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): October 30, 2020

KENTUCKY BANCSHARES, INC.

(Exact Name of Registrant as specified in its 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))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Shares	KTYB	OTCQX

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻

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 third quarter of 2020 on or about November 16, 2020. A copy of this mailing is attached as Exhibit 99.1.

The information in this Form 8-K and Exhibit 99.1 attached hereto is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing of the Registrant under the Securities Act of 1933, as amended, of the Exchange Act, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference in such filing.

Item 9.01. Financial Statements and Exhibits

(d)Exhibits

Exhibit No. Description

99.1 Release dated October 30, 2020 of quarterly financial information as of September 30, 2020.

104 Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

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.

April
	KENTUCKY BANCSHARES, INC.
Date: October 30, 2020	By	/s/ Gregory J. Dawson
		Gregory J. Dawson
		Chief Financial Officer

4

EX-99.1

Exhibit 99.1

October 30, 2020

Earnings Report – September 30, 2020

Dear Shareholders:

Like many companies, we continue to adjust and move forward in dealing with the challenges presented by COVID-19.  Provided below are our financial results for the year-to-date and an update in the context of our four primary stakeholder groups;  shareholders, customers, employees, and communities.

Shareholders:  Year-to-date net income was $8.2 million for the period ending September 30, 2020 compared to $9.7 million for the period ending September 30, 2019.  Year-to-date diluted earnings per share was $1.38 and $1.62, for September 30, 2020 and 2019, respectively.  Total assets were $1.20 billion as of September 30, 2020 compared to $1.08 billion as of September 30, 2019.  The primary drivers behind the decrease in earnings from year-to-year is a $1.1 million increase in provision for loan loss expense and a decrease of $525 thousand in net interest income.  The increase in the provision expense is a result of our best effort to analyze the negative economic impact of COVID-19.  The decrease in net interest income is due to declining interest rates. We remain well capitalized but, like the rest of the banking industry, we do expect continued pressure on net interest margins and a certain degree of uncertainty relating to the health of the economy.

Customers:  We recognize COVID-19 has impacted consumer and commercial customers so we have designed programs to support both groups.  We are offering a Skip-a-Pay opportunity to our consumer loan customers allowing them to defer loan payments through year-end.  Since mid-March, we have worked with commercial and residential loan customers most impacted by this economic recession for principal and/or interest deferments ranging from three to twelve months.  Since early April, we have worked with commercial customers to originate approximately $60 million in U.S. Small Business Administration Paycheck Protection Program loans.  

Employees:  We value the health of our employees and customers and have followed the state and local safety guidelines by increasing physical work space and limiting lobby access at times.  By the end of July, all of our branch lobbies returned to full access.  Our employees have performed exceedingly well during this trying time and have continued to provide Premier Customer Service.  We will continue to follow state and local safety guidelines as COVID cases have recently increased nationally and regionally.  

Communities: The wellbeing of a community bank is closely tied to the wellbeing of the communities in which it serves.  In mid-March, we increased our corporate donations to non-profit groups serving those most in need within our communities.  In addition, we opened our newest branch, Tates Creek Centre Lexington, on July 6.  This new branch increases our presence in Lexington which is the largest market we serve and provides additional access for existing customers and potential customers.

The coming quarters will be challenging from a financial prospective, but as always, we will strive for 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
	9/30/2020		9/30/2019		Change
Assets
Cash & Due From Banks	$	40,883	$	25,063	63.1	%
Federal Funds Sold		384		227	69.2
Interest Bearing Time Deposits		2,523		2,375	6.2
Securities		291,876		246,542	18.4
Loans Held for Sale		4,078		5,232	(22.1)
Loans		787,447		732,267	7.5
Reserve for Loan Losses		10,094		8,266	22.1
Net Loans		777,353		724,001	7.4
Bank Owned Life Insurance		18,585		18,020	3.1
Other Assets		64,857		61,555	5.4
Total Assets	$	1,200,539	$	1,083,015	10.9	%
Liabilities & Stockholders' Equity
Deposits
Demand	$	309,648	$	241,427	28.3	%
Savings & Interest Checking		429,228		361,862	18.6
Certificates of Deposit		192,349		225,912	(14.9)
Total Deposits		931,225		829,201	12.3
Repurchase Agreements		5,428		6,037	(10.1)
Other Borrowed Funds		111,199		109,890	1.2
Other Liabilities		27,270		20,711	31.7
Total Liabilities		1,075,122		965,839	11.3
Stockholders' Equity		125,417		117,176	7.0
Total Liabilities & Stockholders' Equity	$	1,200,539	$	1,083,015	10.9	%

CONSOLIDATED INCOME STATEMENT

(in thousands)

	Nine Months Ending								Three Months Ending
							Percentage								Percentage
	9/30/2020			9/30/2019			Change		9/30/2020			9/30/2019			Change
Interest Income	$	32,197		$	34,051		(5.4)	%	$	10,184		$	11,512		(11.5)	%
Interest Expense		5,414			6,743		(19.7)			1,475			2,202		(33.0)
Net Interest Income		26,783			27,308		(1.9)			8,709			9,310		(6.5)
Loan Loss Provision		1,875			825		127.3			(250)			375		(166.7)
Net Interest Income After Provision		24,908			26,483		(5.9)			8,959			8,935		0.3
Other Income		11,706			10,395		12.6			4,145			4,060		2.1
Other Expenses		28,004			26,273		6.6			9,436			8,730		8.1
Income Before Taxes		8,610			10,605		(18.8)			3,668			4,265		(14.0)
Income Taxes		434			941		(53.9)			316			649		(51.3)
Net Income	$	8,176		$	9,664		(15.4)	%	$	3,352		$	3,616		(7.3)	%
Selected Ratios
Return on Average Assets		0.91	%		1.19	%				1.11	%		1.34	%
Return on Average Equity		8.98			11.42					10.89			12.44
Earnings Per Share	$	1.38		$	1.62				$	0.57		$	0.61
Earnings Per Share - assuming dilution		1.38			1.62					0.57			0.61
Cash Dividends Per Share		0.54			0.51					0.18			0.17
Book Value Per Share		21.09			19.81
Tangible Book Value Per Share		18.73			17.42

Market Price	High		Low		Close
Third Quarter '20	$	17.00	$	15.83	$	16.10
Second Quarter '20	$	19.50	$	15.50	$	16.62

XML

Document and Entity Information	Oct. 30, 2020
Document and Entity Information
Entity Registrant Name	KENTUCKY BANCSHARES INC /KY/
Entity Central Index Key	0001000232
Document Type	8-K
Document Period End Date	Oct. 30, 2020
Amendment Flag	false
Entity File Number	000-52598
Entity Tax Identification Number	61-0993464
City Area Code	859
Local Phone Number	987-1795
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Entity Incorporation, State or Country Code	KY
Entity Address, Address Line One	P.O. Box 157
Entity Address, City or Town	Paris
Entity Address, Postal Zip Code	40362
Entity Address, State or Province	KY
Title of 12(g) Security	Common Shares
Trading Symbol	KTYB