Kentucky Bancshares, Inc. Annual Report 2014

Plain-text annual report

2014 THE ANNUAL REPORT From the Barn to the Winners Circle, Call Kentucky Bank Home! THE FINANCIAL HIGHLIGHTS ASSETS ($ THOUSANDS) NET INCOME ($ THOUSANDS) 2014 2013 2012 2011 2010 $855,209 $770,579 $701,010 $659,453 $658,943 $7,071 $5,822 $7,008 $5,687 $4,939 PER SHARE EARNINGS (ASSUMING DILUTION) PER SHARE DIVIDEND $2.60 $1.00 $2.15 $0.96 $2.59 $0.92 $2.09 $0.88 $1.81 $0.84 ANNUAL MEETING The annual meeting of Kentucky Bancshares, Inc. will be held Wednesday, May 27, 2015 at 11:00 a.m. in the Corporate Headquarters. INVESTOR INFORMATION Any individual requesting a copy of the Corporation’s 2014 Form 10-K Report may obtain these by visiting our website at www.kybank.com/investor or writing to Investor Relations at the Corporate Headquarters. ACQUIRING STOCK - KTYB Kentucky Bancshares, Inc. common stock is available through your broker or Kentucky Bank’s Wealth Management Department. INVESTOR RELATIONS For more information about your investment in Kentucky Bancshares, Inc., please visit www.kybank.com/investor. Here you will ﬁnd company highlights, dividend history, SEC ﬁlings, historical graphs, and other helpful information related to our company and your stock. In addition, you can sign up for email alerts of daily stock updates and public announcements. 21.5% 14.9% 6.1% 37.9% NET INCOME EARNINGS LOAN GROWTH DEPOSITS NEW MOBILE USERS TO OUR SHAREHOLDERS Inc. We are pleased to report Kentucky Bancshares, increased both earnings and assets to record levels. Net income and earnings per share increased by over 20% in 2014 compared to 2013. Dividends per share also increased from $0.96 in 2013 to $1.00 in 2014. Earnings growth drives share-price appreciation as well as dividend growth, so we are proud of these accomplishments light of the challenges associated with a still fragile economy, a prolonged low interest rate environment, and increasing costs associated with heavier regulatory burdens. in Total assets increased to $855 million as of December 31, 2014. During the past 24 months we have opened two branches - one in Lexington and one in Richmond. These branch openings, targeted marketing efforts, and a reﬁnement of and focus on our commitment to Premier Customer Service have all contributed to the growth of our total assets, loans, and deposits. The overall increase in total assets was led by an increase in total loans, which was funded by an increase in deposits and borrowed funds. Similar to 2013, borrowings increased in an effort to strategically lock in longer term funding at ﬁxed rates for anticipated growth and to minimize rate sensitivity in an increasing rate environment. One of our driving principles is to enhance shareholder value by disciplined growth on both sides of the balance sheet, resulting in stable asset quality, manageable interest rate risk, and sustainable earnings. We are pleased with the record results in 2014 and we are excited about the prospects for the future. The effort and resources invested in recent years in the development of our employees, branch expansion, product redesigns, and technology improvements have solidiﬁed our foundation and created a tremendous platform for the future. This platform includes a great team of bankers using a diverse suite of services including trust and wealth management, consumer banking, commercial lending, and corporate and cash management products, to meet the ﬁnancial needs and exceed the expectations of our customers. As we enter 2015, we will be working on the previously announced acquisition of Madison Bank which is anticipated to close in the second or third quarter and is subject to regulatory approval. This merger will bring additional branches to our franchise, and we are looking forward to expanding our presence in the growing Madison County market. Although we must address many challenges as we go team, appropriate risk management