Exhibit 99.1
October 31, 2014
Earnings Report
September 30, 2014
Dear Shareholders:
We are pleased to announce year to date net income increased 11.0% to
$5.4 million as of September 30, 2014, from $4.9 million as of September
30, 2013. Year to date diluted earnings per share increased 10.6% to
$1.99 from $1.80 during the same period last year. The increase in year
to date earnings is largely attributable to higher net interest income
and lower provision expense.
Quarter to date net income increased from $1.37 million as of September
30, 2013 to $1.72 million as of September 30, 2014. Quarter to date
diluted earnings per share increased 23.5% to $0.63 from $0.51 during the
same period last year. The increase in quarterly earnings is primarily
due to higher net interest income and lower income tax expense relative
to the same period last year.
Total assets were $794.1 million at September 30, 2014, which represents
a 7.1% increase from the period ended September 30, 2013. The overall net
increase in total assets was driven by a 10.0% increase in total loans,
which was funded by a 2.6% increase in deposits and a 32.7% increase in
other borrowed funds.
The third quarter of 2014 was a busy quarter at the Bank. In addition to
the asset growth achieved during the quarter, we were active in community
events and new product rollouts. We concluded our very successful
participation in the Kentucky Bank Tennis Championships held in Lexington
at the end of July. Prior to the Championships, we hosted free children's
tennis clinics in all of the counties we serve. On October 3, we were
happy to announce our continued title sponsorship of the Tennis
Championships for 2015. Earlier in the quarter, we were excited to begin
offering our new Rewards Credit Card which allows customers to accumulate
points toward travel, merchandise, and cash back. When combined with our
Rewards Debit Card, which was released on October 27, our joint Rewards
program is very unique in the markets we serve and provides our customers
with a significant value enhancement to our core service offerings.
We have recently announced that Allen Johnson has been promoted to Market
President of our Harrison County Region. Allen's strong background in
both lending and agriculture will be most beneficial as he assumes his
new responsibilities.
As highlighted in recent quarterly reports, we have achieved loan growth
through geographic expansion and deeper market penetration. While this
growth is encouraging, the outlook on loan demand and overall economic
conditions remain uncertain which, when combined with heightened
regulatory pressure, continue to make for a challenging banking
environment. Despite the headwinds, we are moving forward with strategic
opportunities in a measured manner to build and reaffirm a strong
foundation for future growth. As always, we will continue to consider
opportunities for further expansion, including possible acquisitions that
advance our growth objectives and extend our abilities to provide Premier
Customer Service to current and future customers. We will do everything
possible to 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
9/30/2014 9/30/2013 Change
<s> <c> <c> <c>
Assets
Cash & Due From Banks $ 17,101,536 $ 18,528,313 -7.7%
Securities 214,143,042 210,341,434 1.8
Trading Assets 5,324,903 - n/a
Loans Held for Sale 753,923 911,802 -17.3
Loans 510,994,170 464,866,284 9.9
Reserve for Loan Losses 5,705,949 5,501,274 3.7
Net Loans 505,288,221 459,365,010 10.0
Federal Funds Sold 140,000 139,000 0.7
Other Assets 51,372,313 52,150,125 -1.5
Total Assets $ 794,123,938 $ 741,435,684 7.1%
Liabilities & Stockholders' Equity
Deposits
Demand $ 161,173,790 $ 152,766,219 5.5%
Savings & Interest Checking 251,508,047 233,594,860 7.7
Certificates of Deposit 175,636,008 187,124,934 -6.1
Total Deposits 588,317,845 573,486,013 2.6
Repurchase Agreements 11,289,429 9,938,881 13.6
Other Borrowed Funds 110,429,969 83,235,389 32.7
Other Liabilities 7,987,817 5,461,368 46.3
Total Liabilities 718,025,060 672,121,651 6.8
Stockholders' Equity 76,098,878 69,314,033 9.8
Total Liabilities & Stockholders' Equity $ 794,123,938 $ 741,435,684 7.1%
CONSOLIDATED INCOME STATEMENT
Nine Months Ending Three Months Ending
Percentage Percentage
9/30/2014 9/30/2013 Change 9/30/2014 9/30/2013 Change
<s> <c> <c> <c> <c> <c> <c>
Interest Income $ 22,170,545 $ 20,898,202 6.1% $ 7,482,735 $ 7,105,286 5.3%
Interest Expense 2,804,477 2,498,257 12.3 945,037 860,330 9.8
Net Interest Income 19,366,068 18,399,945 5.3 6,537,698 6,244,956 4.7
Loan Loss Provision 500,000 850,000 -41.2 300,000 250,000 20.0
Net Interest Income After Provision 18,866,068 17,549,945 7.5 6,237,698 5,994,956 4.0
Other Income 7,427,211 7,779,374 -4.5 2,490,043 2,349,490 6.0
Other Expenses 20,194,037 19,356,542 4.3 6,964,701 6,735,821 3.4
Income Before Taxes 6,099,242 5,972,777 2.1 1,763,040 1,608,625 9.6
Income Taxes 703,980 1,111,658 -36.7 43,256 241,748 -82.1
Net Income $ 5,395,262 $ 4,861,119 11.0% $ 1,719,784 $ 1,366,877 25.8%
Net Change in Unrealized Gain (Loss)
on Securities 5,079,921 (7,530,786) 167.5 99,219 (1,553,869) 106.4
Comprehensive Income (Loss) $ 10,475,183 $ (2,669,667) 492.4% $ 1,819,003 $ (186,992) 1,072.8%
Selected Ratios
Return on Average Assets 0.91% 0.90% 0.85% 0.75%
Return on Average Equity 9.81 8.96 9.06 8.02
Earnings Per Share $ 1.99 $ 1.80 $ 0.63 $ 0.51
Earnings Per Share - assuming dilution 1.99 1.80 0.63 0.51
Cash Dividends Per Share 0.75 0.72 0.25 0.24
Book Value Per Share 27.97 25.47
Market Price High Low Close
Third Quarter '14 $28.85 $26.10 $28.85
Second Quarter '14 27.50 23.75 26.74