Frankfort First Bancorp, Inc.
For Immediate Release April 26, 2004
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 $251,000
or $0.19 diluted earnings per share for the three month period ended March 31,
2004, compared to $296,000 or $0.23 diluted earnings per share for the three
month period ended March 31, 2003. This results in a 17.4% decrease in diluted
earnings per share for the quarter ended March 31, 2004. Net earnings for the
nine month period ended March 31, 2004 were $716,000 or diluted earnings per
share of $0.54 compared to net earnings of $1.0 million or diluted earnings per
share of $0.79 for the nine month period ended March 31, 2003, a 29.4% decrease
in net earnings, period to period.
Net earnings for the current quarter decreased by $45,000 or 15.2% compared
to the prior year, largely due an increase in general, administrative and other
expense, while a decrease in net interest income also contributed. General,
administrative and other expense increased $52,000 or 11.8% for the three month
period ended March 31, 2004, compared to the prior year period. Higher costs
associated with the Company's pension plan and other employee benefits were
primarily responsible for the increase. Net interest income decreased by $18,000
or 2.1% for the three month period ended March 31, 2004 compared to the prior
year period. The decrease in net interest income in the quarter ended March 31,
2004 was the latest of many such decreases that have resulted from steep
declines in market rates that have caused repricing of the Company's assets and
liabilities. President Don Jennings stated that while margin compression is
affecting many financial institutions, the Company's earnings may have been
impacted to a greater extent as management has continued to adhere to its
longstanding techniques for managing interest rate risk, such as emphasizing
investment in adjustable rate mortgages as opposed to purchasing or originating
higher-yielding fixed rate investments. While this currently exacerbates the
margin compression, such techniques should prove to be beneficial when market
interest rates rise.
The decrease in net earnings for the nine month period ended March 31, 2004
was attributable to the same factors identified for the quarter then ended,
while the decrease in net interest income played a much larger role in the nine
month period just ended. Net interest income decreased $301,000 or 10.9% from
period to period. General, administrative and other expense increased $132,000
or 10.3% for the nine month period ended March 31, 2004 compared to the prior
year period.
At March 31, 2004, the Company reported its book value per share as $13.96
compared to $14.35 at June 30, 2003.
This press release may contain statements that are forward-looking, as that
term is defined by the Private Securities Litigation Act of 1995 or the
Securities and Exchange Commission in its rules, regulations and releases. The
Company intends that such forward-looking statements be subject to the safe
harbors created thereby. All forward-looking statements are based on current
expectation regarding important risk factors including, but not limited to, real
estate values and the impact of interest rates on financing. Accordingly, actual
results may differ from those expressed in the forward-looking statements, and
the making of such statements should not be regarded as a representation by the
Company or any other person that results expressed therein will be achieved.
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 March 31, 2004 the Company had
approximately 1,267,000 shares outstanding.
SUMMARY OF FINANCIAL HIGHLIGHTS
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
March 31, June 30,
2004 2003
---- ----
(In thousands, except per share data)
(Unaudited) (Audited)
Assets
Cash and Cash Equivalents $ 611 $ 2,028
Investment Securities 6,319 7,097
Loans Receivable, net 126,298 124,596
Other Assets 4,742 4,615
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Total Assets $ 137,970 $ 138,336
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Liabilities
Deposits $ 73,808 $ 75,622
FHLB Advances 44,929 43,017
Other Liabilities 1,556 1,699
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Total Liabilities 120,293 120,338
Shareholders' Equity 17,677 17,998
------------- -------------
Total Liabilities and Equity $ 137,970 $ 138,336
============= =============
Book Value Per Share $ 13.96 $ 14.35
============= =============
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
Nine months ended March 31, Three months ended March 31,
2004 2003 2004 2003
---- ---- ---- ----
(In thousands, except per share data) (In thousands, except per share data)
(Unaudited) (Unaudited)
Interest Income $ 5,833 $ 6,592 $ 1,937 $ 2,095
Interest Expense 3,376 3,834 1,077 1,217
------------- ------------- -------------- --------------
Net Interest Income 2,457 2,758 860 878
Provision for Losses on Loans -- -- -- --
Other Operating Income 38 55 13 11
General, Administrative, and Other Expense 1,408 1,276 493 441
------------- ------------- -------------- --------------
Earnings Before Federal Income Taxes 1,087 1,537 380 448
Federal Income Taxes 371 523 129 152
------------- ------------- -------------- --------------
Net Earnings $ 716 $ 1,014 $ 251 $ 296
============= ============= ============== ==============
Basic Earnings Per Share $ 0.57 $ 0.81 $ 0.20 $ 0.23
Diluted Earnings Per Share $ 0.54 $ 0.79 $ 0.19 $ 0.23
Dividends Per Share $ 0.84 $ 0.84 $ 0.28 $ 0.28