercial Banking and WM&T.

Reclassifications — Certain amounts presented in prior periods have been reclassified to conform to the current period presentation. These reclassifications had no impact on previously reported prior periods’ net income or shareholders’ equity.

Accounting Standards Updates Issued

ASU. No.	Topic	Nature of Update	Date Adopted	Method of Adoption	Financial Statement Impact
2016-13	Financial Instruments - Credit Losses (Topic 326)	Amends guidance on reporting credit losses for assets held at amortized-cost basis and available-for-sale debt securities.	January 1, 2020	Modified-retrospective approach	ASU 2016-13 along with subsequent codification updates, requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts and requires enhanced disclosures related to the significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an organization’s portfolio. In addition, the ASU amends the accounting for credit losses on AFS securities and purchased financial assets with credit deterioration. Bancorp currently expects the adoption of the ASU will result in a increase to the allowance between $7.5 and $8.5 million. As Bancorp is currently finalizing the execution of its implementation controls and processes, the ultimate impact of the adoption of the ASU as of January 1, 2020 could differ from our current expectation. Bancorp expects no change related to accounting for credit losses on AFS securities and other financial assets. Interagency guidance issued in December 2018 allows for a three year phase-in of the cumulative-effect adjustment for regulatory capital reporting. The adoption of the ASU is not expected to have a significant impact upon Bancorp's regulatory capital ratios.
2019-04	Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments	Clarifies and improves areas of guidance related to the recently issued standards on credit losses, hedging, and recognition and measurement.	Based on areas amended	Based on areas amended	Immaterial
2019-05	Financial Instruments - Credit Losses (Topic 326): Targeted Transition Relief	Provides the fair value option for certain instruments within the scope of Subtopic 326-20	January 1, 2020	Modified-retrospective approach	Immaterial
2019-11	Financial Instruments - Credit Losses (Topic 326): Codification Improvements	Affects narrow aspects of the guidance issued in ASU 2016-13	January 1, 2020	Conformed to the adoption of ASU 2016-13 above	Immaterial

Accounting Standards Updates Issued (continued)

ASU. No.	Topic	Nature of Update	Date Adopted	Method of Adoption	Financial Statement Impact
2019-01	Lease (Topic 842): Codification Improvements	Aligns fair value guidance for certain lessors with that of existing guidance (Issue 1) and requires lessors within the scope of Topic 942, Financial Services—Depository and Lending, to present all “principal payments received under leases” within investing activities (Issue 2). The ASU exempts lessees and lessors from having to provide certain interim disclosures in the fiscal year in which a company adopts the new leases standard (Issue 3).	Issue 1 and 2 January 1, 2020; Issue 3 January 1, 2019	Prospectively	Immaterial
2019-07	Codification Updates to SEC Sections	Amends certain SEC sections within the FASB Codification to update and simplify disclosure.	Upon adoption of the FASB codification	NA	Immaterial
2019-12	Income Taxes (Topic 7400): Simplifying the Accounting for Income Taxes	Includes several narrow focused simplifications.	January 1, 2020	Modified-retrospective approach	Immaterial

Accounting Standards Updates Adopted in 2019

ASU. No.	Topic	Nature of Update	Date Adopted	Method of Adoption	Financial Statement Impact
2016-02	Leases (Topic 842)	Most leases are considered operating leases, which are not accounted for on the lessees’ balance sheets. The significant change under this ASU is that those operating leases will be recorded on the balance sheet.	January 1, 2019	Modified-retrospective approach, which includes a number of optional practical expedients	Bancorp adopted on January 1, 2019 and recorded a $17 million of right-of-use lease asset and a $18 million of operating lease liability on its balance sheet. This ASU did not have a meaningful impact on Bancorp's performance metrics, including regulatory capital ratios and ROA. Additionally, Bancorp does not believe that the adoption of this ASU by its customers will have a significant impact on Bancorp's ability to underwrite credit when client financial statements are presented inclusive of the requirements of this ASU. See Footnote 6 in this section of the filing regarding disclosures by the Company to comply with this ASU.
2018-10	Codification Improvements to Leases (Topic 842)	Affects narrow aspects of the guidance issued in ASU 2016-02	January 1, 2019	Conformed to the adoption of ASU 2016-02 above	See Footnote 6 in this section of the filing regarding disclosures by Bancorp to comply to this ASU.
2018-11	Targeted Improvements to Leases (Topic 842)	Provides an additional (and optional) transition method to adopt ASU 2016-02 and provides a practical expedient to not separate non-lease components from the associated lease component under certain circumstances.	January 1, 2019	Conformed to the adoption of ASU 2016-02 above	Immaterial
2017-12	Derivatives and Hedging (Topic 815)	The amendments in this ASU make certain targeted improvements to simplify the application of hedge accounting.	January 1, 2019	Prospectively	Immaterial

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Note 21 - Disclosure of Financial Instruments Not Reported at Fair Value

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Fair Value Disclosures [Text Block]

(21) Disclosure of Financial Instruments Not Reported at Fair Value

GAAP requires disclosure of the fair value of financial assets and liabilities, including those financial assets and financial liabilities that are not measured and reported at fair value on a recurring basis or nonrecurring basis. Carrying amounts, estimated fair values, and placement in the fair value hierarchy of Bancorp’s financial instruments are as follows:

(In thousands)	Carrying
December 31, 2019	amount		Fair value		Level 1		Level 2		Level 3
Assets
Cash and cash equivalents	$	249,724	$	249,724	$	249,724	$	—	$	—
Mortgage loans held for sale		8,748		8,923		—		8,923		—
Federal Home Loan Bank stock		11,316		11,316		—		11,316		—
Loans, net		2,818,225		2,841,767		—		—		2,841,767
Accrued interest receivable		8,534		8,534		8,534		—		—
Liabilities
Non-interest bearing deposits	$	810,475	$	810,475	$	810,475	$	—	$	—
Transaction deposits		1,891,246		1,891,246		—		1,891,246		—
Time deposits		432,217		434,927		—		434,927		—
Securities sold under agreement to repurchase		31,895		31,895		—		31,895		—
Federal funds purchased		10,887		10,887		—		10,887		—
FHLB advances		79,953		80,906		—		80,906		—
Accrued interest payable		640		640		640		—		—

(In thousands)	Carrying
December 31, 2018	amount		Fair value		Level 1		Level 2		Level 3
Assets
Cash and cash equivalents	$	198,939	$	198,939	$	198,939	$	—	$	—
Mortgage loans held for sale		1,675		1,743		—		1,743		—
Federal Home Loan Bank stock		10,370		10,370		—		10,370		—
Loans, net		2,522,637		2,508,587		—		—		2,508,587
Accrued interest receivable		8,360		8,360		8,360		—		—
Liabilities
Non-interest bearing deposits	$	711,023	$	711,023	$	711,023	$	—	$	—
Transaction deposits		1,736,618		1,736,618		—		1,736,618		—
Time deposits		346,715		345,273		—		345,273		—
Securities sold under agreement to repurchase		36,094		36,094		—		36,094		—
Federal funds purchased		10,247		10,247		—		10,247		—
FHLB advances		48,177		47,227		—		47,227		—
Accrued interest payable		762		762		762		—		—

Fair value estimates are made at a specific point in time based on relevant market information and information about financial instruments. Because no market exists for a significant portion of Bancorp’s financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Therefore, calculated fair value estimates in many instances cannot be substantiated by comparison to independent markets and, in many cases, may not be realizable in a current sale of the instrument. Changes in assumptions could significantly affect estimates.

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Note 4 - Securities Available for Sale (Tables)

12 Months Ended

Dec. 31, 2019

Notes Tables

Schedule of Available-for-sale Securities Reconciliation [Table Text Block]

(in thousands)	Amortized		Unrealized
December 31, 2019	cost		Gains		Losses			Fair value
U.S. Treasury and other U.S. government obligations	$	49,887	$	10	$	-		$	49,897
Government sponsored enterprise obligations		208,933		1,189		(178	)		209,944
Mortgage backed securities - government agencies		193,574		1,243		(956	)		193,861
Obligations of states and political subdivisions		16,919		117		—			17,036
Total securities available for sale	$	469,313	$	2,559	$	(1,134	)	$	470,738
December 31, 2018
Government sponsored enterprise obligations	$	264,234	$	156	$	(3,351	)	$	261,039
Mortgage backed securities - government agencies		149,748		282		(3,753	)		146,277
Obligations of states and political subdivisions		29,760		107		(188	)		29,679
Total securities available for sale	$	443,742	$	545	$	(7,292	)	$	436,995

Investments Classified by Contractual Maturity Date [Table Text Block]

(in thousands)	Amortized cost		Fair value
Due within 1 year	$	129,251	$	129,311
Due after 1 year but within 5 years		32,124		32,208
Due after 5 years but within 10 years		6,162		6,219
Due after 10 years		108,202		109,139
Mortgage backed securities - government agencies		193,574		193,861
Total securities available for sale	$	469,313	$	470,738

Schedule of Unrealized Loss on Investments [Table Text Block]

	Less than 12 months					12 months or more					Total
(in thousands)	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
December 31, 2019	value		losses			value		losses			value		losses
Government sponsored enterprise obligations	$	16,503	$	(107	)	$	11,492	$	(71	)	$	27,995	$	(178	)
Mortgage-backed securities - government agencies		81,664		(496	)		32,453		(460	)		114,117		(956	)
Total temporarily impaired securities	$	98,167	$	(603	)	$	43,945	$	(531	)	$	142,112	$	(1,134	)
December 31, 2018
Government sponsored enterprise obligations	$	96,740	$	(38	)	$	149,320	$	(3,313	)	$	246,060	$	(3,351	)
Mortgage-backed securities - government agencies		3,108		(5	)		120,848		(3,748	)		123,956		(3,753	)
Obligations of states and political subdivisions		814		(1	)		17,639		(187	)		18,453		(188	)
Total temporarily impaired securities	$	100,662	$	(44	)	$	287,807	$	(7,248	)	$	388,469	$	(7,292	)

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Note 26 - Quarterly Operating Results (Unaudited)

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Quarterly Financial Information [Text Block]

(26) Quarterly Operating Results (unaudited)

A summary of quarterly operating results follows:

	2019
(in thousands except per share data)	4th quarter		3rd quarter		2nd quarter		1st quarter
Interest income	$	37,795	$	37,973	$	36,968	$	35,029
Interest expense		5,075		5,903		6,194		5,372
Net interest income		32,720		32,070		30,774		29,657
Provision for loan and lease losses		-		400		-		600
Net interest income after provision		32,720		31,670		30,774		29,057
Non-interest income		13,161		13,304		12,263		11,062
Non-interest expenses		26,291		23,957		25,464		22,639
Income before income taxes		19,590		21,017		17,573		17,480
Income tax expense		2,941		3,783		1,030		1,839
Net income	$	16,649	$	17,234	$	16,543	$	15,641
Basic earnings per share	$	0.74	$	0.76	$	0.73	$	0.69
Diluted earnings per share	$	0.73	$	0.76	$	0.72	$	0.68

	2018
(in thousands except per share data)	4th quarter		3rd quarter		2nd quarter		1st quarter
Interest income	$	35,004	$	33,021	$	32,004	$	29,744
Interest expense		5,092		4,500		3,330		2,435
Net interest income		29,912		28,521		28,674		27,309
Provision for loan and lease losses		-		735		1,235		735
Net interest income after provision		29,912		27,786		27,439		26,574
Non-interest income		11,576		11,426		11,435		10,909
Non-interest expenses		24,565		21,781		22,136		21,027
Income before income taxes		16,923		17,431		16,738		16,456
Income tax expense		2,265		3,555		3,159		3,052
Net income	$	14,658	$	13,876	$	13,579	$	13,404
Basic earnings per share	$	0.65	$	0.61	$	0.60	$	0.59
Diluted earnings per share	$	0.64	$	0.60	$	0.59	$	0.58

	2017
(in thousands except per share data)	4th quarter		3rd quarter		2nd quarter		1st quarter
Interest income	$	29,098	$	28,120	$	27,026	$	26,655
Interest expense		2,069		1,947		1,781		1,449
Net interest income		27,029		26,173		25,245		25,206
Provision for loan and lease losses		900		150		600		900
Net interest income after provision		26,129		26,023		24,645		24,306
Non-interest income		11,407		10,945		11,525		10,622
Non-interest expenses		27,048		21,168		21,209		20,995
Income before income taxes		10,488		15,800		14,961		13,933
Income tax expense		5,542		4,096		4,359		3,142
Net income	$	4,946	$	11,704	$	10,602	$	10,791
Basic earnings per share	$	0.22	$	0.52	$	0.47	$	0.48
Diluted earnings per share	$	0.22	$	0.51	$	0.46	$	0.47

Note: The sum of EPS of each of the quarter may not add to the year-to-date amount reported in Bancorp’s consolidated financial statements due to rounding.

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Note 22 - Derivative Financial Instruments

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Derivative Instruments and Hedging Activities Disclosure [Text Block]

(22) Derivative Financial Instruments

Periodically, Bancorp enters into interest rate swap transactions with borrowers who desire to hedge exposure to rising interest rates, while at the same time entering into an offsetting interest rate swap, with substantially matching terms, with another approved independent counterparty. These are undesignated derivative instruments and are recognized on the balance sheet at fair value. Because of matching terms of offsetting contracts and collateral provisions mitigating any non-performance risk, changes in fair value subsequent to initial recognition have an insignificant effect on earnings. Exchanges of cash flows related to undesignated interest rate swap agreements were offsetting and therefore had no effect on Bancorp’s earnings or cash flows.

Interest rate swap agreements derive their value from underlying interest rates. These transactions involve both credit and market risk. Notional amounts are amounts on which calculations, payments, and the value of the derivative are based. Notional amounts do not represent direct credit exposures. Direct credit exposure is limited to the net difference between the calculated amounts to be received and paid, if any. Bancorp is exposed to credit-related losses in the event of nonperformance by counterparties to these agreements. Bancorp mitigates the credit risk of its financial contracts through credit approvals, limits, collateral, and monitoring procedures, and does not expect any counterparties to fail their obligations.

Bancorp had outstanding undesignated interest rate swap contracts as follows:

	Receiving				Paying
	December 31,		December 31,		December 31,		December 31,
(dollars in thousands)	2019		2018		2019		2018
Notional amount	$	99,000	$	55,505	$	99,000	$	55,505
Weighted average maturity (years)		8.2		8.0		8.2		8.0
Fair value	$	2,696	$	519	$	2,767	$	543

In 2015, Bancorp entered into an interest rate swap to hedge cash flows of a $20 million rolling fixed-rate three-month FHLB borrowing. The swap began December 9, 2015 and matures December 6, 2020. In 2016, Bancorp entered into an interest rate swap to hedge cash flows of a $10 million rolling fixed-rate three-month FHLB borrowing. The swap began December 6, 2016 and ends December 6, 2021. For purposes of hedging, rolling fixed rate advances are considered to be floating rate liabilities. Interest rate swaps involve exchange of Bancorp’s floating rate interest payments for fixed rate swap payments on underlying principal amounts. These swaps were designated, and qualified, for cash-flow hedge accounting. For derivative instruments that are designated and qualify as cash flow hedging instruments, the effective portion of gains or losses is reported as a component of OCI, and is subsequently reclassified into earnings as an adjustment to interest expense in periods in which the hedged forecasted transaction affects earnings.

The following table details Bancorp’s derivative position designated as a cash flow hedge, and the fair values:

							Fair value
(dollars in thousands)				Pay fixed			December 31,
Notional		Maturity	Receive (variable) index	swap rate			2019			2018
$	10,000	12/6/2021	US 3 Month LIBOR		1.89	%	$	(45	)	$	193
	20,000	12/6/2020	US 3 Month LIBOR		1.79			(6	)		323
$	30,000				1.82		$	(51	)	$	516

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Note 5 - Loans

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

(5) Loans

Composition of loans by primary loan portfolio class follows:

December 31, (in thousands)	2019		2018
Commercial and industrial	$	870,511	$	833,524
Construction and development, excluding undeveloped land(1)		213,822		225,050
Undeveloped land		46,360		30,092
Real estate mortgage:
Commercial investment		736,618		588,610
Owner occupied commercial		473,783		426,373
1-4 family residential		334,358		276,017
Home equity - first lien		48,620		49,500
Home equity - junior lien		73,477		70,947
Subtotal: Real estate mortgage		1,666,856		1,411,447
Consumer		47,467		48,058
Total loans(2)	$	2,845,016	$	2,548,171

(1) Consists of land acquired for development by the borrower, but for which no development has yet taken place.

(2) Total loans are presented inclusive of premiums, discounts, and net loan origination fees and costs.

Fees and costs of originating loans are deferred at origination and amortized over the life of the loan. Loan balances reported herein include deferred loan origination fees, net of deferred loan costs. At December 31, 2019 and 2018, net deferred loan origination costs exceeded deferred loan origination fees, resulting in net negative balances of $564,000 and $592,000.

Bancorp’s credit exposure is diversified with secured and unsecured loans to individuals and businesses. No specific industry concentration exceeds 10% of loans outstanding. While Bancorp has a diversified loan portfolio, a customer’s ability to honor contracts is somewhat dependent upon the economic stability and/or industry in which that customer does business. Loans outstanding and related unfunded commitments are primarily concentrated within Bancorp’s current market areas, which encompass the Louisville, Indianapolis and Cincinnati MSAs.

