CKF Bancorp, Inc. Announces a Loss for the Three Months Ended September 30, 2008 Due to Impairment of an Investment in the Federal Home Loan Mortgage Corporation
DANVILLE, Ky., Oct 17, 2008 (BUSINESS WIRE) -- CKF Bancorp, Inc. (OTCBB:CKFB), parent company of Central Kentucky Federal Savings Bank, reported a consolidated net loss of $915,143 for the three months ended September 30, 2008 compared to a gain of $251,653 for the three months ended September 30, 2007. The diluted loss per share was $.72 for the three months ended September 30, 2008 compared to diluted earnings per share of $.19 for the three months ended September 30, 2007. The three months ended September 30, 2008 included a one-time after-tax loss of $1,050,124, or $.82 diluted loss per share, related to an other-than-temporary impairment of the subsidiary Bank's investment in common stock of the Federal Home Loan Mortgage Corporation, which during the quarter ended September 30, 2008 was placed in conservatorship by the federal government. The common stock was acquired by the subsidiary Bank as part of CKF Bancorp, Inc.'s acquisition, in 2001, of another savings and loan holding company located in the central Kentucky area. Due to required purchase accounting treatment of the acquisition, the stock's cost basis was the fair market value of the stock at the time of the acquisition, or $66.20 per share. The stock closed September 30, 2008 at a market value of $1.71 per share. Losses in value of the stock had previously been reported as a temporary impairment and, thus, had been reflected in CKF Bancorp, Inc.'s equity capital but had not previously impacted earnings. Without the one-time after-tax loss, CKF Bancorp, Inc. would have reported earnings for the three months ended September 30, 2008 of $134,981, or $.10 diluted earning per share.
The subsidiary Bank's core capital at September 30, 2008 was $12.8 million, which exceeds the regulatory requirement to be considered well-capitalized by $4.2 million.
CKF Bancorp, Inc.'s consolidated net losses for the nine months ending September 30, 2008 were $636,481 compared to net earnings of $772,159 for the nine months ended September 30, 2007. The diluted loss per share was $.50 for the nine months ended September 30, 2008 compared to diluted earnings per share of $.59 for the nine months ended September 30, 2007. The nine months ended September 30, 2008 included a one-time after-tax loss of $1,050,124, or $.82 diluted earnings per share, related to the aforementioned other-than-temporary impairment of the subsidiary Bank's investment in common stock of the Federal Home Loan Mortgage Corporation.
Total assets of CKF Bancorp, Inc. at September 30, 2008 were $144.8 million compared to $149.6 million at December 31, 2007. Loans receivable at September 30, 2008 were $123.8 million compared to $132.9 million at December 31, 2007. Deposits were $102.0 million at September 30, 2008 and were $106.9 million at December 31, 2007.
Central Kentucky Federal Savings Bank's main office is located at 340 W. Main Street, Danville, Kentucky. The Bank also operates two full service branch offices, located in Danville and Lancaster, Kentucky.
CKF BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
September 30, December 31,
ASSETS 2008 2007
Cash and cash equivalents $ 2,419,967 $ 2,557,206
Investment securities 11,949,654 7,496,935
Federal Home Loan Bank stock 2,091,000 2,009,600
Loans receivable 123,830,032 132,852,246
Allowance for Loan Losses (878,000 ) (977,372 )
Repossessed Real Estate 1,394,234 1,242,797
Other assets 4,019,449 4,389,795
Total assets $ 144,826,336 $ 149,571,207
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits $ 101,975,156 $ 106,937,871
Advances from the Federal Home Loan Bank 27,500,000 26,000,000
Other liabilities 882,548 971,231
Total liabilities 130,357,704 133,909,102
Shareholders' equity 14,468,632 15,662,105
Total liabilities and shareholders' equity $ 144,826,336 $ 149,571,207
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
Nine months ended Three months ended
September 30, September 30,
2008 2007 2008 2007
Total interest income $ 6,695,798 $ 7,655,601 $ 2,123,728 $ 2,537,622
Total interest expense 3,831,074 4,462,033 1,171,561 1,480,565
Net interest income 2,864,724 3,193,568 952,167 1,057,057
Provision for losses on loans 120,000 72,000 60,000 24,000
Net interest income after provision for losses on loans 2,744,724 3,121,568 892,167 1,033,057
Other income (1,423,573 ) 201,681 (1,516,732 ) 62,570
General, administrative and other expense 2,279,032 2,144,252 756,804 712,081
Earnings before income taxes (957,881 ) 1,178,997 (1,381,369 ) 383,546
Federal income taxes (321,400 ) 406,838 (466,226 ) 131,893
NET EARNINGS $ (636,481 ) $ 772,159 $ (915,143 ) $ 251,653
EARNINGS PER SHARE
Basic $ (0.50 ) $ 0.60 $ (0.72 ) $ 0.19
Diluted $ (0.50 ) $ 0.59 $ (0.72 ) $ 0.19
DIVIDENDS DECLARED PER SHARE $ 0.56 $ 0.72 $ 0.20 $ 0.36
WEIGHTED-AVERAGE SHARES OUTSTANDING
Basic 1,281,651 1,283,760 1,270,876 1,281,821
Diluted 1,286,284 1,295,553 1,274,968 1,293,870
SOURCE: CKF Bancorp, Inc.
CONTACT:
CKF Bancorp, Inc. Russell M. Brooks, 859-236-4181 Fax: 859-236-4363