x
|
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
o
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
Farmers
Capital Bank Corporation
|
||
(Exact
name of registrant as specified in its charter)
|
Kentucky
|
61-1017851
|
|
(State
or other jurisdiction of
incorporation
or organization)
|
(I.R.S.
Employer
Identification
Number)
|
P.O.
Box 309, 202 West Main St.
|
||
Frankfort,
Kentucky
|
40601
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Common
Stock - $.125 per share Par Value
|
The
NASDAQ Global Select Market
|
|
(Title
of each class)
|
(Name
of each exchange on which
registered)
|
None
|
||
(Title
of Class)
|
Yes
o
|
No
x
|
Yes
o
|
No
x
|
Yes
x
|
No
o
|
Large
accelerated filer o
|
Accelerated
filer x
|
Non-accelerated
filer o
|
Yes
o
|
No
x
|
Page
|
|||
Part
I
|
|||
Item
1.
|
4
|
||
Item
1A.
|
12
|
||
Item
1B.
|
14
|
||
Item
2.
|
15
|
||
Item
3.
|
16
|
||
Item
4.
|
16
|
||
Part
II
|
|||
Item
5.
|
16
|
||
Item
6.
|
19
|
||
Item
7.
|
20
|
||
Item
7A.
|
40
|
||
Item
8.
|
41
|
||
Item
9.
|
75
|
||
Item
9A.
|
75
|
||
Item
9B.
|
80
|
||
Part
III
|
|||
Item
10.
|
80
|
||
Item
11.
|
80
|
||
Item
12.
|
80
|
||
Item
13.
|
80
|
||
Item
14.
|
80
|
||
Part
IV
|
|||
Item
15.
|
81
|
||
82
|
|||
83
|
Tier
|
Entity
|
|||
1
|
Farmers
Capital Bank Corporation, Frankfort KY
|
|||
2
|
United
Bank & Trust Co., Versailles KY 100%
|
|||
3
|
EV
Properties, Inc., Versailles KY 100%
|
|||
2
|
Lawrenceburg
National Bank, Harrodsburg KY 100%
|
|||
2
|
Farmers
Bank & Capital Trust Co., Frankfort KY 100%
|
|||
3
|
Farmers
Bank Realty Co., Frankfort KY 100%
|
|||
3
|
Leasing
One Corporation, Frankfort KY 100%
|
|||
3
|
EG
Properties, Inc., Frankfort KY 100%
|
|||
3
|
Austin
Park Apartments, LTD, Frankfort KY 99%
|
|||
3
|
Frankfort
Apartments II, LTD, Frankfort KY 99.9%
|
|||
3
|
Farmers
Capital Insurance Corp., Frankfort KY 100%
|
|||
4
|
Farmers
Fidelity Insurance Agency, LLP, Lexington KY 50%
|
|||
2
|
Citizens
National Bank of Jessamine County, Nicholasville KY
100%
|
|||
2
|
First
Citizens Bank, Elizabethtown KY 100%
|
|||
3
|
EH
Properties, Inc., Elizabethtown KY 100% (Dissolved in January,
2007)
|
|||
2
|
Farmers
Bank and Trust Company, Georgetown KY 100%
|
|||
3
|
Pro
Mortgage Partners, LLC, Georgetown KY 100%
|
|||
2
|
FCB
Services, Inc., Frankfort KY 100%
|
|||
2
|
Kentucky
General Holdings, LLC, Frankfort, KY 100%
|
|||
3
|
KHL
Holdings, LLC, Frankfort KY 45% (equity), 50% (voting)
|
|||
4
|
Kentucky
Home Life Insurance Company, Frankfort KY 100%
|
|||
2
|
Kentucky
General Life Insurance Company, Frankfort KY (Inactive)
|
|||
2
|
FFKT
Insurance Services, Inc., Frankfort, KY 100%
|
|||
2
|
Citizens
Acquisition Subsidiary Corporation, Frankfort, KY 100% (Dissolved
in
January, 2007)
|
|||
3
|
Citizens
Bank of Northern Kentucky, Inc., Newport, KY 100% (Became a Tier
2
subsidiary in January, 2007)
|
|||
2
|
Farmers
Capital Bank Trust I, Frankfort, KY 100%
|
|||
2
|
Farmers
Capital Bank Trust II, Frankfort, KY
100%
|
·
|
limit
the interest and other charges collected or contracted for by all
of the
Company’s subsidiary banks;
|
·
|
govern
disclosures of credit terms to consumer borrowers;
|
·
|
require
financial institutions to provide information to enable the public
and
public officials to determine whether a financial institution is
fulfilling its obligation to help meet the housing needs of the
community
it serves;
|
·
|
prohibit
discrimination on the basis of race, creed, or other prohibited
factors in
extending credit;
|
·
|
require
all of the Company’s subsidiary banks to safeguard the personal non-public
information of its customers, provide annual notices to consumers
regarding the usage and sharing of such information and limit disclosure
of such information to third parties except under specific circumstances;
and
|
·
|
govern
the manner in which consumer debts may be collected by collection
agencies.
|
·
|
require
disclosure of the interest rate and other terms of consumer deposit
accounts;
|
·
|
impose
a duty to maintain the confidentiality of consumer financial records
and
prescribe procedures for complying with administrative subpoenas
of
financial records; and
|
·
|
govern
automatic deposits to and withdrawals from deposit accounts and
customers’
rights and liabilities arising from the use of automated teller
machines
and other electronic banking services.
|
·
|
credit
risks of a particular borrower;
|
·
|
changes
in economic and industry
conditions;
|
·
|
the
duration of the loan; and
|
·
|
in
the case of a collateralized loan, uncertainties as to the future
value of
the collateral.
|
·
|
a
regular review of the quality, mix and size of the overall loan
portfolio;
|
·
|
historical
loan loss experience;
|
·
|
evaluation
of non-performing loans;
|
·
|
assessment
of economic conditions and their effects on the bank’s existing portfolio;
and
|
·
|
the
amount and quality of collateral, including guarantees, securing
loans.
|
Banking
Offices
|
|
125
W. Main Street, Frankfort, KY
|
|
555
Versailles Road, Frankfort, KY
|
|
835
Louisville Road, Frankfort, KY (leased)
|
|
154
Versailles Road, Frankfort, KY
|
|
1301
US 127 South, Frankfort, KY (leased)
|
|
200
E. Main Street, Georgetown, KY
|
|
100
Farmers Bank Drive, Georgetown, KY (leased)
|
|
100
N. Bradford Lane, Georgetown, KY
|
|
3285
Main Street, Stamping Ground, KY
|
|
333
W. Vine Street, Suite 102, Lexington, KY (leased)
|
|
3098
Harrodsburg Road, Lexington, KY (leased)
|
|
100
United Bank Drive, Versailles, KY
|
|
Locust
& Green Streets, Versailles, KY
|
|
206
N. Gratz, Midway, KY
|
|
128
S. Main Street, Lawrenceburg, KY
|
|
West
Park Shopping Center, Lawrenceburg, KY
|
|
838
N. College Street, Harrodsburg, KY
|
|
1035
Ben Ali Drive, Danville, KY (leased)
|
|
425
W. Dixie Avenue, Elizabethtown, KY
|
|
3030
Ring Road, Elizabethtown, KY
|
|
111
Towne Drive (Kroger Store) Elizabethtown, KY (leased)
|
|
232
Redmar Plaza, Radcliff, KY (leased)
|
|
4810
N. Preston Highway, Shepherdsville, KY
|
|
103
Churchill Drive, Newport, KY
|
|
7300
Alexandria Pike, Alexandria, KY
|
|
164
Fairfield Avenue, Bellevue, KY
|
|
8730
US Highway 42, Florence, KY
|
|
34
N. Ft. Thomas Avenue, Ft. Thomas, KY (leased)
|
|
2911
Alexandria Pike, Highland Heights, KY (leased)
|
|
2006
Patriot Way, Independence, KY
|
|
2774
Town Center Blvd., Crestview Hills, KY (leased)
|
|
201
N. Main Street, Nicholasville, KY
|
|
995
S. Main Street (Kroger Store), Nicholasville, KY (leased)
|
|
986
N. Main Street, Nicholasville, KY
|
|
106
S. Lexington Avenue, Wilmore, KY
|
Period
|
Total
Number of
Shares
Purchased
|
Average
Price Paid
per
Share
|
Total
Number of Shares
Purchased
as Part of
Publicly
Announced Plans
or
Programs
|
Maximum
Number of
Shares
that May Yet Be
Purchased
Under the Plans
or
Programs
|
October
1, 2006 to October
31, 2006
|
2,967
|
$
34.16
|
2,967
|
153,145
|
November
1, 2006 to November
30, 2006
|
130
|
33.94
|
130
|
153,015
|
December
1, 2006 to December
31, 2006
|
153,015
|
|||
Total
|
3,097
|
$
34.15
|
3,097
|
2001
|
2002
|
2003
|
2004
|
2005
|
2006
|
||||||||||||||
Farmers
Capital Bank Corporation
|
$
|
100.00
|
$
|
94.03
|
$
|
99.97
|
$
|
125.76
|
$
|
97.61
|
$
|
114.84
|
|||||||
NASDAQ
Composite
|
100.00
|
71.97
|
107.18
|
117.07
|
120.50
|
137.02
|
|||||||||||||
Southeastern
Banks Under 1 Billion Market Capitalization
|
100.00
|
119.52
|
169.59
|
202.36
|
206.28
|
240.80
|
NASDAQ
Market Makers
|
|
J.J.B.
Hilliard, W.L. Lyons, Inc.
|
Morgan,
Keegan and Company
|
(502)
588-8400
|
(800)
260-0280
|
(800)
444-1854
|
UBS
Securities, LLC
|
Howe
Barnes Investments, Inc.
|
859-269-6900
|
(800)
621-2364
|
502-589-4000
|
Selected
Financial Highlights
|
||||||||||||||||
December
31,
(In
thousands, except per share data)
|
2006
|
2005
|
2004
|
2003
|
2002
|
|||||||||||
Results
of Operations
|
||||||||||||||||
Interest
income
|
$
|
92,340
|
$
|
65,651
|
$
|
55,296
|
$
|
52,218
|
$
|
59,695
|
||||||
Interest
expense
|
41,432
|
24,409
|
16,729
|
17,565
|
22,789
|
|||||||||||
Net
interest income
|
50,908
|
41,242
|
38,567
|
34,653
|
36,906
|
|||||||||||
Provision
for loan losses
|
965
|
622
|
856
|
1,895
|
4,095
|
|||||||||||
Noninterest
income
|
20,459
|
19,867
|
17,164
|
17,179
|
15,797
|
|||||||||||
Noninterest
expense
|
53,377
|
42,164
|
38,812
|
34,555
|
33,256
|
|||||||||||
Income
from continuing operations
|
13,665
|
14,532
|
13,064
|
12,267
|
11,861
|
|||||||||||
Income
from discontinued operations1
|
7,707
|
1,240
|
328
|
696
|
700
|
|||||||||||
Net
income
|
21,372
|
15,772
|
13,392
|
12,963
|
12,561
|
|||||||||||
Per
Share Data
|
||||||||||||||||
Basic:
|
||||||||||||||||
Income
from continuing operations
|
$
|
1.82
|
$
|
2.13
|
$
|
1.94
|
$
|
1.82
|
$
|
1.73
|
||||||
Net
income
|
2.85
|
2.31
|
1.99
|
1.93
|
1.83
|
|||||||||||
Diluted:
|
||||||||||||||||
Income
from continuing operations
|
1.82
|
2.12
|
1.93
|
1.81
|
1.72
|
|||||||||||
Net
income
|
2.84
|
2.30
|
1.98
|
1.92
|
1.82
|
|||||||||||
Cash
dividends declared
|
1.43
|
1.32
|
1.32
|
1.29
|
1.25
|
|||||||||||
Book
value
|
22.60
|
20.87
|
19.38
|
18.83
|
18.52
|
|||||||||||
Selected
Ratios
|
||||||||||||||||
Percentage
of income from continuing operations to:
|
||||||||||||||||
Average
shareholders’ equity (ROE)
|
8.49
|
%
|
10.81
|
%
|
10.21
|
%
|
9.83
|
%
|
9.48
|
%
|
||||||
Average
total assets2
(ROA)
|
.85
|
1.10
|
1.07
|
1.07
|
1.07
|
|||||||||||
Percentage
of dividends declared to income from continuing operations
|
78.89
|
61.67
|
68.10
|
70.70
|
72.41
|
|||||||||||
Percentage
of average shareholders’ equity to average total assets2
|
10.04
|
10.19
|
10.45
|
10.88
|
11.23
|
|||||||||||
Total
shareholders’ equity
|
$
|
178,441
|
$
|
154,236
|
$
|
131,450
|
$
|
126,471
|
$
|
125,773
|
||||||
Total
assets
|
1,824,366
|
1,673,943
|
1,399,896
|
1,324,341
|
1,280,108
|
|||||||||||
Long-term
debt
|
87,992
|
75,291
|
51,265
|
53,932
|
55,593
|
|||||||||||
Weighted
Average Shares Outstanding
|
||||||||||||||||
Basic
|
7,511
|
6,831
|
6,737
|
6,727
|
6,870
|
|||||||||||
Diluted
|
7,526
|
6,864
|
6,780
|
6,770
|
6,910
|
·
|
Since
2004, the general trend of the short-term interest rate environment
has
been upward primarily as a result of short-term interest rate increases
by
the Federal Reserve Board (the “Fed”). The Fed began to increase the
short-term federal funds rate by increments of 25 basis points
during the
last half of 2004 that continued into 2006. In all, the federal
funds rate
was increased 125 basis points during 2004, 200 basis points during
2005,
and 100 basis points during 2006 and ended the year at 5.25%. The
prime
interest rate, which significantly impacts the Company’s loan portfolio,
moved in a similar manner as the federal funds rate in the periods
discussed above. Longer-term yields, such as for the 3, 5, 10,
and 20 year
treasuries, were also up at year-end 2006 compared to year-end
2005, with
the 3, 5, and 10 year notes up 37, 35, and 32 basis points,
respectively and the 20 year bond up 30 basis points. For the Company,
this has had a relatively neutral impact on net interest spread
in the
twelve-month comparison of 2006 compared to 2005. Net interest
spread for
2005 was unchanged at 3.32% in the comparable periods. Net interest
margin
increased 6 basis points to 3.75% from 3.69% due to the impact
of
noninterest bearing sources of funds used to support the increase
in
interest earning assets.
|
·
|
On
October 1, 2006, the Company acquired 100% of the outstanding common
shares of Citizens Bancshares. Citizens Bancshares, which was subsequently
merged into the Company, was the parent company of Citizens Jessamine
before the merger. Citizens Jessamine operates four banking locations
in
Jessamine County in Central Kentucky. The impact on this acquisition
was
an immediate increase in loans and deposits of $120 million and
$139
million, respectively, to the Company’s consolidated balance sheet. The
purchase also resulted in an additional $14.6 million and $4.5
million of
goodwill and core deposit intangible assets, respectively. The
additional
core deposit intangible added $255 thousand in amortization expense
for
the Company in 2006.
|
·
|
During
the fourth quarter of 2006 the Company sold KBC and the Bath County
branches of its Farmers Georgetown bank subsidiary. The Company
recorded a
pretax gain on these sales of $9.8 million. The impact from these
sales,
which has been classified as discontinued operations, was a decrease
in
net loans and deposits of $88.6 million and $146 million, respectively.
|
·
|
On
December 6, 2005, the Company acquired Citizens Bancorp in a cash
and
stock transaction. Citizens Bancorp is the former parent company
of
Citizens Northern, which has eight banking locations in our Northern
Kentucky market. The impact of this acquisition generally resulted
in
higher income and expense amounts during 2006 compared to 2005
due to the
timing of this transaction.
|
·
|
In
addition to the four new banking sites acquired in the Citizens
Jessamine
purchase, the Company replaced one existing site in Elizabethtown
and
opened new branches in Danville, Independence, and Crestview Hills.
