Attached files
Exhibit 99.1
April 30, 2015
Earnings Report
March 31, 2015
Dear Shareholders:
We are pleased to announce continued balance sheet growth for Kentucky
Bancshares, Inc. for the period ending March 31, 2015. Total assets were
$856.5 million as of March 31, 2015 compared to $782.7 million as of
March 31, 2014 reflecting growth of 9.4%. Year to date net income was
$1.52 million for the period ended March 31, 2015 compared to $1.77
million for the period ending March 31, 2014.
The overall increase in total assets was driven by a 13.6% increase in
total loans, which was funded by a 5.2% increase in deposits and a 49.1%
increase in other borrowed funds. Similar to prior years, borrowings
increased in an effort to strategically lock in longer term funding at
fixed rates for anticipated growth, and to minimize rate sensitivity in
anticipation of an increasing rate environment.
Year to date diluted earnings per share was $0.56 for the period ending
March 31, 2015 compared to $0.66 for the same period last year. The
change from prior year is largely attributable to higher loan loss
provision and higher non-interest expense, partially offset by higher net
interest income and lower tax expense. While our credit quality of loans
is good and our performance ratios in this area are stronger than our
peer group comparisons, management's calculations support an increase to
our provision primarily because of our significant loan growth. Non-
interest expense increased due, in part, to merger related expenses
associated with the previously announced acquisition of Madison Financial
Corporation. This acquisition is still expected to close, subject to
applicable regulatory approval, in mid-summer. Net interest income is
higher due to our loan and investment growth. Tax expense is lower due to
purchased tax credits, lower income, and increased exemptions associated
with our captive insurance subsidiary.
The first quarter of 2015 was a busy and productive one for us. In
addition to the loan and deposit growth in the first quarter, we continue
to see expanded adoption of our electronic services, including our mobile
banking app with mobile deposit functionality, as well as our Pay-Other-
People (POP) service. In addition, we expanded our service offering by
rolling out a new app for realtors. KY Bank Agent can be found in the app
store and at www.kybankagent.com and is real estate's #1 net sheet and
closing costs app. This technology will be available to realtors in each
of our markets and is a great tool in assisting their customers, and
another example of our commitment to partnering with local professionals
in our communities.
Our view should always be a long term one and we will continue to
consider opportunities for further franchise expansion, which advances
our growth objectives while maintaining our ability to provide Premier
Customer Service. We will continue to do everything possible to
accomplish what is in the long term best interest of our shareholders,
customers, and employees.
As always, we appreciate your support.
/s/Louis Prichard
Louis Prichard
President, CEO
Additional Information for Shareholders because of Possible Business
Combination
This communication does not constitute a solicitation of any vote or
approval or offer to sell securities. Kentucky Bancshares has filed a
registration statement on Form S-4 with the SEC to register the Company's
shares that will be issued to Madison Financial Corporation's
shareholders in connection with the transaction. The registration
statement includes a proxy statement of Madison and a prospectus of the
Company and will be mailed to each of Madison's shareholders when it is
complete and the registration statement on Form S-4 becomes
effective. WE URGE INVESTORS AND SECURITY HOLDERS TO READ THE
REGISTRATION STATEMENT AND PROXY STATEMENT/PROSPECTUS AVAILABLE (AND ANY
OTHER DOCUMENTS FILED WITH THE SEC IN CONNECTION WITH THE TRANSACTION OR
INCORPORATED BY REFERENCE INTO THE PROXY STATEMENT/PROSPECTUS) BECAUSE
SUCH DOCUMENTS WILL CONTAIN IMPORTANT INFORMATION REGARDING THE PROPOSED
SHARE EXCHANGE AND MERGER. Investors and security holders may obtain
free copies of these documents and other documents filed with the SEC on
the SEC's website at http://www.sec.gov. Investors and security holders
may also obtain free copies of the documents filed with the SEC by the
Company at the Company's website at http://www.kybank.com (which website
is not incorporated herein by reference) or by directing a request to
Greg Dawson, PO Box 157, 339 Main Street, Paris, Kentucky 40362.
UNAUDITED
CONSOLIDATED BALANCE SHEET
Percentage
3/31/2015 3/31/2014 Change
Assets
Cash & Due From Banks $ 14,844,254 $ 21,207,735 -30.0%
Interest Bearing Time Deposits 1,280,000 300,000 326.7
Securities 249,476,182 236,364,198 5.5
Trading Assets 5,409,338 5,108,033 5.9
Loans Held for Sale 940,130 149,400 529.3
Loans 538,643,924 474,011,586 13.6
Reserve for Loan Losses 5,920,387 5,616,396 5.4
Net Loans 532,723,537 468,395,190 13.7
Federal Funds Sold 222,000 369,000 -39.8
Other Assets 51,625,357 50,760,340 1.7
Total Assets $ 856,520,798 $ 782,653,896 9.4%
Liabilities & Stockholders' Equity
Deposits
Demand $ 185,424,220 $ 165,674,861 11.9%
Savings & Interest Checking 288,738,274 274,437,415 5.2
Certificates of Deposit 186,651,741 187,891,783 -0.7
Total Deposits 660,814,235 628,004,059 5.2
Repurchase Agreements 12,120,882 11,401,569 6.3
Other Borrowed Funds 96,314,689 64,597,235 49.1
Other Liabilities 7,561,705 6,700,659 12.9
Total Liabilities 776,811,511 710,703,522 9.3
Stockholders' Equity 79,709,287 71,950,374 10.8
Total Liabilities & Stockholders' Equity $ 856,520,798 $ 782,653,896 9.4%
CONSOLIDATED INCOME STATEMENT
Three Months Ending
Percentage
3/31/2015 3/31/2014 Change
Interest Income $ 7,731,342 $ 7,282,534 6.2%
Interest Expense 968,098 933,174 3.7
Net Interest Income 6,763,244 6,349,360 6.5
Loan Loss Provision 300,000 100,000 200.0
Net Interest Income After Provision 6,463,244 6,249,360 3.4
Other Income 2,270,412 2,268,384 0.1
Other Expenses 7,217,448 6,453,891 11.8
Income Before Taxes 1,516,208 2,063,853 -26.5
Income Taxes 653 292,417 -99.8
Net Income $ 1,515,555 $ 1,771,436 -14.4
Net Change in Unrealized Gain (loss)
on Securities 936,876 3,251,229 -71.2
Comprehensive Income $ 2,452,431 $ 5,022,665 -51.2%
Selected Ratios
Return on Average Assets 0.70% 0.91%
Return on Average Equity 7.64 10.04
Earnings Per Share $ 0.56 $ 0.66
Earnings Per Share - assuming dilution 0.56 0.66
Cash Dividends Per Share 0.26 0.25
Book Value Per Share 29.24 26.44
Market Price High Low Close
First Quarter '15 $28.15 $27.00 $28.15
Fourth Quarter '14 28.85 27.15 27.35
