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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 2002
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-14412
FARMERS CAPITAL BANK CORPORATION
(Exact name of registrant as specified in its charter)
Kentucky 61-1017851
- --------------------------------------------- ----------------------
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification Number)
P.O. Box 309, 202 West Main St.
Frankfort, Kentucky 40601
- --------------------------------------------- ----------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (502) 227-1600
Securities registered pursuant to Section 12(b) of the Act:
None None
- -------------------------------------------- ----------------------
(Title of each class) (Name of each exchange
on which registered)
Securities registered pursuant to Section 12(g) of the Act:
Common Stock - $ .125 per share Par Value
-----------------------------------------
(Title of Class)
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [x]
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 [x] No [ ]
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2).
Yes [x] No [ ]
The aggregate market value of the registrant's outstanding voting stock held by
non-affiliates on June 28, 2002 (the last business day of the registrant's most
recently completed second fiscal quarter) was $241,855,220.
As of March 27, 2003 there were 6,726,639 shares outstanding.
Documents incorporated by reference:
Portions of the Registrant's 2002 Annual Report to Shareholders are
incorporated by reference into Part II. Portions of the Registrant's Proxy
Statement relating to the Registrant's 2003 Annual Meeting of Shareholders
are incorporated by reference into Part III.
An index of exhibits filed with this Form 10-K can be found on page 18.
FARMERS CAPITAL BANK CORPORATION
FORM 10-K
INDEX
Page
Part I
Item 1. Business 3
Item 2. Properties 8
Item 3. Legal Proceedings 9
Item 4. Submission of Matters to a Vote of Security Holders 10
Part II
Item 5. Market for Registrant's Common Equity and Related
Shareholder Matters 10
Item 6. Selected Financial Data 11
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 11
Item 7A. Quantitative and Qualitative Disclosures
About Market Risk 11
Item 8. Financial Statements and Supplementary Data 11
Item 9. Changes in and Disagreements With Accountants
on Accounting and Financial Disclosure 12
Part III
Item 10. Directors and Executive Officers of the Registrant 13
Item 11. Executive Compensation 13
Item 12. Security Ownership of Certain Beneficial Owners
and Management 13
Item 13. Certain Relationships and Related Transactions 13
Item 14. Controls and Procedures 13
Part IV
Item 15. Exhibits, Financial Statement Schedules, and Reports
on Form 8-K 14
Signatures 15
Certification of Chief Executive Officer 16
Certification of Chief Financial Officer 17
Index of Exhibits 18
PART I
Item 1. Business
- ----------------
Organization
------------
Farmers Capital Bank Corporation (the "Registrant" or the "Company") is a
financial holding company. The Registrant was originally formed as a bank
holding company under the Bank Holding Company Act of 1956, as amended, on
October 28, 1982 under the laws of the Commonwealth of Kentucky. During 2000,
the Registrant elected to change from a bank holding company to a financial
holding company (see discussion in Supervision and Regulation section of this
report). The Registrant's subsidiaries provide a wide range of banking and
bank-related services to customers throughout Kentucky. The bank subsidiaries
owned by the Registrant include Farmers Bank & Capital Trust Co. ("Farmers
Bank"), Frankfort, Kentucky; United Bank & Trust Co. ("United Bank"),
Versailles, Kentucky; Lawrenceburg National Bank ("Lawrenceburg Bank"),
Harrodsburg, Kentucky; First Citizens Bank, Shepherdsville, Kentucky; Farmers
Bank and Trust Company ("Farmers Georgetown Bank") and its wholly owned
subsidiary, Community Development of Kentucky, Inc. ("CDK, Inc."), Georgetown,
Kentucky; and Kentucky Banking Centers, Inc. ("Ky. Banking Centers"), Glasgow,
Kentucky. The Registrant also owns FCB Services, Inc., ("FCB Services"), a
nonbank data processing subsidiary located in Frankfort, Kentucky and Kentucky
General Life Insurance Company, Inc., ("Kentucky General"), a nonbank insurance
agency subsidiary located in Frankfort, Kentucky. The Registrant provides a
broad range of financial services to individuals, corporations, and others
through its 23 banking locations throughout Central Kentucky. These services
primarily include the activities of lending and leasing, receiving deposits,
providing cash management services, safe deposit box rental, and trust
activities. Operations are managed and financial performance is evaluated at the
subsidiary level. The Registrant's chief decision makers monitor the results of
the various banking products and services of its subsidiaries. Accordingly, all
of the Registrant's operations are considered by management to be aggregated in
one reportable operating segment: commercial and retail banking. As of December
31, 2002, the Registrant had $1.3 billion in consolidated assets.
Farmers Capital Bank Corporation
Frankfort, KY
.
.
.
.
......................................................................................................................
. . . . . . . .
. . . . . . . (Inactive)
. . . . . . . Kentucky General
United Bank & Lawrenceburg Farmers Bank Farmers Bank & First Citizens Kentucky Banking FCB Services, Life Insurance
Trust Co. National Bank and Trust Company Capital Trust Co. Bank Centers, Inc. Inc. Company, Inc.
Versailles, KY Harrodsburg, KY Georgetown, KY Frankfort, KY Shepherdsville, KY Glasgow, KY Frankfort, KY Frankfort, KY
100% 100% 100% 100% 100% 100% 100% 100%
. .
. .
. .
. ......................................................
. . . . .
. . . . .
(Incactive) . . . .
Community Development Farmers Bank Leasing One Farmers Capital (Inactive)
of Kentucky, Inc. Realty Co. Corporation Insurance Corp. EG Properties
Georgetown, KY Frankfort, KY Frankfort, KY Frankfort, KY Frankfort, KY
100% 100% 100% 100% 100%
.
.
.
Farmers Fidelity
Insurance Agency, LLP
50%
Farmers Bank, originally organized in 1850, is a state chartered bank engaged in
a wide range of commercial and personal banking activities, which include
accepting savings, time and demand deposits; making secured and unsecured loans
to corporations, individuals and others; providing cash management services to
corporate and individual customers; issuing letters of credit; renting safe
deposit boxes; and providing funds transfer services. The bank's lending
activities include making commercial, construction, mortgage, and personal loans
and lines of credit. The bank serves as an agent in providing credit card loans.