Additional sites are anticipated to open during
2007.
|
Years
Ended December 31,
|
2006
|
2005
|
2004
|
|||||||||||||||||||||||||
Average
|
Average
|
Average
|
Average
|
Average
|
Average
|
|||||||||||||||||||||||
(In
thousands)
|
Balance
|
Interest
|
Rate
|
Balance
|
Interest
|
Rate
|
Balance
|
Interest
|
Rate
|
|||||||||||||||||||
Earning
Assets
|
||||||||||||||||||||||||||||
Investment
securities
|
||||||||||||||||||||||||||||
Taxable
|
$
|
212,357
|
$
|
9,025
|
4.25
|
%
|
$
|
208,967
|
$
|
7,483
|
3.58
|
%
|
$
|
220,518
|
$
|
7,321
|
3.32
|
%
|
||||||||||
Nontaxable1
|
91,413
|
5,278
|
5.77
|
90,758
|
5,419
|
5.97
|
91,060
|
5,721
|
6.28
|
|||||||||||||||||||
Time
deposits with banks, federal funds sold and securities purchased
under
agreements to resell
|
62,378
|
2,355
|
3.78
|
68,212
|
1,811
|
2.65
|
40,349
|
472
|
1.17
|
|||||||||||||||||||
Loans
1,2,3
|
1,051,002
|
77,836
|
7.41
|
805,014
|
52,990
|
6.58
|
735,697
|
43,874
|
5.96
|
|||||||||||||||||||
Total
earning assets
|
1,417,150
|
$
|
94,494
|
6.67
|
%
|
1,172,951
|
$
|
67,703
|
5.77
|
%
|
1,087,624
|
$
|
57,388
|
5.28
|
%
|
|||||||||||||
Allowance
for loan losses
|
(11,094
|
)
|
(10,528
|
)
|
(10,811
|
)
|
||||||||||||||||||||||
Total
earning assets, net of allowance for loan losses
|
1,406,056
|
1,162,423
|
1,076,813
|
|||||||||||||||||||||||||
Nonearning
Assets
|
||||||||||||||||||||||||||||
Cash
and due from banks
|
77,509
|
75,302
|
84,674
|
|||||||||||||||||||||||||
Premises
and equipment, net
|
32,029
|
22,759
|
21,403
|
|||||||||||||||||||||||||
Other
assets
|
88,044
|
58,566
|
41,637
|
|||||||||||||||||||||||||
Assets
of discontinued operations
|
129,827
|
148,474
|
131,845
|
|||||||||||||||||||||||||
Total
assets
|
$
|
1,733,465
|
$
|
1,467,524
|
$
|
1,356,372
|
||||||||||||||||||||||
Interest
Bearing Liabilities
|
||||||||||||||||||||||||||||
Deposits
|
||||||||||||||||||||||||||||
Interest
bearing demand
|
$
|
260,417
|
$
|
3,774
|
1.45
|
%
|
$
|
214,548
|
$
|
1,878
|
.88
|
%
|
$
|
214,150
|
$
|
1,077
|
.50
|
%
|
||||||||||
Savings
|
212,948
|
4,437
|
2.08
|
182,337
|
2,575
|
1.41
|
176,723
|
1,668
|
.94
|
|||||||||||||||||||
Time
|
587,047
|
24,343
|
4.15
|
453,419
|
14,677
|
3.24
|
390,195
|
10,637
|
2.73
|
|||||||||||||||||||
Federal
funds purchased and securities sold under agreements to
repurchase
|
92,092
|
4,348
|
4.72
|
81,318
|
2,573
|
3.16
|
90,092
|
1,293
|
1.44
|
|||||||||||||||||||
Other
borrowed funds
|
84,869
|
4,530
|
5.34
|
64,027
|
2,706
|
4.23
|
54,257
|
2,055
|
3.79
|
|||||||||||||||||||
Total
interest bearing liabilities
|
1,237,373
|
$
|
41,432
|
3.35
|
%
|
995,649
|
$
|
24,409
|
2.45
|
%
|
925,417
|
$
|
16,730
|
1.81
|
%
|
|||||||||||||
Noninterest
Bearing Liabilities
|
||||||||||||||||||||||||||||
Commonwealth
of Kentucky deposits
|
38,627
|
37,978
|
35,875
|
|||||||||||||||||||||||||
Other
demand deposits
|
157,355
|
141,219
|
133,767
|
|||||||||||||||||||||||||
Other
liabilities
|
7,705
|
11,292
|
8,634
|
|||||||||||||||||||||||||
Liabilities
of discontinued operations
|
131,437
|
147,010
|
124,686
|
|||||||||||||||||||||||||
Total
liabilities
|
1,572,497
|
1,333,148
|
1,228,379
|
|||||||||||||||||||||||||
Shareholders’
equity
|
160,968
|
134,376
|
127,993
|
|||||||||||||||||||||||||
Total
liabilities and shareholders’ equity
|
$
|
1,733,465
|
$
|
1,467,524
|
$
|
1,356,372
|
||||||||||||||||||||||
Net
interest income
|
53,062
|
43,294
|
40,658
|
|||||||||||||||||||||||||
TE
basis adjustment
|
(2,154
|
)
|
(2,052
|
)
|
(2,091
|
)
|
||||||||||||||||||||||
Net
interest income
|
$
|
50,908
|
$
|
41,242
|
$
|
38,567
|
||||||||||||||||||||||
Net
interest spread
|
3.32
|
%
|
3.32
|
%
|
3.47
|
%
|
||||||||||||||||||||||
Effect
of noninterest bearing sources of funds
|
.43
|
.37
|
.27
|
|||||||||||||||||||||||||
Net
interest margin
|
3.75
|
%
|
3.69
|
%
|
3.74
|
%
|
1
|
Income
and yield stated at a fully tax equivalent basis using the marginal
corporate Federal tax rate of 35%.
|
2
|
Loan
balances include principal balances on nonaccrual
loans.
|
3
|
Loan
fees included in interest income amounted to $2.0 million,
$2.1 million, and $1.8 million for 2006, 2005, and 2004,
respectively.
|
Variance
|
Variance
Attributed to
|
Variance
|
Variance
Attributed to
|
||||||||||||||||
(In
thousands)
|
2006/20051
|
Volume
|
Rate
|
2005/20041
|
Volume
|
Rate
|
|||||||||||||
Interest
Income
|
|||||||||||||||||||
Taxable
investment securities
|
$
|
1,542
|
$
|
123
|
$
|
1,419
|
$
|
162
|
$
|
(394
|
)
|
$
|
556
|
||||||
Nontaxable
investment securities2
|
(141
|
)
|
39
|
(180
|
)
|
(302
|
)
|
(19
|
)
|
(283
|
)
|
||||||||
Time
deposits with banks, federal funds sold and securities purchased
under
agreements to resell
|
544
|
(167
|
)
|
711
|
1,339
|
473
|
866
|
||||||||||||
Loans2
|
24,846
|
17,586
|
7,260
|
9,116
|
4,333
|
4,783
|
|||||||||||||
Total
interest income
|
26,791
|
17,581
|
9,210
|
10,315
|
4,393
|
5,922
|
|||||||||||||
Interest
Expense
|
|||||||||||||||||||
Interest
bearing demand deposits
|
1,896
|
471
|
1,425
|
801
|
2
|
799
|
|||||||||||||
Savings
deposits
|
1,862
|
486
|
1,376
|
907
|
54
|
853
|
|||||||||||||
Time
deposits
|
9,666
|
4,950
|
4,716
|
4,040
|
1,876
|
2,164
|
|||||||||||||
Federal
funds purchased and securities sold under agreements to
repurchase
|
1,775
|
375
|
1,400
|
1,280
|
(137
|
)
|
1,417
|
||||||||||||
Other
borrowed funds
|
1,824
|
1,010
|
814
|
651
|
396
|
255
|
|||||||||||||
Total
interest expense
|
17,023
|
7,292
|
9,731
|
7,679
|
2,191
|
5,488
|
|||||||||||||
Net
interest income
|
$
|
9,768
|
$
|
10,289
|
$
|
(521
|
)
|
$
|
2,636
|
$
|
2,202
|
$
|
434
|
||||||
Percentage
change
|
100.0
|
%
|
105.3
|
%
|
(5.3
|
)%
|
100.0
|
%
|
83.5
|
%
|
16.5
|
%
|
1
|
The
changes which are not solely due to rate or volume are allocated
on a
percentage basis using the absolute values of rate and volume variances
as
a basis for allocation.
|
2
|
Income
stated at fully tax equivalent basis using the marginal corporate
Federal
tax rate of 35%.
|
(In
thousands)
December
31,
|
2006
|
% |
2005
|
%
|
2004
|
% |
2003
|
% |
2002
|
% | |||||||||||||||||||||
Commercial,
financial, and agricultural
|
$
|
197,613
|
16.5
|
%
|
$
|
173,797
|
18.1
|
%
|
$
|
119,004
|
15.3
|
%
|
$
|
99,291
|
14.7
|
%
|
$
|
98,392
|
14.8
|
%
|
|||||||||||
Real
estate - construction
|
176,779
|
14.7
|
88,693
|
9.2
|
62,111
|
8.0
|
44,622
|
6.6
|
54,177
|
8.2
|
|||||||||||||||||||||
Real
estate mortgage - residential
|
381,081
|
31.8
|
331,508
|
34.4
|
280,869
|
36.2
|
245,737
|
36.4
|
229,990
|
34.7
|
|||||||||||||||||||||
Real
estate mortgage - farmland and other commercial
enterprises
|
351,793
|
29.4
|
274,411
|
28.5
|
210,701
|
27.2
|
192,541
|
28.5
|
182,281
|
27.5
|
|||||||||||||||||||||
Installment
|
57,116
|
4.8
|
56,169
|
5.8
|
63,684
|
8.2
|
58,274
|
8.6
|
61,932
|
9.3
|
|||||||||||||||||||||
Lease
financing
|
33,454
|
2.8
|
37,993
|
4.0
|
39,348
|
5.1
|
35,372
|
5.2
|
36,730
|
5.5
|
|||||||||||||||||||||
Total
|
$
|
1,197,836
|
100.0
|
%
|
$
|
962,571
|
100.0
|
%
|
$
|
775,717
|
100.0
|
%
|
$
|
675,837
|
100.0
|
%
|
$
|
663,502
|
100.0
|
%
|
Within
|
After
One But
|
After
|
|||||||||||
(In
thousands)
|
One
Year
|
Within
Five Years
|
Five
Years
|
Total
|
|||||||||
Commercial,
financial, and agricultural
|
$
|
89,589
|
$
|
58,312
|
$
|
49,712
|
$
|
197,613
|
|||||
Real
estate - construction
|
120,894
|
47,883
|
8,002
|
176,779
|
|||||||||
Total
|
$
|
210,483
|
$
|
106,195
|
$
|
57,714
|
$
|
374,392
|
Fixed
|
Variable
|
||||||
(In
thousands)
|
Rate
|
Rate
|
|||||
Due
after one but within five years
|
$
|
60,426
|
$
|
45,769
|
|||
Due
after five years
|
14,787
|
42,927
|
|||||
Total
|
$
|
75,213
|
$
|
88,696
|
Years
Ended December 31, (In thousands)
|
2006
|
2005
|
2004
|
2003
|
2002
|
|||||||||||
Balance
of allowance for loan losses at beginning of year
|
$
|
11,069
|
$
|
11,043
|
$
|
10,088
|
$
|
9,931
|
$
|
9,570
|
||||||
Acquisition
of Citizens National Bancshares
|
1,066
|
|||||||||||||||
Acquisition
of Citizens Bancorp, Inc.
|
1,410
|
|||||||||||||||
Acquisition
of Citizens Bank (Kentucky), Inc.