processes, and growing momentum; all of which position Kentucky Bancshares, Inc. to have another successful year in 2015. talented management forward, we have a As always, we appreciate your support. Louis Prichard, President and Chief Executive Officer 5 YEAR CUMULATIVE TOTAL RETURN COMPARISON* Kentucky Bancshares, Inc. Russell Microcap NASDAQ Bank *100 Invested on 12/31/09 in stock or index, including reinvestment of dividends. Fiscal year ending 12/31. $250 $200 $150 $100 $50 12/09 12/10 12/11 12/12 12/13 12/14 DOING WHAT This was a year of remarkable progress and accomplishment for Kentucky Bank. We demonstrated leadership through our ﬁnancial results, our pending acquisition of Madison Bank, and by sustaining and building new customer relationships across our markets. Kentucky Bank delivered exceptional operating performance and we are proud of the gains in ﬁnancial strength. We are conﬁdent that signiﬁcant opportunities exist for us as we enter 2015. add payroll funds to 169 Kentucky Bank customer accounts. We are very proud to have employees that unselﬁshly give their time and effort to assist other families. Our employee knew that since this was a check at the ﬁrst of the month, with a winter storm coming, employees would need their pay to buy necessities for their families. Caring for others is the driving force behind our Premier Customer Service commitment at Kentucky Bank. While customers can now access their accounts electronically from many platforms, we feel personal service is still very important. Our team goes far beyond what is expected, in order to deliver Premier Customer Service. As an example of this we would like to share a story that demonstrates our culture. On a snowy Friday night, just before 5 p.m. a large employer (that did not bank with Kentucky Bank) announced that they were having payroll problems and up to 6,000 of their employees might not receive their pay that evening. One of our employees spent the next few hours putting a plan into place that would help the employer and employees. Working with the employer and other Kentucky Bank personnel, she created notiﬁcations for the public of a special offer to help their employees. She received approval to extend a $200 cash advance (without interest) to employees, both customers and non-customers of Kentucky Bank. On Saturday morning, the payroll was still not available in the account. Our employee spent the next 3 hours working with the company to manually Last year, Kentucky Bank was pleased to become the title sponsor of the USTA Pro Circuit Tennis Championships in Lexington. The tournament was a huge success! Public participation in 2014 created the ﬁrst year that the attendance at the challenge doubled. Along with the challenger event, we held kids’ clinics in nearly all of our communities. The free kids’ clinics allow many children that may not otherwise have an opportunity to have a personal, professional tennis lesson. Throughout our history, Kentucky Bank has been committed to projects that support our communities and regions, and that is why we are so pleased to be able to help keep this tournament in Kentucky. We hope many of you will be able to visit us again this year during the Championships, July 26th through August 2nd. For the fourth year in a row, we have been recognized by the Kentucky Chamber of Commerce as one of the Best Places to Work in Kentucky. This is quite an achievement and a testament to our philosophy as a company and an employer. WE DO BEST Kentucky Bank has also earned a 5-Star rating from Bauer Financial, Inc., the nation’s leading independent banking rating ﬁrm. The 5-Star award recognizes Kentucky Bank’s continuous superior performance and strength. We support personal banking with innovative solutions that strive to keep pace with the latest in banking technology. Our goal is to give customers the choice of how they would like to access their bank in the most