Attached files
Exhibit 99.1
January 23, 2013
Quarterly Report
Fourth Quarter 2012
We are pleased to report for the year ended December 31, 2012, your
company had record earnings of $7.0 million. This represents a 23.2%
increase over the year ended December 31, 2011 total of $ 5.7 million.
For the fourth quarter 2012, net income is $1.9 million. When compared
to the same period in 2011, earnings are up 55.6% over the $1.2 million
figure. Additionally, I am pleased to announce that our earnings for the
year increased from $2.09 per share on a fully diluted basis to $2.59,
which is a 23.9% increase.
We are also pleased to announce that total assets reached a record high
at December 31, 2012 of $701 million compared to $659 million for 2011.
This represents a 6.3% increase.
The state of the national and local economies is improving, but there is
still a bit of uncertainty facing the country. While Congress did,
temporarily, avoid the so called fiscal cliff, there are many government
expenditure issues that have yet to be resolved. As it relates to your
bank, we have seen a slight increase in commercial loan activity.
Additionally, unemployment rates are dropping in virtually all the
markets in which we operate. Our refinancing of residential real estate
mortgages has been extremely strong. This has not only contributed
financially, but has also allowed us to establish stronger relationships
with our existing customers and with new customers who have come to us
from other financial institutions.
We want to take this opportunity to thank William M. Arvin, who is
retiring after sixteen years as a director of your company. He has
served on our Compensation, Audit, Wealth Management, Loan, and Strategic
Planning Committees. His leadership and contributions have been
significant in helping us grow in a profitable manner.
Clark Nyberg, Director of our Wealth Management Department, will be
retiring as of March 31, 2013. Under his management that area has
experienced healthy growth. We thank him for his service and wish him
nothing but success in his future endeavors.
In December, Jim Elliott joined our team to assume the position of
Director of the Wealth Management Department upon Clark's retirement.
Jim was formerly with BB&T in Lexington and has managed Private Banking,
as well as Retail Banking areas during his career. His long time
experience assisting clients and customers in the management of their
assets will be helpful to our Kentucky Bank clients also. He and Clark
are working together to ensure that our customers are well taken care of
during this transition period.
The financial year of 2012 has been a nice improvement over 2011. A
major factor, along with our refinancing activities and improved loan
growth, has been our ability to manage our balance sheet and cost of
funds so as to positively impact our net interest margin. To build on
the financial success of 2012, we will pursue future growth and expansion
opportunities as they arise. We believe the strength of Kentucky Bank
provides a great foundation for either strategic acquisitions or organic
growth.
We will continue to do everything possible to meet future challenges so
that we can 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
UNAUDITED
CONSOLIDATED BALANCE SHEET
Percentage
12/31/2012 12/31/2011 Change
Assets
Cash & Due From Banks $ 31,579,930 $ 17,128,480 84.4%
Securities 192,780,473 180,419,376 6.9
Loans Held for Sale 485,845 625,400 -22.3
Loans 429,975,099 411,866,439 4.4
Reserve for Loan Losses 6,047,343 5,841,719 3.5
Net Loans 423,927,756 406,024,720 4.4
Federal Funds Sold 184,000 528,000 -65.2
Other Assets 52,052,306 54,727,485 -4.9
Total Assets $ 701,010,310 $ 659,453,461 6.3%
Liabilities & Stockholders' Equity
Deposits
Demand $ 144,574,752 $ 130,998,872 10.4%
Savings & Interest Checking 256,588,854 209,326,962 22.6
Certificates of Deposit 189,260,978 202,598,045 -6.6
Total Deposits 590,424,584 542,923,879 8.7
Repurchase Agreements 3,815,384 3,223,526 18.4
Other Borrowed Funds 25,165,932 38,843,229 -35.2
Other Liabilities 7,595,750 5,509,726 37.9
Total Liabilities 627,001,650 590,500,360 6.2
Stockholders' Equity 74,008,660 68,953,101 7.3
Total Liabilities & Stockholders' Equity $ 701,010,310 $ 659,453,461 6.3%
CONSOLIDATED INCOME STATEMENT
Twelve Months Ending Three Months Ending
Percentage Percentage
12/31/2012 12/31/2011 Change 12/31/2012 12/31/2011 Change
Interest Income $ 28,232,911 $ 29,889,329 -5.5% $ 6,812,257 $ 7,284,595 -6.5%
Interest Expense 3,715,640 5,565,428 -33.2 841,655 1,161,756 -27.6
Net Interest Income 24,517,271 24,323,901 0.8 5,970,602 6,122,839 -2.5
Loan Loss Provision 2,050,000 2,450,000 -16.3 450,000 550,000 -18.2
Net Interest Income After Provision 22,467,271 21,873,901 2.7 5,520,602 5,572,839 -0.9
Other Income 11,869,972 9,347,106 27.0 3,803,686 2,855,676 33.2
Other Expenses 25,686,008 24,614,718 4.4 6,903,030 7,061,165 -2.2
Income Before Taxes 8,651,235 6,606,289 31.0 2,421,258 1,367,350 77.1
Income Taxes 1,643,673 919,415 78.8 507,678 137,782 268.5
Net Income $ 7,007,562 $ 5,686,874 23.2% $ 1,913,580 $ 1,229,568 55.6%
Net Change in Unrealized Gain (loss)
on Securities 513,513 5,021,922 -89.8 (1,005,965) 310,609 -423.9
Comprehensive Income $ 7,521,075 $ 10,708,796 -29.8% $ 907,615 $ 1,540,177 -41.1%
Selected Ratios
Return on Average Assets 1.03% 0.87% 1.11% 0.77%
Return on Average Equity 9.70 8.74 10.31 7.12
Earnings Per Share $ 2.59 $ 2.09 $ 0.71 $ 0.44
Earnings Per Share - assuming di 2.59 2.09 0.71 0.44
Cash Dividends Per Share 0.92 0.88 0.23 0.22
Book Value Per Share 27.21 25.38
Market Price High Low Close
Fourth Quarter '12 $21.10 $17.96 $18.50
Third Quarter '12 $23.00 $20.27 $21.10