|
2,005
|
|||||||||||||||
Loans
charged off:
|
||||||||||||||||
Commercial,
financial, and agricultural
|
486
|
301
|
678
|
171
|
336
|
|||||||||||
Real
estate
|
200
|
288
|
462
|
650
|
2,668
|
|||||||||||
Installment
loans to individuals
|
839
|
1,254
|
1,115
|
898
|
949
|
|||||||||||
Lease
financing
|
254
|
602
|
113
|
385
|
144
|
|||||||||||
Total
loans charged off
|
1,779
|
2,445
|
2,368
|
2,104
|
4,097
|
|||||||||||
Recoveries
of loans previously charged off:
|
||||||||||||||||
Commercial,
financial, and agricultural
|
262
|
69
|
119
|
73
|
62
|
|||||||||||
Real
estate
|
81
|
66
|
89
|
47
|
71
|
|||||||||||
Installment
loans to individuals
|
294
|
260
|
229
|
227
|
226
|
|||||||||||
Lease
financing
|
41
|
44
|
25
|
19
|
5
|
|||||||||||
Total
recoveries
|
678
|
439
|
462
|
366
|
364
|
|||||||||||
Net
loans charged off
|
1,101
|
2,006
|
1,906
|
1,738
|
3,733
|
|||||||||||
Additions
to allowance charged to expense
|
965
|
622
|
856
|
1,895
|
4,094
|
|||||||||||
Balance
at end of year
|
$
|
11,999
|
$
|
11,069
|
$
|
11,043
|
$
|
10,088
|
$
|
9,931
|
||||||
Average
loans net of unearned income
|
$
|
1,051,002
|
$
|
805,014
|
$
|
735,697
|
$
|
663,442
|
$
|
634,985
|
||||||
Ratio
of net charge-offs during year to average loans, net of unearned
income
|
.10
|
%
|
.25
|
%
|
.26
|
%
|
.26
|
%
|
.59
|
%
|
December
31, (In thousands)
|
2006
|
2005
|
2004
|
2003
|
2002
|
|||||||||||
Commercial,
financial, and agricultural
|
$
|
2,223
|
$
|
2,840
|
$
|
2,108
|
$
|
2,068
|
$
|
3,436
|
||||||
Real
estate
|
6,497
|
5,849
|
6,206
|
5,560
|
4,517
|
|||||||||||
Installment
loans to individuals
|
2,316
|
1,601
|
1,634
|
1,478
|
1,550
|
|||||||||||
Lease
financing
|
963
|
779
|
1,095
|
982
|
428
|
|||||||||||
Total
|
$
|
11,999
|
$
|
11,069
|
$
|
11,043
|
$
|
10,088
|
$
|
9,931
|
2006
|
2005
|
2004
|
2003
|
2002
|
||||||||||||
Loans
accounted for on nonaccrual basis
|
$
|
1,462
|
$
|
2,269
|
$
|
4,990
|
$
|
4,823
|
$
|
15,474
|
||||||
Loans
past due 90 days or more and still accruing
|
2,856
|
2,383
|
2,831
|
3,235
|
3,558
|
|||||||||||
Total
nonperforming loans
|
4,318
|
4,652
|
7,821
|
8,058
|
19,032
|
|||||||||||
Other
real estate owned
|
5,031
|
8,786
|
3,719
|
1,662
|
282
|
|||||||||||
Other
foreclosed assets
|
54
|
21
|
32
|
218
|
60
|
|||||||||||
Total
nonperforming assets
|
$
|
9,403
|
$
|
13,459
|
$
|
11,572
|
$
|
9,938
|
$
|
19,374
|
December
31,
|
2006
|
2005
|
2004
|
||||||||||||||||
(In
thousands)
|
Available
for
Sale
|
Held
to
Maturity
|
Available
for
Sale
|
Held
to
Maturity
|
Available
for
Sale
|
Held
to
Maturity
|
|||||||||||||
Obligations
of U.S. government-sponsored agencies
|
$
|
141,832
|
$
|
123,684
|
$
|
109,517
|
|||||||||||||
Obligations
of states and political subdivisions
|
88,147
|
$
|
7,788
|
86,031
|
$
|
13,610
|
81,154
|
$
|
17,885
|
||||||||||
Mortgage-backed
securities
|
86,716
|
98,025
|
108,772
|
||||||||||||||||
U.S.
Treasury securities
|
484
|
104
|
|||||||||||||||||
Money
market mutual funds
|
1,396
|
925
|
|||||||||||||||||
Equity
securities
|
7,910
|
6,298
|
5,222
|
||||||||||||||||
Total
|
$
|
326,485
|
$
|
7,788
|
$
|
315,067
|
$
|
13,610
|
$
|
304,665
|
$
|
17,885
|
After
One But
|
After
Five But
|
||||||||||||||||||||||||
Within
One Year
|
Within
Five Years
|
Within
Ten Years
|
After
Ten Years
|
||||||||||||||||||||||
(In
thousands)
|
Amount
|
Rate
|
Amount
|
Rate
|
Amount
|
Rate
|
Amount
|
Rate
|
|||||||||||||||||
Obligations
of U.S. government-sponsored agencies
|
$
|
88,317
|
4.8
|
%
|
$
|
43,857
|
4.4
|
%
|
$
|
8,675
|
5.3
|
%
|
$
|
983
|
5.4
|
%
|
|||||||||
Obligations
of states and political subdivisions
|
805
|
7.0
|
25,116
|
6.7
|
52,785
|
5.0
|
9,441
|
6.4
|
|||||||||||||||||
Mortgage-backed
securities
|
19,941
|
4.5
|
19,290
|
4.8
|
31,199
|
4.7
|
16,286
|
5.1
|
|||||||||||||||||
U.S.
Treasury securities
|
151
|
5.1
|
333
|
4.9
|
|||||||||||||||||||||
Money
market mutual funds
|
1,396
|
4.8
|
|||||||||||||||||||||||
Total
|
$
|
110,610
|
4.7
|
%
|
$
|
88,596
|
5.3
|
%
|
$
|
92,659
|
4.9
|
%
|
$
|
26,710
|
5.7
|
%
|
After
One But
|
After
Five But
|
||||||||||||||||||||||||
Within
One Year
|
Within
Five Years
|
Within
Ten Years
|
After
Ten Years
|
||||||||||||||||||||||
(In
thousands)
|
Amount
|
Rate
|
Amount
|
Rate
|
Amount
|
Rate
|
Amount
|
Rate
|
|||||||||||||||||
Obligations
of states and political subdivisions
|
$
|
3,778
|
6.9
|
%
|
$
|
2,885
|
6.8
|
%
|
$
|
0
|
0
|
%
|
$
|
1,125
|
6.3
|
%
|
Years
Ended December 31,
|
2006
|
2005
|
2004
|
||||||||||||||||
(In
thousands)
|
Average
Balance
|
Average
Rate
|
Average
Balance
|
Average
Rate
|
Average
Balance
|
Average
Rate
|
|||||||||||||
Noninterest
bearing demand
|
$
|
195,982
|
$
|
179,197
|
$
|
169,642
|
|||||||||||||
Interest
bearing demand
|
260,417
|
1.45
|
%
|
214,548
|
.88
|
%
|
214,150
|
.50
|
%
|
||||||||||
Savings
|
212,948
|
2.08
|
182,337
|
1.41
|
176,723
|
.94
|
|||||||||||||
Time
|
587,047
|
4.15
|
453,419
|
3.24
|
390,195
|
2.73
|
|||||||||||||
Total
|
$
|
1,256,394
|
2.59
|
%
|
$
|
1,029,501
|
1.85
|
%
|
$
|
950,710
|
1.41
|
%
|
(In
thousands)
|
Amount
|
|||
3
months or less
|
$
|
35,542
|
||
Over
3 through 6 months
|
37,231
|
|||
Over
6 through 12 months
|
89,610
|
|||
Over
12 months
|
52,986
|
|||
Total
|
$
|
215,369
|
(In
thousands)
|
2006
|
2005
|
2004
|
|||||||
Amount
outstanding at year-end
|
$
|
76,718
|
$
|
72,115
|
$
|
61,349
|
||||
Maximum
outstanding at any month-end
|
98,926
|
166,550
|
122,671
|
|||||||
Average
outstanding
|
94,703
|
82,030
|
91,053
|
|||||||
Weighted
average rate at year-end
|
4.55
|
%
|
3.89
|
%
|
2.09
|
%
|
||||
Weighted
average rate during the year
|
4.74
|
3.16
|
1.44
|
Payments
Due by Period
|
||||||||||||||||
Contractual
Obligations (In thousands)
|
Total
|
Less
Than
One
Year
|
One
to Three
Years
|
Three
to Five
Years
|
More
Than Five
Years
|
|||||||||||
Long-term
debt
|
$
|
61,174
|
$
|
20,447
|
$
|
20,841
|
$
|
5,806
|
$
|
14,080
|
||||||
Subordinated
notes payable
|
25,774
|
25,774
|
||||||||||||||
Unfunded
postretirement benefit obligations
|
4,701
|
383
|
813
|
902
|
2,603
|
|||||||||||
Operating
leases
|
4,494
|
613
|
1,017
|
760
|
2,104
|
|||||||||||
Capital
lease obligations
|
1,044
|
232
|
480
|
332
|
||||||||||||
Total
|
$
|
97,187
|
$
|
21,675
|
$
|
23,151
|
$
|
7,800
|
$
|
44,561
|
Farmers
Capital
Bank
Corporation
|
Regulatory
Minimum
|
||||||
Tier
1 risk-based
|
12.23
|
%
|
4.00
|
%
|
|||
Total
risk-based
|
13.17
|
8.00
|
|||||
Leverage
|
8.47
|
4.00
|
Years
Ended December 31,
|
2006
|
2005
|
2004
|
2003
|
2002
|
||||||||||||
Percentage
of dividends declared to income from continuing operations
|
78.89
|
%
|
61.67
|
%
|
68.10
|
%
|
70.70
|
%
|
72.41
|
%
|
|||||||
Percentage
of average shareholders’ equity to average total assets1
|
10.04
|
10.19
|
10.45
|
10.88
|
11.23
|
High
|
Low
|
Dividends
Declared
|
||||||||
2006
|
||||||||||
Fourth
Quarter
|
$
|
36.98
|
$
|
32.40
|
$
|
.44
|
||||
Third
Quarter
|
34.59
|
29.78
|
.33
|
|||||||
Second
Quarter
|
32.82
|
29.25
|
.33
|
|||||||
First
Quarter
|
33.54
|
30.59
|
.33
|
|||||||
2005
|
||||||||||
Fourth
Quarter
|
$
|
33.73
|
$
|
28.54
|
$
|
.33
|
||||
Third
Quarter
|
35.85
|
30.61
|
.33
|
|||||||
Second
Quarter
|
34.64
|
31.75
|
.33
|
|||||||
First
Quarter
|
41.25
|
32.90
|
.33
|
G.
Anthony Busseni
|
C.
Douglas Carpenter
|
President
and CEO
|
Senior
Vice President, Secretary, and CFO
|
March
12, 2007
|
December
31, (In thousands, except share data)
|
2006
|
2005
|
|||||
Assets
|
|||||||
Cash
and cash equivalents:
|
|||||||
Cash
and due from banks
|
$
|
115,640
|
$
|
71,496
|
|||
Interest
bearing deposits in other banks
|
1,783
|
2,565
|
|||||
Federal
funds sold and securities purchased under agreements to
resell
|
39,405
|
56,957
|
|||||
Total
cash and cash equivalents
|
156,828
|
131,018
|
|||||
Investment
securities:
|
|||||||
Available
for sale, amortized cost of $328,499 (2006) and $317,759
(2005)
|
326,485
|
315,067
|
|||||
Held
to maturity, fair value of $7,849 (2006) and $13,814
(2005)
|
7,788
|
13,610
|
|||||
Total
investment securities
|
334,273
|
328,677
|
|||||
Loans,
net of unearned income
|
1,197,836
|
962,571
|
|||||
Allowance
for loan losses
|
(11,999
|
)
|
(11,069
|
)
|
|||
Loans,
net
|
1,185,837
|
951,502
|
|||||
Premises
and equipment, net
|
37,775
|
28,832
|
|||||
Company-owned
life insurance
|
32,929
|
30,049
|
|||||
Goodwill
|
42,822
|
28,437
|
|||||
Other
intangible assets, net
|
9,755
|
7,271
|
|||||
Assets
of discontinued operations
|
143,569
|
||||||
Other
assets
|
24,147
|
24,588
|
|||||
Total
assets
|
$
|
1,824,366
|
$
|
1,673,943
|
|||
Liabilities
|
|||||||
Deposits:
|
|||||||
Noninterest
bearing
|
$
|
242,938
|
$
|
183,248
|
|||
Interest
bearing
|
1,211,882
|
1,008,403
|
|||||
Total
deposits
|
1,454,820
|
1,191,651
|
|||||
Federal
funds purchased and securities sold under agreements to
repurchase
|
67,941
|
71,336
|
|||||
Other
short-term borrowings
|
8,777
|
779
|
|||||
Subordinated
notes payable to unconsolidated trusts
|
25,774
|
25,774
|
|||||
Other
long-term debt
|
62,218
|
49,517
|
|||||
Dividends
payable
|
3,472
|
2,244
|
|||||
Accrued
purchase price-Citizens Bancorp, Inc.