It acts as trustee of personal trusts, as executor of estates, as trustee for
employee benefit trusts and as registrar, transfer agent and paying agent for
bond issues. Farmers Bank also acts as registrar, transfer agent and paying
agent for the Registrant's stock issue. Farmers Bank is the general depository
for the Commonwealth of Kentucky and has been for more than 70 years.
Farmers Bank is the largest bank chartered in Franklin County. It conducts
business in its principal office and four branches within Frankfort, the capital
of Kentucky. Franklin County is a diverse community, including government,
commerce, finance, industry, medicine, education and agriculture. The bank also
serves many individuals and corporations throughout Central Kentucky. On
December 31, 2002, it had total consolidated assets of $597 million, including
loans net of unearned income of $257 million. On the same date, total deposits
were $366 million and shareholders' equity totaled $53 million.
Farmers Bank had three active subsidiaries during 2002: Farmers Bank Realty Co.
("Realty"), Leasing One Corporation ("Leasing One"), and Farmers Capital
Insurance Corporation ("Farmers Insurance"). In May 2000 Farmers Bank
incorporated E Properties, Inc. ("E Properties"). This company was involved in
real estate management and liquidation for properties repossessed by Farmers
Bank. E Properties was effectively liquidated on December 31, 2001. In November
2002 Farmers Bank incorporated EG Properties. EG Properties is currently an
inactive company. Upon being capitalized, this company will be involved in real
estate management and liquidation for properties repossessed by Farmers Bank.
Realty was incorporated in 1978 for the purpose of owning certain real estate
used by the Registrant and Farmers Bank in the ordinary course of business.
Realty had total assets of $3.5 million on December 31, 2002.
Leasing One was incorporated in August 1993 to operate as a commercial equipment
leasing company. It is located in Frankfort and is currently licensed to conduct
business in thirteen states. In 1997, it began to service leases for
unaffiliated third parties. At year-end 2002 it had total assets of $26.7
million, including leases net of unearned income of $23.0 million.
Farmers Insurance was organized in 1988 to engage in insurance activities
permitted to the Registrant under federal and state law. Farmers Bank
capitalized this corporation in December 1998. Farmers Insurance acts as an
agent for Commonwealth Land Title Co. At year-end 2002 it had total assets of
$115 thousand. Farmers Insurance holds a 50% interest in Farmers Fidelity
Insurance Company, LLP ("Farmers Fidelity"). The Creech & Stafford Insurance
Agency, Inc., an unrelated party to the Registrant, also holds a 50% interest in
Farmers Fidelity.
On February 15, 1985, the Registrant acquired United Bank, a state chartered
bank originally organized in 1880. It is engaged in a general banking business
providing full service banking to individuals, businesses and governmental
customers. It conducts business in its principal office and two branches in
Woodford County, Kentucky. Based on deposits, United Bank is the largest bank
chartered in Woodford County with total assets of $153 million and total
deposits of $133 million at December 31, 2002.
On June 28, 1985, the Registrant acquired Lawrenceburg Bank, a national
chartered bank originally organized in 1885. It is engaged in a general banking
business providing full service banking to individuals, businesses and
governmental customers. During 1998, it was granted permission by the Office of
the Comptroller of the Currency ("OCC") to move its charter and main office to
Harrodsburg, Kentucky in Mercer County. Construction of the new site in
Harrodsburg was completed and operations began there in July 1999. Lawrenceburg
Bank conducts business at the Harrodsburg site and two branches in Anderson
County, Kentucky. Based on deposits, the Anderson County branches rank number
one in size compared to all banks chartered in Anderson County. Total assets
were $135 million and total deposits were $121 million at December 31, 2002.
On March 31, 1986, the Registrant acquired First Citizens Bank, a state
chartered bank originally organized in 1964. It is engaged in a general banking
business providing full service banking to individuals, businesses and
governmental customers. During 1997, it applied and was granted permission by
the Kentucky Department of Financial Institutions ("KDFI") to move its charter
and main office to Shepherdsville, Kentucky in Bullitt County. First Citizens
Bank completed construction of the site and began operations in April 1998.
During 1999, First Citizens Bank closed its South Dixie branch in Elizabethtown,
Kentucky. It now conducts business in its four branches in Hardin County,
Kentucky along with its principal office in Shepherdsville. Based on deposits,
First Citizens Bank's Hardin County branches rank number three in size compared
to all banks chartered in Hardin County. Total assets were $157 million and
total deposits were $126 million at December 31, 2002.
On June 30, 1986, the Registrant acquired Farmers Georgetown Bank, a state
chartered bank originally organized in 1850. It is engaged in a general banking
business providing full service banking to individuals, businesses and
governmental customers. It conducts business in its principal office and three
branches in Scott County, Kentucky. Based on deposits, Farmers Georgetown Bank
is the largest bank chartered in Scott County with total assets of $207 million
and total deposits of $131 million at December 31, 2002. On July 16, 2002, CDK,
Inc. was incorporated in order to apply to be certified as a Community
Development Entity for participation in the New Markets Tax Credit Program as
provided by the Community Renewal Tax Relief Act of 2000. If CDK, Inc. is
successful in being granted an allocation of tax credits, this corporation will
lend money to qualified businesses in qualified low-income communities as
defined by the tax regulations.
On June 15, 1987, the Registrant acquired Horse Cave State Bank, a state
chartered bank originally organized in 1926. During 1997, it received approval
from the KDFI to move its charter to Glasgow, Kentucky. Subsequent to that
approval, Horse Cave State Bank changed its name to Kentucky Banking Centers,
Inc. Ky. Banking Centers is engaged in a general banking business providing full
service banking to individuals, businesses, and governmental customers. It
conducts business in its principal office in Glasgow and two branches in Hart
County, Kentucky. Based on deposits, Ky. Banking Centers' Hart County branches
rank number one in size compared to all banks chartered in Hart County. Total
assets were $103 million and total deposits were $92 million at December 31,
2002.
