CRESTVIEW HILLS, Ky., April 17, 2009 (GLOBE NEWSWIRE) -- The Bank of Kentucky Financial Corporation (the "Company") (Nasdaq:BKYF), the holding company of the Bank of Kentucky, Inc. (the "Bank"), today reported its earnings for the first quarter of 2009. The Company reported an increase in diluted earnings per common share of 5% for the first quarter of 2009, as compared to the same period in 2008. The first quarter results reflect the sale of $34 million in preferred stock and the issuance of a warrant for common shares to the U.S. Department of Treasury ("Treasury") on February 13, 2009 in connection with the Company's participation in the Capital Purchase Program. The effect of Treasury's investment on the first quarter results includes the accrual for the payment of dividends on the preferred stock and the related preferred stock amortization expense. The first quarter results included an increase in net interest income of $629,000 and gains on the sales of securities of $263,000, which were partially offset with an additional $725,000 provision for loan losses as compared to the first quarter of 2008. Contributing to this increase in the provision for loan losses was management's continuing concerns over the effect the current deteriorating economic conditions will have on the Company's loan portfolio.
A summary of the Company's results follows: First Quarter ended March 31, 2009 2008 Change ----------------------------- ---- ---- ------ Net income $2,816,000 $2,504,000 12% Net income available for common shareholders $2,558,000 $2,504,000 2% Earnings per common share, basic $ 0.46 $ 0.44 5% Earnings per common share, diluted $ 0.46 $ 0.44 5%
Net interest income increased $629,000, or 7% in the first quarter of 2009, as compared to the same period in 2008, while the net interest margin increased from 3.44% in the first quarter of 2008 to 3.50% in the first quarter of 2009. These increases resulted primarily from the cost of interest bearing liabilities decreasing more than the yield on earning assets. The cost of interest bearing liabilities decreased 171 basis points, from 3.67% for the first quarter of 2008 to 1.96% for the first quarter of 2009, while the yield on interest earning assets decreased only 142 basis points, from 6.67% for the first quarter of 2008 to 5.25% for the first quarter of 2009.
The provision for loan losses increased by $725,000 (91%) in the first quarter of 2009 as compared to the same period in 2008. Contributing to this increase was higher levels of charge-offs in the first quarter of 2009, as compared to the same period in 2008, and management's concerns over the declining housing market and overall deteriorating economic conditions. The Company recorded $682,000 in net charge-offs in the first quarter of 2009 as compared to $485,000 in the first quarter of 2008. The Company's non-performing loans as a percentage of total loans were 1.18% as of March 31, 2009, as compared to 1.23% as of March 31, 2008, and the annualized net charge-offs to average loans increased from .20% in the first quarter of 2008 to .27% in the first quarter of 2009.
Non-interest income increased 15% ($548,000) in the first quarter of 2009, as compared to the same period in 2008, while non-interest expense increased 1% ($108,000) from the same period last year. Contributing to the increase in non-interest income was $263,000 in gains on the sales of securities and an 8% ($145,000) increase in service charges on deposits. Non-interest expense in the first quarter of 2009 included a $218,000 (120%) increase in FDIC insurance expense which was offset by a $297,000 (7%) decrease in salaries and employee benefits expense as compared to the first quarter of 2008. The reduction in salaries and benefits included a $229,000 decrease in accruals for the bonus and profit sharing plans in the first quarter of 2009 as compared to the first quarter of 2008. The decreases in these incentive plans cost was the result of the Company not meeting earnings expectations.
Total assets were $1.315 billion at the end of the first quarter of 2009, which was $77 million or 6% higher than the same date a year ago. Total loans and investments grew $66 million or 7% and $48 million or 40% respectively from March of 2008 and were funded by an increase in deposits of $56 million or 5% and an increase in preferred stock and warrants of $34 million.
