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)
April 28, 1999
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 jurisdiction (Commission File No.) (IRS Employer Identification
of incorporation) No.)
344 17th 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 April 28, 1999, the Registrant issued the press release attached hereto
as Exhibit 99.1 announcing its earnings for the fiscal year ended March 31,
1999. On April 22, 1999, the Registrant issued the press release attached hereto
as Exhibit 99.2 announcing the declaration of a cash dividend, the completion of
a repurchase of five percent of its outstanding shares of common stock and the
intent to initiate another stock repurchase program.
Item 7. Financial Statements and Exhibits
(c) Exhibits
99.1 Press release dated April 28, 1999.
99.2 Press release dated April 22, 1999.
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SIGNATURES
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: May 12, 1999 By: /s/Lisah M. Frazier
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Lisah M. Frazier, Senior Vice
President, Treasurer and Chief
Financial Officer
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EXHIBIT 99.1
<PAGE>
FOR IMMEDIATE RELEASE
For Additional Information Contact:
David B. Barbour, President and Chief Executive Officer
Lisah Frazier, Senior Vice President, Treasurer and Chief Financial Officer
(606) 325-4789
Fax (606) 324-1307
CLASSIC BANCSHARES, INC. REPORTS ANNUAL EARNINGS AND LOAN AND DEPOSIT GROWTH
Ashland, Kentucky, -- April 28, 1999 -- Classic Bancshares, Inc. (NASDAQ -
CLAS) had net income for the fourth quarter ended March 31, 1999 of $246,000
compared to net income in the fourth quarter of 1998 of $229,000. Basic earnings
per share were $.21 for the quarter ended March 31, 1999 compared to $.20 for
the quarter ended March 31, 1998.
For the year ended March 31, 1999, the Company reported net income of
$885,000, or $.75 basic earnings per share compared to $1.0 million, or $.87
basic earnings per share reported for the year ended March 31, 1998. Return on
average assets was .6% for the twelve months ended March 31, 1999 compared to
.8% for the twelve months ended March 31, 1998. Net income for the year ended
March 31, 1998 included a $245,000 gain, net of tax, recorded from the
settlement of First National's pension plan. Excluding this one-time gain, net
income for 1998 would have been $775,000, or $.66 per share. Return on average
assets for 1998 excluding the pension gain would have been .6%.
Classic Bancshares' assets increased $11.8 million from $131.1 million at
March 31, 1998 to $142.9 million at March 31, 1999. The increase in assets was
primarily due to an increase in loans of $7.4 million and an increase in
investment and mortgage-backed securities of $3.7 million. Loans increased $7.4
million from $90.1 million at March 31, 1998 to $97.5 million at March 31, 1999.
The increase in loans is primarily the result of aggressive origination efforts
and improved loan demand within the Company's market areas. Deposits increased
$12.8 million from $104.9 million at March 31, 1998 to $117.7 million at March
31, 1999 due to increased marketing efforts and the opening of two additional
banking offices in the first quarter of fiscal 1999.
Asset quality remained stable as total non-performing assets was .7% of
total assets at March 31, 1999 compared to .4% at March 31, 1998. The Company
recorded a provision for loan losses of $35,000 in the current quarter and
$100,000 for the year resulting in an allowance for loan losses of $861,000 at
March 31, 1999 equal to 204% of total non- performing loans, 87% of
non-performing assets and .9% of total loans receivable.
President and Chief Executive Officer, David B. Barbour stated that,
"Fiscal year 1999 represented a year of expansion, growth and technological
advances for the Company while also recording the third consecutive quarterly
increase in earnings. The successful opening of two new banking offices during
1998 contributed to a 12.2% increase in deposits and an 8.2% increase in loans.
On an adjusted earnings basis, net income after tax increased 14% over fiscal
year 1998 and represents the third consecutive year of increased earnings for
the Company."
"We also announced the acquisition of Citizens Bank in Grayson, Kentucky
which after closing will operate as a branch of Classic Bank and is anticipated
to become accretive to earnings immediately. This acquisition will allow us to
extend our franchise in an important and growing market while further allowing
the Company to continue the consolidation of corporate functions. The
implementation of our transactional web site and home-banking product has
enabled us to provide our customers with technology products and services
<PAGE>
comparable to our national and regional banking competitors. The investments
made during fiscal year 1999 in technology, ATM's and additional offices will
continue to benefit earnings in future periods through market share increases in
deposits and loans, further leveraging overhead efficiencies."
