Farmers Capital Bank Corporation (NASDAQ:FFKT) (the “Company”)
reported net income of $5.3 million or $.71 per common share for
the third quarter and $13.1 million or $1.75 per common share for
the nine months ended September 30, 2017. Net income for the
current quarter is up $830 thousand or 18.5% compared to the
quarter ended June 30, 2017 and $988 thousand or 22.8% compared to
the third quarter of 2016. On a per common share basis, this
represents an increase of $.11 and $.13, respectively. Net income
for the current nine months compared to the year ago period is down
$937 thousand or 6.7%, which represents a decrease of $.12 per
common share.
Non-GAAP adjusted net income excludes after-tax
expenses related to the Company’s consolidation and integration of
its subsidiaries announced during the third quarter of 2016.
Non-GAAP adjusted net income for the nine months ended September
30, 2017 was $13.4 million or $1.79 per common share which excludes
pre-tax expenses of $472 thousand ($307 thousand after tax) related
to the Company’s consolidation of its four bank subsidiaries and
data processing subsidiary into one bank. There were no non-GAAP
adjustments to net income for the second and third quarters of
2017. Non-GAAP adjusted net income for the three and nine months
ended September 30, 2016 was $4.5 million or $.60 per common share
and $14.2 million or $1.89 per common share, which excludes pre-tax
expenses of $259 thousand ($168 thousand after tax) for both
periods. The Company completed the consolidation in February
2017. Refer to the heading captioned “Use of Non-GAAP
Financial Measures” for a reconciliation of non-GAAP financial
measures.
“Pretax income is $18.2 million for the first
nine months of 2017 compared with $19.6 million for the first nine
months of 2016. This is noteworthy as the prior year period
includes $5.5 million in nonrecurring income related to the early
extinguishment of debt and a legal settlement. This is primarily
due to a number of initiatives put in place in the latter half of
2016 and early 2017,” states Lloyd C. Hillard, Jr., President and
Chief Executive Officer. “These include the balance sheet
deleveraging transaction in the third quarter of 2016 that has
boosted our net interest income and the charter consolidation that
occurred in the first quarter of 2017 resulting in lower overall
operating costs.”
“Our loan portfolio grew $6.1 million during the
quarter, resulting in an overall year-to-date increase of $24.1
million or 2.5%,” says Mr. Hillard. “With growth in three of the
previous four quarters, our loan portfolio is up $44.4 million or
4.7% over that period of time. Loans are now $995 million and loan
demand remains encouraging.”
A summary of nonperforming assets follows for the periods
indicated:
(In thousands) |
September 30, 2017 |
June 30, 2017 |
March 31, 2017 |
December 31, 2016 |
September 30, 2016 |
Nonaccrual loans |
$ |
3,949 |
$ |
4,427 |
$ |
5,182 |
$ |
6,423 |
$ |
6,779 |
Loans
90 days or more past due and still accruing |
|
32 |
|
2 |
|
3 |
|
- |
|
- |
Restructured loans |
|
22,276 |
|
22,415 |
|
22,551 |
|
22,942 |
|
23,079 |
Total nonperforming loans |
|
26,257 |
|
26,844 |
|
27,736 |
|
29,365 |
|
29,858 |
|
|
|
|
|
|
Other
real estate owned |
|
6,106 |
|
6,187 |
|
8,000 |
|
10,673 |
|
15,336 |
Total nonperforming assets |
$ |
32,363 |
$ |
33,031 |
$ |
35,736 |
$ |
40,038 |
$ |
45,194 |
|
|
|
|
|
|
|
September 30, 2017 |
June 30, 2017 |
March 31, 2017 |
December 31, 2016 |
September 30, 2016 |
Ratio of total
nonperforming loans to total loans |
2.6 |
% |
2.7 |
% |
2.8 |
% |
3.0 |
% |
3.1 |
% |
Impact of restructured loans |
(2.2 |
) |
(2.3 |
) |
(2.3 |
) |
(2.3 |
) |
(2.4 |
) |
Ratio,
excluding restructured loans |
0.4 |
% |
0.4 |
% |
0.5 |
% |
0.7 |
% |
0.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
Ratio
