Stock Yards Bancorp in Louisville, Ky., reported much better-than-expected earnings in the first quarter one the strength of higher mortgage revenue and net interest income.

The $2.5 billion-asset company said Wednesday that net income climbed 13% from the same period last year, to $9.3 million. Earnings per share of 62 cents topped by 6 cents the average estimates of analysts polled by Bloomberg.

Noninterest income grew 2%, to $9.7 million, mostly on a 41% increase in revenue from Stock Yards' mortgage banking business.

Though the net interest margin fell 4 basis points, to 3.72%, net interest income edged up 6.5% year-over-year, to $21.6 million, as the total loans increased 8.4%, to nearly $1.9 billion. Still, in a news release, management said it was "disappointed" in the pace of the loan growth and that it expects demand to pick up this year.

Credit quality also improved, as net chargeoffs fell 82% from a year earlier, to $38,000.

Some of these gains were tempered by a 1.7% rise in noninterest expenses, to $17.8 million. The increase was a result of a small loss on the disposition of foreclosed properties, versus a gain in 2014.

Subscribe Now

Authoritative analysis and perspective for every segment of the mortgage industry

30-Day Free Trial

Authoritative analysis and perspective for every segment of the mortgage industry