Bancorp occasionally enters into loan participation agreements with other banks in the ordinary course of business to diversify credit risk. For certain sold participation loans, Bancorp has retained effective control of the loans, typically by restricting the participating institutions from pledging or selling their share of the loan without permission from Bancorp. GAAP requires the participated portion of these loans to be recorded as secured borrowings. The participated portions of these loans are included in the C&I totals above with a corresponding liability reflected in other liabilities. At December 31, 2019 and 2018, the total participated portions of loans of this nature were $8 million and $11 million respectively.

Loans to directors and their related interests, including loans to companies for which directors are principal owners and executive officers are presented in the following table.

Years ended December 31, (in thousands)	2019			2018
Balance as of January 1	$	52,687		$	629
Effect of change in composition of directors and executive officers		—			51,415
Repayment of term loans		(184	)		—
Changes in balances of revolving lines of credit		(9,279	)		643
Balance as of December 31	$	43,224		$	52,687

Loans totaling $0 and $500,000 to directors and executive officers were past due as of December 31, 2019 and 2018.

The following table summarizes loans acquired in Bancorp’s May 1, 2019 KSB acquisition, recast as of December 31, 2019.

	May 1, 2019
	Contractual		Non-accretable			Accretable			Acquisition-day
(in thousands)	receivable		amount			amount			fair value
Commercial and industrial	$	8,249	$	—		$	(23	)	$	8,226
Construction and development		10,764		—			43			10,807
Raw Land		7,974		—			43			8,017
Real estate mortgage:
Commercial real estate		84,219		—			(456	)		83,763
1-4 family residential		50,556		—			322			50,878
Home equity - first lien		196		—			3			199
Home equity - junior lien		679		—			5			684
Subtotal: Real estate mortgage		135,650		—			(126	)		135,524
Consumer		1,528		—			(73	)		1,455
Total loans ASC 310-20		164,165		—			(136	)		164,029
Commercial and industrial
Construction and development		—		—			—			—
Raw Land		—		—			—			—
Real estate mortgage:
Commercial real estate		1,351		(1,351	)		—			—
1-4 family residential		228		(228	)		—			—
Home equity - first lien		—		—			—			—
Home equity - junior lien		—		—			—			—
Subtotal: Real estate mortgage		1,579		(1,579	)		—			—
Consumer		—		—			—			—
Total loans ASC 310 purchased- credit-impaired loans		1,579		(1,579	)		—			—
Total loans	$	165,744	$	(1,579	)	$	(136	)	$	164,029

PCI Loans

The Bank acquired PCI loans on May 1, 2019 related to the KSB acquisition and also during 2013 associated with the TBOC acquisition. PCI loans are accounted for under ASC 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality. As provided for under GAAP, management has up to 12 months following the date of acquisition to finalize the fair values of the acquired assets.

Management utilized the following criteria in determining which loans were classified as PCI loans for its KSB acquisition:

● Loans classified by management as substandard, doubtful or loss

● Loans classified as non-accrual when acquired

● Loans past due 90 days or more when acquired

● Loans for which management assigned a non-accretable mark

The following table presents loans acquired during 2019 for which it was probable at acquisition date that all contractually required payments would not be collected:

December 31, (in thousands)	2019
Contractually-required principal	$	1,579
Non-accretable amount		(1,579	)
Accretable amount		—
Carrying value of loans	$	-

The following table presents a rollforward of the accretable amount on all PCI loans:

Years ended December 31, (in thousands)	2019			2018
Balance, beginning of period	$	(69	)	$	(106	)
Transfers between non-accretable and accretable		—			—
Net accretion into interest income on loans, including loan fees		69			37
Balance, end of period	$	-		$	(69	)

Credit Quality Indicators

Consistent with regulatory guidance, Bancorp categorizes loans into credit risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information and current economic trends. Pass-rated loans included all risk-rated loans other than those classified as OAEM, substandard, and doubtful, which are defined below:

● OAEM: Loans classified as OAEM have potential weaknesses requiring management's heightened attention. These potential weaknesses may result in deterioration of repayment prospects for the loan or of Bancorp's credit position at some future date.

● Substandard: Loans classified as substandard are inadequately protected by the paying capacity of the obligor or of collateral pledged, if any. Loans so classified have well-defined weaknesses that jeopardize ultimate repayment of the debt. Default is a distinct possibility if the deficiencies are not corrected.

● Substandard non-performing: Loans classified as substandard non-performing have all the characteristics of substandard loans and have been placed on non-accrual status or have been accounted for as TDRs. Loans are placed on non-accrual status when prospects for recovering both principal and accrued interest are considered doubtful or when a default of principal or interest has existed for 90 days or more.

● Doubtful: Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or repayment in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable.

Internally assigned risk grades of loans by loan portfolio class classification category follows:

(in thousands)							Substandard				Total
December 31, 2019	Pass		OAEM		Substandard		Non-performing		Doubtful		Loans
Commercial and industrial	$	840,105	$	704	$	21,500	$	8,202	$	—	$	870,511
Construction and development, excluding undeveloped land		213,822		—		—		—		—		213,822
Undeveloped land		46,360		—		—		—		—		46,360
Real estate mortgage:
Commercial investment		722,747		6,459		6,275		1,137		—		736,618
Owner occupied commercial		460,981		1,375		9,050		2,377		—		473,783
1-4 family residential		332,294		1,701		122		241		—		334,358
Home equity - first lien		48,620		—		—		—		—		48,620
Home equity - junior lien		73,273		—		17		187		—		73,477
Subtotal: Real estate mortgage		1,637,915		9,535		15,464		3,942		—		1,666,856
Consumer		47,429		—		38		—		—		47,467
Total	$	2,785,631	$	10,239	$	37,002	$	12,144	$	—	$	2,845,016

(in thousands)							Substandard				Total
December 31, 2018	Pass		OAEM		Substandard		Non-performing		Doubtful		Loans
Commercial and industrial	$	803,073	$	11,516	$	18,703	$	232	$	—	$	833,524
Construction and development, excluding undeveloped land		220,532		4,200		—		318		—		225,050
Undeveloped land		29,618		—		—		474		—		30,092
Real estate mortgage:
Commercial investment		586,543		1,815		15		237		—		588,610
Owner occupied commercial		411,722		9,030		4,500		1,121		—		426,373
1-4 family residential		273,537		1,544		162		774		—		276,017
Home equity - first lien		49,500		—		—		—		—		49,500
Home equity - junior lien		70,437		249		19		242		—		70,947
Subtotal: Real estate mortgage		1,391,739		12,638		4,696		2,374		—		1,411,447
Consumer		48,058		—		—		—		—		48,058
Total	$	2,493,020	$	28,354	$	23,399	$	3,398	$	—	$	2,548,171

The following tables present the activity in the allowance by loan portfolio class:

	Type of loan
				Construction
				and development,
	Commercial			excluding
	and			undeveloped			Undeveloped		Real estate
(in thousands)	industrial			land			land		mortgage			Consumer			Total
Balance, January 1, 2019	$	11,965		$	1,760		$	752	$	10,681		$	376		$	25,534
Provision (credit)		684			(644	)		34		1,021			(95	)		1,000
Charge-offs		(94	)		—			—		(38	)		(552	)		(684	)
Recoveries		267			203			—		100			371			941
Balance, December 31, 2019	$	12,822		$	1,319		$	786	$	11,764		$	100		$	26,791

	Type of loan
				Construction
				and development,
	Commercial			excluding
	and			undeveloped		Undeveloped		Real estate
(in thousands)	industrial			land		land		mortgage			Consumer			Total
Balance, January 1, 2018	$	11,276		$	1,724	$	521	$	11,012		$	352		$	24,885
Provision (credit)		2,539			36		231		(261	)		160			2,705
Charge-offs		(2,404	)		—		—		(132	)		(476	)		(3,012	)
Recoveries		554			—		—		62			340			956
Balance, December 31, 2018	$	11,965		$	1,760	$	752	$	10,681		$	376		$	25,534

	Type of loan
				Construction
				and development,
	Commercial			excluding
	and			undeveloped			Undeveloped			Real estate
(in thousands)	industrial			land			land			mortgage			Consumer			Total
Balance, January 1, 2017	$	10,483		$	1,923		$	684		$	10,573		$	344		$	24,007
Provision (credit)		2,373			(199	)		(163	)		383			156			2,550
Charge-offs		(1,782	)		—			—			(98	)		(549	)		(2,429	)
Recoveries		202			—			—			154			401			757
Balance, December 31, 2017	$	11,276		$	1,724		$	521		$	11,012		$	352		$	24,885

The considerations by Bancorp in computing its allowance are determined based on the various risk characteristics of each loan segment. Relevant risk characteristics are as follows:

● C&I: Loans in this category are made to businesses. Generally these loans are secured by assets of the business and repayment is expected from cash flows of the business. A decline in the strength of the business or a weakened economy and decreased consumer and/or business spending may have an effect on the credit quality in this loan category.

● C&D, excluding undeveloped land: Loans in this category primarily include owner-occupied and investment C&D loans and commercial development projects. In most cases, C&D loans require only interest to be paid during the construction period. Upon completion or stabilization, C&D loans generally convert to permanent financing in the real estate mortgage segment, requiring principal amortization. Repayment of development loans is derived from sale of lots or units. Credit risk is affected by construction delays, cost overruns, market conditions and availability of permanent financing; to the extent such permanent financing is not being provided by Bancorp.

● Undeveloped land: Loans in this category are secured by land acquired for development by the borrower, but for which no development has yet taken place. Credit risk is primarily dependent upon the financial strength of the borrower, but can also be affected by market conditions and time to sell lots at an adequate price in the future. Credit risk is also affected by availability of permanent financing, including to the end user, to the extent such permanent financing is not being provided by Bancorp.

● Real estate mortgage: Loans in this category are made to and secured by owner-occupied residential real estate, owner-occupied real estate used for business purposes, and income-producing investment properties. Underlying properties are generally located in Bancorp's primary market areas. For owner occupied residential and owner-occupied CRE, repayment is dependent on financial strength of the borrower. A decline in the strength of the business, weakened economy, unemployment, decreased consumer and/or business spending and real estate prices may have an effect on the credit quality in this loan category. For income-producing investment properties, repayment is dependent on financial strength of tenants, and to a lesser extent the borrowers’ financial strength. Cash flows of income producing investment properties may be adversely impacted by a downturn in the economy as reflected by increased vacancy rates, which in turn, will have an effect on credit quality and property values.

● Consumer: Loans in this category may be either secured or unsecured and repayment is dependent on credit quality of the individual borrower and, if applicable, adequacy of collateral securing the loan. Therefore, the overall health of the economy, including unemployment rates, as well as home and securities prices, will have a significant effect on credit quality in this loan category.

The following table presents the recorded investment in non-accrual and loans past due 90-days-or-more and still accruing interest:

					Past Due 90-Days-or-More
	Non-accrual				and Still Accruing Interest
(in thousands)	December 31, 2019		December 31, 2018		December 31, 2019		December 31, 2018
Commercial and industrial	$	8,202	$	192	$	—	$	12
Construction and development, excluding undeveloped land		—		318		—		—
Undeveloped land		—		474		—		—
Real estate mortgage:
Commercial investment		740		138		396		99
Owner occupied commercial		2,278		586		—		535
1-4 family residential		123		760		104		—
Home equity - first lien		—		—		—		—
Home equity - junior lien		151		143		35		99
Subtotal: Real estate mortgage		3,292		1,627		535		733
Consumer		—		—		—		—
Total loans	$	11,494	$	2,611	$	535	$	745

In the course of working with borrowers, Bancorp may elect to restructure the contractual terms of certain loans. TDRs occur when, for economic, legal, or other reasons related to a borrower’s financial difficulties, Bancorp grants a concession to the borrower that it would not otherwise consider. Bancorp did not recognize new TDRs, nor did any TDRs default, in years ended December 31, 2019 and 2018. Detail of outstanding TDRs included in total non-performing loans follows:

	December 31, 2019						December 31, 2018
			Specific		Additional				Specific		Additional
			reserve		commitment				reserve		commitment
(in thousands)	Balance		allocation		to lend		Balance		allocation		to lend
Commercial and industrial	$	21	$	21	$	—	$	28	$	28	$	—
1-4 family residential		13		13		—		14		14		—
Total TDRs	$	34	$	34	$	—	$	42	$	42	$	—

Impaired loans include non-accrual loans and loans past due 90 days-or-more accruing interest in addition to a nominal amount TDRs, which continue to accrue interest.

As of December 31, 2019 formal foreclosure proceedings were in process on 1-4 family residential mortgage loans with a total recorded investment of $239,000, as compared with $528,000 as of December 31, 2018.

The following tables present the balance in the recorded investment in loans and by portfolio loan class and based on impairment evaluation method:

(in thousands)	Loans								Allowance
December 31, 2019	Loans individually evaluated for impairment		Loans collectively evaluated for impairment		Loans acquired with deteriorated credit quality		Total loans		Loans individually evaluated for impairment		Loans collectively evaluated for impairment		Loans acquired with deteriorated credit quality		Total allowance
Commercial and industrial	$	8,223	$	862,288	$	—	$	870,511	$	1,150	$	11,672	$	—	$	12,822
Construction and development, excluding undeveloped land		—		213,822		—		213,822		—		1,319		—		1,319
Undeveloped land		—		46,360		—		46,360		—		786		—		786
Real estate mortgage		3,307		1,663,549		—		1,666,856		13		11,751		—		11,764
Consumer		—		47,467		—		47,467		—		100		—		100
Total	$	11,530	$	2,833,486	$	—	$	2,845,016	$	1,163	$	25,628	$	—	$	26,791

(in thousands)	Loans								Allowance
December 31, 2018	Loans individually evaluated for impairment		Loans collectively evaluated for impairment		Loans acquired with deteriorated credit quality		Total loans		Loans individually evaluated for impairment		Loans collectively evaluated for impairment		Loans acquired with deteriorated credit quality		Total allowance
Commercial and industrial	$	220	$	833,304	$	—	$	833,524	$	28	$	11,937	$	—	$	11,965
Construction and development, excluding undeveloped land		318		224,732		—		225,050		—		1,760		—		1,760
Undeveloped land		474		29,618		—		30,092		—		752		—		752
Real estate mortgage		1,641		1,409,806		—		1,411,447		14		10,667		—		10,681
Consumer		—		48,058		—		48,058		—		376		—		376
Total	$	2,653	$	2,545,518	$	—	$	2,548,171	$	42	$	25,492	$	—	$	25,534

The following table’s present loans individually evaluated for impairment by loan portfolio class:

	As of						Twelve Months Ended
	December 31, 2019						December 31, 2019
			Unpaid				Average		Interest
	Recorded		principal		Related		recorded		income
(in thousands)	investment		balance		allowance		investment		recognized
Impaired loans with no related allowance:
Commercial and industrial	$	174	$	174	$	—	$	166	$	—
Construction and development, excluding undeveloped land		—		—		—		64		—
Undeveloped land		—		—		—		95		—
Real estate mortgage
Commercial investment		741		741		—		448		—
Owner occupied commercial		2,278		2,736		—		1,437		—
1-4 family residential		124		124		—		516		—
Home equity - first lien		—		—		—		—		—
Home equity - junior lien		151		151		—		293		—
Subtotal: Real estate mortgage		3,294		3,752		—		2,694		—
Consumer		—		—		—		—		—
Subtotal	$	3,468	$	3,926	$	—	$	3,019	$	—
Impaired loans with an allowance:
Commercial and industrial	$	8,049	$	8,049	$	1,150	$	1,631	$	—
Construction and development, excluding undeveloped land		—		—		—		—		—
Undeveloped land		—		—		—		—		—
Real estate mortgage
Commercial investment		—		—		—		—		—
Owner occupied commercial		—		—		—		—		—
1-4 family residential		13		13		13		13		—
Home equity - first lien		—		—		—		—		—
Home equity - junior lien		—		—		—		—		—
Subtotal: Real estate mortgage		13		13		13		13		—
Consumer		—		—		—		—		—
Subtotal	$	8,062	$	8,062	$	1,163	$	1,644	$	—
Total:
Commercial and industrial	$	8,223	$	8,223	$	1,150	$	1,797	$	—
Construction and development, excluding undeveloped land		—		—		—		64		—
Undeveloped land		—		—		—		95		—
Real estate mortgage
Commercial investment		741		741		—		448		—
Owner occupied commercial		2,278		2,736		—		1,437		—
1-4 family residential		137		137		13		529		—
Home equity - first lien		—		—		—		—		—
Home equity - junior lien		151		151		—		293		—
Subtotal: Real estate mortgage		3,307		3,765		13		2,707		—
Consumer		—		—		—		—		—
Total impaired loans	$	11,530	$	11,988	$	1,163	$	4,663	$	—

	As of						Twelve Months Ended
	December 31, 2018						December 31, 2018
			Unpaid				Average		Interest
	Recorded		principal		Related		recorded		income
(in thousands)	investment		balance		allowance		investment		recognized
Impaired loans with no related allowance:
Commercial and industrial	$	192	$	707	$	—	$	161	$	—
Construction and development, excluding undeveloped land		318		489		—		437		—
Undeveloped land		474		506		—		474		—
Real estate mortgage
Commercial investment		138		138		—		35		—
Owner occupied commercial		586		1,023		—		1,503		—
1-4 family residential		760		760		—		1,242		—
Home equity - first lien		—		—		—		—		—
Home equity - junior lien		143		143		—		73		—
Subtotal: Real estate mortgage		1,627		2,064		—		2,853		—
Consumer		—		—		—		23		—
Subtotal	$	2,611	$	3,766	$	—	$	3,948	$	—
Impaired loans with an allowance:
Commercial and industrial	$	28	$	28	$	28	$	1,851	$	2
Construction and development, excluding undeveloped land		—		—		—		—		—
Undeveloped land		—		—		—		24		—
Real estate mortgage
Commercial investment		—		—		—		—		—
Owner occupied commercial		—		—		—		897		—
1-4 family residential		14		14		14		14		1
Home equity - first lien		—		—		—		—		—
Home equity - junior lien		—		—		—		—		—
Subtotal: Real estate mortgage		14		14		14		911		1
Consumer		—		—		—		—		—
Subtotal	$	42	$	42	$	42	$	2,786	$	3
Total:
Commercial and industrial	$	220	$	735	$	28	$	2,012	$	2
Construction and development, excluding undeveloped land		318		489		—		437		—
Undeveloped land		474		506		—		498		—
Real estate mortgage
Commercial investment		138		138		—		35		—
Owner occupied commercial		586		1,023		—		2,400		—
1-4 family residential		774		774		14		1,256		1
Home equity - first lien		—		—		—		—		—
Home equity - junior lien		143		143		—		73		—
Subtotal: Real estate mortgage		1,641		2,078		14		3,764		1
Consumer		—		—		—		23		—
Total impaired loans	$	2,653	$	3,808	$	42	$	6,734	$	3

