FRANKFORT, Ky., July 21 /PRNewswire-FirstCall/ -- Farmers Capital
Bank Corporation (NASDAQ:FFKT) (the "Company") reported a net loss
of $801 thousand or $.17 per common share for the quarter ended
June 30, 2009 compared to net income of $3.3 million or $.39 per
common share for the quarter ended March 31, 2009 and $4.9 million
or $.67 per common share for the quarter ended June 30, 2008. Net
income for the six months ended June 30, 2009 was $2.5 million or
$.22 per common share compared to $9.3 million or $1.26 per common
share for the same six months a year earlier. Higher provision for
loan losses, increased deposit insurance expense, and lower net
interest income are the primary drivers of the lower earnings.
Excluding the special deposit insurance assessment of $1.1 million
or $.096 per common share referred to below, the Company's net loss
per common share was $.08 for the current quarter and for the
current six months earnings per common share was $.32. The
Company's regulatory capital level remains in excess of
"well-capitalized" as defined by its regulators. At June 30, 2009
the Company's regulatory Tier 1 and total capital ratios were
13.39% and 14.65%, respectively. Nonperforming assets were $64.4
million at June 30, 2009 compared to $43.9 million at March 31,
2009. This represents an increase of $20.5 million or 46.7% in the
linked quarter comparison. Other real estate owned, which
represents properties acquired through foreclosure, totaled $20.0
million, an increase of $5.1 million or 33.9%. Loans past due 90
days or more and still accruing interest increased $3.5 million or
56.8% to $9.7 million. Nonaccrual loans increased $11.8 million or
51.9% to $34.7 million. The increase in nonperforming assets is the
result of continued economic stress that has negatively impacted
the Company's lending portfolio, particularly loans to real estate
developers and related businesses. Net loan charge-offs were $2.4
million in the current three months ended June 30, 2009 versus $727
thousand for the linked quarter. Net charge-offs as a percentage of
outstanding loans (net of unearned income) were 0.18% and .055% in
the current and linked quarters, respectively. The allowance for
loan losses as a percentage of net loans outstanding increased to
1.62% at June 30, 2009 compared to 1.35% at March 31, 2009 and
1.28% at year-end 2008. Second Quarter 2009 Compared to First
Quarter 2009 -- The $.56 decrease in per common share earnings in
the second quarter of 2009 compared to the first quarter of 2009 is
driven mainly by a $4.3 million increase in the provision for loan
losses and higher deposit insurance expense of $1.3 million. -- The
higher provision for loan losses reflects an increase in
nonperforming assets, primarily nonaccrual loans secured by real
estate developments. -- The increase in deposit insurance expense
was driven by a special assessment imposed by the Federal Deposit
Insurance Corporation ("FDIC") during the current quarter as part
of its plan to replenish the Deposit Insurance Fund. -- Margin
compression, primarily due to a 22 basis point decline in the
average rate earned on earning assets, lowered net interest income
$836 thousand or 5.9%. Net interest margin declined to 2.85%
compared to 3.03% in the linked quarter. -- Noninterest income
increased $1.1 million or 16.4%, boosted by securities gains and
moderate increases in other fee income line items. -- Noninterest
expenses increased $1.1 million or 7.0% due mainly to the increase
in deposit insurance. -- Income tax expense decreased $945 thousand
due the decline in income before tax. Second Quarter 2009 Compared
to Second Quarter 2008 -- The $.84 decrease in per common share
earnings in the second quarter of 2009 compared to the second
quarter of 2008 is driven mainly by a $5.5 million increase in the
provision for loan losses, a decrease in net interest income of
$1.9 million, and higher deposit insurance expense of $1.6 million.
In addition, preferred stock dividends and related accretion, which
did not exist in the prior year, account for $.06 of the decrease
in per common share earnings. -- The higher provision for loan
losses is attributed to the increase in nonperforming assets,
primarily nonaccrual loans secured by real estate developments. --
The increase in deposit insurance expense was driven by the FDIC
special assessment mentioned above. -- Margin compression,
primarily due to a 107 basis point decline in the average rate
earned on earning assets, lowered net interest income $1.9 million
or 12.7%. Net interest margin declined to 2.85% compared to 3.43%
in the same period a year earlier. -- Noninterest income increased
$1.6 million or 26.4%, mainly attributed to higher securities gains
and moderate increases in other fee income categories. --
Noninterest expenses increased $1.8 million or 12.3% due mainly to
the increase in deposit insurance premiums. -- Income tax expense
decreased $1.8 million due to the net loss in the current quarter.
