Exhibit 99.1
October 18, 2010
Quarterly Report
Third Quarter 2010
We are pleased to report for the three months ended September 30, 2010,
earnings for your company were up 16.3% when compared to the September
30, 2009 earnings. We reported $1.57 million in profit for the third
quarter of 2010, compared to $1.35 million for the third quarter of 2009.
On a year to date basis, we earned $3.7 million compared to $3.4 million
for the nine months ended September 30, 2009, an 8.0% increase. Year to
date earnings per share on a fully diluted basis, increased from $1.25
per share in 2009 to $1.35 per share in 2010.
Additionally, we are pleased to announce that the total assets of
Kentucky Bank reached $666.1 million at September 30, 2010, which
represents a 1.7% increase over the period ended September 30, 2009.
Deposits increased 8.5% from $496.6 million to $538.9 million.
As has been said in prior quarterly reports, the state of the national
and local economies still provides a large measure of uncertainty as we
prepare for the last quarter of 2010 and even into 2011. The national
unemployment rate is still hovering at 9.5% and the Kentucky unemployment
rate at 10.0% as of the date of this letter. We believe that until the
employment situation improves, the economy will continue to move at a
very slow pace. The housing market is still extremely slow, despite
record low interest rates. The stock market has shown some recent
strength which, in the past, has been an indicator of the future of the
economy. We hope this is still the case. We have seen more publicly
traded companies showing improved earnings over the past quarter, which
we also hope is a positive sign.
We are continuing our efforts to move market share in those areas where
troubled banks continue to struggle. We are pursuing this strategy by
calling on businesses and individuals, providing Premier Customer Service
at every opportunity, and by ensuring we have the products available to
our customers that will fit their needs.
We are closing in on the end of the year and we will be doing everything
possible so that we can accomplish what is in the long term best interest
of our shareholders, customers, and employees.
As always, we appreciate your support.
/s/Louis Prichard
Louis Prichard
President, CEO
UNAUDITED
CONSOLIDATED BALANCE SHEET
Percentage
9/30/2010 9/30/2009 Change
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Assets
Cash & Due From Banks $ 18,115,061 $ 11,483,550 57.7%
Securities 176,487,078 169,558,408 4.1
Loans Held for Sale 148,800 - n/m
Loans 415,416,551 427,920,730 -2.9
Reserve for Loan Losses 7,371,721 6,337,802 16.3
Net Loans 408,044,830 421,582,928 -3.2
Federal Funds Sold 7,855,000 102,000 76.0
Other Assets 55,455,793 52,266,443 6.1
Total Assets $ 666,106,562 $ 654,993,329 1.7%
Liabilities & Stockholders' Equity
Deposits
Demand $ 112,889,900 $ 91,338,800 23.6%
Savings & Interest Checking 158,127,111 149,056,904 6.1
Certificates of Deposit 267,837,125 256,187,535 4.5
Total Deposits 538,854,136 496,583,239 8.5
Repurchase Agreements 4,118,278 10,055,688 -59.0
Other Borrowed Funds 53,102,552 78,765,682 -32.6
Other Liabilities 5,341,603 6,725,119 -20.6
Total Liabilities 601,416,569 592,129,728 1.6
Stockholders' Equity 64,689,993 62,863,601 2.9
Total Liabilities & Stockholders' Equity $ 666,106,562 $ 654,993,329 1.7%
CONSOLIDATED INCOME STATEMENT
Nine Months Ending Three Months Ending
Percentage Percentage
9/30/2010 9/30/2009 Change 9/30/2010 9/30/2009 Change
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Interest Income $ 22,924,210 $ 24,016,153 -4.5% $ 7,475,788 $ 7,911,425 -5.5%
Interest Expense 8,012,451 9,665,872 -17.1 2,565,150 2,986,380 -14.1
Net Interest Income 14,911,759 14,350,281 3.9 4,910,638 4,925,045 -0.3
Loan Loss Provision 1,950,000 1,350,000 44.4 700,000 450,000 55.6
Net Interest Income After Provision 12,961,759 13,000,281 -0.3 4,210,638 4,475,045 -5.9
Other Income 7,422,952 6,855,029 8.3 3,306,232 2,291,326 44.3
Other Expenses 16,217,355 16,152,940 0.4 5,709,661 5,304,629 7.6
Income Before Taxes 4,167,356 3,702,370 12.6 1,807,209 1,461,742 23.6
Income Taxes 467,301 277,511 68.4 232,673 107,867 115.7
Net Income $ 3,700,055 $ 3,424,859 8.0 $ 1,574,536 $ 1,353,875 16.3
Net Change in Unrealized Gain (loss)
on Securities 1,679,934 4,108,818 -59.1 788,651 3,289,941 -76.0
Comprehensive Income $ 5,379,989 $ 7,533,677 -28.6% $ 2,363,187 $ 4,643,816 -49.1%
Selected Ratios
Return on Average Assets 0.70% 0.68% 0.91% 0.82%
Return on Average Equity 7.9 7.8 10.0 9.1
Earnings Per Share $ 1.35 $ 1.25 $ 0.57 $ 0.49
Earnings Per Share - assuming dilution 1.35 1.25 0.57 0.49
Cash Dividends Per Share 0.63 0.60 0.21 0.20
Book Value Per Share 23.59 22.94
Market Price High Low Close
Third Quarter '10 $17.50 $15.00 $17.00
Second Quarter '10 $18.00 $15.75 $15.75