FCB Services, organized in 1992, provides data processing services and support
for the Registrant and its subsidiaries. It is located in Frankfort, Kentucky.
During 1994, FCB Services began performing data processing services for
nonaffiliated banks. FCB Services had total assets of $3.9 million at December
31, 2002.
Kentucky General was incorporated on June 22, 2000 to engage in insurance
activities permitted by federal and state law. This corporation was inactive as
of December 31, 2002.
Lending
-------
A significant part of the Company's operating activities include originating
loans, approximately 70% of which are secured by real estate at December 31,
2002. Real estate lending primarily includes loans secured by owner-occupied
one-to-four family residential properties as well as commercial real estate
mortgage loans to developers and owners of other commercial real estate. Real
estate lending primarily includes both variable and adjustable rate products.
Loan rates on variable rate loans generally adjust upward or downward
immediately based on changes in the loan's index, normally prime rate as
published in the Wall Street Journal. Rates on adjustable rate loans move upward
or downward after an initial fixed term of normally 1, 3, or 5 years. However,
rate adjustments on adjustable rate loans are made annually after the initial
fixed term expires and are indexed primarily to shorter-term Treasury indexes.
Generally, variable and adjustable rate loans contain provisions that cap annual
increases at a maximum of 100 basis points with lifetime caps and floors of up
to 600 basis points. The Registrant also makes fixed rate commercial real estate
loans to a lesser extent with repayment terms generally not exceeding 12 months.
The Registrant's subsidiary banks make first and second residential mortgage
loans secured by real estate not to exceed 90% loan to value without seeking
third party guarantees. Commercial real estate loans are made primarily to small
and mid-sized businesses, secured by real estate not exceeding 80% loan to
value. Other commercial loans are asset based loans secured by equipment and
lines of credit secured by receivables and include lending across a diverse
range of business types. Commercial lending and real estate construction
lending, including commercial leasing, generally includes a higher degree of
credit risk than other loans, such as residential mortgage loans. Commercial
loans, like other loans, are evaluated at the time of approval to determine the
adequacy of repayment sources and collateral requirements. Collateral
requirements vary to some degree among borrowers and depend on the borrowers
financial strength, the terms and amount of the loan, and collateral available
to secure the loan. Credit risk results from the decreased ability or
willingness to pay by a borrower. Credit risk also results when a liquidation of
collateral occurs and there is a shortfall in collateral value as compared to a
loans outstanding balance. For construction loans, inaccurate initial estimates
of a property's value could lead to a property having a value that is
insufficient to satisfy full payment of the amount of funds advanced for the
property. Secured and unsecured consumer loans generally are made for
automobiles, boats, and other motor vehicles. In most cases loans are restricted
to the subsidiaries' general market area.
Supervision and Regulation
--------------------------
The Registrant originally registered as a bank holding company and was
restricted to those activities permissible under the Bank Holding Company Act of
1956, as amended ("BHC Act"). The BHC Act provides for regulation, supervision,
and examination by the Board of Governors of the Federal Reserve System ("FRB").
On July 30, 2002, President Bush signed into law the Sarbanes-Oxley Act of 2002,
a law that addresses, among other issues, corporate governance, auditing and
accounting oversight, executive compensation, and enhanced and timely disclosure
of corporate information. The Nasdaq Stock Market has also proposed corporate
governance rules that were presented to the Securities and Exchange Commission
("SEC") for review and approval. The proposed changes, which have various
implementation dates, are intended to allow shareholders to more easily and
efficiently monitor the performance of companies and directors.
Effective August 29, 2002, as directed by Section 302(a) of the Sarbanes-Oxley
Act, the Company's chief executive officer and chief financial officer are each
required to certify that the Company's Quarterly and Annual Reports do not
contain any untrue statement of a material fact. The rules have several
requirements, including having these officers certify that: they are responsible
for establishing, maintaining and regularly evaluating the effectiveness of the
Company's internal controls; they have made certain disclosures to the Company's
auditors and the audit committee of the Board of Directors about the Company's
internal controls; and they have included information in the Company's Quarterly
and Annual Reports about their evaluation and whether there have been
significant changes in the Company's internal controls or in other factors that
could significantly affect internal controls subsequent to the evaluation.
The Gramm-Leach-Bliley Act of 1999 ("GLB Act") signed into law in 1999 had a
significant effect on Federal banking laws applicable to the Registrant and its
subsidiary banks. The GLB Act permitted the Registrant to elect to become a
financial holding company. The Registrant elected this option on June 9, 2000.
In order to be granted status as a financial holding company, a bank holding
company and each of its subsidiary depository institutions must be well
capitalized, well managed, and have achieved at least a satisfactory record of
meeting community credit needs at its most recent Community Reinvestment Act
("CRA") examination. A financial holding company is subject to corrective action
by the FRB if any depository institution controlled by the company fails to
maintain both well capitalized and well managed status. The GLB Act places
limitations on a financial holding company's ability to engage in new financial
activities and affiliations if the company fails to maintain its satisfactory
CRA rating.
The GLB Act amended the BHC Act to allow a bank holding company that has elected
financial holding company status to engage in an expanded list of permissible
activities, including insurance and securities underwriting, among others. The
GLB Act includes a system of functional regulation in which the FRB serves as
the umbrella regulator of the holding company. The FRB regulates the
Registrant's business activities in a variety of ways including, but not limited
to, requirements on acquiring control of other banks and bank holding companies,
limitations on activities and investments, and regulatory capital requirements.
State and other federal financial regulators, such as the KDFI, OCC, the Federal
Deposit Insurance Corporation ("FDIC"), and the SEC also regulate either
affiliates of the holding company or the holding company itself.
The Registrant's state bank subsidiaries are subject to state banking law and
regulation and periodic examinations by the KDFI. Lawrenceburg Bank, a national
bank, is subject to similar regulation and supervision by the OCC under the
National Banking Act and the Federal Reserve System under the Federal Reserve
Act. Other regulations that apply to the Registrant's bank subsidiaries include,
but are not limited to, insurance of deposit accounts, capital ratios, payment
of dividends, liquidity requirements, the nature and amount of investments that
can be made, transactions with affiliates, community and consumer lending, and
internal policies and control.
