Exhibit 99.1 July 23, 2012 Quarterly Report Second Quarter 2012 We are pleased to report that through the second quarter ended June 30, 2012, earnings for your company were up 26.6% when compared to the June 30, 2011 earnings. On a year to date basis, we earned $3.40 million compared to $2.68 million for the six months ended June 30, 2011. We reported $1.78 million in profit for the second quarter of 2012, compared to $1.42 million for the second quarter of 2011, a 25.1% increase. Earnings per share on a fully diluted basis increased from $0.98 per share in 2011 to $1.25 per share for the six months ended June 30, 2012. Our total assets increased from $648.2 million to $670.5 million, a 3.5% increase. Total net loans increased by 3.2% from $402.9 million to $415.6 million. Net interest margins have remained stable for the year. This has been helped by an ability to control our cost of deposits while increasing our loan balances. Nationally, the economy appears to be growing at a very moderate pace of 1.0% to 1.5% in the second quarter. Unemployment rates continue to be higher than desired at 8.2%. In Kentucky, we are still higher than the national average, but in the eight markets in which we operate we are seeing improvement, as they are all below the state averages. The stock market, which had been showing signs of improvement through the first part of the year, has been a little weaker as of late. Some of this has had to do with the expected weaker second quarter of the year but has also been impacted by the uncertainties in Europe. In our local markets, we are seeing positive movement in the housing market. Our applications for residential mortgages are increasing, with more customers interested in purchasing homes. Additionally, we have seen increased requests for construction loans for the first time in two years. We have also seen an increase in our business lending activity as customers are looking more and more for opportunities than they have in recent times. If these trends continue, we are cautiously optimistic about the economy of the markets in which we operate. In May, we welcomed Aaron Roberts as a Regional Director for our East Kentucky Board. He is a Rowan County native, a graduate of Morehead State University, and the owner of Aaron?s Best One Tire in Morehead. He has been very active in his community and we look forward to his assistance with our growth in that market. Our economy is improving, but there is still significant improvement that has yet to take place. Your company is in a position to deal with the challenges ahead and to capitalize on opportunities as they arise. Kentucky Bank ranks 15th in size among the 177 banks headquartered in the Commonwealth of Kentucky. Kentucky Bank is headquartered in Paris and also has offices in Cynthiana, Georgetown, Morehead, Nicholasville, Sandy Hook, Versailles, Wilmore and Winchester. As always, we appreciate your support. /s/Louis Prichard Louis Prichard President, CEO UNAUDITED CONSOLIDATED BALANCE SHEET Percentage 6/30/2012 6/30/2011 Change <s> <c> <c> <c> Assets Cash & Due From Banks $ 15,204,048 $ 13,547,467 12.2% Securities 184,962,107 173,611,167 6.5 Loans Held for Sale 92,000 513,900 -82.1 Loans 421,398,577 408,515,863 3.2 Reserve for Loan Losses 5,788,737 5,641,760 2.6 Net Loans 415,609,840 402,874,103 3.2 Federal Funds Sold 110,000 106,000 3.8 Other Assets 54,564,593 57,507,552 -5.1 Total Assets $ 670,542,588 $ 648,160,189 3.5% Liabilities & Stockholders' Equity Deposits Demand $ 137,710,763 $ 126,399,413 8.9% Savings & Interest Checking 214,859,811 180,542,318 19.0 Certificates of Deposit 190,560,577 210,051,532 -9.3 Total Deposits 543,131,151 516,993,263 5.1 Repurchase Agreements 4,691,782 4,488,530 4.5 Other Borrowed Funds 44,115,466 56,109,788 -21.4 Other Liabilities 6,239,616 5,032,243 24.0 Total Liabilities 598,178,015 582,623,824 2.7 Stockholders' Equity 72,364,573 65,536,365 10.4 Total Liabilities & Stockholders? Equity $ 670,542,588 $ 648,160,189 3.5% CONSOLIDATED INCOME STATEMENT Six Months Ending Three Months Ending Percentage Percentage 6/30/2012 6/30/2011 Change 6/30/2012 6/30/2011 Change <s> <c> <c> <c> <c> <c> <c> Interest Income $ 14,483,259 $ 15,139,200 -4.3% $ 7,320,886 $ 7,681,644 -4.7% Interest Expense 2,014,356 3,103,202 -35.1 961,679 1,465,720 -34.4 Net Interest Income 12,468,903 12,035,998 3.6 6,359,207 6,215,924 2.3 Loan Loss Provision 1,000,000 1,450,000 -31.0 550,000 700,000 -21.4 Net Interest Income After Provision 11,468,903 10,585,998 8.3 5,809,207 5,515,924 5.3 Other Income 4,977,591 4,100,992 21.4 2,481,443 2,273,525 9.1 Other Expenses 12,292,554 11,560,448 6.3 6,084,940 6,130,935 -0.8 Income Before Taxes 4,153,940 3,126,542 32.9 2,205,710 1,658,514 33.0 Income Taxes 758,035 443,350 71.0 427,831 237,731 80.0 Net Income $ 3,395,905 $ 2,683,192 26.6 $ 1,777,879 $ 1,420,783 25.1 Net Change in Unrealized Gain (loss) on Securities 1,276,805 3,101,686 -58.8 1,768,232 1,807,535 -2.2 Comprehensive Income $ 4,672,710 $ 5,784,878 -19.2% $ 3,546,111 $ 3,228,318 9.8% Selected Ratios Return on Average Assets 1.00% 0.82% 1.05% 0.87% Return on Average Equity 9.61 8.55 10.01 8.85 Earnings Per Share $ 1.25 $ 0.98 $ 0.65 $ 0.52 Earnings Per Share - assuming dilution 1.25 0.98 0.65 0.52 Cash Dividends Per Share 0.46 0.44 0.23 0.22 Book Value Per Share 26.61 23.96 Market Price High Low Close Second Quarter '12 $23.90 $20.20 $21.00 First Quarter '12 $23.49 $19.05 $22.00