SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
October 28, 1998
CLASSIC BANCSHARES, INC.
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(Exact name of Registrant as specified in its Charter)
Delaware 0-27170 61-1289391
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(State or other jurisdiction (Commission File No.)(IRS Employer Identification
of incorporation) No.)
344 17th Street, Ashland, Kentucky 41101
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (606) 325-4789
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N/A
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(Former name or former address, if changed since last report)
Item 5. Other Events
On October 28, 1998, the Registrant issued the press release attached
hereto as Exhibit 99, which announced its earnings for the quarter ended
September 30, 1998, declared a cash dividend and announced its intent to
initiate a stock repurchase program.
Item 7. Financial Statements and Exhibits
(c) Exhibits
99 Press release dated October 28, 1998.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
CLASSIC BANCSHARES, INC.
Date: October 28, 1998 By: /s/Lisah M. Frazier
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Lisah M. Frazier, Senior Vice
President, Treasurer and Chief
Financial Officer
EXHIBIT 99
FOR IMMEDIATE RELEASE
For Additional Information Contact:
David B. Barbour, President and Chief Executive Officer
Lisah Frazier, Senior Vice President, Treasurer and Chief Financial Officer
(606) 325-4789
Fax (606) 324-1307
CLASSIC BANCSHARES, INC. REPORTS SECOND QUARTER EARNINGS,
DECLARES A CASH DIVIDEND AND ACCOUNCES THE INTENT TO
INITIATE STOCK REPURCHASE PROGRAM
Ashland, Kentucky, -- October 21, 1998 -- Classic Bancshares, Inc. (NASDAQ
- - CLAS) had net income for the second quarter ended September 30, 1998 of
$210,000 compared to net income in the same quarter of 1997 of $274,000 and net
income of $407,000 for the six months ended September 30, 1998 compared to net
income of $511,000 for the six months ended September 30, 1997. The quarterly
results ended September 30, 1997 included certain one-time income and expense
items and a net loss on the sale of assets that resulted in a net gain, net of
tax of approximately $90,000. Return on average assets was .6% for the second
quarter and six months ended September 30, 1998 compared to .8% for the second
quarter and six months ended September 30, 1997. Earnings per share were $.18
for the three months ended September 30, 1998 and $.35 for the six months ended
September 30, 1998 compared to $.22 for the three months ended September 30,
1997 and $.42 for the six months ended September 30, 1997. Excluding the
one-time gain and asset losses set forth above, earnings per share would have
been $.15 for the quarter ended September 30, 1997.
Classic Bancshares' banking franchise continued to show strong growth as
assets increased $12.6 million from $130.9 million at March 31, 1998 to $143.5
million at September 30, 1998. The increase in assets was due to an increase in
loans of $5.9 million and an increase in investment and mortgage-backed
securities of $4.9 million. Loans increased $5.9 million from $90.1 million at
March 31, 1998 to $96.0 million at September 30, 1998. The increase in loans is
primarily the result of aggressive origination efforts and improved loan demand
within the Company's market areas. Deposits increased $12.6 million from $104.6
million at March 31, 1998 to $117.2 million at September 30, 1998 due to
increased marketing efforts and the opening of two additional banking offices.
Non-performing assets increased from .4% of total assets at March 31, 1998 to
.6% at September 30, 1998.
President and Chief Executive Officer, David B. Barbour, stated that, "The
quarterly results for 1998 are comparable to the 1997 results excluding certain
restructuring items which resulted in a net gain of approximately $90,000 after
tax for the 1997 quarter. The 1998 quarter represents the first full quarter in
which our two new full-service banking branches were operational resulting in
significant loan and deposit growth from these branch openings and increased
marketing efforts. Deposit growth of $12.6 million and loan increases of $5.9
million can be directly attributable to the additional banking offices while
non-interest expenses were maintained at prior levels due to a cost reduction
strategy of restructuring employee benefit plans and a reduction in the work
force through normal attrition. Much of the deposit increase was in the
non-interest bearing transaction account category that matches our strategy of
decreasing cost of funds and continued increases in non-interest income from
deposit fees and services."
Net interest income was $1.2 million for the second quarter ended September
30, 1998 and $2.3 million for the six months ended September 30, 1998 compared
to $1.2 million for the second quarter ended September 30, 1997 and $2.4 million
for the six months ended September 30, 1997. The net interest margin was 3.6%
for the three months ended September 30, 1998 and 3.7% for the six months ended
September 30, 1998 compared to 3.9% for the three and six
months ended September 30, 1997. The net interest margin experienced a decline
for the period due to a decrease in the yield earned on interest-earning assets.