The Bank of Kentucky Financial Corporation
Selected Consolidated Financial Data
(Dollars in thousands, except per share data)
First Quarter
Comparison
-------------
Income Statement Data 3/31/09 3/31/08 % Chg
------- ------- -----
Interest income $ 15,113 $ 18,510 (18)%
Interest expense 4,877 8,903 (45)%
--------- ---------
Net interest income 10,236 9,607 7%
Provision for loan losses 1,525 800 91%
--------- ---------
Net interest income after provision
for loan losses 8,711 8,807 (1)%
Non - interest income 4,102 3,554 15%
Non - interest expense 8,848 8,740 1%
--------- ---------
Net income before income taxes 3,965 3,621 10%
Provision for income taxes 1,149 1,117 3%
--------- ---------
Net income 2,816 2,504 12%
Preferred Stock Dividends &
Amortization 258 -- 100%
--------- ---------
Net Income Available to Common
Shareholders $ 2,558 $ 2,504 2%
========= =========
Per Common Share Data
Diluted earnings per common share 0.46 0.44 5%
Cash dividends declared 0.28 0.26 8%
Earnings Performance Data
Return on common equity 10.11% 10.77% (66)bps
Return on assets .89% .83% 6 bps
Net interest margin 3.50% 3.44% 6 bps
Balance Sheet Data
Investments $ 159,192 $ 111,204 43%
Total loans 1,026,845 960,737 7%
Allowance for loan losses 10,753 8,820 22%
Total assets 1,315,329 1,238,643 6%
Total deposits 1,097,811 1,041,852 5%
Total borrowings 71,050 92,415 (23)%
Common Stockholders' equity 103,711 93,596 11%
Preferred Stock 33,007 -- 100%
Common Shares Outstanding 5,612,607 5,624,607 --%
Five-Quarter Comparison
-----------------------
Income Statement
Data 3/31/09 12/31/08 9/30/08 6/30/08 3/31/08
------- -------- ------- ------- -------
Net interest income $10,236 $10,394 $10,544 $10,117 $9,607
Provision for loan
losses 1,525 1,675 775 1,600 800
--------- --------- --------- --------- ---------
Net interest income
after provision for
loan losses 8,711 8,719 9,769 8,517 8,807
--------- --------- --------- --------- ---------
Service charges and
fees 2,015 2,269 2,452 2,327 1,870
Gain on sale of real
estate loans 526 220 116 165 436
Gain on sale of
securities 263 -- -- -- --
Trust fee income 230 252 284 283 292
Bankcard transaction
revenue 491 489 502 500 433
Other non-interest
income 577 420 553 382 523
--------- --------- --------- --------- ---------
Total non-interest
income 4,102 3,650 3,907 3,657 3,554
--------- --------- --------- --------- ---------
Salaries and
employee benefits
expense 3,999 3,886 4,224 3,979 4,296
Occupancy and
equipment expense 1,237 1,132 1,191 1,183 1,212
Data processing
expense 394 330 336 339 360
State bank taxes 452 336 420 420 400
Amortization of
intangible assets 296 296 296 333 352
FDIC Insurance 399 194 194 195 181
Other non-interest
expenses 2,071 2,183 2,073 1,943 1,939
--------- --------- --------- --------- ---------
Total non-interest
expense 8,848 8,357 8,734 8,392 8,740
--------- --------- --------- --------- ---------
Net income before
income tax expense 3,965 4,012 4,942 3,782 3,621
Income tax expense 1,149 1,221 1,523 1,155 1,117
--------- --------- --------- --------- ---------
Net income 2,816 2,791 3,419 2,627 2,504
Preferred Stock
Dividends &
Amortization 258 -- -- -- --
--------- --------- --------- --------- ---------
Net Income Available
to Common
Shareholders $2,558 2,791 3,419 2,627 2,504