	As of						Twelve Months Ended
	December 31, 2017						December 31, 2017
			Unpaid				Average		Interest
	Recorded		principal		Related		recorded		income
(in thousands)	investment		balance		allowance		investment		recognized
Impaired loans with no related allowance:
Commercial and industrial	$	1,142	$	2,202	$	—	$	411	$	—
Construction and development, excluding undeveloped land		664		834		—		559		—
Undeveloped land		474		506		—		425		—
Real estate mortgage
Commercial investment		52		53		—		110		—
Owner occupied commercial		3,332		3,789		—		1,678		—
1-4 family residential		1,637		1,657		—		935		—
Home equity - first lien		—		—		—		—		—
Home equity - junior lien		31		31		—		186		—
Subtotal: Real estate mortgage		5,052		5,530		—		2,909		—
Consumer		—		—		—		—		—
Subtotal	$	7,332	$	9,072	$	—	$	4,304	$	—
Impaired loans with an allowance:
Commercial and industrial	$	34	$	34	$	34	$	1,882	$	78
Construction and development, excluding undeveloped land		—		—		—		—		—
Undeveloped land		—		—		—		48		—
Real estate mortgage
Commercial investment		—		—		—		—		—
Owner occupied commercial		—		—		—		—		—
1-4 family residential		14		14		14		5		—
Home equity - first lien		—		—		—		—		—
Home equity - junior lien		—		—		—		—		—
Subtotal: Real estate mortgage		14		14		14		5		—
Consumer		—		—		—		46		—
Subtotal	$	48	$	48	$	48	$	1,981	$	78
Total:
Commercial and industrial	$	1,176	$	2,236	$	34	$	2,293	$	78
Construction and development, excluding undeveloped land		664		834		—		559		—
Undeveloped land		474		506		—		473		—
Real estate mortgage
Commercial investment		52		53		—		110		—
Owner occupied commercial		3,332		3,789		—		1,678		—
1-4 family residential		1,651		1,671		14		940		—
Home equity - first lien		—		—		—		—		—
Home equity - junior lien		31		31		—		186		—
Subtotal: Real estate mortgage		5,066		5,544		14		2,914		—
Consumer		—		—		—		46		—
Total impaired loans	$	7,380	$	9,120	$	48	$	6,285	$	78

Differences between recorded investment amounts and unpaid principal balance amounts less related allowance are due to partial charge-offs which have occurred over the lives of certain loans.

Interest paid on impaired or non-accrual loans that was used to reduce principal was $552,000, $93,000 and $338,000 in 2019, 2018 and 2017. Interest income that would have been recorded if non-accrual loans were on a current basis in accordance with their original terms was $491,000, $391,000 and $159,000 in 2019, 2018 and 2017. No interest income was recognized on a cash basis in 2019, 2018, or 2017.

The following table presents the aging of the recorded investment in loans by portfolio class:

							90 or More
							Days Past Due
(in thousands)			30-59 Days		60-89 days		(includes all		Total		Total
December 31, 2019	Current		Past Due		Past Due		non-accrual)		Past Due		Loans
Commercial and industrial	$	861,860	$	253	$	194	$	8,204	$	8,651	$	870,511
Construction and development, excluding undeveloped land		213,766		6		50		—		56		213,822
Undeveloped land		46,360		—		—		—		—		46,360
Real estate mortgage:
Commercial investment		735,387		94		—		1,137		1,231		736,618
Owner occupied commercial		470,951		467		86		2,279		2,832		473,783
1-4 family residential		332,718		1,368		33		239		1,640		334,358
Home equity - first lien		48,441		179		—		—		179		48,620
Home equity - junior lien		72,995		196		100		186		482		73,477
Subtotal: Real estate mortgage		1,660,492		2,304		219		3,841		6,364		1,666,856
Consumer		47,379		84		4		—		88		47,467
Total	$	2,829,857	$	2,647	$	467	$	12,045	$	15,159	$	2,845,016

							90 or More
							Days Past Due
(in thousands)			30-59 Days		60-89 days		(includes all		Total		Total
December 31, 2018	Current		Past Due		Past Due		non-accrual)		Past Due		Loans
Commercial and industrial	$	832,923	$	197	$	200	$	204	$	601	$	833,524
Construction and development, excluding undeveloped land		224,732		—		—		318		318		225,050
Undeveloped land		29,552		66		—		474		540		30,092
Real estate mortgage:
Commercial investment		586,884		1,382		107		237		1,726		588,610
Owner occupied commercial		421,143		2,732		1,377		1,121		5,230		426,373
1-4 family residential		274,547		374		336		760		1,470		276,017
Home equity - first lien		49,321		179		—		—		179		49,500
Home equity - junior lien		70,467		182		56		242		480		70,947
Subtotal: Real estate mortgage		1,402,362		4,849		1,876		2,360		9,085		1,411,447
Consumer		48,058		—		—		—		—		48,058
Total	$	2,537,627	$	5,112	$	2,076	$	3,356	$	10,544	$	2,548,171

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Note 9 - Income Taxes

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Income Tax Disclosure [Text Block]

(9) Income Taxes

Components of income tax expense (benefit) from operations were as follows:

Years Ended December 31, (in thousands)	2019			2018			2017
Current income tax expense:
Federal	$	14,673		$	11,567		$	12,622
State		772			732			546
Total current income tax expense		15,445			12,299			13,168
Deferred income tax expense (benefit) :
Federal		(746	)		(52	)		3,783
State		(2,872	)		(289	)		(4	)
Total deferred income tax expense (benefit)		(3,618	)		(341	)		3,779
Change in valuation allowance		(2,234	)		73			192
Total income tax expense	$	9,593		$	12,031		$	17,139

Components of income tax (benefit) expense recorded directly to stockholders’ equity were as follows:

Years Ended December 31, (in thousands)	2019			2018			2017
Unrealized (loss) gain on securities available for sale	$	1,757		$	(812	)	$	(531	)
Reclassification adjustment for securities losses realized in income		—			—			81
Unrealized gain on derivatives		(120	)		46			112
Minimum pension liability adjustment		(58	)		46			(9	)
Total income tax (benefit) expense recorded directly to stockholders' equity	$	1,579		$	(720	)	$	(347	)

An analysis of the difference between statutory and ETRs from operations follows:

Years Ended December 31,	2019			2018			2017
U.S. federal statutory income tax rate		21.0	%		21.0	%		35.0	%
Kentucky state income tax enactments		(5.2	)		—			—
Net deferred tax asset remeasurement		—			(0.5	)		10.8
Excess tax benefits from stock-based compensation arrangements		(1.0	)		(0.8	)		(2.6	)
Increase in cash surrender value of life insurance		(0.9	)		(0.4	)		(1.5	)
Tax credits		(1.9	)		(1.8	)		(14.4	)
Tax exempt interest income		(0.3	)		(0.4	)		(1.2	)
Amortization/impairment of investments in tax credit partnerships		0.3			0.4			3.4
State income taxes, net of federal benefit		0.7			0.8			0.7
Other, net		—			(0.5	)		0.9
Effective tax rate		12.7	%		17.8	%		31.1	%

Currently, state income tax expense represents tax owed to the state of Indiana. Kentucky and Ohio state bank taxes are currently based on capital levels, and are recorded as other non-interest expense.

In March 2019, the Kentucky Legislature passed HB354 requiring financial institutions to transition from a capital based franchise tax to the Kentucky corporate income tax beginning in 2021. Historically, the franchise tax, a component of non-interest expenses, was assessed at 1.1% of net capital and averaged $2.5 million annually over the prior two year-end periods. The Kentucky corporate income tax will be assessed at 5% of Kentucky taxable income and will be included as a component of current and deferred state income tax expense. Associated with this change, predominantly during the first quarter of 2019, Bancorp established a Kentucky state DTA related to existing temporary differences estimated to reverse after the effective date of the law change. Bancorp recorded a corresponding state tax benefit, net of federal tax impact of $1.2 million, or approximately $0.06 per diluted share for 2019. While this is positive in the short-term, Bancorp anticipates an unfavorable impact of approximately $200,000 per year beginning in 2021.

In April 2019, the Kentucky Legislature passed HB458 allowing entities filing a combined Kentucky income return to share certain tax attributes, including net operating loss carryforwards. The combined filing beginning in 2021 will allow Bancorp’s Holding Company net operating loss carryforwards to offset against net revenue generated by the Bank up to 50% of the Bank’s Kentucky taxable income and reduce Bancorp’s tax liability. Bancorp recorded a state tax benefit, net of federal tax impact of $2.7 million, predominantly in the second quarter of 2019, or approximately $0.12 per diluted share for 2019. The losses are expected to be utilized when Bancorp begins filing a combined Kentucky income tax return. A valuation allowance is maintained for the loss that will expire in 2020.

The TCJA was enacted on December 22, 2017 and reduced the federal corporate tax rate from 35% to 21%, effective January 1, 2018. Bancorp incurred a charge of $5.9 million to income tax expense during 2017 representing the decrease in value of its net DTA upon enactment of the TCJA.

In December 2017, the SEC released SAB 118 to address any uncertainty or diversity of views in practice in accounting for the income tax effects of tax reform in situations where a registrant does not have the necessary information available, prepared or analyzed in reasonable detail to complete this accounting in the reporting period that includes the enactment date. SAB 118 allowed a measurement period not to extend beyond one year from the tax reform’s enactment date to complete the necessary accounting.

The effects of temporary differences that gave rise to significant portions of DTAs and DTLs follows:

December 31, (in thousands)	2019			2018
Deferred tax assets
Allowance for loan loss	$	6,633		$	5,567
Deferred compensation		5,758			4,703
Operating lease liability		3,427			—
State net operating loss		2,550			2,201
Accrued expenses		1,486			968
Securities		—			756
Investments in tax credit partnerships		655			543
Loans		501			434
Other assets		228			181
Write-downs and costs associated with other real estate owned		22			7
Total deferred tax assets		21,260			15,360
Deferred tax liabilities
Property and equipment		1,054			1,154
Right-of-use operating lease asset		3,154			—
Securities		748			—
Loan costs		767			632
Mortgage servicing rights		299			193
Leases		266			336
Core deposit intangible		202			230
Other liabilities		183			267
Total deferred tax liabilities		6,673			2,812
Valuation allowance		(121	)		(2,355	)
Net deferred tax asset	$	14,466		$	10,193

A valuation allowance is recognized for a DTA if, based on the weight of available evidence, it is more likely than not that some portion of the entire DTA will not be realized. Ultimate realization of DTAs is dependent upon generation of future taxable income during periods in which those temporary differences become deductible. Management considers scheduled reversal of DTLs, projected future taxable income and tax planning strategies in making this assessment. Based upon the level of historical taxable income and projection for future taxable income over periods which the temporary differences resulting in remaining DTAs are deductible, management believes it is more likely than not that Bancorp will realize the benefits of these deductible differences, net of the valuation allowance, at December 31, 2019.

Realization of DTAs associated with investment in tax credit partnerships is dependent upon generating sufficient taxable capital gain income prior to their expiration and net operating losses that will not be utilized prior to their expiration. A valuation allowance of $121,000 and $2.4 million reflects management’s estimate of the temporary deductible differences that may expire prior to their utilization and has been recorded as of December 31, 2019 and 2018. The losses are expected to be utilized when Bancorp begins filing a combined Kentucky income tax return with the Bank. A valuation allowance is maintained for the loss that will expire in 2020. The loss carryforward is $64.7 million and expires over varying periods through 2039.

Kentucky DTAs amounts and the related valuation allowance for Bancorp’s net operating losses were previously reported as net due to a full valuation allowance and immaterial amounts. The 2018 amounts reported herein have been revised to report the items gross.

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 December 31, 2019 and 2018, the gross amount of unrecognized tax benefits was immaterial to Bancorp’s consolidated financial statements. Federal and state income tax returns are subject to examination for the years after 2015.

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Note 7 - Goodwill and Core Deposit Intangibles - Future Amortization Expense (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Total future payments	$ 2,285	$ 1,057
Core Deposits [Member]
2020	323
2021	302
2022	295
2023	259
2024	241
Beyond 2024	865
Total future payments	$ 2,285	$ 1,057	$ 1,225	$ 1,405

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Note 5 - Loans - Non-accrual Loans (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Non-accrual loans	$ 11,494	$ 2,611
Past Due 90-Days-or-More and Still Accruing Interest	535	745
Commercial and Industrial Portfolio Segment [Member]
Non-accrual loans	8,202	192
Past Due 90-Days-or-More and Still Accruing Interest	0	12
Construction and Development Excluding Undeveloped Land Portfolio Segment [Member]
Non-accrual loans	0	318
Past Due 90-Days-or-More and Still Accruing Interest	0	0
Undevelopment Land Portfolio Segment [Member]
Non-accrual loans	0	474
Past Due 90-Days-or-More and Still Accruing Interest	0	0
Real Estate Mortgage Portfolio Segment [Member]
Non-accrual loans	3,292	1,627
Past Due 90-Days-or-More and Still Accruing Interest	535	733
Real Estate Mortgage Portfolio Segment [Member] | Commercial Investment [Member]
Non-accrual loans	740	138
Past Due 90-Days-or-More and Still Accruing Interest	396	99
Real Estate Mortgage Portfolio Segment [Member] | Owner Occupied Commercial [Member]
Non-accrual loans	2,278	586
Past Due 90-Days-or-More and Still Accruing Interest	0	535
Real Estate Mortgage Portfolio Segment [Member] | One to Four Family Residential [Member]
Non-accrual loans	123	760
Past Due 90-Days-or-More and Still Accruing Interest	104	0
Real Estate Mortgage Portfolio Segment [Member] | Home Equity First Lien [Member]
Non-accrual loans	0	0
Past Due 90-Days-or-More and Still Accruing Interest	0	0
Real Estate Mortgage Portfolio Segment [Member] | Home Equity Junior Lien [Member]
Non-accrual loans	151	143
Past Due 90-Days-or-More and Still Accruing Interest	35	99
Consumer Portfolio Segment [Member]
Non-accrual loans	0	0
Past Due 90-Days-or-More and Still Accruing Interest	$ 0	$ 0

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Note 5 - Loans - Reconciliation of PCI Loans (Details) $ in Thousands	Dec. 31, 2019 USD ($)
Contractually-required principal	$ 1,579
Non-accretable amount	(1,579)
Accretable amount	0
Carrying value of loans	$ 0

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Note 6 - Premises and Equipment- Balance Sheet, Income Statement, and Cash Flow Detail Regarding Operating Leases (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Right-of-use operating lease asset	$ 12,737	$ 0
Weighted average remaining lease term (Year)	9 years 4 months 17 days
Weighted average discount rate	2.46%
One year or less	$ 1,964
Year 2	1,915
Year 3	1,930
Year 4	1,972
Year 5	1,781
Greater than 5 years	6,619
Total lease payments	16,181
Less imputed interest	1,812
Operating lease cost	1,870
Variable lease cost	152
Less sublease income	54
Total lease cost	1,968
Operating cash flows from operating leases	1,656
Other Liabilities [Member]
Operating lease liability	$ 14,369

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Note 13 - Other Comprehensive Income (Loss) - Accumulated Other Comprehensive Income (Loss) by Component (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018		Dec. 31, 2017
Balance	$ 366,500	$ 333,644		$ 313,872
Balance	406,297	366,500		333,644
Net current period other comprehensive income (loss)	5,819	(2,706)		(431)
Reclassification adjustment - ASU 2018-02		0
AOCI, Accumulated Gain (Loss), Debt Securities, Available-for-sale, Parent [Member]
Balance	(5,330)	(1,781)	[1]	(1,211)
Net current period other comprehensive income gain (loss)				(721)
Amounts reclassifed from AOCI				151
Balance	1,085	(5,330)		(1,781)	[1]
Net current period other comprehensive income (loss)	6,415	(3,053)
Reclassification adjustment - ASU 2018-02		(496)
Accumulated Net Gain (Loss) from Cash Flow Hedges Attributable to Parent [Member]
Balance	408	193	[1]	(16)
Net current period other comprehensive income gain (loss)				209
Amounts reclassifed from AOCI				0
Balance	(37)	408		193	[1]
Net current period other comprehensive income (loss)	(445)	174
Reclassification adjustment - ASU 2018-02		41
Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member]
Balance	(220)	(342)	[1]	(272)
Net current period other comprehensive income gain (loss)				(70)
Amounts reclassifed from AOCI				0
Balance	(371)	(220)		(342)	[1]
Net current period other comprehensive income (loss)	(151)	173
Reclassification adjustment - ASU 2018-02		(51)
AOCI Attributable to Parent [Member]
Balance	(5,142)	(1,930)	[1]	(1,499)
Net current period other comprehensive income gain (loss)				(582)
Amounts reclassifed from AOCI				151
Balance	677	(5,142)		(1,930)	[1]
Net current period other comprehensive income (loss)	$ 5,819	(2,706)		$ (431)
Reclassification adjustment - ASU 2018-02		$ (506)

[1] December 31, 2017 AOCI component balances reflect a correction of incorrectly reported year-end balances in the Footnote titled "Other Comprehensive Income (Loss)" of the 2017 Form 10-K, which were presented as $(2,278), $234, and $(392) for securities AFS, cash flow hedges, and minimum pension liability, respectively.

