<PAGE> 1
FORM 10-QSB
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For Quarterly Period ended March 31, 1998
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______________to___________________
Commission File Number: 0-25960
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THE BANK OF KENTUCKY FINANCIAL CORPORATION
----------------------------------------------
(Name of small business issuer in its charter)
Kentucky 61-1256535
------------------------------- ---------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1065 Burlington Pike, Florence, Kentucky 41042
----------------------------------------------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (606) 371-2340
---------------
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the issuer was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No
--- ---
As of May 5, 1998, the latest practicable date, 1,753,967 shares of the
Registrant's Common Stock, $5.00 per value per share, were issued and
outstanding.
Transitional Small Business Disclosure Format Yes No X
---- ----
<PAGE> 2
THE BANK OF KENTUCKY FINANCIAL CORPORATION
INDEX
FINANCIAL INFORMATION PAGE
The Bank of Kentucky Financial Corporation
Consolidated Statements of Financial Condition 1
The Bank of Kentucky Financial Corporation
Consolidated Statements of Income 2
The Bank of Kentucky Financial Corporation
Consolidated Statements of Changes
in Shareholders' Equity 3
The Bank of Kentucky Financial Corporation
Consolidated Statements of Cash Flows 4
The Bank of Kentucky Financial Corporation
Notes to Consolidated Financial Statements 5
The Bank of Kentucky Financial Corporation
Management's Discussion and Analysis of
Financial Condition and Results of Operations 6
The Bank of Kentucky Financial Corporation
Part II 8
The Bank of Kentucky Financial Corporation
Signatures 9
<PAGE> 3
<TABLE>
<CAPTION>
THE BANK OF KENTUCKY FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(DOLLARS IN THOUSANDS)
MARCH 31 DECEMBER 31
1998 1997
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 10,869 $ 10,125
Interest bearing deposits with banks 560 560
Available-for-sale securities 5,858 8,315
Held-to-maturity securities 25,917 24,259
Loans held for sale 2,835 828
Total loans 186,141 180,666
Less: Allowances for loan losses 2,141 2,078
---------- ----------
Net loans 184,000 178,588
Premises and equipment, net 3,811 3,831
FHLB stock, at cost 1,921 1,887
Accrued interest receivable and other assets 2,220 2,456
---------- ----------
Total assets $ 237,991 $ 230,849
======== ========
LIABILITIES & SHAREHOLDERS' EQUITY
LIABILITIES
Deposits $ 204,553 $ 199,207
Short-term borrowings 10,303 9,256
Notes payable 546 550
Accrued interest payable & other liabilities 1,502 1,509
---------- ----------
Total liabilities 216,904 210,522
SHAREHOLDERS' EQUITY
Common stock 8,755 8,752
Additional paid-in capital 1,711 1,703
Retained earnings 10,629 9,883
Unrealized loss on available-for sale
securities, net of tax (8) (11)
------------ -------------
Total shareholders' equity 21,087 20,327
--------- ---------
Total liabilities and shareholders' equity $ 237,991 $ 230,849
======== ========
</TABLE>
See accompanying notes to consolidated financial statements
<PAGE> 4
THE BANK OF KENTUCKY FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
INTEREST INCOME 1998 1997
------- -------
<S> <C> <C>
Loans, including related fees $4,202 $3,471
Securities and other 516 459
------ ------
Total interest income 4,718 3,930
------ ------
INTEREST EXPENSE
Deposits 2,198 1,742
Borrowings 142 137
------ ------
Total interest expense 2,340 1,879
------ ------
Net interest income 2,378 2,051
Provision for loan losses 70 68
------ ------
Net interest income after
Provision for loan losses 2,308 1,983
------ ------
NON-INTEREST INCOME
Service charges and fees 209 140
Gain/(loss) on securities 0 0
Other 297 108
------ ------
Total non-interest income 506 248
NON-INTEREST EXPENSE
Salaries and benefits 699 677
Occupancy and equipment 283 240
Data processing 113 90
Advertising 45 42
Other operating expenses 297 271
------ ------
Total non-interest expense 1,437 1,320
------ ------
INCOME BEFORE INCOME TAXES 1,377 911
Less: income taxes 455 307
------ ------
NET INCOME $ 922 $ 604
====== ======
Earnings per share $ 0.53 $ 0.35
Earnings per share, assuming dilution $ 0.53 $ 0.35
</TABLE>
See accompanying notes to consolidated financial statements
<PAGE> 5
THE BANK OF KENTUCKY FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
1998 1997
-------- --------
<S> <C> <C>
Balance January 1 $ 20,327 $ 17,385
Comprehensive Income:
Net Income 922 604
Unrealized Gain/Loss on Securities Available for