The operations of the Registrant and its subsidiary banks are also affected by
other banking legislation and policies and practices of various regulatory
authorities. Such legislation and policies include statutory maximum rates on
loans, reserve requirements, domestic monetary and fiscal policy, and
limitations on the kinds of services that may be offered. During 2000, the State
Wide Branching Bill became effective, which allows banks to open a branch
anywhere in the state of Kentucky. Previously, banks were limited to the county
where the main office was located.
The BHC Act formerly prohibited the Federal Reserve Board from approving an
application from a bank holding company to acquire shares of another bank across
its own state lines. However, effective September 1995, new legislation
abolished those restrictions and now allows bank holding companies to acquire
shares of out of state banks, subject to certain conditions. Currently, the
Company has no plans to purchase an out of state bank.
The GLB Act includes various extensive customer privacy protection provisions.
The GLB Act requires a financial institution to clearly disclose its privacy
policy to its customers regarding the sharing of non-public personal information
with affiliates and third parties. The financial institution's privacy policy
must be disclosed at the time a customer relationship is established and not
less than annually thereafter.
The Financial Reform, Recovery and Enforcement Act of 1989 provides that a
holding company's controlled insured depository institutions are liable for any
loss incurred by the FDIC in connection with the default of, or any FDIC
assisted transaction involving, an affiliated insured bank.
Deposits of the Registrant's subsidiary banks are insured by the FDIC's Bank
Insurance Fund, which subjects the banks to regulation and examination under the
provisions of the Federal Deposit Insurance Act.
Under the Federal Deposit Insurance Corporation Improvement Act ("FDICIA"), the
FDIC established a risk-based assessment system for insured depository
institutions, which became effective January 1, 1994. The FDIC has adopted a
risk-based deposit insurance assessment system under which the assessment rate
for an insured depository institution depends on the assessment risk
classification assigned to the institution by the FDIC which is determined by
the institution's capital level.
Under FDICIA, the federal banking regulators are required to take prompt
corrective action if an institution fails to satisfy certain minimum capital
requirements, including a leverage limit, a risk-based capital requirement, and
any other measure deemed appropriate by the federal banking regulators for
measuring the capital adequacy of an insured depository institution. All
institutions, regardless of their capital levels, are restricted from making any
capital distribution or paying any management fees that would cause the
institution to become undercapitalized.
The purpose of the CRA is to encourage banks to respond to the credit needs of
the communities they serve, including low and moderate-income neighborhoods. CRA
states that banks should accomplish this while still preserving the flexibility
needed for safe and sound operations. It is designed to increase the bank's
sensitivity to investment opportunities that will benefit the community.
References under the caption "Supervision and Regulation" to applicable statutes
and regulations are brief summaries of portions thereof which do not purport to
be complete and which are qualified in their entirety by reference thereto.
Competition
-----------
The Registrant and its subsidiaries compete for banking business with various
types of businesses other than commercial banks and savings and loan
associations. These include, but are not limited to, credit unions, mortgage
lenders, finance companies, insurance companies, stock and bond brokers,
financial planning firms, and department stores which compete for one or more
lines of banking business. The banks also compete for commercial and retail
business not only with banks in Central Kentucky, but with banking organizations
from Ohio, Indiana, Tennessee, Pennsylvania, and North Carolina which have
banking subsidiaries located in Kentucky and may possess greater resources than
the Corporation.
The primary areas of competition pertain to quality of services, interest rates,
and fees charged on loans and deposits.
The business of the Registrant is not dependent upon any one customer or on a
few customers, and the loss of any one or a few customers would not have a
material adverse effect on the Registrant.
No material portion of the business of the Registrant is seasonal. No material
portion of the business of the Registrant is subject to renegotiation of profits
or termination of contracts or subcontracts at the election of the government,
though certain contracts are subject to such renegotiation or termination.
The Registrant is not engaged in operations in foreign countries.
Employees
---------
As of December 31, 2002, the Registrant and its subsidiaries had 458 full-time
equivalent employees. Employees are provided with a variety of employee
benefits. A retirement plan, a profit-sharing (401K) plan, group life insurance,
hospitalization, dental, and major medical insurance are available to eligible
personnel. Employees are not represented by a union. Management and employee
relations are good.
During 1997, the Registrant's Board of Directors approved its Stock Option Plan
("Plan"), which grants certain eligible employees the option to purchase a
limited number of the Registrant's common stock. The Plan specifies the
conditions and terms that the grantee must meet in order to exercise the
options. The Registrant's shareholders at its annual meeting held on May 12,
1998 subsequently ratified the Plan.
Available Information
---------------------
The Registrant makes available, free of charge through its website
(www.farmerscapital.com), the annual report on Form 10-K, quarterly reports on
Form 10-Q, current reports on Form 8-K, and amendments to these reports filed or
furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as
reasonably practicable after electronically filing such material with the
Securities and Exchange Commission.
Item 2. Properties
- ------------------
The Registrant leases its main office from Realty.
Farmers Bank and its subsidiaries currently own or lease nine buildings. Farmers
Bank operates at five locations, two of which it owns and three of which it
leases. United Bank owns its two branch offices and approximately 52% of a
condominium building that houses its main office. Lawrenceburg Bank owns its
main office in Harrodsburg and its two branch sites in Lawrenceburg. First
Citizens Bank owns its main office and two of its four branches. The other two
branch locations of First Citizens Bank are leased facilities, one of which is
located in a grocery store. Farmers Georgetown Bank owns its main office,
another branch in Georgetown, and one in Stamping Ground, Kentucky. Farmers
Georgetown Bank's third branch is located in a leased facility. Ky. Banking
Centers owns its main office in Glasgow, Kentucky and its branch site in Horse
Cave, Kentucky. It leases its branch facilities in Munfordville, Kentucky.
Item 3. Legal Proceedings
- -------------------------
Farmers Bank was named, on September 10, 1992, as a defendant in Case No.
