8-K

UNITED STATES

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):  April 28, 2017

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
(Address of principal executive offices) 40362-0157
(Zip code)

(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 first quarter of 2017 on or about May 10, 2017.  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 April 28, 2017 of quarterly financial information as of March 31, 2017.

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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.

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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.

April
	KENTUCKY BANCSHARES, INC.
Date: April 28, 2017	By	/s/ Gregory J. Dawson
		Gregory J. Dawson
		Chief Financial Officer

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EX-99.1

Exhibit 99.1

April 28, 2017

Earnings Report – March 31, 2017

Dear Shareholders:

We are pleased to announce a strong first quarter for your company.  Year-to-date net income was $3.1 million for the three months ending March 31, 2017 compared to $1.8 million for the same period ending March 31, 2016, reflecting an increase of 70.8%.  Year-to-date diluted earnings per share was $1.06 for the period ending March 31, 2017 compared to $0.61 for the same period last year, an increase of 73.8%.

The increase in year-to-date net income of $1.3 million from prior year was largely driven by a one-time gain for the sale of a branch building located in Winchester, Kentucky, to a non-banking real estate investor.  The sale was solely for the building and not for the loans or deposits associated with the branch. Simultaneous to the sale transaction, we entered into a one-year lease with the non-banking real estate investor to allow time for the construction of a smaller, more efficient branch in Winchester.  The sale of the building resulted in a pre-tax gain of approximately $1.2 million.  Absent the sale of the building, net income would have increased approximately $500 thousand, or 27% compared to the same period last year.

Other changes impacting the increase in net income include a $194 thousand increase in net interest income after provision expense due to the increase in interest-earning assets, a $251 thousand increase in gains on sale of loans due to higher volume, and a $95 thousand decrease in legal and professional expense due to one-time consulting costs incurred in 2016.

Total assets were $1.05 billion as of March 31, 2017 compared to $990.8 million as of March 31, 2016, reflecting growth of 5.9%.  The change in assets reflected a $31.5 million increase in securities, a $21.1 million increase in net loans, and a $58.4 million increase in total deposits.  The increase in balances reflects our efforts for expanded relationships and deeper market penetration.

We are pleased with the first quarter of 2017 and look forward to what we believe will be a busy and productive year.  We will continue to focus on profitable growth, expanding the suite and efficiency of our product and service offerings, and continue to evaluate our franchise footprint for opportunities to expand.  We do this as a means of pursuing ongoing success in what continues to be an environment of heightened competition and enhanced supervisory oversight.  As always, we will concentrate on what is in the long term best interest of our shareholders, customers, and employees.  Thank you for your continued support.

/s/Louis Prichard

Louis Prichard

President, CEO

UNAUDITED

CONSOLIDATED BALANCE SHEET

(in thousands)

					Percentage
	3/31/2017		3/31/2016		Change
Assets
Cash & Due From Banks	$	36,135	$	25,387	42.3	%
Interest Bearing Time Deposits		4,659		4,629	0.6
Securities		301,927		270,393	11.7
Trading Assets		5,644		5,612	0.6
Loans Held for Sale		1,189		1,634	(27.2)
Loans		657,565		635,783	3.4
Reserve for Loan Losses		7,876		7,147	10.2
Net Loans		649,689		628,636	3.3
Federal Funds Sold		1,113		1,667	(33.2)
Other Assets		49,412		52,876	(6.6)
Total Assets	$	1,049,768	$	990,834	5.9	%
Liabilities & Stockholders' Equity
Deposits
Demand	$	218,379	$	208,715	4.6	%
Savings & Interest Checking		395,596		347,624	13.8
Certificates of Deposit		210,370		209,603	0.4
Total Deposits		824,345		765,942	7.6
Repurchase Agreements		21,811		26,296	(17.1)
Other Borrowed Funds		101,812		98,243	3.6
Other Liabilities		5,976		7,460	(19.9)
Total Liabilities		953,944		897,941	6.2
Stockholders' Equity		95,824		92,893	3.2
Total Liabilities & Stockholders' Equity	$	1,049,768	$	990,834	5.9	%

CONSOLIDATED INCOME STATEMENT

(in thousands)

	Three Months Ending
							Percentage
	3/31/2017			3/31/2016			Change
Interest Income	$	9,376		$	9,098		3.1	%
Interest Expense		1,198			1,089		10.0
Net Interest Income		8,178			8,009		2.1
Loan Loss Provision		350			375		(6.7)
Net Interest Income After Provision		7,828			7,634		2.5
Other Income		4,350			2,747		58.4
Other Expenses		8,186			8,328		(1.7)
Income Before Taxes		3,992			2,053		94.4
Income Taxes		855			216		295.8
Net Income	$	3,137		$	1,837		70.8	%
Net Change in Unrealized Gain (Loss) on Securities		736			2,387		(69.2)
Comprehensive Income (Loss)	$	3,873		$	4,224		(8.3)	%
Selected Ratios
Return on Average Assets		1.20	%		0.74	%
Return on Average Equity		13.34			8.07
Earnings Per Share	$	1.06		$	0.61
Earnings Per Share - assuming dilution		1.06			0.61
Cash Dividends Per Share		0.29			0.27
Book Value Per Share		32.23			31.01

Market Price	High		Low		Close
First Quarter '17	$	37.04	$	32.50	$	37.04
Fourth Quarter '16	$	32.65	$	30.01	$	32.50