updated 1/20/2011 5:19:48 PM ET 2011-01-20T22:19:48

CRESTVIEW HILLS, Ky., Jan. 20, 2011 (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 fourth quarter and twelve months ended December 31, 2010. For the fourth quarter and twelve months of 2010, the Company reported an increase in diluted earnings per common share of 44% and 30% respectively from the same periods in 2009.

A summary of the Company's results follows:

Fourth Quarter ended December 31, 2010 2009 Change
Net income $3,673,000 $2,328,000 58%
Net income available to common shareholders $2,966,000 $1,819,000 63%
Earnings per common share, basic $0.46 $0.32 44%
Earnings per common share, diluted $0.46 $0.32 44%
       
Year ended December 31, 2010 2009 Change
Net income $11,671,000 $8,760,000 33%
Net income available to common shareholders $9,425,000 $6,968,000 35%
Net income per common share, basic $1.61 $1.24 30%
Net income per common share, diluted $1.61 $1.23 30%

Robert Zapp, President and Chief Executive Officer stated, "The fourth quarter was a very active period for the Company. A very successful stock issue in November, which allowed us to repurchase a portion of the TARP preferred stock, was a notable highlight. Significant revenue growth and improving credit metrics highlighted the increase in earnings in the fourth quarter. While credit quality has been trending in the right direction, the economic recovery is slow and we will continue to work closely with our business clients trying to emerge from the downturn. With much of the fight behind us, we will continue to focus on lending and identifying opportunities to assist businesses in a wide range of credit needs. We are pleased to report the Company's successful fourth quarter financial performance, but stand ready to execute our strategy to grow organically and seek opportunities to expand the franchise through acquisition."  

On November 22, 2010 the Company announced the closing of a public offering of 1,765,588 shares of its common stock at $17.00 per share, for net proceeds of approximately $28.1 million. This offering was  followed by the Company's repurchase, on December 22, 2010, of $17 million of the outstanding $34 million of its Fixed Rate Cumulative Perpetual Preferred Stock, Series A (the "Series A Preferred Stock"), previously issued to the U.S. Department of the Treasury.  As a result of the partial repurchase, the Company recognized the accretion of the remaining discount on the repurchased Series A Preferred Stock as of the date of repurchase. The additional accretion recognized at the date of repurchase reduced net income available to common stockholders for the fourth quarter of 2010 by $215,000. 

Two acquisitions that were completed in the fourth quarter of 2009 also had a significant impact on the Company's fourth quarter 2010 income statement as compared to the fourth quarter of 2009. In the fourth quarter of 2009, the Bank completed the purchase of three banking offices of Integra Bank Corporation's wholly-owned bank subsidiary, Integra Bank N.A., located in Crittenden, Dry Ridge and Warsaw, Kentucky and a portfolio of selected commercial loans originated by Integra Bank's Covington, Kentucky loan production office. This transaction added $76 million in deposits and $107 million in loans.   The Bank also completed the purchase of Tapke Asset Management, LLC ("TAM") in the fourth quarter of 2009. 

Driving the increase in earnings in the fourth quarter of 2010 was strong revenue growth and a lower provision for loan losses as compared to the fourth quarter of 2009. Total revenue increased $2,093,000 or 12% from the fourth quarter of 2009 while the provision for loan losses decreased $1,500,000 or 33% in the same period. The growth in revenue included a $1,267,000 or 10% increase in net interest income and a $826,000 or 18% increase in non interest income. The decrease in the provision for loan losses reflected improving credit metrics.

Net interest income increased $1,267,000, or 10% in the fourth quarter of 2010, as compared to the same period in 2009, while the net interest margin, on a tax equivalent basis, increased 5 basis points from 3.65% in the fourth quarter of 2009 to 3.70% in the fourth quarter of 2010.    Contributing to the increase in net interest income was the growth in average earning assets which increased $121 million, or 9% on average from the fourth quarter of 2009. 

