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 SECOND QUARTER EARNINGS
Ashland, Kentucky, -- November 1, 2004 -- Classic Bancshares, Inc.
(NASDAQ - CLAS) reported net income of $2.1 million, or $1.34 per diluted share
for the six months ended September 30, 2004 compared to net income of $1.7
million, or $1.16 per diluted share for the six months ended September 30, 2003.
Net income for the second quarter ended September 30, 2004 was $1.0 million or
$.67 per diluted share compared to $905,000 or $.59 per diluted share for the
second quarter ended September 30, 2003.
The Company's assets decreased approximately $1.9 million from $341.8
million at March 31, 2004 to $339.9 million at September 30, 2004 primarily due
to a decrease in investment securities of $3.0 million offset by a slight
increase in cash and loans. The decrease in investment securities was a result
of maturities, calls and principal repayments during the period. Deposits
decreased $18.0 million due primarily to the loss of one public fund account,
which amounted to $15.2 million at June 30, 2004. Retention of the deposit was
based upon pricing and management felt that the cost to retain the deposit was
too high. Management chose to replace the deposit with FHLB borrowings at a
lower cost. FHLB borrowings increased approximately $12.5 million since March
31, 2004.
Total non-performing assets represented .9% of total assets at
September 30, 2004 compared to .7% at March 31, 2004. The Company recorded a
provision for loan losses of $261,000 for the six-month period and had net
charge-offs of $225,000 resulting in an allowance for loan losses of $2.2
million at September 30, 2004. The allowance at September 30, 2004 was equal to
91% of total non-performing loans and .9% of total loans receivable.
Net interest income increased for both the six-month period and the
second quarter. Net interest income increased $1.0 million for the six months
ended September 30, 2004 compared to the same period in 2003 and $262,000 for
the second quarter ended September 30, 2004 compared to the same period in 2003.
The increases in net interest income for the three and six months was due to an
increase in average interest-earning assets and an increase in the Company's
interest rate spread.
The Company's non-interest income grew for both the six-month period
and the quarter. Non-interest income increased $140,000 for the six months ended
September 30, 2004 compared to the same period in 2003 and $31,000 for the
second quarter ended September 30, 2004 compared to the same period in 2003. The
increase in non-interest income was primarily due to an increase in fees and
service charges on deposit accounts as a result of a larger deposit base offset
by a decrease in commissions earned on the origination of secondary market
loans. The Company's secondary market activity consists only of commissions
earned from a third party originator and represents a small portion of the
Company's non-interest income.
Non-interest expense increased for the six-month period and remained
flat for the quarter ended September 30, 2004 when compared to the quarter ended
September 30, 2003. Non-interest expense increased approximately $302,000 for
the six months ended September 30, 2004 as compared to the six months ended
September 30, 2003. The increase in non-interest expense for the six months was
due to an increase in salaries and employee benefits and an increase in
occupancy and equipment expense primarily due to the increase in the number of
employees and banking offices as a result of the acquisition of First Federal
completed in June 2003. Non-interest expense also increased for the six-month
period due to an increase in professional fees resulting primarily from the
Company's efforts to upgrade its corporate governance policies and procedures as
well as compliance 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 condition 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, 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 September 30, 2004 and March 31, 2004 and for the three
and six months ended September 30, 2004 and 2003.
September 30, March 31,
2004 2004
---- ----
(In Thousands)
Selected Financial Condition Data:
Cash and other interest bearing deposits $ 10,512 $ 9,213
Securities available for sale 47,604 50,916
Loans receivable, net 257,943 257,455
Goodwill and other intangible assets 8,438 8,798
Other assets 15,369 15,383
-------- --------
Total assets $339,866 $341,765
======== ========
Deposits $242,270 $260,241
Securities sold under agreement to repurchase 11,673 9,168
FHLB advances 46,727 34,218
Other liabilities 2,520 2,911
-------- --------
Total liabilities 303,190 306,538
Stockholders' Equity 36,676 35,227
-------- --------
Total liabilities and stockholders' equity $339,866 $341,765
======== ========
Three Months Ended Six Months Ended
September 30, September 30,
2004 2003 2004 2003
------ ------ ------ ------
(In Thousands)
Selected Operations Data:
Total interest income $4,551 $4,455 $9,078 $8,113
Total interest expense 1,288 1,454 2,585 2,660
------ ------ ------ ------
Net interest income 3,263 3,001 6,493 5,453
6 61 2
Provision for loan losses 126 4 2 9
------ ------ ------ ------
Net interest income after provision
for losses on loans 3,137 2,955 6,232 5,361
------ ------ ------ ------
Fees and service charges 451 1,058 850 541
Gain on sale of securities -- 1 17 1
27 40 24
Other noninterest income 69 1 1 2
------ ------ ------ ------
Total noninterest income 579 1,215 1,075 610
Total noninterest expense 2,261 2,263 4,443 4,141
------ ------ ------ ------
Income before income taxes 1,486 1,271 3,004 2,295
Income tax expense 449 366 915 645
------ ------ ------ ------
Net income $1,037 $ 905 $2,089 $1,650
====== ====== ====== ======
Basic earnings per share $ 0.74 $ 0.64 $ 1.48 $ 1.28
Fully diluted earnings per share $ 0.67 $ 0.59 $ 1.34 $ 1.16
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At or for the At or for the
Three Months Ended Six Months Ended
September 30, September 30,
------------- -------------
2004 2003 2004 2003
---- ---- ---- ----
Other Data:
Return on average assets (ratio of annualized
net income to total average assets) 1.2% 1.1% 1.2% 1.1%
Return on average equity (ratio of annualized
net income to total average equity) 11.5 11.2 11.8 11.2
Net interest margin(1) (Federal Tax Equivalent) 4.4 4.1 4.4 4.3
Non-performing assets to total assets 0.9 1.0 0.9 1.0
Allowance for loan losses to non-performing loans 91.1 100.3 91.1 100.3
Allowance for loan losses to loans receivable, net 0.9 1.0 0.9 1.0
Non-interest expenses/ Total revenues(2) 56.8 61.4 56.3 61.2
Book value per share $ 26.08 $ 23.13 $ 26.08 $ 23.13
Tangible book value per share $ 20.08 $ 16.67 $ 20.08 $ 16.67
Total shares outstanding 1,408,478 1,409,891 1,408,478 1,409,891
Total weighted avg. shares outstanding for diluted EPS 1,556,291 1,538,752 1,556,379 1,424,144
Number of full service offices 10 10 10 10
Number of ATM locations 23 23 23 23
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(1)- Net interest income (Federal Tax Equivalent) annualized divided by
average earning assets.
(2)- Total revenues=Net interest income (Federal Tax Equivalent) + non-interest
income.
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