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EXHIBIT 99
FOR IMMEDIATE RELEASE
For Additional Information Contact:
David B. Barbour, President and Chief Executive Officer
Lisah M. Frazier, Chief Operating Officer and Chief Financial Officer
(606) 326-2800
Fax (606) 326-2801
www.classicbank.com
CLASSIC BANCSHARES, INC. REPORTS RECORD EARNINGS AND DECLARES A CASH DIVIDEND
Ashland, Kentucky, -- August 2, 2001 -- Classic Bancshares, Inc.
(NASDAQ - CLAS) reported net income of $414,000 for the first quarter ended June
30, 2001 compared to net income of $283,000 for the same period in 2000. Fully
diluted earnings per share were $.37 for the three months ended June 30, 2001
compared to fully diluted earnings per share of $.26 for the same period in
2000.
Classic Bancshares' assets increased $4.0 million from $187.9 million
at March 31, 2001 to $191.9 million at June 30, 2001. Loans increased $5.4
million from $138.9 million at March 31, 2001 to $144.3 million at June 30,
2001. Consistent with the Company's strategic plan, the growth in loans was
primarily in the areas of commercial mortgage, commercial business, and consumer
loans. Deposits increased approximately $1.7 million from $145.4 million at
March 31, 2001 to $147.1 million at June 30, 2001.
The Company continues to be strategically focused on maintaining asset
quality and adhering to stringent underwriting standards. As a result, asset
quality remains strong as evidenced by a ratio of non- performing assets to
total assets of .5% at June 30, 2001. The Company recorded a provision for loan
losses of $70,000 for the three-month period, had net charge-offs of $22,000 for
the three-month period resulting in an allowance for loan losses of $1.5 million
at June 30, 2001. The allowance at June 30, 2001 was equal to 207% of total
non-performing loans, 158% of non-performing assets and 1.0% of total loans
receivable.
David B. Barbour, President and Chief Executive Officer commented,
"through the continued execution of our strategic plan and the consolidation of
our banking charters, the Company was able to open and operate our seventh
banking office for the entire quarter without an increase in operating costs. We
anticipate continued success in controlling costs as consolidation expenses
relative to the merging of charters and reduction in work force were present in
this period that will not be inherent in future quarters." Lisah M. Frazier,
Chief Operating and Chief Financial Officer added, "the Company's earnings were
favorably impacted by the new FASB statement eliminating the amortization of
goodwill which has effected the reported earnings of the Company in prior
periods."
Net interest income increased approximately $26,000 for the first
quarter ended June 30, 2001. The net interest margin decreased to 4.0% for the
quarter ended June 30, 2001 compared to 4.2% for the same period in 2000 due to
a decrease in interest rates during the quarter.
Non-interest income was $334,000 for the quarter ended June 30, 2001
compared to $255,000 for the quarter ended June 30, 2000. Non-interest income
increased for the quarter primarily due to an increase in fees and service
charges on deposit accounts. The increase in fees and service charges on
deposits is the
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result of a larger deposit base and the continued adherence to a stringent
waiver policy.
On July 20, 2001, the Financial Accounting Standards Board issued
Statement No. 142, Goodwill and Other Intangible Assets ("SFAS No. 142"). The
new statement changes the accounting for goodwill in that goodwill should not be
amortized but should be tested for impairment annually. The new statement is
effective for fiscal years beginning after December 15, 2001. However, early
adoption is permitted for fiscal years beginning after March 15, 2001.
Therefore, the Company was able to discontinue the amortization of its goodwill
beginning April 1, 2001. As a result, no goodwill amortization was recorded for
the quarter ended June 30, 2001 and will not be recorded in future periods
unless the goodwill is deemed to be impaired after annual evaluation. Management
estimates that the adoption of SFAS No. 142 resulted in an increase of $63,000
in net income and $.06 in fully diluted earnings per share.
Non-interest expenses decreased approximately $65,000. The decrease was
due primarily to the discontinuance of the amortization of goodwill for the
quarter ended June 30, 2001. The Company recorded amortization of goodwill of
$63,000 for the quarter ended June 30, 2000.