of total nonperforming assets to total assets |
1.9 |
% |
2.0 |
% |
2.1 |
% |
2.4 |
% |
2.7 |
% |
Impact of restructured loans |
(1.3 |
) |
(1.4 |
) |
(1.3 |
) |
(1.4 |
) |
(1.4 |
) |
Ratio, excluding restructured loans |
0.6 |
% |
0.6 |
% |
0.8 |
% |
1.0 |
% |
1.3 |
% |
Activity during the current quarter for nonaccrual loans,
restructured loans, and other real estate owned follows:
(In thousands) |
Nonaccrual Loans |
Restructured Loans |
Other Real Estate Owned |
Balance at June 30,
2017 |
$ |
4,427 |
|
$ |
22,415 |
|
$ |
6,187 |
|
Principal paydowns |
|
(170 |
) |
|
(139 |
) |
|
- |
|
Transfers to other real
estate owned and other changes, net |
|
(272 |
) |
|
- |
|
|
248 |
|
Charge-offs/write-downs |
|
(36 |
) |
|
- |
|
|
(235 |
) |
Proceeds from
sales |
|
- |
|
|
- |
|
|
(117 |
) |
Net gain
on sales |
|
- |
|
|
- |
|
|
23 |
|
Balance at September 30, 2017 |
$ |
3,949 |
|
$ |
22,276 |
|
$ |
6,106 |
|
The $478 thousand decline in nonaccrual loans
during the quarter was driven mainly by transfers to other real
estate owned and principal payments received. The $81 thousand
decrease in other real estate owned was mainly driven by impairment
charges to adjust carrying amounts to their estimated fair value
less cost to sell.
The allowance for loan losses was $9.0 million
or 0.91% of loans outstanding at September 30, 2017. At June 30,
2017 and December 31, 2016, the allowance for loan losses was $9.2
million or 0.93% of loans outstanding and $9.3 million or 0.96% of
loans outstanding, respectively. Net loan recoveries were $205
thousand and $214 thousand in the current and linked quarters,
respectively. Loans were $995 million at quarter-end, an increase
of $6.1 million or 0.6% compared with $989 million for the linked
quarter.
Third Quarter 2017 Compared to Second
Quarter 2017
- Net income was $5.3 million or $.71 per common share for the
third quarter of 2017, up $830 thousand or $.11 per common share
compared to the linked quarter. The increase in net income is
primarily attributed to higher noninterest income of $525 thousand
or 10.3% combined with lower noninterest expense of $638 thousand
or 4.8%.
- Net interest income was up $141 thousand or 1.0% compared with
the linked quarter. The increase was driven by higher interest
income of $153 thousand or 1.0%, partially offset by higher
interest expense of $12 thousand or 1.4%. Interest income on loans
increased $175 thousand or 1.4%, which includes the collection of
$120 thousand related to two nonaccrual loans that fully paid off
during the quarter. The linked quarter included a $73 thousand
prepayment fee and the collection of $38 thousand related to a
nonaccrual loan that fully paid off during the quarter. Interest
income on investment securities declined $143 thousand or 5.6% in
the comparison. Interest expense on deposits was up $17 thousand or
3.3% and interest expense on borrowed funds decreased $5 thousand
or 1.4% in the comparison.
- Net interest margin was 3.67% for the current quarter, a
decrease of two basis points from 3.69% in the linked quarter. Net
interest spread was 3.57% and 3.60% in the current and linked
quarters, respectively. Overall cost of funds remained unchanged at
0.32%. Net interest margin and spread were positively impacted
three basis points each for both the current quarter and the linked
quarter related to the collection of interest on the nonaccrual
loans and the prepayment fee identified above.
- The Company recorded a credit to the provision for loan losses
of $379 thousand and $499 thousand for the current and linked
quarters, respectively. The credit for the current quarter is
primarily due to net recoveries of $205 thousand during the
quarter. The overall credit quality of the loan portfolio continued
to improve during the quarter. Nonperforming, watch list, and
impaired loans each declined compared with the linked quarter.