secure environment. The options in new technology continue to grow and improve. We are providing smartphone and iPad apps, mobile deposit, faster person-to-person (POP) payments, and more. In 2014, we began offering rewards points on our credit and debit cards. This makes us extremely competitive with any ﬁnancial provider. We have also begun the process of redesigning our website, which receives over one million visits per year, to reﬂect a responsive web design. In an effort to provide a more user-friendly atmosphere, we are striving to create a virtual branch that will not only enhance the mobile user’s experience but be just as informative for our current and prospective customers as before. We have just released an app called KY Bank Agent which is designed for Real Estate professionals. It is pre-loaded with area speciﬁc closing costs, tax rates, and monthly payments. The app generates buyer estimates and seller net sheets quickly and easily from any mobile device. Tools that we will release in 2015 will help increase security and reduce fraud. We also look forward to issuing EMV (chip) credit and debit cards and partnering with Apple Pay. EMV is named after its original developers (Europay, MasterCard® and Visa®) and the chip cards are becoming the global standard for bank cards. These cards are embedded with micro-computer chips that store and protect cardholder data. A cardholder's conﬁdential data is more secure on a chip-enabled payment card than on a magnetic strip card. With the new Apple Pay process, your payments are private. Instead of using your actual credit and debit card numbers, a unique device account number is assigned, encrypted, and securely stored in a dedicated chip in iPhone, iPad, and Apple Watch. These numbers are never stored on Apple servers. Thus, when you make a purchase, the device account number, along with a transaction-speciﬁc security code, is used to process your payment. Your actual credit or debit card numbers are never shared by Apple with merchants or transmitted with payment. We want to ensure that your banking is accessible, secure, and fun. This was a year marked by important progress for our clients. We achieved strong results and gained market share by seizing opportunities and delivering on our promises. Our passion for our business, our clients, and in driving results for our shareholders was clear. We will continue that dedication by delivering quality solutions, building lasting relationships, and generating results to drive shareholder value. BOARD OF DIRECTORS BUCKNER WOODFORD IV Chairman, Kentucky Bank, Kentucky Bancshares, Inc. LOUIS PRICHARD President and Chief Executive Officer Kentucky Bank, Kentucky Bancshares, Inc. B. PROCTOR CAUDILL, JR. Special Projects Manager, Kentucky Bank HENRY HINKLE President, Hinkle Contracting Company, LLC THEODORE KUSTER Chief Executive Officer, Hillside Farm/Shawhan Place, LLC BETTY J. LONG Retired President, First Federal Savings of Cynthiana TED MCCLAIN President, Hopewell Insurance Company EDWIN S. SAUNIER President, Saunier North American, Inc. ROBERT G. THOMPSON Farmer, Thoroughbred Breeder, Snowhill Farm DR. WOODFORD VAN METER Professor of Opthalmology, University of Kentucky REGIONAL DIRECTORS BOURBON PROCTOR W. BLAIR Partner, Ludwig, Blair & Bush, PLLC LONNIE CONLEY Co-Owner, Paris Machining ALLYSON EADS Co-Owner, Eads Hardware RODES SHACKELFORD PARRISH President, The Clay Ward Agency, LLC BOBBY L. SHIFLET Owner, Frames on Main Gallery CLARK MARY BETH HENDRICKS Owner, Beech Springs Garden Barn and Beech Springs Farm Market DONALD PACE Retired Executive Director Central Kentucky Educational Co-op University of Kentucky PRECISION & MEET OUR JOHN G. ROCHE John G. Roche Opticians, Inc. EDWIN S. SAUNIER President, Saunier North American, Inc. KEVIN E. WELSH Alltech, Winchester Operations Manager FAYETTE WILLIAM MILES ARVIN, JR. Attorney, Law Offices of William Miles Arvin ROSE MARY