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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
October 29, 1996
CLASSIC BANCSHARES, INC.
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(Exact name of Registrant as specified in its Charter)
Delaware 0-27170 61-1289391
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State or other (Commission File No.) (IRS Employer
jurisdiction of Identification
incorporation) Number)
344 Seventeenth Street, Ashland, Kentucky 41101
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(606) 325-4789
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N/A
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(Former name or former address, if changed since last report)
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Item 5. Other Events
On October 29, 1996, the Registrant issued the attached press release
announcing earnings for the first quarter and a one-time special assessment.
Item 7. Financial Statements and Exhibits
(a) Exhibits
99. Press release dated October 29, 1996.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
CLASSIC BANCSHARES, INC.
Date: October 29, 1996 By: /s/ David B. Barbour
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David B. Barbour, President
and Chief Executive Officer)
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<TABLE>
Index to Exhibits
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Exhibit
Number
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99 Press release dated October 29, 1996
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FOR IMMEDIATE RELEASE
For Additional Information Contact:
David B. Barbour, President and Chief Executive Officer
Lisah Frazier, Vice President, Treasurer and Chief Financial
Officer
(606) 325-4789
Fax (606) 324-1307
SECOND QUARTER ENDING SEPTEMBER 30, 1996
EARNINGS RELEASE - CLASSIC BANCSHARES, INC.
Ashland, Kentucky -- October 29, 1996 -- Classic Bancshares, Inc.
(NASDAQ - CLAS) reported net income for the six months ended September 30,
1996 of $34,000 and a net loss of $127,000 for the quarter ended September 30,
1996. The Company recorded a net loss for the quarter due to a one-time
special assessment for SAIF-insured institutions of $316,000 and restructuring
costs of $100,000. While the payment of this one-time assessment reduced net
income for the second quarter, future earnings will more than offset the
negative impact on earnings since the deposit insurance premiums that SAIF-
insured institutions pay will decline from an average of 23.4 basis points to
6.4 basis points, effective January 1, 1997. If the Company had not recorded
these one-time charges, net income would have been $152,000 for the three
months ended September 30, 1996 as compared to $43,000 for the three months
ended September 30, 1995; and $312,000 for the six months ended September 30,
1996 compared to $26,000 for the six months ended September 30, 1995. Return
on average assets would have been .9% for the six months ended September 30,
1996 compared to .1% for the six months ended September 30, 1995. Earnings
per share for the six months ended September 30, 1996 was $.03. Excluding the
special assessment and restructuring charges, earnings per share would have
been $.26 per share for the six months ended September 30, 1996.
Classic Bancshares' assets increased 106% to $136.2 million at
September 30, 1996 form $66.1 million at March 31, 1996. The primary factor
in this growth was due to the acquisition of First Paintsville Bancshares,
Inc., the bank holding company for The First National Bank of Paintsville on
September 30, 1996. The acquisition was accounted for under the purchase
method of accounting. As a result, assets and liabilities are consolidated as
of the balance sheet date and earnings are consolidated from the date of
acquisition. Therefore, earnings of The First National Bank of Paintsville
are not reflected in the quarter or six months ended September 30, 1996. In
connection with the acquisition, the Company recorded $3.1 million in
goodwill. Deposits increased 115%, from $46.2 million at March 31, 1996 to
$99.4 million at September 30, 196 as a result of the acquisition. The
Company also assumed $700,000 in long-term debt as part of the acquisition.
Non-performing assets remained at .9% of total assets at March 31, 1996 and
September 30, 1996.
President and Chief Executive Officer, David B. Barbour, stated that
"notwithstanding the special one-time charges incurred in this quarter, we
remain on track toward performing at the higher end of our peers in all
categories. The net interest margin continues to be favorably impacted by our
strategy of increasing loan yields through diversification of our loan
portfolio in commercial and consumer lending activities, as well as decreasing
our cost of interest bearing liabilities through the offering of a wide range
of transaction oriented deposit products. Our net interest margin of 3.5% for
the quarter ending September 30, 1996 represents a significant improvement
over the 2.0% net interest margin recorded for the corresponding period in
1995. Return on average assets, notwithstanding the effect of the one-time
charges, was .9% compared with .1% for the corresponding period in 1995, which
exceeds our peer group average. Our efficiency ratio, net of one-time
charges, was lowered to 63.9% from the previous quarter's 64.9%. Asset<PAGE>
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quality remains a top priority in view of nationwide consumer debt levels,
with non-performing assets remaining under the 1% level."
"We look forward to the December 1996 quarter which will reflect the
earnings of our recent acquisition, the First National Bank of Paintsville.