- Noninterest income was $5.6 million for the current quarter, up
$525 thousand or 10.3% in the comparison. The increase in
noninterest income is mainly driven by higher income from
company-owned life insurance of $246 thousand, higher trust income
of $98 thousand or 15.7%, and higher net gains on the sale of
investment securities of $86 thousand. Income from company-owned
life insurance in the current quarter includes $245 thousand
attributed to a tax-free death benefit received in excess of the
cash surrender value. The increase in trust income was mostly
attributed to higher estate fees of $65 thousand. Net gain on the
sale of investment securities during the current quarter includes
$82 thousand related to the sale of stock held in connection with a
correspondent banking relationship.
- Noninterest expenses were $12.7 million, a decrease of $638
thousand or 4.8% compared to the linked quarter primarily due to
lower salary and employee benefit expense of $337 thousand or 4.4%
and a decline in legal expense of $281 thousand. Salary and benefit
expense for the current quarter includes incentive pay accruals of
$257 thousand, down from $359 thousand in the linked quarter,
related to the Company’s Board-approved incentive payment plans put
in place for 2017. These plans include the Company’s executive
management team and certain other designated officers throughout
the corporation. Salary expense in the linked quarter also includes
Board-approved retention payments in the amount of $201 thousand to
certain members of management. Legal expenses during the current
quarter include the receipt of a $197 thousand insurance payment
for reimbursement of expenses previously incurred.
- Income tax expense was $2.1 million for the current quarter, an
increase of $354 thousand or 20.6% compared with $1.7 million for
the linked quarter. The effective income tax rates were 28.1% and
27.8% for the current and linked quarter, respectively.
Third Quarter 2017 Compared to Third
Quarter 2016
- Net income was $5.3 million for the third quarter of 2017, an
increase of $988 thousand or 22.8% compared to $4.3 million for the
third quarter of 2016. Net income for the current quarter was $.71
on a per common share basis, up $.13 in the comparison. The
increase in net income was driven by higher net interest income of
$1.3 million or 10.0%. The credit to the provision for loan losses
increased $189 thousand. Noninterest income and noninterest
expenses were down $5.1 million and $5.2 million, respectively, in
the comparison.
- There were no consolidation expenses in the third quarter of
2017. For the three months ended September 30, 2016, non-GAAP
adjusted net income was $4.5 million or $.60 per common share,
which excludes after-tax consolidation expenses of $168 thousand.
Refer to the heading captioned “Use of Non-GAAP Financial Measures”
for a reconciliation of non-GAAP financial measures.
- The increase in net interest income of $1.3 million was driven
by lower interest expense of $916 thousand or 50.6%, combined with
higher interest income of $364 thousand or 2.5%. Interest expense
on deposits and borrowed funds declined $38 thousand or 6.6% and
$878 thousand or 71.3%, respectively. Interest income on loans was
up $567 thousand or 4.8%. The current quarter includes the
collection of $120 thousand related to two nonaccrual loans that
fully paid off during the quarter. Interest income on investment
securities was down $369 thousand or 13.2%.
- The decline in interest income on investment securities and
interest expense on borrowed funds is primarily a result of lower
average balances of investment securities and long-term borrowings.
As part of its balance sheet deleveraging transaction during
September 2016, the Company used excess cash and proceeds from the
sale of investment securities to fund the early repayment of $100
million of high fixed-rate borrowings.
- Net interest margin was 3.67% for the current quarter, up 44
basis points compared with 3.23% a year earlier. Net interest
spread was 3.57% and 3.07% in the current and year-ago quarters,
respectively. Overall cost of funds decreased 28 basis points to
0.32%, mainly as a result of the balance sheet deleveraging
transaction discussed above. Net interest margin and spread for the
current quarter were also positively impacted three basis points
from collection of interest on the nonaccrual commercial real
estate loan identified above.