Net interest income increased $115,000 to $1.3 million for the fourth
quarter ended March 31, 1999 compared to $1.2 million for the fourth quarter
ended March 31, 1998. Net interest income increased $149,000 to $4.8 million for
the twelve months ended March 31, 1999 compared to $4.7 million for the twelve
months ended March 31, 1998. The net interest margin was 3.9% for the quarter
ended March 31, 1999 and 3.8% for the year ended March 31, 1999 compared to 3.8%
for the quarter ended March 31, 1998 and 3.9% for the year ended March 31, 1998.
Non-interest income was $182,000 for the quarter ended March 31, 1999
compared to $169,000 for the quarter ended March 31, 1998. Non-interest income
increased for the quarter due to an increase in fees and service charges on
deposit accounts and fees earned on the origination of secondary market loans.
Non-interest income was $675,000 for the twelve months ended March 31, 1999
compared to $873,000 for the twelve months ended March 31, 1998. The decrease in
non-interest income for the twelve month period was primarily the result of a
$371,000 gain recorded in 1998 from the settlement of First National's pension
plan offset by an increase in fees and service charges on deposit accounts and
an increase in fees earned on the origination of secondary market loans. The
increase in fees and service charges on deposits is the result of new product
offerings, an increased deposit base and aggressive pricing strategies.
Non-interest expense for the quarter ended March 31, 1999 was $1.1 million
compared to $994,000 for the quarter ended March 31, 1998. Non-interest expenses
increased for the quarter due primarily to the implementation and marketing of
the transactional web site with home banking and bill pay services for the
Company's subsidiary banks. Non-interest expenses also increased due to
increased costs related to two additional banking offices that were not open
during the same quarter in 1998.
Non-interest expense was $4.3 million for the twelve months ended March 31,
1999 compared to $4.0 million for the twelve months ended March 31, 1998.
Non-interest expenses increased for the year due to increased costs related to
the opening of two new banking offices in the first quarter of fiscal 1999.
Stockholders' equity was $20.3 million at March 31, 1999 compared to $20.4
million at March 31, 1998.
Classic Bancshares, Inc. also previously announced the acquisition of
Citizens Bank, Grayson. Immediately upon closing of the transaction, the charter
for Citizens Bank will be dissolved and operated as a branch of Classic Bank.
The transaction is anticipated to be completed in mid May 1999.
Classic Bancshares, Inc. is headquartered in Ashland, Kentucky and has two
subsidiaries, Classic Bank and First National Bank of Paintsville. Classic Bank
operates at 344 Seventeenth Street, Ashland, Kentucky with two branch offices
located in Boyd and Greenup counties. First National Bank of Paintsville
operates at 240 Main Street, Paintsville, Kentucky with one branch office
located in Johnson County.
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
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could affect the Company's financial erformance 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.
SEE FOLLOWING PAGES FOR
SELECTED FINANCIAL DATA
INCLUDED AS PART OF THIS RELEASE
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SELECTED FINANCIAL DATA
The following table sets forth selected financial data of Classic
Bancshares, Inc. as of March 31, 1999 and March 31, 1998 and for the three and
twelve months ended March 31, 1999 and 1998.
