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 FISCAL 2004 FIRST QUARTER EARNINGS
Ashland, Kentucky, -- August 18, 2003 -- Classic Bancshares, Inc.
(NASDAQ - CLAS) reported net income of $745,000, or $.63 per diluted share for
the three months ended June 30, 2003 compared to net income of $656,000, or $.58
per diluted share for the three months ended June 30, 2002.
The Company's assets increased approximately $79.7 million from $249.9
million at March 31, 2003 to $329.6 million at June 30, 2003. The growth for the
period was primarily due to the completion of the acquisition of First Federal
Financial Bancorp, Inc. on June 20, 2003. On the date of closing, First Federal
had total assets of $72.1 million, net loans of $49.5 millions and deposits of
$56.7 million and the Company recorded goodwill and other intangibles of
approximately $3.5 million in connection with the acquisition. Aside from the
acquisition, the Company experienced asset growth of approximately $3.6 million
primarily in loans. Deposits also increased independent of the acquisition by
approximately $1.5 million. The increase in deposits was used to fund loan
growth.
Total non-performing assets represented .8% of total assets at June 30,
2003 compared to .5% at March 31, 2003. The increase was a result of the
non-performing assets most of which consisted of residential loans, acquired
from First Federal. The Company recorded a provision for loan losses of $46,000
for the three-month period, had net charge-offs of $17,000 for the three-month
period and acquired an allowance from First Federal of approximately $885,000
resulting in an allowance for loan losses of $2.9 million at June 30, 2003. The
allowance at June 30, 2003 was equal to 119% of total non-performing loans, 110%
of non-performing assets and 1.2% of total loans receivable.
David B. Barbour, President and Chief Executive Officer commented,
"Despite difficult economic conditions, the Company is pleased to continue to
post double digit earnings increases through diligent management of the
Company's margin. In late June, we completed our acquisition of First Federal
Financial Bancorp and integrated their operations successfully. While management
of the margin has been a major focus, the incorporation of First Federal's
primarily thrift balance sheet into Classic's will result in lower margins in
future periods. We believe the effect of the margin reduction can be offset by
revenue opportunities in First Federal's market area, and intend to restructure
over time the assets and liabilities acquired from First Federal so that they
are more in step with Classic's commercial bank focus."
Net interest income increased for the first quarter of the fiscal year.
Net interest income increased $184,000 for the three months ended June 30, 2003
compared to the same period in 2002. 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.
Interest expense decreased due to a decrease in the cost of funds resulting from
a decline in interest rates.
Non-interest income increased $136,000 for the three months ended June
30, 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 as
a result of a larger deposit base.
Non-interest expense increased approximately $304,000 for the three
months ended June 30, 2003 as compared to the three months ended June 30, 2002.
The increase in non-interest expenses was due to an increase in salaries and
employee benefits, an increase in occupancy and equipment expense, an increase
in marketing and advertising expense, an increase in professional fees and an
increase in stationary, printing and supplies expense. All of these expenses
increased partially due to the acquisition of First Federal. 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
August 18, 2003 to shareholders of record on August 4, 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 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 conditions 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 and demand for loans in the Company's market area and
competition, and difficulties in integrating the operations of merged companies
into Classic's 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 June 30, 2003 and March 31, 2003 and for the three months
ended June 30, 2003 and 2002.
JUNE 30, MARCH 31,
2003 2003
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(In thousands)
Total assets $ 329,617 $ 249,881
Cash and other interest bearing deposits
with other financial institutions 16,989 8,149
Loans receivable, net 241,122 187,175
Investment securities:
Available for sale 35,574 30,196
Mortgage-backed securities:
Available for sale 14,942 9,596
Goodwill & other intangibles 9,052 5,555
Deposits 248,923 190,155
Securities sold under agreement to repurchase 4,997 4,382
FHLB advances 40,022 28,126
Stockholders' equity 32,418 25,423
THREE MONTHS ENDED JUNE 30,
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(In thousands, except per
share amounts)
2003 2002
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Total interest income $ 3,658 $ 3,524
Total interest expense 1,206 1,257
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Net interest income 2,452 2,267
Provision for loan losses 46 160
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Net interest income after provision
for losses on loans 2,406 2,107
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Fees and service charges 399 303
Gain on sale of securities -- 4
Other noninterest income 97 53
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Total noninterest income 496 360
Total noninterest expense 1,878 1,574
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Income before income taxes 1,024 893
Income tax expense 279 237
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Net income $ 745 $ 656
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Basic earnings per share $ 0.70 $ 0.62
Fully diluted earnings per share $ 0.63 $ 0.58
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AT OR FOR THE
THREE MONTHS ENDED JUNE 30,
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2003 2002
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Return on average assets (ratio of annualized
net income to total average assets) 1.2% 1.2%
Return on average equity (ratio of annualized
net income to total average equity) 11.1 11.6
Net interest margin* (Federal Tax Equivalent) 4.5 4.6
Non-performing assets to total assets 0.8 0.4
Allowance for loan losses to non-performing loans 119.1 214.1
Allowance for loan losses to loans receivable, net 1.2 1.0
Non-interest expenses/ Total revenues** 61.4 57.6
Book value per share $ 24.30 $ 20.57
Tangible book value per share $ 17.51 $ 15.61
Total shares outstanding 1,334,151 1,120,586
Total weighted avg. shares outstanding for
diluted EPS 1,179,229 1,166,855
Number of full service offices 10 8
Number of ATM locations 23 18
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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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