Six-month Comparison -- The $1.04 decrease in per common share
earnings for the six-month period ended June 30, 2009 compared to
the same period for 2008 is mainly attributed to a $6.0 million
increase in the provision for loan losses, lower net interest
income of $2.5 million, and higher deposit insurance expense of
$2.0 million. In addition, preferred stock dividends and related
accretion, which did not exist in the prior year, account for $.12
of the decrease in per common share earnings. -- The higher
provision for loan losses is attributed to a sharp increase in
nonperforming assets, primarily nonaccrual loans secured by real
estate developments. -- The increase in deposit insurance expense
was driven by the FDIC special assessment mentioned above. --
Margin compression, primarily due to a 106 basis point decline in
the average rate earned on earning assets, lowered net interest
income $2.5 million or 8.2%. Net interest margin declined to 2.94%
compared to 3.36% a year ago. -- Noninterest income increased $2.0
million or 15.7%, driven by higher securities gains, allotment
processing fees, and net gains on the sale of loans. -- Noninterest
expenses increased $2.5 million or 8.7% due mainly to the increase
in deposit insurance. -- Income tax expense decreased $2.3 million
due to an overall lower taxable position. The Company's effective
income tax rate was relatively unchanged at 24.1%. Balance Sheet --
Total assets were $2.3 billion at June 30, 2009, an increase of
$55.1 million or 2.5% compared to March 31, 2009. The net increase
in assets is primarily related to $46.1 million or 20.3% higher
cash and equivalents and higher net investment securities of $11.8
million or 2.2% partially offset by lower net loans of $7.2 million
or 0.6%. -- The decrease in net loans compared to March 31, 2009 is
mainly attributed to a $5.1 million increase in repossessed
properties and a higher allowance for loan losses of $3.5 million.
-- Total deposits were up $35.7 million or 2.2% in the linked
quarter comparison. Commonwealth of Kentucky deposits account for
$9.4 million or 26.3% of the increase in total deposits and 58.5%
of the $16.0 million increase in noninterest bearing deposit
balances. -- Noninterest bearing deposits, short-term borrowing
arrangements, and cash balances were all boosted by a large volume
of activity with the Commonwealth on June 30, 2009. --
Nonperforming loans were $44.3 million at June 30, 2009, an
increase of $15.3 million or 52.9% from the linked quarter-end and
an increase of $18.8 million compared to year-end 2008. -- The
allowance for loan losses was 1.62% of net loans outstanding at
June 30, 2009 compared to 1.35% and 1.28% at March 31, 2009 and
December 31, 2008, respectively. Net charge-offs for the three
months ended June 30, 2009 were $2.4 million, an increase of $1.7
million compared to the first quarter of 2009. -- The Company's
regulatory capital level remains in excess of "well-capitalized" as
defined by its regulators. Farmers Capital Bank Corporation is a
financial holding company headquartered in Frankfort, Kentucky. The
Company operates 37 banking locations in 23 communities throughout
Central and Northern Kentucky, a leasing company, a data processing
company, and an insurance company. Its stock is publicly traded on
the NASDAQ Stock Market LLC exchange in the Global Select Market
tier under the symbol: FFKT. This press release contains
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995 that are based upon
current expectations, but are subject to certain risks and
uncertainties that may cause actual results to differ materially.
