Farmers Capital Bank Corp. (FFKT, Financial) filed Quarterly Report for the period ended 2010-06-30.
Farmers Capital Bank Corp. has a market cap of $40.6 million; its shares were traded at around $5.51 with a P/E ratio of 19 and P/S ratio of 0.3.
Total interest income was $23.5 million in the second quarter of 2010, a decrease of $2.0 million or 7.9% and was driven by lower interest income on loans of $1.4 million or 7.3%. The average rate earned on loans was 5.8% in the current quarter, down 12 basis points from 6.0% a year earlier. Similar declines were experienced in other earning asset categories, most notably related to investment securities. Interest on taxable investment securities decreased $374 thousand or 7.4% due mainly to a 71 basis point lower average rate earned to 4.0% from 4.7% that was partially offset by a higher average outstanding balance of $37.8 million or 8.8%. Interest on nontaxable investment securities decreased $199 thousand or 21.0% in the comparison. The decrease in interest on nontaxable investment securities was due more to a lower average balance outstanding of $16.6 million or 16.2% and, to a lesser extent, a decrease in the average rate earned of 26 basis points to 5.1% from 5.4%.
Total interest expense was $9.2 million in the current quarter. This represents a decrease of $2.9 million or 23.8% compared to $12.1 million a year ago. The decrease in interest expense was driven by lower interest expense on deposits of $2.6 million or 30.1%. As discussed above, the Company has strategically reduced many of its higher-rate deposit balances in an effort to improve net interest margin, overall profitability, and capital position. The average rate paid on interest bearing deposit accounts was 1.75% in the current period, a decrease of 69 basis points compared to 2.44% a year earlier. Interest expense on time deposits, the largest component of interest expense, declined $2.4 million or 30.7% in the quarterly comparison and is the greatest factor for the decrease in interest expense on deposit accounts. Interest expense on long-term borrowings decreased $258 thousand or 7.6% and was mainly driven by a lower average balance outstanding resulting from principal repayments.
The net interest margin on a taxable equivalent basis increased 27 basis points to 3.12% for the second quarter of 2010 compared to 2.85% in the same quarter of 2009. The increase in net interest margin is attributed to a 30 basis point increase in the spread between the average rate earned on earning assets and the average rate paid on interest bearing liabilities to 2.91% in the current quarter from 2.61% in the same quarter of 2009. The increase in net interest margin was three basis points lower than the increase in net interest spread due the impact of noninterest bearing sources of funds. The impact of noninterest bearing sources of funds on the Company s net interest margin has decreased in the quarterly comparison due mainly to the overall lower average costs of funds. The Company expects its net interest margin to remain relatively flat or trend up slightly in the near term according to internal modeling using expectations about future market interest rates, the maturity structure of the Company s earning assets and liabilities, and other factors. Future results could be significantly different than expectations.
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Farmers Capital Bank Corp. has a market cap of $40.6 million; its shares were traded at around $5.51 with a P/E ratio of 19 and P/S ratio of 0.3.
Highlight of Business Operations:
Net interest income was $14.3 million for the three months ended June 30, 2010, an increase of $874 thousand or 6.5% from $13.4 million in the same period a year earlier. The increase in net interest income is attributed mainly to a $2.6 million or 30.1% decrease in interest expense on deposits that was partially offset by a $1.4 million or 7.3% decrease in interest and fee income on loans. The decrease in interest expense on deposits was driven mainly by an overall decline in the average rate paid and, to a lesser extent, a lower average outstanding balance related to time deposits. The decrease in interest and fee income on loans is attributed mainly to a lower average outstanding balance with a lower overall average rate earned also contributing. Rate declines were driven mainly by a combination of continuing weak economic conditions in the Company s markets as well as the Company s overall strategy to reduce many of its higher-rate deposit balances to improve net interest margin, overall profitability, and capital position.Total interest income was $23.5 million in the second quarter of 2010, a decrease of $2.0 million or 7.9% and was driven by lower interest income on loans of $1.4 million or 7.3%. The average rate earned on loans was 5.8% in the current quarter, down 12 basis points from 6.0% a year earlier. Similar declines were experienced in other earning asset categories, most notably related to investment securities. Interest on taxable investment securities decreased $374 thousand or 7.4% due mainly to a 71 basis point lower average rate earned to 4.0% from 4.7% that was partially offset by a higher average outstanding balance of $37.8 million or 8.8%. Interest on nontaxable investment securities decreased $199 thousand or 21.0% in the comparison. The decrease in interest on nontaxable investment securities was due more to a lower average balance outstanding of $16.6 million or 16.2% and, to a lesser extent, a decrease in the average rate earned of 26 basis points to 5.1% from 5.4%.
Total interest expense was $9.2 million in the current quarter. This represents a decrease of $2.9 million or 23.8% compared to $12.1 million a year ago. The decrease in interest expense was driven by lower interest expense on deposits of $2.6 million or 30.1%. As discussed above, the Company has strategically reduced many of its higher-rate deposit balances in an effort to improve net interest margin, overall profitability, and capital position. The average rate paid on interest bearing deposit accounts was 1.75% in the current period, a decrease of 69 basis points compared to 2.44% a year earlier. Interest expense on time deposits, the largest component of interest expense, declined $2.4 million or 30.7% in the quarterly comparison and is the greatest factor for the decrease in interest expense on deposit accounts. Interest expense on long-term borrowings decreased $258 thousand or 7.6% and was mainly driven by a lower average balance outstanding resulting from principal repayments.
The net interest margin on a taxable equivalent basis increased 27 basis points to 3.12% for the second quarter of 2010 compared to 2.85% in the same quarter of 2009. The increase in net interest margin is attributed to a 30 basis point increase in the spread between the average rate earned on earning assets and the average rate paid on interest bearing liabilities to 2.91% in the current quarter from 2.61% in the same quarter of 2009. The increase in net interest margin was three basis points lower than the increase in net interest spread due the impact of noninterest bearing sources of funds. The impact of noninterest bearing sources of funds on the Company s net interest margin has decreased in the quarterly comparison due mainly to the overall lower average costs of funds. The Company expects its net interest margin to remain relatively flat or trend up slightly in the near term according to internal modeling using expectations about future market interest rates, the maturity structure of the Company s earning assets and liabilities, and other factors. Future results could be significantly different than expectations.
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