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Section 1: 8-K (8-K)

ktyb_Current folio_8K_ER

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 


 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported):  April 30, 2019

 

KENTUCKY BANCSHARES, INC.

(Exact Name of Registrant as specified in Charter)

 

 

 

 

 

 

Kentucky

    

000-52598

    

61-0993464

(State or other

 

(Commission

 

(IRS Employer

jurisdiction of incorporation)

 

File Number)

 

Identification No.)

 

 

 

 

 

 

P.O. Box 157, Paris, Kentucky
(Address of principal executive offices)

40362-0157
(Zip code)

 

(859)987-1795

(Registrant's telephone number, including area code)

 

N/A

(Former name or former address, if changed since last report.)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐  Written communications pursuant to Rule 425 under the Securities Act (17CFR230.425)

 

☐  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

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

 

Emerging growth company

 

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

 

 


 

INFORMATION TO BE INCLUDED IN THE REPORT

 

Item 2.02. Results of Operations and Financial Condition

 

The Registrant expects to mail to its shareholders the Registrant's quarterly financial information for the first quarter of 2019 on or about May 15, 2019.  A copy of this mailing is attached as Exhibit 99.1.

 

The information in this Form 8-K and Exhibit 99.1 attached hereto shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference.

 

Item 9.01. Financial Statements and Exhibits

 

Exhibit 99.1 - Release dated April 30, 2019 of quarterly financial information as of March 31, 2019.

 

2


 

Forward-Looking Statements

 

Except for historical information contained herein, the discussion in this Report may include certain forward looking statements based upon management expectations.  Actual results and experience could differ materially from the anticipated results or other expectations expressed in the forward-looking statements.  Factors which could cause future results to differ from these expectations include the following:  change in economic conditions in the markets we serve; changes in laws or regulatory enforcement; monetary and fiscal policies of the federal government; changes in  interest rates; demand for financial services; the impact of our continuing growth strategy; and other factors, including various “risk factors” set forth in our most recent annual report on Form 10-K and in other reports we file from time to time with the Securities and Exchange Commission.  Our annual report on Form 10-K and these other reports are available publicly on the SEC website, www.sec.gov, and on the Company's website, www.kybank.com.

 

3


 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

April

 

 

 

 

    

KENTUCKY BANCSHARES, INC.

 

 

 

 

 

 

Date: April 30, 2019

 

By

/s/ Gregory J. Dawson

 

 

 

Gregory J. Dawson

 

 

 

Chief Financial Officer

 

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Section 2: EX-99.1 (EX-99.1)

ktyb_Ex99_1

Exhibit 99.1

 

April 30, 2019

 

Earnings Report – March 31, 2019

 

Dear Shareholders:

 

We are pleased to announce first quarter earnings for your company. Year-to-date net income was $2.8 million for the period ending March 31, 2019 compared to $3.1 million for the period ending March 31, 2018. Year-to-date diluted earnings per share was $0.47 and $0.53, for March 31, 2019 and 2018, respectively. Total assets were $1.09 billion as of March 31, 2019 compared to $1.04 billion as of March 31, 2018.

 

The change in year-to-date net income from prior year was driven by the following factors: an increase in net interest income primarily due to higher average loan balances offset by higher provision expense due to loan growth, and higher non-interest expense due to increases in compensation expense and processing expense. Also, in the first quarter of 2018, we recorded a recovery of $359 thousand on a previously charged off loan. Absent the one-time non-recurring recovery in 2018, net income would have essentially been flat in the first quarter of 2019 compared to 2018.

 

On March 26, Governor Bevin signed House Bill 354 into law which, among other things, repealed the bank franchise tax structure in Kentucky. The franchise tax structure will be replaced with the state-wide corporate income tax structure starting in 2021. This change will lower our overall relative tax expense. We intend to deploy those future tax savings toward continued growth.

 

Some of our recent and upcoming growth efforts include the following:

·

We launched our online mortgage application in February of 2019 and anticipate launching our improved deposit application in the very near future. These two services expand our ever growing list of digital offerings. 

·

We are increasing our customer service availability by constructing a new branch in Lexington on the corner of Man-O-War Boulevard and Polo Club Boulevard. We believe this location to be a key position given its proximity to new households and an ever expanding retail district. We anticipate the new branch to be open by the end of 2019 or early 2020.

