Attached files
Exhibit 99.1
July 23, 2012
Quarterly Report
Second Quarter 2012
We are pleased to report that through the second quarter ended June 30,
2012, earnings for your company were up 26.6% when compared to the June
30, 2011 earnings. On a year to date basis, we earned $3.40 million
compared to $2.68 million for the six months ended June 30, 2011. We
reported $1.78 million in profit for the second quarter of 2012, compared
to $1.42 million for the second quarter of 2011, a 25.1% increase.
Earnings per share on a fully diluted basis increased from $0.98 per
share in 2011 to $1.25 per share for the six months ended June 30, 2012.
Our total assets increased from $648.2 million to $670.5 million, a 3.5%
increase. Total net loans increased by 3.2% from $402.9 million to $415.6
million. Net interest margins have remained stable for the year. This has
been helped by an ability to control our cost of deposits while
increasing our loan balances.
Nationally, the economy appears to be growing at a very moderate pace of
1.0% to 1.5% in the second quarter. Unemployment rates continue to be
higher than desired at 8.2%. In Kentucky, we are still higher than the
national average, but in the eight markets in which we operate we are
seeing improvement, as they are all below the state averages.
The stock market, which had been showing signs of improvement through the
first part of the year, has been a little weaker as of late. Some of
this has had to do with the expected weaker second quarter of the year
but has also been impacted by the uncertainties in Europe.
In our local markets, we are seeing positive movement in the housing
market. Our applications for residential mortgages are increasing, with
more customers interested in purchasing homes. Additionally, we have
seen increased requests for construction loans for the first time in two
years.
We have also seen an increase in our business lending activity as
customers are looking more and more for opportunities than they have in
recent times. If these trends continue, we are cautiously optimistic
about the economy of the markets in which we operate.
In May, we welcomed Aaron Roberts as a Regional Director for our East
Kentucky Board. He is a Rowan County native, a graduate of Morehead
State University, and the owner of Aaron?s Best One Tire in Morehead. He
has been very active in his community and we look forward to his
assistance with our growth in that market.
Our economy is improving, but there is still significant improvement that
has yet to take place. Your company is in a position to deal with the
challenges ahead and to capitalize on opportunities as they arise.
Kentucky Bank ranks 15th in size among the 177 banks headquartered in the
Commonwealth of Kentucky. Kentucky Bank is headquartered in Paris and
also has offices in Cynthiana, Georgetown, Morehead, Nicholasville, Sandy
Hook, Versailles, Wilmore and Winchester.
As always, we appreciate your support.
/s/Louis Prichard
Louis Prichard
President, CEO
UNAUDITED
CONSOLIDATED BALANCE SHEET
Percentage
6/30/2012 6/30/2011 Change
Assets
Cash & Due From Banks $ 15,204,048 $ 13,547,467 12.2%
Securities 184,962,107 173,611,167 6.5
Loans Held for Sale 92,000 513,900 -82.1
Loans 421,398,577 408,515,863 3.2
Reserve for Loan Losses 5,788,737 5,641,760 2.6
Net Loans 415,609,840 402,874,103 3.2
Federal Funds Sold 110,000 106,000 3.8
Other Assets 54,564,593 57,507,552 -5.1
Total Assets $ 670,542,588 $ 648,160,189 3.5%
Liabilities & Stockholders' Equity
Deposits
Demand $ 137,710,763 $ 126,399,413 8.9%
Savings & Interest Checking 214,859,811 180,542,318 19.0
Certificates of Deposit 190,560,577 210,051,532 -9.3
Total Deposits 543,131,151 516,993,263 5.1
Repurchase Agreements 4,691,782 4,488,530 4.5
Other Borrowed Funds 44,115,466 56,109,788 -21.4
Other Liabilities 6,239,616 5,032,243 24.0
Total Liabilities 598,178,015 582,623,824 2.7
Stockholders' Equity 72,364,573 65,536,365 10.4
Total Liabilities & Stockholders? Equity $ 670,542,588 $ 648,160,189 3.5%
CONSOLIDATED INCOME STATEMENT
Six Months Ending Three Months Ending
Percentage Percentage
6/30/2012 6/30/2011 Change 6/30/2012 6/30/2011 Change
Interest Income $ 14,483,259 $ 15,139,200 -4.3% $ 7,320,886 $ 7,681,644 -4.7%
Interest Expense 2,014,356 3,103,202 -35.1 961,679 1,465,720 -34.4
Net Interest Income 12,468,903 12,035,998 3.6 6,359,207 6,215,924 2.3
Loan Loss Provision 1,000,000 1,450,000 -31.0 550,000 700,000 -21.4
Net Interest Income After Provision 11,468,903 10,585,998 8.3 5,809,207 5,515,924 5.3
Other Income 4,977,591 4,100,992 21.4 2,481,443 2,273,525 9.1
Other Expenses 12,292,554 11,560,448 6.3 6,084,940 6,130,935 -0.8
Income Before Taxes 4,153,940 3,126,542 32.9 2,205,710 1,658,514 33.0
Income Taxes 758,035 443,350 71.0 427,831 237,731 80.0
Net Income $ 3,395,905 $ 2,683,192 26.6 $ 1,777,879 $ 1,420,783 25.1
Net Change in Unrealized Gain (loss)
on Securities 1,276,805 3,101,686 -58.8 1,768,232 1,807,535 -2.2
Comprehensive Income $ 4,672,710 $ 5,784,878 -19.2% $ 3,546,111 $ 3,228,318 9.8%
Selected Ratios
Return on Average Assets 1.00% 0.82% 1.05% 0.87%
Return on Average Equity 9.61 8.55 10.01 8.85
Earnings Per Share $ 1.25 $ 0.98 $ 0.65 $ 0.52
Earnings Per Share - assuming dilution 1.25 0.98 0.65 0.52
Cash Dividends Per Share 0.46 0.44 0.23 0.22
Book Value Per Share 26.61 23.96
Market Price High Low Close
Second Quarter '12 $23.90 $20.20 $21.00
First Quarter '12 $23.49 $19.05 $22.0
