Bank of Kentucky Financial (BKYF) 8-K Announces Second Quarter Earnings

Exhibit 99.1

THE BANK OF KENTUCKY FINANCIAL CORPORATION

ANNOUNCES SECOND QUARTER EARNINGS

Earnings Per Share up 2% for the Second Quarter and 7% for the first Six Months of 2005.

CRESTVIEW HILLS, KENTUCKY, July 21, 2005 – The Bank of Kentucky Financial Corporation (the “Company”) (OTC/BB: BKYF), the holding company of the Bank of Kentucky, Inc., today reported its earnings for the second quarter and the six months ended June 30, 2005. For the second quarter and the first six months of 2005, the Company reported an increase in diluted net income per share of 2% and 7% respectively, as compared to the same periods in 2004. Highlighting 2005 results was net interest income which increased 12% ($903,000) from the second quarter of 2004 and 12% (1,750,000) from the six months ended June 30, 2004. These increases were offset by decreases in gains on the sale of mortgage loans of 43% ($204,000) and 44% ($352,000), respectively, for the same periods.

A summary of the Company’s interim results follows:

Second Quarter ended June 30,	2005		2004		Change
Net income	$	2,615,000	$	2,602,000	0	%
Net income per share, basic	$	0.44	$	0.44	0	%
Net income per share, diluted	$	0.44	$	0.43	2	%
Six Months ended June 30,	2005		2004		Change
Net income	$	5,160,000	$	4,913,000	5	%
Net income per share, basic	$	.87	$	.82	6	%
Net income per share, diluted	$	.87	$	.81	7	%

Net interest income increased $903,000 or 12% in the second quarter of 2005, as compared to the same period in 2004. The increase was both the result of an increase in loans outstanding and a favorable rate variance from the second quarter of 2004. This growth and favorable rate environment helped increase the net interest margin from 3.99% in the second quarter of 2004 to 4.15% in the second quarter of 2005. The provision for loan losses increased by $125,000 (36%) in the second quarter of 2005 as compared to the same period in 2004, resulting primarily from higher losses.

Non-interest income increased 6% ($133,000) in the second quarter of 2005, as compared to the same period in 2004, while non-interest expense increased 17% ($908,000) from the same period last year. Increases in service charge income (up $146,000, 15%), bankcard transaction revenue (up $59,000, 28%) and fees from the issuance of standby letters of credit (up $84,000, 335%) offset decreases in gains on the sale of mortgage loans (down $204,000, 43%). This decrease in gains on the sale of mortgage loans was a result of a saturated mortgage loan refinancing market. The largest increases in non-interest expense were salaries and employee benefits expense (up $414,000, 16%) and occupancy and equipment expense (up $193,000, 24%). These non-interest expense increases were due in part to the opening of the Bank’s cash management operations center in February.

Total assets were $873 million at the end of the second quarter of 2005, which was $40 million or 5% higher than the same date a year ago. Total loans grew $42 million or 6% from June of 2004 and were funded by an increase in deposits of $43 million or 6% from the end of the second quarter of 2004.

The Bank of Kentucky Financial Corporation

Selected Consolidated Financial Data

(Dollars in thousands, except per share data)

