FARMERS CAP BK 
By
The results of the current year are driven mainly by a
Nonperforming assets were
Net charge-offs were
The Company recorded an income tax benefit for 2008 as opposed to income tax expense in the prior year. The income tax benefit for the current year is due to income from nontaxable sources which greatly exceeded income from taxable sources.
The overall interest rate environment during 2008 has been extremely
volatile and has made managing the Company's net interest margin more
challenging. At
Fourth Quarter 2008 Compared to Third Quarter 2008
-- The $1.21 increase in per share earnings for the fourth quarter of 2008
compared to the third quarter of 2008 is driven by the $14.0 million
OTTI charge related to the GSE's recorded in the third quarter.
-- An $864 thousand or 5.8% decrease in net interest income was driven by
lower interest income of $870 thousand or 3.1%.
-- Securities losses were $751 thousand in the current quarter, with a
loss of $766 thousand attributed to the sale of the Company's GSE
investments.
-- Noninterest expenses increased $1.6 million or 10.5% led by an increase
in FDIC insurance expense of $593 thousand and higher salaries and
employee benefits of $244 thousand or 3.3%.
-- Income tax benefit decreased $1.5 million due mainly to the OTTI charge
recorded in the prior quarter.
Fourth Quarter 2008 Compared to Fourth Quarter 2007
-- Net income was relatively unchanged at $2.0 million for the fourth
quarter 2008 compared to the fourth quarter 2007. Per share earning of
$.27 was up $.01 in the comparison mainly due the $56 thousand increase
in net income combined with a 28 thousand decrease in the weighted
average number of shares outstanding.
-- Net interest income decreased $741 thousand or 5.1%. Interest income on
loans declined $3.4 million or 14.2% partially offset by lower interest
expense on deposits of $2.2 million. Net interest income was boosted in
comparison by an additional $561 thousand related to the Company's
leverage transaction that occurred during the fourth quarter of 2007.
-- The provision for loan losses was $1.3 million lower in the current
quarter compared to a year ago.
-- Noninterest income decreased $1.2 million led by a $751 net loss on the
sale of securities, primarily in connection with the sale of the GSE
preferred stock.
-- Noninterest expenses increased $627 thousand or 4.0%. Lower salary and
benefit expenses of $1.1 million attributed mainly to lower benefit
costs, were offset by higher net other expenses of $1.7 million. Higher
expenses occurred across a broad range of line items, led by increases
in FDIC deposit insurance premiums of $654 thousand, data processing
and communication expenses of $250 thousand, and bank franchise taxes
of $169 thousand.
-- Income tax benefit increased $1.3 million due mainly to the OTTI charge
recorded in the prior quarter.
Twelve-month Comparison
-- The $1.43 decrease in per share earnings for the twelve-month period
ended December 31, 2008 compared to the same period for 2007 is due
mainly to the impact of the $14.7 million loss ($9.7 million after tax)
related to the Company's GSE investments and a higher provision for
loan losses of $1.7 million.
-- Net interest income increased $572 thousand or 1.0% as a result of a
$909 thousand or 1.6% decrease in interest expense outpaced a $337
thousand or .3% decrease in interest income. Net interest income for
the current year was helped by an additional $3.1 million attributed to
the Company's leverage transaction that occurred during the fourth
quarter of 2007.
-- Excluding investment securities related transactions, noninterest
income was relatively flat at $23.9 million for the current year
compared to $24.2 million a year earlier.
-- Noninterest expenses increased $1.3 million or 2.2%. Lower salary and
benefit expenses of $1.2 million attributed mainly to lower benefit
costs, were offset by higher net other expenses of $2.5 million. Higher
expenses occurred across a broad range of line items, led by increases
in FDIC deposit insurance premiums of $812 thousand, higher net
expenses related to properties acquired through foreclosure of $761
thousand, and data processing and communication expenses of $653
thousand.
