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Farmers Capital Bank Corporation Announces 2006 Earnings.

FRANKFORT, Ky., Jan. 22 /PRNewswire-FirstCall/ -- Farmers Capital Bank Corporation (the "Company") reported net income of $21,372,000 for the twelve months ended December 31, 2006, an increase of $5,600,000 or 35.5% compared to $15,772,000 reported for the twelve months ended December 31, 2005. Basic and diluted net income per share was $2.85 and $2.84 for the current twelve months, an increase of $.54 or 23.4% (basic) and $.54 or 23.5% (diluted) compared to $2.31 and $2.30 a year earlier. For the three months ended December 31, 2006, net income was $8,929,000 an increase of $4,954,000 or 125% compared to $3,975,000 for the same period in 2005. Basic and diluted net income per share was $1.13 for the current three months, $.56 higher compared to $.57 in the same period a year ago.

In June 2006, the Company announced that it had entered into a definitive agreement to sell its wholly-owned subsidiary, Kentucky Banking Centers, Inc. ("KBC"), based in Glasgow, Kentucky. During the third quarter of 2006, the Company also committed to a plan of sale of the Bath County branches of its wholly-owned subsidiary Farmers Bank & Trust Company ("Farmers Georgetown"). Both sales were closed during the fourth quarter of 2006. All prior period results included herein have been reclassified to conform to the current presentation which displays the operating results prior to the sale and the subsequent gains on sale of KBC and Bath County as discontinued operations. These reclassifications had no effect on net income or shareholders' equity. Unless otherwise noted, the remaining discussion and tabular data relate only to the Company's continuing operations.

Income from continuing operations was $13,665,000 for the twelve months ended December 31, 2006, a decline of $867,000 or 6.0% from $14,532,000 reported for the twelve months ended December 31, 2005. Basic and diluted income per share from continuing operations was $1.82 for the current twelve months, a decrease of $.31 or 14.6% on a basic per share basis and $.30 or 14.2% on a diluted per share basis compared to a year earlier. For the three months ended December 31, 2006, income from continuing operations was $2,515,000, a decrease of $1,325,000 or 34.5% compared to $3,840,000 for the same period in 2005. Basic and diluted income per share from continuing operations was $.32 for the current three months, a decrease of $.23 or 41.8% on a basic and diluted per share basis compared to the same period a year ago.

The percentage change in net income in the comparable periods is not proportional to the percentage change in per share earnings due mainly to the effect of an additional 584,000 shares issued in connection with the December 6, 2005 acquisition of Citizens Bancorp, Inc. ("Citizens Bancorp") and an additional 464,000 shares issued in connection with the October 1, 2006 acquisition of Citizens National Bancshares, Inc. ("Citizens National"). The operating results related to Citizens Bancorp and Citizens National generally increased reported income and expense line items in the current three and twelve-month periods compared to a year ago due to the timing of the acquisitions. Net loans and deposits acquired from Citizens Bancorp on the date of purchase were $149,029,000 and $173,014,000, respectively. Net loans and deposits acquired from Citizens National on the date of purchase were $119,659,000 and $139,441,000, respectively.

The increase in net interest income, which was fueled by the Citizens Bancorp and Citizens National acquisitions, had a significant impact on net income for the three and twelve months ended December 31, 2006. Net interest income was $13,962,000 and $50,908,000 in the current three and twelve-month periods ended December 31, 2006. This represents an increase of $2,825,000 or 25.4% and $9,666,000 or 23.4% compared to the same periods a year ago. The increase in net interest income in each period is primarily due to higher interest on loans of $7,757,000 or 52.7% (three months) and $24,724,000 or 47.0% (twelve months), partially offset by $4,696,000 or 83.3% (three months) and $13,424,000 or 70.2% (twelve months) higher interest expense on deposits. The Citizens Bancorp acquisition accounted for $1,279,000 and $6,737,000 of the increase in net interest income in the three and twelve-month periods, respectively, including $2,316,000 (three months) and $10,977,000 (twelve months) higher interest from loans partially offset by $1,285,000 (three months) and $5,231,000 (twelve months) higher interest expense on deposits. The Citizens National acquisition accounted for $1,352,000 of the increase in net interest income in both the three and twelve-month periods, including $2,234,000 higher interest from loans partially offset by $1,209,000 higher interest expense on deposits.