Among the risks and uncertainties that could cause actual results
to differ materially are economic conditions generally and in the
subject market areas, overall loan demand, increased competition in
the financial services industry which could negatively impact the
ability of the subject entities to increase total earning assets,
and retention of key personnel. Actions by the Federal Reserve
Board and changes in interest rates, loan prepayments by, and the
financial health of, borrowers, and other factors described in the
reports filed by the Company with the Securities and Exchange
Commission could also impact current expectations. For more
information about these factors please see the Company's Annual
Report on Form 10-K on file with the SEC. All of these factors
should be carefully reviewed, and readers should not place undue
reliance on these forward-looking statements. These forward-looking
statements were based on information, plans and estimates at the
date of this press release, and the Company does not promise to
update any forward-looking statements to reflect changes in
underlying assumptions or factors, new information, future events
or other changes. Consolidated Financial Highlights (1) (In
thousands except per share data) -------------------- Three Months
Ended Six Months Ended June 30, March 31, June 30, June 30, June
30, 2009 2009 2008 2009 2008 ---- ---- ---- ---- ---- Interest
income $25,479 $26,329 $29,037 $51,808 $59,072 Interest expense
12,076 12,090 13,686 24,166 28,966 ---------------- ------ ------
------ ------ ------ Net interest income 13,403 14,239 15,351
27,642 30,106 ------------------- ------ ------ ------ ------
------ Provision for loan losses 5,940 1,676 483 7,616 1,585
------------------ ----- ----- --- ----- ----- Net interest income
after provision for loan losses 7,463 12,563 14,868 20,026 28,521
-------------------- ----- ------ ------ ------ ------ Noninterest
income 7,825 6,725 6,191 14,550 12,578 Noninterest expenses 16,163
15,112 14,392 31,275 28,772 -------------------- ------ ------
------ ------ ------ (Loss) income before income tax expense (875)
4,176 6,667 3,301 12,327 Income tax (benefit) expense (74) 871
1,767 797 3,051 -------------------- ---- --- ----- --- ----- Net
(loss) income $(801) $3,305 $4,900 $2,504 $9,276 -----------------
----- ----- ----- ----- ----- Net (loss) income $(801) $3,305
$4,900 $2,504 $9,276 Preferred stock dividends and discount
accretion (462) (414) (876) ------------------------- ---- ----
---- Net (loss) income available to common shareholders $(1,263)
$2,891 $4,900 $1,628 $9,276 -------------------- ------- -----
----- ----- ----- Per common share Basic and diluted net (loss)
income $(.17) $.39 $.67 $.22 $1.26 Cash dividend declared .25 .25
.33 .50 .66 Averages Loans, net of Unearned interest $1,319,377
$1,315,584 $1,297,789 $1,317,491 $1,296,851 Total assets 2,268,229
2,225,577 2,135,643 2,247,021 2,136,148 Deposits 1,634,587
1,591,758 1,531,628 1,613,291 1,526,085 Shareholders' equity
197,990 195,154 173,584 196,580 172,409 Weighted average shares
outstanding - basic 7,363 7,357 7,350 7,360 7,362 Weighted average
shares outstanding - diluted 7,376 7,357 7,350 7,360 7,362 Return
on average assets (0.14)% .60% .92% .22% .87% Return on average
equity (1.62)% 6.87% 11.35% 2.57% 10.82% June 30, March 31,
December 31, 2009 2009 2008 ---- ---- ---- Cash and cash
equivalents $272,731 $226,638 $190,775 Investment securities
552,476 540,638 536,109 Loans, net of allowance of $21,318,
$17,777, and $16,828 1,293,988 1,301,216 1,295,752 Other assets
176,997 172,641 179,531 ------------ ------- ------- ------- Total
assets $2,296,192 2,241,133 $2,202,167 ------------ ---------
---------- ---------- Deposits $1,638,265 $1,602,590 $1,594,115
Federal funds purchased and other short-term borrowings 105,843
71,709 77,474 Other borrowings 329,762 335,480 335,661 Other
liabilities 27,645 33,342 26,621 ----------------- ------ ------
------ Total liabilities 2,101,515 2,043,121 2,033,871
----------------- --------- --------- --------- Shareholders'
equity 194,677 198,012 168,296 -------------------- ------- -------
------- Total liabilities and shareholders' equity $2,296,192
$2,241,133 $2,202,167 --------------------- --------- ---------
---------- End of period book value per common share(1) $22.60
$23.08 $22.87 End of period common share value 25.17 15.67 24.42
End of period dividend yield(2) 3.97% 6.38% 5.41% (1) Represents
total common equity divided by the number of common shares
outstanding at the end of the period. (2) Represents annualized
dividend declared divided by the end of period common share value.
DATASOURCE: Farmers Capital Bank Corporation CONTACT: Doug
Carpenter of Farmers Capital Bank Corporation, +1-502-227-1668 Web
Site: http://www.farmerscapital.com/
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