STAMLER DOW President and Secretary, Signal Investments, Inc. GEORGE HOSKINS Managing Director, Wimbledon Farm GREG LADD Founder, Cross Gate Gallery WES OMOHUNDRO Senior Manager, Blue & Company, LLC HARRISON K. BRUCE FLORENCE Branch Campus Director Maysville Community and Technical College Licking Valley Campus and Kiser Center BETTY J. LONG Retired President, First Federal Savings of Cynthiana BRAD MARSHALL Farmer, Former Owner Marshall’s Tractor Supply JOEL TECHAU Chief Executive Officer, Techau, Inc. GERRY WHALEN Appraiser, Broker, Whalen and Company JESSAMINE WILLIAM M. ARVIN Attorney, Law Offices of William Miles Arvin DR. MICHAEL R. BISHOP Michael R. Bishop, DMD and Associates, PSC TOM BUFORD Kentucky State Senator EVA MCDANIEL Retired, Jessamine County Clerk JONAH MITCHELL President, Jonah Mitchell Real Estate and Auction BOARD OF DIRECTORS BUCKNER WOODFORD IV Chairman, Kentucky Bank, Kentucky Bancshares, Inc. LOUIS PRICHARD President and Chief Executive Officer Kentucky Bank, Kentucky Bancshares, Inc. B. PROCTOR CAUDILL, JR. Special Projects Manager, Kentucky Bank HENRY HINKLE President, Hinkle Contracting Company, LLC THEODORE KUSTER Chief Executive Officer, Hillside Farm/Shawhan Place, LLC BETTY J. LONG Retired President, First Federal Savings of Cynthiana TED MCCLAIN President, Hopewell Insurance Company EDWIN S. SAUNIER President, Saunier North American, Inc. ROBERT G. THOMPSON Farmer, Thoroughbred Breeder, Snowhill Farm DR. WOODFORD VAN METER Professor of Opthalmology, University of Kentucky REGIONAL DIRECTORS BOURBON PROCTOR W. BLAIR Partner, Ludwig, Blair & Bush, PLLC LONNIE CONLEY Co-Owner, Paris Machining ALLYSON EADS Co-Owner, Eads Hardware RODES SHACKELFORD PARRISH President, The Clay Ward Agency, LLC BOBBY L. SHIFLET Owner, Frames on Main Gallery CLARK MARY BETH HENDRICKS Farm Market Owner, Beech Springs Garden Barn and Beech Springs DONALD PACE Retired Executive Director Central Kentucky Educational Co-op University of Kentucky JOHN G. ROCHE John G. Roche Opticians, Inc. EDWIN S. SAUNIER President, Saunier North American, Inc. KEVIN E. WELSH Alltech, Winchester Operations Manager FAYETTE WILLIAM MILES ARVIN, JR. Attorney, Law Offices of William Miles Arvin ROSE MARY STAMLER DOW President and Secretary, Signal Investments, Inc. GEORGE HOSKINS Managing Director, Wimbledon Farm GREG LADD Founder, Cross Gate Gallery WES OMOHUNDRO Senior Manager, Blue & Company, LLC HARRISON K. BRUCE FLORENCE Branch Campus Director Maysville Community and Technical College Licking Valley Campus and Kiser Center BETTY J. LONG Retired President, First Federal Savings of Cynthiana BRAD MARSHALL Farmer, Former Owner Marshall’s Tractor Supply JOEL TECHAU Chief Executive Officer, Techau, Inc. GERRY WHALEN Appraiser, Broker, Whalen and Company JESSAMINE WILLIAM M. ARVIN Attorney, Law Offices of William Miles Arvin DR. MICHAEL R. BISHOP Michael R. Bishop, DMD and Associates, PSC TOM BUFORD Kentucky State Senator EVA MCDANIEL Retired, Jessamine County Clerk JONAH MITCHELL President, Jonah Mitchell Real Estate and Auction HARD WORK TEAM JOHN G. ROCHE John G. Roche Opticians, Inc. EDWIN S. SAUNIER President, Saunier North American, Inc. KEVIN E. WELSH Alltech, Winchester Operations Manager FAYETTE WILLIAM MILES ARVIN, JR. Attorney, Law Offices of William Miles Arvin ROSE MARY STAMLER DOW President and Secretary, Signal Investments, Inc. GEORGE HOSKINS Managing Director, Wimbledon Farm GREG LADD Founder, Cross Gate Gallery WES OMOHUNDRO Senior Manager, Blue & Company, LLC HARRISON K. BRUCE FLORENCE Branch Campus Director Maysville Community and Technical College Licking Valley Campus and Kiser Center BETTY J. LONG Retired President, First Federal Savings of Cynthiana BRAD MARSHALL Farmer, Former Owner Marshall’s Tractor Supply JOEL TECHAU Chief Executive Officer, Techau, Inc. GERRY WHALEN Appraiser, Broker, Whalen and Company JESSAMINE WILLIAM M. ARVIN Attorney, Law Offices of William Miles Arvin