EXHIBIT 99
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 2003 THIRD QUARTER EARNINGS
AND DECLARES A CASH DIVIDEND
Ashland, Kentucky, -- January 24, 2003 -- Classic Bancshares, Inc.
(NASDAQ - CLAS) reported net income of $2.2 million, or $1.91 per diluted share
for the nine months ended December 31, 2002 compared to net income of $1.6
million, or $1.45 per diluted share for the nine months ended December 31, 2001.
Net income for the third quarter ended December 31, 2002 was $788,000, or $.70
per diluted share compared to $623,000 or $.57 per diluted share for the third
quarter ended December 31, 2001.
The Company's assets increased approximately $21.2 million from $215.4
million at March 31, 2002 to $236.6 million at December 31, 2002. The growth for
the nine-month period was primarily in the loan portfolio, which increased
approximately $19.8 million. The increase in loans was primarily in the
consumer, commercial business and commercial real estate portfolios. Increased
deposits funded loan growth during the nine-month period with deposits
increasing approximately $17.1 million for the nine months ended December 31,
2002.
Total non-performing assets represented .6% of total assets at December
31, 2002 compared to .3% at March 31, 2002. The increase was a result of an
increase in non-performing loans in primarily the 1-4 family mortgage portfolio
and commercial real estate portfolio. The Company recorded a provision for loan
losses of $306,000 for the nine-month period and had net charge-offs of $23,000
for the nine-month period resulting in an allowance for loan losses of $1.9
million at December 31, 2002. The allowance at December 31, 2002 was equal to
139% of total non-performing loans and non-performing assets and 1.1% of total
loans receivable.
Net interest income increased for both the nine-month period and the
third quarter. Net interest income increased $1.4 million for the nine months
ended December 31, 2002 compared to the same period in 2001 and $338,000 for the
third quarter ended December 31, 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 the
increases in interest-earning assets noted above. 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
deposits, repriced more quickly than assets.
The Company's non-interest income grew for both the nine-month period
and the quarter. Non-interest income increased $123,000 for the nine months
ended December 31, 2002 compared to the same period in 2001 and $45,000 for the
third quarter ended December 31, 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 nine-month period and the
quarter. Non-interest expense increased approximately $627,000 for the nine
months ended December 31, 2002 as compared to the nine months ended December 31,
2001 and $171,000 for the third quarter ended December 31, 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
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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 and an increase
in ESOP expense due to the increase in the average market price of the Company's
stock.
Classic Bancshares, Inc. also announced that the Company would pay a
quarterly cash dividend of $.08 per share. The dividend will be payable on
February 18, 2003 to shareholders of record on February 4, 2003.
Classic Bancshares, Inc. previously announced that the Company entered
into a definitive merger agreement with First Federal Financial Bancorp, Inc.
Under the terms of the agreement, First Federal Financial Bancorp, Inc. will
merge into Classic Bancshares, Inc. in a transaction valued at approximately
$11.5 million. The deal is subject to certain conditions, including the approval
of the shareholders of Classic Bancshares, Inc. and First Financial Bancorp,
Inc. and receipt of regulatory approval.
Classic Bancshares, Inc. is headquartered in Ashland, Kentucky and has
one subsidiary, Classic Bank. Classic Bank operates at 344 Seventeenth Street,
Ashland, Kentucky with seven branch offices located in Boyd, Carter, Greenup and
Johnson counties in Kentucky.
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 December 31, 2002 and March 31, 2002 and for the three
and nine months ended December 31, 2002 and 2001
<table>
<caption>
December 31, March 31,
2002 2002
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(In Thousands)
SELECTED FINANCIAL CONDITION DATA:
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Total Assets $236,626 $215,447
Cash and other interest bearing deposits
with other financial institutions 5,771 5,400
Loans receivable, net 180,161 160,316
Investment securities,
Available for sale 29,149 27,284
Mortgage-backed securities,
Available for sale 7,101 9,064
Goodwill 5,555 5,555
Deposits 175,988 158,874
Securities sold under agreement to repurchase 4,630 5,396
FHLB advances 29,147 27,401
Stockholders' Equity, subject to certain restrictions 24,414 21,981
</table>
<table>
<caption>
Three Months Ended Nine Months Ended
December 31, December 31,
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2002 2001 2002 2001
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(In Thousands)
SELECTED OPERATIONS DATA:
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Total interest income $ 3,581 $ 3,423 $10,661 $10,310
Total interest expense 1,241 1,421 3,783 4,837
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Net interest income 2,340 2,002 6,878 5,473
Provision for loan losses 96 127 306 268
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Net interest income after provision
for losses on loans 2,244 1,875 6,572 5,205
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Fees and service charges 383 312 1,028 900
Gain on sale of securities 7 6 11 7
Other noninterest income 74 101 181 190
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Total noninterest income 464 419 1,220 1,097
Total noninterest expense 1,615 1,444 4,802 4,175
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Income before income taxes 1,093 850 2,990 2,127
Income tax expense (benefit) 305 227 818 547
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Net income $ 788 $ 623 $ 2,172 $ 1,580
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Basic earnings per share $ 0.76 $ 0.59 $ 2.07 $ 1.50
Fully diluted earnings per share $ 0.70 $ 0.57 $ 1.91 $ 1.45
</table>
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<table>
<caption>
At or for the At or for the
Three Months Ended Nine Months Ended
December 31, December 31,
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2002 2001 2002 2001
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OTHER DATA:
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Return on average assets (ratio of annualized
net income to total average assets) .1% .1% .1% .1%
Return on average equity (ratio of annualized
net income to total average equity) 13.1 11.6 12.3 10.0
Net interest margin* (Federal Tax Equivalent) 4.6 4.5 4.6 4.3
Non-performing assets to total assets 0.6 0.4 0.6 0.4
Allowance for loan losses to non-performing loans 139.1 281.6 139.1 281.6
Allowance for loan losses to loans receivable, net 1.1 1.0 1.1 1.0
Non-interest expenses/ Total revenues** 55.6 57.4 57.1 61.0
Book value per share $22.08 $19.08 $22.08 $ 19.08
Tangible book value per share $17.06 $14.12 $17.06 $ 14.12
Total shares outstanding 1,105,486 1,120,336 1,105,486 1,120,336
Total weighted avg. shares outstanding for EPS 1,127,129 1,084,419 1,134,373 1,091,666
Number of full service offices 8 7 8 7
Number of ATM locations 18 18 18 18
</table>
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* Net interest income (Federal Tax Equivalent) annualized divided by average
earning assets.
** Total revenues = Net interest income (Federal Tax Equivalent) + non-interest
income.
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