EX-99 3 pr101703.txt PRESS RELEASE Exhibit 99.1 Press Release Dated October 17, 2003 NEWS RELEASE October 17, 2003 FARMERS CAPITAL BANK CORPORATION ANNOUNCES NINE MONTHS EARNINGS Frankfort, Kentucky - Farmers Capital Bank Corporation reported net income of $10,520,000 for the nine months ended September 30, 2003, a decrease of $104,000 or 1.0% compared to $10,624,000 reported for the nine months ended September 30, 2002. Basic and diluted net income per share were $1.56 and $1.55, respectively, for the current nine month period. This represents an increase of $.02 or 1.3% on both a basic and diluted basis. The per share earnings increase is a result of fewer common shares outstanding attributed to the Company's share buy back program. For the three months ended September 30, 2003, net income was $3,901,000, an increase of $375,000 or 10.6% compared to $3,526,000 for the same period in 2002. On a basic and diluted per share basis, net income was $0.58 for the current three months ended September 30, 2003, an increase of $.07 or 13.7% compared to the prior year. A decrease in net interest income had a significant effect on net income in each of the reporting periods presented. Net interest income decreased $838,000 or 8.2% and $1,636,000 or 5.4% in the current three and nine months, respectively, compared to the same periods in 2002. Net interest income for the current quarter and nine month periods declined mainly as a result of continued declines in the overall market interest rate environment. Interest rates earned on earning assets have declined more rapidly than the interest rates paid on interest paying liabilities since many of the Company's funding sources, particularly deposits, have approached their repricing floors. The provision for loan losses decreased $227,000 or 26.1% and $600,000 or 30.3% in the three and nine month periods ended September 30, 2003. The improvement in the provision for loan losses is attributed to changes in the general risk characteristics of the Company's entire loan portfolio from the previous periods and cannot be attributed directly to any particular individual credit. Total noninterest income increased $810,000 or 18.7% and $1,192,000 or 9.5% in the three and nine month comparisons. Income from the purchase of company-owned life insurance, instituted in the first quarter of 2003 to offset the rising costs of the Company's employee benefit plans, totaled $416,000 and $1,089,000 for the current three and nine months. Securities gains increased $382,000 in the current three month comparison while a decline of $467,000 was reported in the nine month comparison. Gains on the sale of mortgage loans increased $136,000 and $463,000 in the three and nine month comparisons as the low interest rate environment continued to fuel the Company's secondary market mortgage loan originations. Total noninterest expenses increased $166,000 or 1.8% and $1,045,000 or 3.9% in the three and nine month comparisons. Noninterest expenses increased primarily due to an increase in salaries and employee benefits of $155,000 or 3.1% for the current three months and $485,000 or 3.2% for the current nine months. These increases mainly represent employee benefits and normal salary increases. A decline in correspondent banking fees of $172,000 favorably impacted noninterest expenses in the three month comparison while an increase in correspondent banking fees totaling $104,000 contributed to the increase in the nine month comparison. Other operating expenses generally increased in the comparisons, including depreciation increases of $86,000 or 12.7% and $110,000 or 5.1% in the three and nine month periods and bank franchise taxes of $22,000 or 7.1% and $74,000 or 8.0% in the three and nine month periods. The effective income tax rate declined 740 basis points to 17.56% and 420 basis points to 21.06% for the three and nine months ended September 30, 2003 compared to the same periods a year earlier. The decrease in the effective income tax rate is due primarily to lower gross income, an increased amount of credits derived from qualified zone academy bonds, and the addition of nontaxable income accrued from the increase in cash surrender value on company-owned life insurance purchased on key employees. Farmers Capital Bank Corporation is a financial holding company headquartered in Frankfort, Kentucky. The Company operates 23 banking locations in 13 communities throughout Kentucky, a leasing company, a data processing company, and an insurance company. Its stock is publicly traded on the National Association of Securities Dealers Automated Quotation System (NASDAQ) SmallCap Market tier, under the symbol: FFKT.
CONSOLIDATED FINANCIAL HIGHLIGHTS (In thousands except per share data) ---------------------------------------------------------------------------------------------------------------------------- THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, 2003 2002 2003 2002 ---------------------------------------------------------------------------------------------------------------------------- Interest income $ 14,189 $ 16,642 $ 44,054 $ 50,145 Interest expense 4,757 6,372 15,329 19,784 ---------------------------------------------------------------------------------------------------------------------------- Net interest income 9,432 10,270 28,725 30,361 ---------------------------------------------------------------------------------------------------------------------------- Provision for loan losses 642 869 1,378 1,978 ---------------------------------------------------------------------------------------------------------------------------- Net interest income after provision for loan losses 8,790 9,401 27,347 28,383 ---------------------------------------------------------------------------------------------------------------------------- Noninterest income 5,151 4,341 13,795 12,603 Noninterest expenses 9,209 9,043 27,816 26,771 ---------------------------------------------------------------------------------------------------------------------------- Income before income tax expense 4,732 4,699 13,326 14,215 ---------------------------------------------------------------------------------------------------------------------------- Income tax expense 831 1,173 2,806 3,591 ---------------------------------------------------------------------------------------------------------------------------- Net income $ 3,901 $ 3,526 $ 10,520 $ 10,624 ---------------------------------------------------------------------------------------------------------------------------- Per common share: Net income - basic $ 0.58 $ 0.51 $ 1.56 $ 1.54 Net income - diluted 0.58 0.51 1.55 1 1.53 Cash dividend declared 0.32 0.31 0.96 0.93 ---------------------------------------------------------------------------------------------------------------------------- Cash and cash equivalents $ 135,959 $ 242,324 Investment securities 340,122 293,934 Loans, net of allowance of $11,127 (2003) and $11,618 (2002) 728,171 708,706 Other assets 63,649 38,177 ---------------------------------------------------------------------------------------------------------------------------- Total assets $ 1,267,901 $ 1,283,141 ---------------------------------------------------------------------------------------------------------------------------- Deposits $ 1,010,886 $ 986,375 Federal funds purchased and securities sold under agreements to repurchase 64,230 112,560 Other borrowings 57,765 45,382 Other liabilities 9,820 11,020 ---------------------------------------------------------------------------------------------------------------------------- Total liabilities 1,142,701 1,155,337 ---------------------------------------------------------------------------------------------------------------------------- Shareholders' equity 125,200 127,804 ---------------------------------------------------------------------------------------------------------------------------- Total liabilities and shareholders' equity $ 1,267,901 $ 1,283,141 ---------------------------------------------------------------------------------------------------------------------------- End of period book value per share2 $ 18.66 $ 18.68 End of period share value 32.48 33.37 End of period dividend yield3 3.94% 3.71% AVERAGES FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 2002 ---------------------------------------------------------------------------------------------------------------------------- Assets $ 1,243,874 $ 1,203,211 Deposits 972,853 932,284 Loans, net of unearned interest 739,505 696,679 Shareholders' equity 124,760 124,433 Weighted average shares outstanding - basic 6,733 6,880 Weighted average shares outstanding - diluted 6,773 6,925 Return on average assets 1.13% 1.18% Return on average equity 11.27% 11.42% ---------------------------------------------------------------------------------------------------------------------------- 1The sum of diluted earnings per common share of each of the quarters in 2003 does not add to the year-to-date figure reported due to rounding. 2Represents total equity divided by the number of shares outstanding at the end of the period. 3Represents current annualized dividend declared divided by the end of period share value.