DR. MICHAEL R. BISHOP Michael R. Bishop, DMD and Associates, PSC TOM BUFORD Kentucky State Senator EVA MCDANIEL Retired, Jessamine County Clerk JONAH MITCHELL President, Jonah Mitchell Real Estate and Auction BOARD OF DIRECTORS BUCKNER WOODFORD IV Chairman, Kentucky Bank, Kentucky Bancshares, Inc. LOUIS PRICHARD President and Chief Executive Officer Kentucky Bank, Kentucky Bancshares, Inc. B. PROCTOR CAUDILL, JR. Special Projects Manager, Kentucky Bank HENRY HINKLE President, Hinkle Contracting Company, LLC THEODORE KUSTER Chief Executive Officer, Hillside Farm/Shawhan Place, LLC BETTY J. LONG Retired President, First Federal Savings of Cynthiana TED MCCLAIN President, Hopewell Insurance Company EDWIN S. SAUNIER President, Saunier North American, Inc. ROBERT G. THOMPSON Farmer, Thoroughbred Breeder, Snowhill Farm DR. WOODFORD VAN METER Professor of Opthalmology, University of Kentucky REGIONAL DIRECTORS BOURBON PROCTOR W. BLAIR Partner, Ludwig, Blair & Bush, PLLC LONNIE CONLEY Co-Owner, Paris Machining ALLYSON EADS Co-Owner, Eads Hardware RODES SHACKELFORD PARRISH President, The Clay Ward Agency, LLC BOBBY L. SHIFLET Owner, Frames on Main Gallery CLARK MARY BETH HENDRICKS Farm Market Owner, Beech Springs Garden Barn and Beech Springs DONALD PACE Retired Executive Director Central Kentucky Educational Co-op University of Kentucky SCOTT DR. GUS BYNUM Family Physician, Retired MIKE HOCKENSMITH Owner and President, The Hockensmith Agency, Inc. KATY PRATHER Realtor, Keller Williams Bluegrass Realty RYAN QUARLES Kentucky House of Representatives, Attorney, Farmer WOODFORD Tommy Haggard Chief Executive Officer, Bluegrass Community Hospital JAMES KAY Businessman, Farmer TRICIA N. KITTINGER Retired, Circuit Clerk, Woodford County CAROLYN MCDONALD Realtor, Rector Hayden Realtors EAST KENTUCKY REPRESENTATIVE ROCKY ADKINS Majority Floor Leader, House of Representatives TRENT HAMILTON Owner, Hamilton, Inc. G. R. (SONNY) JONES Vice President, Chief Financial Officer St. Claire Regional Medical Center WILLIAM H. REDWINE Assistant Vice President, Auxiliary Services Morehead State University AARON S. ROBERTS Owner, Best One Tire MADONNA WEATHERS Vice President, Student Life, Morehead State University LEADERSHIP TEAM SENIOR MANAGEMENT LOUIS PRICHARD President and Chief Executive Officer NORMAN J. FRYMAN Executive Vice President, Chief Credit Officer JAMES BRADEN Senior Vice President, Chief Administrative Officer BRENDA BRAGONIER Senior Vice President Director of Marketing and Corporate Services CAROL CASKEY Senior Vice President, Director of Human Resources GREGORY J. DAWSON Senior Vice President, Chief Financial Officer JAMES L. ELLIOTT Senior Vice President, Director of Wealth Management Market President, Fayette County CHRIS GORLEY Senior Vice President, Director of Operations WILLIAM H. HOUGH Senior Vice President, Director of Sales and Service ACCOUNTING GREGORY J. DAWSON Senior Vice President, Chief Financial Officer BRENDA BERRY Assistant Vice President, Senior Accountant BRANDON GILLIAM Assistant Vice President, Controller JANICE HASH Assistant Vice President Senior Accountant/Purchasing Agent COMMERCIAL LENDING DARREN HENRY Vice President, Director of Commercial Lending BENJAMIN CAUDILL Vice President, Commercial Lender KEN DEVASHER Vice President, Commercial Lender SHANE FOLEY Vice President, Commercial Lender WOODFORD REGION DUNCAN GARDINER Market President JUSTIN CARROLL Assistant Vice President Small Business Mortgage Lender JESSAMINE REGION BRANDON EASON Market President TEAGUE SIMS Assistant Vice President Small Business/Mortgage Lender MADISON REGION JOHN HAMILTON Market President DOUG EVERSOLE Assistant Vice President Mortgage Lender NICHOLE GOODSON Branch Manager/Consumer Lender ROWAN REGION JEREMY BROWN Market President GABE BROWN Branch Manager/Consumer Lender CONNIE INGRAM Assistant Vice President Small Business/Mortgage Lender TOM JAMES Assistant Vice President Small