The provision for loan losses decreased by $1,500,000 (33%) in the fourth quarter of 2010, as compared to the same period in 2009. Contributing to this decrease were lower levels on non-performing loans and charge-offs as compared to December 2009.   The Company's non-performing loans as a percentage of total loans were 1.90% as of December 31, 2010, as compared to 2.21% as of December 31, 2009, while annualized net charge-offs to average loans decreased from 1.12% in the fourth quarter of 2009 to 1.00% in the fourth quarter of 2010, and the net charge-off ratio was lower than the levels experienced over the last four quarters. The Company recorded $2,795,000 in net charge-offs in the fourth quarter of 2010 as compared to $3,125,000 in the fourth quarter of 2009. On a sequential basis, the provision for loan losses of $3,000,000 in the fourth quarter of 2010 was $500,000 lower than the provision in the third quarter of 2010, while non-performing loans increased from $19 million (1.69% of total loans) at September 30, 2010 to $21.1 million (1.90% of total loans) at December 31, 2010. Net charge-offs on a sequential basis decreased from $2,867,000 (1.02% of loans) in the third quarter of 2010 to $2,795,000 (1.00% of loans) in the fourth quarter of 2010. As a result of the impact that current economic conditions have had on the Company's loan portfolio, the allowance for loan losses (ALL) increased $2,215,000 (15%) from December 31, 2009. As a result of the added allowance, the ALL has increased from 1.31% of loans at the end of the fourth quarter of 2009 to 1.57% of loans at the end of the fourth quarter of 2010.   Removing the loans purchased from Integra, the ALL would be approximately 1.72% of loans at the end of fourth quarter 2010. The portfolio of commercial loans purchased from Integra in the fourth quarter of 2009 were purchased at a discount of .98%, and current accounting does not allow this discount to be added to the ALL. The adequacy of the ALL is analyzed quarterly and adjusted as necessary to maintain appropriate reserves for probable incurred losses in the Bank's loan portfolio.

Non-interest income increased 18% ($826,000) in the fourth quarter of 2010, as compared to the same period in 2009, while non-interest expense increased 16% ($1,524,000) from the same period last year. Contributing to the increase in non-interest income was gains on the sale of real estate loans which increase $670,000 (243%) from the fourth quarter of 2009. These gains were driven by extremely low interest rates, which have prompted increased demand for home mortgage loan refinancing.   Non-interest income in the fourth quarter of 2009 included $465,000 in gains on the sale of securities versus $0 in the fourth quarter of 2010. Other increases in non-interest income included trust income and bankcard revenue. Contributing to the $279,000 (87%) increase in trust fees was the TAM acquisition.     Non-interest expense in the fourth quarter of 2010 included the full quarter effect of both the Integra branch acquisition and the TAM acquisition. Added personnel from the TAM and Integra acquisitions and higher commissions associated with the gains on the sale of real estate loans contributed to the 21% ($873,000) increase in salaries and benefits. Commissions accounted for $147,000 of this increase in salaries and benefits, which was 218% higher than the fourth quarter of 2009.

Total assets were $1.665 billion at the end of the fourth quarter of 2010, which was $100 million or 6% higher than the same date a year ago. Total loans decrease $48 million (4%) while investments in securities and other short-term investments grew $71 million (33%) and $74 million (127%) respectively, from December of 2009 and were funded by an increase in deposits of $79 million or 6%.   Shareholders' equity totaled $159 million at the end of 2010 which was $18 million (13%) higher than the end of 2009. The growth in equity was a result of earnings and the net increase in capital from the common stock offering less the Series A Preferred Stock repurchase.   

The Bank of Kentucky Financial Corporation
 Selected Consolidated Financial Data
 (Dollars in thousands, except per share data)
 
   Fourth Quarter Comparison  Year ended December 31, Comparison 
Income Statement Data 12/31/10 12/31/09 % Chg 12/31/10 12/31/09 % Chg
Interest income $16,402 $16,322 0% $66,682 $62,750 6%
Interest expense 2,973 4,160 (29)% 13,273 17,957 (26)%
Net interest income 13,429 12,162 10% 53,409 44,793 19%
Provision for loan losses 3,000 4,500 (33)% 15,500 12,825 21%
Net interest income after provision for loan losses 10,429 7,662 36% 37,909 31,968 19%
Non interest income 5,542 4,716 18% 20,714 16,616 25%
Non interest expense 10,770 9,246 16% 42,424 36,677 16%
Net income before income taxes 5,201 3,132 66% 16,199 11,907 36%
Provision for income taxes 1,528 804 90% 4,528 3,147 44%
Net income 3,673 2,328 58% 11,671 8,760 33%
Preferred stock dividends & amortization 707 509 39% 2,246 1,792 25%
Net income available to common shareholders $2,966 $1,819 63% $9,425 $6,968 35%
Per Common Share Data            
Diluted earnings per common share 0.46 0.32 44% 1.61 1.23 30%
Cash dividends declared 0.00 0.00 0% 0.56 0.56 0%
Earnings Performance Data            
Return on common equity 9.33% 6.76% 257bps 8.23% 6.66%  157bps
Return on assets .91% .63% 28bps .75% .65% 10bps
Net interest margin 3.62% 3.57% 5bps 3.72% 3.56% 16bps
 