========= ========= ========= ========= =========
Per Common Share
Data
Diluted earnings per
common share 0.46 0.50 0.61 0.47 0.44
Cash dividends
declared 0.28 0.00 0.28 0.00 0.26
Weighted average
common shares
outstanding
Basic 5,611,607 5,606,607 5,606,607 5,613,530 5,658,002
Diluted 5,611,607 5,606,749 5,606,980 5,615,496 5,670,435
Earnings Performance
Data
Return on common
equity 10.11% 11.15% 14.08% 11.17% 10.77%
Return on assets .89% .90% 1.14% .87% .83%
Net interest margin 3.50% 3.64% 3.82% 3.63% 3.44%
Net interest margin
(tax equivalent) 3.58% 3.70% 3.86% 3.68% 3.48%
Balance Sheet Data 3/31/09 12/31/08 9/30/08 6/30/08 3/31/08
------- -------- ------- ------- -------
Investments $159,192 $119,212 $97,819 $101,142 $111,204
Total loans 1,026,845 1,026,557 999,393 982,916 960,737
Allowance for loan
losses 10,753 9,910 9,464 9,099 8,820
Total assets 1,315,329 1,255,382 1,214,339 1,208,176 1,238,643
Total deposits 1,097,811 1,071,153 992,493 1,031,990 1,041,852
Total borrowings 71,050 72,951 113,256 70,555 92,415
Common Stockholders'
equity 103,711 101,448 97,720 95,514 93,596
Preferred Stock 33,007 -- -- -- --
Common Shares
Outstanding 5,612,607 5,606,607 5,606,607 5,606,607 5,624,607
Average Balance
Sheet Data
Average investments $123,123 $106,903 $99,185 $110,174 $123,958
Average other
earning assets 35,120 17,872 7,865 38,578 46,825
Average loans 1,027,391 1,011,395 991,206 971,573 953,592
Average earning
assets 1,185,634 1,136,170 1,098,256 1,120,325 1,124,375
Average assets 1,282,008 1,236,114 1,195,289 1,214,158 1,218,466
Average deposits 1,080,699 1,046,289 1,003,548 1,030,671 1,044,996
Average interest
bearing deposits 936,503 899,434 852,399 887,201 910,592
Average interest
bearing transaction
deposits 536,141 516,082 492,501 523,734 537,275
Average interest
bearing time
deposits 400,362 383,352 359,898 363,467 373,317
Average borrowings 73,397 78,631 79,227 72,707 63,791
Average interest
bearing
liabilities 1,009,900 978,065 931,626 959,908 974,383
Average Common
stockholders equity 102,579 99,584 96,618 94,556 93,541
Average Preferred
stock 16,504 -- -- -- --
Asset Quality Data
Allowance for loan
losses to total
loans 1.05% .97% .95% .93% .92%
Allowance for loan
losses to
non-performing
loans 89% 98% 85% 74% 75%
Nonaccrual loans $7,636 $8,211 $8,226 $9,745 $8,744
Restructured loans 3,492 575 575 -- --
Loans - 90 days
past due & still
accruing 1,022 1,350 2,844 2,490 3,066
--------- --------- --------- --------- ---------
Total non-performing
loans 12,150 10,136 11,645 12,235 11,810
OREO and repossessed
assets 1,259 712 3,673 3,474 4,373
--------- --------- --------- --------- ---------
Total non-performing
assets 13,409 10,848 15,318 15,709 16,183
========= ========= ========= ========= =========
Non-performing loans
to total loans 1.18% .99% 1.17% 1.24% 1.23%
Non-performing
assets to total
assets 1.02% .87% 1.26% 1.30% 1.31%
Annualized
charge-offs to
average loans .27% .48% .16% .54% .20%
Net charge-offs $682 $1,229 $410 $1,321 $485
About BKFC
BKFC, a bank holding company with assets of approximately $1.315 billion, offers banking and related financial services to both individuals and business customers. BKFC operates twenty-eight branch locations and forty-five ATMs in the Northern Kentucky market.