92CIO5734 in Jefferson Circuit Court, Louisville, Kentucky, Earl H. Shilling et
al. v. Farmers Bank & Capital Trust Company. Details of this case have been
disclosed in previous Annual Reports on Form 10-K and subsequent 10-Q filings.
The named plaintiffs purported to represent a class consisting of all present
and former owners of the County of Jefferson, Kentucky, Nursing Home Refunding
Revenue Bonds (Filson Care Home Project) Series 1986A and County of Jefferson,
Kentucky, Nursing Home Improvement Revenue Bonds (Filson Care Home Project)
Series 1986B (collectively "the Bonds"). The plaintiffs alleged that the class
had been damaged through a reduction in the value of the Bonds and a loss of
interest on the Bonds because of the actions of the Bank in its capacity as
indenture trustee for the Bondholders. The plaintiffs demanded compensatory and
punitive damages.
On July 6, 1993, the Court denied the plaintiffs' motion to certify the case as
a class action. Subsequently, the plaintiffs amended their complaint to join
additional Bondholders as plaintiffs. The plaintiffs claimed to hold Bonds in
the aggregate principal amount of $480,000. Before trial, the Court dismissed
thirty-nine of the plaintiffs because they were unable or unwilling to present
testimony to support their claims.
The case was tried to a jury beginning on March 28, 2000 on the claims of four
plaintiffs holding Bonds in the aggregate principal amount of $80,000. The Court
granted a directed verdict in favor of the Bank on the plaintiffs' claim that
the Bank had engaged in commercial bribery and that the legal fees that were
paid by the Bank should be disgorged because of an alleged conflict of interest
of the Bank's counsel. The jury found for the plaintiffs on the claim that the
Bank had breached its fiduciary duty and awarded the plaintiffs $99,875 in
compensatory damages and $600,000 in punitive damages.
The Bank filed a motion for judgment notwithstanding the verdict or, in the
alternative, for a new trial, asserting that the jury's verdict that the Bank
breached its fiduciary duty was not supported by sufficient evidence, that the
jury's award of damages was speculative and was not supported by the evidence,
and that the jury's award of punitive damages was not supported by sufficient
evidence. The Bank also asserted that a new trial was warranted because of the
erroneous admission of evidence concerning legal fees paid by the Bank.
Plaintiffs filed an appeal contending that the denial of class certification was
erroneous, that the individual plaintiffs should not have been dismissed from
the lawsuit, that certain evidence was erroneously excluded, and that the
directed verdict regarding the disgorgement of legal fees and the commercial
bribery claims was erroneous. On August 1, 2000, the Kentucky Court of Appeals
dismissed the appeal as having been prematurely filed.
On January 3, 2001, the Jefferson Circuit Court entered judgment in favor of the
Bank notwithstanding the jury's verdict in favor of the plaintiffs, holding that
the Bank reasonably relied in good faith on the advice of its counsel, that
there was no evidence that the Bank breached its fiduciary duty to the
plaintiffs, and that there was no evidence that the Bank caused the plaintiffs'
losses.
On January 31, 2001, the plaintiff bondholders appealed, and on February 9,
2001, defendant Bank cross-appealed, the judgment of the Jefferson Circuit Court
to the Kentucky Court of Appeals.
In their appeal, the Bondholders claim that the trial court's denial of class
certification was erroneous, that certain individual plaintiffs should not have
been dismissed from the lawsuit, that the trial court erroneously directed a
verdict against them on the issue of a conflict of interest, and that the
judgment notwithstanding the verdict was erroneously granted because the
evidence was sufficient to support the jury's verdict.
In its cross-appeal, the Bank claims that the trial court erroneously bifurcated
the trial on the issue of liability and damages, that certain witnesses should
have been excluded from the trial, that the Bank should have been granted
summary judgment, and that certain evidence and testimony regarding attorneys'
fees should have been excluded.
On May 10, 2002, the Kentucky Court of Appeals affirmed the Jefferson Circuit
Court's judgment in favor of the Bank. The plaintiff bondholders filed a motion
for discretionary review to the Kentucky Supreme Court on June 7, 2002. It is
not possible at this stage of the proceedings to make any prediction as to the
outcome, however the Supreme Court must grant the plaintiff bondholders' motion
to review the appeal, or the affirmed judgment in favor of the Bank will become
the final outcome of the case.
As of December 31, 2002, there were various other pending legal actions and
proceedings against the Company, including these above, arising from the normal
course of business and in which claims for damages are asserted. Management,
after discussion with legal counsel, believes that these actions are without
merit and that the ultimate liability resulting from these legal actions and
proceedings, if any, will not have a material adverse effect upon the
consolidated financial statements of the Company.
Item 4. Submission of Matters to a Vote of Security Holders
- -----------------------------------------------------------
No matters were submitted during the fourth quarter of the fiscal year covered
by this report to a vote of security holders, through the solicitation of
proxies or otherwise.
PART II
Item 5. Market for Registrant's Common Equity and Related Shareholder Matters
- -----------------------------------------------------------------------------
The information set forth under the sections "Shareholder Information" and
"Stock Prices" on pages 32 and 33 of the 2002 Annual Report to Shareholders is
hereby incorporated by reference. Additional information set forth under
Footnote 16 in the notes to the Registrant's 2002 audited consolidated financial
statements on pages 52 through 54 of the 2002 Annual Report to Shareholders is
also hereby incorporated by reference.
STOCK TRANSFER AGENT AND REGISTRAR:
Farmers Bank & Capital Trust Co.
P.O. Box 309
Frankfort, Kentucky 40602
The Registrant offers shareholders automatic reinvestment of dividends in shares
of stock at the market price without fees or commissions. For a description of
the plan and an authorization card, contact the Registrar above.
NASDAQ MARKET MAKERS:
J.J.B. Hilliard, W.L. Lyons, Inc. Morgan, Keegan and Company
(502)588-8400 (800) 260-0280
(800)444-1854
Knight Securities LP Trident Securities, Inc.