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Note 15 - Net Income Per Share - Antidiutive SARs (Details) - shares shares in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Stock Appreciation Rights (SARs) [Member]
Antidilutive SARs (in shares)	199	146

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Note 22 - Derivative Financial Instruments - Outstanding Undesignated Interest Rate Swap Contracts (Details) - Not Designated as Hedging Instrument [Member] - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Receiving [Member]
Notional amount	$ 99,000	$ 55,505
Weighted average maturity (Year)	8 years 2 months 12 days	8 years
Fair value	$ 2,696	$ 519
Paying [Member]
Notional amount	$ 99,000	$ 55,505
Weighted average maturity (Year)	8 years 2 months 12 days	8 years
Fair value	$ 2,767	$ 543

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Note 19 - Commitments and Contingent Liabilities (Tables)

12 Months Ended

Dec. 31, 2019

Notes Tables

Schedule of Off Balance Sheet Commitments to Extend Credit [Table Text Block]

December 31, (in thousands)	2019		2018
Commercial and industrial	$	416,195	$	309,920
Construction and development		240,503		179,364
Home equity lines of credit		155,920		147,907
Credit cards		26,439		20,003
Overdrafts		32,715		21,751
Letters of credit		24,193		20,891
Other		40,083		33,369
Future loan commitments		236,885		101,399
Total off balance sheet commitments to extend credit	$	1,172,933	$	834,604

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Note 23 - Regulatory Matters (Tables)

12 Months Ended

Dec. 31, 2019

Notes Tables

Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations [Table Text Block]

(dollars in thousands)	Actual					Minimum for adequately capitalized					Minimum for well capitalized
December 31, 2019	Amount		Ratio			Amount		Ratio			Amount		Ratio
Total risk-based capital (1)
Consolidated	$	418,460		12.85	%	$	260,448		8.00	%	NA		NA
Bank		396,299		12.20			259,823		8.00		$	324,778		10.00	%
Common equity tier 1 risk-based capital
Consolidated		391,319		12.02			146,502		4.50		NA		NA
Bank		369,158		11.37			146,150		4.50			211,106		6.50
Tier 1 risk-based capital (1)
Consolidated		391,319		12.02			195,336		6.00		NA		NA
Bank		369,158		11.37			194,867		6.00			259,823		8.00
Leverage (2)
Consolidated		391,319		10.60			147,733		4.00		NA		NA
Bank		369,158		10.67			138,392		4.00			172,990		5.00

(dollars in thousands)	Actual					Minimum for adequately capitalized					Minimum for well capitalized
December 31, 2018	Amount		Ratio			Amount		Ratio			Amount		Ratio
Total risk-based capital (1)
Consolidated	$	396,019		13.91	%	$	227,714		8.00	%	NA		NA
Bank		385,637		13.56			227,462		8.00		$	284,327		10.00	%
Common equity tier 1 risk-based capital
Consolidated		370,135		13.00			128,089		4.50		NA		NA
Bank		359,753		12.65			127,947		4.50			184,813		6.50
Tier 1 risk-based capital (1)
Consolidated		370,135		13.00			170,785		6.00		NA		NA
Bank		359,753		12.65			170,596		6.00			227,462		8.00
Leverage (2)
Consolidated		370,135		11.33			130,698		4.00		NA		NA
Bank		359,753		11.02			130,569		4.00			163,211		5.00

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Note 20 - Assets and Liabilities Measured and Reported at Fair Value - Assets Measured at Fair Value on a Non-recurring Basis (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Other real estate owned	$ (7)	$ 102	$ 39
Fair Value, Nonrecurring [Member]
Impaired loans	7,253	925
Impaired loans	(20)	(514)
Other real estate owned	493	239
Other real estate owned	(70)	(32)
Fair Value, Nonrecurring [Member] | Fair Value, Inputs, Level 1 [Member]
Impaired loans	0	0
Other real estate owned	0	0
Fair Value, Nonrecurring [Member] | Fair Value, Inputs, Level 2 [Member]
Impaired loans	0	0
Other real estate owned	0	0
Fair Value, Nonrecurring [Member] | Fair Value, Inputs, Level 3 [Member]
Impaired loans	7,253	925
Other real estate owned	$ 493	$ 239

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Note 19 - Commitments and Contingent Liabilities (Details Textual) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Loss Contingency Accrual, Ending Balance	$ 350,000	$ 350,000
Standby Letters of Credit [Member] | Minimum [Member]
Guarantee Obligations, Agreement Term	1 year
Standby Letters of Credit [Member] | Maximum [Member]
Guarantee Obligations, Agreement Term	2 years
Performance Guarantee [Member]
Guarantee Obligation, Estimated Payment Under Default on Contract	$ 2,600,000

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Note 27 - Revenue From Contracts With Customers (Tables)

12 Months Ended

Dec. 31, 2019

Notes Tables

Disaggregation of Revenue [Table Text Block]

	Year Ended December 31, 2019
(in thousands)	Commercial		WM&T		Total
Wealth management and trust services	$	—	$	22,643	$	22,643
Deposit service charges		5,513		—		5,513
Debit and credit card income		8,123		—		8,123
Treasury management fees		4,992		—		4,992
Mortgage banking income(1)		3,090		—		3,090
Net investment product sales commissions and fees		1,498		—		1,498
Bank owned life insurance(1)		1,031		—		1,031
Other(2)		2,900		—		2,900
Total non-interest income	$	27,147	$	22,643	$	49,790

	Year Ended December 31, 2018
(in thousands)	Commercial		WM&T		Total
Wealth management and trust services	$	—	$	21,536	$	21,536
Deposit service charges		5,759		—		5,759
Debit and credit card income		6,769		—		6,769
Treasury management fees		4,571		—		4,571
Mortgage banking income(1)		2,568		—		2,568
Net investment product sales commissions and fees		1,677		—		1,677
Bank owned life insurance(1)		1,129		—		1,129
Other(2)		1,337		—		1,337
Total non-interest income	$	23,810	$	21,536	$	45,346

	Year Ended December 31, 2017
(in thousands)	Commercial			WM&T		Total
Wealth management and trust services	$	—		$	20,505	$	20,505
Deposit service charges		6,172			—		6,172
Debit and credit card income		5,979			—		5,979
Treasury management fees		4,297			—		4,297
Mortgage banking income(1)		3,221			—		3,221
Loss on sale of securities		(232	)		—		(232	)
Net investment product sales commissions and fees		1,629			—		1,629
Bank owned life insurance(1)		1,159			—		1,159
Other(2)		1,769			—		1,769
Total non-interest income	$	23,994		$	20,505	$	44,499

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Note 27 - Revenue From Contracts With Customers

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Revenue from Contract with Customer [Text Block]

(27) Revenue from contracts with customers

Bancorp adopted ASU 2014-09, Revenue from Contracts with Customers and all related amendments (ASC 606), which created a single framework for recognizing revenue from contracts with customers that fall within its scope and revised when it is appropriate to recognize a gain (loss) from the transfer of nonfinancial assets, effective January 1, 2018 using the full retrospective method. Bancorp recognizes revenue upon satisfying a performance obligation as services are rendered to a customer. All of Bancorp’s revenue from contracts with customers in the scope of ASC 606 is recognized within non-interest income. The only impact to financial statement presentation was reclassification from expense to contra income costs incurred to obtain and fulfill contracts associated with investment product sales. All periods presented in these financial statements have been adjusted to reflect the reclassification. The table below presents Bancorp’s sources of non-interest income. Items outside the scope of ASC 606 are noted as such.

	Year Ended December 31, 2019
(in thousands)	Commercial		WM&T		Total
Wealth management and trust services	$	—	$	22,643	$	22,643
Deposit service charges		5,513		—		5,513
Debit and credit card income		8,123		—		8,123
Treasury management fees		4,992		—		4,992
Mortgage banking income(1)		3,090		—		3,090
Net investment product sales commissions and fees		1,498		—		1,498
Bank owned life insurance(1)		1,031		—		1,031
Other(2)		2,900		—		2,900
Total non-interest income	$	27,147	$	22,643	$	49,790

	Year Ended December 31, 2018
(in thousands)	Commercial		WM&T		Total
Wealth management and trust services	$	—	$	21,536	$	21,536
Deposit service charges		5,759		—		5,759
Debit and credit card income		6,769		—		6,769
Treasury management fees		4,571		—		4,571
Mortgage banking income(1)		2,568		—		2,568
Net investment product sales commissions and fees		1,677		—		1,677
Bank owned life insurance(1)		1,129		—		1,129
Other(2)		1,337		—		1,337
Total non-interest income	$	23,810	$	21,536	$	45,346

	Year Ended December 31, 2017
(in thousands)	Commercial			WM&T		Total
Wealth management and trust services	$	—		$	20,505	$	20,505
Deposit service charges		6,172			—		6,172
Debit and credit card income		5,979			—		5,979
Treasury management fees		4,297			—		4,297
Mortgage banking income(1)		3,221			—		3,221
Loss on sale of securities		(232	)		—		(232	)
Net investment product sales commissions and fees		1,629			—		1,629
Bank owned life insurance(1)		1,159			—		1,159
Other(2)		1,769			—		1,769
Total non-interest income	$	23,994		$	20,505	$	44,499

(1) Outside of the scope of ASC 606.

(2) Outside of the scope of ASC 606, with the exception of safe deposit fees which were nominal for all periods.

Revenue sources within the scope of ASC 606 are discussed below:

Bancorp earns fees from its deposit customers for transactions-based, account management, and overdraft services. Transaction-based fees, which include services such as ATM use fees, stop payments fees, and ACH fees, are recognized at the time the transaction is executed as that is when the company fulfills the performance obligation. Account management fees are earned over the course of a month and charged in the month in which the services are provided. Overdraft fees are recognized at the point in time that the overdraft occurs. Deposit service charges are withdrawn from customer’s account balances.

Treasury management transaction fees are recognized at the time the transaction is executed as that is when the company fulfills the performance obligation. Account management fees are earned over the course of a month and charged in the month in which the services are provided. Treasury management fees are withdrawn from customer’s account balances.

WM&T provides customers fiduciary and investment management services as agreed upon in asset management contracts. The contracts require WM&T to provide a series of distinct services for which fees are earned over time. The contracts are cancellable upon demand with fees typically based upon the asset value of investments. Revenue is accrued and recognized monthly based upon month-end asset values and collected from the customer predominately in the following month except for a small percentage of fees collected quarterly. Incentive compensation related to WM&T activities is considered a cost of obtaining the contract. Contracts between WM&T and clients do not permit performance based fees and accordingly, none of the fees earned by WM&T are performance based. Trust fees receivable as of December 31, 2019 were $2.1 million compared with $1.9 million as of December 31, 2018.

Investment products sales commissions and fees represent the Bank’s share of transaction fees and wrap fees resulting from investment services and programs provided through an agent relationship with a third party broker-dealer. Transaction fees are assessed at the time of the transaction. Those fees are collected and recognized on a monthly basis. Trailing fees are based upon market value and are assessed, collected, and recognized on a quarterly basis. Because the Bank acts as an agent in arranging the relationship between the customer and third party provider, and does not control the services rendered, investment product sales commissions and fees are reported net of related costs, including nominal incentive compensation, and trading activity charges of $516,000 and $544,000 for the years ended December 31, 2019 and 2018.

Debit and credit card revenue primarily consists of debit and credit card interchange income. Interchange income represents fees assessed within the payment card system for acceptance of card based transactions. Interchange fees are assessed as the performance obligation is satisfied, which is at the point in time the card transaction is authorized. Revenue is collected and recognized daily through the payment network settlement process.

Bancorp did not establish any contract assets or liabilities as a result of adopting ASC 606, nor were any recognized during 2019.

Bancorp’s revenue on the consolidated statement of income is categorized by product type, which effectively depicts how the nature, timing, and extent of cash flows are affected by economic factors.

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Note 23 - Regulatory Matters

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Regulatory Capital Requirements under Banking Regulations [Text Block]

(23) Regulatory Matters

Bancorp and the Bank are subject to capital regulations in accordance with Basel III, as administered by banking regulators. Regulatory agencies measure capital adequacy within a framework that makes capital requirements, in part, dependent on the individual risk profiles of financial institutions. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on Bancorp’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Holding Company and the Bank must meet specific capital guidelines that involve quantitative measures of Bancorp’s assets, liabilities and certain off-balance sheet items, as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators regarding components, risk weightings and other factors.

Banking regulators have categorized the Bank as well-capitalized. For prompt corrective action, the regulations in accordance with Basel III define “well capitalized” as a 6.5% Common Equity Tier 1 Risk-Based Capital ratio, an 8.0% Tier 1 Risk-Based Capital ratio, a 10.0% Total Risk-Based Capital ratio and a 5.0% Tier 1 Leverage ratio. Additionally, in order to avoid limitations on capital distributions, including dividend payments and certain discretionary bonus payments to executive officers, Bancorp and Bank must hold a capital conservation buffer composed of Common Equity Tier 1 Risk-Based Capital above their minimum risk-based capital requirements. The capital conservation buffer phased in from 2016 to 2019 on the following schedule: a capital conservation buffer of 0.625% effective January 1, 2016; 1.25% effective January 1, 2017; 1.875% effective January 1, 2018; and a fully phased in capital conservation buffer of 2.5% on January 1, 2019.

Bancorp continues to exceed the regulatory requirements for all calculations. Bancorp and the Bank intend to maintain a capital position that meets or exceeds the “well-capitalized” requirements as defined by the FRB and the FDIC, in addition to the capital conservation buffer.

The following table sets forth Bancorp’s and the Bank’s risk based capital amounts and ratios:

(dollars in thousands)	Actual					Minimum for adequately capitalized					Minimum for well capitalized
December 31, 2019	Amount		Ratio			Amount		Ratio			Amount		Ratio
Total risk-based capital (1)
Consolidated	$	418,460		12.85	%	$	260,448		8.00	%	NA		NA
Bank		396,299		12.20			259,823		8.00		$	324,778		10.00	%
Common equity tier 1 risk-based capital
Consolidated		391,319		12.02			146,502		4.50		NA		NA
Bank		369,158		11.37			146,150		4.50			211,106		6.50
Tier 1 risk-based capital (1)
Consolidated		391,319		12.02			195,336		6.00		NA		NA
Bank		369,158		11.37			194,867		6.00			259,823		8.00
Leverage (2)
Consolidated		391,319		10.60			147,733		4.00		NA		NA
Bank		369,158		10.67			138,392		4.00			172,990		5.00

(dollars in thousands)	Actual					Minimum for adequately capitalized					Minimum for well capitalized
December 31, 2018	Amount		Ratio			Amount		Ratio			Amount		Ratio
Total risk-based capital (1)
Consolidated	$	396,019		13.91	%	$	227,714		8.00	%	NA		NA
Bank		385,637		13.56			227,462		8.00		$	284,327		10.00	%
Common equity tier 1 risk-based capital
Consolidated		370,135		13.00			128,089		4.50		NA		NA
Bank		359,753		12.65			127,947		4.50			184,813		6.50
Tier 1 risk-based capital (1)
Consolidated		370,135		13.00			170,785		6.00		NA		NA
Bank		359,753		12.65			170,596		6.00			227,462		8.00
Leverage (2)
Consolidated		370,135		11.33			130,698		4.00		NA		NA
Bank		359,753		11.02			130,569		4.00			163,211		5.00

(1) Ratio is computed in relation to risk-weighted assets.

(2) Ratio is computed in relation to average assets.

NA – Regulatory framework does not define “well capitalized” for holding companies.