Sale, Net of Income Taxes 3 (31)
-------- --------
Total Comprehensive Income 925 573
Cash dividends paid (176) (146)
Exercise of stock options (including tax benefit of $2) 11
-------- --------
Balance March 31 21,087 17,812
======== ========
</TABLE>
See accompanying notes to consolidated financial statements
<PAGE> 6
<TABLE>
<CAPTION>
THE BANK OF KENTUCKY FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
FOR THE THREE MONTHS ENDED MARCH 31 1998 1997
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Net income $ 922 $ 604
Adjustments to reconcile net income to net cash
From operating activities 369 343
-------- --------
Net cash from operating activities 1,291 947
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from paydowns and maturities of
Held-to-maturity securities 4,160 3,600
Proceeds from paydowns and maturities of
Available-for-sale securities 3,015 2,590
Purchases of held-to-maturity securities (5,798) (3,445)
Purchases of available-for-sale securities (549) (1,995)
Net change in loans (7,420) (4,488)
Purchase stock in FHLB 0 (610)
Property and equipment expenditures (177) (100)
-------- --------
Net cash from investing activities (6,769) (4,448)
CASH FLOWS FROM FINANCING ACTIVITIES
Net change in deposits 5,346 (4,767)
Net change in short-term borrowings 1,047 9,183
Proceeds from exercise of stock options 9 0
Cash dividends paid (176) (146)
Payments on note payable (4) (4)
-------- --------
Net cash from financing activities 6,222 4,266
-------- --------
Net change in cash and cash equivalents 744 765
Cash and cash equivalents at beginning of period 10,125 10,762
-------- --------
Cash and cash equivalents at end of period $ 10,869 $ 11,527
======== ========
</TABLE>
See accompanying notes to consolidated financial statements
<PAGE> 7
THE BANK OF KENTUCKY FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1998
NOTE 1 - BASIS OF PRESENTATION:
The consolidated financial statements include the accounts of The Bank of
Kentucky Financial Corporation (the company) and its wholly owned subsidiary,
The Bank of Kentucky (the Bank). All significant intercompany accounts and
transactions have been eliminated.
NOTE 2 - GENERAL:
These financial statements were prepared in accordance with the instructions for
Form 10Q-SB and, therefore, do not include all of the disclosures necessary for
a complete presentation of financial position, results of operations and cash
flows in conformity with generally accepted accounting principles. Except for
the adoption of the required accounting changes described in Note 3, these
financial statements have been prepared on a basis consistent with the annual
financial statements and include, in the opinion of management, all adjustments,
consisting of only normal recurring adjustments, necessary for a fair
presentation of the results of operations and financial position at the end of
and for the periods presented.
NOTE 3 - ACCOUNTING CHANGES:
As required by a new accounting standard, comprehensive income is now reported
for all periods. Comprehensive income includes both net income and other
comprehensive income. Other comprehensive income includes the change in
unrealized gains and losses on securities available for sale, foreign currency
translation adjustments, and additional minimum pension liability adjustments.
NOTE 4 - EARNINGS PER SHARE:
Earnings per share are computed based upon the weighted average number of shares
outstanding during the quarter which were 1,753,684 and 1,750,467 for 1998 and
1997. Diluted earnings per share are computed assuming that average stock
options outstanding are exercised and the proceeds, including the relevant tax
benefit, are used entirely to reacquire shares at the average price for the
period. For 1998, this would result in there being an additional 667 shares
outstanding. There were no stock options outstanding during the first quarter of
1997.
<PAGE> 8
THE BANK OF KENTUCKY FINANCIAL CORPORATION
Management's Discussion and Analysis of Financial Condition
and the Results of Operations
March 31, 1998
FINANCIAL CONDITION
Total assets at March 31,1998 were $237,991,000 compared to $230,849,000 at
December 31, 1997, an increase of $7,142,000 (3.09%). Deposits increased
$5,346,000 (2.68%) to $204,553,000 at March 31, 1998 compared to $199,207,000 at
December 31, 1997. The deposit growth funded a $5,475,000 (3.03%) increase in
loans from $180,666,000 at December 31, 1997 to $186,141,000 at March 31,1998.
Short Term borrowings increased $1,047,000 (11.31%) in the first quarter of 1998
from $9,256,000 at December 31, 1997 to $10,303,000 at March 31, 1998.