(888) 302-9197 (800) 340-6355
Item 6. Selected Financial Data
- -------------------------------
- -----------------------------------------------------------------------------------------------------------------------
DECEMBER 31, 2002 2001 2000 1999 1998
(In thousands, except per share data)
- -----------------------------------------------------------------------------------------------------------------------
RESULTS OF OPERATIONS
Interest income $ 66,291 $ 77,039 $ 75,481 $ 69,034 $ 69,681
Interest expense 25,746 34,357 32,536 27,184 29,147
Net interest income 40,545 42,682 42,945 41,850 40,534
Provision for loan losses 4,748 2,448 2,472 2,863 1,134
Net income 12,561 14,671 14,380 13,930 14,247
- -----------------------------------------------------------------------------------------------------------------------
PER SHARE DATA
Net income -
Basic $ 1.83 $ 2.10 $ 1.97 $ 1.86 $ 1.89
Diluted 1.82 2.09 1.97 1.86 1.89
Cash dividends declared 1.25 1.21 1.17 1.13 1.00
Book value 18.52 17.89 17.49 16.82 16.47
- -----------------------------------------------------------------------------------------------------------------------
SELECTED RATIOS
Percentage of net income to:
Average shareholders' equity (ROE) 10.04% 11.93% 11.61% 11.20% 11.88%
Average total assets (ROA) 1.04 1.28 1.40 1.41 1.49
Percentage of dividends declared to
net income 68.38 57.70 59.33 60.66 53.02
Percentage of average shareholders'
equity to average total assets 10.37 10.75 12.06 12.58 12.55
- -----------------------------------------------------------------------------------------------------------------------
Total shareholders' equity $ 125,773 $ 123,560 $ 125,461 $ 125,106 $ 123,839
Total assets 1,275,602 1,183,530 1,204,752 1,039,787 992,338
Long-term debt 57,152 10,913 10,501 3,668 3,466
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic 6,870 6,982 7,304 7,478 7,555
Diluted 6,910 7,025 7,307 7,478 7,555
- -----------------------------------------------------------------------------------------------------------------------
Item 7. Management's Discussion and Analysis of Financial Condition and Results
- -------------------------------------------------------------------------------
of Operations
-------------
The discussion on pages 20 through 35 of the 2002 Annual Report to Shareholders
is hereby incorporated by reference.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
- --------------------------------------------------------------------
The information set forth under the item "Market Risk Management" on pages 29
and 30 of the 2002 Annual Report to Shareholders is hereby incorporated by
reference.
Item 8. Financial Statements and Supplementary Data
- ---------------------------------------------------
The information set forth below on pages 37 through 58, and the inside back
cover of the 2002 Annual Report to Shareholders is hereby incorporated by
reference:
Independent Auditors' Report
Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statements of Comprehensive Income
Consolidated Statements of Changes in Shareholders' Equity
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
Shareholder Information
Item 9. Changes in and Disagreements with Accountants on Accounting and
- -----------------------------------------------------------------------
Financial Disclosure
--------------------
On October 28, 2002, the Audit Committee of the Registrant determined and
approved the replacement of KPMG LLP ("KPMG") with Crowe, Chizek, and Company
LLP ("Crowe Chizek") as its independent accountants. KPMG's service will
terminate at the completion of its audit and issuance of its related report on
the Registrant's financial statements to be filed on Form 10-K for the
Registrant's 2002 fiscal year ended December 31, 2002. The change in the
Registrant's independent accountants was the result of a competitive bidding
process involving several accounting firms.
In connection with the audits of the two fiscal years ended December 31, 2001,
and the subsequent interim period through October 28, 2002, there have been no
disagreements with KPMG on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure or any reportable
events. KPMG's audit reports on the financial statements of the Registrant as of
and for the years ended December 31, 2001 and 2000 contained no adverse opinion
or disclaimer of opinion and was not qualified or modified as to uncertainty,
audit scope or accounting principles.
None of the reportable events described under Item 304(a)(1)(v) of Regulation
S-K occurred within the Registrant's two most recent fiscal years and the
subsequent interim period through October 28, 2002.
During the two most recent fiscal years, and any subsequent interim period prior
to engaging Crowe Chizek, neither the Registrant, nor anyone on its behalf,
consulted Crowe Chizek regarding (i) either the application of accounting
principles to a specified transaction, either completed or proposed; or the type
of audit opinion that might be rendered on the Registrant's financial
statements, where either a written report was provided to the Registrant or oral
advice was provided, that Crowe Chizek concluded was an important factor
considered by the Registrant in reaching a decision as to the accounting,
auditing or financial reporting issue; or (ii) any matter that was either the
subject of a disagreement (as defined in paragraph 304(a)(1)(iv) of Regulation
S-K and the related instructions) or a reportable event (as described in
paragraph 304(a)(1)(v) of Regulation S-K).
The Registrant has requested that KPMG furnish it with a letter addressed to the
SEC stating whether it agrees with the above statements. A copy of KPMG's letter
to the SEC dated November 4, 2002 is attached as an exhibit to this report.
PART III
Item 10. Directors and Executive Officers of the Registrant
- -----------------------------------------------------------
Positions and Years of Service
Offices With With the
Executive Officer1 Age the Registrant Registrant
- -------------------------------------------------------------------------------
G. Anthony Busseni 54 President and CEO, 18*
Director2
Allison B. Gordon 39 Senior Vice President3 16*
Additional information required by Item 10 is hereby incorporated by reference
from the Registrant's definitive proxy statement in connection with its annual
meeting of shareholders scheduled for May 13, 2003 which will be filed with the
Commission on or about April 1, 2003, pursuant to Regulation 14A.
* Includes years of service with the Registrant and its subsidiaries.
1 For Regulation O purposes, Frank W. Sower, Jr., Chairman of the
Registrant's board of directors, is considered an executive officer in name
only.
2 Also a director of Farmers Bank, Ky. Banking Centers, Farmers Georgetown
Bank, United Bank, Lawrenceburg Bank, First Citizens Bank, FCB Services,
Farmers Insurance (Chairman), and Leasing One (Chairman).