First National has historically outperformed their banking peers and provides
Classic with the higher bank earnings that will supplement the lower thrift
earnings generated by Ashland Federal, until Ashland Federal can successfully
complete it's configuration to a commercial bank structure. We fully expect
the earnings of First National to positively impact Classic's earnings per
share in the next quarter."
Net interest income was $1.1 million for the six months ended September
30, 1996 as compared to $639,000 for the same period of 1995. Net interest
income for the quarter ended September 30, 1996 was $566,000 compared to
$307,000 for the same period in 1995. The increase in net interest income
resulted from an increase in loan volume and higher yielding loans and a
decrease in higher costing deposits. The net interest margin was 3.4% for the
six months ended September 30, 1996 as compared to 2.1% for the six months
ended September 30, 1995 and 3.5% for the quarter ended September 30, 1996 as
compared to 2.0% for the quarter ended September 30, 1995.
Non-interest income was $23,000 for the six months ended September 30,
1996 compared to a loss of $31,000 for the six months ended September 30,
1995. The loss for the period in 1995 resulted from the loss on the sale of
mortgage-backed securities.
Total non-interest expense for the six months ended September 30, 1996
was $1.1 million compared to $517,000 for the same period in 1995. The
increase resulted primarily from the one-time SAIF assessment and
restructuring costs. The remainder of the increase resulted from costs
associated with the introduction of new product offerings, increased costs
relative to operation as a public company and additional staffing and
increased personnel costs from employee benefit plans. Excluding the special
assessment and restructuring costs, non-interest expenses would have been
$690,000 for the six months ended September 30, 1996 and the efficiency ratio
for the six months ended September 30, 1996 would have been 63.9%.
Stockholders' equity was $18.8 million at September 30, 1996 as compared
to $19.5 million at March 31, 1996. The decrease in equity was the result of
the purchase of shares for the Company's Recognition and Retention Plan. The
book value per share was $16.08 at September 30, 1996.
Classic Bancshares Inc. has two subsidiaries, Ashland Federal Savings
Bank and First National Bank of Paintsville. Ashland Federal Savings Bank
operates at 344 Seventeenth Street, Ashland, Kentucky. First National Bank of
Paintsville operates at 240 Main Street, Paintsville, Kentucky and has one
branch office.
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, 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.<PAGE>
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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, 1996 and March 31, 1996 and for the three
and six months ended September 30, 1996 and 1995.
September 30, March 31,
Selected Financial Condition Data: 1996 1996
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(In Thousands)
Total Assets $136,218 $66,083
Cash and other interest bearing
deposits with other financial
institutions 17,235 7,106
Loans receivable, net 77,403 43,722
Investment securities:
Available for sale 29,989 10,438
Mortgage-backed securities:
Available for sale 2,749 2,840
Goodwill 3,086 ---
Deposits 99,390 46,201
FHLB advances 10,200 ---
Shareholders' Equity, subject to
certain restrictions 18,798 19,500
Three months ended Six months ended
September 30, September 30,
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Selected Operations Data: 1996 1995 1996 1995
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(In Thousands)
Total interest income $1,219 $1,049 $2,378 $2,102
Total interest expense 653 742 1,274 1,463
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Net interest income 566 307 1,104 639
Provision for loan losses 15 5 30 115
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Net interest income after
provision for losses on loans 551 302 1,074 524
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Fees and service charges 8 9 17 13
Loss on sale of mortgage-backed
securities --- --- --- (62)
Other non-interest income 3 12 6 18
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Total non-interest income 11 21 23 (31)
Total non-interest expense 786 291 1,105 517
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Income(loss) before income taxes (224) 32 (8) (24)
Income tax expense (benefit) (97) (11) (42) (50)
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Net income (loss) $ (127) $ 43 $ 34 $ 26
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At of for the At or for the
Three months ended Six months ended
September 30, September 30,
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1996 1995 1996 1995
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Other Data:
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Return on average assets (ratio
of net income to total
average assets)* -.1% .3% .1% .1%
Net interest margin** 3.5 2.0 3.4 2.1
Non-performing assets to total
assets 0.9 1.0 0.9 1.0
Allowance for loan losses to
non-performing loans 106.8 42.1 106.8 42.1
Equity to total assets at end
of period 13.8 11.9 13.8 11.9
Efficiency ratio*** 138.7% 90.2% 100.7% 103.9%
Number of full service offices 3 1 3 1
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* Annualized
** Net interest income annualized divided by average-earning assets.
*** Non-interest expenses divided by the total of net interest income and
non-interest income.
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