EXHIBIT 99
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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 RECORD EARNINGS FOR ITS 2002 FISCAL
YEAR
Ashland, Kentucky, -- May 30, 2002 -- Classic Bancshares, Inc.
(NASDAQ - CLAS) reported net income of $2.2 million, or $1.93 per diluted share
for the fiscal year ended March 31, 2002 compared to net income of $1.0 million,
or $.96 per diluted share for the fiscal year ended March 31, 2001. Net income
for the fourth quarter ended March 31, 2002 was $619,000, or $.55 per diluted
share compared to $150,000 or $.14 per diluted share for the fourth quarter
ended March 31, 2001. The Company recorded one-time charges of approximately
$95,000, net of tax during the fourth quarter of fiscal year 2001 as a result of
the merger of its two banking subsidiaries.
The Company's assets increased approximately $27.6 million to $215.4
million at March 31, 2002. The growth for the twelve-month period was primarily
in the Company's loan portfolio, which increased approximately $21.5 million.
The Company's loan growth was principally in the consumer, commercial business
and commercial real estate portfolios. The remainder of the asset growth was
attributed to an increase in mortgage-backed and investment securities of
approximately $6.7 million. Increased deposits and Federal Home Loan Bank
borrowings funded asset growth during the fiscal year. In compliance with the
Company's strategic plan, management continually seeks to utilize the lowest
cost funding sources available. As a result, borrowings were utilized during the
fiscal year when the cost of those borrowings was more attractive than the cost
of deposits. Deposits increased approximately $13.4 million and borrowings
increased approximately $10.8 million for the fiscal year ended March 31, 2002.
Management continues to strategically focus on structuring a balance sheet that
enhances the Company's net interest margin while managing its interest rate
position.
The Company's diligence to asset quality remains a primary focus as
evidenced by improvements in asset quality. Total non-performing assets
represented .3% of total assets at March 31, 2002 compared to .5% at March 31,
2001. The Company recorded a provision for loan losses of $363,000 for the
twelve- month period and had net charge-offs of $142,000 for the twelve-month
period resulting in an allowance for loan losses of $1.6 million at March 31,
2002. The allowance at March 31, 2002 was equal to 248% of total non-performing
loans, 222% of non-performing assets and 1.0% of total loans receivable.
Chief Operating and Chief Financial Officer, Lisah M. Frazier stated
that, "The increase in net income for the fiscal year ending March 31, 2002 is
in alignment with our strategic plan and the underlying reasons for this
accomplishment were three fold. First, by increasing loan volume we were able to
maintain interest income levels while reducing our funding costs in a declining
interest rate environment. Secondly, the Company realized increased levels of
non-interest income mainly from charges related to deposit accounts due to an
increased deposit base. Finally, stringent cost control resulted in decreased
levels of non- interest expenses. The containment of costs allowed the
enhancements in net interest income and non- interest income to translate
directly to the bottom line."
President and Chief Executive Officer, David B. Barbour added that,
"The acceptance of our community banking strategy by the communities we serve
has been overwhelming and responsible for the Company attaining our internal
growth targets and record earnings. The achievement of a double digit return on
equity and greater than 1% return on assets represent significant milestones for
the Company."
Net interest income increased for both the twelve-month period and
the fourth quarter. Net interest income increased $1.3 million for the fiscal
year ended March 31, 2002 compared to the fiscal year ended March 31, 2001 and
$569,000 for the fourth quarter of fiscal year 2002 compared to the same period
in 2001. The increase in net interest income was primarily due to a decrease in
the cost of funds as a result of a decline in interest rates.
The Company's non-interest income improved for both the twelve-month
period and the quarter. Non-interest income increased $370,000 for the fiscal
year ended March 31, 2002 compared to the fiscal year ended March 31, 2001 and
$81,000 for the fourth quarter of fiscal year 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 caused by deposit growth.
Non-interest expense decreased for both the twelve-month period and
the quarter. Non-interest expense decreased approximately $67,000 for the fiscal
year ended March 31, 2002 as compared to the fiscal year ended March 31, 2001
and decreased approximately $43,000 for the fourth quarter of fiscal year 2002
compared to the same period in 2001.
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 of 2002, the Company will
begin 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, 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 March 31, 2002 and March 31, 2001 and for the three and
twelve months ended March 31, 2002 and 2001.
March 31, March 31,
2002 2001
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(In Thousands)
SELECTED FINANCIAL CONDITION DATA:
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Total Assets $ 215,420 $ 187,860
Cash and other interest bearing deposits
with other financial institutions 5,400 5,606
Loans receivable, net 160,316 138,862
Investment securities,
Available for sale 27,284 26,188
Mortgage-backed securities,
Available for sale 9,064 3,445
Goodwill 5,555 5,555
Deposits 158,874 145,430
Securities sold under agreement to repurchase 5,396 3,180
FHLB advances 27,401 16,636
Stockholders' Equity, subject to certain restrictions 21,981 20,460
Three Months Ended Twelve Months Ended
March 31, March 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 $ 3,399 $ 3,448 $ 13,709 $ 13,697
Total interest expense 1,263 1,881 6,100 7,349
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Net interest income 2,136 1,567 7,609 6,348
Provision for loan losses 96 58 363 261
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Net interest income after provision for
losses on loans 2,040 1,509 7,246 6,087
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Fees and service charges 288 225 1,189 915
Gain on sale of securities -- 31 7 31
Loss on disposal of assets -- (31) -- (31)
Other noninterest income 69 51 259 170
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Total noninterest income 357 276 1,455 1,085
Total noninterest expense 1,551 1,594 5,727 5,794
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Income before income taxes 846 191 2,974 1,378
Income tax expense (benefit) 227 41 774 330
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Net income $ 619 $ 150 $ 2,200 $ 1,048
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Basic earnings per share $ 0.59 $ 0.14 $ 2.07 $ 0.97
Fully diluted earnings per share $ 0.55 $ 0.14 $ 1.93 $ 0.96
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At or for the At or for the
Three Months Ended Twelve Months Ended
March 31, March 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) 1.2% .3% 1.1% .6%
Return on average equity (ratio of annualized
net income to total average equity) 11.3 2.9 10.3 5.3
Net interest margin* (Federal Tax Equivalent) 4.6 4.0 4.4 4.1
Non-performing assets to total assets 0.3 0.5 0.3 0.5
Allowance for loan losses to non-performing loans 248.0 179.1 248.0 179.1
Allowance for loan losses to loans receivable, net 1.0 1.0 1.0 1.0
Non-interest expenses/ Total revenues** 60.0 74.4 60.6 69.9
Book value per share $ 19.62 $ 17.88 $ 19.62 $ 17.88
Tangible book value per share $ 14.66 $ 13.03 $ 14.66 $ 13.03
Total shares outstanding 1,120,586 1,144,336 1,120,586 1,144,336
Total weighted avg. shares outstanding for EPS 1,132,974 1,076,088 1,138,111 1,087,788
Number of full service offices 7 7 7 7
Number of ATM locations 18 16 18 16
* 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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