3 Also a director of Farmers Bank, Farmers Georgetown Bank, and FCB Services.
Item 11. Executive Compensation
- -------------------------------
Item 12. Security Ownership of Certain Beneficial Owners and Management
- -----------------------------------------------------------------------
Item 13. Certain Relationships and Related Transactions
- -------------------------------------------------------
The information required by Items 11 through 13 is hereby incorporated by
reference from the Registrant's definitive proxy statement in connection with
its annual meeting of shareholders scheduled for May 13, 2003 which will be
filed with the Commission on or about April 1, 2003, pursuant to Regulation 14A.
Item 14. Controls and Procedures
- ---------------------------------
The Registrant's Chief Executive Officer and Chief Financial Officer have
reviewed and evaluated the Registrant's disclosure controls and procedures
within 90 days of the filing of this report, and have concluded that the
Registrant's disclosure controls and procedures were adequate and effective to
ensure that information required to be disclosed is recorded, processed,
summarized, and reported in a timely manner.
There were no significant changes in the Registrant's internal controls or in
other factors that could significantly affect these controls subsequent to the
date of the Chief Executive Officer and Chief Financial Officers evaluation, nor
were there any significant deficiencies or material weaknesses in the controls
which required corrective action.
PART IV
Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
2002 Annual Report
To Shareholders
(a)1. Financial Statements Page
--------------------
Independent Auditors' Report 37
Consolidated Balance Sheets at
December 31, 2002 and 2001 38
Consolidated Statements of Income
for the years ended December 31, 2002, 2001, and 2000 39
Consolidated Statements of Comprehensive Income
for the years ended December 31, 2002, 2001, and 2000 40
Consolidated Statements of Changes in
Shareholders' Equity for the years
ended December 31, 2002, 2001, and 2000 41
Consolidated Statements of Cash Flows
for the years ended December 31, 2002, 2001, and 2000 42
Notes to Consolidated Financial Statements 43 - 58
(a)2. Financial Statement Schedules
-----------------------------
All schedules are omitted for the reason they are not required, or are
not applicable, or the required information is disclosed elsewhere in
the financial statements and related notes thereto.
(a)3. Exhibits:
---------
13. 2002 Annual Report to Shareholders
16. Letter re Change in Certifying Accountant
21. Subsidiaries of the Registrant
23. Independent Auditors' Consent
99.1 CEO Certification
99.2 CFO Certification
(b) Reports on Form 8-K
-------------------
On January 27, 2003, the Registrant filed a report on Form 8-K disclosing
its intention to purchase up to 300,000 shares of its outstanding common
stock. The purchases will be dependent on market conditions and there is no
guarantee as to the exact number of shares to be purchased. There were no
financial statements filed with this Form 8-K.
(c) Exhibits
--------
See Index of Exhibits set forth on page 18.
(d) Separate Financial Statements and Schedules
-------------------------------------------
None.
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.
FARMERS CAPITAL BANK CORPORATION
By: /s/ G. Anthony Busseni
------------------------------------------
G. Anthony Busseni
President and Chief Executive Officer
Date: March 13, 2003
-----------------------------------------
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/ G. Anthony Busseni President, Chief Executive Officer Mar-13-2003
- ---------------------------- and Director (principal executive -----------------
G. Anthony Busseni officer of the Registrant)
/s/ Frank W. Sower, Jr. Chairman 2-21-2003
- ---------------------------- -----------------
Frank W. Sower, Jr.
/s/ Gerald R. Hignite Director 3-14-03
- ---------------------------- -----------------
Gerald R. Hignite
/s/ Lloyd C Hillard, Jr. Director 3-14-03
- ---------------------------- -----------------
Lloyd C. Hillard, Jr.
Director
- ---------------------------- -----------------
W. Benjamin Crain
Director
- ---------------------------- -----------------
Shelley S. Sweeney
/s/ Harold G. Mays Director 3-18-03
- ---------------------------- -----------------
Harold G. Mays
/s/ E. Glenn Birdwhistell Director 3-19-03
- ---------------------------- -----------------
E. Glenn Birdwhistell
/s/ Michael M. Sullivan Director 3-17-03
- ---------------------------- -----------------
Michael M. Sullivan
/s/ J. Barry Banker Director 2-21-03
- ---------------------------- -----------------
J. Barry Banker
/s/ Robert Roach Jr. Director 2-21-03
- ---------------------------- -----------------
Robert Roach, Jr.
/s/ C. Douglas Carpenter Vice President, Secretary and 3-13-03
- ---------------------------- CFO (principal financial and -----------------
C. Douglas Carpenter accounting officer)
CERTIFICATIONS
I, G. Anthony Busseni, certify that:
1. I have reviewed this annual report on Form 10-K of Farmers Capital Bank
Corporation;
2. Based on my knowledge, this annual 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 annual report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual 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 annual 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-14 and 15d-14) for the registrant and we have: a)
designed such disclosure controls and procedures 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 annual report is being
prepared; b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the filing
date of this annual report (the "Evaluation Date"); and c) presented in
this annual report our conclusions about the effectiveness of the
disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function): a) all significant deficiencies in the design or
operation of internal controls which could adversely affect the
registrant's ability to record, process, summarize and report financial
data and have identified for the registrant's auditors any material
weaknesses in internal controls; and b) any fraud, whether or not material,
that involves management or other employees who have a significant role in
the registrant's internal controls; and
6. The registrant's other certifying officer and I have indicated in this
annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Date: March 13, 2003 /s/ G. Anthony Busseni
----------------------- -----------------------------------
G. Anthony Busseni
President and CEO
I, C. Douglas Carpenter, certify that:
1. I have reviewed this annual report on Form 10-K of Farmers Capital Bank
Corporation;
2. Based on my knowledge, this annual 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 annual report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual 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 annual 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-14 and 15d-14) for the registrant and we have: a)
designed such disclosure controls and procedures 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 annual report is being
prepared; b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the filing
date of this annual report (the "Evaluation Date"); and c) presented in
this annual report our conclusions about the effectiveness of the
disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function): a) all significant deficiencies in the design or
operation of internal controls which could adversely affect the
registrant's ability to record, process, summarize and report financial
data and have identified for the registrant's auditors any material
weaknesses in internal controls; and b) any fraud, whether or not material,
that involves management or other employees who have a significant role in
the registrant's internal controls; and
6. The registrant's other certifying officer and I have indicated in this
annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Date: 3-13-03 /s/ C. Douglas Carpenter
----------------------- -----------------------------------
C. Douglas Carpenter
Vice President, Secretary, and CFO
INDEX OF EXHIBITS
Exhibit Page
13. 2002 Annual Report to Shareholders Enclosed
16. Letter re Change in Certifying Accountant 19
21. Subsidiaries of the Registrant 20
23. Independent Auditors' Consent 21
99.1 CEO Certification Pursuant to Section 906 of The Sarbanes-Oxley
Act of 2002 22
99.2 CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 23
Exhibit 16
Letter re Change in Certifying Accountant
November 4, 2002
Securities and Exchange Commission
Washington, D.C. 20549
Ladies and Gentlemen:
We are currently principal accountants for Farmers Capital Bank Corporation and,
under the date of January 15, 2002, we reported on the consolidated financial
statements of Farmers Capital Bank Corporation as of and for the years ended
December 31, 2001 and 2000. On October 28, 2002, we were notified that Farmers
Capital Bank Corporation engaged Crowe, Chizek, and Company LLP as its principal
accountant for the year ending December 31, 2003 and that the auditor-client
relationship with KPMG LLP will cease upon completion of the audit of Farmers
Capital Bank Corporation's consolidated financial statements as of and for the
year ended December 31, 2002, and the issuance of our report thereon.