|
21,846
|
||||||
Liabilities
of discontinued operations
|
144,409
|
||||||
Other
liabilities
|
22,923
|
12,151
|
|||||
Total
liabilities
|
1,645,925
|
1,519,707
|
|||||
Commitments
and contingencies
|
|||||||
Shareholders’
Equity
|
|||||||
Common
stock, par value $.125 per share; 9,608,000 shares
authorized;
9,388,900
and 8,856,249 shares issued at
December
31, 2006 and 2005, respectively
|
1,174
|
1,107
|
|||||
Capital
surplus
|
56,679
|
39,829
|
|||||
Retained
earnings
|
167,387
|
156,796
|
|||||
Treasury
stock, at cost, 1,493,448 and 1,467,351 shares at
December
31, 2006 and 2005, respectively
|
(42,399
|
)
|
(41,579
|
)
|
|||
Accumulated
other comprehensive loss
|
(4,400
|
)
|
(1,917
|
)
|
|||
Total
shareholders’ equity
|
178,441
|
154,236
|
|||||
Total
liabilities and shareholders’ equity
|
$
|
1,824,366
|
$
|
1,673,943
|
(In
thousands, except per share data)
|
||||||||||
Years
Ended December 31,
|
2006
|
2005
|
2004
|
|||||||
Interest
Income
|
||||||||||
Interest
and fees on loans
|
$
|
77,303
|
$
|
52,579
|
$
|
43,872
|
||||
Interest
on investment securities:
|
||||||||||
Taxable
|
9,025
|
7,483
|
7,321
|
|||||||
Nontaxable
|
3,657
|
3,778
|
3,739
|
|||||||
Interest
on deposits in other banks
|
53
|
61
|
17
|
|||||||
Interest
on federal funds sold and securities purchased under agreements
to
resell
|
2,302
|
1,750
|
347
|
|||||||
Total
interest income
|
92,340
|
65,651
|
55,296
|
|||||||
Interest
Expense
|
||||||||||
Interest
on deposits
|
32,554
|
19,130
|
13,381
|
|||||||
Interest
on federal funds purchased and securities sold under agreements
to
repurchase
|
4,348
|
2,573
|
1,293
|
|||||||
Interest
on subordinated notes payable to unconsolidated trusts
|
1,747
|
623
|
||||||||
Interest
on other borrowed funds
|
2,783
|
2,083
|
2,055
|
|||||||
Total
interest expense
|
41,432
|
24,409
|
16,729
|
|||||||
Net
interest income
|
50,908
|
41,242
|
38,567
|
|||||||
Provision
for loan losses
|
965
|
622
|
856
|
|||||||
Net
interest income after provision for loan losses
|
49,943
|
40,620
|
37,711
|
|||||||
Noninterest
Income
|
||||||||||
Service
charges and fees on deposits
|
9,191
|
8,543
|
7,675
|
|||||||
Allotment
processing fees
|
2,601
|
2,656
|
1,124
|
|||||||
Other
service charges, commissions, and fees
|
2,617
|
2,245
|
2,652
|
|||||||
Data
processing income
|
1,719
|
1,786
|
1,709
|
|||||||
Trust
income
|
1,790
|
1,616
|
1,589
|
|||||||
Investment
securities (losses) gains, net
|
(195
|
)
|
(3
|
)
|
391
|
|||||
Gains
on sale of mortgage loans, net
|
649
|
653
|
370
|
|||||||
Income
from company-owned life insurance
|
1,343
|
1,189
|
1,412
|
|||||||
Other
|
744
|
1,182
|
242
|
|||||||
Total
noninterest income
|
20,459
|
19,867
|
17,164
|
|||||||
Noninterest
Expense
|
||||||||||
Salaries
and employee benefits
|
28,978
|
22,347
|
21,074
|
|||||||
Occupancy
expenses, net
|
3,664
|
2,751
|
2,482
|
|||||||
Equipment
expenses
|
2,929
|
2,587
|
2,295
|
|||||||
Data
processing and communications expenses
|
4,980
|
4,161
|
3,962
|
|||||||
Bank
franchise tax
|
1,831
|
1,377
|
1,373
|
|||||||
Correspondent
bank fees
|
692
|
883
|
775
|
|||||||
Amortization
of intangibles
|
2,009
|
934
|
385
|
|||||||
Other
|
8,294
|
7,124
|
6,466
|
|||||||
Total
noninterest expense
|
53,377
|
42,164
|
38,812
|
|||||||
Income
from continuing operations before income taxes
|
17,025
|
18,323
|
16,063
|
|||||||
Income
tax expense from continuing operations
|
3,360
|
3,791
|
2,999
|
|||||||
Income
from continuing operations
|
13,665
|
14,532
|
13,064
|
|||||||
Income
from discontinued operations before income taxes (including gain
on
disposals of $9,873 in 2006)
|
11,842
|
1,723
|
351
|
|||||||
Income
tax expense from discontinued operations (including $3,456 related
to gain
on disposals)
|
4,135
|
483
|
23
|
|||||||
Income
from discontinued operations
|
7,707
|
1,240
|
328
|
|||||||
Net
income
|
$
|
21,372
|
$
|
15,772
|
$
|
13,392
|
||||
Net
Income Per Common Share
|
||||||||||
Income
from continuing operations - basic
|
$
|
1.82
|
$
|
2.13
|
$
|
1.94
|
||||
Income
from discontinued operations - basic
|
1.03
|
.18
|
.05
|
|||||||
Net
income per common share - basic
|
2.85
|
2.31
|
1.99
|
|||||||
Income
from continuing operations - diluted
|
1.82
|
2.12
|
1.93
|
|||||||
Income
from discontinued operations - diluted
|
1.02
|
.18
|
.05
|
|||||||
Net
income per common share - diluted
|
2.84
|
2.30
|
1.98
|
|||||||
Weighted
Average Shares Outstanding
|
||||||||||
Basic
|
7,511
|
6,831
|
6,737
|
|||||||
Diluted
|
7,526
|
6,864
|
6,780
|
(In
thousands)
|
||||||||||
Years
Ended December 31,
|
2006
|
2005
|
2004
|
|||||||
Net
income
|
$
|
21,372
|
$
|
15,772
|
$
|
13,392
|
||||
Other
comprehensive income:
|
||||||||||
Unrealized
holding gain (loss) on available for sale securities arising during
the
period on securities held at end of period, net of tax of $306,
$1,410,
and $547, respectively
|
568
|
(2,622
|
)
|
(1,015
|
)
|
|||||
Reclassification
adjustment for prior period unrealized loss (gain) previously reported
in
other comprehensive income recognized during current period, net
of tax of
$22, $3, and $219, respectively
|
40
|
5
|
(407
|
)
|
||||||
Other
comprehensive income (loss)
|
608
|
(2,617
|
)
|
(1,422
|
)
|
|||||
Comprehensive
income
|
$
|
21,980
|
$
|
13,155
|
$
|
11,970
|
(In
thousands, except per share data)
|
Accumulated
Other
|
Total
|
|||||||||||||||||||||||
Years
Ended
|
Common
Stock
|
Capital
|
Retained
|
Treasury
Stock
|
Comprehensive
|
Shareholders’
|
|||||||||||||||||||
December
31, 2006, 2005, and 2004
|
Shares
|
Amount
|
Surplus
|
Earnings
|
Shares
|
Amount
|
Income
(Loss)
|
Equity
|
|||||||||||||||||
Balance
at January 1, 2004
|
8,161
|
$
|
1,020
|
$
|
18,670
|
$
|
145,489
|
1,445
|
$
|
(40,830
|
)
|
$
|
2,122
|
$
|
126,471
|
||||||||||
Net
income
|
13,392
|
13,392
|
|||||||||||||||||||||||
Other
comprehensive loss
|
(1,422
|
)
|
(1,422
|
)
|
|||||||||||||||||||||
Cash
dividends declared, $1.32 per share
|
(8,896
|
)
|
(8,896
|
)
|
|||||||||||||||||||||
Purchase
of common stock
|
5
|
(178
|
)
|
(178
|
)
|
||||||||||||||||||||
Stock
options exercised, including related tax benefits
|
70
|
9
|
1,764
|
1,773
|
|||||||||||||||||||||
Shares
issued pursuant to Employee Stock Purchase Plan
|
3
|
93
|
93
|
||||||||||||||||||||||
Stock
option expense
|
217
|
217
|
|||||||||||||||||||||||
Balance
at December 31, 2004
|
8,234
|
1,029
|
20,744
|
149,985
|
1,450
|
(41,008
|
)
|
700
|
131,450
|
||||||||||||||||
Net
income
|
15,772
|
15,772
|
|||||||||||||||||||||||
Other
comprehensive loss
|
(2,617
|
)
|
(2,617
|
)
|
|||||||||||||||||||||
Cash
dividends declared, $1.32 per share
|
(8,961
|
)
|
(8,961
|
)
|
|||||||||||||||||||||
Purchase
of common stock
|
17
|
(571
|
)
|
(571
|
)
|
||||||||||||||||||||
Stock
options exercised, including related tax benefits
|
31
|
4
|
770
|
774
|
|||||||||||||||||||||
Shares
issued pursuant to Employee Stock Purchase Plan
|
7
|
1
|
186
|
187
|
|||||||||||||||||||||
Shares
issued in connection with the purchase of Citizens Bancorp,
Inc.
|
584
|
73
|
18,129
|
18,202
|
|||||||||||||||||||||
Balance
at December 31, 2005
|
8,856
|
|
1,107
|
|
39,829
|
|
156,796
|
1,467
|
|
(41,579
|
)
|
|
(1,917
|
)
|
|
154,236
|
|||||||||
Net
income
|
21,372
|
21,372
|
|||||||||||||||||||||||
Other
comprehensive income
|
608
|
608
|
|||||||||||||||||||||||
Cash
dividends declared, $1.43 per share
|
(10,781
|
)
|
(10,781
|
)
|
|||||||||||||||||||||
Purchase
of common stock
|
26
|
(820
|
)
|
(820
|
)
|
||||||||||||||||||||
Stock
options exercised, including related tax benefits
|
60
|
8
|
1,536
|
1,544
|
|||||||||||||||||||||
Shares
issued pursuant to Employee Stock Purchase Plan
|
8
|
1
|
222
|
223
|
|||||||||||||||||||||
Stock
option expense
|
154
|
154
|
|||||||||||||||||||||||
Shares
issued in connection with the purchase of Citizens National Bancshares,
Inc.
|
464
|
58
|
14,938
|
14,996
|
|||||||||||||||||||||
Adjustment
to initially apply SFAS No. 158, net of tax of $1,664
|
(3,091
|
)
|
(3,091
|
)
|
|||||||||||||||||||||
Balance
at December 31, 2006
|
9,388
|
$
|
1,174
|
$
|
56,679
|
$
|
167,387
|
1,493
|
$
|
(42,399
|
)
|
$
|
(4,400
|
)
|
$
|
178,441
|
Years
Ended December 31, (In thousands)
|
2006
|
2005
|
2004
|
|||||||
Cash
Flows from Operating Activities
|
||||||||||
Net
income
|
$
|
21,372
|
$
|
15,772
|
$
|
13,392
|
||||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||||
Depreciation
and amortization
|
5,826
|
4,085
|
3,190
|
|||||||
Net
amortization (accretion) of investment security premiums and
discounts:
|
||||||||||
Available
for sale
|
(424
|
)
|
323
|
1,294
|
||||||
Held
to maturity
|
(25
|
)
|
(39
|
)
|
(38
|
)
|
||||
Provision
for loan losses
|
965
|
622
|
856
|
|||||||
Deferred
income tax (benefit) expense
|
(1,848
|
)
|
(194
|
)
|
965
|
|||||
Noncash
stock option expense
|
125
|
196
|
||||||||
Mortgage
loans originated for sale
|
(29,539
|
)
|
(35,456
|
)
|
(20,243
|
)
|
||||
Proceeds
from sale of mortgage loans
|
26,973
|
35,849
|
19,052
|
|||||||
Gains
on sale of mortgage loans, net
|
(649
|
)
|
(653
|
)
|
(370
|
)
|
||||
Gain
on sale of credit card portfolio
|
(700
|
)
|
||||||||
(Gain)
loss on sale of premises and equipment
|
(174
|
)
|
14
|
16
|
||||||
Loss
(gain) on sale of available for sale investment securities,
net
|
195
|
3
|
(391
|
)
|
||||||
Increase
in accrued interest receivable
|
(3,450
|
)
|
(1,705
|
)
|
(788
|
)
|
||||
Income
from company-owned life insurance
|
(1,301
|
)
|
(1,162
|
)
|
(1,401
|
)
|
||||
Decrease
(increase) in other assets
|
6,157
|
2,869
|
(2,304
|
)
|
||||||
Increase
in accrued interest payable
|
2,594
|
618
|
375
|
|||||||
Increase
(decrease) in other liabilities
|
4,577
|
(1,226
|
)
|
1,255
|
||||||
Gain
on sales of discontinued operations
|
(9,873
|
)
|
||||||||
Net
cash provided by discontinued operating activities
|
1,390
|
1,638
|
2,124
|
|||||||
Net
cash provided by operating activities
|
22,891
|
20,658
|
17,180
|
|||||||
Cash
Flows from Investing Activities
|
||||||||||
Proceeds
from maturities and calls of investment securities:
|
||||||||||
Available
for sale
|
121,699
|
164,014
|
236,636
|
|||||||
Held
to maturity
|
5,847
|
4,314
|
4,748
|
|||||||
Proceeds
from sale of available for sale investment securities
|
19,263
|
3,038
|
66,916
|
|||||||
Purchases
of investment securities:
|
||||||||||
Available
for sale
|
(138,081
|
)
|
(158,252
|
)
|
(262,919
|
)
|
||||
Loans
originated for investment, net of principal collected
|
(112,426
|
)
|
(37,461
|
)
|
(66,637
|
)
|
||||
Purchase
of company-owned life insurance
|
(1,579
|
)
|
||||||||
Payment
of prior year accrued purchase price-Citizens Bancorp,
Inc.
|
(21,846
|
)
|
||||||||
Net
cash acquired in purchase of Citizens National Bancshares,
Inc.
|
1,066
|
|||||||||
Purchase
of Citizens Bancorp, Inc., net of cash acquired
|
(29
|
)
|
10,620
|
|||||||
Purchase
of Citizens Bank (Kentucky), Inc., net of cash acquired
|
(2
|
)
|
(5,820
|
)
|
||||||
Purchase
of FiNET, Inc.
