Frankfort First Bancorp, Inc.
For Immediate Release August 4, 2003
Contact: Don Jennings, President, or Clay Hulette, Vice President
(502) 223-1638
216 West Main Street
P.O. Box 535
Frankfort, KY 40602
FRANKFORT FIRST BANCORP, INC. RELEASES EARNINGS
Frankfort First Bancorp, Inc. (Nasdaq: FKKY), the holding company for First
Federal Savings Bank of Frankfort, Kentucky, announced net earnings of $1.3
million or $1.02 diluted earnings per share for the fiscal year ended June 30,
2003, compared to $1.3 million or $1.04 diluted earnings per share for the
fiscal year ended June 30, 2002. This results in a 1.9% decrease in diluted
earnings per share for the year.
While net earnings decreased by only $12,000 year-to-year, net interest
income decreased by $187,000 or 4.9% for the year recently ended compared to
fiscal 2002. This was mostly offset by a decrease in general, administrative,
and other expense which decreased by $158,000 or 8.5%. Net interest income was
affected by historically low market interest rates that caused radical changes
in the Company's loan portfolio including accelerated prepayments, borrowers
refinancing for lower rates, and downward adjustment of adjustable rate
mortgages which had the result of reducing both volume and rate. While rates and
volumes of interest-bearing liabilities decreased as well, the net change was
negative. The decrease in general, administrative, and other expense was chiefly
due to a reduction in employee compensation expense stemming from changes in
employee benefit plans affected by charges taken in the fourth quarter of fiscal
2002.
At June 30, 2003 the Company reported its book value per share as $14.35
compared to $14.50 at June 30, 2002. Contributing to the decrease in book value
per share is the fact that dividends paid to shareholders exceeded earnings per
share and a slight increase in the shares outstanding resulting from a stock
compensation plan.
In addition to historical information, the preceding discussion may contain
forward-looking statements that involve risk and uncertainties. Economic
circumstances, the Company's operations, and the Company's actual results could
differ significantly from those discussed in the forward-looking statements.
First Federal Savings Bank of Frankfort operates three offices in
Frankfort, Kentucky. Frankfort First Bancorp, Inc. shares are traded on the
Nasdaq National Market under the symbol FKKY. At June 30, 2003 the Company had
approximately 1,254,000 shares outstanding.
SUMMARY OF FINANCIAL HIGHLIGHTS
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
June 30, June 30,
2003 2002
(In thousands, except per share data)
(Unaudited) (Audited)
Assets
Cash and Cash Equivalents $ 2,028 $ 4,812
Investment Securities 7,097 100
Loans Receivable, net 124,596 131,180
Other Assets 4,615 4,865
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Total Assets $ 138,336 $ 140,957
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Liabilities
Deposits $ 75,622 $ 75,896
FHLB Advances 43,017 44,982
Other Liabilities 1,699 2,014
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Total Liabilities 120,338 122,892
Shareholders' Equity 17,998 18,065
-------------- -------------
Total Liabilities and Equity $ 138,336 $ 140,957
============== =============
Book Value Per Share $ 14.35 $ 14.50
============== =============
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
Twelve months ended June 30, Three months ended June 30,
2003 2002 2003 2002
(In thousands, except per share data)
(Unaudited) (Audited) (Unaudited) (Unaudited)
Interest Income $ 8,652 $ 9,991 $ 2,060 $ 2,330
Interest Expense 5,020 6,172 1,186 1,385
------------ ------------- ------------- -------------
Net Interest Income 3,632 3,819 874 945
Provision for Losses on Loans -- 1 -- --
Other Operating Income 71 62 16 20
General, Administrative, and Other Expense 1,710 1,868 434 553
------------ ------------- ------------- -------------
Earnings Before Federal Income Taxes 1,993 2,012 456 412
Federal Income Taxes 678 685 155 140
------------ ------------- ------------- -------------
Net Earnings $ 1,315 $ 1,327 $ 301 $ 272
============ ============= ============= =============
Basic Earnings Per Share $ 1.05 $ 1.07 $ 0.24 $ 0.22
Diluted Earnings Per Share $ 1.02 $ 1.04 $ 0.23 $ 0.21
Dividends Per Share $ 1.12 $ 1.12 $ 0.28 $ 0.28