SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 29, 2016
KENTUCKY BANCSHARES, INC.
(Exact Name of Registrant as specified in Charter)
|
Kentucky |
|
000-52598 |
|
61-0993464 |
|
(State or other |
|
(Commission |
|
(IRS Employer |
|
jurisdiction of incorporation) |
|
File Number) |
|
Identification No.) |
|
|
|
|
|
|
|
P.O. Box 157, Paris, Kentucky |
40362-0157 |
(859)987-1795
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17CFR230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
INFORMATION TO BE INCLUDED IN THE REPORT
Item 2.02. Results of Operations and Financial Condition
The Registrant expects to mail to its shareholders the Registrant's quarterly financial information for the second quarter of 2016 on or about August 10, 2016. A copy of this mailing is attached as Exhibit 99.1.
The information in this Form 8-K and Exhibit 99.1 attached hereto shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference.
Item 9.01. Financial Statements and Exhibits
Exhibit 99.1 - Release dated July 29, 2016 of quarterly financial information as of June 30, 2016.
2
Forward-Looking Statements
Except for historical information contained herein, the discussion in this Report may include certain forward looking statements based upon management expectations. Actual results and experience could differ materially from the anticipated results or other expectations expressed in the forward-looking statements. Factors which could cause future results to differ from these expectations include the following: change in economic conditions in the markets we serve; changes in laws or regulatory enforcement; monetary and fiscal policies of the federal government; changes in interest rates; demand for financial services; the impact of our continuing growth strategy; and other factors, including various “risk factors” set forth in our most recent annual report on Form 10-K and in other reports we file from time to time with the Securities and Exchange Commission. Our annual report on Form 10-K and these other reports are available publicly on the SEC website, www.sec.gov, and on the Company's website, www.kybank.com.
3
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
|
|
KENTUCKY BANCSHARES, INC. |
|
|
|
|
|
|
|
|
|
|
|
|
Date: July 29, 2016 |
|
By |
/s/ Gregory J. Dawson |
|
|
|
|
Gregory J. Dawson |
|
|
|
|
Chief Financial Officer |
4
July 29, 2016
Earnings Report
June 30, 2016
Dear Shareholders:
We are pleased to announce continued balance sheet growth for your company. Total assets were $994.1 million as of June 30, 2016 compared to $853.0 million as of June 30, 2015, reflecting growth of 16.5%. Year-to-date net income was $3.9 million for the period ending June 30, 2016 compared to $3.6 million for the period ending June 30, 2015, reflecting an increase of 7.8%.
The increase in total assets of $141.1 million from prior year reflects the merger with Madison Bank in July of 2015 as well as organic growth from our existing branches. Components of the change include an increase in net loans of $105.9 million, an increase in investment securities of $29.2 million, and an increase in total deposits of $107.4 million.
The increase in year-to-date net income of $282 thousand from prior year was driven by an increase in net interest income after provision of $2.4 million, offset by an increase in other expenses of $2.0 million. The rise in net interest income was due to increased loans and securities associated with the growth in those asset classes. The rise in other expenses was primarily due to an increase in compensation expense associated with the increase in employees year-over-year.
Year-to-date diluted earnings per share was $1.31 for the period ending June 30, 2016 compared to $1.33 for the same period last year. While net income was higher than prior year, the earnings per share was slightly lower due to more shares being outstanding this year compared to prior year.
Recently, we created a Regional Board in Madison County. We are happy to announce the following as board members: Keith Daniel, Mark Gentry, Chris Hornsby, Amanda Marcum, Debra Neal, and Marc Robbins. As we partner with this Board, we are excited about the prospects for continued growth in Madison County.
We are pleased with the results of the first half of 2016 but recognize the banking industry continues to face challenges, including heightened competition and enhanced supervisory oversight. The national and statewide economies continue to improve but the global economy remains uncertain and, most recently, created market and interest rate volatility as international influences impacted the U.S. stock and bond markets. Banking regulators are becoming increasingly concerned about, among other things, growth, capital levels, and cyber security. This cumulative environment exerts downward pressure on revenues and upward pressure on costs. In response to these challenges, we will be pursuing opportunities for profitable growth and improved efficiency to accomplish what is in the long term best interest of our shareholders, customers, and employees.
Thank you for your continued support and we look forward to the remainder of the year.