 

We are pleased with core earnings in the first quarter of 2019 and remain optimistic about the rest of the year. However, we recognize there are increasing global economic weaknesses continuing to develop, as well as ongoing geopolitical issues which could negatively impact growth rates for the country, state, and ultimately the communities in which we operate. We will continue to focus on meeting our customers’ loan demand needs while paying attention to those uncertainties which may lead to an accelerated economic contraction. At the same time, we will continue to pursue opportunities for profitable growth, strategic expansion, and improved efficiency to accomplish what is in the long term best interest of our shareholders, customers, and employees. As always, thank you for your continued support.

 

 

 

 

/s/Louis Prichard

 

Louis Prichard

 

President, CEO

 

 


 

UNAUDITED

CONSOLIDATED BALANCE SHEET

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Percentage

 

 

    

3/31/2019

    

3/31/2018

    

Change

 

 

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

Cash & Due From Banks

 

$

37,676

 

$

23,519

 

60.2

%

Federal Funds Sold

 

 

230

 

 

3,266

 

(93.0) 

 

Interest Bearing Time Deposits

 

 

2,175

 

 

1,785

 

21.8

 

Securities

 

 

297,969

 

 

305,998

 

(2.6) 

 

Loans Held for Sale

 

 

1,282

 

 

1,221

 

5.0

 

Loans

 

 

687,484

 

 

649,845

 

5.8

 

Reserve for Loan Losses

 

 

7,882

 

 

7,905

 

(0.3) 

 

Net Loans

 

 

679,602

 

 

641,940

 

5.9

 

Bank Owned Life Insurance

 

 

10,282

 

 

10,007

 

      2.7

 

Other Assets

 

 

57,757

 

 

53,400

 

8.2

 

Total Assets

 

$

1,086,973

 

$

1,041,136

 

4.4

%

 

 

 

 

 

 

 

 

 

 

Liabilities & Stockholders' Equity

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

Demand

 

$

241,400

 

$

230,692

 

4.6

%

Savings & Interest Checking

 

 

417,701

 

 

411,221

 

1.6

 

Certificates of Deposit

 

 

185,037

 

 

174,829

 

5.8

 

Total Deposits

 

 

844,138

 

 

816,742

 

3.4

 

Repurchase Agreements

 

 

6,604

 

 

12,233

 

(46.0) 

 

Other Borrowed Funds

 

 

111,556

 

 

107,013

 

4.2

 

Other Liabilities

 

 

12,966

 

 

5,882

 

120.4

 

Total Liabilities

 

 

975,264

 

 

941,870

 

3.5

 

Stockholders' Equity

 

 

111,709

 

 

99,266

 

12.5

 

Total Liabilities & Stockholders' Equity

 

$

1,086,973

 

$

1,041,136

 

4.4

%

 


 

CONSOLIDATED INCOME STATEMENT

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ending

 

 

    

 

    

 

    

Percentage

    

 

 

3/31/2019

 

3/31/2018

 

Change

 

Interest Income

 

$

11,179

 

$

10,220

 

9.4

%  

Interest Expense

 

 

2,240

 

 

1,426

 

57.1

 

Net Interest Income

 

 

8,939

 

 

8,794

 

1.6

 

Loan Loss Provision

 

 

125

 

 

 —

 

n/m

 

Net Interest Income After Provision

 

 

8,814

 

 

8,794

 

0.2

 

Other Income

 

 

3,000

 

 

3,051

 

(1.7) 

 

Other Expenses

 

 

8,765

 

 

8,290

 

5.7

 

Income Before Taxes

 

 

3,049

 

 

3,555

 

(14.2) 

 

Income Taxes

 

 

238

 

 

407

 

(41.5) 

 

Net Income

 

$

2,811

 

$

3,148

 

(10.7) 

%  

Net Change in Unrealized Gain (Loss) on Securities

 

 

2,769

 

 

(3,397)

 

181.5

 

Comprehensive Income (Loss)

 

$

5,580

 

$

(249)

 

2341.0

%  

 

 

 

 

 

 

 

 

 

 

Selected Ratios

 

 

 

 

 

 

 

 

 

Return on Average Assets

 

 

1.04

%  

 

1.20

%  

 

 

Return on Average Equity

 

 

10.39

 

 

12.73

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings Per Share

 

$

0.47

 

$

0.53

 

 

 

Earnings Per Share - assuming dilution

 

 

0.47

 

 

0.53

 

 

 

Cash Dividends Per Share

 

 

0.170

 

 

0.155

 

 

 

Book Value Per Share

 

 

18.68

 

 

16.67

 

 

 

Tangible Book Value Per Share

 

 

16.30

 

 

14.24

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Market Price

    

High

    

Low

    

Close

 

First Quarter '19

 

$

24.50

 

$

22.70

 

$

24.05

 

Fourth Quarter '18

 

$

25.98

 

$

22.50

 

$

22.70

 

 


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