EXHIBIT 99.1
October 26, 2004
NEWS RELEASE to Lexington Herald-Leader
First Security Bancorp, Inc., the parent of First Security Bank of Lexington, announced its financial results for the quarter ended September 30, 2004.
Net income for the three months ended September 30, 2004 was $(1,000), or $0.00 per share (on a diluted basis), compared to $249,000, or $0.16 per share, for the quarter ended September 30, 2003. Net income for the nine-month period ended September 30, 2004 was $403,000, or $0.26 per share, as compared to $574,000, or $0.38 per share, for the nine-month period ended September 30, 2003. Total assets at September 30, 2004 were $214.0 million as compared to $217.2 million at June 30, 2004, a decrease of $3.2 million.
Earnings for the current quarter, as compared to the third quarter of 2003, were positively impacted by a decline of $226,000 in operating expenses. Earnings were adversely impacted, however, by two primary factors: 1) an increase in the provision for loan losses of $222,000 and 2) as previously announced, an approximate loss of $100,000 on the sale of certain assets used in the mortgage banking operations it conducted under the name of First Security Mortgage Company.
According to Doug Hutcherson, President & CEO, “In 2003, loans to a troubled franchise operator were re-classified into non-accrual. Following that operator’s Chapter 11 Reorganization during the third quarter of 2004, we obtained revised collateral values and lowered our loan balances to those levels. With that action, we also increased our provision for loan losses. We believe this step, when combined with the reduction in non-accrual loan balances, strengthened our balance sheet.
The sale of certain assets used in the bank’s residential mortgage banking operations represents a re-positioning of our efforts in that portion of our business, following the decline in residential mortgage refinancing opportunities in the market.”
CONSOLIDATED BALANCE SHEETS (unaudited)
(in thousands, except share data)
| | 9/30/04 | 12/31/03 | 9/30/03 |
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| Assets | | | | | | | | | | | |
| Cash & Due From Banks | | | $ | 4,753 | | $ | 4,820 | | $ | 5,403 | |
| Federal Funds Sold | | | | 7,216 | | | 25,193 | | | 8,686 | |
| Securities | | | | 36,265 | | | 38,624 | | | 38,386 | |
| Loans | | | | 157,482 | | | 161,519 | | | 163,895 | |
| Allowance For Loan Losses | | | | (1,796 | ) | | (2,379 | ) | | (2,224 | ) |
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| Net Loans | | | | 155,686 | | | 159,140 | | | 161,671 | |
| Other Assets | | | | 10,090 | | | 10,481 | | | 10,855 | |
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| Total Assets | | | $ | 214,010 | | $ | 238,258 | | $ | 225,001 | |
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| Liabilities & Shareholders' Equity | | |
| Deposits | | |
| Non-interest Bearing | | | $ | 23,002 | | $ | 24,581 | | $ | 21,944 | |
| Savings, Money Market & NOW | | | | 54,491 | | | 41,391 | | | 41,803 | |
| Certificates of Deposit | | | | 93,153 | | | 124,668 | | | 124,024 | |
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| Total Deposits | | | | 170,646 | | | 190,640 | | | 187,771 | |
| Repurchase Agreements | | | | 8,264 | | | 8,874 | | | 3,723 | |
| Other Borrowed Funds | | | | 13,821 | | | 17,512 | | | 13,065 | |
| Other Liabilities | | | | 941 | | | 1,120 | | | 1,040 | |
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| Total Liabilities | | | | 193,672 | | | 218,146 | | | 205,599 | |
| Shareholders' Equity | | | | 20,338 | | | 20,112 | | | 19,402 | |
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| Total Liabilities & Shareholders' Equity | | | $ | 214,010 | | $ | 238,258 | | $ | 225,001 | |
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CONSOLIDATED INCOME STATEMENTS(unaudited)
(in thousands, except per share data)
| | Three Months Ended
9/30/04 9/30/03 | | Nine Months Ended
9/30/04 9/30/03 | |
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| Interest Income | | | $ | 2,639 | | $ | 2,768 | | $ | 8,057 | | $ | 8,648 | |
| Interest Expense | | | | 1,054 | | | 1,333 | | | 3,376 | | | 4,241 | |
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| Net Interest Income | | | | 1,585 | | | 1,435 | | | 4,681 | | | 4,407 | |
| Loan Loss Provision | | | | 222 | | | 50 | | | 297 | | | 519 | |
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| Net Interest Income After Provision | | | | 1,363 | | | 1,385 | | | 4,384 | | | 3,888 | |
| Other Income | | | | 255 | | | 794 | | | 1,166 | | | 2,214 | |
| Other Expenses | | | | 1,629 | | | 1,855 | | | 4,975 | | | 5,397 | |
| Provision for Federal Income Tax | | | | (10 | ) | | 75 | | | 172 | | | 131 | |
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| Net Income (loss) | | | $ | (1 | ) | $ | 249 | | $ | 403 | | $ | 574 | |
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| Earnings Per Share | | |
| Basic | | | $ | .00 | | $ | .17 | | $ | .26 | | $ | .39 | |
| Diluted | | | | .00 | | | .16 | | | .26 | | | .38 | |
Where appropriate, some items in the prior financial statements have been reclassified to conform to the current presentation.