RESULTS OF OPERATIONS
GENERAL
Net income increased $318,000 (52.6%) in the first quarter of 1998 to $922,000
($.53 per share), compared to $604,000 ($.34 per share) for the same period in
1997. This increase was driven by a $327,000 increase in net interest income and
a $258,000 increase in non-interest income, partially offset by higher
non-interest and income tax expenses.
NET INTEREST INCOME
Increasing loan volume drove the $327,000 (15.94%) increase in net interest
income. Net interest income for the first quarter of 1998 increased to
$2,378,000, compared to $2,051,000 for the same period in 1997.
PROVISION FOR LOAN LOSSES
The provision for loan losses was $70,000 for the three months ending March 31,
1998, an increase of $2,000 compared to the $68,000 provision recorded during
the same period in 1997. At March 31, 1998 the Bank had $182,000 in
non-performing loans or .09% of total loans outstanding. Management believes the
reserve was adequate at March 31, 1998.
<PAGE> 9
NON-INTEREST INCOME
Total non-interest income increased $258,000 during the first quarter of 1998
from $248,000 in 1997 to $506,000 in 1998. Service charges on deposit accounts
totaled $209,000 for the first quarter of 1998, compared to $140,000 for the
same period in 1997, an increase of $69,000 (49.28%), driven by increased volume
and a fee increase that took place. Other fee income increased $189,000 to
$297,000 for the first quarter of 1998 compared to $108,000 for the same period
in 1997. Increased income from the sale of mortgage loans into the secondary
market accounted for $144,000 of the increase in other fees. The Bank originates
fixed rate first mortgage loans and sells them, service released, into the
secondary market. The increase in fee income is driven by increased volume.
During the first quarter of 1998, 123 loans with a principal balance of $12.0
million were sold compared to 19 loans with a principal balance of $1.7 million
during the same period in 1997. Loans held for sale at March 31, 1998 increased
to $2.8 million from $828,000 at December 31, 1997. These loans have been
approved by the secondary market buyer and closed by the Bank. The Bank is
awaiting settlement but is not exposed to significant interest rate or pricing
risk during the period between closing the loan and settlement.
NON-INTEREST EXPENSE
Non-interest expense increased to $1,437,000, in the first quarter of 1998 from
$1,320,000 in 1997, an increase of $117,000 (8.86%). Most of the increase was
driven by increases in occupancy and equipment expense and data processing
expense. Occupancy and equipment expense increased $43,000 (17.92%) to $283,000
through March 31,1998 compared to $240,000 for the same period in 1997. The
increase was due to expenses associated with an additional branch opened in the
fourth quarter of 1997. Data processing expense increased $23,000 (25.5%) in the
first quarter of 1998 to $113,000 compared to $90,000 for the same period in
1997. Volume increases and technology enhancements contributed to the increase.
Other operating expenses increased to $297,000 in the first quarter of 1998,
from $271,000 for the same period in 1997, an increase of $26,000 (9.59%).
INCOME TAX EXPENSE
Income tax expense increased by $148,000 (48.21%) in the first quarter of 1998
compared to 1997. The increase was primarily due to higher income before tax as
the effective tax rate decreased to 33.04% for 1998 from 33.85% for 1997.
<PAGE> 10
LIQUIDITY AND CAPITAL RESOURCES
The company achieves liquidity by maintaining an appropriate balance between its
sources and uses of funds to assure that sufficient funds are available to meet
loan demands and deposit fluctuations. The corporation has the ability to draw
funds from the Federal Home Loan Bank and two of its correspondent banks to meet
liquidity demands. Management is satisfied that BKFC's liquidity is sufficient
at March 31, 1998.
The corporations' total shareholders' equity increased $760,000, from
$20,327,000 at December 31, 1997 to $21,087,000 at March 31, 1998. In the first
quarter of 1998 BKFC paid a cash dividend of $.10 per share totaling $176,000.
For purposes of determining a bank's deposit insurance assessment, the FDIC has
issued regulations that define a "well capitalized" bank as one with a leverage
ratio of 5% or more and a total risk-based ratio of 10% or more. At March 31,
1998, the Bank's leverage and total risk-based ratios were 9.06% and 12.67%
respectively, which exceed the well capitalized threshold.