|
/s/Louis Prichard |
|
|
Louis Prichard |
|
|
President, CEO |
|
UNAUDITED
CONSOLIDATED BALANCE SHEET
(in thousands)
|
|
|
|
|
|
|
|
|
Percentage |
|
|
|
|
6/30/2016 |
|
12/31/2015 |
|
Change |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
Cash & Due From Banks |
|
$ |
15,459 |
|
$ |
16,143 |
|
-4.2 |
% |
|
Interest Bearing Time Deposits |
|
|
4,829 |
|
|
1,280 |
|
277.3 |
|
|
Securities |
|
|
266,722 |
|
|
237,476 |
|
12.3 |
|
|
Trading Assets |
|
|
5,704 |
|
|
5,400 |
|
5.6 |
|
|
Loans Held for Sale |
|
|
1,485 |
|
|
1,719 |
|
-13.6 |
|
|
Loans |
|
|
653,277 |
|
|
546,085 |
|
19.6 |
|
|
Reserve for Loan Losses |
|
|
7,259 |
|
|
5,950 |
|
22.0 |
|
|
Net Loans |
|
|
646,018 |
|
|
540,135 |
|
19.6 |
|
|
Federal Funds Sold |
|
|
1,169 |
|
|
205 |
|
470.2 |
|
|
Other Assets |
|
|
52,682 |
|
|
50,596 |
|
4.1 |
|
|
Total Assets |
|
$ |
994,068 |
|
$ |
852,954 |
|
16.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities & Stockholders' Equity |
|
|
|
|
|
|
|
|
|
|
Deposits |
|
|
|
|
|
|
|
|
|
|
Demand |
|
$ |
205,693 |
|
$ |
179,909 |
|
14.3 |
% |
|
Savings & Interest Checking |
|
|
344,983 |
|
|
280,409 |
|
23.0 |
|
|
Certificates of Deposit |
|
|
200,720 |
|
|
183,698 |
|
9.3 |
|
|
Total Deposits |
|
|
751,396 |
|
|
644,016 |
|
16.7 |
|
|
Repurchase Agreements |
|
|
26,057 |
|
|
13,690 |
|
90.3 |
|
|
Other Borrowed Funds |
|
|
111,529 |
|
|
110,090 |
|
1.3 |
|
|
Other Liabilities |
|
|
9,287 |
|
|
6,161 |
|
50.7 |
|
|
Total Liabilities |
|
|
898,269 |
|
|
773,957 |
|
16.1 |
|
|
Stockholders' Equity |
|
|
95,799 |
|
|
78,997 |
|
21.3 |
|
|
Total Liabilities & Stockholders' Equity |
|
$ |
994,068 |
|
$ |
852,954 |
|
16.5 |
% |
CONSOLIDATED INCOME STATEMENT
(in thousands)
|
|
|
Six Months Ending |
|
Three Months Ending |
|
||||||||||||
|
|
|
|
|
|
|
Percentage |
|
|
|
|
|
Percentage |
|
||||
|
|
|
6/30/2016 |
|
12/31/2015 |
|
Change |
|
6/30/2016 |
|
12/31/2015 |
|
Change |
|
||||
|
Interest Income |
|
$ |
18,184 |
|
$ |
15,566 |
|
16.8 |
% |
$ |
9,086 |
|
$ |
7,835 |
|
16.0 |
% |
|
Interest Expense |
|
|
2,190 |
|
|
1,940 |
|
12.9 |
|
|
1,101 |
|
|
972 |
|
13.3 |
|
|
Net Interest Income |
|
|
15,994 |
|
|
13,626 |
|
17.4 |
|
|
7,985 |
|
|
6,863 |
|
16.3 |
|
|
Loan Loss Provision |
|
|
600 |
|
|
650 |
|
(7.7) |
|
|
225 |
|
|
350 |
|
(35.7) |
|
|
Net Interest Income After Provision |
|
|
15,394 |
|
|
12,976 |
|
18.6 |
|
|
7,760 |
|
|
6,513 |
|
19.1 |
|
|
Other Income |
|
|
6,033 |
|
|
5,892 |
|
2.4 |
|
|
3,286 |
|
|
3,622 |
|
(9.3) |
|
|
Other Expenses |
|
|
16,936 |
|
|
14,925 |
|
13.5 |
|
|
8,608 |
|
|
7,708 |
|
11.7 |
|
|
Income Before Taxes |
|
|
4,491 |
|
|
3,943 |
|
13.9 |
|
|
2,438 |
|
|
2,427 |
|
0.5 |
|
|
Income Taxes |
|
|
572 |
|
|
306 |
|
86.9 |
|
|
356 |
|
|
305 |
|
16.7 |
|
|
Net Income |
|
$ |
3,919 |
|
$ |
3,637 |
|
7.8 |
% |
$ |
2,082 |
|
$ |
2,122 |
|
(1.9) |
% |
|
Net Change in Unrealized Gain (Loss) on Securities |
|
|
4,043 |
|
|
(1,223) |
|
(430.6) |
|
|
1,656 |
|
|
(2,160) |
|
(176.7) |
|
|
Comprehensive Income (Loss) |
|
$ |
7,962 |
|
$ |
2,414 |
|
229.8 |
% |
$ |
3,738 |
|
$ |
(38) |
|
(9936.8) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Ratios |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on Average Assets |
|
|
0.79 |
% |
|
0.84 |
% |
|
|
|
0.83 |
% |
|
0.99 |
% |
|
|
|
Return on Average Equity |
|
|
8.49 |
|
|
9.14 |
|
|
|
|
8.91 |
|
|
10.64 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Per Share |
|
$ |
1.31 |
|
$ |
1.33 |
|
|
|
$ |
0.70 |
|
$ |
0.77 |
|
|
|
|
Earnings Per Share - assuming dilution |
|
|
1.31 |
|
|
1.33 |
|
|
|
|
0.70 |
|
|
0.77 |
|
|
|
|
Cash Dividends Per Share |
|
|
0.54 |
|
|
0.52 |
|
|
|
|
0.27 |
|
|
0.26 |
|
|
|
|
Book Value Per Share |
|
|
32.00 |
|
|
28.98 |
|
|
|
|
|
|
|
|
|
|
|
|
Market Price |
|
High |
|
Low |
|
Close |
|
|||
|
Second Quarter '16 |
|
$ |
28.00 |
|
$ |
26.41 |
|
$ |
27.00 |
|
|
First Quarter '16 |
|
|
29.65 |
|
|
26.01 |
|
|
26.80 |
|