Attached files
Exhibit 99.1
April 25, 2011
Quarterly Report
First Quarter 2011
We are pleased to report that for the quarter ended March 31, 2011,
earnings for your company were up 33.7% over those of March 31, 2010. For
the first quarter, we earned $1.26 million compared to $945 thousand for
the same period in 2010. Earnings per share, on a fully diluted basis,
increased from $0.35 to $0.46 which represents a 31.4% increase.
Since August of 2010, we have implemented a strategy to improve our net
interest margin. We have increased the margin from 3.40% for August,
2010, to 4.27% for March, 2011. As a result, our net interest income has
totaled $5.8 million for the first quarter of 2011, which was a 19.5 %
increase over March 31, 2010.
Loan demand remains relatively soft as the economies in our markets
continue to be somewhat uncertain. However, over the last two months we
are starting to see some slight improvement in demand. In many markets in
which we do business, unemployment numbers have improved slightly. The
housing and home construction sectors of both our local and national
economies are still struggling, with a forecast of at least another year
of high levels of unsold homes. The recent escalation of oil and gas
prices has added another level of uncertainty about the economy as well.
The stock market currently appears to have some strength, and that
typically is an indicator of anticipated improvement in the economy.
In our business today, there are two very important aspects on which we
need to continually focus--service and loan quality. To help us maintain
that focus, we have made some recent organizational changes. Joe Fryman
has become the Chief Credit Officer for the bank. He has over thirty-five
years of credit experience, and has been a member of our Senior
Management team for many years. He is a graduate of the Stonier Graduate
School of Banking at Rutgers University. Joe will be responsible for all
credit functions of the bank, and will chair our Executive Loan
Committee. Joe?s experience and knowledge in this capacity will be
invaluable to us.
Billy Hough, who has served as Market President of our East Kentucky
Region since the acquisition of Peoples Bank in Morehead, will now become
head of Sales and Service, with our Market Presidents reporting to him.
His role will be to assist them in reaching their goals of growth and
customer service. Billy has over ten years of banking experience, and
prior to that owned his own successful business. He is a graduate of the
Louisiana State University Graduate School of Banking. We look forward to
his guidance in working with our Market Presidents.
?
Your company is still committed not only to meet the economic challenges
that currently exist, but to overcome them. We will do everything
possible to accomplish what is in the long term best interest of our
customers, employees, communities, and ultimately our shareholders.
As always, we appreciate your support.
/s/Louis Prichard
Louis Prichard
President, CEO
UNAUDITED
CONSOLIDATED BALANCE SHEET
Percentage
3/31/2011 3/31/2010 Change
Assets
Cash & Due From Banks $ 14,467,772 $ 16,087,964 -10.1%
Securities 176,318,253 191,089,171 -7.7
Loans Held for Sale - 899,000 n/m
Loans 414,231,816 422,270,397 -1.9
Reserve for Loan Losses 5,640,859 5,763,250 -2.1
Net Loans 408,590,957 416,507,147 -1.9
Federal Funds Sold 151,000 60,619,000 -99.8
Other Assets 56,973,176 55,388,038 2.9
Total Assets $ 656,501,158 $ 740,590,320 -11.4%
Liabilities & Stockholders' Equity
Deposits
Demand $ 132,005,504 $ 118,284,850 11.6%
Savings & Interest Checking 194,439,567 183,476,535 6.0
Certificates of Deposit 212,333,998 303,846,369 -30.1
Total Deposits 538,779,069 605,607,754 -11.0
Repurchase Agreements 4,321,885 3,387,228 27.6
Other Borrowed Funds 47,977,504 65,092,817 -26.3
Other Liabilities 2,417,266 4,934,843 -51.0
Total Liabilities 593,495,724 679,022,642 -12.6
Stockholders' Equity 63,005,434 61,567,678 2.3
Total Liabilities & Stockholders' Equity $ 656,501,158 $ 740,590,320 -11.4%
CONSOLIDATED INCOME STATEMENT
Three Months Ending
Percentage
3/31/2011 3/31/2010 Change
Interest Income $ 7,457,556 $ 7,571,592 -1.5%
Interest Expense 1,637,482 2,702,246 -39.4
Net Interest Income 5,820,074 4,869,346 19.5
Loan Loss Provision 750,000 450,000 66.7
Net Interest Income After Provision 5,070,074 4,419,346 14.7
Other Income 1,827,467 1,746,773 4.6
Other Expenses 5,429,513 5,172,353 5.0
Income Before Taxes 1,468,028 993,766 47.7
Income Taxes 205,619 49,347 316.7
Net Income $ 1,262,409 $ 944,419 33.7
Net Change in Unrealized Gain (loss)
on Securities 1,294,151 206,233 527.5
Comprehensive Income $ 2,556,560 $ 1,150,652 122.2%
Selected Ratios
Return on Average Assets 0.76% 0.54%
Return on Average Equity 8.2 6.1
Earnings Per Share $ 0.46 $ 0.35
Earnings Per Share - assuming dilution 0.46 0.35
Cash Dividends Per Share 0.22 0.21
Book Value Per Share 22.97 22.44
Market Price High Low Close
First Quarter '11 $17.50 $16.50 $16.50
Fourth Quarter '10 $17.45 $16.25 $16.7
