1
Filed by Frankfort First Bancorp, Inc.
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12 of the Securities Act of 1934
Subject Company: Frankfort First Bancorp, Inc.
Commission File No.: 0-26360
Frankfort First Bancorp, Inc.
For Immediate Release January 25, 2005
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
$180,000 or $0.14 diluted earnings per share for the three month period ended
December 31, 2004, compared to $214,000 or $0.16 diluted earnings per share for
the three month period ended December 31, 2003. This results in a 12.5% decrease
in diluted earnings per share for the quarter ended December 31, 2004. Net
earnings for the six month period ended December 31, 2004 were $389,000 or $0.29
diluted earnings per share compared to net earnings of $465,000 or diluted
earnings per share of $0.35 for the six month period ended December 31, 2003, a
17.1% decrease in earnings, period to period.
Net earnings decreased by $34,000 or 15.9% from quarter to quarter
largely due to a decrease in net interest income and an increase in general,
administrative and other expense. Net interest income decreased by $48,000 or
6.0% for the three month period ended December 31, 2004 compared to the 2003
period. General, administrative and other expense increased by $41,000 or 8.3%
quarter to quarter, largely due to lower deferred costs on loans originated
during the quarter just ended compared to last year's quarter. To a lesser
extent benefit costs contributed to the overall increase.
Net earnings for the six month period ended December 31, 2004 decreased
$76,000 or 16.3% compared to the prior year period. The decrease in net earnings
is attributable to the same factors identified for the quarter then ended. Net
interest income decreased $67,000 or 4.2% from period to period. Other operating
income increased $64,000 or 256.0%, while general, administrative and other
expense increased $135,000 or 14.8% compared to the prior year period.
At December 31, 2004, the Company reported its book value per share as
$13.58 compared to $13.83 at June 30, 2004.
On July 16, 2004, Frankfort First Bancorp, Inc. announced that it had
executed a definitive agreement with First Federal Savings and Loan Association
of Hazard, Kentucky pursuant to which First Federal Savings and Loan Association
of Hazard will reorganize into a mutual holding company in order to acquire
Frankfort First Bancorp for $23.50 per share of outstanding Frankfort First
Bancorp common stock. This transaction is expected to close in the first
calendar quarter of 2005.
2
The proposed acquisition has been submitted to Frankfort First
Bancorp's stockholders for their consideration. Kentucky First Federal Bancorp,
Inc., the new mid-tier holding company to be formed by First Federal in the
reorganization, has filed a registration statement, including a prospectus, and
other relevant documents concerning the reorganization and the merger; and
Frankfort First Bancorp has filed a proxy statement and other relevant documents
concerning the merger, with the United States Securities and Exchange Commission
(the "SEC").
We urge potential investors to read the registration statement and the
prospectus and Frankfort First Bancorp stockholders to read the Frankfort First
Bancorp proxy statement which has been filed with the SEC, because they contain
important additional information. Interested parties are able to obtain these
documents free of charge at the SEC's web site (www.sec.gov). Copies of the
prospectus have been sent to First Federal Savings and Loan Association of
Hazard's members and the proxy statement to Frankfort First Bancorp's
stockholders. Copies of the proxy statement can be obtained, without charge,
from the Investor Relations Department at Frankfort First Bancorp, Inc., 216
West Main Street, P.O. Box 535, Frankfort, Kentucky 40602. Copies of the
prospectus can be obtained, without charge, from the Secretary of First Federal
Savings and Loan Association of Hazard, 479 Main Street, P.O. Box 1069, Hazard,
Kentucky 41702.
The directors, executive officers, and certain other members of
management of Frankfort First Bancorp, Inc. may be soliciting proxies in favor
of the merger from the Frankfort First Bancorp, Inc. stockholders. For
information about these directors, executive officers, and members of
management, stockholders are asked to refer to the definitive proxy statement
filed by Frankfort First Bancorp, Inc. with the SEC on Schedule 14A.
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 December 31, 2004 the Company
had approximately 1,265,000 shares outstanding.
3
SUMMARY OF FINANCIAL HIGHLIGHTS
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
December 31, June 30,
2004 2004
---- ----
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED) (AUDITED)
Assets
Cash and Cash Equivalents $ 725 $ 1,122
Investment Securities 2,398 4,858
Loans Receivable, net 122,149 125,262
Other Assets 7,065 6,876
----------- ----------
Total Assets $ 132,337 $ 138,118
=========== ==========
Liabilities
Deposits $ 71,984 $ 75,025
FHLB Advances 41,713 43,718
Other Liabilities 1,470 1,861
----------- ----------
Total Liabilities 115,167 120,604
Shareholders' Equity 17,170 17,514
----------- ----------
Total Liabilities and Equity $ 132,337 $ 138,118
=========== ==========
Book Value Per Share $ 13.58 $ 13.83
=========== ==========
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
Six months ended December 31, Three months ended December 31,
2004 2003 2004 2003
---- ---- ---- ----
(IN THOUSANDS, EXCEPT PER SHARE DATA) (IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED) (UNAUDITED)
Interest Income $ 3,653 $ 3,896 $ 1,812 $ 1,933
Interest Expense 2,123 2,299 1,054 1,127
----------- ---------- ---------- ----------
Net Interest Income 1,530 1,597 758 806
Provision for Losses on Loans -- -- -- --
Other Operating Income 89 25 37 13
General, Administrative, and Other Expense 1,050 915 533 492
----------- ---------- ---------- ----------
Earnings Before Federal Income Taxes 569 707 262 327
Federal Income Taxes 180 242 82 113
----------- ---------- ---------- ----------
Net Earnings $ 389 $ 465 $ 180 $ 214
=========== ========== ========== ==========
Basic Earnings Per Share $ 0.31 $ 0.37 $ 0.14 $ 0.17
Diluted Earnings Per Share $ 0.29 $ 0.35 $ 0.14 $ 0.16
Dividends Per Share $ 0.56 $ 0.56 $ 0.28 $ 0.28