EX-99 2 apr072005.htm PRESS RELEASE DATED 7-20-05

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Exhibit 99.1

Press Release Dated July 20, 2005

 

NEWS RELEASE

July 20, 2005

 

Farmers Capital Bank Corporation Announces Six Months Earnings

 

Frankfort, Kentucky – Farmers Capital Bank Corporation (Nasdaq: FFKT) reported net income of $7,944,000 for the six months ended June 30, 2005, an increase of $695,000 or 9.6% compared to $7,249,000 reported for the six months ended June 30, 2004. Basic and diluted net income per share were $1.17 and $1.16 for the current six months, an increase of $.09 or 8.3% and $.09 or 8.4%, respectively compared to $1.08 and $1.07 a year earlier. For the three months ended June 30, 2005, net income was $3,888,000, an increase of $147,000 or 3.9% compared to $3,741,000 for the same period in 2004. Basic and diluted net income per share were $.57 for the current three months, an increase of $.01 or 1.8% and $.02 or 3.6%, respectively compared to $.56 and $.55 in the same period a year ago.

 

The increase in net income for the three and six months ended June 30, 2005 is primarily attributed to an increase in net interest income and a lower provision for loan losses offset by a higher effective federal income tax rate. Net interest income for the current quarter was $11,300,000, an increase of $751,000 or 7.1% compared to $10,549,000 during the same period a year earlier. Net interest income for the current six-month period was $22,402,000, an increase of $1,508,000 or 7.2% compared to $20,894,000 for the same six months in 2004. The increase in net interest income in the quarterly and six-month comparisons can be attributed to higher interest income, primarily on loans, which offset the growth in interest expense.

 

The provision for loans losses decreased $465,000 or 103.8% and $877,000 or 107.9% in the three and six-month comparisons, respectively. The negative provision for loan losses of $17,000 and $64,000 for the current three and six months is attributed to a $900 thousand and $4.8 million reduction in nonperforming loans in the current three and six-month periods ended June 30, 2005 and the sale of the Company’s credit card portfolio during the first six months of 2005. Nonperforming loans include nonaccrual loans and loans past due 90 days or more in which interest is still accruing. Nonperforming loans and credit card loans typically have larger allowances due to their identified risk of loss characteristics.

 

Noninterest income increased $924,000 or 21.8% and $2,361,000 or 28.4% in the quarterly and year to date comparisons, respectively. The increase in noninterest income was led by higher allotment processing fees of $444,000 or 220.9% and $898,000 or 224.5% for the quarter and year to date periods, respectively and is attributed to the FiNET acquisition late during 2004. Other significant increases in noninterest income include service charges and fees on deposits of $435,000 or 20.8% for the quarter and $800,000 or 20.1% for the six-month comparison, gains on the sale of mortgage loans of $150,000 or 211.3% for the quarter and $294,000 or 255.7% for the six-month comparison, and a one-time $700,000 gain on the sale of the Company’s credit card portfolio for the six-month comparison. Notable declines in noninterest income include income from bank owned life insurance of $22,000 or 6.1% for the quarter and $196,000 or 25.6% for the six-month comparison due to lower crediting rates on the underlying investments and lower service charges, commissions, and fees of $93,000 or 13.5% and $139,000 or 10.1% for the quarter and year to date comparisons, respectively. Up until recently, the underlying investments related to the bank owned life insurance have been repricing in a lower interest rate environment.

 

Noninterest expenses increased $1,720,000 or 17.9% and $3,547,000 or 18.4% for the current three and six months respectively, compared to the same periods a year earlier. These increases offset the higher amount of reported noninterest income. The increase in noninterest expenses occurred across a broad range of line items and is generally attributed to the Company's business expansion during the last half of 2004. The most significant increase was salaries and employee benefits, which grew $771,000 or 14.3% and $1,337,000 or 12.4% in the three and six-month comparisons, respectively as the average number of full time equivalent employees rose to 519 from 468 for the three-month comparison and 517 from 462 in the six-month comparison. Other notable increases include amortization of intangibles of $246,000 and $491,000 in the three and six month comparisons, respectively, and auditing expenses of $69,000 and $187,000 in the same comparable periods. The effective income tax rate increased to 24.2% from 20.5% in the three-month comparison and to 22.8% from 20.3% in the six-month comparison. This resulted in an increase in income tax expense of $273,000 or 28.2% and $504,000 or 27.3% in the quarterly and year to date comparisons, respectively.

