EXHIBIT 99.1
FOR IMMEDIATE RELEASE
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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 FISCAL 2005 FIRST QUARTER EARNINGS AND
ANNOUNCES AN INCREASE IN THE CASH DIVIDEND
Ashland, Kentucky, -- August 3, 2004 -- Classic Bancshares, Inc.
(NASDAQ - CLAS) reported net income of $1.1 million, or $.68 per diluted share
for the three months ended June 30, 2004 compared to net income of $745,000, or
$.57 per diluted share for the three months ended June 30, 2003.
The Company's assets decreased approximately $5.8 million from $341.8
million at March 31, 2004 to $336.0 million at June 30, 2004. Assets decreased
primarily due to a decrease in investment securities of $4.8 million and a
decrease in loans of $1.5 million. Securities decreased as a result of
maturities, calls and principal repayments during the period and a decline in
the market value of these available for sale securities. Management was
reluctant to replace these securities based on its expectation of an increase in
interest rates. Loans decreased due to the payout of some large commercial
credits and also a slowing of loan demand within the Company's market area.
Deposits decreased approximately $2.1 million due to outflow of deposits in the
normal course of business and FHLB borrowings also decreased approximately $4.6
million.
Total non-performing assets represented .8% of total assets at June 30,
2004 compared to .7% at March 31, 2004. The Company recorded a provision for
loan losses of $135,000 for the three-month period and had net charge-offs of
$132,000 for the three-month period resulting in an allowance for loan losses of
$2.2 million at June 30, 2004. The allowance at June 30, 2004 was equal to 112%
of total non-performing loans and .9% of total loans receivable.
"We are pleased to continue to report double digit growth in earnings
per share despite uncertain economic conditions both regionally and nationally,"
commented President and Chief Executive Officer David B. Barbour. "Our earnings
per share growth of 17% is reflective of our effort to maintain net interest
margins while keeping non-interest expenses at levels below our peers."
Lisah M. Frazier, Chief Operating and Chief Financial Officer added,
"In view of our continued earnings growth, the Board of Directors has elected to
increase the dividend from the current rate of $.08 per quarter to $.10 per
quarter payable to shareholders of record on August 10, 2004, representing a 25%
increase." The dividend is payable on August 24, 2004.
Net interest income increased for the first quarter of the fiscal year.
Net interest income increased $778,000 for the three months ended June 30, 2004
compared to the same period in 2003. The increase in net interest income was due
to an increase in average interest-earning assets. This increase was due
primarily to the acquisition of First Federal completed in June 2003.
Non-interest income increased $109,000 for the three months ended June
30, 2004 compared to the same period in 2003. Non-interest income increased
primarily due to an increase in fees and service charges on deposit accounts as
a result of a larger deposit base.
Non-interest expense increased approximately $303,000 for the three
months ended June 30, 2004 as compared to the three months ended June 30, 2003.
The increase in non-interest expenses was due primarily to an increase in
salaries and employee benefits and an increase in occupancy and equipment
expense. These expenses increased primarily due to the acquisition of First
Federal completed in June 2003. Non-interest expenses also increased due to an
increase in professional fees resulting primarily from the Company's efforts to
upgrade its corporate governance and comply with new regulatory requirements.
Classic Bancshares, Inc. is headquartered in Ashland, Kentucky and has
one subsidiary, Classic Bank. Classic Bank operates at 344 Seventeenth Street,
Ashland, Kentucky with nine branch offices located in Boyd, Carter, Greenup and
Johnson counties in Kentucky and Lawrence County, Ohio.
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 conditions in the Company's market
area including unemployment levels and plant closings, real estate values in the
Company's market area, changes in policies by regulatory agencies, fluctuations
in interest rates and demand for loans in the Company's market area and
competition, and the Company's ability to recruit additional managers to sustain
its growth and difficulties in integrating the operations of merged companies
into Classic's 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 June 30, 2004 and March 31, 2004 and for the three months
ended June 30, 2004 and 2003.
June 30, March 31,
2004 2004
---- ----
(In thousands)
Cash and other interest bearing deposits
with other financial institutions $ 10,098 $ 9,213
Securities available for sale 46,122 50,916
Loans receivable, net 255,961 257,455
Goodwill & other intangibles 8,465 8,798
Other assets 15,329 15,383
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Total assets $335,975 $341,765
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Deposits $258,183 $260,241
Securities sold under agreement to repurchase 11,541 9,168
FHLB advances 29,580 34,218
Other liabilities 1,757 2,911
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Total liabilities 301,061 306,538
Stockholders' equity 34,914 35,227
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Total liabilities and stockholders' equity $335,975 $341,765
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Three Months Ended
June 30,
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(In thousands, except per share amounts)
2004 2003
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Total interest income $ 4,528 $ 3,658
Total interest expense 1,298 1,206
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Net interest income 3,230 2,452
Provision for loan losses 135 46
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Net interest income after provision for loan losses 3,095 2,406
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Fees and service charges 517 399
Gain on sale of securities 17 ---
Other noninterest income 71 97
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Total noninterest income 605 496
Total noninterest expense 2,181 1,878
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Income before income taxes 1,519 1,024
Income tax expense 467 279
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Net income $ 1,052 $ 745
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Basic earnings per share(1) $0.75 $0.63
Fully diluted earnings per share(1) $0.68 $0.57
At or for the
Three Months Ended
June 30,
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2004 2003
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Return on average assets (ratio of annualized
net income to total average assets) 1.3% 1.2%
Return on average equity (ratio of annualized
net income to total average equity) 12.1 11.1
Net interest margin(2) (Federal Tax Equivalent) 4.3 4.5
Non-performing assets to total assets 0.8 0.8
Allowance for loan losses to non-performing loans 112.2 119.1
Allowance for loan losses to loans receivable, net 0.9 1.2
Non-interest expenses/ Total revenues(3) 55.5 61.4
Book value per share(1) $24.81 $22.11
Tangible book value per share(1) $18.80 $15.94
Total shares outstanding(1) 1,407,183 1,467,566
Total weighted avg. shares outstanding for diluted EPS 1,556,468 1,297,383
Number of full service offices 10 10
Number of ATM locations 21 23
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(1) - Amounts were adjusted for all periods presented to reflect the 10% stock dividend paid on November 17, 2003.
(2) - Net interest income (Federal Tax Equivalent) annualized divided by average earning assets.
(3) - Total revenues=Net interest income (Federal Tax Equivalent) + non-interest income.