-- Income tax benefit was $1.2 million for the current twelve months
compared to income tax expense of $4.3 million in the prior year. The
income tax benefit recorded in the current year is due mainly to the
impact of the losses associated with the GSE preferred stock
investments in the third and fourth quarters of 2008.
Balance Sheet
-- Total assets were $2.2 billion at December 31, 2008, an increase of
$47.7 million or 2.2% compared to September 30, 2008. The increase in
assets is primarily related to $25.4 million higher cash and
equivalents and $17.5 million higher net investment securities. Net
deposit balances increased $46.6 million or 3.0% in the linked quarter
comparison.
-- Net loans increased $7.9 million or .6% compared to the linked quarter
as the Company continues to take a measured and cautious lending
approach in the near term.
-- Nonperforming loans were $25.6 million and $24.0 million at December
31, 2008 and September 30, 2008, respectively, compared to $21.1 at
year -end 2007.
-- The allowance for loan losses was 1.28% and 1.20% of net loans
outstanding at December 31, 2008 and September 30, 2008, respectively,
compared to 1.10% at December 31, 2007.
-- 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
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
(In thousands except per share data)
Three Months Ended Twelve Months Ended
December September December December December
31, 2008 30, 2008 31, 2007 31, 2008 31, 2007
Interest income $26,989 $27,859 $29,850 $113,920 $114,257
Interest expense 13,079 13,085 15,199 55,130 56,039
Net interest income 13,910 14,774 14,651 58,790 58,218
Provision for loan
losses 1,956 1,780 3,209 5,321 3,638
Net interest income
after provision for
loan losses 11,954 12,994 11,442 53,469 54,580
Noninterest income 5,097 (7,865) 6,263 9,810 24,157
Noninterest expenses 16,447 14,879 15,820 60,098 58,823
(Loss) income before
income tax expense 604 (9,750) 1,885 3,181 19,914
Income tax (benefit)
expense (1,400) (2,865) (63) (1,214) 4,287
Net (loss) income $ 2,004 $ (6,885) $ 1,948 $ 4,395 $ 15,627
Per common share
Basic and diluted
net income (loss) $ .27 $ (.94) $ .26 $ .60 $ 2.03
Cash dividend declared .33 .33 .33 1.32 1.32
Averages
Loans, net of
unearned
interest $1,307,561 $1,308,192 $1,281,280 $1,302,394 $1,250,423
Total assets 2,165,341 2,111,753 2,007,644 2,137,354 1,886,052
Deposits 1,552,549 1,498,304 1,495,268 1,525,754 1,466,653
Shareholders'
equity 160,739 166,539 169,931 168,000 175,921
Weighted Average
Shares outstanding-
basic and diluted 7,354 7,349 7,382 7,357 7,706
Return on average
assets .37% (1.30)% .38% .21% .83%
Return on average
equity 4.96% (16.45)% 4.55% 2.62% 8.88%
December September December
31, 2008 30, 2008 31, 2007
Cash and cash equivalents $190,775 $165,343 $79,140
Investment securities 536,109 518,653 546,477
Loans, net of allowance of
$16,828, $15,602, and $14,216 1,295,752 1,287,817 1,277,769
Other assets 179,531 182,644 164,861
Total assets 2,202,167 2,154,457 $2,068,247
Deposits $1,594,115 $1,547,476 $1,474,097
Federal funds purchased and
other short-term borrowings 77,474 83,247 80,755
Other borrowings 335,661 335,791 316,309
Other liabilities 26,621 27,325 28,595
Total liabilities 2,033,871 1,993,839 1,899,756
Shareholders' equity 168,296 160,618 168,491
Total liabilities and
shareholders' equity $2,202,167 $2,154,457 $2,068,247
End of period book value per share(1) $ 22.87 $ 21.84 $ 22.82
End of period share value 24.42 27.02 27.00
End of period dividend yield(2) 5.41% 4.89% 4.89%
(1) Represents total equity divided by the number of shares outstanding at
the end of the period.
(2) Represents annualized dividend declared divided by the end of period
share value.
SOURCE Farmers Capital Bank Corporation