Business/Mortgage Lender SCOTT REGION MARK SULSKI Market President KARIN BUCHANAN Assistant Vice President Small Business Mortgage Lender TAMARA MAYBURY Assistant Vice President Small Business Mortgage Lender REGIONS WILLIAM H. HOUGH Senior Vice President Director of Sales and Service BOURBON REGION NANCYE FIGHTMASTER Market President WALLIS BROOKS Assistant Vice President, Branch Manager BENSON FRYMAN Assistant Vice President Small Business/Mortgage Lender CLARK REGION DARRYL M. TERRY Market President CHRISTOPHER J. LEMASTER Assistant Vice President Small Business/Mortgage Lender TERESA SHIMFESSEL Assistant Vice President Branch Manager/Consumer Lender ELLIOTT REGION SHERRY MATHIS Market President FAYETTE REGION JAMES L. ELLIOTT Market President Senior Vice President Director of Wealth Management GLENDA FEATHERSTON Banking Officer, Branch Manager LINDA G. HELM Vice President, Mortgage Loan Originator JEFF ROWLAND Vice President, Commercial Lender/Private Banker HARRISON REGION ALLEN JOHNSON Market President FRED CAUDILL Assistant Vice President Small Business/Mortgage Lender JOHN G. ROCHE John G. Roche Opticians, Inc. EDWIN S. SAUNIER President, Saunier North American, Inc. KEVIN E. WELSH Alltech, Winchester Operations Manager FAYETTE WILLIAM MILES ARVIN, JR. Attorney, Law Offices of William Miles Arvin ROSE MARY STAMLER DOW President and Secretary, Signal Investments, Inc. GEORGE HOSKINS Managing Director, Wimbledon Farm GREG LADD Founder, Cross Gate Gallery WES OMOHUNDRO Senior Manager, Blue & Company, LLC HARRISON K. BRUCE FLORENCE Branch Campus Director Maysville Community and Technical College Licking Valley Campus and Kiser Center BETTY J. LONG Retired President, First Federal Savings of Cynthiana BRAD MARSHALL Farmer, Former Owner Marshall’s Tractor Supply JOEL TECHAU Chief Executive Officer, Techau, Inc. GERRY WHALEN Appraiser, Broker, Whalen and Company JESSAMINE WILLIAM M. ARVIN Attorney, Law Offices of William Miles Arvin DR. MICHAEL R. BISHOP Michael R. Bishop, DMD and Associates, PSC TOM BUFORD Kentucky State Senator EVA MCDANIEL Retired, Jessamine County Clerk JONAH MITCHELL President, Jonah Mitchell Real Estate and Auction A. J. GULLETT Small Business Administration Guaranty Officer MELINDA BIDDLE Assistant Vice President, Bank Support Specialist MATTHEW JOEFREDA Vice President, Commercial Lender ANDREW BIDDLE Senior Software Administrator DIXIE FITE Assistant Vice President, Quality Control Officer ERIC HASH Assistant Vice President Product Development Manager CATE MILBURN Manager of Electronic Services RISK MANAGEMENT JAMES BRADEN Senior Vice President, Chief Administrative Officer CYNTHIA CRISWELL Community Reinvestment Act Officer Assistant Bank Secrecy Act Officer SHERRY GRIFFITH Assistant Vice President Bank Secrecy Act/Security Officer LYDIA SOSBY Vice President, Compliance Officer JENNIFER STIVERS Vice President, Audit Manager WEALTH MANAGEMENT JAMES L. ELLIOTT Senior Vice President, Director of Wealth Management Market President, Fayette County JAMES GRAY Financial Consultant JASON GRESHAM Vice President Business Development/Trust Officer CHRISTOPHER MENSER Financial Advisor CLARK NYBERG Vice President, Portfolio Manager MELISSA RITCHIE Certiﬁed Securities Operations Specialist SELINA SHEPHERD Personal Trust Officer CREDIT ADMINISTRATION NORMAN J. FRYMAN Executive Vice President, Chief Credit Officer LISA HIGHLEY Vice President, Director of Mortgage Lending CONNIE FOLEY Administrative Assistant/Consumer Lender CATHERINE HILL Vice President, Collections Manager SONYA KINCADE Assistant Vice President Loan Data Entry/Escrow Supervisor SHAWN KING Vice President, Loan Operations Director JEFF LEHMANN Assistant Vice President, Mortgage Servicing Manager KAY WILSON Direct Endorsement Underwriter HUMAN RESOURCES CAROL CASKEY Senior Vice President, Director of Human Resources DEANNA FOLEY Human Resources Supervisor CAROL RASKIN Assistant Vice President Director of