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

Exhibit 99.1

NEWS RELEASE

THE BANK OF KENTUCKY FINANCIAL CORPORATION

ANNOUNCES FIRST QUARTER EARNINGS

Earnings per share up 19% from the First Quarter of 2007

CRESTVIEW HILLS, KENTUCKY, April 18, 2008 – The Bank of Kentucky Financial Corporation (the “Company”) (OTC/BB: BKYF), the holding company of the Bank of Kentucky, Inc. (the “Bank”), today reported its earnings for the first quarter of 2008. For the first quarter the Company reported an increase in diluted net income per share of 19%, as compared to the same period in 2007. Highlighting the first quarter results were an increase in total revenue of 9%, an increase in loans of 17% and an increase in deposits of 15%. The first quarter results included the impact of the acquisition of FNB Bancorporation, Inc. and its subsidiary, First Bank of Northern Kentucky, Inc. (“First Bank”), which was completed on May 18, 2007.

A summary of the Company’s results follows:

First Quarter ended March 31,	2008		2007		Change
Net income	$	2,504,000	$	2,157,000	16	%
Net income per share, basic	$	0.44	$	0.37	19	%
Net income per share, diluted	$	0.44	$	0.37	19	%

Net interest income increased $840,000, or 10% in the first quarter of 2008, as compared to the same period in 2007, while the net interest margin decreased from 3.71% in the first quarter of 2007 to 3.44% in the first quarter of 2008. The increase in net interest income was the result of the growth in earning assets by $166 million, as compared to the first quarter of 2007, while the interest rate environment contributed to the reduction in the Bank’s net interest margin. The Federal Reserve Bank’s 200 basis point reduction in short term rates in the first quarter of 2008 put pressure on the net interest margin, as these cuts tend to reduce interest income more swiftly than interest expense. The provision for loan losses increased by $150,000 (23%) in the first quarter of 2008 compared to the same period in 2007. Contributing to this increase was higher levels of charge-offs and non-performing loans in the first quarter of 2008 versus the same period in 2007 and management’s concerns over the declining housing market and overall deteriorating economic conditions. The Company’s non-performing loans as a percentage of total loans were 1.23% at March 31, 2008, which was above the level as of March 31, 2007, when the percentage was .70% and the annualized net charge-offs to average loans increased from .11% in the first quarter of 2007 to .20% in the first quarter of 2008.

Non-interest income increased 9% ($282,000) in the first quarter of 2008, as compared to the same period in 2007, while non-interest expense increased 5% ($443,000) from the same period last year. Contributing to the increase in non-interest income was gains on the sale of real estate loans (up $244,000, 127%). The largest increases in non-interest expense were attributed to increased salaries and employee benefits expense, which increased $261,000 or 6%. Non-interest expense in the first quarter of 2008 included the addition of $190,000 in the amortization of intangible assets acquired with the First Bank acquisition. Offsetting these increases was a decrease in expenses related to repossessed properties, which decreased $433,000 from 2007 to 2008. The expenses in 2007 were primarily the result of certain improvements made to a repossessed commercial office building.

Total assets were $1.239 billion at the end of the first quarter of 2008, which was $190 million or 18% higher than the same date a year ago. Total loans grew $142 million or 17% from March of 2007 and were funded by an increase in deposits of $133 million or 15%, with the First Bank acquisition adding approximately $63 million in loans and deposits in 2007. Total borrowing increased $50 million or 119% from March of 2007 as a result of $18 million in trust preferred securities issued in 2007 in connection with to the First Bank acquisition, and a $20 million subordinated debt facility that was entered into in March of 2008, the proceeds of which the Company expects to use to redeem $17 million of outstanding trust preferred securities previously issued in 2002.

The Bank of Kentucky Financial Corporation

Selected Consolidated Financial Data

(Dollars in thousands, except per share data)

	First Quarter Comparison
	3/31/08			3/31/07			% Change
Income Statement Data
Interest income	$	18,510		$	17,525		6	%
Interest expense		8,903			8,758		2	%
Net interest income		9,607			8,767		10	%
Provision for loan losses		800			650		23	%
Net interest income after provision for loan losses		8,807			8,117		9	%
Non – interest income		3,554			3,272		9	%
Non – interest expense		8,740			8,297		5	%
Net income before income taxes		3,621			3,092		17	%
Provision for income taxes		1,117			935		19	%
Net income		2,504			2,157		16	%
Per Share Data
Basic earnings per share	$	0.44		$	0.37		19	%
Diluted earnings per share		0.44			0.37		19	%
Cash dividends declared		0.26			0.22		18	%
Earnings Performance Data
Return on equity		10.77	%		10.00	%	77	bps
Return on assets		.83	%		.84	%	(1)	bps
Net interest margin		3.44	%		3.71	%	(27)	bps
Balance Sheet Data
Investments	$	111,204		$	113,959		(2)	%
Total loans		960,737			818,582		17	%
Allowance for loan losses		8,820			7,342		20	%
Total assets		1,238,643			1,048,395		18	%
Total deposits		1,041,852			908,458		15	%
Total borrowings		92,415			41,950		120	%
Stockholders’ equity		93,596			87,591		7	%