Non-interest income was $177,000 for the quarter ended September 30, 1998
and $323,000 for the six months ended September 30, 1998 compared to $419,000
for the quarter ended September 30, 1997 and $526,000 for the six months ended
September 30, 1997. The decrease in non-interest income was primarily the result
of a $330,000 gain recorded in 1997 from the settlement of a subsidiary's
pension plan. The increase in fees and service charges on deposits is the result
of new product offerings, an increased deposit base and aggressive pricing
strategies.
Total non-interest expense for the quarter ended September 30, 1998 was
$1.0 million and $2.1 million for the six months ended September 30, 1998
compared to $1.1 million for the quarter ended September 30, 1997 and $2.1
million for the six months ended September 30, 1997. Non-interest expenses were
higher for the quarter in 1997 due to one-time restructuring charges recorded
relative to the consolidation of the operations of the Company's subsidiaries.
Non-interest expenses experienced very little change for the six-month period
even with the opening of the two new branching locations as a result of
management's efforts to initiate various strategies to reduce the Company's
overhead.
Stockholders' equity was $20.7 million at September 30, 1998 compared to
$20.4 million at March 31, 1998.
Classic Bancshares, Inc. also announced that the Company will pay a
quarterly cash dividend of $.08 per share. The dividend will be payable on
November 9, 1998 to shareholders of record on October 26, 1998.
Classic Bancshares, Inc. also announced that the Company intends to
repurchase up to 5% of its outstanding shares of common stock in the open market
over a twelve-month period at prevailing market prices from time to time
depending upon market conditions. The reacquired shares will become treasury
shares and will be used for general corporate purposes, including the issuance
of shares in connection with the exercise of stock options.
Classic Bancshares, Inc. is headquartered in Ashland, Kentucky and has two
subsidiaries, Classic Bank and First National Bank of Paintsville. Classic Bank
operates at 344 Seventeenth Street, Ashland, Kentucky with two branch offices
located in Boyd and Greenup counties. First National Bank of Paintsville
operates at 240 Main Street, Paintsville, Kentucky with one branch office
located in Johnson County.
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.
SELECTED FINANCIAL DATA
The following table sets forth selected financial data of Classic
Bancshares, Inc. as of September 30, 1998 and March 31, 1998 and for the three
and six months ended September 30, 1998 and 1997.
Sept. 30 March 31,
1998 1998
(In Thousands)
Selected Financial Condition Data:
Total Assets $143,450 $130,933
Cash and other interest bearing deposits
with other financial institutions 6,511 3,625
Loans receivable, net 96,042 90,100
Investment securities:
Available for sale 25,851 18,177
Mortgage-backed securities:
Available for sale 5,045 7,831
Goodwill 2,841 2,903
Deposits 117,186 104,627
Securities sold under agreement to repurchase 2,110 3,522
FHLB advances 397 -
Stockholders' Equity, subject to certain restrictions 20,717 20,407
Three Months Ended Six Months Ended
September 30, September 30,
1998 1997 1998 1997
(In Thousands)
Selected Operations Data:
Total interest income $2,434 $2,384 $4,849 $4,754
Total interest expense 1,276 1,217 2,503 2,397
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Net interest income 1,158 1,167 2,346 2,357
Provision for loan losses 15 55 40 103
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Net interest income after provision
for losses on loans 1,143 1,112 2,306 2,254
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Fees and service charges 105 85 213 158
Gain on sale of securities 3 18 4 18
Other noninterest income 69 316 106 350
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Total noninterest income 177 419 323 526
Total noninterest expense 1,029 1,143 2,076 2,063
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Income before income taxes 291 388 553 717
Income tax expense (benefit) 81 114 146 206
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Net income $210 $274 $407 $511
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At or for the At or for the
Three Months Ended Six Months Ended
September 30, September 30,
1998 1997 1998 1997
Other Data:
Return on average assets (ratio of net
income to total average assets)* .6% .8% .6% .8%
Return on average equity (ratio of net
income to total average assets)* 4.1 5.9 4.0 5.4
Net interest margin** 3.6 3.9 3.7 3.9
Non-performing assets to total assets 0.6 0.7 0.6 0.7
Allowance for loan losses to non-
performing loans 161.7 119.3 161.7 119.3
Equity to total assets at end of period 14.4 14.9 14.4 14.9
Efficiency ratio*** 78.0 72.1 79.0 71.6
Basic earnings per share $0.18 $0.22 $0.35 $0.42
Fully diluted earnings per share $0.17 $0.22 $0.33 $0.42
Book value per share $15.94 $15.13 $15.94 $15.13
Tangible book value per share $13.76 $12.85 $13.76 $12.85
Number of full service offices 5 3 5 3
<FN>
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* Annualized
** Net interest income annualized divided by average-earning assets.
*** Non-interest expenses divided by the total of net interest income and
non-interest income.
</FN>