Education and Development MARKETING BRENDA BRAGONIER Senior Vice President Director of Marketing and Corporate Services CAROL NORTON Corporate Sales Manager OPERATIONS CHRIS GORLEY Senior Vice President, Director of Operations KAREN ANDERSON Assistant Vice President Exception Item and Data Management Officer WOODFORD REGION DUNCAN GARDINER Market President JUSTIN CARROLL Assistant Vice President Small Business Mortgage Lender BOARD OF DIRECTORS BUCKNER WOODFORD IV Chairman, Kentucky Bank, Kentucky Bancshares, Inc. LOUIS PRICHARD President and Chief Executive Officer Kentucky Bank, Kentucky Bancshares, Inc. B. PROCTOR CAUDILL, JR. Special Projects Manager, Kentucky Bank HENRY HINKLE President, Hinkle Contracting Company, LLC THEODORE KUSTER Chief Executive Officer, Hillside Farm/Shawhan Place, LLC BETTY J. LONG Retired President, First Federal Savings of Cynthiana TED MCCLAIN President, Hopewell Insurance Company EDWIN S. SAUNIER President, Saunier North American, Inc. ROBERT G. THOMPSON Farmer, Thoroughbred Breeder, Snowhill Farm DR. WOODFORD VAN METER Professor of Opthalmology, University of Kentucky REGIONAL DIRECTORS BOURBON PROCTOR W. BLAIR Partner, Ludwig, Blair & Bush, PLLC LONNIE CONLEY Co-Owner, Paris Machining ALLYSON EADS Co-Owner, Eads Hardware RODES SHACKELFORD PARRISH President, The Clay Ward Agency, LLC BOBBY L. SHIFLET Owner, Frames on Main Gallery CLARK MARY BETH HENDRICKS Farm Market Owner, Beech Springs Garden Barn and Beech Springs DONALD PACE Retired Executive Director Central Kentucky Educational Co-op University of Kentucky JESSAMINE REGION BRANDON EASON Market President TEAGUE SIMS Assistant Vice President Small Business/Mortgage Lender MADISON REGION JOHN HAMILTON Market President DOUG EVERSOLE Assistant Vice President Mortgage Lender NICHOLE GOODSON Branch Manager/Consumer Lender ROWAN REGION JEREMY BROWN Market President GABE BROWN Branch Manager/Consumer Lender CONNIE INGRAM Assistant Vice President Small Business/Mortgage Lender TOM JAMES Assistant Vice President Small Business/Mortgage Lender SCOTT REGION MARK SULSKI Market President KARIN BUCHANAN Assistant Vice President Small Business Mortgage Lender TAMARA MAYBURY Assistant Vice President Small Business Mortgage Lender REGIONS WILLIAM H. HOUGH Senior Vice President Director of Sales and Service BOURBON REGION NANCYE FIGHTMASTER Market President WALLIS BROOKS Assistant Vice President, Branch Manager BENSON FRYMAN Assistant Vice President Small Business/Mortgage Lender CLARK REGION DARRYL M. TERRY Market President CHRISTOPHER J. LEMASTER Assistant Vice President Small Business/Mortgage Lender TERESA SHIMFESSEL Assistant Vice President Branch Manager/Consumer Lender ELLIOTT REGION SHERRY MATHIS Market President FAYETTE REGION JAMES L. ELLIOTT Market President Senior Vice President Director of Wealth Management GLENDA FEATHERSTON Banking Officer, Branch Manager LINDA G. HELM Vice President, Mortgage Loan Originator JEFF ROWLAND Vice President, Commercial Lender/Private Banker HARRISON REGION ALLEN JOHNSON Market President FRED CAUDILL Assistant Vice President Small Business/Mortgage Lender WOODFORD REGION DUNCAN GARDINER Market President JUSTIN CARROLL Assistant Vice President Small Business Mortgage Lender JESSAMINE REGION BRANDON EASON Market President TEAGUE SIMS Assistant Vice President Small Business/Mortgage Lender MADISON REGION JOHN HAMILTON Market President DOUG EVERSOLE Assistant Vice President Mortgage Lender NICHOLE GOODSON Branch Manager/Consumer Lender ROWAN REGION JEREMY BROWN Market President GABE BROWN Branch Manager/Consumer Lender CONNIE INGRAM Assistant Vice President Small Business/Mortgage Lender TOM JAMES Assistant Vice President Small Business/Mortgage Lender SCOTT REGION MARK SULSKI Market President KARIN BUCHANAN Assistant Vice President Small Business Mortgage Lender TAMARA MAYBURY Assistant Vice President Small Business Mortgage Lender REGIONS WILLIAM H. HOUGH Senior Vice