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Note 5 - Loans (Tables)

12 Months Ended

Dec. 31, 2019

Notes Tables

Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block]

December 31, (in thousands)	2019		2018
Commercial and industrial	$	870,511	$	833,524
Construction and development, excluding undeveloped land(1)		213,822		225,050
Undeveloped land		46,360		30,092
Real estate mortgage:
Commercial investment		736,618		588,610
Owner occupied commercial		473,783		426,373
1-4 family residential		334,358		276,017
Home equity - first lien		48,620		49,500
Home equity - junior lien		73,477		70,947
Subtotal: Real estate mortgage		1,666,856		1,411,447
Consumer		47,467		48,058
Total loans(2)	$	2,845,016	$	2,548,171

Schedule of Loans and Leases Receivable, Related Parties [Table Text Block]

Years ended December 31, (in thousands)	2019			2018
Balance as of January 1	$	52,687		$	629
Effect of change in composition of directors and executive officers		—			51,415
Repayment of term loans		(184	)		—
Changes in balances of revolving lines of credit		(9,279	)		643
Balance as of December 31	$	43,224		$	52,687

Schedule of Loans and Leases Receivable Outstanding Balances and Related Carrying Amounts for PCI Loans [Table Text Block]

December 31, (in thousands)	2019
Contractually-required principal	$	1,579
Non-accretable amount		(1,579	)
Accretable amount		—
Carrying value of loans	$	-

Schedule of Loans and Leases Receivable Rollforward of the Accretable Amount on PCI Loans [Table Text Block]

Years ended December 31, (in thousands)	2019			2018
Balance, beginning of period	$	(69	)	$	(106	)
Transfers between non-accretable and accretable		—			—
Net accretion into interest income on loans, including loan fees		69			37
Balance, end of period	$	-		$	(69	)

Financing Receivable Credit Quality Indicators [Table Text Block]

(in thousands)							Substandard				Total
December 31, 2019	Pass		OAEM		Substandard		Non-performing		Doubtful		Loans
Commercial and industrial	$	840,105	$	704	$	21,500	$	8,202	$	—	$	870,511
Construction and development, excluding undeveloped land		213,822		—		—		—		—		213,822
Undeveloped land		46,360		—		—		—		—		46,360
Real estate mortgage:
Commercial investment		722,747		6,459		6,275		1,137		—		736,618
Owner occupied commercial		460,981		1,375		9,050		2,377		—		473,783
1-4 family residential		332,294		1,701		122		241		—		334,358
Home equity - first lien		48,620		—		—		—		—		48,620
Home equity - junior lien		73,273		—		17		187		—		73,477
Subtotal: Real estate mortgage		1,637,915		9,535		15,464		3,942		—		1,666,856
Consumer		47,429		—		38		—		—		47,467
Total	$	2,785,631	$	10,239	$	37,002	$	12,144	$	—	$	2,845,016

(in thousands)							Substandard				Total
December 31, 2018	Pass		OAEM		Substandard		Non-performing		Doubtful		Loans
Commercial and industrial	$	803,073	$	11,516	$	18,703	$	232	$	—	$	833,524
Construction and development, excluding undeveloped land		220,532		4,200		—		318		—		225,050
Undeveloped land		29,618		—		—		474		—		30,092
Real estate mortgage:
Commercial investment		586,543		1,815		15		237		—		588,610
Owner occupied commercial		411,722		9,030		4,500		1,121		—		426,373
1-4 family residential		273,537		1,544		162		774		—		276,017
Home equity - first lien		49,500		—		—		—		—		49,500
Home equity - junior lien		70,437		249		19		242		—		70,947
Subtotal: Real estate mortgage		1,391,739		12,638		4,696		2,374		—		1,411,447
Consumer		48,058		—		—		—		—		48,058
Total	$	2,493,020	$	28,354	$	23,399	$	3,398	$	—	$	2,548,171

Financing Receivable, Allowance for Credit Loss [Table Text Block]

	Type of loan
				Construction
				and development,
	Commercial			excluding
	and			undeveloped			Undeveloped		Real estate
(in thousands)	industrial			land			land		mortgage			Consumer			Total
Balance, January 1, 2019	$	11,965		$	1,760		$	752	$	10,681		$	376		$	25,534
Provision (credit)		684			(644	)		34		1,021			(95	)		1,000
Charge-offs		(94	)		—			—		(38	)		(552	)		(684	)
Recoveries		267			203			—		100			371			941
Balance, December 31, 2019	$	12,822		$	1,319		$	786	$	11,764		$	100		$	26,791

	Type of loan
				Construction
				and development,
	Commercial			excluding
	and			undeveloped		Undeveloped		Real estate
(in thousands)	industrial			land		land		mortgage			Consumer			Total
Balance, January 1, 2018	$	11,276		$	1,724	$	521	$	11,012		$	352		$	24,885
Provision (credit)		2,539			36		231		(261	)		160			2,705
Charge-offs		(2,404	)		—		—		(132	)		(476	)		(3,012	)
Recoveries		554			—		—		62			340			956
Balance, December 31, 2018	$	11,965		$	1,760	$	752	$	10,681		$	376		$	25,534

	Type of loan
				Construction
				and development,
	Commercial			excluding
	and			undeveloped			Undeveloped			Real estate
(in thousands)	industrial			land			land			mortgage			Consumer			Total
Balance, January 1, 2017	$	10,483		$	1,923		$	684		$	10,573		$	344		$	24,007
Provision (credit)		2,373			(199	)		(163	)		383			156			2,550
Charge-offs		(1,782	)		—			—			(98	)		(549	)		(2,429	)
Recoveries		202			—			—			154			401			757
Balance, December 31, 2017	$	11,276		$	1,724		$	521		$	11,012		$	352		$	24,885

(in thousands)	Loans								Allowance
December 31, 2019	Loans individually evaluated for impairment		Loans collectively evaluated for impairment		Loans acquired with deteriorated credit quality		Total loans		Loans individually evaluated for impairment		Loans collectively evaluated for impairment		Loans acquired with deteriorated credit quality		Total allowance
Commercial and industrial	$	8,223	$	862,288	$	—	$	870,511	$	1,150	$	11,672	$	—	$	12,822
Construction and development, excluding undeveloped land		—		213,822		—		213,822		—		1,319		—		1,319
Undeveloped land		—		46,360		—		46,360		—		786		—		786
Real estate mortgage		3,307		1,663,549		—		1,666,856		13		11,751		—		11,764
Consumer		—		47,467		—		47,467		—		100		—		100
Total	$	11,530	$	2,833,486	$	—	$	2,845,016	$	1,163	$	25,628	$	—	$	26,791

(in thousands)	Loans								Allowance
December 31, 2018	Loans individually evaluated for impairment		Loans collectively evaluated for impairment		Loans acquired with deteriorated credit quality		Total loans		Loans individually evaluated for impairment		Loans collectively evaluated for impairment		Loans acquired with deteriorated credit quality		Total allowance
Commercial and industrial	$	220	$	833,304	$	—	$	833,524	$	28	$	11,937	$	—	$	11,965
Construction and development, excluding undeveloped land		318		224,732		—		225,050		—		1,760		—		1,760
Undeveloped land		474		29,618		—		30,092		—		752		—		752
Real estate mortgage		1,641		1,409,806		—		1,411,447		14		10,667		—		10,681
Consumer		—		48,058		—		48,058		—		376		—		376
Total	$	2,653	$	2,545,518	$	—	$	2,548,171	$	42	$	25,492	$	—	$	25,534

Financing Receivable, Nonaccrual [Table Text Block]

					Past Due 90-Days-or-More
	Non-accrual				and Still Accruing Interest
(in thousands)	December 31, 2019		December 31, 2018		December 31, 2019		December 31, 2018
Commercial and industrial	$	8,202	$	192	$	—	$	12
Construction and development, excluding undeveloped land		—		318		—		—
Undeveloped land		—		474		—		—
Real estate mortgage:
Commercial investment		740		138		396		99
Owner occupied commercial		2,278		586		—		535
1-4 family residential		123		760		104		—
Home equity - first lien		—		—		—		—
Home equity - junior lien		151		143		35		99
Subtotal: Real estate mortgage		3,292		1,627		535		733
Consumer		—		—		—		—
Total loans	$	11,494	$	2,611	$	535	$	745

Financing Receivable, Troubled Debt Restructuring [Table Text Block]

	December 31, 2019						December 31, 2018
			Specific		Additional				Specific		Additional
			reserve		commitment				reserve		commitment
(in thousands)	Balance		allocation		to lend		Balance		allocation		to lend
Commercial and industrial	$	21	$	21	$	—	$	28	$	28	$	—
1-4 family residential		13		13		—		14		14		—
Total TDRs	$	34	$	34	$	—	$	42	$	42	$	—

Impaired Financing Receivables [Table Text Block]

	As of						Twelve Months Ended
	December 31, 2019						December 31, 2019
			Unpaid				Average		Interest
	Recorded		principal		Related		recorded		income
(in thousands)	investment		balance		allowance		investment		recognized
Impaired loans with no related allowance:
Commercial and industrial	$	174	$	174	$	—	$	166	$	—
Construction and development, excluding undeveloped land		—		—		—		64		—
Undeveloped land		—		—		—		95		—
Real estate mortgage
Commercial investment		741		741		—		448		—
Owner occupied commercial		2,278		2,736		—		1,437		—
1-4 family residential		124		124		—		516		—
Home equity - first lien		—		—		—		—		—
Home equity - junior lien		151		151		—		293		—
Subtotal: Real estate mortgage		3,294		3,752		—		2,694		—
Consumer		—		—		—		—		—
Subtotal	$	3,468	$	3,926	$	—	$	3,019	$	—
Impaired loans with an allowance:
Commercial and industrial	$	8,049	$	8,049	$	1,150	$	1,631	$	—
Construction and development, excluding undeveloped land		—		—		—		—		—
Undeveloped land		—		—		—		—		—
Real estate mortgage
Commercial investment		—		—		—		—		—
Owner occupied commercial		—		—		—		—		—
1-4 family residential		13		13		13		13		—
Home equity - first lien		—		—		—		—		—
Home equity - junior lien		—		—		—		—		—
Subtotal: Real estate mortgage		13		13		13		13		—
Consumer		—		—		—		—		—
Subtotal	$	8,062	$	8,062	$	1,163	$	1,644	$	—
Total:
Commercial and industrial	$	8,223	$	8,223	$	1,150	$	1,797	$	—
Construction and development, excluding undeveloped land		—		—		—		64		—
Undeveloped land		—		—		—		95		—
Real estate mortgage
Commercial investment		741		741		—		448		—
Owner occupied commercial		2,278		2,736		—		1,437		—
1-4 family residential		137		137		13		529		—
Home equity - first lien		—		—		—		—		—
Home equity - junior lien		151		151		—		293		—
Subtotal: Real estate mortgage		3,307		3,765		13		2,707		—
Consumer		—		—		—		—		—
Total impaired loans	$	11,530	$	11,988	$	1,163	$	4,663	$	—

	As of						Twelve Months Ended
	December 31, 2018						December 31, 2018
			Unpaid				Average		Interest
	Recorded		principal		Related		recorded		income
(in thousands)	investment		balance		allowance		investment		recognized
Impaired loans with no related allowance:
Commercial and industrial	$	192	$	707	$	—	$	161	$	—
Construction and development, excluding undeveloped land		318		489		—		437		—
Undeveloped land		474		506		—		474		—
Real estate mortgage
Commercial investment		138		138		—		35		—
Owner occupied commercial		586		1,023		—		1,503		—
1-4 family residential		760		760		—		1,242		—
Home equity - first lien		—		—		—		—		—
Home equity - junior lien		143		143		—		73		—
Subtotal: Real estate mortgage		1,627		2,064		—		2,853		—
Consumer		—		—		—		23		—
Subtotal	$	2,611	$	3,766	$	—	$	3,948	$	—
Impaired loans with an allowance:
Commercial and industrial	$	28	$	28	$	28	$	1,851	$	2
Construction and development, excluding undeveloped land		—		—		—		—		—
Undeveloped land		—		—		—		24		—
Real estate mortgage
Commercial investment		—		—		—		—		—
Owner occupied commercial		—		—		—		897		—
1-4 family residential		14		14		14		14		1
Home equity - first lien		—		—		—		—		—
Home equity - junior lien		—		—		—		—		—
Subtotal: Real estate mortgage		14		14		14		911		1
Consumer		—		—		—		—		—
Subtotal	$	42	$	42	$	42	$	2,786	$	3
Total:
Commercial and industrial	$	220	$	735	$	28	$	2,012	$	2
Construction and development, excluding undeveloped land		318		489		—		437		—
Undeveloped land		474		506		—		498		—
Real estate mortgage
Commercial investment		138		138		—		35		—
Owner occupied commercial		586		1,023		—		2,400		—
1-4 family residential		774		774		14		1,256		1
Home equity - first lien		—		—		—		—		—
Home equity - junior lien		143		143		—		73		—
Subtotal: Real estate mortgage		1,641		2,078		14		3,764		1
Consumer		—		—		—		23		—
Total impaired loans	$	2,653	$	3,808	$	42	$	6,734	$	3

	As of						Twelve Months Ended
	December 31, 2017						December 31, 2017
			Unpaid				Average		Interest
	Recorded		principal		Related		recorded		income
(in thousands)	investment		balance		allowance		investment		recognized
Impaired loans with no related allowance:
Commercial and industrial	$	1,142	$	2,202	$	—	$	411	$	—
Construction and development, excluding undeveloped land		664		834		—		559		—
Undeveloped land		474		506		—		425		—
Real estate mortgage
Commercial investment		52		53		—		110		—
Owner occupied commercial		3,332		3,789		—		1,678		—
1-4 family residential		1,637		1,657		—		935		—
Home equity - first lien		—		—		—		—		—
Home equity - junior lien		31		31		—		186		—
Subtotal: Real estate mortgage		5,052		5,530		—		2,909		—
Consumer		—		—		—		—		—
Subtotal	$	7,332	$	9,072	$	—	$	4,304	$	—
Impaired loans with an allowance:
Commercial and industrial	$	34	$	34	$	34	$	1,882	$	78
Construction and development, excluding undeveloped land		—		—		—		—		—
Undeveloped land		—		—		—		48		—
Real estate mortgage
Commercial investment		—		—		—		—		—
Owner occupied commercial		—		—		—		—		—
1-4 family residential		14		14		14		5		—
Home equity - first lien		—		—		—		—		—
Home equity - junior lien		—		—		—		—		—
Subtotal: Real estate mortgage		14		14		14		5		—
Consumer		—		—		—		46		—
Subtotal	$	48	$	48	$	48	$	1,981	$	78
Total:
Commercial and industrial	$	1,176	$	2,236	$	34	$	2,293	$	78
Construction and development, excluding undeveloped land		664		834		—		559		—
Undeveloped land		474		506		—		473		—
Real estate mortgage
Commercial investment		52		53		—		110		—
Owner occupied commercial		3,332		3,789		—		1,678		—
1-4 family residential		1,651		1,671		14		940		—
Home equity - first lien		—		—		—		—		—
Home equity - junior lien		31		31		—		186		—
Subtotal: Real estate mortgage		5,066		5,544		14		2,914		—
Consumer		—		—		—		46		—
Total impaired loans	$	7,380	$	9,120	$	48	$	6,285	$	78

Financing Receivable, Past Due [Table Text Block]

							90 or More
							Days Past Due
(in thousands)			30-59 Days		60-89 days		(includes all		Total		Total
December 31, 2019	Current		Past Due		Past Due		non-accrual)		Past Due		Loans
Commercial and industrial	$	861,860	$	253	$	194	$	8,204	$	8,651	$	870,511
Construction and development, excluding undeveloped land		213,766		6		50		—		56		213,822
Undeveloped land		46,360		—		—		—		—		46,360
Real estate mortgage:
Commercial investment		735,387		94		—		1,137		1,231		736,618
Owner occupied commercial		470,951		467		86		2,279		2,832		473,783
1-4 family residential		332,718		1,368		33		239		1,640		334,358
Home equity - first lien		48,441		179		—		—		179		48,620
Home equity - junior lien		72,995		196		100		186		482		73,477
Subtotal: Real estate mortgage		1,660,492		2,304		219		3,841		6,364		1,666,856
Consumer		47,379		84		4		—		88		47,467
Total	$	2,829,857	$	2,647	$	467	$	12,045	$	15,159	$	2,845,016

							90 or More
							Days Past Due
(in thousands)			30-59 Days		60-89 days		(includes all		Total		Total
December 31, 2018	Current		Past Due		Past Due		non-accrual)		Past Due		Loans
Commercial and industrial	$	832,923	$	197	$	200	$	204	$	601	$	833,524
Construction and development, excluding undeveloped land		224,732		—		—		318		318		225,050
Undeveloped land		29,552		66		—		474		540		30,092
Real estate mortgage:
Commercial investment		586,884		1,382		107		237		1,726		588,610
Owner occupied commercial		421,143		2,732		1,377		1,121		5,230		426,373
1-4 family residential		274,547		374		336		760		1,470		276,017
Home equity - first lien		49,321		179		—		—		179		49,500
Home equity - junior lien		70,467		182		56		242		480		70,947
Subtotal: Real estate mortgage		1,402,362		4,849		1,876		2,360		9,085		1,411,447
Consumer		48,058		—		—		—		—		48,058
Total	$	2,537,627	$	5,112	$	2,076	$	3,356	$	10,544	$	2,548,171

King Bancorp Inc. [Member]

Notes Tables

Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block]

	May 1, 2019
	Contractual		Non-accretable			Accretable			Acquisition-day
(in thousands)	receivable		amount			amount			fair value
Commercial and industrial	$	8,249	$	—		$	(23	)	$	8,226
Construction and development		10,764		—			43			10,807
Raw Land		7,974		—			43			8,017
Real estate mortgage:
Commercial real estate		84,219		—			(456	)		83,763
1-4 family residential		50,556		—			322			50,878
Home equity - first lien		196		—			3			199
Home equity - junior lien		679		—			5			684
Subtotal: Real estate mortgage		135,650		—			(126	)		135,524
Consumer		1,528		—			(73	)		1,455
Total loans ASC 310-20		164,165		—			(136	)		164,029
Commercial and industrial
Construction and development		—		—			—			—
Raw Land		—		—			—			—
Real estate mortgage:
Commercial real estate		1,351		(1,351	)		—			—
1-4 family residential		228		(228	)		—			—
Home equity - first lien		—		—			—			—
Home equity - junior lien		—		—			—			—
Subtotal: Real estate mortgage		1,579		(1,579	)		—			—
Consumer		—		—			—			—
Total loans ASC 310 purchased- credit-impaired loans		1,579		(1,579	)		—			—
Total loans	$	165,744	$	(1,579	)	$	(136	)	$	164,029

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Note 4 - Securities Available for Sale

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

(4) Securities Available for Sale

All of Bancorp’s securities are classified as AFS. Amortized cost, unrealized gains and losses, and fair value of these securities follow:

(in thousands)	Amortized		Unrealized
December 31, 2019	cost		Gains		Losses			Fair value
U.S. Treasury and other U.S. government obligations	$	49,887	$	10	$	-		$	49,897
Government sponsored enterprise obligations		208,933		1,189		(178	)		209,944
Mortgage backed securities - government agencies		193,574		1,243		(956	)		193,861
Obligations of states and political subdivisions		16,919		117		—			17,036
Total securities available for sale	$	469,313	$	2,559	$	(1,134	)	$	470,738
December 31, 2018
Government sponsored enterprise obligations	$	264,234	$	156	$	(3,351	)	$	261,039
Mortgage backed securities - government agencies		149,748		282		(3,753	)		146,277
Obligations of states and political subdivisions		29,760		107		(188	)		29,679
Total securities available for sale	$	443,742	$	545	$	(7,292	)	$	436,995

At December 31, 2019 and 2018, there were no holdings of debt securities of any one issuer, other than the U.S. government and its agencies, in an amount greater than 10% of stockholders’ equity.