<PAGE> 11
THE BANK OF KENTUCKY FINANCIAL CORPORATION
PART II
ITEM 1. Legal Proceedings
-----------------
Not applicable
ITEM 2. Changes in Securities
---------------------
Not applicable
ITEM 3. Defaults Upon Senior Securities
--------------------------------
Not applicable
ITEM 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
Not applicable
ITEM 5. Other Information
-----------------
Not applicable
ITEM 6. Exhibits an Reports on Form 8 - K
---------------------------------
(a) Exhibit 3.1 Articles of Incorporation of The Bank of Kentucky
Financial Corporation, as amended (Incorporated by reference to the
Form 8-A filed by Registrant on April 28, 1995 the "8-A", Exhibits
2(a), 2(b), and 2(c).
Exhibit 3.2 By-Laws of The Bank of Kentucky Financial Corporation
(Incorporated by reference to the 8-A, Exhibit 2(d).
Exhibit 27 Financial Data Schedule.
Exhibit 99 Safe Harbor under the Private Securities Litigation
Reform Act of 1995.
<PAGE> 12
SIGNATURES
----------
Pursuant to the requirement of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: May 9, 1998 /s/ Robert W. Zapp
--------------------------- -----------------------------------
Robert W. Zapp
President
Date: May 9, 1998 /s/ Robert D. Fulkerson
--------------------------- ------------------------------------
Robert D. Fulkerson
Treasurer (Chief Financial Officer)
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 10,599
<INT-BEARING-DEPOSITS> 560
<FED-FUNDS-SOLD> 270
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 5,858
<INVESTMENTS-CARRYING> 25,917
<INVESTMENTS-MARKET> 25,964
<LOANS> 186,141
<ALLOWANCE> 2,141
<TOTAL-ASSETS> 237,991
<DEPOSITS> 204,553
<SHORT-TERM> 10,303
<LIABILITIES-OTHER> 1,502
<LONG-TERM> 546
0
0
<COMMON> 8,755
<OTHER-SE> 12,332
<TOTAL-LIABILITIES-AND-EQUITY> 237,991
<INTEREST-LOAN> 4,202
<INTEREST-INVEST> 516
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 4,718
<INTEREST-DEPOSIT> 2,198
<INTEREST-EXPENSE> 2,340
<INTEREST-INCOME-NET> 2,378
<LOAN-LOSSES> 70
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1,437
<INCOME-PRETAX> 1,377
<INCOME-PRE-EXTRAORDINARY> 1,377
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 922
<EPS-PRIMARY> .53
<EPS-DILUTED> .53
<YIELD-ACTUAL> 8.53
<LOANS-NON> 83
<LOANS-PAST> 94
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 2,078
<CHARGE-OFFS> 7
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 2,141
<ALLOWANCE-DOMESTIC> 2,141
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
<PAGE> 1
EXHIBIT 99
----------
SAFE HARBOR UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
The Private Securities Litigation Reform Act of 1995 (the "Act")
provides a "safe harbor" for forward-looking statements to encourage companies
to provide prospective information about their companies, so long as those
statements are identified as forward-looking and are accompanied by meaningful
cautionary statements identifying important factors that could cause actual
results to differ materially from those discussed in the statement. The Bank of
Kentucky Financial Corporation ("BKFC") desires to take advantage of the "safe
harbor" provisions of the Act. Certain information, particularly information
regarding future economic performance and finances and plans and objectives of
management, contained or incorporated by reference in BKFC's Annual Report on
Form 10-KSB for fiscal year 1996 is forward-looking. In some cases, information
regarding certain important factors that could cause actual results of
operations or outcomes of other events to differ materially from any such
forward-looking statement appear together with such statement. In addition,
forward-looking statements are subject to other risks and uncertainties
affecting the financial institutions industry, including, but not limited to,
the following:
Interest Rate Risk
- ------------------
BKFC's operating results are dependent to a significant degree on its
net interest income, which is the difference between interest income from loans,
investments and other interest-earning assets and interest expense on deposits,
borrowings and other interest-bearing liabilities. The interest income and
interest expense of BKFC change as the interest rates on interest-earning assets
and interest-bearing liabilities change. Interest rates may change because of
general economic conditions, the policies of various regulatory authorities and
other factors beyond BKFC's control. In a rising interest rate environment,
loans tend to prepay slowly and new loans at higher rates increase slowly, while
interest paid on deposits increases rapidly because the terms to maturity of
deposits tend to be shorter than the terms to maturity or prepayment of loans.
Such differences in the adjustment of interest rates on assets and liabilities
may negatively affect BKFC's income.