- The company recorded a credit to the provision for loan losses
of $379 thousand and $190 thousand for the current and year-ago
quarters, respectively. The credit to the provision for the current
quarter was driven by net recoveries of $205 thousand. Overall
credit quality trends remain positive and have continued to
improve. Nonperforming, watch list, and impaired loans each
declined compared with the year-ago quarter. Historical loss rates
continued to improve as a result of lower recent charge-off
activity.
- Noninterest income was $5.6 million, down $5.1 million or 47.8%
in the comparison. The decline was driven by net gains on the sale
of investment securities during the prior-year quarter of $3.8
million related to the balance sheet deleveraging transaction
discussed above, and a $1.4 million payment received in the third
quarter of 2016 related to a litigation settlement.
- Other significant changes to components of noninterest income
include a decline in allotment processing fees of $117 thousand or
14.4%, mainly due to lower processing volume. Net gains on the sale
of mortgage loans were down $101 thousand or 37.0%, related to
lower sales volume of $3.4 million or 32.8%. Nondeposit service
charges, commission, and fees decreased $99 thousand or 6.8% due to
small declines across several line items. Income from company-owned
life insurance increased $238 thousand in the comparison, primarily
attributed to a tax-free death benefit received in excess of the
cash surrender value of $245 thousand during the current
quarter.
- Noninterest expenses were $12.7 million for the current
quarter, down $5.2 million or 29.0% compared to the year-ago
quarter. The decrease was primarily the result of the $3.8 million
loss related to the early extinguishment of debt during the third
quarter of 2016 as discussed above, and lower salaries and employee
benefits expense of $501 thousand or 6.4%. The decline in salary
and employee benefit expense was driven by lower employee benefits
of $338 thousand or 22.8%, mostly due to the reduction in workforce
resulting in lower claims activity related to the Company’s
self-funded health insurance plan. Salaries and related payroll
taxes were down $163 thousand or 2.6% driven by the reduction in
workforce compared to the prior year. Salaries and related payroll
taxes declined even when factoring in $257 thousand of incentive
pay accruals in the current quarter.
- Other significant changes to components of noninterest expense
include lower legal expenses of $264 thousand, driven by the
receipt of a $197 thousand insurance payment during the current
quarter as reimbursement for expenses previously incurred. Expenses
related to repossessed real estate were down $138 thousand or
30.4%. The decline was the result of lower write-downs of $364
thousand or 60.8%, partially offset by a lower net gain on the sale
of properties of $132 thousand and higher maintenance and operating
costs of $94 thousand. Deposit insurance expense was down $98
thousand or 43.2% due to a combination of further improvement in
the risk ratings at the Company’s subsidiary bank and lower
assessment rates.
- Income tax expense was $2.1 million for the current quarter, an
increase of $516 thousand compared to $1.6 million for the third
quarter of 2016. The effective income tax rates were 28.1% and
26.5% for the current and year-ago quarters, respectively. The
increase in the effective income tax rate is mainly attributed to
higher pretax income and a higher mix of taxable versus tax-exempt
sources of revenue.
Nine-month Comparison
- Net income was $13.1 million for the first nine months of 2017,
a decrease of $937 thousand or 6.7% compared to $14.1 million for
the first nine months of 2016. On a per common share basis, net
income was $1.75, down $.12 or 6.4% in the comparison. The decline
in net income is primarily attributed to lower noninterest income
of $9.9 million or 38.1%, partially offset by lower noninterest
expense of $6.6 million or 14.3%. Net interest income was up $2.4
million or 6.2% in the comparison. The credit to the provision for
loan losses decreased $521 thousand.
- Non-GAAP adjusted net income was $13.4 million or $1.79 per
common share for the nine months ended September 30, 2017 and $14.2
million or $1.89 per common share for the first nine months of
2016. Non-GAAP adjusted net income excludes after-tax consolidation
expenses of $307 thousand and $168 thousand for the current and
prior-year periods, respectively. Refer to the heading captioned
“Use of Non-GAAP Financial Measures” for a reconciliation of
non-GAAP financial measures.