 
The Bank of Kentucky Financial Corporation
 Selected Consolidated Financial Data
 (Dollars in thousands, except per share data)
     
Balance Sheet Data    
  December 31, 2010 December 31, 2009
Assets:    
Cash and cash equivalents $171,399 $98,738
Investments 285,326 214,667
Loans held for sale 15,279 6,798
Total loans, gross 1,107,274 1,154,984
Allowance for loan losses (17,368) (15,153)
Premises and equipment, net 23,170 23,588
Goodwill and acquisition intangibles, net 25,464 26,936
Other assets and accrued interest receivable 54,340 54,440
Total assets $1,664,884 $1,564,998
     
Liabilities & Shareholders' Equity    
Total deposits $1,422,312 $1,343,272
Short-term borrowings 23,419 21,669
Notes payable 48,761 44,781
Accrued interest payable and other liabilities 11,022 14,143
Total liabilities 1,505,514 1,423,865
Common stockholders' equity 142,580 107,907
Preferred stock 16,790 33,226
Shareholders' equity 159,370 141,133
Total liabilities and shareholders' equity $1,664,884 $1,564,998
 
 
The Bank of Kentucky Financial Corporation
Selected Consolidated Financial Data 
(Dollars in thousands, except per share data)
             
  Average Balance Sheet Rates (presented on a tax equivalent basis )
  Quarter ended December 31, 2010  Quarter ended December 31, 2009
  Average Interest    Average Interest  
  outstanding  earned/ Yield/ outstanding   earned/ Yield/
  balance paid rate balance paid rate
Interest-earning assets:            
Loans receivable (1)(2) $1,133,524 $15,228 5.33% $1,123,355 $15,106 5.33%
Securities (2) 252,793 1,352 2.12 182,769 1,390 3.02
Other interest-earning assets 85,384 113 .53 44,822 86 .76
Total interest-earning assets 1,471,701 16,693 4.50 1,350,946 16,582 4.87
             
             
Non-interest-earning assets 124,134     104,550    
Total assets $1,595,835     $1,455,496    
             
Interest-bearing liabilities:            
Transaction accounts 682,826 684 0.4 629,018 1,068 0.67
Time deposits 448,064 1,995 1.77 435,326 2,775 2.53
Borrowings 69,784 294 1.67 67,517 317 1.86
             
Total interest-bearing liabilities 1,200,674 2,973 .98 1,131,861 4,160 1.46
Non-interest-bearing liabilities 237,383     183,633    
Total liabilities 1,438,057     1,315,494    
             
             
Shareholders' equity 157,778     140,002    
             
             
Total liabilities and shareholders' equity $1,595,835     $1,455,496    
Net interest income   $13,720     $12,422  
Interest rate spread     3.52%     3.41%
             
             
Net interest margin (net interest income as a percent of average interest-earning assets)     3.70%     3.65%
             
(1) Includes non-accrual loans.
(2) Income presented on a tax equivalent basis using a 34.62% and 34.35% tax rate in 2010 and 2009, respectively. The tax equivalent adjustment was $291,000 and $260,000 in 2010 and 2009, respectively.
 
The Bank of Kentucky Financial Corporation
 Selected Consolidated Financial Data
 (Dollars in thousands, except per share data)
             
  Average Balance Sheet Rates (presented on a tax equivalent basis )
  Year ended December 31, 2010  Year ended December 31, 2009
  Average Interest    Average Interest   
  outstanding  earned/ Yield/ outstanding  earned/ Yield/
  balance paid rate balance paid rate
             
Interest-earning assets:            
Loans receivable (1)(2) $1,137,373 $61,535 5.41% $1,066,886 $58,093 5.45%
Securities (2) 236,838 5,812 2.45 156,847 5,354 3.41
Other interest-earning assets 62,722 395 .63 34,224 298 .87
  1,436,933 67,742 4.71 1,257,957 63,745 5.07
Total interest-earning assets            
             