We have read Farmers Capital Bank Corporation's statements included under Item 4
of its Form 8-K dated October 28, 2002, and we agree with such statements,
except that we are not in a position to agree or disagree with Farmers Capital
Bank Corporation's statement that the change was determined and approved by the
Audit Committee, and we are not in a position to agree or disagree with Farmers
Capital Bank Corporation's stated reason for changing principal accountants, and
we are not in a position to agree or disagree with Farmers Capital Bank
Corporation's statement that Crowe, Chizek, and Company LLP was not engaged
regarding (i) either the application of accounting principles to a specified
transaction, either completed or proposed; or the type of audit opinion that
might be rendered on Farmers Capital Bank Corporation's financial statements,
where either a written report was provided to Farmers Capital Bank Corporation
or oral advice was provided, that Crowe, Chizek, and Company LLP concluded was
an important factor considered by Farmers Capital Bank Corporation in reaching a
decision as to the accounting, auditing or financial reporting issue; or (ii)
any matter that was either the subject of a disagreement (as defined in
paragraph 304(a)(1)(iv) of Regulation S-K and the related instructions) or a
reportable event (as described in paragraph 304(a)(1)(v) of Regulation S-K).
Very truly yours,
/s/ KPMG LLP
Exhibit 21
Subsidiaries of the Registrant
------------------------------
The following table provides a listing of the direct and indirect operating
subsidiaries of the Registrant, the percent of voting stock held by the
Registrant as of December 31, 2002 and the jurisdiction of incorporation in
which each subsidiary was incorporated or organized.
Percentage of
Voting
Jurisdiction Stock held by
Subsidiaries of the Registrant of Incorporation Registrant
- --------------------------------------------------------------------------------
Farmers Bank & Capital Trust Co. Kentucky 100%
United Bank & Trust Company Kentucky 100%
First Citizens Bank Kentucky 100%
Lawrenceburg National Bank Kentucky 100%
Farmers Bank and Trust Company Kentucky 100%
Kentucky Banking Centers, Inc. Kentucky 100%
FCB Services, Incorporated Kentucky 100%
Kentucky General Life Insurance Company, Inc. Kentucky 1
Farmers Capital Insurance Corporation 2 Kentucky
EG Properties, Inc.1,2 Kentucky
Farmers Fidelity Insurance Agency, LLP 3 Kentucky
Farmers Bank Realty Co. 2 Kentucky
Leasing One Corporation 2 Kentucky
Community Development of Kentucky, Inc.1,2 Kentucky
1 No stock issued; inactive company.
2 A wholly owned subsidiary of Farmers Bank & Capital Trust Co.
3 A fifty (50%) percent owned LLP of Farmers Capital Insurance Corporation.
4 A wholly owned subsidiary of Farmers Bank and Trust Company
Exhibit 23
INDEPENDENT AUDITORS' CONSENT
-----------------------------
The Board of Directors
Farmers Capital Bank Corporation:
We consent to the incorporation by reference in the registration statement (No.
333-63037) on Form S-8 of Farmers Capital Bank Corporation of our report dated
January 17, 2003, with respect to the consolidated balance sheets of Farmers
Capital Bank Corporation and Subsidiaries as of December 31, 2002 and 2001, and
the related consolidated statements of income, comprehensive income, changes in
shareholders' equity, and cash flows for each of the years in the three-year
period ended December 31, 2002, which report appears in the December 31, 2002
annual report on Form 10-K of Farmers Capital Bank Corporation.
/s/ KPMG LLP
Louisville, Kentucky
March 27, 2003
Exhibit 99.1
Certification of Periodic Report
I, G. Anthony Busseni, President and Chief Executive Officer of Farmers Capital
Bank Corporation, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, 18 U.S.C. Section 1350, that:
1) the annual report on Form 10-K of the Company for the period ended
December 31, 2002 (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 the Company.
Date: March 13, 2003 /s/ G. Anthony Busseni
------------------- -----------------------------------
G. Anthony Busseni
President and CEO
Exhibit 99.2
Certification of Periodic Report
I, C. Douglas Carpenter, Vice President, Secretary, and Chief Financial Officer
of Farmers Capital Bank Corporation, certify, pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:
1) the annual report on Form 10-K of the Company for the period ended
December 31, 2002 (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 the Company.
Date: 3-13-02 /s/ C. Douglas Carpenter
--------------------- -----------------------------------
C. Douglas Carpenter
Vice President, Secretary, and CFO