There were no gains or losses on sales or calls of securities for the years ended December 31, 2019 and 2018. In 2017, a corporate equity security was sold for a loss of $263,000 and a security was called with a $31,000 pre-payment penalty realized.

Securities acquired from KSB, totaling $12 million, were sold immediately following the acquisition with no gain or loss realized in the income statement.

A summary of securities AFS by contractual maturity follows:

(in thousands)	Amortized cost		Fair value
Due within 1 year	$	129,251	$	129,311
Due after 1 year but within 5 years		32,124		32,208
Due after 5 years but within 10 years		6,162		6,219
Due after 10 years		108,202		109,139
Mortgage backed securities - government agencies		193,574		193,861
Total securities available for sale	$	469,313	$	470,738

Actual maturities may differ from contractual maturities because some issuers have the right to call or prepay obligations with or without prepayment penalties. The investment portfolio includes MBSs, which are guaranteed by agencies such as FHLMC, FNMA, and GNMA. These securities differ from traditional debt securities primarily in that they may have uncertain principal payment dates and are priced based on estimated prepayment rates on the underlying collateral.

Securities with a carrying value of $403 million and $355 million were pledged at December 31, 2019 and 2018, to secure accounts of commercial depositors in cash management accounts, public deposits, and uninsured cash balances for WM&T accounts.

Securities with unrealized losses at December 31, 2019 and 2018, aggregated by investment category and length of time securities have been in a continuous unrealized loss position follows:

	Less than 12 months					12 months or more					Total
(in thousands)	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
December 31, 2019	value		losses			value		losses			value		losses
Government sponsored enterprise obligations	$	16,503	$	(107	)	$	11,492	$	(71	)	$	27,995	$	(178	)
Mortgage-backed securities - government agencies		81,664		(496	)		32,453		(460	)		114,117		(956	)
Total temporarily impaired securities	$	98,167	$	(603	)	$	43,945	$	(531	)	$	142,112	$	(1,134	)
December 31, 2018
Government sponsored enterprise obligations	$	96,740	$	(38	)	$	149,320	$	(3,313	)	$	246,060	$	(3,351	)
Mortgage-backed securities - government agencies		3,108		(5	)		120,848		(3,748	)		123,956		(3,753	)
Obligations of states and political subdivisions		814		(1	)		17,639		(187	)		18,453		(188	)
Total temporarily impaired securities	$	100,662	$	(44	)	$	287,807	$	(7,248	)	$	388,469	$	(7,292	)

Applicable dates for determining when securities are in an unrealized loss position are December 31, 2019 and 2018. As such, it is possible that a security had a market value lower than its amortized cost on other days during the past twelve months, but is not in the “Less than 12 months” category above.

Investment securities are evaluated for OTTI on at least a quarterly basis and more frequently when economic or market conditions warrant such an evaluation to determine whether a decline in value below amortized cost is other-than-temporary. The term “other-than-temporary” is not intended to indicate that the decline is permanent, but indicates that the prospects for a near-term recovery of value are not necessarily favorable, or that there is a general lack of evidence to support a realizable value equal to or greater than the carrying value of the investment. Once a decline in value is determined to be other-than-temporary, the value of the security is reduced and a corresponding charge to earnings is recognized for the anticipated credit losses.

Unrealized losses on Bancorp’s investment securities portfolio have not been recognized as an expense because the securities are of high credit quality, and the decline in fair values is due to changes in the prevailing interest rate environment since the purchase date. Fair value is expected to recover as securities reach maturity and/or the interest rate environment returns to conditions similar to when these securities were purchased. These investments consist of 54 and 117 separate investment positions as of December 31, 2019 and 2018. Because management does not intend to sell the securities, and it is not likely that Bancorp will be required to sell the investments before recovery of their amortized cost, which may be at maturity, Bancorp does not consider these securities to be other-than-temporarily impaired at December 31, 2019.

FHLB stock represents an investment held by Bancorp which is not readily marketable and is carried at cost adjusted for identified impairment. Impairment is evaluated on an annual basis as of September 30th. No impairment has been recorded in the past and not future impairment is expected. Holdings of FHLB stock are required for access to FHLB advances.

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Note 8 - Other Assets

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Other Assets Disclosure [Text Block]

(8) Other Assets

A summary of major components of other assets follows:

December 31, (in thousands)	2019		2018
Cash surrender value of life insurance other than BOLI	$	16,145	$	15,029
Net deferred tax asset		14,466		10,193
Investments in tax credit related ventures		6,248		4,537
Prepaid assets		2,812		3,072
Trust fee receivable		2,171		1,939
Mortgage servicing rights		1,372		1,022
Other real estate owned		493		1,018
Other		7,232		8,362
Total other assets	$	50,939	$	45,172

Bancorp maintains life insurance policies other than BOLI in conjunction with its non-qualified defined benefit retirement and non-qualified compensation plans.

MSRs, a component of other assets, are initially recognized at fair value when mortgage loans are sold with servicing retained. The MSRs are amortized in proportion to and over the period of estimated net servicing income, considering appropriate prepayment assumptions. MSRs are evaluated quarterly for impairment by comparing carrying value to fair value. Estimated fair values of MSRs at December 31, 2019 and December 31, 2018 were $3 million and $4 million. Total outstanding principal balances of loans serviced by Bancorp were $327 million and $328 million at December 31, 2019 and December 31, 2018.

Changes in the net carrying amount of MSRs are shown in the following table.

Years ended December 31, (in thousands)	2019			2018			2017
Balance, beginning of period	$	1,022		$	875		$	921
Additions		506			302			225
Amortized to expense		(156	)		(155	)		(271	)
Balance, end of period	$	1,372		$	1,022		$	875

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Note 13 - Other Comprehensive Income (Loss) (Details Textual) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017		Dec. 31, 2016
Stockholders' Equity Attributable to Parent, Ending Balance		$ 406,297,000	$ 366,500,000	$ 333,644,000		$ 313,872,000
Tax Cuts and Jobs Act, Reclassification from AOCI to Retained Earnings, Tax Effect			$ 0
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent		21.00%	21.00%	35.00%
Accounting Standards Update 2018-02 [Member]
Tax Cuts and Jobs Act, Reclassification from AOCI to Retained Earnings, Tax Effect	$ (506,000)
AOCI, Accumulated Gain (Loss), Debt Securities, Available-for-sale, Parent [Member]
Stockholders' Equity Attributable to Parent, Ending Balance		$ 1,085,000	$ (5,330,000)	$ (1,781,000)	[1]	(1,211,000)
Tax Cuts and Jobs Act, Reclassification from AOCI to Retained Earnings, Tax Effect			(496,000)
Accumulated Net Gain (Loss) from Cash Flow Hedges Attributable to Parent [Member]
Stockholders' Equity Attributable to Parent, Ending Balance		(37,000)	408,000	193,000	[1]	(16,000)
Tax Cuts and Jobs Act, Reclassification from AOCI to Retained Earnings, Tax Effect			41,000
Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member]
Stockholders' Equity Attributable to Parent, Ending Balance		$ (371,000)	(220,000)	(342,000)	[1]	$ (272,000)
Tax Cuts and Jobs Act, Reclassification from AOCI to Retained Earnings, Tax Effect			$ (51,000)
Previously Reported [Member] | AOCI, Accumulated Gain (Loss), Debt Securities, Available-for-sale, Parent [Member]
Stockholders' Equity Attributable to Parent, Ending Balance				(2,278,000)
Previously Reported [Member] | Accumulated Net Gain (Loss) from Cash Flow Hedges Attributable to Parent [Member]
Stockholders' Equity Attributable to Parent, Ending Balance				234,000
Previously Reported [Member] | Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member]
Stockholders' Equity Attributable to Parent, Ending Balance				$ (392,000)

[1] December 31, 2017 AOCI component balances reflect a correction of incorrectly reported year-end balances in the Footnote titled "Other Comprehensive Income (Loss)" of the 2017 Form 10-K, which were presented as $(2,278), $234, and $(392) for securities AFS, cash flow hedges, and minimum pension liability, respectively.

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Note 15 - Net Income Per Share - Basic and Diluted Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended												12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Net income	$ 16,649	$ 17,234	$ 16,543	$ 15,641	$ 14,658	$ 13,876	$ 13,579	$ 13,404	$ 4,946	$ 11,704	$ 10,602	$ 10,791	$ 66,067	$ 55,517	$ 38,043
Weighted average shares outstanding - basic (in shares)													22,598	22,619	22,532
Dilutive securities (in shares)													267	325	451
Weighted average shares outstanding - diluted (in shares)													22,865	22,944	22,983
Net income per share, basic (in dollars per share)	$ 0.74	$ 0.76	$ 0.73	$ 0.69	$ 0.65	$ 0.61	$ 0.60	$ 0.59	$ 0.22	$ 0.52	$ 0.47	$ 0.48	$ 2.92	$ 2.45	$ 1.69
Net income per share, diluted (in dollars per share)	$ 0.73	$ 0.76	$ 0.72	$ 0.68	$ 0.64	$ 0.60	$ 0.59	$ 0.58	$ 0.22	$ 0.51	$ 0.46	$ 0.47	$ 2.89	$ 2.42	$ 1.66

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Note 8 - Other Assets (Details Textual) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Servicing Asset at Fair Value, Amount, Ending Balance	$ 3	$ 4
Principal Amount Outstanding on Loans Managed and Securitized, Total	$ 327	$ 328

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Note 5 - Loans - Outstanding TDRs (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Balance	$ 34	$ 42
Specific Reserve Allocation	34	42
Additional Commitment to Lend	0	0
Commercial and Industrial Loans [Member]
Balance	21	28
Specific Reserve Allocation	21	28
Additional Commitment to Lend	0	0
One to Four Family Residential [Member]
Balance	13	14
Specific Reserve Allocation	13	14
Additional Commitment to Lend	$ 0	$ 0

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Note 5 - Loans - Accretable Amount on PCI Loans (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Balance, beginning of period	$ (69)	$ (106)
Transfers between non-accretable and accretable	0	0
Net accretion into interest income on loans, including loan fees	69	37
Balance, end of period	$ 0	$ (69)

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Note 7 - Goodwill and Core Deposit Intangibles (Details Textual) - USD ($)	Dec. 31, 2019	May 01, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2013	Dec. 31, 1996
Goodwill, Ending Balance	$ 12,513,000		$ 682,000	$ 682,000
King Bancorp Inc. [Member]
Goodwill, Ending Balance	$ 12,000,000	$ 11,831,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles		1,519,000
King Bancorp Inc. [Member] | Core Deposits [Member]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles		$ 1,500,000
Indiana Bank [Member] | Commercial Banking [Member]
Goodwill, Ending Balance						$ 682,000
THE BANCorp [Member] | Core Deposits [Member]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles					$ 2,500,000

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Note 20 - Assets and Liabilities Measured and Reported at Fair Value - Significant Unobservable Inputs (Details) - Impaired Loans [Member] - Fair Value, Inputs, Level 3 [Member] - Appraisal Discount Method [Member] $ in Thousands	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Impaired loans - collateral dependent, fair value	$ 7,253	$ 925
Other real estate owned	$ 493	$ 239
Weighted Average [Member]
Impaired loans - collateral dependent, weighted average of input	0.603	0.099
Other real estate owned - collateral dependent, weighted average of input	0.171	0.220

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Note 19 - Commitments and Contingent Liabilities - Off Balance Sheet Commitments to Extend Credit (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Off balance sheet commitments to extend credit	$ 1,172,933	$ 834,604
Commercial and Industrial Loans [Member]
Off balance sheet commitments to extend credit	416,195	309,920
Construction and Development [Member]
Off balance sheet commitments to extend credit	240,503	179,364
Home Equity Loans [Member]
Off balance sheet commitments to extend credit	155,920	147,907
Credit Cards [Member]
Off balance sheet commitments to extend credit	26,439	20,003
Overdrafts [Member]
Off balance sheet commitments to extend credit	32,715	21,751
Letters of Credit [Member]
Off balance sheet commitments to extend credit	24,193	20,891
Other Off Balance Sheet Commitments [Member]
Off balance sheet commitments to extend credit	40,083	33,369
Future Loan Commitments [Member]
Off balance sheet commitments to extend credit	$ 236,885	$ 101,399

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Note 26 - Quarterly Operating Results (Unaudited) (Tables)

12 Months Ended

Dec. 31, 2019

Notes Tables

Quarterly Financial Information [Table Text Block]

	2019
(in thousands except per share data)	4th quarter		3rd quarter		2nd quarter		1st quarter
Interest income	$	37,795	$	37,973	$	36,968	$	35,029
Interest expense		5,075		5,903		6,194		5,372
Net interest income		32,720		32,070		30,774		29,657
Provision for loan and lease losses		-		400		-		600
Net interest income after provision		32,720		31,670		30,774		29,057
Non-interest income		13,161		13,304		12,263		11,062
Non-interest expenses		26,291		23,957		25,464		22,639
Income before income taxes		19,590		21,017		17,573		17,480
Income tax expense		2,941		3,783		1,030		1,839
Net income	$	16,649	$	17,234	$	16,543	$	15,641
Basic earnings per share	$	0.74	$	0.76	$	0.73	$	0.69
Diluted earnings per share	$	0.73	$	0.76	$	0.72	$	0.68

	2018
(in thousands except per share data)	4th quarter		3rd quarter		2nd quarter		1st quarter
Interest income	$	35,004	$	33,021	$	32,004	$	29,744
Interest expense		5,092		4,500		3,330		2,435
Net interest income		29,912		28,521		28,674		27,309
Provision for loan and lease losses		-		735		1,235		735
Net interest income after provision		29,912		27,786		27,439		26,574
Non-interest income		11,576		11,426		11,435		10,909
Non-interest expenses		24,565		21,781		22,136		21,027
Income before income taxes		16,923		17,431		16,738		16,456
Income tax expense		2,265		3,555		3,159		3,052
Net income	$	14,658	$	13,876	$	13,579	$	13,404
Basic earnings per share	$	0.65	$	0.61	$	0.60	$	0.59
Diluted earnings per share	$	0.64	$	0.60	$	0.59	$	0.58

	2017
(in thousands except per share data)	4th quarter		3rd quarter		2nd quarter		1st quarter
Interest income	$	29,098	$	28,120	$	27,026	$	26,655
Interest expense		2,069		1,947		1,781		1,449
Net interest income		27,029		26,173		25,245		25,206
Provision for loan and lease losses		900		150		600		900
Net interest income after provision		26,129		26,023		24,645		24,306
Non-interest income		11,407		10,945		11,525		10,622
Non-interest expenses		27,048		21,168		21,209		20,995
Income before income taxes		10,488		15,800		14,961		13,933
Income tax expense		5,542		4,096		4,359		3,142
Net income	$	4,946	$	11,704	$	10,602	$	10,791
Basic earnings per share	$	0.22	$	0.52	$	0.47	$	0.48
Diluted earnings per share	$	0.22	$	0.51	$	0.46	$	0.47

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Note 22 - Derivative Financial Instruments - Derivative Position Designated As a Cash Flow Hedge (Details) - Designated as Hedging Instrument [Member] - Cash Flow Hedging [Member] - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Notional amount	$ 30,000
Pay fixed swap rate	1.82%
Fair value	$ (51)	$ 516
Interest Rate Swap, Maturing December 6, 2021 [Member]
Notional amount	$ 10,000
Receive (variable index)	US 3 Month LIBOR
Pay fixed swap rate	1.89%
Fair value	$ (45)	193
Interest Rate Swap, Maturing December 6, 2020 [Member]
Notional amount	$ 20,000
Receive (variable index)	US 3 Month LIBOR
Pay fixed swap rate	1.79%
Fair value	$ (6)	$ 323

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Note 17 - Stock-based Compensation (Tables)

12 Months Ended

Dec. 31, 2019

Notes Tables

Schedule of Share-based Compensation Arrangement by Share-based Payment Award Fair Value Assumptions and Methodology [Table Text Block]

	2019			2018			2017
Dividend yield		2.54	%		2.56	%		2.72	%
Expected volatility		20.39	%		20.17	%		19.47	%
Risk free interest rate		2.52	%		2.96	%		2.29	%
Expected life of SARs (years)	7.2			7.0			7.0

Share-based Payment Arrangement, Expensed and Capitalized, Amount [Table Text Block]

	Year Ended December 31, 2019
(in thousands)	Stock Appreciation Rights			Restricted Stock Awards			Restricted Stock Units			Performance Stock Units			Total
Expense	$	345		$	1,185		$	329		$	1,719		$	3,578
Deferred tax benefit		(72	)		(249	)		(69	)		(361	)		(751	)
Total net expense	$	273		$	936		$	260		$	1,358		$	2,827