Non-interest-earning assets 124,408     99,562    
Total assets $1,561,341     $1,357,519    
             
Interest-bearing liabilities:            
Transaction accounts 679,597 3,012 0.44 568,135 3,924 0.69
Time deposits 450,712 9,054 2.01 416,179 12,505 3
Borrowings 67,628 1,207 1.78 67,527 1,528 2.26
             
Total interest-bearing liabilities 1,197,937 13,273 1.11 1,051,841 17,957 1.71
Non-interest-bearing liabilities 215,427     171,585    
  1,413,364     1,223,426    
Total liabilities            
             
Shareholders' equity 147,977     134,093    
             
             
Total liabilities and shareholders' equity $1,561,341     $1,357,519    
Net interest income   $54,469     $45,788  
Interest rate spread     3.60%     3.36%
             
             
Net interest margin (net interest income as a percent of average interest-earning assets)     3.79%     3.64%
___________________________            
(1) Includes non-accrual loans.
(2) Income presented on a tax equivalent basis using a 34.62% and 34.35% tax rate in 2010 and 2009, respectively. The tax equivalent adjustment was $1,060,000 and $995,000 in 2010 and 2009, respectively.
 
 
The Bank of Kentucky Financial Corporation
 Selected Consolidated Financial Data
 (Dollars in thousands, except per share data)
           
  Five-Quarter Comparison    
Income Statement Data 12/31/10 9/30/10 6/30/10 3/31/10 12/31/09
Net interest income $13,429 $13,592 $13,454 $12,934 $12,162
Provision for loan losses 3,000 3,500 4,500 4,500 4,500
Net interest income after provision for loan losses 10,429 10,092 8,954 8,434 7,662
Service charges and fees 2,411 2,589 2,622 2,267 2,408
Gain on sale of real estate loans 946 1,041 337 322 276
Gain on sale of securities -- -- -- -- 465
Trust fee income 601 620 602 550 322
Bankcard transaction revenue 774 727 749 673 615
Gains/(losses) on Other Real Estate Owned (125) (110) 30 141 14
Other non-interest income 935 760 600 652 616
Total non-interest income 5,542 5,627 4,940 4,605 4,716
Salaries and employee benefits expense 4,959 5,110 4,764 4,565 4,086
Occupancy and equipment expense 1,185 1,195 1,187 1,450 1,139
Data processing expense 484 442 443 461 426
State bank taxes 477 492 507 490 433
Amortization of intangible assets 357 357 375 384 258
FDIC Insurance 566 504 587 585 553
Other non-interest expenses 2,742 2,625 2,453 2,678 2,351
Total non-interest expense 10,770 10,725 10,316 10,613 9,246
Net income before income tax expense 5,201 4,994 3,578 2,426 3,132
Income tax expense 1,528 1,466 968 566 804
Net income 3,673 3,528 2,610 1,860 2,328
Preferred stock dividends & amortization 707 515 514 510 509
Net income available to common shareholders $2,966 $3,013 $2,096 $1,350 $1,819
Per Common Share Data          
Diluted earnings per common share  0.46 0.53 0.37 0.24 0.32
Cash dividends declared 0.00 0.28 0.00 0.28 0.00
Weighted average common shares outstanding          
Basic  6,434,354 5,666,707 5,666,707 5,666,707 5,622,142
Diluted  6,434,354 5,666,707 5,666,707 5,681,515 5,652,722
Earnings Performance Data          
Return on common equity 9.33% 10.68% 7.59% 5.03% 6.76%
Return on assets .91% .93% .67% .48% .63%
Net interest margin 3.62% 3.90% 3.74% 3.63% 3.57%
Net interest margin (tax equivalent) 3.70% 3.97% 3.81% 3.69% 3.65%



The Bank of Kentucky Financial Corporation
 Selected Consolidated Financial Data
 (Dollars in thousands, except per share data)
           