	Second Quarter Comparison								Six months ended June 30, Comparison
	6/30/05			6/30/04			% Change		2005			2004			% Change
Income Statement Data
Net interest income	$	8,237		$	7,334		12	%	$	16,148		$	14,398		12	%
Provision for loan losses		475			350		36	%		825			675		22	%
Service charges on deposit accounts		1,092			946		15	%		1,883			1,792		5	%
Gains on the sale of mortgage loans		276			480		(43	)%		451			803		(44	)%
Other non-interest income		972			781		24	%		1,927			1,520		27	%
Salaries and employee benefits expense		3,007			2,593		16	%		5,764			5,130		12	%
Occupancy and equipment expense		987			794		24	%		1,928			1,629		18	%
Other non-interest expense		2,216			1,915		16	%		4,217			3,757		12	%
Net income		2,615			2,602		0	%		5,160			4,913		5	%
Per Share Data
Basic earnings per share	$	0.44		$	0.44		0	%	$	.87		$	.82		6	%
Diluted earnings per share		0.44			0.43		2	%		.87			.81		7	%
Cash dividends declared		0.00			0.00		0	%		0.14			0.11		27	%
Earnings Performance Data
Return on equity		13.74	%		15.07	%	(133	)bps		13.78	%		14.37	%	(59	)bps
Return on assets		1.20	%		1.27	%	(7	)bps		1.19	%		1.21	%	(2	)bps
Net interest margin		4.15	%		3.99	%	16	bps		4.12	%		3.95	%	17	bps
									6/30/05			6/30/04			% Change
Balance Sheet Data
Investments									$	59,468		$	50,233		18	%
Total loans										733,579			692,025		6	%
Allowance for loan losses										7,364			7,180		3	%
Total assets										872,841			833,204		5	%
Total deposits										740,192			696,936		6	%
Total borrowings										49,675			62,238		(20	)%
Stockholders’ equity										77,230			69,687		11	%
Asset Quality Data
Allowance for loan losses to total loans										1.00	%		1.04	%
Non-performing loans to total loans										.94	%		.48	%
Annualized charge-offs to average loans										.19	%		.11	%

	Five-Quarter Comparison
	6/30/05			3/31/05			12/31/04			9/30/04			6/30/04
Income Statement Date
Net interest income	$	8,237		$	7,911		$	7,881		$	7,714		$	7,334
Provision for loan losses		475			350			500			500			350
Service charges on deposit accounts		1,092			791			894			994			946
Gains on the sale of mortgage loans		276			175			256			222			480
Other non-interest income		972			955			985			805			781
Salaries and employee benefits expense		3,007			2,757			2,601			2,655			2,593
Occupancy and equipment expense		987			941			860			868			794
Other non-interest expense		2,216			2,001			2,068			2,034			1,915
Net income		2,615			2,545			2,680			2,465			2,602
Per Share Data
Basic earnings per share	$	0.44		$	0.43		$	0.45		$	0.42		$	0.44
Diluted earnings per share		0.44			0.43			0.45			0.41			0.43
Cash dividends declared		0.00			0.14			0.00			0.12			0.00
Earnings Performance Data
Return on equity		13.74	%		13.83	%		14.70	%		14.09	%		15.07	%
Return on assets		1.20	%		1.18	%		1.23	%		1.17	%		1.27	%
Net interest margin		4.15	%		4.09	%		4.00	%		4.05	%		3.99	%
	6/30/05			3/31/05			12/31/04			9/30/04			6/30/04
Balance Sheet Data
Investments	$	59,468		$	60,632		$	64,266		$	48,633		$	50,233
Total loans		733,579			727,525			719,157			712,275			692,025
Allowance for loan losses		7,364			7,320			7,214			7,385			7,180
Total assets		872,841			880,200			878,129			853,444			833,204
Total deposits		740,192			731,479			752,800			708,486			696,936
Total borrowings		49,675			68,637			46,734			68,656			62,238
Stockholders’ equity		77,230			74,547			73,664			71,084			69,687
Asset Quality Data
Allowance for loan losses to total loans		1.00	%		1.01	%		1.00	%		1.04	%		1.04	%
Non-performing loans to total loans		.94	%		.72	%		.72	%		.61	%		.48	%
Annualized charge-offs to average loans		.19	%		.14	%		.19	%		.17	%		.11	%

About BKFC

BKFC, a bank holding company with assets of approximately $873 million, offers banking and related financial services to both individuals and business customers. BKFC operates twenty-six branch locations and forty ATM’s in the Northern Kentucky market.

For more information contact:

Martin Gerrety

Senior Vice President and CFO

(859) 372-5169

mgerrety@bankofky.com

###