The provision for loan losses increased $538,000 or 211% and $343,000 or 55.1% in the three and twelve month comparisons, respectively. The percentage increases are not indicative of a decline in credit quality of the loan portfolio, but rather to a large increase in loan volume. The increase in the provision for loan losses was also impacted by the Citizens Jessamine acquisition during the fourth quarter of 2006, which accounts for $196,000 of the quarterly and twelve-month increase. The amount of year-to-date loan charge-offs remain relatively low at 0.1% of net loans outstanding.

Noninterest income was $5,397,000 and $20,459,000 in the current quarter and twelve-month periods, up $728,000 or 15.6% for the quarter and $592,000 or 3.0% in the twelve-month comparisons. The increase in noninterest income in each of the periods was driven mainly by higher service charges on deposits of $516,000 or 25.3% (quarter) and $648,000 or 7.6% (twelve-months). Non-deposit service charges, commissions, and fees also increased $89,000 or 15.6% and $372,000 or 16.6% in the quarter and twelve-month periods, respectively. Both line items were fueled by the Citizens Bancorp and Citizens National acquisitions. The increase in noninterest income in the twelve-month comparison reflects a one-time gain of $700,000 on the sale of the Company's credit card portfolio recorded in the first quarter of the previous year. Excluding the effect of the one-time gain on the sale of the credit card portfolio in the prior year, noninterest income grew $1,292,000 or 6.7% in the twelve-month comparison.

The Company recorded a loss of $195,000 on the sale of available for sale investment securities during the twelve months ended December 31, 2006 compared to a loss of $3,000 in the same period a year earlier. Trust department income increased $23,000 or 5.9% and $174,000 or 10.8% in the comparable three and twelve-month periods. Income from company-owned life insurance was up $12,000 or 3.7% in the quarterly comparison and $154,000 or 13.0% in the twelve-month comparison. Allotment processing fees were $55,000 lower in both the quarterly and twelve-month comparisons due to procedural changes and volume losses related to Hurricane Katrina beginning late in the third quarter of 2005. This represents a decrease of 7.9% (quarter) and 2.1% (twelve-months).

Noninterest expenses were $15,535,000 and $53,377,000 for the three and twelve-months ended December 31, 2006. This represents an increase of $4,793,000 or 44.6% and $11,213,000 or 26.6%, respectively. The increase in noninterest expenses occurred across a broad range of line items and is generally attributed to the Citizens Bancorp and Citizens National acquisitions. The most significant increase was salaries and employee benefits, which was up $3,134,000 or 55.9% and $6,631,000 or 29.7% in the three and twelve-month comparisons, respectively. The increase in salaries and employee benefits was primarily driven by an increase in the average number of full time equivalent employees to 578 from 479 in the three-month comparison and to 546 from 467 in the twelve-month comparison and $1,300,000 related to the initial-year impact of the adoption of a new paid time off policy for the Company's employees. Combined other noninterest expenses increased $1,659,000 or 32.3% (three months) and $4,582,000 or 23.1% (twelve months) and occurred across a broad range of categories. These increases are generally attributed to the purchases of Citizens Bancorp and Citizens National. The effective income tax rate decreased to 17.0% from 20.1% in the three-month comparison and was 19.7% for the current twelve-month period compared to 20.7% a year earlier.

Excluding the gain on sale of discontinued operations (net of tax) of $6,417,000, the Company had a loss from discontinued operations of $3,000 for the three months ended December 31, 2006 and income from discontinued operations of $1,290,000 for the twelve-month period ended December 31, 2006. This represents a decrease of $138,000 and an increase of $50,000 in the comparable three and twelve-month periods. As previously disclosed, the Company completed the sale of its KBC subsidiary and the Bath County branches of Farmers Georgetown during the fourth quarter of 2006.

On January 12, 2007 the Company announced that First Citizens Bank ("First Citizens") had completed its acquisition of the Military Allotment operation of PNC Bank, National Association. First Citizens acquired intangible assets in the form of a customer list and goodwill. It also recorded a core deposit intangible in connection with receiving approximately $11.0 million in deposits from PNC in the transaction. First Citizens will integrate the acquired Military Allotment operation into its existing allotment operations, which specializes in the processing of federal benefit payments and military allotments. The results presented herein do not include any results related to this acquisition since it closed subsequent to year-end 2006.

