ELIZABETHTOWN, Ky.,
Jan. 27, 2011 /PRNewswire/ -- First
Financial Service Corporation (Nasdaq: FFKY) today announced that
its subsidiary, First Federal Savings Bank of Elizabethtown, has entered into a consent
order with the Federal Deposit Insurance Corporation (FDIC) and the
Kentucky Department of Financial Institutions (KDFI). The
Company has voluntarily agreed to take various steps to improve the
balance sheet, including increasing capital ratios and reducing its
concentration in commercial real estate loans and the level of
non-performing assets.
B. Keith Johnson, Chief Executive
Officer of First Federal Savings Bank stated, "A key issue
resulting in the consent order was the increase in non-performing
assets in 2010. The non-performing assets are predominantly
comprised of residential housing and residential housing
development loans in Jefferson and
Oldham Counties. Many
high-end subdivisions, while showing initial progress, have stalled
due to the recession. Residential markets in other areas,
such as Hardin and Meade Counties, have shown improvement as a
result of a projected local population increase of 14,000 from the
Base Realignment and Closure Act affecting the Fort Knox Military
Base."
First Federal Savings Bank's ability to serve its customers will
not be impacted by these actions and customer deposits remain fully
insured to the highest limits set by the FDIC.
The consent order was negotiated between First Federal Savings
Bank and the FDIC and KDFI. "We are striving to meet all of
its requirements in the time frames specified. Many of the items
stipulated in the agreement are items the Bank has already been
focusing on improving. The Bank has been focused on working
through these credits and reducing commercial real estate
concentrations since the regulatory examination. We
anticipate continued progress during the first two quarters of
2011. We're proud of our strong history and we are confident
that we will work through these challenging times. We have a
solid plan in place and very good bankers on our team. We
value our customer relationships and look forward to serving them
for many years to come" said Johnson.
First Financial Service Corporation is the parent bank holding
company of First Federal Savings Bank of Elizabethtown, which was chartered in 1923.
The Bank serves the needs and caters to the economic
strengths of the local communities in which it operates and strives
to provide a high level of personal and professional customer
service. The Bank offers a variety of financial services to
its retail and commercial banking customers. These services
include personal and corporate banking services, and personal
investment financial counseling services. Today, the Bank
serves eight contiguous counties encompassing Central Kentucky and the Louisville Metropolitan area, including
Southern Indiana, through its 22
full-service banking centers and a commercial private banking
center.
This press release contains forward-looking statements.
Statements that are not historical or current facts, including
statements about beliefs and expectations, are forward-looking
statements and are based on the information available to, and
assumptions and estimates made by, management as of the date made.
These forward-looking statements cover, among other things,
anticipated future revenue and expenses and the future plans and
prospects of First Federal Savings Bank. Forward-looking statements
involve inherent risks and uncertainties, and important factors
could cause actual results to differ materially from those
anticipated. Adverse conditions in the commercial real estate
markets, as well as a delay or failure of recovery in the
residential real estate markets, could cause additional credit
losses and deterioration in asset values. First Financial Service
Corporation's results also be adversely affected by further
deterioration in business and economic conditions both generally
and in the markets we serve; changes in interest rates;
deterioration in the credit quality of its loan portfolios or in
the value of the collateral securing those loans; deterioration in
the value of securities held in its investment securities
portfolio; legal and regulatory developments; increased competition
from both banks and non-banks; changes in customer behavior and
preferences; effects of critical accounting policies and judgments;
and management's ability to effectively manage credit risk,
residual value risk, market risk, operational risk, interest rate
risk, and liquidity risk.
For discussion of these and other risks that may cause actual
results to differ from expectations, refer to First Financial
Service Corporation's Annual Report on Form 10-K for the year ended
December 31, 2009, on file with the
Securities and Exchange Commission, including the section entitled
"Risk Factors," and all subsequent filings with the Securities and
Exchange Commission. Forward-looking statements speak only as of
the date they are made, and First Financial Service Corporation
undertakes no obligation to update them in light of new information
or future events.
First Financial Service Corporation's stock is traded on the
Nasdaq Global Market under the symbol "FFKY." Market makers
for the stock are:
Keefe, Bruyette & Woods,
Inc.
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FTN Midwest
Securities
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J.J.B. Hilliard, W.L. Lyons
Company, Inc.
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Howe Barnes Investments,
Inc.
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Stifel Nicolaus &
Company
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Knight Securities,
LP
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SOURCE First Financial Service Corporation