EXHIBIT 99.1
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 FISCAL 2003 SECOND QUARTER EARNINGS
AND DECLARES A CASH DIVIDEND
Ashland, Kentucky, -- October 30, 2002 -- Classic Bancshares, Inc.
(NASDAQ - CLAS) reported net income of $1.4 million, or $1.22 per diluted share
for the six months ended September 30, 2002 compared to net income of $957,000,
or $.87 per diluted share for the six months ended September 30, 2001. Net
income for the second quarter ended September 30, 2002 was $729,000, or $.64 per
diluted share compared to $544,000 or $.50 per diluted share for the second
quarter ended September 30, 2001.
The Company's assets increased approximately $17.7 million from $215.4
million at March 31, 2002 to $233.1 million at September 30, 2002. The growth
for the six-month period was primarily in the loan portfolio, which increased
approximately $14.2 million. The increase in loans was primarily in the
consumer, commercial business and commercial real estate portfolios. Increased
deposits funded loan growth during the six-month period with deposits increasing
approximately $14.5 million for the six months ended September 30, 2002.
The Company continues to experience positive trends in asset quality
due to adherence to stringent underwriting standards. Total non-performing
assets represented .4% of total assets at September 30, 2002 compared to .3% at
March 31, 2002. The Company recorded a provision for loan losses of $210,000 for
the six-month period and net charge-offs of $15,000 for the six-month period
resulting in an allowance for loan losses of $1.8 million at September 30, 2002.
The allowance at September 30, 2002 was equal to 250% of total non-performing
loans, 226% of non-performing assets and 1.0% of total loans receivable.
Net interest income increased for both the six-month period and the
second quarter. Net interest income increased $1.1 million for the six months
ended September 30, 2002 compared to the same period in 2001 and $437,000 for
the second quarter ended September 30, 2002 compared to the same period in 2001.
The increase in net interest income was due to an increase in interest income
and a decrease in interest expense. Interest income increased primarily due to
an increase in interest-earning assets offset by a decrease in the yield earned
on interest-earning assets. Interest expense decreased due to a decrease in the
cost of funds resulting from a decline in interest rates. During the period of
declining interest rates, liabilities, particularly borrowings, repriced more
quickly than assets.
The Company's non-interest income grew for both the six-month period
and the quarter. Non-interest income increased $77,000 for the six months ended
September 30, 2002 compared to the same period in 2001 and $51,000 for the
second quarter ended September 30, 2002 compared to the same period in 2001.
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 for both the six-month period and the
quarter. Non-interest expense increased approximately $456,000 for the six
months ended September 30, 2002 as compared to the six months ended September
30, 2001 and $241,000 for the second quarter ended September 30, 2002 compared
to the same period in 2001. The increase in non-interest expenses was due to an
increase in salaries and employee benefits, an increase in supplies and
equipment expense and an increase in marketing and advertising expense. All of
these expenses increased partially due to the opening of an additional banking
office opened in Greenup County in August 2002. Non-interest expenses also
increased due to the increased costs related to incentive-based compensation
programs, an increase in ESOP expense due to the increase in the average market
price of the Company's stock and the write-down of a piece of real estate
acquired through foreclosure.
Classic Bancshares, Inc. also announced that the Company would pay a
quarterly cash dividend of $.08 per share. The dividend will be payable on
November 18, 2002 to shareholders of record on November 4, 2002.
Classic Bancshares, Inc. is headquartered in Ashland, Kentucky and has
one subsidiary, Classic Bank. Classic Bank operates at 344 Seventeenth Street,
Ashland, Kentucky with six branch offices located in Boyd, Carter, Greenup and
Johnson counties in Kentucky. In June 2002, the Company began the construction
of an additional banking office in Greenup County. This location will create the
second banking office in the Greenup County market area and will give the
Company a total of seven branch offices.
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.
SELECTED FINANCIAL DATA
The following table sets forth selected financial data of Classic
Bancshares, Inc. as of September 30, 2002 and March 31, 2002 and for the three
and six months ended September 30, 2002 and 2001.
September 30, March 31,
2002 2002
---- ----
(In Thousands)
SELECTED FINANCIAL CONDITION DATA:
- ----------------------------------
Total Assets $233,145 $215,447
Cash and other interest bearing deposits
with other financial institutions 7,327 5,400
Loans receivable, net 174,477 160,316
Investment securities,
Available for sale 29,084 27,284
Mortgage-backed securities,
Available for sale 8,362 9,064
Goodwill 5,555 5,555
Deposits 173,420 158,874
Securities sold under agreement to repurchase 5,329 5,396
FHLB advances 27,956 27,401
Stockholders' Equity, subject to certain restrictions 23,996 21,981
Three Months Ended Six Months Ended
September 30, September 30,
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2002 2001 2002 2001
---- ---- ---- ----
(In Thousands)
SELECTED OPERATIONS DATA:
- -------------------------
Total interest income $3,557 $3,477 $7,080 $6,887
Total interest expense 1,285 1,642 2,542 3,416
Net interest income 2,272 1,835 4,538 3,471
Provision for loan losses 50 71 210 141
Net interest income after provision
for losses on loans 2,222 1,764 4,328 3,330
Fees and service charges 341 293 645 589
Gain on sale of securities -- 1 4 1
Other noninterest income 55 51 107 89
Total noninterest income 396 345 756 679
Total noninterest expense 1,614 1,373 3,188 2,732
Income before income taxes 1,004 736 1,896 1,277
Income tax expense (benefit) 275 192 513 320
Net income $ 729 $ 544 $1,383 $ 957
Basic earnings per share $ 0.70 $ 0.51 $ 1.32 $ 0.90
Fully diluted earnings per share $ 0.64 $ 0.50 $ 1.22 $ 0.87
SELECTED FINANCIAL DATA
At or for the At or for the
Three Months Ended Six Months Ended
September 30, September 30,
------------- -------------
2002 2001 2002 2001
---- ---- ---- ----
OTHER DATA:
- -----------
Return on average assets (ratio of annualized
net income to total average assets) 1.3% 1.1% 1.2% 1.0%
Return on average equity (ratio of annualized
net income to total average equity) 12.3 10.3 11.6 9.2
Net interest margin* (Federal Tax Equivalent) 4.5 4.4 4.6 4.2
Non-performing assets to total assets 0.4 0.5 0.4 0.5
Allowance for loan losses to non-performing loans 249.6 216.0 249.6 216.0
Allowance for loan losses to loans receivable, net 1.0 1.0 1.0 1.0
Non-interest expenses/ Total revenues** 58.2 60.5 57.9 63.1
Book value per share $ 21.71 $ 18.89 $ 21.71 $ 18.89
Tangible book value per share $ 16.68 $ 13.95 $ 16.68 $ 13.95
Total shares outstanding 1,105,486 1,124,172 1,105,486 1,124,172
Total weighted avg. shares outstanding for EPS 1,132,189 1,093,560 1,135,830 1,092,961
Number of full service offices 8 7 8 7
Number of ATM locations 18 17 18 17
* Net interest income (Federal Tax Equivalent) annualized divided by average
earning assets.
** Total revenues = Net interest income (Federal Tax Equivalent) + non-interest
income.