- Net interest income increased $2.4 million or 6.2% in the
nine-month comparison. The increase was driven by lower interest
expense of $3.1 million or 53.8%, partially offset by a decline in
interest income of $730 thousand or 1.6%. Interest expense on
deposits and borrowed funds were down $227 thousand or 12.5% and
$2.9 million or 72.7%, respectively. Interest income on investment
securities decreased $1.5 million or 16.6%. Interest income on
loans was up $469 thousand or 1.3%, boosted by a $73 thousand
prepayment fee and the collection of $158 thousand related to three
nonaccrual loans that fully paid off during the period. The prior
year includes the collection of $236 thousand related to a
nonaccrual loan that fully paid off during the year-ago first
quarter.
- The decline in interest income on investment securities and
interest expense on borrowed funds is primarily a result of lower
average balances of investment securities and long-term borrowings.
As part of its balance sheet deleveraging transaction during 2016,
the Company used excess cash and proceeds from the sale of
investment securities to fund the early repayment of $100 million
of high fixed-rate borrowings.
- Net interest margin was 3.65% for the first nine months of
2017, up 36 basis points compared with 3.29% a year earlier. Net
interest spread was 3.55% and 3.13% in the current and year-ago
periods, respectively. Overall cost of funds decreased 30 basis
points to 0.33%. Net interest margin and spread were positively
impacted two basis points each in both nine month periods related
to the collection of interest on the nonaccrual loans and the
prepayment fee identified above.
- The company recorded a credit to the provision for loan losses
of $298 thousand and $819 thousand in the first nine months of 2017
and 2016, respectively. The credit in the current period was driven
by lower historical loss rates and a decline in specific reserves
on impaired loans of $160 thousand or 5.4%. Nonperforming, watch
list, and impaired loans each declined in the comparison.
Historical loss rates continued to improve as lower recent
charge-off activity has replaced higher levels that had been
included in the early part of the Company’s look-back period used
in its allowance for loan losses methodology.
- Noninterest income was $16.0 million, down $9.9 million or
38.1% in the comparison. The decline is mainly attributed to the
$4.1 million gain during the first quarter of 2016 related to the
early extinguishment of debt, lower net gains on the sale of
investment securities of $3.9 million due to the balance sheet
deleveraging transaction during 2016 discussed above, and $1.5
million in payments received during 2016 related to a litigation
settlement.
- Other significant changes to components of noninterest income
include a decline in allotment processing fees of $445 thousand or
17.8% due primarily to lower processing volume. Net gains on the
sale of mortgage loans were down $180 thousand or 25.9%, mainly
related to lower sales volume of $6.6 million or 24.4%. Nondeposit
service charges, commissions, and fees decreased $113 thousand or
2.7%, due to small declines across several line items.
- Service charges and fees on deposits increased $171 thousand or
2.9%, primarily driven by higher service charges related to demand
deposits and savings accounts of $136 thousand or 19.6% and $52
thousand or 75.2%, respectively. Income from company-owned life
insurance was up $138 thousand or 17.6%, which is mainly attributed
to the tax-free death benefits received in excess of the cash
surrender value of $245 thousand during the current period,
compared to $81 thousand during the prior year.
- Noninterest expenses were $39.6 million in the current nine
months, which include $472 thousand related to the consolidation of
the Company’s subsidiaries. Compared to the first nine months of
2016, noninterest expenses were down $6.6 million or 14.3%. The
decrease was primarily the result of the $3.8 million loss related
to the early extinguishment of debt recorded in the third quarter
of 2016 as discussed above.
- Salaries and employee benefits expense declined $872 thousand
or 3.7%, driven by lower employee benefits of $1.1 million or
25.7%, primarily related to a curtailment gain of $351 thousand
recorded in the first quarter as a result of revaluing the
Company’s postretirement benefits plan liability and lower claims
activity related to the Company’s self-funded health insurance plan
each due to a reduction in workforce. Salaries and related payroll
taxes increased $200 thousand or 1.0%, which resulted from
incentive pay accruals and severance pay expense of $831 thousand
and $301 thousand, respectively. Salary expense also includes
retention payments during the second quarter of 2017 in the amount
of $201 thousand to certain members of management. There were no
similar expenses during the first nine months of 2016.
