Exhibit 99.1
October 31, 2006
Quarterly Report
Third Quarter 2006
We are very pleased to report that our net income for the third
quarter ended September 30, 2006 was $1.7 million, which represented a
19.9% increase over the $1.4 million earned for the third quarter ended
September 30, 2005. After the effects of dilution, earnings per share
for the quarter equaled 60 cents, which represented an 11.1% increase
over the 54 cents per share for the same quarter in 2005.
Net income for the first nine months of the fiscal year was $4.7
million, which represented a 10.4% increase over the $4.3 million earned
through the third quarter of 2005. Pre-tax earnings were up 13.8% when
compared to the nine months ended September 30, 2005. This resulted in
an increase in our earnings per share on a diluted basis from $1.59 to
$1.72, an 8.2% increase.
As of September 30, 2006, total assets reached $632.8 million
compared to $553.9 million as of September 30, 2005. This represented a
14.2% increase in total assets. Through the help of the merger as well
as internal growth, loans totaled $439.5 million or a 22.2% increase over
loans outstanding as of September 30, 2005. Deposits were up 9.7% over
the previous year and ended on September 30, 2006 at $455.1 million.
The merger with Peoples Bank has virtually been completed, and we
continue to be pleased about the contribution that this transaction will
make to the continued growth and assets and earnings of your company. Now
that the significant portion of the merger has been completed, we are
spending time and energy exploring opportunities to increase efficiencies
and to improve upon the delivery of our customer service. A number of
teams are exploring various facets of the operations of our bank so that
they can make recommendations to accomplish these goals.
We are very pleased to announce that Robert Richardson, a
successful Woodford County farmer and businessman, has agreed to join our
Woodford Regional Advisory Board.
Additionally, we are pleased to announce the directors for our
newly created Rowan/Elliott Regional Advisory Board. Madonna Weathers is
Vice President of Student Affairs at Morehead State University. G. R.
(Sonny) Jones is CFO of St. Claire Regional Medical Center. Tod Barhorst
is the owner of Abner Construction Company. We are confident that these
community leaders will make significant contributions to our ongoing
success in the Rowan/Elliott region.
Louis Prichard
President, CEO
UNAUDITED
CONSOLIDATED BALANCE SHEET
Percentage
9/30/2006 9/30/2005 Change
<s> <c> <c> <c>
Assets
Cash & Due From Banks $ 12,510,592 $ 13,201,776 -5.2%
Securities 142,456,536 133,868,626 6.4
Loans Held For Sale - 214,414 n/m
Loans 439,491,965 359,523,684 22.2
Reserve for Loan Losses 5,141,526 4,509,599 14.0
Net Loans 434,350,439 355,014,085 22.3
Federal Funds Sold 167,000 19,915,850 -99.2
Other Assets 43,315,628 31,733,280 36.5
Total Assets $ 632,800,195 $ 553,948,031 14.2%
Liabilities & Stockholders' Equity
Deposits
Demand $ 89,189,951 $ 74,593,351 19.6%
Savings & Interest Checking 148,796,786 155,450,429 -4.3
Certificates of Deposit 217,072,235 184,768,595 17.5
Total Deposits 455,058,972 414,812,375 9.7
Repurchase Agreements 18,184,443 14,911,455 21.9
Other Borrowed Funds 100,176,931 75,217,275 33.2
Other Liabilities 4,343,165 2,769,923 56.8
Total Liabilities 577,763,511 507,711,028 13.8
Stockholders' Equity 55,036,684 46,237,003 19.0
Total Liabilities & Stockholders' Equity $ 632,800,195 $ 553,948,031 14.2%
CONSOLIDATED INCOME STATEMENT
Nine Months Ending Three Months Ending
Percentage Percentage
9/30/2006 9/30/2005 Change 9/30/2006 9/30/2005 Change
<s> <c> <c> <c> <c> <c> <c>
Interest Income $25,789,226 $21,073,699 22.4% $9,493,182 $7,320,613 29.7%
Interest Expense 11,952,354 8,221,848 45.4 4,643,094 3,075,087 51.0
Net Interest Income 13,836,872 12,851,851 7.7 4,850,088 4,245,526 14.2
Loan Loss Provision 334,000 583,100 -42.7 94,000 166,600 -43.6
Net Interest Income After Provision 13,502,872 12,268,751 10.1 4,756,088 4,078,926 16.6
Other Income 5,400,067 5,107,459 5.7 2,098,908 1,719,417 22.1
Other Expenses 12,331,147 11,601,387 6.3 4,504,097 3,827,963 17.7
Income Before Taxes 6,571,792 5,774,823 13.8 2,350,899 1,970,380 19.3
Income Taxes 1,848,962 1,495,818 23.6 636,988 540,576 17.8
Net Income 4,722,830 4,279,005 10.4 1,713,911 1,429,804 19.9
Net Change in Unrealized Gain (loss)
on Securities 493,366 (802,862) 161.5 1,975,478 (603,586) 427.3
Comprehensive Income $ 5,216,196 $ 3,476,143 50.1% $3,689,389 $ 826,218 346.5%
Selected Ratios
Return on Average Assets 1.08% 1.08% 1.09% 1.05%
Return on Average Equity 12.9 12.5 13.0 12.3
Earnings Per Share $ 1.73 $ 1.60 $ 0.60 $ 0.54
Earnings Per Share - assuming dilution 1.72 1.59 0.60 0.54
Cash Dividends Per Share 0.75 0.69 0.25 0.23
Book Value Per Share 19.25 17.31
Market Price High Low Close
Third Quarter '06 $30.00 $26.65 $29.50
Second Quarter '06 $29.75 $27.00 $27.00