|
(203
|
)
|
(6,586
|
)
|
||||||
Investment
in unconsolidated trusts
|
(774
|
)
|
||||||||
Additions
to mortgage servicing rights, net
|
(47
|
)
|
||||||||
Purchases
of premises and equipment
|
(9,682
|
)
|
(3,341
|
)
|
(4,018
|
)
|
||||
Proceeds
from sale of equipment
|
720
|
124
|
988
|
|||||||
Net
cash received on disposal of discontinued operations
|
47
|
|||||||||
Net
cash provided by (used in) discontinued investing
activities
|
9,384
|
15,058
|
(25,810
|
)
|
||||||
Net
cash used in investing activities
|
(125,664
|
)
|
(2,865
|
)
|
(62,502
|
)
|
||||
Cash
Flows from Financing Activities
|
||||||||||
Net
increase (decrease) in deposits
|
123,728
|
29,891
|
(7,506
|
)
|
||||||
Net
(decrease) increase in federal funds purchased and securities sold
under
agreements to repurchase
|
(6,275
|
)
|
11,778
|
(2,734
|
)
|
|||||
Proceeds
from long-term debt
|
26,198
|
27,774
|
1,800
|
|||||||
Repayments
of long-term debt
|
(13,496
|
)
|
(7,750
|
)
|
(9,707
|
)
|
||||
Net
increase (decrease) in other borrowed funds
|
7,997
|
(1,011
|
)
|
1,373
|
||||||
Dividends
paid
|
(9,553
|
)
|
(8,949
|
)
|
(8,879
|
)
|
||||
Purchase
of common stock
|
(820
|
)
|
(571
|
)
|
(178
|
)
|
||||
Shares
issued under Employee Stock Purchase Plan
|
223
|
187
|
93
|
|||||||
Stock
options exercised
|
1,529
|
771
|
1,755
|
|||||||
Net
cash provided by (used in) discontinued financing
activities
|
3,710
|
(12,607
|
)
|
17,965
|
||||||
Net
cash provided by (used in) financing activities
|
133,241
|
39,513
|
(6,018
|
)
|
||||||
Net
increase (decrease) in cash and cash equivalents
|
30,468
|
57,306
|
(51,340
|
)
|
||||||
Less:
net (increase) decrease in cash and cash equivalents of discontinued
operations
|
(4,658
|
)
|
(4,089
|
)
|
5,721
|
|||||
Net
increase (decrease) in cash and cash equivalents from continuing
operations
|
25,810
|
53,217
|
(45,619
|
)
|
||||||
Cash
and cash equivalents from continuing operations at beginning of
year
|
131,018
|
77,801
|
123,420
|
|||||||
Cash
and cash equivalents from continuing operations at end of
year
|
$
|
156,828
|
$
|
131,018
|
$
|
77,801
|
Supplemental
Disclosures
|
||||||||||
Cash
paid during the year for:
|
||||||||||
Interest
|
$
|
29,695
|
$
|
26,973
|
$
|
18,813
|
||||
Income
taxes
|
4,900
|
2,725
|
2,525
|
|||||||
Transfers
from loans to repossessed assets
|
1,973
|
2,751
|
3,454
|
|||||||
Cash
dividend declared and unpaid at year-end
|
3,472
|
2,244
|
2,232
|
|||||||
Issuance
of 464 and 584 shares of common stock to acquire Citizens National
Bancshares, Inc. and Citizens Bancorp, Inc., respectively
|
14,996
|
18,202
|
||||||||
Acquisition
purchase price payable at year-end
|
21,846
|
(In
thousands, except per share data)
Years
Ended December 31,
|
2006
|
2005
|
2004
|
|||||||
Net
income, basic and diluted
|
$
|
21,372
|
$
|
15,772
|
$
|
13,392
|
||||
Average
shares outstanding
|
7,511
|
6,831
|
6,737
|
|||||||
Effect
of dilutive stock options
|
15
|
33
|
43
|
|||||||
Average
diluted shares outstanding
|
7,526
|
6,864
|
6,780
|
|||||||
Net
income per share, basic
|
$
|
2.85
|
$
|
2.31
|
$
|
1.99
|
||||
Net
income per share, diluted
|
2.84
|
2.30
|
1.98
|
Income
from continuing operations, basic and diluted
|
$
|
13,665
|
$
|
14,532
|
$
|
13,064
|
||||
Income
per share from continuing operations, basic
|
$
|
1.82
|
$
|
2.13
|
$
|
1.94
|
||||
Income
per share from continuing operations, diluted
|
1.82
|
2.12
|
1.93
|
Income
from discontinued operations, basic and diluted
|
$
|
7,707
|
$
|
1,240
|
$
|
328
|
||||
Income
per share from discontinued operations, basic
|
$
|
1.03
|
$
|
.18
|
$
|
.05
|
||||
Income
per share from discontinued operations, diluted
|
1.02
|
.18
|
.05
|
(In
thousands, except per share data)
Years
Ended December 31,
|
2005
|
2004
|
|||||
Net
Income
|
|||||||
As
reported
|
$
|
15,772
|
$
|
13,392
|
|||
Add:
Stock-based compensation expense included in reported net
income
|
141
|
||||||
Less:
Stock-based compensation expense determined under fair value based
method
for all awards, net of related tax effects
|
(112
|
)
|
(208
|
)
|
|||
Proforma
|
$
|
15,660
|
$
|
13,325
|
|||
Net
Income Per Common Share
|
|||||||
Basic,
as reported
|
$
|
2.31
|
$
|
1.99
|
|||
Basic,
proforma
|
2.29
|
1.98
|
|||||
Diluted,
as reported
|
2.30
|
1.98
|
|||||
Diluted,
proforma
|
2.28
|
1.97
|
Income
From Continuing Operations
|
|||||||
As
reported
|
$
|
14,532
|
$
|
13,064
|
|||
Add:
Stock-based compensation expense included in reported net
income
|
127
|
||||||
Less:
Stock-based compensation expense determined under fair value based
method
for all awards, net of related tax effects
|
(100
|
)
|
(190
|
)
|
|||
Proforma
|
$
|
14,432
|
$
|
13,001
|
|||
Income
Per Common Share From Continuing Operations
|
|||||||
Basic,
as reported
|
$
|
2.13
|
$
|
1.94
|
|||
Basic,
proforma
|
2.11
|
1.93
|
|||||
Diluted,
as reported
|
2.12
|
1.93
|
|||||
Diluted,
proforma
|
2.10
|
1.92
|
Income
From Discontinued Operations
|
|||||||
As
reported
|
$
|
1,240
|
$
|
328
|
|||
Add:
Stock-based compensation expense included in reported net
income
|
14
|
||||||
Less:
Stock-based compensation expense determined under fair value based
method
for all awards, net of related tax effects
|
(12
|
)
|
(18
|
)
|
|||
Proforma
|
$
|
1,228
|
$
|
324
|
|||
Income
Per Common Share From Discontinued Operations
|
|||||||
Basic
and diluted, as reported
|
$
|
.18
|
$
|
.05
|
|||
Basic
and diluted, proforma
|
.18
|
.05
|
Grant
|
ESPP
|
|||||||||||||||||||
1997
|
2000
|
2004
|
2006
|
2005
|
2004
|
|||||||||||||||
Dividend
yield
|
3.18
|
%
|
3.12
|
%
|
3.80
|
%
|
3.88
|
3.82
|
%
|
3.80
|
%
|
|||||||||
Expected
volatility
|
23.4
|
29.6
|
10.5
|
14.0
|
13.0
|
10.8
|
||||||||||||||
Risk-free
interest rate
|
5.75
|
6.71
|
2.78
|
4.70
|
2.98
|
1.47
|
||||||||||||||
Expected
life (in years)
|
7
|
7
|
3
|
.25
|
.25
|
.25
|
||||||||||||||
Fair
value
|
$
|
16.11
|
$
|
9.25
|
$
|
1.79
|
$
|
5.75
|
$
|
5.97
|
$
|
5.72
|
(In
thousands)
|
Before
Application
of
SFAS No. 158
|
Adjustments
|
After
Application
of
SFAS No. 158
|
|||||||
Liability
for postretirement benefits
|
$
|
4,534
|
$
|
4,755
|
$
|
9,289
|
||||
Deferred
income tax (liability) asset
|
(410
|
) |
(1,664
|
)
|
1,254
|
|||||
Accumulated
other comprehensive loss
|
(1,309
|
)
|
(3,091
|
)
|
(4,400
|
)
|
||||
Total assets | 1,832,112 | 1,254 | 1,824,366 | |||||||
Total liabilities | 1,641,580 | 4,345 | 1,645,925 | |||||||
Total
shareholders’ equity
|
181,532
|
(3,091
|
)
|
178,441
|
(In
thousands)
|
November
30, 2006
|
December
31, 2005
|
|||||
Assets
|
|||||||
Cash
and cash equivalents
|
$
|
13,544
|
$
|
3,718
|
|||
Investment
securities
|
32,276
|
36,027
|
|||||
Loans,
net
|
88,631
|
94,043
|
|||||
Premises
and equipment, net
|
4,978
|
5,164
|
|||||
Other
assets
|
5,118
|
4,616
|
|||||
Total
assets
|
$
|
144,547
|
$
|
143,568
|
|||
Liabilities
|
|||||||
Deposits
|
$
|
146,208
|
$
|
141,589
|
|||
Other
borrowed funds
|
1,459
|
2,368
|
|||||
Other
liabilities
|
921
|
451
|
|||||
Total
liabilities
|
148,588
|
144,408
|
|||||
Net
liabilities
|
$
|
4,041
|
$
|
840
|
Eleven
months ended
November
30
|
Twelve
months ended
December
31
|
|||||||||
(In
thousands)
|
2006
|
2005
|
2004
|
|||||||
Interest
income
|
$
|
9,008
|
$
|
8,443
|
$
|
6,712
|
||||
Interest
expense
|
3,696
|
3,370
|
2,553
|
|||||||
Net
interest income
|
5,312
|
5,073
|
4,159
|
|||||||
Provision
for loan losses
|
17
|
96
|
1,274
|
|||||||
Noninterest
income
|
1,272
|
1,305
|
1,266
|
|||||||
Noninterest
expense
|
4,597
|
4,559
|
3,799
|
|||||||
Income
tax expense
|
679
|
483
|
24
|
|||||||
Net
income
|
$
|
1,291
|
$
|
1,240
|
$
|
328
|
3.
|
Investment
Securities
|
Amortized
|
Gross
|
Gross
|
Estimated
|
||||||||||
December
31, 2006 (In thousands)
|
Cost
|
Unrealized
Gains
|
Unrealized
Losses
|
Fair
Value
|
|||||||||
Available
For Sale
|
|||||||||||||
Obligations
of U.S. government-sponsored agencies
|
$
|
142,128
|
$
|
74
|
$
|
370
|
$
|
141,832
|
|||||
Obligations
of states and political subdivisions
|
87,974
|
939
|
766
|
88,147
|
|||||||||
Mortgage-backed
securities
|
88,607
|
87
|
1,978
|
86,716
|
|||||||||
U.S.
Treasury securities
|
484
|
484
|
|||||||||||
Money
market mutual funds
|
1,396
|
1,396
|
|||||||||||
Equity
securities
|
7,910
|
7,910
|
|||||||||||
Total
securities - available for sale
|
$
|
328,499
|
$
|
1,100
|
$
|
3,114
|
$
|
326,485
|
|||||
Held
To Maturity
|
|||||||||||||
Obligations
of states and political subdivisions
|
$
|
7,788
|
$
|
61
|
$
|
0
|
$
|
7,849
|
Amortized
|
Gross
|
Gross
|
Estimated
|
||||||||||
December
31, 2005 (In thousands)
|
Cost
|
Unrealized
Gains
|
Unrealized
Losses
|
Fair
Value
|
|||||||||
Available
For Sale
|
|||||||||||||
Obligations
of U.S. government-sponsored agencies
|
$
|
124,668
|
$
|
66
|
$
|
1,050
|
$
|
123,684
|
|||||
Obligations
of states and political subdivisions
|
85,546
|
1,243
|
758
|
86,031
|
|||||||||
Mortgage-backed
securities
|
100,218
|
121
|
2,314
|
98,025
|
|||||||||
U.S.
Treasury securities
|
104
|
104
|
|||||||||||
Money
market mutual funds
|
925
|
925
|
|||||||||||
Equity
securities
|
6,298
|
6,298
|
|||||||||||
Total
securities - available for sale
|
$
|
317,759
|
$
|
1,430
|
$
|
4,122
|
$
|
315,067
|
|||||
Held
To Maturity
|
|||||||||||||
Obligations
of states and political subdivisions
|
$
|
13,610
|
$
|
204
|
$
|
0
|
$
|
13,814
|
Available
For Sale
|
Held
To Maturity
|
||||||||||||
Amortized
|
Estimated
|
Amortized
|
Estimated
|
||||||||||
December
31, 2006 (In thousands)
|
Cost
|
Fair
Value
|
Cost
|
Fair
Value
|
|||||||||
Due
in one year or less
|
$
|
90,698
|
$
|
90,669
|
$
|
3,778
|
$
|
3,801
|
|||||
Due
after one year through five years
|
69,822
|
69,306
|
2,885
|
2,923
|
|||||||||
Due
after five years through ten years
|
61,224
|
61,460
|
|||||||||||
Due
after ten years
|
10,238
|
10,424
|
1,125
|
1,125
|
|||||||||
Mortgage-backed
securities
|
88,607
|
86,716
|
|||||||||||
Total
|
$
|
320,589
|
$
|
318,575
|
$
|
7,788
|
$
|
7,849
|
Less
than 12 Months
|
12
Months or More
|
Total
|
|||||||||||||||||
December
31, 2006 (In thousands)
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
|||||||||||||
Obligations
of U.S. government-sponsored agencies
|
$
|
25,591
|
$
|
34
|
$
|
34,949
|
$
|
336
|
$
|
60,540
|
$
|
370
|
|||||||
Obligations
of states and political subdivisions
|
12,756
|
63
|
25,793
|
703
|
38,549
|
766
|
|||||||||||||
Mortgage-backed
securities
|
2,467
|
6
|
68,993
|
1,972
|
71,460
|
1,978
|
|||||||||||||
Total
|
$
|
40,814
|
$
|
103
|
$
|
129,735
|
$
|
3,011
|
$
|
170,549
|
$
|
3,114
|
Less
than 12 Months
|
12
Months or More
|
Total
|
|||||||||||||||||
December
31, 2005 (In thousands)
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
|||||||||||||
Obligations
of U.S. government-sponsored agencies
|
$
|
54,184
|
$
|
388
|
$
|
44,159
|
$
|
662
|
$
|
98,343
|
$
|
1,050
|
|||||||
Obligations
of states and political subdivisions
|
23,287
|
285
|
13,107
|
473
|
36,394
|
758
|
|||||||||||||
Mortgage-backed
securities
|
31,326
|
413
|
54,583
|
1,901
|
85,909
|
2,314
|
|||||||||||||
Total
|
$
|
108,797
|
$
|
1,086
|
$
|
111,849
|
$
|
3,036
|
$
|
220,646
|
$
|
4,122
|
4.
|
Loans
|
December
31, (In thousands)
|
2006
|
2005
|
|||||
Commercial,
financial, and agricultural
|
$
|
197,613
|
$
|
173,797
|
|||
Real
estate - construction
|
176,779
|
88,693
|
|||||
Real
estate mortgage - residential
|
381,081
|
331,508
|
|||||
Real
estate mortgage - farmland and other commercial
enterprises
|
351,793
|
274,411
|
|||||
Installment
loans
|
57,116
|
56,169
|
|||||
Lease
financing
|
37,522
|
42,501
|
|||||
Total
loans
|
1,201,904
|
967,079
|
|||||
Less
unearned income
|
(4,068
|
)
|
(4,508
|
)
|
|||
Total
loans, net of unearned income
|
$
|
1,197,836
|
$
|
962,571
|
(In
thousands)
|
Amount
|
|||
Balance,
December 31, 2005
|
$
|
25,103
|
||
New
loans
|
15,081
|
|||
Repayments
|
(18,938
|
)
|
||
Loans
no longer meeting disclosure requirements, new loans meeting disclosure
requirements, and other adjustments
|
4,657
|
|||
Balance,
December 31, 2006
|
$
|
25,903
|
Years
Ended December 31, (In thousands)
|
2006
|
2005
|
2004
|
|||||||
Balance,
beginning of year
|
$
|
11,069
|
$
|
11,043
|
$
|
10,088
|
||||
Acquisition
of Citizens National Bancshares, Inc.
|
1,066
|
|||||||||
Acquisition
of Citizens Bancorp, Inc.
|
1,410
|
|||||||||
Acquisition
of Citizens Bank (Kentucky), Inc.
|
2,005
|
|||||||||
Provision
for loan losses
|
965
|
622
|
856
|
|||||||
Recoveries
|
678
|
439
|
462
|
|||||||
Loans
charged off
|
(1,779
|
)
|
(2,445
|
)
|
(2,368
|
)
|
||||
Balance,
end of year
|
$
|
11,999
|
$
|
11,069
|
$
|
11,043
|
December
31, (In thousands)
|
2006
|
2005
|
|||||
Nonaccrual
loans
|
$
|
1,462
|
$
|
2,269
|
|||
Loans
past due 90 days or more and still accruing
|
2,856
|
2,383
|
|||||
Total
nonperforming loans
|
$
|
4,318
|
$
|
4,652
|
6.