- Expenses related to repossessed real estate were down $750
thousand or 51.2%, primarily as a result of lower write-downs of
$746 thousand or 56.0%. Deposit insurance expense decreased $409
thousand or 50.8%, due to a combination of further improvement in
the risk ratings at the Company’s subsidiary bank and lower
assessment rates. Legal expenses were down $330 thousand, led by
the receipt of a $197 thousand insurance payment during the third
quarter of 2017 as reimbursement for expenses previously incurred.
Directors’ fees declined $129 thousand or 25.7%, mainly
attributable to having fewer boards of directors due to the
consolidation of subsidiaries during the first quarter of 2017.
Data processing and communications expense was up $94 thousand or
2.8%, primarily due to $127 thousand of expense in the current year
related to the consolidation of subsidiaries.
- Income tax expense was $5.1 million for the current nine
months, a decrease of $436 thousand compared to $5.5 million for
2016. The effective income tax rates were 27.9% and 28.2% for the
current and year-ago periods, respectively.
Balance Sheet
- Total assets were $1.7 billion at September 30, 2017, an
increase of $7.6 million or 0.5% from June 30, 2017. Cash and cash
equivalents increased $19.6 million or 20.0% and loans were up $6.1
million or 0.6%. Investment securities are down $16.1 million or
3.5%.
- The $6.1 million or 0.6% increase in loans was led by real
estate development and commercial loans.
- The allowance for loan losses was $9.0 million or 0.91% of
loans outstanding at September 30, 2017 compared with $9.2 million
or 0.93% at June 30, 2017. The $174 thousand decrease in the
allowance was the result of a credit to the provision for loan
losses of $379 thousand, partially offset by net recoveries of $205
thousand during the quarter. Net loan recoveries as a percentage of
outstanding loans were 0.02% in the current quarter.
- Total nonperforming assets were $32.4 million, a decrease of
$668 thousand or 2.0% for the quarter. Nonperforming loans declined
$587 thousand or 2.2% during the quarter, led by a $478 thousand or
10.8% decrease in nonaccrual loans. The ratio of nonperforming
loans to loans outstanding improved to 2.6% from 2.7% at June 30,
2017. Other real estate owned was $6.1 million at quarter-end, a
decrease of $81 thousand. Write-downs and sales activity were
partially offset by additions during the quarter.
- Total deposits were $1.4 billion at quarter-end, up $9.0
million or 0.7% in the linked quarter comparison. Noninterest
bearing and interest bearing deposits increased $6.9 million or
2.0% and $2.1 million or 0.2%, respectively.
- Securities sold under agreements to repurchase were up $3.0
million or 9.1% to $35.5 million. Other borrowings were down $10.0
million or 21.3% in the comparison due to the maturity of $10.0
million of Federal Home Loan Bank advances during the quarter.
- Shareholders’ equity was $198 million, up $4.8 million or 2.5%
for the quarter. The increase was due primarily to net income of
$5.3 million and other comprehensive income of $126 thousand,
partially offset by dividends declared on common stock of $751
thousand.
- On a consolidated basis, the Company’s regulatory capital
levels remain in excess of “well-capitalized” as defined by bank
regulators. Likewise, the regulatory capital for the Company’s
subsidiary bank, United Bank & Capital Trust Company, exceeds
“well-capitalized.”
Use of Non-GAAP Financial Measures
In addition to disclosing financial results
calculated in accordance with the accounting principles generally
accepted in the United States of America (“GAAP”), the financial
information in this release contains non-GAAP financial measures,
including adjusted net income and adjusted net income per common
share. Adjusted net income and adjusted net income per common share
for the three and nine months ended September 30, 2016 and the nine
months ended September 30, 2017 reflect adjustments for expenses
incurred in connection with the Company’s consolidation and
integration of its subsidiaries announced during the third quarter
of 2016. There were no similar expenses during the second and third
quarters of 2017. Management believes providing these non-GAAP
adjusted financial measures, combined with the primary GAAP
presentation of net income and net income per common share, to be
useful for investors to understand the Company’s results of
operations in comparison to prior periods. It also considers them
to be important supplemental measures of the Company’s performance.