   Five-Quarter Comparison
Balance Sheet Data 12/31/10 9/30/10 6/30/10 3/31/10 12/31/09
Assets:          
Cash and cash equivalents $171,399 $41,280 $69,094 $121,299 $98,738
Investments 285,326 240,657 233,817 240,650 214,667
Loans held for sale 15,279 21,903 6,795 2,072 6,798
Total loans 1,107,274 1,120,168 1,122,964 1,142,609 1,154,984
Allowance for loan losses (17,368) (17,163) (16,531) (15,607) (15,153)
Premises and equipment, net 23,170 23,373 23,690 23,883 23,588
Goodwill and acquisition intangibles, net 25,464 25,820 26,178 26,552 26,936
Other assets & accrued interest receivable 54,340 54,028 53,613 54,096 54,440
Total assets $1,664,884 $1,510,066 1,519,620 1,595,554 1,564,998
Liabilities & Shareholders' Equity          
Total deposits $1,422,312 $1,271,455 $1,300,949 $1,376,468 $1,343,272
Short-term borrowings 23,419 36,175 18,097 22,833 21,669
Notes payable 48,761 44,766 44,770 44,776 44,781
Accrued interest payable & other liabilities 11,022 11,307 10,894 10,214 14,143
Total liabilities 1,505,514 1,363,703 1,374,710 1,454,291 1,423,865
Common stockholders' equity 142,580 112,873 111,510 107,952 107,907
Preferred stock 16,790 33,490 33,400 33,311 33,226
Shareholders' equity 159,370 146,363 144,910 141,263 141,133
Total liabilities and shareholders' equity $1,664,884 $1,510,066 1,519,620 1,595,554 1,564,998
Common shares outstanding 7,432,295 5,666,707 5,666,707 5,666,707 5,666,707
Average Balance Sheet Data          
Average investments $252,793 $234,335 $243,572 $216,280 $182,769
Average other earning assets 85,384 28,232 60,416 77,147 44,822
Average loans 1,133,524 1,123,503 1,139,730 1,153,099 1,123,355
Average earning assets 1,471,701 1,386,070 1,443,718 1,446,526 1,350,946
Average assets 1,595,835 1,509,821 1,567,837 1,572,174 1,455,496
Average deposits 1,366,256 1,285,557 1,347,906 1,354,035 1,236,465
Average interest bearing deposits 1,130,890 1,083,935 1,146,120 1,161,137 1,064,344
Average interest bearing transaction deposits 682,826 637,835 695,866 702,534 629,018
Average interest bearing time deposits 448,064 446,100 450,254 458,603 435,326
Average borrowings 69,784 67,153 66,333 67,144 67,517
Average interest bearing liabilities 1,200,674 1,151,088 1,212,453 1,288,281 1,131,861
Average common stockholders equity 126,068 112,192 109,732 107,929 106,818
Average preferred stock 31,710 33,445 33,355 33,269 33,184
 
The Bank of Kentucky Financial Corporation
 Selected Consolidated Financial Data
 (Dollars in thousands, except per share data
           
  Five-Quarter Comparison 
Asset Quality Data 12/31/10 9/30/10 6/30/10 3/31/10 12/31/09
Allowance for loan losses to total loans 1.57% 1.53% 1.47% 1.37% 1.31%
Allowance for loan losses to non-performing loans 82% 90% 74% 72% 59%
           
Nonaccrual loans $21,062 $18,768 $22,184 $21,692 $23,826
Loans – 90 days past due & still accruing 414 207 213 114 1,736
Total non-performing loans 21,062 18,975 22,397 21,806 25,562
OREO and repossessed assets 795 1,392 1,397 1,535 1,381
Total non-performing assets 21,857 20,367 23,794 23,341 26,943
Restructured loans-accruing 6,135 3,901 3,441 6,332 3,568
Non-performing loans to total loans 1.90% 1.69% 1.99% 1.91% 2.21%
Non-performing assets to total assets 1.32% 1.35% 1.57% 1.47% 1.73%
Annualized charge-offs to average loans 1.00% 1.02% 1.26% 1.41% 1.12%
Net charge-offs $2,795 $2,867 $3,577 $4,046 $3,125

About BKFC

BKFC, a bank holding company with assets of approximately $1.665 billion, offers banking and related financial services to both individuals and business customers. BKFC operates thirty-one branch locations and forty-seven ATMs in the Northern Kentucky market.

CONTACT: Martin Gerrety
         Executive Vice President and CFO
         (859) 372-5169
         mgerrety@bankofky.com

© Copyright 2012, GlobeNewswire, Inc. All Rights Reserved

Discuss:

Discussion comments

,

Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 4.91%
$30K home equity loan FICO 5.20%
$75K home equity loan FICO 4.57%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.42%
13.40%
Cash Back Cards 17.92%
17.92%
Rewards Cards 17.13%
17.12%
Source: Bankrate.com