 

As previously disclosed, on July 1, 2005 the Company announced that it had reached an agreement to acquire Citizens Bancorp, Inc. (“Citizens”). The results presented by the Company will not include the results of Citizens until after the transaction closes, which is expected to be in the fourth quarter of 2005.

 

Farmers Capital Bank Corporation is a financial holding company headquartered in Frankfort, Kentucky. The Company operates 27 banking locations in 16 communities throughout Kentucky, a leasing company, a data processing company, an insurance company, and a mortgage company. Its stock is publicly traded on the National Association of Securities Dealers Automated Quotation System (NASDAQ) SmallCap Market tier, under the symbol: FFKT.

 

 


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Consolidated Financial Highlights

(In thousands except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

 

 

 

 

 

2005 

 

2004 

 

2005 

 

2004 

Interest income

 

 

$ 17,702 

 

$ 14,893 

 

$ 34,810 

 

$ 29,632 

Interest expense

 

 

6,402 

 

4,344 

 

12,408 

 

8,738 

Net interest income

 

 

11,300 

 

10,549 

 

22,402 

 

20,894 

Provision for loan losses

 

 

(17)

 

448 

 

(64)

 

813 

Net interest income after provision for loan losses

11,317 

 

10,101 

 

22,466 

 

20,081 

Noninterest income

 

 

5,160 

 

4,236 

 

10,684 

 

8,323 

Noninterest expenses

 

 

11,349 

 

9,629 

 

22,858 

 

19,311 

Income before income tax expense

 

5,128 

 

4,708 

 

10,292 

 

9,093 

Income tax expense

 

 

 

1,240 

 

967 

 

2,348 

 

1,844 

Net income

 

 

 

$  3,888 

 

$  3,741 

 

$  7,944 

 

$  7,249 

 

 

 

 

 

 

 

 

 

 

 

Per common share:

 

 

 

 

 

 

 

 

 

 

Net income - basic

 

 

$ .57 

 

$ .56 

 

$ 1.17 

 

$ 1.08 

Net income - diluted

 

 

.57 

 

.55 

 

1.16 

 

1.07 

Cash dividend declared

 

 

.33 

 

.33 

 

.66 

 

.66 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding - basic

 

6,781 

 

6,730 

 

6,786 

 

6,727 

Weighted average shares outstanding - diluted

6,818 

 

6,778 

 

6,829 

 

6,780 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2005 

 

June 30, 2004 

Cash and cash equivalents

 

 

 

 

 

 

$     112,112 

 

$      70,704 

Investment securities

 

 

 

 

 

 

327,453 

 

374,648 

Loans, net of allowance of $11,775 (2005) and $11,419 (2004)

 

 

 

887,610 

 

781,475 

Other assets

 

 

 

 

 

 

91,351 

 

67,342 

Total assets

 

 

 

 

 

 

$ 1,418,526 

 

$ 1,294,169 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

$ 1,151,593 

 

$ 1,002,581 

Federal funds purchased and securities sold under

 

 

 

 

 

 

 

agreements to repurchase

 

 

 

 

 

 

67,091 

 

101,148 

Other borrowings

 

 

 

 

 

 

52,638 

 

55,263 

Other liabilities

 

 

 

 

 

 

12,731 

 

9,794 

Total liabilities

 

 

 

 

 

 

1,284,053 

 

1,168,786 

 

 

 

 

 

 

 

 

 

 

 

Shareholders’ equity

 

 

 

 

 

 

134,473 

 

125,383 

Total liabilities and shareholders’ equity

 

 

 

 

 

$ 1,418,526 

 

$ 1,294,169 

 

 

 

 

 

 

 

 

 

 

 

End of period book value per share1

 

 

 

 

 

$       19.84 

 

$       18.63 

End of period share value

 

 

 

 

34.64 

 

35.75 

End of period dividend yield2

 

 

 

 

3.81% 

 

3.69% 

 


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Averages for the six months ended June 30,

 

 

 

 

 

2005 

 

2004 

Assets

 

 

 

 

 

 

 

 

$ 1,438,660 

 

$ 1,297,621 

Deposits

 

 

 

 

 

 

 

 

1,159,712 

 

1,027,489 

Loans, net of unearned interest

 

 

 

 

 

 

883,769 

 

773,642 

Shareholders' equity

 

 

 

 

 

 

 

131,713 

 

126,648 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets

 

 

 

 

 

 

1.11% 

 

1.12% 

Return on average equity

 

 

 

 

 

 

12.16% 

 

11.51% 

 

1Represents total equity divided by the number of shares outstanding at the end of the period.

2Represents current annualized dividend declared divided by the end of period share value.