The non-GAAP financial measures should not be considered superior
to, or a substitute for, financial measures calculated in
accordance with GAAP. A reconciliation of non-GAAP adjusted net
income and non-GAAP adjusted net income per common share is
included in the tables below.
The Company’s methods for determining these
non-GAAP financial measures may differ from the methods used by
other companies for these or similar non-GAAP financial measures.
Accordingly, these non-GAAP financial measures may not be
comparable to methods used by other companies.
Reconcilement of Non-GAAP Financial Measures
(In
thousands, except per share data) |
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
September30, 2017 |
June 30,2017 |
September30, 2016 |
|
September30, 2017 |
September30, 2016 |
|
|
|
|
|
|
|
Net income |
$ |
5,312 |
$ |
4,482 |
$ |
4,324 |
|
$ |
13,123 |
$ |
14,060 |
Adjustments1: |
|
|
|
|
|
|
Noninterest expense |
|
|
|
|
|
|
Severance
costs |
|
- |
|
- |
|
- |
|
|
195 |
|
- |
Data
processing and systems integration |
|
- |
|
- |
|
80 |
|
|
95 |
|
80 |
Other |
|
- |
|
- |
|
88 |
|
|
17 |
|
88 |
Adjusted net income |
$ |
5,312 |
$ |
4,482 |
$ |
4,492 |
|
$ |
13,430 |
$ |
14,228 |
|
|
|
|
|
|
|
Basic and diluted net
income per common share |
$ |
.71 |
$ |
.60 |
$ |
.58 |
|
$ |
1.75 |
$ |
1.87 |
Adjustments1: |
|
|
|
|
|
|
Noninterest expense |
|
|
|
|
|
|
Severance
costs |
|
- |
|
- |
|
- |
|
.03 |
|
- |
Data
processing and systems integration |
|
- |
|
- |
.01 |
|
.01 |
.01 |
Other |
|
- |
|
- |
.01 |
|
|
- |
.01 |
Adjusted basic and
diluted net income per common share |
$ |
.71 |
$ |
.60 |
$ |
.60 |
|
$ |
1.79 |
$ |
1.89 |
|
|
|
|
|
|
|
1All adjustments are net of tax using the
marginal corporate Federal tax rate of 35%.
Farmers Capital Bank Corporation is a bank
holding company with one bank subsidiary, United Bank & Capital
Trust Company. The Company is headquartered in Frankfort, Kentucky
and operates 34 banking locations in 21 communities throughout
Central and Northern Kentucky, 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, retention of key
personnel, and the capability of the Company to successfully
enter into, close, and realize the benefits
of anticipated transactions. 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 (“SEC”) 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-Unaudited
(In
thousands except per share data) |
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
September 30, 2017 |
June 30, 2017 |
September 30, 2016 |
|
September 30, 2017 |
September 30, 2016 |
Interest income |
$ |
14,983 |
|
$ |
14,830 |
|
$ |
14,619 |
|
|
$ |
44,192 |
|
$ |
44,922 |
|
Interest
expense |
|
893 |
|
|
881 |
|
|
1,809 |
|
|
|
2,690 |
|
|
5,827 |
|
Net
interest income |
|
14,090 |
|
|
13,949 |
|
|
12,810 |
|
|
|
41,502 |
|
|
39,095 |
|
Provision
for loan losses |
|
(379 |
) |
|
(499 |
) |
|
(190 |
) |
|
|
(298 |
) |
|
(819 |
) |
Net interest income after provision for loan losses |