	Year Ended December 31, 2018
(in thousands)	Stock Appreciation Rights			Restricted Stock Awards			Restricted Stock Units			Performance Stock Units			Total
Expense	$	379		$	1,100		$	248		$	2,300		$	4,027
Deferred tax benefit		(80	)		(231	)		(52	)		(483	)		(846	)
Total net expense	$	299		$	869		$	196		$	1,817		$	3,181

	Year Ended December 31, 2017
(in thousands)	Stock Appreciation Rights			Restricted Stock Awards			Restricted Stock Units			Performance Stock Units			Total
Expense	$	280		$	1,032		$	219		$	1,361		$	2,892
Deferred tax benefit		(59	)		(216	)		(46	)		(286	)		(607	)
Total net expense	$	221		$	816		$	173		$	1,075		$	2,285

Share-based Payment Arrangement, Nonvested Award, Cost [Table Text Block]

(in thousands) Year ended	Stock Appreciation Rights		Restricted Stock Awards		Restricted Stock Units		Performance Stock Units		Total
2020	$	306	$	1,035	$	2	$	853	$	2,196
2021		248		816		—		462		1,526
2022		193		547		—		—		740
2023		118		302		—		—		420
2024		11		24		—		—		35
2025		—		—		—		—		-
Total estimated expense	$	876	$	2,724	$	2	$	1,315	$	4,917

Share-based Payment Arrangement, Option and Stock Appreciation Rights, Activity [Table Text Block]

													Weighted
							Weighted				Weighted		average
							average		Aggregate		average		remaining
				Exercise			exercise		intrinsic		fair		contractual
(in thousands, except per share and years)	SARs			price			price		value(1)		value		life (in years)
Outstanding, January 1, 2017		735		$14.02	-	$33.08	$	17.78	$	21,443	$	3.26		5.5
Granted		46		40.00	-	40.00		40.00		—		6.34
Exercised		(77	)	14.02	-	17.89		15.41		1,855		3.18
Forfeited		—			-			-		—		—
Outstanding, December 31, 2017		704		$14.02	-	$40.00	$	19.51	$	12,923	$	3.47		5.1
Outstanding, January 1, 2018		704		$14.02	-	$40.00	$	19.51	$	12,923	$	3.47		5.1
Granted		100		35.90	-	39.32		37.75		—		6.07
Exercised		(73	)	14.02	-	19.37		15.32		1,654		3.43
Forfeited		—			-			-		—		—
Outstanding, December 31, 2018		731		$14.02	-	$40.00	$	22.42	$	8,422	$	3.83		5.2
Outstanding, January 1, 2019		731		$14.02	-	$40.00	$	22.42	$	8,422	$	3.83		5.2
Granted		53		36.65	-	38.18		37.01		213		6.24
Exercised		(143	)	14.02	-	22.96		15.99		3,025		3.47
Forfeited		—			-			-		—		—
Outstanding, December 31, 2019		641		$14.02	-	$40.00	$	25.06	$	10,250	$	4.10		5.3
Vested and exercisable		439		$14.02	-	$40.00	$	20.53	$	9,017	$	3.42		4.0
Unvested		202		22.96	-	40.00		34.93		1,233		5.59		7.9
Outstanding, December 31, 2019		641		$14.02	-	$40.00	$	25.06	$	10,250	$	4.10		5.3
Vested during 2019		91		$19.37	-	$40.00	$	28.80	$	1,110	$	4.66

Schedule of Share-based Compensation, Stock Options and Stock Appreciation Rights, Award Expiration Period [Table Text Block]

(in thousands, except per share data)
Expiration	SARs Outstanding		SARs Exercisable		Weighted Average Exercise Price
2020		3		3	$	14.02
2021		27		27		15.88
2022		108		108		15.25
2023		80		80		15.26
2024		73		73		19.37
2025		63		49		23.00
2026		88		55		25.84
2027		46		21		40.00
2028		100		23		37.75
2029		53		—		37.01
		641		439	$	25.06

Schedule of Nonvested Share Activity [Table Text Block]

				Grant date
				weighted
(in thousands, except per share data)	RSAs			average cost
Unvested at January 1, 2017		145		$	21.57
Shares awarded		29			44.85
Restrictions lapsed and shares released		(47	)		19.79
Shares forfeited		(8	)		25.18
Unvested at December 31, 2017		119		$	27.62
Unvested at January 1, 2018		119		$	27.62
Shares awarded		40			35.89
Restrictions lapsed and shares released		(44	)		23.62
Shares forfeited		(5	)		31.35
Unvested at December 31, 2018		110		$	32.09
Unvested at January 1, 2019		110		$	32.09
Shares awarded		40			34.88
Restrictions lapsed and shares released		(40	)		28.74
Shares forfeited		(2	)		35.36
Unvested at December 31, 2019		108		$	34.31

Share-based Payment Arrangement, Restricted Stock Unit, Activity [Table Text Block]

Grant Year	Vesting Period in Years	Fair Value		Expected Shares to be Awarded
2017	3	$	35.66	61,893
2018	3		31.54	50,352
2019	3		32.03	43,603

Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares to be Issued Upon Exercise and Remaining Shares Available for Future Issuance [Table Text Block]

	Number of				Shares
	shares to be		Weighted		available for
	issued upon		average		future
Plan category (in thousands)	exercising/vesting		exercise price		issuance (a)
Equity compensation plans approved by security holders:
Stock Appreciation Rights	(b)		(b)			547
Restricted Stock Awards		108		N/A	(a)
Restricted Stock Units		10		N/A	(a)
Performance Stock Units	(c)			N/A	(a)
Total shares		118				547

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Note 22 - Derivative Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2019

Designated as Hedging Instrument [Member]

Notes Tables

Schedule of Interest Rate Derivatives [Table Text Block]

							Fair value
(dollars in thousands)				Pay fixed			December 31,
Notional		Maturity	Receive (variable) index	swap rate			2019			2018
$	10,000	12/6/2021	US 3 Month LIBOR		1.89	%	$	(45	)	$	193
	20,000	12/6/2020	US 3 Month LIBOR		1.79			(6	)		323
$	30,000				1.82		$	(51	)	$	516

Not Designated as Hedging Instrument [Member]

Notes Tables

Schedule of Interest Rate Derivatives [Table Text Block]

	Receiving				Paying
	December 31,		December 31,		December 31,		December 31,
(dollars in thousands)	2019		2018		2019		2018
Notional amount	$	99,000	$	55,505	$	99,000	$	55,505
Weighted average maturity (years)		8.2		8.0		8.2		8.0
Fair value	$	2,696	$	519	$	2,767	$	543

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Note 9 - Income Taxes - Components of Income Tax (Benefit) Expense Recorded Directly to Stockholders' Equity (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Unrealized (loss) gain on securities available for sale	$ 1,757	$ (812)	$ (531)
Reclassification adjustment for securities losses realized in income	0	0	81
Unrealized gain on derivatives	(120)	46	112
Minimum pension liability adjustment	(58)	46	(9)
Total income tax (benefit) expense recorded directly to stockholders' equity	$ 1,579	$ (720)	$ (347)

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Note 3 - Acquisition of KSB (Details Textual) - USD ($) $ in Thousands		12 Months Ended
	May 01, 2019	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Goodwill, Ending Balance		$ 12,513	$ 682	$ 682
King Bancorp Inc. [Member]
Payments to Acquire Businesses, Gross	$ 28,000
Goodwill, Ending Balance	$ 11,831	12,000
Business Acquisition, Pro Forma Revenue		$ 4,000

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Note 4 - Securities Available for Sale - Available-for-sale Securities by Contractual Maturity (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Due within 1 year, amortized cost	$ 129,251
Due within 1 year, fair value	129,311
Due after 1 but within 5 years, amortized cost	32,124
Due after 1 but within 5 years, fair value	32,208
Due after 5 but within 10 years, amortized cost	6,162
Due after 5 but within 10 years, fair value	6,219
Due after 10 years, amortized cost	108,202
Due after 10 years, fair value	109,139
Mortgage-backed securities – government agencies, amortized cost	193,574
Mortgage-backed securities – government agencies, fair value	193,861
Total securities available-for-sale, amortized cost	469,313	$ 443,742
Total securities available-for-sale, fair value	$ 470,738	$ 436,995

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Note 10 - Deposits - Composition of Deposits (Details) - USD ($) $ in Thousands		Dec. 31, 2019	Dec. 31, 2018
Non-interest bearing demand deposits		$ 810,475	$ 711,023
Interest bearing demand		979,595	892,867
Savings		169,622	155,007
Money market		742,029	688,744
Time deposits of $250,000 or more		81,412	55,182
Other time deposits		350,805	291,533
Total time deposits	[1]	432,217	346,715
Total interest bearing deposits		2,323,463	2,083,333
Total deposits		$ 3,133,938	$ 2,794,356

[1] Includes $30 million in brokered deposits as of December 31, 2019 and 2018.

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Note 17 - Stock-based Compensation - Performance-based Restricted Stock Units (Details) - $ / shares	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Expected shares to be awarded (in shares)	547,000
Performance Shares [Member]
Vesting period (Year)	3 years
Performance Shares [Member] | Executive Officer [Member]
Vesting period (Year)	3 years	3 years	3 years
Fair value at grant date (in dollars per share)	$ 32.03	$ 31.54	$ 35.66
Expected shares to be awarded (in shares)	43,603	50,352	61,893

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Note 17 - Stock-based Compensation - Unrecognized Stock-based Compensation Expense (Details) $ in Thousands	Dec. 31, 2019 USD ($)
2020	$ 2,196
2021	1,526
2022	740
2023	420
2024	35
2025	0
Total estimated expense	4,917
Stock Appreciation Rights (SARs) [Member]
2020	306
2021	248
2022	193
2023	118
2024	11
2025	0
Total estimated expense	876
Restricted Stock [Member]
2020	1,035
2021	816
2022	547
2023	302
2024	24
2025	0
Total estimated expense	2,724
Restricted Stock Units (RSUs) [Member]
2020	2
2021	0
2022	0
2023	0
2024	0
2025	0
Total estimated expense	2
Performance Shares [Member]
2020	853
2021	462
2022	0
2023	0
2024	0
2025	0
Total estimated expense	$ 1,315

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Note 11 - Securities Sold Under Agreements to Repurchase (Tables)

12 Months Ended

Dec. 31, 2019

Notes Tables

Schedule of Short-term Debt [Table Text Block]

December 31, (Dollars in thousands)	2019			2018
Outstanding balance at end of period	$	31,895		$	36,094
Weighted average interest rate at end of period		0.22	%		0.27	%

Years Ended December 31, (dollars in thousands)	2019			2018			2017
Average outstanding balance during the period	$	38,555		$	62,580		$	70,187
Average interest rate during the period		0.26	%		0.25	%		0.19	%
Maximum outstanding at any month end during the period	$	52,599		$	74,725		$	75,365

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Note 7 - Goodwill and Core Deposit Intangibles (Tables)

12 Months Ended

Dec. 31, 2019

Notes Tables

Schedule of Goodwill [Table Text Block]

December 31, (in thousands)	2019			2018
Balance at beginning of period	$	682		$	682
Goodwill acquired		12,144			—
Recast adjustments		(313	)		—
Impairment		—			—
Balance at end of period	$	12,513		$	682

Finite-lived Intangible Assets Amortization Expense [Table Text Block]

Years ended December 31, (in thousands)	2019			2018			2017
Balance, beginning of period	$	1,057		$	1,225		$	1,405
Additions		1,519			—			—
Amortized to expense		(291	)		(168	)		(180	)
Balance, end of period	$	2,285		$	1,057		$	1,225

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block]

(in thousands)
2020	$	323
2021		302
2022		295
2023		259
2024		241
Beyond 2024		865
Total future payments	$	2,285

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Note 27 - Revenue From Contracts With Customers (Details Textual) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Trading Activity Charges Reducing Product Sales Commissions and Fees	$ 516,000	$ 544,000
Contract with Customer, Asset, after Allowance for Credit Loss, Total	0
Contract with Customer, Liability, Total	0
Fiduciary and Trust [Member]
Accrued Fees and Other Revenue Receivable	$ 2,100,000	$ 1,900,000

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Note 16 - Employee Benefit Plans (Tables)

12 Months Ended

Dec. 31, 2019

Notes Tables

Schedule of Expected Benefit Payments [Table Text Block]

(in thousands)
2020	$	84
2021		—
2022		—
2023		—
2024		137
Beyond 2024		3,141
Total future payments	$	3,362

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Note 23 - Regulatory Matters (Details Textual)		Dec. 31, 2019	Jan. 01, 2019	Dec. 31, 2018	Jan. 01, 2018	Jan. 01, 2017	Jan. 01, 2016
Capital Conservation Buffer			2.50%		1.875%	1.25%	0.625%
Subsidiaries [Member]
Common Equity Tier One Risk Based Capital, Required to Be Well Capitalized to Risk Weighted Assets		6.50%		6.50%
Tier One Risk Based Capital Required to be Well Capitalized to Risk Weighted Assets	[1]	8.00%		8.00%
Capital Required to be Well Capitalized to Risk Weighted Assets	[1]	10.00%		10.00%
Tier One Leverage Capital Required to be Well Capitalized to Average Assets	[2]	5.00%		5.00%

[1] Ratio is computed in relation to risk-weighted assets.

[2] Ratio is computed in relation to average assets.

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Note 24 - Stock Yards Bancorp, Inc. (Parent Company Only) - Condensed Statements of Cash Flows (Details) - USD ($) $ in Thousands	3 Months Ended												12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Operating activities:
Net income	$ 16,649	$ 17,234	$ 16,543	$ 15,641	$ 14,658	$ 13,876	$ 13,579	$ 13,404	$ 4,946	$ 11,704	$ 10,602	$ 10,791	$ 66,067	$ 55,517	$ 38,043
Adjustments to reconcile net income to net cash provided by operating activities:
Loss on the disposal of premises and equipment													372	56	0
Stock compensation expense													3,578	4,027	2,892
Excess tax benefits from stock- based compensation arrangements													(812)	(549)	(1,463)
Depreciation, amortization and accretion, net													4,880	5,782	13,640
Proceeds from liquidation of private investment fund													0	(113)	(92)
Net cash provided by operating activities													58,436	65,889	53,676
Investing activities:
Proceeds from sale of fixed assets													2,907	230	0
Cash for acquisition, net of cash acquired													(24,686)	0	0
Net cash provided by (used in) investing activities													(163,173)	(11,570)	(114,705)
Financing activities:
Repurchase of common stock													(11,817)	(2,004)	(2,389)
Share repurchases related to compensation plans													(272)	(154)	(216)
Cash dividends paid													(23,542)	(21,766)	(18,077)
Net cash used in financing activities													155,522	5,372	152,304
Net increase (decrease) in cash													50,785	59,691	91,275
Cash and cash equivalents at beginning of period				198,939				139,248				47,973	198,939	139,248	47,973
Cash and cash equivalents at end of period	249,724				198,939				139,248				249,724	198,939	139,248
Parent Company [Member]
Operating activities:
Net income													66,067	55,517	38,043
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in undistributed net income of subsidiaries													5,802	(37,207)	(21,071)
Loss on the disposal of premises and equipment													0	(10)	0
Stock compensation expense													3,578	4,027	2,892
Excess tax benefits from stock- based compensation arrangements													(812)	(549)	(1,463)
Depreciation, amortization and accretion, net													0	0	4
Proceeds from liquidation of private investment fund													0	0	(81)
Change in other assets													(3,863)	(1,080)	5,943
Change in other liabilities													(81)	220	10
Net cash provided by operating activities													70,691	20,918	24,277
Investing activities:
Proceeds from sale of fixed assets													0	13	0
Cash for acquisition, net of cash acquired													(28,000)	0	0
Proceeds from liquidation of private investment fund													0	0	81
Net cash provided by (used in) investing activities													(28,000)	13	81
Financing activities:
Repurchase of common stock													(11,817)	(2,004)	(2,389)
Share repurchases related to compensation plans													(272)	(154)	(216)
Cash dividends paid													(23,543)	(21,766)	(18,077)
Net cash used in financing activities													(35,632)	(23,924)	(20,682)
Net increase (decrease) in cash													7,059	(2,993)	3,676
Cash and cash equivalents at beginning of period				$ 7,655				$ 10,648				$ 6,972	7,655	10,648	6,972
Cash and cash equivalents at end of period	$ 14,714				$ 7,655				$ 10,648				$ 14,714	$ 7,655	$ 10,648

