EX-99.1 3 ex99-1.txt EXHIBIT 99.1 FOR IMMEDIATE RELEASE 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 SECOND QUARTER EARNINGS AND DECLARES A CASH DIVIDEND Ashland, Kentucky, -- October 30, 2002 -- Classic Bancshares, Inc. (NASDAQ - CLAS) reported net income of $1.4 million, or $1.22 per diluted share for the six months ended September 30, 2002 compared to net income of $957,000, or $.87 per diluted share for the six months ended September 30, 2001. Net income for the second quarter ended September 30, 2002 was $729,000, or $.64 per diluted share compared to $544,000 or $.50 per diluted share for the second quarter ended September 30, 2001. The Company's assets increased approximately $17.7 million from $215.4 million at March 31, 2002 to $233.1 million at September 30, 2002. The growth for the six-month period was primarily in the loan portfolio, which increased approximately $14.2 million. The increase in loans was primarily in the consumer, commercial business and commercial real estate portfolios. Increased deposits funded loan growth during the six-month period with deposits increasing approximately $14.5 million for the six months ended September 30, 2002. The Company continues to experience positive trends in asset quality due to adherence to stringent underwriting standards. Total non-performing assets represented .4% of total assets at September 30, 2002 compared to .3% at March 31, 2002. The Company recorded a provision for loan losses of $210,000 for the six-month period and net charge-offs of $15,000 for the six-month period resulting in an allowance for loan losses of $1.8 million at September 30, 2002. The allowance at September 30, 2002 was equal to 250% of total non-performing loans, 226% of non-performing assets and 1.0% of total loans receivable. Net interest income increased for both the six-month period and the second quarter. Net interest income increased $1.1 million for the six months ended September 30, 2002 compared to the same period in 2001 and $437,000 for the second quarter ended September 30, 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 an increase in interest-earning assets offset by a decrease in the yield earned on interest-earning assets. 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 borrowings, repriced more quickly than assets. The Company's non-interest income grew for both the six-month period and the quarter. Non-interest income increased $77,000 for the six months ended September 30, 2002 compared to the same period in 2001 and $51,000 for the second quarter ended September 30, 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 six-month period and the quarter. Non-interest expense increased approximately $456,000 for the six months ended September 30, 2002 as compared to the six months ended September 30, 2001 and $241,000 for the second quarter ended September 30, 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 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, an increase in ESOP expense due to the increase in the average market price of the Company's stock and the write-down of a piece of real estate acquired through foreclosure. Classic Bancshares, Inc. also announced that the Company would pay a quarterly cash dividend of $.08 per share. The dividend will be payable on November 18, 2002 to shareholders of record on November 4, 2002. 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 2002, the Company began 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 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. SELECTED FINANCIAL DATA The following table sets forth selected financial data of Classic Bancshares, Inc. as of September 30, 2002 and March 31, 2002 and for the three and six months ended September 30, 2002 and 2001.
September 30, March 31, 2002 2002 ---- ---- (In Thousands) SELECTED FINANCIAL CONDITION DATA: ---------------------------------- Total Assets $233,145 $215,447 Cash and other interest bearing deposits with other financial institutions 7,327 5,400 Loans receivable, net 174,477 160,316 Investment securities, Available for sale 29,084 27,284 Mortgage-backed securities, Available for sale 8,362 9,064 Goodwill 5,555 5,555 Deposits 173,420 158,874 Securities sold under agreement to repurchase 5,329 5,396 FHLB advances 27,956 27,401 Stockholders' Equity, subject to certain restrictions 23,996 21,981
Three Months Ended Six Months Ended September 30, September 30, ------------- ------------- 2002 2001 2002 2001 ---- ---- ---- ---- (In Thousands) SELECTED OPERATIONS DATA: ------------------------- Total interest income $3,557 $3,477 $7,080 $6,887 Total interest expense 1,285 1,642 2,542 3,416 Net interest income 2,272 1,835 4,538 3,471 Provision for loan losses 50 71 210 141 Net interest income after provision for losses on loans 2,222 1,764 4,328 3,330 Fees and service charges 341 293 645 589 Gain on sale of securities -- 1 4 1 Other noninterest income 55 51 107 89 Total noninterest income 396 345 756 679 Total noninterest expense 1,614 1,373 3,188 2,732 Income before income taxes 1,004 736 1,896 1,277 Income tax expense (benefit) 275 192 513 320 Net income $ 729 $ 544 $1,383 $ 957 Basic earnings per share $ 0.70 $ 0.51 $ 1.32 $ 0.90 Fully diluted earnings per share $ 0.64 $ 0.50 $ 1.22 $ 0.87
SELECTED FINANCIAL DATA
At or for the At or for the Three Months Ended Six Months Ended September 30, September 30, ------------- ------------- 2002 2001 2002 2001 ---- ---- ---- ---- OTHER DATA: ----------- Return on average assets (ratio of annualized net income to total average assets) 1.3% 1.1% 1.2% 1.0% Return on average equity (ratio of annualized net income to total average equity) 12.3 10.3 11.6 9.2 Net interest margin* (Federal Tax Equivalent) 4.5 4.4 4.6 4.2 Non-performing assets to total assets 0.4 0.5 0.4 0.5 Allowance for loan losses to non-performing loans 249.6 216.0 249.6 216.0 Allowance for loan losses to loans receivable, net 1.0 1.0 1.0 1.0 Non-interest expenses/ Total revenues** 58.2 60.5 57.9 63.1 Book value per share $ 21.71 $ 18.89 $ 21.71 $ 18.89 Tangible book value per share $ 16.68 $ 13.95 $ 16.68 $ 13.95 Total shares outstanding 1,105,486 1,124,172 1,105,486 1,124,172 Total weighted avg. shares outstanding for EPS 1,132,189 1,093,560 1,135,830 1,092,961 Number of full service offices 8 7 8 7 Number of ATM locations 18 17 18 17
* Net interest income (Federal Tax Equivalent) annualized divided by average earning assets. ** Total revenues = Net interest income (Federal Tax Equivalent) + non-interest income.