Farmers Capital Bank Corporation is a financial holding company headquartered in Frankfort, Kentucky. The Company operates 35 banking locations in 22 communities throughout Central and Northern Kentucky, a leasing company, a data processing company, a mortgage company, and an insurance company. Its stock is publicly traded on the NASDAQ Stock Market LLC exchange in the Global Select Market tier under the symbol: FFKT.
 Consolidated Financial Highlights(1)

 (In thousands except per share data)
 Three Months Twelve Months
 Ended Ended
 December 31, December 31,
 2006 2005 2006 2005

 Interest income $ 26,952 $ 18,433 $ 92,340 $ 65,651
 Interest expense 12,990 7,296 41,432 24,409
 Net interest income 13,962 11,137 50,908 41,242
 Provision for loan losses 793 255 965 622
 Net interest income after
 provision for loan losses 13,169 10,882 49,943 40,620
 Noninterest income 5,397 4,669 20,459 19,867
 Noninterest expenses 15,535 10,742 53,377 42,164
 Income from continuing
 operations before income
 tax expense 3,031 4,809 17,025 18,323
 Income tax expense from
 continuing operations 516 969 3,360 3,791
 Income from continuing
 operations 2,515 3,840 13,665 14,532
 Income from discontinued
 operations before income tax
 expense, including gain on sale
 of discontinued operations of
 $9,873 in 2006 columns 9,964 179 11,842 1,723
 Income tax expense from
 discontinued operations,
 including income tax expense of
 $3,456 on gain on sale of
 discontinued operations 3,550 44 4,135 483
 Income from discontinued
 operations 6,414 135 7,707 1,240
 Net income $ 8,929 $ 3,975 $ 21,372 $ 15,772

 Per common share:
 Income from continuing
 operations - basic $ .32 $ .55 $ 1.82 $ 2.13
 Income from discontinued
 operations - basic .81 .02 1.03 .18
 Net income per common share
 - basic 1.13 .57 2.85 2.31

 Income from continuing
 operations - diluted .32 .55 1.82 2.12
 Income from discontinued
 operations - diluted .81 .02 1.02 .18
 Net income per common share -
 diluted 1.13 .57 2.84 2.30

 Cash dividend declared .44 .33 1.43 .99

 Weighted average shares
 outstanding - basic 7,884 6,963 7,511 6,831
 Weighted average shares
 outstanding - diluted 7,904 6,991 7,526 6,864



 December December
 31, 2006 31, 2005

 Cash and cash equivalents $156,828 $ 131,018
 Investment 334,273 328,677
 securities
 Loans, net of allowance of $11,999
 (2006) and $11,069 (2005) 1,185,837 951,502
 Assets of discontinued operations 143,569
 Other assets 147,428 119,177
 Total assets $ 1,824,366 $ 1,673,943

 Deposits $ 1,454,820 $ 1,191,651
 Federal funds purchased and securities
 sold under agreements to repurchase 67,941 71,336
 Other borrowings 96,769 76,070
 Liabilities of discontinued operations 144,409
 Other liabilities 26,395 36,241
 Total liabilities 1,645,925 1,519,707

 Shareholders' equity 178,441 154,236
 Total liabilities and
 shareholders' equity $ 1,824,366 $ 1,673,943



 December December
 31, 2006 31, 2005

 End of period book value per share(2) $ 22.60 $ 20.87
 End of period share value 34.13 30.74
 End of period dividend yield(3) 3.87% 4.29%



 Averages for the twelve
 months ended December 30(4), 2006 2005

 Assets $ 1,603,638 $ 1,319,050
 Deposits 1,256,394 1,029,501
 Loans, net of unearned interest 1,051,002 805,014
 Shareholders' equity 160,968 134,376

 Return on average assets .85% 1.10%
 Return on average equity 8.49% 10.81%

 (1) Prior period amounts have been reclassified to conform to the current
 presentation to display KBC and Bath County branches as discontinued
 operations.
 (2) Represents total equity divided by the number of shares outstanding at
 the end of the period.
 (3) Represents current annualized dividend declared (excluding special
 dividend of $.11) divided by the end of period share value.
 (4) Discontinued operations have been excluded.



CONTACT: Doug Carpenter of Farmers Capital Bank Corporation, +1-502-227-1668

Web site: http://www.farmerscapital.com/
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