|
Premises
and Equipment
|
December
31, (In thousands)
|
2006
|
2005
|
|||||
Land,
buildings, and leasehold improvements
|
$
|
45,652
|
$
|
37,034
|
|||
Furniture
and equipment
|
21,470
|
19,413
|
|||||
Total
premises and equipment
|
67,122
|
56,447
|
|||||
Less
accumulated depreciation and amortization
|
(29,347
|
)
|
(27,615
|
)
|
|||
Premises
and equipment, net
|
$
|
37,775
|
$
|
28,832
|
7.
|
Deposit
Liabilities
|
(In
thousands)
|
Amount
|
|||
2007
|
$
|
482,687
|
||
2008
|
137,745
|
|||
2009
|
61,138
|
|||
2010
|
15,772
|
|||
2011
|
9,125
|
|||
Thereafter
|
4,482
|
|||
Total
|
$
|
710,949
|
8.
|
December
31, (Dollars in thousands)
|
2006
|
2005
|
|||||
Average
balance during the year
|
$
|
92,092
|
$
|
81,318
|
|||
Average
interest rate during the year
|
4.72
|
%
|
3.16
|
%
|
|||
Average
interest rate at year-end
|
4.47
|
3.90
|
|||||
Maximum
month-end balance during the year
|
$
|
90,149
|
$
|
165,167
|
Average
|
Average
|
||||||||||||
December
31, (Dollars in thousands)
|
2006
|
Rate
|
2005
|
Rate
|
|||||||||
Short-term
|
|||||||||||||
Federal
funds purchased and securities sold under agreements to
repurchase
|
$
|
67,941
|
4.47
|
%
|
$
|
71,336
|
3.90
|
%
|
|||||
FHLB
advances
|
8,000
|
5.49
|
|||||||||||
Other
|
777
|
2.00
|
779
|
3.20
|
|||||||||
Total
short-term
|
$
|
76,718
|
4.55
|
%
|
$
|
72,115
|
3.89
|
%
|
|||||
Long-term
|
|||||||||||||
FHLB
advances
|
$
|
61,174
|
4.51
|
%
|
$
|
49,162
|
4.16
|
%
|
|||||
Subordinated
notes payable
|
25,774
|
6.96
|
25,774
|
5.61
|
|||||||||
Other
|
1,044
|
2.32
|
355
|
2.32
|
|||||||||
Total
long-term
|
$
|
87,992
|
5.20
|
%
|
$
|
75,291
|
4.65
|
%
|
(In
thousands)
|
Amount
|
|||
2007
|
$
|
20,679
|
||
2008
|
10,663
|
|||
2009
|
10,658
|
|||
2010
|
654
|
|||
2011
|
5,484
|
|||
Thereafter
|
39,854
|
|||
Total
|
$
|
87,992
|
December
31, (In thousands)
|
2006
|
2005
|
2004
|
|||||||
Currently
payable
|
$
|
5,208
|
$
|
3,985
|
$
|
2,034
|
||||
Deferred
|
(1,848
|
)
|
(194
|
)
|
965
|
|||||
Total
applicable to continuing operations
|
3,360
|
3,791
|
2,999
|
|||||||
Deferred
tax charged to components of shareholders’ equity:
|
||||||||||
Unfunded
status of postretirement benefits
|
1,664
|
|||||||||
Net
unrealized securities gains (losses)
|
237
|
(1,362
|
)
|
(713
|
)
|
|||||
Total
income taxes from continuing operations
|
$
|
5,261
|
$
|
2,429
|
$
|
2,286
|
December
31, (In thousands)
|
2006
|
2005
|
2004
|
|||||||
Currently
payable
|
$
|
4,287
|
$
|
294
|
$
|
276
|
||||
Deferred
|
(152
|
)
|
189
|
(253
|
)
|
|||||
Total
applicable to discontinued operations
|
4,135
|
483
|
23
|
|||||||
Deferred
tax charged to components of shareholders’ equity:
|
||||||||||
Net
unrealized securities gains (losses)
|
90
|
(47
|
)
|
(52
|
)
|
|||||
Total
income taxes from discontinued operations
|
$
|
4,225
|
$
|
436
|
$
|
(29
|
)
|
December
31,
|
2006
|
2005
|
2004
|
|||||||
Federal
statutory rate
|
35.0
|
%
|
35.0
|
%
|
35.0
|
%
|
||||
Changes
from statutory rates resulting from:
|
||||||||||
Tax-exempt
interest
|
(9.7
|
)
|
(8.3
|
)
|
(9.4
|
)
|
||||
Nondeductible
interest to carry tax-exempt obligations
|
1.2
|
.7
|
.6
|
|||||||
Tax
credits
|
(3.8
|
)
|
(3.6
|
)
|
(4.1
|
)
|
||||
Premium
income not subject to tax
|
(2.4
|
)
|
(.2
|
)
|
||||||
Company-owned
life insurance
|
(2.4
|
)
|
(1.9
|
)
|
(2.5
|
)
|
||||
Other,
net
|
1.8
|
(1.0
|
)
|
(.9
|
)
|
|||||
Effective
tax rate on pretax income from continuing operations
|
19.7
|
%
|
20.7
|
%
|
18.7
|
%
|
December
31,
|
2006
|
2005
|
2004
|
|||||||
Federal
statutory rate
|
35.0
|
%
|
35.0
|
%
|
35.0
|
%
|
||||
Changes
from statutory rates resulting from:
|
||||||||||
Tax-exempt
interest
|
(.7
|
)
|
(5.4
|
)
|
(23.2
|
)
|
||||
Nondeductible
interest to carry tax-exempt obligations
|
.1
|
.6
|
2.1
|
|||||||
Company-owned
life insurance
|
(.2
|
)
|
(1.1
|
)
|
(6.7
|
)
|
||||
Other,
net
|
.7
|
(1.1
|
)
|
(.6
|
)
|
|||||
Effective
tax rate on pretax income from discontinued operations
|
34.9
|
%
|
28.0
|
%
|
6.6
|
%
|
December
31, (In thousands)
|
2006
|
2005
|
||||||||
Continuing
Operations
|
Discontinued
Operations
|
|||||||||
Assets
|
||||||||||
Allowance
for loan losses
|
$
|
4,122
|
$
|
3,832
|
$
|
488
|
||||
Unrealized
losses on available for sale investment securities, net
|
705
|
943
|
90
|
|||||||
Deferred
directors’ fees
|
131
|
137
|
||||||||
Postretirement
benefit obligations
|
3,251
|
1,277
|
40
|
|||||||
Stock
options
|
513
|
902
|
67
|
|||||||
Commissions
|
12
|
67
|
||||||||
Self-funded
insurance
|
279
|
200
|
||||||||
Paid
time off
|
455
|
|||||||||
Other
|
157
|
46
|
||||||||
Total
deferred tax assets
|
9,625
|
7,404
|
685
|
|||||||
Liabilities
|
||||||||||
Depreciation
|
925
|
971
|
287
|
|||||||
Prepaid
expenses
|
590
|
557
|
41
|
|||||||
Discount
on investment securities
|
1,040
|
860
|
178
|
|||||||
Deferred
loan fees
|
1,000
|
1,093
|
241
|
|||||||
Lease
financing operations
|
1,942
|
2,368
|
||||||||
Intangibles
|
2,874
|
2,331
|
||||||||
Total
deferred tax liabilities
|
8,371
|
8,180
|
747
|
|||||||
Net
deferred tax asset (liability)
|
$
|
1,254
|
$
|
(776
|
)
|
$
|
(62
|
)
|
11.
|
Common
Stock Options
|
2006
|
|||||||
Weighted
|
|||||||
Shares
|
Average
Price
|
||||||
Outstanding
at January 1
|
189,447
|
$
|
27.67
|
||||
Granted
|
|||||||
Forfeited
|
(3,714
|
)
|
32.47
|
||||
Exercised
|
(60,211
|
)
|
25.37
|
||||
Outstanding
at December 31
|
125,522
|
$
|
28.62
|
||||
Options
exercisable at year-end
|
120,379
|
$
|
28.58
|
Outstanding
|
Exercisable
|
|||||||||||||||
Weighted
Average
|
||||||||||||||||
Remaining
Contractual
|
Weighted
Average
|
Weighted
Average
|
||||||||||||||
Range
of Exercise Prices
|
Number
|
Life
(Years)
|
Exercise
Price
|
Number
|
Exercise
Price
|
|||||||||||
$24.50
|
61,615
|
.75
|
$
|
24.50
|
61,615
|
$
|
24.50
|
|||||||||
$29.75
|
27,858
|
3.00
|
29.75
|
22,715
|
29.75
|
|||||||||||
$34.80
|
36,049
|
7.83
|
34.80
|
36,049
|
34.80
|
|||||||||||
Outstanding
at year-end
|
125,522
|
3.28
|
$
|
28.62
|
120,379
|
$
|
28.58
|
(In
thousands)
|
2006
|
2005
|
2004
|
|||||||
Tax
benefit realized from options exercised
|
$
|
168
|
$
|
109
|
$
|
283
|
||||
Total
intrinsic value of options exercised
|
479
|
311
|
810
|
|||||||
Total
fair value of options vested
|
63
|
135
|
404
|
|||||||
Cash
received from options exercised
|
1,529
|
771
|
1,755
|
12.
|
Postretirement
Benefits
|
Postretirement
Medical Benefits
|
Supplemental
Retirement Plan
|
||||||||||||
(In
thousands)
|
2006
|
2005
|
2006
|
2005
|
|||||||||
Change
in Benefit Obligation
|
|||||||||||||
Obligation
at beginning of year
|
$
|
7,354
|
$
|
6,414
|
$
|
374
|
|||||||
Service
cost
|
258
|
186
|
41
|
||||||||||
Interest
cost
|
415
|
376
|
22
|
||||||||||
Prior
service cost
|
222
|
215
|
|||||||||||
Actuarial
loss
|
814
|
462
|
124
|
||||||||||
Participant
contributions
|
32
|
||||||||||||
Benefit
payments
|
(367
|
)
|
(299
|
)
|
|||||||||
Acquisition
|
$
|
374
|
|||||||||||
Obligation
at end of year
|
$
|
8,728
|
$
|
7,354
|
$
|
561
|
$
|
374
|
|||||
Reconciliation
of Funded Status
|
|||||||||||||
Benefit
obligation
|
$
|
(8,728
|
)
|
$
|
(7,354
|
)
|
$
|
(561
|
)
|
$
|
(374
|
)
|
|
Unrecognized
transition obligation
|
609
|
710
|
|||||||||||
Unamortized
prior service cost
|
2,121
|
2,167
|
|||||||||||
Unrecognized
net actuarial loss
|
1,721
|
929
|
304
|
||||||||||
Adjustment
to accumulated other comprehensive loss upon the adoption of SFAS
No.
158
|
(4,451
|
)
|
(304
|
)
|
|||||||||
Plan
liability
|
$
|
(8,728
|
)
|
$
|
(3,548
|
)
|
$
|
(561
|
)
|
$
|
(374
|
)
|
Postretirement
Medical Benefits
|
Supplemental
Retirement Plan
|
|||||||||
(In
thousands)
|
2006
|
2005
|
2006
|
|||||||
Service
cost
|
$
|
258
|
$
|
186
|
$
|
41
|
||||
Interest
cost
|
415
|
376
|
21
|
|||||||
Amortization
of transition obligation
|
102
|
101
|
||||||||
Recognized
prior service cost
|
268
|
250
|
||||||||
Recognized
net actuarial loss
|
21
|
7
|
17
|
|||||||
Net
periodic benefit cost
|
$
|
1,064
|
$
|
920
|
$
|
79
|
||||
Major
assumptions:
|
||||||||||
Discount
rate
|
5.75
|
%
|
5.75
|
%
|
5.75
|
%
|
(In
thousands)
|
1%
Increase
|
1%
Decrease
|
|||||
Effect
on total of service and interest cost components of net periodic
postretirement health care benefit cost
|
$
|
167
|
$
|
(131
|
)
|
||
Effect
on postretirement benefit obligation
|
1,341
|
(1,091
|
)
|
(In
thousands)
|
Postretirement
Medical Benefits |
Supplemental
Retirement Plan
|
|||||
2007
|
$
|
363
|
$
|
20
|
|||
2008
|
372
|
20
|
|||||
2009
|
401
|
20
|
|||||
2010
|
428
|
20
|
|||||
2011
|
434
|
20
|
|||||
2012-2016
|
2,397
|
206
|
|||||
Total
|
$
|
4,395
|
$
|
306
|
(In
thousands)
|
Postretirement
Medical Benefits |
Supplemental
Retirement Plan
|
|||||
Unrecognized
net actuarial loss
|
$
|
1,721
|
$
|
304
|
|||
Unrecognized
transition obligation
|
609
|
||||||
Unrecognized
prior service cost
|
2,121
|
||||||
Total
|
$
|
4,451
|
$
|
304
|
(In
thousands)
|
Postretirement
Medical Benefits |
Supplemental
Retirement Plan
|
|||||
Unrecognized
net actuarial loss
|
$
|
4
|
|||||
Unrecognized
prior service cost
|
287
|
||||||
Net
actuarial loss
|
$
|
23
|
|||||
Total
|
$
|
291
|
$
|
23
|
(In
thousands)
|
Operating
Leases |
Capital
Lease |
|||||
2007
|
$
|
613
|
$
|
254
|
|||
2008
|
540
|
254
|
|||||
2009
|
477
|
254
|
|||||
2010
|
402
|
254
|
|||||
2011
|
358
|
84
|
|||||
Thereafter
|
2,104
|
||||||
$
|
4,494
|
1,100
|
|||||
Less:
amount representing interest
|
56
|
||||||
Long-term
obligation under capital lease
|
$
|
1,044
|
December
31,
|
2006
|
2005
|
|||||||||||
(In
thousands)
|
Fixed
Rate
|
Variable
Rate
|
Fixed
Rate
|
Variable
Rate
|
|||||||||
Commitments
to extend credit
|
$
|
84,590
|
$
|
132,695
|
$
|
34,707
|
$
|
126,029
|
|||||
Standby
letters of credit
|
15,102
|
1,761
|
11,049
|
583
|
|||||||||
Total
|
$
|
99,692
|
$
|
134,456
|
$
|
45,756
|
$
|
126,612
|
16.