Stockholders' equity was $20.7 million at June 30, 2001 compared to
$20.5 million at March 31, 2001.
Classic Bancshares, Inc. also announced that the Company will pay a
quarterly cash dividend of $.08 per share. The dividend will be payable on
August 20, 2001 to shareholders of record on August 6, 2001.
Classic Bancshares, Inc. is headquartered in Ashland, Kentucky and has
one subsidiary, Classic Bank that operates at 344 Seventeenth Street, Ashland,
Kentucky with six branch offices located in Boyd, Carter, Greenup and Johnson
counties.
When used in this press release, the words or phrases "should result,"
"will likely result", "are expected to", "will continue", "is anticipated",
"estimate", "project" or similar expressions are intended to identify
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Such statements are subject to certain risks and
uncertainties, including changes in economic condition in the Company's market
area, changes in policies by regulatory agencies, fluctuations in interest
rates, demand for loans in the Company's market area and competition, that could
cause actual results to differ materially from historical earnings and those
presently anticipated or projected. The Company wishes to caution readers not to
place undue reliance on such forward-looking statements, which speak only as of
the date made. The Company wishes to advise readers that the factors listed
could affect the Company's financial performance and could cause the Company's
actual results for future periods to differ materially from any opinions or
statements expressed with respect to future periods in any current statements.
The Company does not undertake-and specifically declines any
obligation-to publicly release the result of any revisions which may be made to
any forward-looking statements to reflect events or circumstances after the date
of such statements or to reflect the occurrence of anticipated or unanticipated
events.
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SELECTED FINANCIAL DATA
The following table sets forth selected financial data of
Classic Bancshares, Inc. as of June 30, 2001 and March 31, 2001and for the three
months ended June 30, 2001 and 2000.
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<Caption>
June 30, March 31,
2001 2001
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(In Thousands)
Total Assets $ 191,929 $ 187,860
Cash and other interest bearing deposits
with other financial institutions 4,750 5,606
Loans receivable, net 144,268 138,862
Investment securities:
Available for sale 26,148 26,188
Mortgage-backed securities:
Available for sale 3,015 3,445
Goodwill 5,555 5,555
Deposits 147,097 145,430
Federal funds purchased and securities sold under
Agreement to repurchase 4,127 3,180
FHLB advances 18,025 16,636
Stockholders' Equity, subject to certain restrictions 20,719 20,460
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<Table>
<Caption>
Three Months Ended
June 30,
2001 2000
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Total interest income $ 3,410 $ 3,310
Total interest expense 1,774 1,700
Net interest income 1,636 1,610
Provision for loan losses 70 69
Net interest income after provision for losses on loans 1,566 1,541
Fees and service charges 296 217
Other noninterest income 38 38
Total noninterest income 334 255
Total noninterest expense 1,358 1,423
Income before income taxes 542 373
Income tax expense 128 90
Net income $ 414 $ 283
Basic earnings per share $0.39 $0.26
Fully diluted earnings per share $0.37 $0.26
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<Table>
<Caption>
At or for the
Three Months Ended
June 30,
2001 2000
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Return on average assets (ratio of annualized
net income to total average assets) .9% .6%
Return on average equity (ratio of annualized
net income to total average equity) 8.1 6.0
Net interest margin** (FTE) 4.0 4.2
Non-performing assets to total assets 0.5 0.6
Allowance for loan losses to non-performing loans 206.8 182.4
Allowance for loan losses to loans receivable, net 1.0 1.0
Equity to total assets at end of period 10.8 10.6
Non-interest expenses/Total revenues*** 66.0 76.3
Book value per share $18.19 $16.11
Tangible book value per share $13.31 $11.23
Total shares outstanding 1,139,336 1,176,356
Number of full service offices 7 6
Number of ATM locations 16 14
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** Net interest income (FTE) annualized divided by average earning assets.
*** Total revenues=Net interest income (FTE) + non-interest income.
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