Possible Inadequacy of the Allowance for Loan Losses
- ----------------------------------------------------
BKFC maintains an allowance for loan losses based upon a number of
relevant factors, including, but not limited to, trends in the level of
nonperforming assets and classified loans, current and anticipated economic
conditions in the primary lending area, past loss experience, possible losses
arising from specific problem loans and changes in the composition of the loan
portfolio. While the Board of Directors of BKFC believes that it uses the best
information available to determine the allowance for loan losses, unforeseen
market conditions could result in material adjustments, and net earnings could
be significantly adversely affected if circumstances differ substantially from
the assumptions used in making the final determination.
Loans not secured by one- to four-family residential real estate are
generally considered to involve greater risk of loss than loans secured by one-
to four-family residential real estate due, in part, to the effects of general
economic conditions. The repayment of commercial loans and multifamily
residential and nonresidential real estate loans generally depends upon the cash
flow from the operation of the business or property, which may be negatively
affected by national and local economic conditions. Construction loans may also
be negatively affected by such economic conditions, particularly loans made to
developers who do not have a buyer for a property before the loan is made. The
risk of default on consumer loans increases during periods of recession, high
unemployment and other adverse economic conditions. When consumers have trouble
paying their bills, they are more likely to pay mortgage loans
<PAGE> 2
than consumer loans. In addition, the collateral securing such loans, if any,
may decrease in value more rapidly than the outstanding balance of the loan.
Competition
- -----------
The Bank of Kentucky, Inc. (the "Bank") competes for deposits with
other savings associations, commercial banks and credit unions and issuers of
commercial paper and other securities, such as shares in money market mutual
funds. The primary factors in competing for deposits are interest rates and
convenience of office location. In making loans, the Bank competes with other
commercial banks, savings and loan associations, savings banks, consumer finance
companies, credit unions, leasing companies, mortgage companies and other
lenders. Competition is affected by, among other things, the general
availability of lendable funds, general and local economic conditions, current
interest rate levels and other factors which are not readily predictable. The
size of financial institutions competing with the Bank is likely to increase as
a result of changes in statutes and regulations eliminating various restrictions
on interstate and inter-industry branching and acquisitions. Such increased
competition may have an adverse effect upon the Bank.
Legislation and Regulation that may Adversely Affect BKFC's Earnings
- --------------------------------------------------------------------
The Bank is subject to regulation by the Department of Financial
Institutions of the Commonwealth of Kentucky and the Federal Deposit Insurance
Corporation (the "FDIC") and is periodically examined by such regulatory
agencies to test compliance with various regulatory requirements. As a savings
and loan holding company, BKFC is also subject to regulation and examination by
the Board of Governors of the Federal Reserve System. Such supervision and
regulation of the Bank and BKFC are intended primarily for the protection of
depositors and not for the maximization of shareholder value and may affect the
ability of the company to engage in various business activities. The
assessments, filing fees and other costs associated with reports, examinations
and other regulatory matters are significant and may have an adverse effect on
BKFC's net earnings.
The FDIC is authorized to establish separate annual assessment rates
for deposit insurance of members of the Bank Insurance fund (the "BIF") and the
Savings Association Insurance Fund (the "SAIF"). The FDIC has established a
risk-based assessment system for both SAIF and BIF members. Under such system,
assessments may vary depending on the risk the institution poses to its deposit
insurance fund. Such risk level is determined by reference to the institution's
capital level and the FDIC's level of supervisory concern about the institution.
Because the reserves of the BIF exceeded the statutorily set minimum,
assessments for healthy BIF institutions were significantly decreased in the
last half of 1995 and were reduced to $2,000 per year for well-capitalized,
well-managed banks, like the Bank, in 1996. Assessments paid by healthy
institutions on deposits in the SAIF exceed that paid by healthy banks by
approximately $.23 per $100 in deposits in 1996.
Federal legislation that was effective September 30, 1996, provided for
the recapitalization of the SAIF by means of a special assessment of $.657 per
$100 in deposits held at March 31, 1995, in order to increase SAIF reserves to
the level required by law. Certain banks were required to pay the special
assessment on only 80% of SAIF deposits held at that date. That legislation also
required that BIF members begin to share the cost of prior thrift failures. As a
result of the recapitalization of the SAIF and this cost sharing between BIF and
SAIF members, FDIC assessments for healthy institutions during 1997 have been
set at $.013 per $100 in BIF deposits and $.064 per $100 in SAIF deposits. The
recapitalization plan also provides of the merger of the BIF and the SAIF
effective January 1, 1999, assuming there are no savings associations under
federal law. Under separate proposed legislation, Congress is considering the
elimination of the federal thrift charter. BKFC cannot predict the impact of
such legislation and the merger of the BIF and the SAIF on BKFC or the Bank
until the legislation is enacted and the funds are merged.
