EXHIBIT 99.1
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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 THIRD QUARTER EARNINGS
Ashland, Kentucky, -- January 27, 2004 -- Classic Bancshares, Inc.
(NASDAQ - CLAS) reported net income of $2.7 million, or $1.80 per diluted share
for the nine months ended December 31, 2003 compared to net income of $2.2
million, or $1.73 per diluted share for the nine months ended December 31, 2002.
Net income for the third quarter ended December 31, 2003 was $1.0 million, or
$.65 per diluted share compared to $788,000 or $.63 per diluted share for the
third quarter ended December 31, 2002.
The Company's assets increased approximately $91.6 million from
$249.9 million at March 31, 2003 to $341.5 million at December 31, 2003. The
growth for the period was primarily due to the acquisition of First Federal
Financial Bancorp, Inc. completed on June 20, 2003. On the date of closing,
First Federal had total assets of $72.1 million, net loans of $49.5 million 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 $16.4 million. The growth for the nine-month period was primarily
in the loan portfolio, which increased approximately $67.9 million ($17.8
million exclusive of the loans acquired from First Federal). Investment
securities increased by $17.1 million ($8.8 million exclusive of the
acquisition). Deposits also increased by $66.3 million ($9.3 exclusive of the
acquisition). Increased deposits were used to fund loan growth during the
nine-month period.
Total non-performing assets represented .9% of total assets at
December 31, 2003 compared to .5% at March 31, 2003. The increase reflects
primarily non-performing assets, most of which consisted of residential loans
acquired from First Federal. The Company recorded a provision for loan losses of
$158,000 for the nine-month period and net charge-offs of $789,000 for the
nine-month period and acquired an allowance from First Federal of approximately
$885,000 resulting in an allowance for loan losses of $2.2 million at December
31, 2003. The allowance at December 31, 2003 was equal to 102% of total
non-performing loans, 75.7% of non-performing assets and .9% of total loans
receivable.
President and Chief Executive Officer David B. Barbour commented,
"We continue to focus on our June 2003 acquisition of First Federal in the terms
of earnings, deposit and loan growth, margin improvement to pre-acquisition
levels and asset quality. Organic growth within our market areas, while not at
historical levels, continues to outpace other market participants and have
resulted in continued market share increases. Continued restructuring of First
Federal's thrift balance sheet offers margin opportunities in the future. We
fully expect continued improvements in asset quality as problematic loans
advance through our collection process."
Net interest income increased for both the nine-month period and the
third quarter. Net interest income increased $1.7 million for the nine months
ended December 31, 2003 compared to the same period in 2002 and $834,000 for the
third quarter ended December 31, 2003 compared to the same period in 2002. The
increases in net interest income were primarily due to a larger earning asset
base as a result of the First Federal acquisition, purchases of securities, and
internal growth in loans experienced during the nine-month period.
The Company's non-interest income grew for both the nine-month
period and the quarter. Non-interest income increased $356,000 for the nine
months ended December 31, 2003 compared to the same period in 2002 and $35,000
for the third quarter ended December 31, 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 income also increased for the nine months due to an increase
in commissions earned on the origination of secondary market loans. Although
these fees increased for the nine months, fees earned from the origination of
secondary market loans has begun to slow, therefore decreasing the amount of
commissions earned during the quarter and possibly in future periods. The
Company's secondary market activity consists only of commissions earned from a
third party originator and represents a small portion of the Company's
non-interest income.
Non-interest expense increased for both the nine-month period and
the quarter. Non-interest expense increased approximately $1.5 million for the
nine months ended December 31, 2003 as compared to the nine months ended
December 31, 2002 and $579,000 for the third quarter ended December 31, 2003
compared to the same period in 2002. The increase in non-interest expenses was
due to an increase in salaries and employee benefits, an increase in occupancy
and equipment expense, and an increase in supplies expense. All of these
expenses increased primarily due to the acquisition of First Federal.
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 an increase in
legal and accounting fees.
Classic Bancshares, Inc. announced that the Company declared a
quarterly cash dividend of $.08 per share payable on February 24, 2004 to
shareholders of record on February 10, 2004. Per share information was adjusted
for all periods presented to reflect the stock dividend paid on November 17,
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 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, 2003 and March 31, 2003 and for the three
and nine months ended December 31, 2003 and 2002.
December 31, March 31,
2003 2003
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(In Thousands)
SELECTED FINANCIAL CONDITION DATA:
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Total Assets $ 341,452 $ 249,881
Cash and other interest bearing deposits
with other financial institutions 7,935 8,148
Loans receivable, net 255,071 187,175
Securities available for sale 56,941 39,792
Goodwill and other intangible assets 8,891 5,555
Deposits 256,417 190,155
Securities sold under agreement to repurchase 9,172 4,382
FHLB advances 39,051 28,126
Stockholders' Equity 33,907 25,422
Three Months Ended Nine Months Ended
December 31, December 31,
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2003 2002 2003 2002
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(In Thousands)
SELECTED OPERATIONS DATA:
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Total interest income $ 4,559 $ 3,581 $ 12,671 $ 10,661
Total interest expense 1,385 1,241 4,045 3,783
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Net interest income 3,174 2,340 8,626 6,878
Provision for loan losses 66 96 158 306
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Net interest income after provision
for losses on loans 3,108 2,244 8,468 6,572
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Fees and service charges 418 383 1,269 1,028
Gain on sale of securities 1 7 2 11
Other noninterest income 80 74 305 181
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Total noninterest income 499 464 1,576 1,220
Total noninterest expense 2,194 1,615 6,336 4,802
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Income before income taxes 1,413 1,093 3,708 2,990
Income tax expense 410 305 1,055 818
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Net income $ 1,003 $ 788 $ 2,653 $ 2,172
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Basic earnings per share $ 0.71 $ 0.69 $ 1.98 $ 1.88
Diluted earnings per share $ 0.65 $ 0.63 $ 1.80 $ 1.73
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At or for the At or for the
Three Months Ended Nine Months Ended
December 31, December 31,
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2003 2002 2003 2002
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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% 1.3% 1.2% 1.3%
Return on average equity (ratio of annualized
net income to total average equity) 12.0 13.1 11.5 12.3
Net interest margin* (Federal Tax Equivalent) 4.2 4.6 4.3 4.6
Non-performing assets to total assets 0.9 0.6 0.9 0.6
Allowance for loan losses to non-performing loans 102.0 139.1 102.0 139.1
Allowance for loan losses to loans receivable, net 0.9 1.1 0.9 1.1
Non-interest expenses/ Total revenues** 58.0 55.6 60.2 57.1
Book value per share $ 24.14 $ 22.08 $ 24.14 $ 22.08
Tangible book value per share $ 17.81 $ 17.06 $ 17.81 $ 17.06
Total shares outstanding 1,404,825 1,144,281 1,404,825 1,105,486
Total weighted avg. shares outstanding for Diluted EPS 1,543,264 1,250,894 1,470,315 1,258,863
Number of full service offices 10 8 10 8
Number of ATM locations 23 18 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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