President Director of Sales and Service BOURBON REGION NANCYE FIGHTMASTER Market President WALLIS BROOKS Assistant Vice President, Branch Manager BENSON FRYMAN Assistant Vice President Small Business/Mortgage Lender CLARK REGION DARRYL M. TERRY Market President CHRISTOPHER J. LEMASTER Assistant Vice President Small Business/Mortgage Lender TERESA SHIMFESSEL Assistant Vice President Branch Manager/Consumer Lender ELLIOTT REGION SHERRY MATHIS Market President FAYETTE REGION JAMES L. ELLIOTT Market President Senior Vice President Director of Wealth Management GLENDA FEATHERSTON Banking Officer, Branch Manager LINDA G. HELM Vice President, Mortgage Loan Originator JEFF ROWLAND Vice President, Commercial Lender/Private Banker HARRISON REGION ALLEN JOHNSON Market President FRED CAUDILL Assistant Vice President Small Business/Mortgage Lender WOODFORD REGION DUNCAN GARDINER Market President JUSTIN CARROLL Assistant Vice President Small Business Mortgage Lender COMMUNITY COMMUNITY ENRICHMENT ENRICHMENT JESSAMINE REGION BRANDON EASON Market President TEAGUE SIMS Assistant Vice President Small Business/Mortgage Lender MADISON REGION JOHN HAMILTON Market President DOUG EVERSOLE Assistant Vice President Mortgage Lender NICHOLE GOODSON Branch Manager/Consumer Lender ROWAN REGION JEREMY BROWN Market President GABE BROWN Branch Manager/Consumer Lender CONNIE INGRAM Assistant Vice President Small Business/Mortgage Lender TOM JAMES Assistant Vice President Small Business/Mortgage Lender SCOTT REGION MARK SULSKI Market President KARIN BUCHANAN Assistant Vice President Small Business Mortgage Lender TAMARA MAYBURY Assistant Vice President Small Business Mortgage Lender REGIONS WILLIAM H. HOUGH Senior Vice President Director of Sales and Service BOURBON REGION NANCYE FIGHTMASTER Market President WALLIS BROOKS Assistant Vice President, Branch Manager BENSON FRYMAN Assistant Vice President Small Business/Mortgage Lender CLARK REGION DARRYL M. TERRY Market President CHRISTOPHER J. LEMASTER Assistant Vice President Small Business/Mortgage Lender TERESA SHIMFESSEL Assistant Vice President Branch Manager/Consumer Lender ELLIOTT REGION SHERRY MATHIS Market President FAYETTE REGION JAMES L. ELLIOTT Market President Senior Vice President Director of Wealth Management GLENDA FEATHERSTON Banking Officer, Branch Manager LINDA G. HELM Vice President, Mortgage Loan Originator JEFF ROWLAND Vice President, Commercial Lender/Private Banker HARRISON REGION ALLEN JOHNSON Market President FRED CAUDILL Assistant Vice President Small Business/Mortgage Lender INNOVATING THE INNOVATING THE CUSTOMER EXPERIENCE CUSTOMER EXPERIENCE EXPANSION Our expansion into Richmond during 2014 has carried over into 2015. In January we announced the acquisition of Madison Bank, approximately $120 million in assets with three locations in Richmond. This acquisition will take Kentucky Bank’s assets to just under $1 billion. COMMUNITY In October 2014, Kentucky Bank announced the continued titled sponsorship of the Lexington Challenger. The Lexington Challenger is a $50,000 Pro-Circuit USTA tennis event with a non-proﬁt status. All gains from the tournament are used to support local charities that promote healthy activity among kids. It is the only USTA event in the state of Kentucky. TECHNOLOGY In January 2015, Kentucky Bank announced the release of the new KY Bank Agent, Real Estate’s #1 net sheet and closing costs app. This technology will be available to Realtors and each market’s Mortgage Lender will have a customized “My Sales Executive” feature. This will be a great tool for both Realtors and Mortgage Lenders assisting their customers. PHOTO CREDITS Bobby Shiﬂet, Frames on Main Gallery: Front Cover; Pages 1 & 2; 5 & 6; and 13 & 14. The Tony Leonard Collection: Pages 7 & 8 Charlie Baglan: Pages 3 & 12. KENTUCKY BANCSHARES, INC. PO Box 157 Paris, KY 40362-0157 www.kybank.com 800.467.1939

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