Exhibit 99.1
November 12, 2009
Quarterly Report
Third Quarter 2009
For the third quarter of 2009, we reported a $1.35 million profit,
compared with $1.36 million for the third quarter of 2008, a decline of
0.2%. On a year to date basis, earnings for the nine months ended
September 30, 2009, were $3.42 million as compared to the $4.03 million
earned through September 30, 2008. This represented a 15.1% decline in
earnings on a year to date basis. Assets totaled $655.0 million on
September 30, 2009, a 2.9% increase over the September 30, 2008 figure of
$636.7 million.
There are a few items that are noteworthy relating to our year to date
net income. As has been mentioned in earlier communications, the bank
made a determination to terminate our pension plan. This one time
termination expense in 2009 was $874 thousand. Additionally, the Federal
Deposit Insurance Corporation placed on all banks a special assessment,
and this negatively impacted us in the amount of slightly over $300
thousand. If not for those one time expenses, combined with several other
miscellaneous one time expenses throughout the year, our earnings would
have been virtually flat with last year's year to date earnings.
Total loans have increased from $418 million as of June 30, 2009 to $428
million as of September 30, 2009. While we do not know that this trend
will continue considering the economy, we are pleased by this increase in
loan demand. The global, national, and regional economies continue to
face serious challenges. As we have all been made aware by the media, the
economy is still facing serious issues, particularly in the employment
area as nationally we are experiencing 10% unemployment and in Kentucky
we are well over 11%.
The markets that Kentucky Bank serves are certainly impacted by these
times, as well. Home sales are still negligible, retail sales are still
on the decline, and unemployment numbers continue to increase. The
management of the bank continues to be very aggressive in working on
credit issues as they arise. As a prudent bank, it is imperative that we
take this posture during these uncertain economic times.
We always want to ensure that our bank is positioned to accommodate
future growth when the economy does rebound. In this regard, we are
encouraged with the success of our new Nicholasville office. As always,
we continue to look at new products and services, as well as focusing on
the delivery of premier customer service. By continuing to add value to
our banking customer relationships, we will provide the appropriate
return to our shareholders.
As we look to the end of 2009 and the beginning of 2010, we can see that
the economy is going to continue to struggle. However, we believe that
when the economy does turn around, we will have a strong balance sheet to
help us grow our bank as we have done in the past.
As always, we appreciate your support and confidence.
/s/Louis Prichard
Louis Prichard
President, CEO
UNAUDITED
CONSOLIDATED BALANCE SHEET
Percentage
9/30/2009 9/30/2008 Change
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Assets
Cash & Due From Banks $ 11,483,550 $ 14,191,970 -19.1%
Securities 169,558,408 145,135,199 16.8
Loans Held For Sale 0 40,000 n/m
Loans 427,920,730 420,552,066 1.8
Reserve for Loan Losses 6,337,802 5,757,658 10.1
Net Loans 421,582,928 414,794,408 1.6
Federal Funds Sold 102,000 14,676,000 -99.3
Other Assets 52,266,443 47,841,582 9.2
Total Assets $ 654,993,329 $ 636,679,159 2.9%
Liabilities & Stockholders' Equity
Deposits
Demand $ 91,338,800 93,859,909 -2.7%
Savings & Interest Checking 149,056,904 145,482,377 2.5
Certificates of Deposit 256,187,535 232,236,700 10.3
Total Deposits 496,583,239 471,578,986 5.3
Repurchase Agreements 10,055,688 8,656,381 16.2
Other Borrowed Funds 78,765,682 95,173,186 -17.2
Other Liabilities 6,725,119 5,558,139 21.0
Total Liabilities 592,129,728 580,966,692 1.9
Stockholders' Equity 62,863,601 55,712,467 12.8
Total Liabilities & Stockholders' Equity $ 654,993,329 636,679,159 2.9%
CONSOLIDATED INCOME STATEMENT
Nine Months Ending Three Months Ending
Percentage Percentage
9/30/2009 9/30/2008 Change 9/30/2009 9/30/2008 Change
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Interest Income $ 24,016,153 $ 26,716,449 -10.1% $ 7,911,425 $ 8,788,176 -10.0%
Interest Expense 9,665,872 11,682,880 -17.3 2,986,380 3,688,165 -19.0
Net Interest Income 14,350,281 15,033,569 -4.5 4,925,045 5,100,011 -3.4
Loan Loss Provision 1,350,000 1,500,000 -10.0 450,000 600,000 -25.0
Net Interest Income After Provision 13,000,281 13,533,569 -3.9 4,475,045 4,500,011 -0.6
Other Income 6,976,241 6,011,025 16.1 2,357,134 1,976,361 19.3
Other Expenses 16,274,152 14,352,348 13.4 5,370,437 4,736,201 13.4
Income Before Taxes 3,702,370 5,192,246 -28.7 1,461,742 1,740,171 -16.0
Income Taxes 277,511 1,157,308 -76.0 107,867 383,821 -71.9
Net Income $ 3,424,859 $ 4,034,938 -15.1 1,353,875 1,356,350 -0.2
Net Change in Unrealized Gain (loss)
on Securities 4,108,818 (1,589,827) 358.4 $ 3,289,941 $ (739,557) 544.9
Comprehensive Income $ 7,533,677 $ 2,445,111 208.1% $ 4,643,816 $ 616,793 652.9%
Selected Ratios
Return on Average Assets 0.68% 0.85% 0.82% 0.85%
Return on Average Equity 7.8 9.3 9.1 9.4
Earnings Per Share $ 1.25 $ 1.44 $ 0.49 $ 0.49
Earnings Per Share - assuming dilution 1.25 1.44 0.49 0.49
Cash Dividends Per Share 0.60 0.84 0.20 0.28
Book Value Per Share 22.94 20.28
Market Price High Low Close
Third Quarter '09 $18.00 $15.20 $15.99
Second Quarter '09 $17.95 $15.50 $16.75