|
Loss
Contingencies
|
To
Be Well Capitalized
|
|||||||||||||||||||
For
Capital
|
Under
Prompt Corrective
|
||||||||||||||||||
Actual
|
Adequacy
Purposes
|
Action
Provisions
|
|||||||||||||||||
December
31, 2006 (Dollars in thousands)
|
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||||||
Tier
1 Capital (to Risk-Weighted Assets)
|
|||||||||||||||||||
Consolidated
|
$
|
155,264
|
12.23
|
%
|
$
|
50,793
|
4.00
|
%
|
N/A
|
N/A
|
|||||||||
Farmers
Bank & Capital Trust Co.
|
38,411
|
10.94
|
14,046
|
4.00
|
$
|
21,069
|
6.00
|
%
|
|||||||||||
Farmers
Bank and Trust Company
|
26,975
|
11.04
|
9,771
|
4.00
|
14,656
|
6.00
|
|||||||||||||
Lawrenceburg
National Bank
|
11,888
|
10.78
|
4,413
|
4.00
|
6,619
|
6.00
|
|||||||||||||
First
Citizens Bank
|
18,072
|
11.62
|
6,223
|
4.00
|
9,335
|
6.00
|
|||||||||||||
United
Bank & Trust Co.
|
14,084
|
11.19
|
5,034
|
4.00
|
7,552
|
6.00
|
|||||||||||||
Citizens
National Bank of Jessamine County
|
11,429
|
9.50
|
4,813
|
4.00
|
7,220
|
6.00
|
|||||||||||||
Citizens
Bank of Northern Kentucky
|
17,345
|
10.05
|
6,902
|
4.00
|
10,353
|
6.00
|
|||||||||||||
Total
Capital (to Risk-Weighted Assets)
|
|||||||||||||||||||
Consolidated
|
$
|
167,263
|
13.17
|
%
|
$
|
101,587
|
8.00
|
%
|
N/A
|
N/A
|
|||||||||
Farmers
Bank & Capital Trust Co.
|
41,931
|
11.94
|
28,092
|
8.00
|
$
|
35,115
|
10.00
|
%
|
|||||||||||
Farmers
Bank and Trust Company
|
28,839
|
11.81
|
19,541
|
8.00
|
24,427
|
10.00
|
|||||||||||||
Lawrenceburg
National Bank
|
13,269
|
12.03
|
8,825
|
8.00
|
11,032
|
10.00
|
|||||||||||||
First
Citizens Bank
|
19,341
|
12.43
|
12,447
|
8.00
|
15,559
|
10.00
|
|||||||||||||
United
Bank & Trust Co.
|
15,332
|
12.18
|
10,069
|
8.00
|
12,586
|
10.00
|
|||||||||||||
Citizens
National Bank of Jessamine County
|
12,673
|
10.53
|
9,626
|
8.00
|
12,033
|
10.00
|
|||||||||||||
Citizens
Bank of Northern Kentucky
|
18,657
|
10.81
|
13,804
|
8.00
|
17,255
|
10.00
|
|||||||||||||
Tier
1 Capital (to Average Assets)
|
|||||||||||||||||||
Consolidated
|
$
|
155,264
|
8.47
|
%
|
$
|
73,314
|
4.00
|
%
|
N/A
|
N/A
|
|||||||||
Farmers
Bank & Capital Trust Co.
|
38,411
|
6.55
|
23,449
|
4.00
|
$
|
29,312
|
5.00
|
%
|
|||||||||||
Farmers
Bank and Trust Company
|
26,975
|
8.05
|
13,406
|
4.00
|
16,757
|
5.00
|
|||||||||||||
Lawrenceburg
National Bank
|
11,888
|
6.86
|
6,935
|
4.00
|
8,669
|
5.00
|
|||||||||||||
First
Citizens Bank
|
18,072
|
8.41
|
8,594
|
4.00
|
10,743
|
5.00
|
|||||||||||||
United
Bank & Trust Co.
|
14,084
|
7.90
|
7,128
|
4.00
|
8,910
|
5.00
|
|||||||||||||
Citizens
National Bank of Jessamine County
|
11,429
|
7.61
|
6,005
|
4.00
|
7,507
|
5.00
|
|||||||||||||
Citizens
Bank of Northern Kentucky
|
17,345
|
8.17
|
8,489
|
4.00
|
10,611
|
5.00
|
To
Be Well Capitalized
|
|||||||||||||||||||
For
Capital
|
Under
Prompt Corrective
|
||||||||||||||||||
Actual
|
Adequacy
Purposes
|
Action
Provisions
|
|||||||||||||||||
December
31, 2005 (Dollars in thousands)
|
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||||||
Tier
1 Capital (to Risk-Weighted Assets)
|
|||||||||||||||||||
Consolidated
|
$
|
143,861
|
12.68
|
%
|
$
|
45,395
|
4.00
|
%
|
N/A
|
N/A
|
|||||||||
Farmers
Bank & Capital Trust Co.
|
38,022
|
12.25
|
12,416
|
4.00
|
$
|
18,624
|
6.00
|
%
|
|||||||||||
Farmers
Bank and Trust Company
|
22,316
|
10.69
|
8,347
|
4.00
|
12,521
|
6.00
|
|||||||||||||
Lawrenceburg
National Bank
|
12,112
|
11.26
|
4,304
|
4.00
|
6,456
|
6.00
|
|||||||||||||
First
Citizens Bank
|
14,323
|
10.56
|
5,425
|
4.00
|
8,138
|
6.00
|
|||||||||||||
United
Bank & Trust Co.
|
14,068
|
11.13
|
5,055
|
4.00
|
7,583
|
6.00
|
|||||||||||||
Citizens
Bank of Northern Kentucky
|
15,591
|
9.53
|
6,545
|
4.00
|
9,817
|
6.00
|
|||||||||||||
Total
Capital (to Risk-Weighted Assets)
|
|||||||||||||||||||
Consolidated
|
$
|
156,323
|
13.77
|
%
|
$
|
90,791
|
8.00
|
%
|
N/A
|
N/A
|
|||||||||
Farmers
Bank & Capital Trust Co.
|
41,458
|
13.36
|
24,832
|
8.00
|
$
|
31,040
|
10.00
|
%
|
|||||||||||
Farmers
Bank and Trust Company
|
24,482
|
11.73
|
16,694
|
8.00
|
20,868
|
10.00
|
|||||||||||||
Lawrenceburg
National Bank
|
13,459
|
12.51
|
8,608
|
8.00
|
10,760
|
10.00
|
|||||||||||||
First
Citizens Bank
|
15,625
|
11.52
|
10,850
|
8.00
|
13,563
|
10.00
|
|||||||||||||
United
Bank & Trust Co.
|
15,528
|
12.29
|
10,111
|
8.00
|
12,639
|
10.00
|
|||||||||||||
Citizens
Bank of Northern Kentucky
|
17,017
|
10.40
|
13,089
|
8.00
|
16,362
|
10.00
|
|||||||||||||
Tier
1 Capital (to Average Assets)
|
|||||||||||||||||||
Consolidated
|
$
|
143,861
|
9.59
|
%
|
$
|
59,992
|
4.00
|
%
|
N/A
|
N/A
|
|||||||||
Farmers
Bank & Capital Trust Co.
|
38,022
|
6.55
|
23,216
|
4.00
|
$
|
29,020
|
5.00
|
%
|
|||||||||||
Farmers
Bank and Trust Company
|
22,316
|
7.62
|
11,715
|
4.00
|
14,644
|
5.00
|
|||||||||||||
Lawrenceburg
National Bank
|
12,112
|
7.22
|
6,711
|
4.00
|
8,388
|
5.00
|
|||||||||||||
First
Citizens Bank
|
14,323
|
7.44
|
7,702
|
4.00
|
9,627
|
5.00
|
|||||||||||||
United
Bank & Trust Co.
|
14,068
|
7.49
|
7,514
|
4.00
|
9,392
|
5.00
|
|||||||||||||
Citizens
Bank of Northern Kentucky
|
15,591
|
7.99
|
7,805
|
4.00
|
9,756
|
5.00
|
December
31,
|
2006
|
2005
|
|||||||||||
Carrying
|
Fair
|
Carrying
|
Fair
|
||||||||||
(In
thousands)
|
Amount
|
Value
|
Amount
|
Value
|
|||||||||
Assets
|
|||||||||||||
Cash
and cash equivalents
|
$
|
156,828
|
$
|
156,828
|
$
|
131,018
|
$
|
131,018
|
|||||
Investment
securities:
|
|||||||||||||
Available
for sale
|
326,485
|
326,485
|
315,067
|
315,067
|
|||||||||
Held
to maturity
|
7,788
|
7,849
|
13,610
|
13,814
|
|||||||||
Loans,
net
|
1,185,837
|
1,161,656
|
951,502
|
938,816
|
|||||||||
Accrued
interest receivable
|
11,735
|
11,735
|
8,285
|
8,285
|
|||||||||
Liabilities
|
|||||||||||||
Deposits
|
1,454,820
|
1,452,129
|
1,191,651
|
1,189,528
|
|||||||||
Federal
funds purchased and securities sold under agreements to
repurchase
|
67,941
|
67,941
|
71,336
|
71,336
|
|||||||||
FHLB
and other borrowings
|
70,995
|
79,796
|
50,296
|
57,381
|
|||||||||
Subordinated
notes payable to unconsolidated trusts
|
25,774
|
25,774
|
25,774
|
25,774
|
|||||||||
Accrued
interest payable
|
4,773
|
4,773
|
2,179
|
2,179
|
19.
|
Parent
Company Financial
Statements
|
December
31, (In thousands)
|
2006
|
2005
|
|||||
Assets
|
|||||||
Cash
on deposit with subsidiaries
|
$
|
11,103
|
$
|
32,121
|
|||
Investment
in subsidiaries
|
192,459
|
165,091
|
|||||
Net
assets of discontinued operations
|
840
|
||||||
Other
assets
|
11,610
|
8,482
|
|||||
Total
assets
|
$
|
215,172
|
$
|
206,534
|
|||
Liabilities
|
|||||||
Dividends
payable
|
$
|
3,472
|
$
|
2,244
|
|||
Subordinated
notes payable to unconsolidated trusts
|
25,774
|
25,774
|
|||||
Accrued
purchase price-Citizens Bancorp, Inc.
|
21,846
|
||||||
Other
liabilities
|
7,485
|
2,434
|
|||||
Total
liabilities
|
36,731
|
52,298
|
|||||
Shareholders’
Equity
|
|||||||
Common
stock
|
1,174
|
1,107
|
|||||
Capital
surplus
|
56,679
|
39,829
|
|||||
Retained
earnings
|
167,387
|
156,796
|
|||||
Treasury
stock
|
(42,399
|
)
|
(41,579
|
)
|
|||
Accumulated
other comprehensive loss
|
(4,400
|
)
|
(1,917
|
)
|
|||
Total
shareholders’ equity
|
178,441
|
154,236
|
|||||
Total
liabilities and shareholders’ equity
|
$
|
215,172
|
$
|
206,534
|
Years
Ended December 31, (In thousands)
|
2006
|
2005
|
2004
|
|||||||
Income
|
||||||||||
Dividends
from subsidiaries
|
$
|
9,086
|
$
|
7,490
|
$
|
8,457
|
||||
Interest
income
|
74
|
85
|
80
|
|||||||
Other
dividend income
|
24
|
|||||||||
Investment
securities gains, net
|
250
|
|||||||||
Gain
on sale of discontinued operations
|
9,442
|
|||||||||
Other
noninterest income
|
2,732
|
2,110
|
2,003
|
|||||||
Total
income
|
21,334
|
9,685
|
10,814
|
|||||||
Expense
|
||||||||||
Interest
expense-subordinated notes payable to unconsolidated
trusts
|
1,747
|
623
|
||||||||
Interest
expense on other borrowed funds
|
186
|
|||||||||
Noninterest
expense
|
4,021
|
3,290
|
3,417
|
|||||||
Total
expense
|
5,954
|
3,913
|
3,417
|
|||||||
Income
before income tax benefit and equity in undistributed income of
subsidiaries
|
15,380
|
5,772
|
7,397
|
|||||||
Income
tax expense (benefit)
|
2,321
|
(772
|
)
|
(608
|
)
|
|||||
Income
before equity in undistributed income of subsidiaries
|
13,059
|
6,544
|
8,005
|
|||||||
Equity
in undistributed income of subsidiaries1
|
8,313
|
9,228
|
5,387
|
|||||||
Net
income
|
$
|
21,372
|
$
|
15,772
|
$
|
13,392
|
Years
Ended December 31, (In thousands)
|
2006
|
2005
|
2004
|
|||||||
Cash
Flows From Operating Activities
|
||||||||||
Net
income
|
$
|
21,372
|
$
|
15,772
|
$
|
13,392
|
||||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||||
Gain
on sale of discontinued operations
|
(9,442
|
)
|
||||||||
Equity
in undistributed income of subsidiaries
|
(8,313
|
)
|
(9,228
|
)
|
(5,387
|
)
|
||||
Noncash
stock option expense
|
52
|
39
|
||||||||
Gain
on sale of available for sale investment securities
|
(250
|
)
|
||||||||
Change
in other assets and liabilities, net
|
3,925
|
(793
|
)
|
691
|
||||||
Deferred
income tax (benefit) expense
|
(742
|
)
|
8
|
(512
|
)
|
|||||
Net
cash provided by operating activities
|
6,852
|
5,759
|
7,973
|
|||||||
Cash
Flows From Investing Activities
|
||||||||||
Proceeds
from sale of available for sale investment securities
|
925
|
|||||||||
Proceeds
from disposal of discontinued operations
|
19,875
|
|||||||||
Investment
in unconsolidated trusts
|
(774
|
)
|
||||||||
Investment
in nonbank subsidiaries
|
(285
|
)
|
(1,600
|
)
|
||||||
Investment
in bank subsidiary
|
(629
|
)
|
(581
|
)
|
(4,000
|
)
|
||||
Payment
of prior year accrued purchase price-Citizens Bancorp,
Inc.
|
(21,846
|
)
|
||||||||
Purchase
of Citizens National Bancshares, Inc.
|
(15,041
|
)
|
||||||||
Purchase
of Citizens Bank (Kentucky), Inc.
|
(29
|
)
|
(2
|
)
|
(14,588
|
)
|
||||
Purchase
of company-owned life insurance
|
(1,579
|
)
|
||||||||
Net
cash used in investing activities
|
(19,249
|
)
|
(1,642
|
)
|
(19,263
|
)
|
||||
Cash
Flows From Financing Activities
|
||||||||||
Proceeds
from short-term borrowings
|
15,000
|
|||||||||
Repayment
of short-term borrowings
|
(15,000
|
)
|
||||||||
Dividends
paid
|
(9,553
|
)
|
(8,949
|
)
|
(8,879
|
)
|
||||
Purchase
of common stock
|
(820
|
)
|
(571
|
)
|
(178
|
)
|
||||
Shares
issued under Employee Stock Purchase Plan
|
223
|
187
|
93
|
|||||||
Stock
options exercised
|
1,529
|
771
|
1,755
|
|||||||
Proceeds
from long-term debt issued to unconsolidated trusts
|
25,774
|
|||||||||
Net
cash (used in) provided by financing activities
|
(8,621
|
)
|
17,212
|
(7,209
|
)
|
|||||
Net
(decrease) increase in cash and cash equivalents
|
(21,018
|
)
|
21,329
|
(18,499
|
)
|
|||||
Cash
and cash equivalents at beginning of year
|
32,121
|
10,792
|
29,291
|
|||||||
Cash
and cash equivalents at end of year
|
$
|
11,103
|
$
|
32,121
|
$
|
10,792
|
20.
|
Quarterly
Financial Data (Unaudited)
|
(In
thousands, except per share data)
|
|||||||||||||
Quarters
Ended 2006
|
March
31
|
June
30
|
Sept.
