FARMERS CAP BK 
By Farmers Capital Bank Corporation 202 West Main Street l Post Office Box 309
Frankfort, Kentucky 40602-0309
phone: 502.227.1668 l Fax: 502.227.1692
www.farmerscapital.com
NEWS RELEASE January 23, 2013
Farmers Capital Bank Corporation Announces Fourth Quarter Earnings Nonperforming Assets Decline 9.1% During Quarter; Termination of Regulatory Agreement at Bank Subsidiary
Frankfort, Kentucky - Farmers Capital Bank Corporation (NASDAQ: FFKT) (the "Company") reported net income of
$2.6 million or $.28 per common share for the quarter ended December 31, 2012. This represents a decrease of $489 thousand or $.07 per common share compared to the linked quarter and an improvement of $1.4 million or $.18 per common share compared to the fourth quarter a year ago. Net income was $12.1 million or $1.37 per common share for the twelve months ended December 31, 2012, an increase of $9.4 million and $1.26, respectively, compared to the year ended December 31, 2011.
"We continue to make strides improving the Company's overall financial condition and profitability", says Lloyd C. Hillard, Jr., President and Chief Executive Officer of the Company. "Nonperforming loans, while still elevated, are down 23% for the quarter and are now at their lowest point since the third quarter of 2009. Nonaccrual loans decreased
36% during the quarter. Our holding of repossessed real estate has increased, but we are also experiencing favorable selling opportunities for many of these properties," Mr. Hillard continues. "Net interest income improved in the quarter as certain components of higher rate debt matured or have repriced to a lower rate. Quality loan demand remains an issue, but the credit quality of our loan portfolio continues to improve."
Today the Company received written notification from the Federal Reserve Bank of St. Louis and the Kentucky Department of Financial Institutions that, as a result of their recent examination, the Memorandum of Understanding entered into with its largest bank subsidiary (Farmers Bank and Capital Trust Company) in November of 2009 has been terminated effective immediately. "Termination of the Memorandum of Understanding at Farmers Bank further illustrates progress toward our goal of improving the financial condition of the Company", states Mr. Hillard. "We are pleased to receive this notification, but are not satisfied. Our focus remains on continual improvement and the eventual removal of the remaining regulatory agreements at other entities within our Company."
A summary of nonperforming assets is as follows for the periods indicated.
(In thousands)
December 31,
2012
September 30,
2012
June 30,
2012
March 31,
2012
December 31,
2011
Nonaccrual loans $27,408 $43,150 $54,598 $61,358 $59,755
Loans 90 days or more past due and still accruing 103 28 29 50 1
Restructured loans 26,349 26,449 17,540 17,551 19,125
Total nonperforming loans 53,860 69,627 72,167 78,959 78,881
Other real estate owned 52,562 47,480 39,566 41,750 38,157
Other foreclosed assets - - 16 36 36
Total nonperforming assets $106,422 $117,107 $111,749 $120,745 $117,074
Ratio of total nonperforming loans to total loans
(net of unearned income) | 5.4% | 6.8% | 6.9% | 7.5% | 7.4% |
Ratio of total nonperforming assets to total assets | 5.9 |
Activity during the current quarter for nonaccrual loans, restructured loans, and other real estate owned is as follows:
(In thousands)
Nonaccrual
Loans
Restructured
Loans
Other Real
Estate Owned
Balance at September 30, 2012 $43,150 $26,449 $47,480
Loans placed on nonaccrual status 1,106 (72) - Loans restructured (38) 38 - Principal paydowns (2,929) (66) - Transfers to other real estate owned (12,069) - 12,211
Charge-offs/write-downs (1,647) - (1,558) Reclassified to performing status (165) - -
Proceeds from sales - - (5,488)
Net loss on sales - - (83) Balance at December 31, 2012 $27,408 $26,349 $52,562
The more significant changes to nonperforming assets during the current quarter include the transfer of $12.1 million of collateral previously securing nonaccrual loans to other real estate owned. There were six larger-balance nonaccrual credits totaling $11.1 million that moved to other real estate owned during the quarter as a result of repossession, including four related to real estate development properties totaling $7.3 million, one related to commercial real estate of
$2.9 million, and one group of related residential properties totaling $911 thousand. The Company received principal payments on nonaccrual loans of $2.9 million during the quarter and received proceeds of $5.5 million on the sale of other real estate.
The allowance for loan losses was $24.4 million or 2.43% of loans (net of unearned income) outstanding at December
31, 2012. At September 30, 2012 and year-end 2011, the allowance for loan losses was $25.1 million or 2.47% of net loans outstanding and $28.3 million or 2.64% of net loans outstanding, respectively. Net loan charge-offs were $1.4 million and $1.7 million in the current three months and linked quarter, respectively. This represents a decrease of $303 thousand or 17.7%. Net charge-offs as a percentage of outstanding loans (net of unearned income) were .14% and .17% in the current and linked quarters, respectively.