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands		12 Months Ended
		Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Operating activities:
Net income		$ 66,067	$ 55,517	$ 38,043
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan and lease losses		1,000	2,705	2,550
Depreciation, amortization and accretion, net		4,880	5,782	13,640
Deferred income tax (benefit) expense		(5,852)	(268)	3,971
Loss on sale of securities available for sale		0	0	232
Gain on other investment activities		0	(113)	(92)
Gain on sales of mortgage loans held for sale		(1,907)	(1,443)	(1,989)
Origination of mortgage loans held for sale		(108,020)	(71,807)	(97,623)
Proceeds from sale of mortgage loans held for sale		102,854	74,539	99,861
Bank owned life insurance income	[1]	(1,031)	(1,129)	(1,159)
Loss on the disposal of premises and equipment		372	56	0
Loss (gain) on the sale of other real estate owned		7	(102)	(39)
Stock compensation expense		3,578	4,027	2,892
Excess tax benefits from share-based compensation arrangements		(812)	(549)	(1,463)
Net change in accrued interest receivable and other assets		(2,786)	(582)	(13,848)
Net change in accrued interest payable and other liabilities		85	(744)	8,700
Net cash provided by operating activities		58,436	65,889	53,676
Investing activities:
Purchases of securities available for sale		(702,441)	(768,407)	(661,086)
Proceeds from sales of securities available for sale		12,427	0	421
Proceeds from maturities and paydowns of securities available for sale		678,039	901,512	652,411
Purchase of Federal Home Loan Bank stock		0	(2,724)	(2,254)
Proceeds from redemption of Federal Home Loan Bank stock		591	0	955
Proceeds from redemption of acquired Federal Reserve Bank stock		490	0	0
Proceeds from redemption of interest bearing due from banks		1,761	0	0
Net change in loans		(131,734)	(137,835)	(105,867)
Purchases of premises and equipment		(5,098)	(7,057)	(2,786)
Proceeds from sales of premises and equipment		2,907	230	0
Proceeds from surrender of acquired bank owned life insurance		3,431	0	0
Proceeds from bank owned life insurance mortality benefit		1,878	0	977
Other investment activities		(2,766)	(1,184)	92
Proceeds from sales of other real estate owned		2,028	3,895	2,432
Cash for acquisition, net of cash acquired		(24,686)	0	0
Net cash used in investing activities		(163,173)	(11,570)	(114,705)
Financing activities:
Net change in deposits		213,913	216,061	57,747
Net change in securities sold under agreements to repurchase and federal funds purchased		(5,125)	(185,484)	116,856
Proceeds from Federal Home Loan Bank advances		120,000	120,000	120,000
Repayments of Federal Home Loan Bank advances		(131,726)	(121,281)	(121,617)
Repayment of acquired bank holding company line of credit		(2,300)	0	0
Redemption of acquired bank subordinated debentures		(3,609)	0	0
Repurchase of common stock		(11,817)	(2,004)	(2,389)
Share repurchases related to compensation plans		(272)	(154)	(216)
Cash dividends paid		(23,542)	(21,766)	(18,077)
Net cash provided by financing activities		155,522	5,372	152,304
Net change in cash and cash equivalents		50,785	59,691	91,275
Cash and cash equivalents at beginning of period		198,939	139,248	47,973
Cash and cash equivalents at end of period		249,724	198,939	139,248
Supplemental cash flow information:
Income tax payments, net of refunds		13,938	7,227	15,838
Cash paid for interest		22,666	14,827	7,158
Supplemental non-cash activity:
Initial recognition of right-of-use lease assets		16,747	0	0
Initial recognition operating lease liabilities		18,067	0	0
Loans purchased and not settled		0	4,992	0
Transfers from loans to real estate acquired in settlement of loans		1,160	2,170	0
Fair value of assets acquired		204,613	0	0
Cash paid in acquisition		28,000	0	0
Liabilities assumed		$ 176,613	$ 0	$ 0

[1] Outside of the scope of ASC 606

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Note 20 - Assets and Liabilities Measured and Reported at Fair Value

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Fair Value Measurement and Measurement Inputs, Recurring and Nonrecurring [Text Block]

(20) Assets and Liabilities Measured and Reported at Fair Value

Fair value represents the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values:

●     Level 1: Valuation is based upon quoted (unadjusted) prices for identical instruments traded in active markets.

●     Level 2: Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.

●     Level 3: Valuation is generated from model-based techniques that use significant assumptions not observable in the market. These unobservable assumptions would reflect internal estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques could include pricing models, discounted cash flows and other similar techniques.

Authoritative guidance requires maximization of use of observable inputs and minimization of use of unobservable inputs in fair value measurements. Where there exists limited or no observable market data, Bancorp derives its own estimates by generally considering characteristics of the asset/liability, the current economic and competitive environment and other factors. For this reason, results cannot be determined with precision and may not be realized on an actual sale or immediate settlement of the asset or liability.

Bancorp’s AFS securities portfolio and interest rate swaps are recorded at fair value on a recurring basis.

All AFS securities are priced using standard industry models or matrices with various assumptions such as yield curves, volatility, prepayment speeds, default rates, time value, credit rating and market prices for similar instruments. These assumptions are observable in the market place and can be derived from or supported by observable data. These measurements are classified as Level 2.

Fair value measurements for interest rate swaps are based on benchmark forward yield curves and other relevant observable market data. For purposes of potential valuation adjustments to derivative positions, Bancorp evaluates the credit risk of its counterparties as well as its own credit risk. To date, Bancorp has not realized any losses due to counterparty’s inability to perform and the change in value of derivative assets and liabilities attributable to credit risk was not significant during the reporting period. Interest rate swaps are valued using primarily Level 2 inputs.

MSRs, impaired loans and OREO are recorded at fair value on a non-recurring basis, generally in the application of lower of cost or market adjustments or write-downs of specific assets.

Carrying values of assets measured at fair value on a recurring basis follows:

(in thousands)	Fair value at December 31, 2019
Assets	Total		Level 1		Level 2		Level 3
Securities available for sale:
U.S. Treasury and other U.S. government obligations	$	49,897	$	49,897	$	—	$	—
Government sponsored enterprise obligations		209,944		—		209,944		—
Mortgage backed securities - government agencies		193,861		—		193,861		—
Obligations of states and political subdivisions		17,036		—		17,036		—
Total securities available for sale		470,738		49,897		420,841		—
Interest rate swaps		2,696		—		2,696		—
Total assets	$	473,434	$	49,897	$	423,537	$	—
Liabilities
Interest rate swaps	$	2,767	$	—	$	2,767	$	—

(in thousands)	Fair value at December 31, 2018
Assets	Total		Level 1		Level 2		Level 3
Securities available for sale:
Government sponsored enterprise obligations	$	261,039	$	—	$	261,039	$	—
Mortgage backed securities - government agencies		146,277		—		146,277		—
Obligations of states and political subdivisions		29,679		—		29,679		—
Total securities available for sale		436,995		—		436,995		—
Interest rate swaps		1,035		—		1,035		—
Total assets	$	438,030	$	—	$	438,030	$	—
Liabilities
Interest rate swaps	$	543	$	—	$	543	$	—

For the securities portfolio, Bancorp monitors the valuation technique used by pricing agencies to ascertain when transfers between levels have occurred. The nature of other assets and liabilities measured at fair value is such that transfers in and out of any level are expected to be rare. For the year ended December 31, 2019, there were no transfers between Levels 1, 2, or 3.

Bancorp had no financial instruments classified within Level 3 of the valuation hierarchy for assets and liabilities measured at fair value on a recurring basis at December 31, 2019 or 2018.

Discussion of assets measured at fair value on a non-recurring basis follows:

MSRs – On at least a quarterly basis, MSRs are evaluated for impairment based upon the fair value of the MSRs as compared to carrying amount. Fair value is based on a valuation model that calculates the present value of estimated net servicing income. The model incorporates assumptions that market participants would use in estimating future net servicing income. These measurements are classified as Level 3. At December 31, 2019 and 2018, there was no valuation allowance for MSRs, as the fair value exceeded the cost. Accordingly, the MSRs are not included in the following tabular disclosure for December 31, 2019 or 2018.

Impaired loans – Collateral-dependent impaired loans generally include loans that have received partial charge-downs or specific reserve allocations needed to record the loan at fair value. Fair value is commonly based on recent real estate appraisals or other sources of valuations based upon the underlying collateral. Fair value of impaired loans was primarily measured based on the value of collateral securing these loans. Impaired loans are classified within Level 3 of the fair value hierarchy. Collateral may be real estate and/or business assets including equipment, inventory, and/or accounts receivable. Bancorp typically determines the value of real estate collateral based on independent appraisals performed by qualified licensed appraisers. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Appraised values are discounted for costs to sell and may be discounted further based on management’s historical knowledge, changes in market conditions from the date of the most recent appraisal, and/or management’s expertise and knowledge of the customer and the customer’s business. Such discounts by management are subjective and are typically significant unobservable inputs for determining fair value. For other assets, Bancorp relies on both internal and third party assessments of asset value, based on information provided by the borrower, following methodologies similar to those described for real estate. As of December 31, 2019, total impaired collateral dependent loans charged down to their fair value and impaired loans with a valuation allowance were $8.4 million and the specific allowance totaled $1.2 million, resulting in a fair value of $7.3 million, compared with total collateral dependent loans charged down to their fair value and impaired loans with a valuation allowance of $967,000, and the specific allowance allocation totaling $42,000, resulting in a fair value of $925,000 at December 31, 2018. Losses represent charge offs and changes in specific allowances for the periods indicated.

OREO – Assets acquired through or instead of loan foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. These assets are subsequently accounted for at lower of cost or fair value less estimated costs to sell. Fair value is commonly based on recent real estate appraisals or valuations performed by internal or external parties which use judgments and assumptions that are property-specific and sensitive to changes in the overall economic environment. Appraisals may be further discounted based on management’s historical knowledge and/or changes in market conditions from the date of the most recent appraisal. Many of these inputs are not observable and, accordingly, these measurements are classified as Level 3. For OREO in the following table, fair value is the carrying value of only parcels of OREO which have a carrying value equal to appraised value. Losses represent write-downs which occurred during the period indicated. At December 31, 2019 and 2018, carrying value of OREO was $493,000 and $1 million.

Below are carrying values of assets measured at fair value on a non-recurring basis.

	Fair value at December 31, 2019								Losses
(in thousands)	Total		Level 1		Level 2		Level 3		Recorded
Impaired loans	$	7,253	$	—	$	—	$	7,253	$	(20	)
Other real estate owned		493		—		—		493		(70	)

	Fair value at December 31, 2018								Losses
(in thousands)	Total		Level 1		Level 2		Level 3		Recorded
Impaired loans	$	925	$	—	$	—	$	925	$	(514	)
Other real estate owned		239		—		—		239		(32	)

For Level 3 assets measured at fair value on a non-recurring basis, the significant unobservable inputs used in the fair value measurements are presented below.

December 31, 2019
(dollars in thousands)	Fair Value		Valuation Technique	Unobservable Inputs	Weighted Average
Impaired loans - collateral dependent	$	7,253	Appraisal	Appraisal discounts		60.3	%
Other real estate owned		493	Appraisal	Appraisal discounts		17.1

December 31, 2018
(dollars in thousands)	Fair Value		Valuation Technique	Unobservable Inputs	Weighted Average
Impaired loans - collateral dependent	$	925	Appraisal	Appraisal discounts		9.9	%
Other real estate owned		239	Appraisal	Appraisal discounts		22.0

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Note 12 - FHLB Advances

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Federal Home Loan Bank Advances, Disclosure [Text Block]

(12) FHLB Advances

Bancorp had outstanding 57 separate advances totaling $80 million as of December 31, 2019, as compared with 14 separate advances totaling $48 million as of December 31, 2018. As a result of the KSB acquisition, Bancorp assumed 46 advances totaling $43 million, with maturities ranging from 2019 to 2028. These advances were discounted to fair value as of the acquisition date. See the Note titled “Acquisition of KSB” in this section of the filing for additional detail. As of December 31, 2019, for 15 advances totaling $50 million, all of which are non-callable, interest payments are due monthly, with principal due at maturity. For the remaining advances, principal and interest payments are due monthly based on an amortization schedule.

The following is a summary of the contractual maturities and average effective rates of outstanding advances:

(dollars in thousands)	December 31, 2019					December 31, 2018
Maturity			Weighted average					Weighted average
Year	Advance		Fixed Rate			Advance		Fixed Rate
2020	$	50,004		1.99		$	1,691		2.23
2021		2,400		2.52			215		2.12
2023		456		1.00			—		—
2024		2,023		2.36			2,240		2.36
2025		3,774		2.41			4,626		2.42
2026		8,156		1.96			8,185		1.99
2027		7,445		1.73			—		—
2028		5,695		2.32			1,220		1.49
Total	$	79,953		2.02	%	$	18,177		2.14	%

Payments based on amortization schedules over the next five years are as follows:

(dollars in thousands)
Year
2020	$	55,680
2021		6,004
2022		3,193
2023		2,655
2024		3,122
2025 and beyond		9,299

FHLB advances are collateralized by certain CRE and residential real estate mortgage loans under a blanket mortgage collateral pledge agreement and FHLB stock. Bancorp views these advances to be an effective alternative to brokered deposits to fund loan growth. At December 31, 2019, and 2018, the amount of available credit from the FHLB totaled $599 million and $537 million. Bancorp also had $105 million in FFP lines available from correspondent banks at both December 31, 2019 and 2018.

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Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands		12 Months Ended
		Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Interest income:
Loans and leases, including fees		$ 134,342	$ 118,467	$ 99,924
Federal funds sold and interest bearing due from banks		2,933	1,307	1,330
Mortgage loans held for sale		182	166	191
Securities available for sale
Taxable		9,839	9,001	8,365
Tax-exempt		469	832	1,089
Total interest income		147,765	129,773	110,899
Interest expense:
Deposits		20,560	13,441	5,975
Securities sold under agreements to repurchase and other short-term borrowings		318	992	316
Federal Home Loan Bank advances		1,640	924	955
Subordinated debentures		26	0	0
Total interest expense		22,544	15,357	7,246
Net interest income		125,221	114,416	103,653
Provision for loan and lease losses		1,000	2,705	2,550
Net interest income after provision		124,221	111,711	101,103
Non-interest income:
Non-interest income		22,643	21,536	20,505
Mortgage banking income	[1]	3,090	2,568	3,221
Loss on sale of securities available for sale		0	0	(232)
Bank owned life insurance	[1]	1,031	1,129	1,159
Total non-interest income		49,790	45,346	44,499
Non-interest expenses:
Compensation		50,319	46,104	42,581
Employee benefits		11,038	10,098	9,987
Net occupancy and equipment		8,417	7,653	7,393
Technology and communication		9,591	8,897	7,957
Marketing and business development		3,627	3,099	2,716
Postage, printing and supplies		1,652	1,558	1,475
Legal and professional		3,014	2,614	2,393
FDIC insurance		245	961	960
Amortization of investments in tax credit partnerships		1,078	1,237	7,124
Capital and deposit based taxes		3,870	3,325	3,440
Other		5,500	3,963	4,394
Total non-interest expenses		98,351	89,509	90,420
Income before income tax expense		75,660	67,548	55,182
Income tax expense		9,593	12,031	17,139
Net income		$ 66,067	$ 55,517	$ 38,043
Net income per share, basic (in dollars per share)		$ 2.92	$ 2.45	$ 1.69
Net income per share, diluted (in dollars per share)		$ 2.89	$ 2.42	$ 1.66
Weighted average outstanding shares:
Basic (in shares)		22,598	22,619	22,532
Diluted (in shares)		22,865	22,944	22,983
Fiduciary and Trust [Member]
Non-interest income:
Non-interest income		$ 22,643	$ 21,536	$ 20,505
Deposit Account [Member]
Non-interest income:
Non-interest income		5,513	5,759	6,172
Credit and Debit Card [Member]
Non-interest income:
Non-interest income		8,123	6,769	5,979
Treasury Management [Member]
Non-interest income:
Non-interest income		4,992	4,571	4,297
Investment Advisory, Management and Administrative Service [Member]
Non-interest income:
Non-interest income		1,498	1,677	1,629
Product and Service, Other [Member]
Non-interest income:
Non-interest income		$ 2,900	$ 1,337	$ 1,769

[1] Outside of the scope of ASC 606

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Note 16 - Employee Benefit Plans

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Pension and Other Postretirement Benefits Disclosure [Text Block]

(16) Employee Benefit Plans

Bancorp has a combined employee stock ownership and profit sharing plan. The plan is a defined contribution plan and is available to all employees meeting certain eligibility requirements. In general, for employees who work more than 1,000 hours per year, Bancorp matches employee contributions up to 6% of the employee’s salary, and contributes an amount of Bancorp stock equal to 2% of the employee’s salary. Employer matching expenses related to contributions to the plan for 2019, 2018, and 2017 were $2.6 million, $2.2 million and $2.0 million and are recorded on the consolidated statements of income within employee benefits. Employee and employer contributions are made in accordance with the terms of the plan. As of December 31, 2019 and 2018, the KSOP held 508,000 and 568,000 shares of Bancorp stock, respectively.

In addition Bancorp has non-qualified plans into which directors and certain senior officers may defer director fees or salary/incentives. Bancorp matched certain executives’ deferrals into the senior officers’ plan amounting to approximately $241,000, $250,000 and $232,000 in 2019, 2018 and 2017. At December 31, 2019 and 2018, the amounts included in other liabilities in the consolidated financial statements for this plan were $10.1 million and $8.6 million. The total was comprised primarily of participants’ contributions, and represented the fair value of mutual fund investments directed by plan participants.

Bancorp sponsors an unfunded, non-qualified, defined benefit retirement plan for three key officers (one current and two retired), and has no plans to increase the number of or the benefits to participants. All participants are fully vested and based on 25 years of service. Bancorp uses a December 31 measurement date for this plan. The accumulated benefit obligation for the plan included in other liabilities in the consolidated financial statements was $2.3 million and $2.1 million as of December 31, 2019 and December 31, 2018. Actuarially determined pension costs are expensed and accrued over the service period and benefits are paid from Bancorp’s assets. Bancorp maintains life insurance policies, for which it is the beneficiary, for defined benefit plan participants and certain former executives. Income from these policies serves to offset costs of benefits. The liability for Bancorp’s plan met the benefit obligation as of December 31, 2019 and 2018. Net periodic benefit cost was immaterial for all periods.

Benefits expected to be paid in each year from 2020 to 2024 and beyond are listed in the table below.

(in thousands)
2020	$	84
2021		—
2022		—
2023		—
2024		137
Beyond 2024		3,141
Total future payments	$	3,362

Expected benefits to be paid are based on the same assumptions used to measure Bancorp’s benefit obligation at December 31, 2019. There are no obligations for other post-retirement and post-employment benefits.