30
|
Dec.
31
|
|||||||||
Interest
income
|
$
|
20,883
|
$
|
21,669
|
$
|
22,835
|
$
|
26,953
|
|||||
Interest
expense
|
8,567
|
9,427
|
10,447
|
12,991
|
|||||||||
Net
interest income
|
12,316
|
12,242
|
12,388
|
13,962
|
|||||||||
Provision
for loan losses
|
(34
|
)
|
(46
|
)
|
253
|
792
|
|||||||
Net
interest income after provision for loan losses
|
12,350
|
12,288
|
12,135
|
13,170
|
|||||||||
Noninterest
income
|
5,056
|
4,991
|
5,015
|
5,397
|
|||||||||
Noninterest
expense
|
12,507
|
12,434
|
12,901
|
15,535
|
|||||||||
Income
from continuing operations before income taxes
|
4,899
|
4,845
|
4,249
|
3,032
|
|||||||||
Income
tax expense from continuing operations
|
910
|
967
|
966
|
517
|
|||||||||
Income
from continuing operations
|
3,989
|
3,878
|
3,283
|
2,515
|
|||||||||
Income
from discontinued operations before income taxes1
|
567
|
599
|
713
|
9,963
|
|||||||||
Income
tax expense from discontinued operations2
|
165
|
171
|
250
|
3,549
|
|||||||||
Income
from discontinued operations
|
402
|
428
|
463
|
6,414
|
|||||||||
Net
income
|
$
|
4,391
|
$
|
4,306
|
$
|
3,746
|
$
|
8,929
|
|||||
Income
from continuing operations - basic and diluted
|
$
|
.54
|
$
|
.52
|
$
|
.45
|
$
|
.32
|
|||||
Income
from discontinued operations - basic and diluted
|
.05
|
.06
|
.06
|
.81
|
|||||||||
Net
income per common share, basic and diluted
|
.59
|
.58
|
.51
|
1.13
|
|||||||||
Weighted
average shares outstanding, basic
|
7,385
|
7,378
|
7,393
|
7,884
|
|||||||||
Weighted
average shares outstanding, diluted
|
7,413
|
7,400
|
7,412
|
7,904
|
(In
thousands, except per share data)
|
|||||||||||||
Quarters
Ended 2005
|
March
31
|
June
30
|
Sept.
30
|
Dec.
31
|
|||||||||
Interest
income
|
$
|
15,127
|
$
|
15,722
|
$
|
16,369
|
$
|
18,433
|
|||||
Interest
expense
|
5,237
|
5,616
|
6,260
|
7,296
|
|||||||||
Net
interest income
|
9,890
|
10,106
|
10,109
|
11,137
|
|||||||||
Provision
for loan losses
|
(12
|
)
|
31
|
348
|
255
|
||||||||
Net
interest income after provision for loan losses
|
9,902
|
10,075
|
9,761
|
10,882
|
|||||||||
Noninterest
income
|
5,362
|
4,984
|
4,852
|
4,669
|
|||||||||
Noninterest
expense
|
10,547
|
10,372
|
10,503
|
10,742
|
|||||||||
Income
from continuing operations before income taxes
|
4,717
|
4,687
|
4,110
|
4,809
|
|||||||||
Income
tax expense from continuing operations
|
992
|
1,131
|
699
|
969
|
|||||||||
Income
from continuing operations
|
3,725
|
3,556
|
3,411
|
3,840
|
|||||||||
Income
from discontinued operations before income taxes
|
448
|
440
|
656
|
179
|
|||||||||
Income
tax expense from discontinued operations
|
117
|
108
|
214
|
44
|
|||||||||
Income
from discontinued operations
|
331
|
332
|
442
|
135
|
|||||||||
Net
income
|
$
|
4,056
|
$
|
3,888
|
$
|
3,853
|
$
|
3,975
|
|||||
Income
from continuing operations - basic
|
$
|
.55
|
$
|
.52
|
$
|
.51
|
$
|
.55
|
|||||
Income
from discontinued operations - basic
|
.05
|
.05
|
.06
|
.02
|
|||||||||
Net
income per common share, basic
|
.60
|
.57
|
.57
|
.57
|
|||||||||
Income
from continuing operations - diluted
|
.54
|
.52
|
.50
|
.55
|
|||||||||
Income
from discontinued operations - diluted
|
.05
|
.05
|
.06
|
.02
|
|||||||||
Net
income per common share, diluted
|
.59
|
.57
|
.56
|
.57
|
|||||||||
Weighted
average shares outstanding, basic
|
6,791
|
6,781
|
6,786
|
6,963
|
|||||||||
Weighted
average shares outstanding, diluted
|
6,839
|
6,818
|
6,821
|
6,991
|
21.
|
Business
Combination - Citizens National Bancshares,
Inc.
|
(In
thousands)
|
October
1, 2006
|
|||
Assets
|
||||
Cash
and equivalents
|
$
|
16,307
|
||
Investment
securities
|
13,391
|
|||
Loans,
net of unearned income and allowance for loan losses
|
119,659
|
|||
Premises
and equipment, net
|
3,424
|
|||
Goodwill
|
14,570
|
|||
Core
deposit intangible
|
4,524
|
|||
Other
assets
|
4,407
|
|||
Total
assets
|
$
|
176,282
|
||
Liabilities
|
||||
Deposits
|
$
|
139,441
|
||
Short-term
borrowings
|
2,880
|
|||
Other
liabilities
|
3,724
|
|||
Total
liabilities
|
146,045
|
|||
Net
Assets Acquired
|
$
|
30,237
|
||
22.
|
Goodwill
and Intangible Assets
|
(In
thousands)
|
2006
|
2005
|
|||||
Beginning
of year
|
$
|
28,437
|
$
|
7,509
|
|||
Purchase
price refinements of prior years’ acquisitions
|
211
|
206
|
|||||
Acquired
goodwill
|
14,174
|
20,722
|
|||||
End
of year
|
$
|
42,822
|
$
|
28,437
|
2006
|
2005
|
||||||||||||
Amortized
Intangible Assets
(In
thousands)
|
Gross
Amount
|
Accumulated
Amortization
|
Gross
Amount
|
Accumulated
Amortization
|
|||||||||
Core
deposit intangibles
|
$
|
10,890
|
$
|
2,541
|
$
|
6,112
|
$
|
634
|
|||||
Other
customer relationship intangibles
|
2,414
|
1,008
|
2,414
|
621
|
|||||||||
Total
|
$
|
13,304
|
$
|
3,549
|
$
|
8,526
|
$
|
1,255
|
(In
thousands)
|
Amount
|
|||
2007
|
$
|
2,475
|
||
2008
|
1,880
|
|||
2009
|
1,425
|
|||
2010
|
1,070
|
|||
2011
|
899
|
·
|
the
amount (including estimated potential amounts), net of tax, that
could
have been accrued for the PTO policy represents only approximately
5.0% of
our 2006 net income;
|
·
|
the
under-accrual in question is an isolated event in our accounting
history;
and
|
·
|
the
amount required under GAAP in 2006 for the PTO policy is not
representative of the cost that will be accrued in future periods.
Due to
the facts that (i) upon adoption of the new PTO policy each of
our
employees was granted a start-up PTO balance of between one to
two weeks
and (ii) our employees in future periods will not be able to accumulate
PTO days as quickly as was the case in 2006 due to the Carry Over
Limitation, we anticipate that the level of accrual required for
our PTO
policy in future periods will not require a substantial increase
beyond
the amount that has been accrued and reflected in our year end
financial
statements.
|
·
|
Revise
our procedures related to internal control over financial reporting
with
respect to any complex or non-routine change (including changes
in
compensation policies) to require the Chief Financial Officer or
other
senior financial reporting employee to document in writing the
results of
their evaluation of potential accounting changes and financial
reporting
changes that would occur from such complex or non-routine change.
|
·
|
Implement
a monitoring system for the differences between drafts and final
documentation relating to complex or non-routine changes to evaluate
whether the accounting and financial reporting requirements have
changed.
|
·
|
Increase
communication by and among our senior management and financial
reporting
employees and other third parties relevant to the disclosure
process.
|
·
|
Retain
our procedures of ensuring that our Chief Financial Officer be
made aware
of and involved in any complex or non-routine contemplated change
so that
any potential tax, accounting and financial reporting issues may
be
evaluated.
|
·
|
Retain
our procedure of encouraging our Chief Financial Officer and other
senior
financial reporting employees to contact outside financial experts
and
consultants, if deemed advisable, to discuss potential tax, accounting
and/or financial reporting issues regarding a complex or non-routine
contemplated change.
|
·
|
Pertain
to the maintenance of records that in reasonable detail accurately
and
fairly reflect the transactions and dispositions of Company
assets;
|
·
|
Provide
reasonable assurance that transactions are recorded as necessary
to permit
preparation of financial statements in accordance with generally
accepted
accounting principles, and that Company’s receipts and expenditures are
being made only in accordance with the authorization of Company’s
management and members of the Company’s Board of Directors;
and
|
·
|
Provide
reasonable assurance regarding prevention or timely detection of
unauthorized acquisitions, uses or dispositions of Company assets
that
could have a material effect on the Company’s financial
statements.
|
Positions
and
|
Years
of Service
|
||
Offices
With
|
With
the
|
||
Executive
Officer1
|
Age
|
the
Registrant
|
Registrant
|
G.
Anthony Busseni
|
58
|
President
and CEO, Director2
|
22*
|
Allison
B. Gordon
|
43
|
Senior
Vice President3
|
20*
|
*
|
Includes
years of service with the Company and its
subsidiaries.
|
1
|
For
Regulation O purposes, Frank W. Sower, Jr., Chairman of the Company’s
board of directors, is considered an executive officer in name
only.
|
2
|
Also
a director of Farmers Bank, Citizens Jessamine, Farmers Georgetown,
United
Bank, Lawrenceburg Bank, First Citizens Bank, Citizens Northern,
FCB
Services, Farmers Insurance (Chairman), Leasing One (Chairman),
Kentucky
General (Chairman), Pro Mortgage, FFKT Insurance, Kentucky Home
Life
Insurance Company, Citizens Acquisition, and an administrative
trustee of
Farmers Capital Bank Trust I and Farmers Capital Bank Trust
II.
|
3
|
Also
a director of Farmers Bank, Farmers Georgetown, FCB Services, and
an
administrative trustee of Farmers Capital Bank Trust I and Farmers
Capital
Bank Trust II.
|
(a)1.
|
(a)2.
|
Financial
Statement Schedules
|
(a)3.
|
Exhibits:
|
3.1
|
Amended
and Restated Articles of Incorporation of the Registrant (incorporated
by
reference to Quarterly Report on Form 10-Q for the quarterly period
ended
June 30, 2006).
|
3.2
|
Amended
and Restated Bylaws of the Registrant (incorporated by reference
to Annual
Report of Form 10-K for the fiscal year ended December 31,
1997).
|
3.3
|
Amendments
to Bylaws of the Registrant (incorporated by reference to Quarterly
Report
of Form 10-Q for the quarterly period ended March 31,
2003).
|
4
|
Articles
of Incorporation and Bylaws of the Registrant (incorporated by
reference
to Quarterly Report on Form 10-Q for the quarterly period ended
June 30,
2006, the Annual Report on Form 10-K for the fiscal year ended
December
31, 1997, and the Quarterly Report on Form 10-Q for the quarterly
period
ended March 31, 2003).
|
FARMERS
CAPITAL BANK CORPORATION
|
|||
By:
|
/s/ G. Anthony Busseni | ||
G.
Anthony Busseni
|
|||
President
and Chief Executive Officer
|
|||
Date:
|
March 6, 2007 |
/s/ G. Anthony Busseni |
President,
Chief Executive Officer
|
March 6, 2007 |
G.
Anthony Busseni
|
and
Director (principal executive
|
|
officer
of the Registrant)
|
||
/s/ Frank W. Sower, Jr. |
Chairman
|
3-6-07 |
Frank
W. Sower, Jr.
|
||
/s/ Frank R. Hamilton, Jr. |
Director
|
3-7-07 |
Frank
R. Hamilton, Jr.
|
||
/s/ Lloyd C. Hillard, Jr. |
Director
|
3-5-07 |
Lloyd
C. Hillard, Jr.
|
||
/s/ Cecil D. Bell, Jr. |
Director
|
3-2-07 |
Cecil
D. Bell, Jr.
|
||
/s/ Shelley Sweeney |
Director
|
3-9-07 |
Shelley
S. Sweeney
|
||
/s/ Donald J. Mullineaux |
Director
|
3/6/07 |
Dr.
Donald J. Mullineaux
|
||
/s/ Harold G Mays |
Director
|
3-3-07 |
Harold
G. Mays
|
||
/s/ J.D. Sutterlin |
Director
|
3/2/07 |
Dr.
John D. Sutterlin
|
||
/s/ Michael M. Sullivan |
Director
|
March 5, 2007 |
Michael
M. Sullivan
|
||
/s/ J. Barry Banker |
Director
|
3-5-07 |
J.
Barry Banker
|
||
/s/ Robert Roach Jr. |
Director
|
March 6, 2007 |
Robert
Roach, Jr.
|
||
/s/ Doug Carpenter |
Senior
Vice President, Secretary
|
3-6-07 |
C.
Douglas Carpenter
|
and
CFO (principal financial and
|
|
accounting
officer)
|
Exhibit
|
Page
|
|
21
|
84
|
|
23
|
86
|
|
31.1
|
87
|
|
31.2
|
88
|
|
32
|
89
|