	Five-Quarter Comparison
	3/31/08			12/31/07			9/30/07			6/30/07			3/31/07
Income Statement Data
Net interest income	$	9,607		$	9,694		$	9,681		$	9,094		$	8,767
Provision for loan losses		800			525			100			300			650
Net interest income after provision for loan losses		8,807			9,169			9,581			8,794			8,117
Service charges and fees		1,870			2,157			2,117			2,119			1,850
Gain on sale of real estate loans		436			227			202			298			192
Trust fee income		292			292			266			257			274
Bankcard transaction revenue		433			437			409			421			359
Other non-interest income		523			431			523			615			597
Total non-interest income		3,554			3,544			3,517			3,710			3,272
Salaries and employee benefits expense		4,296			4,166			4,119			4,082			4,035
Occupancy and equipment expense		1,212			1,178			1,158			1,094			1,087
Data processing expense		360			378			352			372			331
State bank taxes		400			300			300			307			351
Amortization of intangible assets		352			352			347			230			161
Other non-interest expenses		2,120			2,117			2,326			2,244			2,332
Total non-interest expense		8,740			8,491			8,602			8,329			8,297
Net income before income tax expense		3,621			4,222			4,496			4,175			3,092
Income tax expense		1,117			1,137			1,455			1,327			935
Net income		2,504			3,085			3,041			2,848			2,157
Per Share Data
Basic earnings per share	$	0.44		$	0.54		$	0.53		$	0.49		$	0.37
Diluted earnings per share		0.44			0.54			0.53			0.49			0.37
Cash dividends declared		0.26			0.00			0.24			0.00			0.22
Weighted average shares outstanding
Basic		5,658,002			5,704,610			5,745,799			5,770,536			5,792,055
Diluted		5,670,435			5,721,841			5,767,876			5,797,269			5,824,452
Earnings Performance Data
Return on equity		10.77	%		13.26	%		13.32	%		12.85	%		10.00	%
Return on assets		.83	%		1.01	%		1.05	%		1.06	%		.84	%
Net interest margin		3.44	%		3.46	%		3.65	%		3.67	%		3.71	%

	3/31/08			12/31/07			9/30/07			6/30/07			3/31/07
Balance Sheet Data
Investments	$	111,204		$	168,299		$	103,073		$	97,463		$	113,959
Total loans		960,737			949,714			920,756			909,377			818,582
Allowance for loan losses		8,820			8,505			8,755			8,664			7,342
Total assets		1,238,643			1,232,724			1,154,181			1,142,083			1,048,395
Total deposits		1,041,852			1,062,079			988,738			980,888			908,458
Total borrowings		92,415			65,129			62,418			60,064			41,950
Stockholders’ equity		93,596			93,485			91,060			90,146			87,591
Average Balance Sheet Data
Average Investments	$	123,958		$	121,373		$	99,085		$	83,837		$	94,168
Average other earning assets		46,825			56,158			40,476			48,537			40,743
Average loans		953,592			934,089			913,500			860,607			823,529
Average earning assets		1,124,375			1,111,620			1,053,061			992,981			958,440
Average assets		1,218,466			1,208,352			1,144,792			1,078,645			1,042,212
Average interest bearing deposits		910,592			897,253			848,048			799,927			777,543
Average borrowings		63,791			61,330			58,554			43,864			38,964
Average interest bearing liabilities		974,383			958,583			906,602			843,791			816,507
Average stockholders equity		93,541			92,273			90,603			88,869			87,519
Asset Quality Data
Allowance for loan losses to total loans		.92	%		.90	%		.95	%		.95	%		.90	%
Allowance for loan losses to non-performing loans		75	%		94	%		100	%		86	%		128	%
Nonaccrual loans	$	8,744		$	6,389		$	5,860		$	6,766		$	3,068
Loans – 90 days past due & still accruing		3,066			2,658			2,928			3,329			2,666
Total non-performing loans		11,810			9,047			8,788			10,095			5,734
OREO and repossessed assets		4,373			4,117			4,276			3,777			3,538
Total non-performing assets		16,183			13,164			13,064			13,872			9,272
Non-performing loans to total loans		1.23	%		.95	%		.95	%		1.11	%		.70	%
Non-performing assets to total assets		1.30	%		1.07	%		1.14	%		1.22	%		.89	%
Annualized charge-offs to average loans		.20	%		.33	%		.00	%		(.01	)%		.11	%
Net charge-offs	$	485		$	774		$	9		$	(11	)	$	226

About BKFC

BKFC, a bank holding company with assets of approximately $1.239 billion, offers banking and related financial services to both individuals and business customers. BKFC operates twenty-eight branch locations and forty-one ATMs in the Northern Kentucky market.

For more information contact:

Martin Gerrety

Executive Vice President and CFO

(859) 372-5169

mgerrety@bankofky.com

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