|
14,469 |
|
|
14,448 |
|
|
13,000 |
|
|
|
41,800 |
|
|
39,914 |
|
Noninterest income |
|
5,627 |
|
|
5,102 |
|
|
10,772 |
|
|
|
15,980 |
|
|
25,835 |
|
Noninterest expenses |
|
12,708 |
|
|
13,346 |
|
|
17,888 |
|
|
|
39,583 |
|
|
46,179 |
|
Income
before income tax expense |
|
7,388 |
|
|
6,204 |
|
|
5,884 |
|
|
|
18,197 |
|
|
19,570 |
|
Income
tax expense |
|
2,076 |
|
|
1,722 |
|
|
1,560 |
|
|
|
5,074 |
|
|
5,510 |
|
Net income |
$ |
5,312 |
|
$ |
4,482 |
|
$ |
4,324 |
|
|
$ |
13,123 |
|
$ |
14,060 |
|
|
|
|
|
|
|
|
Basic and diluted net
income per common share |
$ |
.71 |
|
$ |
.60 |
|
$ |
.58 |
|
|
$ |
1.75 |
|
$ |
1.87 |
|
Cash dividends declared
per common share |
|
.10 |
|
|
.10 |
|
|
.07 |
|
|
|
.30 |
|
|
.21 |
|
|
|
|
|
|
|
|
Averages |
|
|
|
|
|
|
Loans, net of unearned
interest |
$ |
991,579 |
|
$ |
983,139 |
|
$ |
948,734 |
|
|
$ |
983,281 |
|
$ |
955,417 |
|
Total assets |
|
1,670,704 |
|
|
1,660,207 |
|
|
1,753,761 |
|
|
|
1,665,968 |
|
|
1,761,777 |
|
Deposits |
|
1,367,236 |
|
|
1,362,179 |
|
|
1,362,241 |
|
|
|
1,367,153 |
|
|
1,364,209 |
|
Shareholders’
equity |
|
195,653 |
|
|
190,758 |
|
|
189,573 |
|
|
|
190,756 |
|
|
185,262 |
|
|
|
|
|
|
|
|
Weighted average common
shares outstanding – basic and diluted |
|
7,514 |
|
|
7,512 |
|
|
7,505 |
|
|
|
7,512 |
|
|
7,503 |
|
|
|
|
|
|
|
|
Return on average
assets |
|
1.26% |
|
|
1.09% |
|
|
.98% |
|
|
|
1.05% |
|
|
1.07% |
|
Return on
average equity |
|
10.77% |
|
|
9.45% |
|
|
9.07% |
|
|
|
9.20% |
|
|
10.14% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2017 |
June 30, 2017 |
December 31, 2016 |
Cash and
cash equivalents |
|
$ |
117,608 |
$ |
98,014 |
$ |
113,534 |
Investment
securities |
|
|
450,963 |
|
467,081 |
|
484,352 |
Loans, net
of allowance of $9,048, $9,222 and $9,344 |
|
|
986,063 |
|
979,827 |
|
961,631 |
Other assets |
|
|
105,342 |
|
107,418 |
|
111,513 |
Total assets |
|
$ |
1,659,976 |
$ |
1,652,340 |
$ |
1,671,030 |
|
|
|
|
|
Deposits |
|
$ |
1,361,824 |
$ |
1,352,838 |
$ |
1,369,907 |
Securities
sold under agreements to repurchase |
|
|
35,537 |
|
32,569 |
|
36,370 |
Other
borrowings |
|
|
37,027 |
|
47,068 |
|
52,152 |
Other liabilities |
|
|
27,940 |
|
26,989 |
|
28,535 |
Total liabilities |
|
|
1,462,328 |
|
1,459,464 |
|
1,486,964 |
|
|
|
|
|
Shareholders’ equity |
|
|
197,648 |
|
192,876 |
|
184,066 |
Total liabilities and shareholders’ equity |
|
$ |
1,659,976 |
$ |
1,652,340 |
$ |
1,671,030 |
|
|
|
|
|
|
|
|
|
End of
period tangible book value per common share1 |
|
|
$ |
26.30 |
$ |
25.67 |
$ |
24.51 |
End of
period per common share closing price |
|
|
|
42.05 |
|
38.55 |
|
42.05 |
1Represents total common equity less intangible assets divided
by the number of common shares outstanding at the end of the
period.
Contact:
Lloyd C. Hillard, Jr.
President and Chief Executive Officer
502-227-1668
Lhillard@farmerscapital.com
Farmers Capital Bank (NASDAQ:FFKT)
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