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 A 32% INCREASE IN EARNINGS
FOR ITS 2003 FISCAL YEAR
Ashland, Kentucky, -- May 16, 2003 -- Classic Bancshares, Inc. (NASDAQ -
CLAS) reported net income of $2.9 million, or $2.55 per diluted share for the
fiscal year ended March 31, 2003 compared to net income of $2.2 million, or
$1.93 per diluted share for the fiscal year ended March 31, 2002. Net income for
the fourth quarter ended March 31, 2003 was $749,000 or $.66 per diluted share
compared to $619,000 or $.55 per diluted share for the fourth quarter ended
March 31, 2002.
The Company's assets increased approximately $34.4 million to $249.8
million at March 31, 2003, representing a year-to-year asset growth rate of 16%.
The growth for the twelve-month period was primarily in the Company's loan
portfolio, which increased approximately $26.9 million or 17% on a year-to-year
basis. The Company's loan growth was evenly weighted in the consumer and
commercial business portfolios. Increased deposits funded asset growth during
the fiscal year. Deposits increased approximately $31.3 million, an increase of
19.7% and borrowings decreased approximately $700,000 for the fiscal year ended
March 31, 2003, as deposit inflows from other investment sources continued. A
total of $11.2 million of the deposit increase was in demand, money market and
savings accounts.
Asset quality continues as a primary focus of the Company with total
non-performing assets representing .5% of total assets at March 31, 2003
compared to .3% at March 31, 2002. The increase in non-performing assets was
primarily in the one-to-four family portfolio and is representative of a slowing
national and local economy. The Company recorded a provision for loan losses of
$428,000 for the twelve-month period and had net charge-offs of approximately
$81,000 for the twelve-month period resulting in an allowance for loan losses of
approximately $2.0 million at March 31, 2003. The allowance at March 31, 2003
was equal to 156% of total non-performing loans and non-performing assets and
1.0% of total loans receivable.
President and Chief Executive Officer, David B. Barbour remarked, "these
results represent the second consecutive year of record earnings for the Company
despite difficult economic conditions. Our management team and employees
continue to execute a strategic direction that is focused on customer service,
efficiencies and sustained profitability. Our new banking office in Greenup,
Kentucky provided a major boost for the Company in deposit and loan growth."
Net interest income increased for both the twelve-month period and the
fourth quarter. Net interest income increased $1.6 million for the fiscal year
ended March 31, 2003 compared to the fiscal year ended March 31, 2002 and
$222,000 for the fourth quarter of fiscal year 2003 compared to the same period
in 2002. The increases in net interest income were primarily due to a larger
earning asset base.
The Company's non-interest income improved for both the twelve-month
period and the quarter. Non- interest income increased $220,000 for the fiscal
year ended March 31, 2003 compared to the fiscal year ended March 31, 2002 and
$98,000 for the fourth quarter of fiscal year 2003 compared to the same period
in 2002. Non-interest income increased primarily due to an increase in fees and
service charges on deposit accounts caused by deposit growth. Non-interest
income also increased from a gain on the sale of securities.
Non-interest expense increased for both the twelve-month period and the
quarter. Non-interest expense increased approximately $730,000 for the fiscal
year ended March 31, 2003 as compared to the fiscal year ended March 31, 2002
and increased approximately $105,000 for the fourth quarter of fiscal year 2003
compared to the same period in 2002. The increase in non-interest expense was
due to an increase in salaries and employee benefits, and an increase in
supplies and equipment expense. All of these expenses increased primarily due to
the opening of a new branch office in Greenup, Kentucky in August 2002.
Non-interest expense also increased due to increased costs related to
incentive-based compensation programs as well as increases in ESOP expense as a
result of increases in the average market price of the Company's stock.
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 Federal Financial
Bancorp, inc. and receipt of regulatory approval, and is anticipated to close by
the end of June 2003.
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, 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 March 31, 2003 and March 31, 2002 and for the three and
twelve months ended March 31, 2003 and 2002.
March 31, March 31,
2003 2002
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(In Thousands)
SELECTED FINANCIAL CONDITION DATA:
Total Assets $ 249,881 $ 215,447
Cash and other interest bearing deposits with other
financial institutions 8,148 5,400
Loans receivable, net 187,175 160,316
Investment securities,
Available for sale 30,196 27,283
Mortgage-backed securities,
Available for sale 9,596 9,064
Goodwill 5,555 5,555
Deposits 190,155 158,874
Securities sold under agreement to repurchase 4,382 5,396
FHLB advances 28,126 27,401
Stockholders' Equity, subject to certain restrictions 25,422 21,981
Three Months Ended Twelve Months Ended
March 31, March 31,
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2003 2002 2003 2002
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(In Thousands)
SELECTED OPERATIONS DATA:
Total interest income $ 3,544 $ 3,399 $ 14,205 $ 13,709
Total interest expense 1,186 1,263 4,970 6,100
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Net interest income 2,358 2,136 9,235 7,609
Provision for loan losses 122 96 428 363
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Net interest income after provision
for losses on loans 2,236 2,040 8,807 7,246
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Fees and service charges 310 288 1,338 1,189
Gain on sale of securities 61 -- 72 7
Other noninterest income 84 69 265 259
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Total noninterest income 455 357 1,675 1,455
Total noninterest expense 1,656 1,551 6,457 5,727
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Income before income taxes 1,035 846 4,025 2,974
Income tax expense (benefit) 286 227 1,104 774
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Net income $ 749 $ 619 $ 2,921 $ 2,200
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Basic earnings per share $ 0.72 $ 0.59 $ 2.77 $ 2.08
Fully diluted earnings per share $ 0.66 $ 0.55 $ 2.55 $ 1.94
At or for the At or for the
Three Months Ended Twelve Months Ended
March 31, March 31,
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2003 2002 2003 2002
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OTHER DATA:
Return on average assets (ratio of annualized
net income to total average assets) 1.2% 1.2% 1.3% 1.1%
Return on average equity (ratio of annualized
net income to total average equity) 11.9 11.3 12.2 10.3
Net interest margin* (Federal Tax Equivalent) 4.5 4.6 4.5 4.4
Non-performing assets to total assets 0.5 0.3 0.5 0.3
Allowance for loan losses to non-performing loans 155.7 248.0 155.7 248.0
Allowance for loan losses to loans receivable, net 1.0 1.0 1.0 1.0
Non-interest expenses/ Total revenues** 58.0 60.0 57.1 60.6
Book value per share $ 23.00 $ 19.62 $ 23.00 $ 19.62
Tangible book value per share $ 17.97 $ 14.66 $ 17.97 $ 14.66
Total shares outstanding 1,105,486 1,120,586 1,105,486 1,120,586
Total weighted avg. shares outstanding for EPS 1,139,236 1,132,974 1,144,676 1,138,111
Number of full service offices 8 7 8 7
Number of ATM locations 20 18 20 18
* Net interest income (Federal Tax Equivalent) annualized divided by average
earning assets.
** Total revenues = Net interest income (Federal Tax Equivalent) + non-interest
income.