March 31, March 31,
1999 1998
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(In Thousands)
Selected Financial Condition Data:
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Total Assets $142,897 $ 131,121
Cash and other interest bearing deposits
with other financial institutions 4,486 3,625
Loans receivable, net 97,527 90,100
Investment securities:
Available for sale
26,526 19,474
Mortgage-backed securities:
Available for sale 4,479 7,831
Goodwill 2,779 2,903
Deposits 117,732 104,927
Securities sold under agreement to repurchase
2,099 3,522
FHLB advances
388 -
Stockholders' Equity, subject to certain
restrictions 20,263 20,407
<TABLE>
<CAPTION>
Three Months Ended Twelve Months Ended
March 31, March 31,
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1999 1998 1999 1998
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(In Thousands)
<S> <C> <C> <C> <C>
Selected Operations Data:
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Total interest income $ 2,489 $ 2,362 $ 9,822 $ 9,507
Total interest expense
1,214 1,202 4,978 4,812
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Net interest income
1,275 1,160 4,844 4,695
Provision for loan losses
35 30 100 158
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Net interest income after provision
for losses on loans
1,240 1,130 4,744 4,537
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Fees and service charges
119 91 456 344
Gain on sale of securities
- 1 4 29
Gain on pension plan settlement
- - - 371
Other noninterest income
63 77 215 129
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Total noninterest income
182 169 675 873
Total noninterest expense
1,140 994 4,296 3,994
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Income before income taxes
282 305 1,123 1,416
Income tax expense (benefit)
36 76 238 396
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Net income $ 246 $ 229 $ 885 $ 1,020
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</TABLE>
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<TABLE>
<CAPTION>
At of for the At or for the
Three Months Ended Twelve Months Ended
March 31, March 31,
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1999 1998 1999 1998
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<S> <C> <C> <C> <C>
Other Data:
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Return on average assets (ratio of net
income to total average assets)* .7% .7% .6% .8%
Return on average equity (ratio of net
income to total average assets)* 4.8 4.5 4.3 5.2
Net interest margin** 3.9 3.8 3.8 3.9
Non-performing assets to total assets 0.7 0.4 0.7 0.4
Allowance for loan losses to non-
performing loans 204.2 249.6 204.2 249.6
Equity to total assets at end of period 14.1 15.6 14.1 15.6
Efficiency ratio*** 78.2 74.8 77.8 71.7
Basic earnings per share $0.21 $0.20 $0.75 $0.87
Fully diluted earnings per share $0.20 $0.19 $0.72 $0.83
Book value per share $16.08 $15.70 $16.08 $15.70
Tangible book value per share $13.87 $13.47 $13.87 $13.47
Number of full service offices 5 4 5 4
Number of ATM locations
12 6 12 6
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<FN>
* 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.
</FN>
</TABLE>
Analysis of Net Income (dollars in thousands)
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1999 1998 Change
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Reported net income $ 885 $ 1,020 -13.2%
Gain on settlement of pension plan, net of tax $ - $ (245) -
Adjusted net income $ 885 $ 775 14.2%
Adjusted primary earnings per share $ 0.75 $ 0.66 13.6%
Adjusted diluted earnings per share $ 0.72 $ 0.63 14.3%
<PAGE>
EXHIBIT 99.2
<PAGE>
FOR IMMEDIATE RELEASE
For Additional Information Contact:
David B. Barbour, President and Chief Executive Officer
Lisah Frazier, Senior Vice President, Treasurer and Chief Financial Officer
(606) 325-4789
Fax (606) 324-1307
CLASSIC BANCSHARES, INC. DECLARES A CASH DIVIDEND AND ANNOUNCES THE COMPLETION
OF A REPURCHASE OF 5% OF ITS SHARES AND THE INTENT TO
INITIATE ANOTHER STOCK REPURCHASE PROGRAM
Ashland, Kentucky, -- April 22, 1999 -- Classic Bancshares, Inc. (NASDAQ -
CLAS) has announced that the Company will pay a quarterly cash dividend of $.08
per share. The dividend will be payable on May 17, 1999 to shareholders of
record on May 3, 1999.
Classic Bancshares, Inc. also announced that the Company recently completed
the repurchase of 5% of its outstanding shares of common stock, which resulted
in the purchase of 65,000 shares. The shares were purchased in the open market
from October 1998 to April 1999. The reacquired shares are being held as
treasury shares and will be used for general corporate purposes, including the
issuance of shares in connection with the exercise of stock options.
The Company also announced its intent to repurchase up to another 5% of its
outstanding shares of common stock in the open market over a twelve-month period
at prevailing market prices from time to time depending on market conditions.
The Company has 1,237,300 shares outstanding. David B. Barbour, President and
Chief Executive Officer of the Company, indicated that the Board of Directors
approved the repurchase program in view of the current price level of the
Company's common stock. Mr. Barbour stated, "We believe that the repurchase of
our shares represents an attractive investment opportunity which will benefit
the Company and our stockholders."
Classic Bancshares, Inc. is headquartered in Ashland, Kentucky and has two
subsidiaries, Classic Bank and First National Bank of Paintsville. Classic Bank
operates at 344 Seventeenth Street, Ashland, Kentucky with two branch offices
located in Boyd and Greenup counties. First National Bank of Paintsville
operates at 240 Main Street, Paintsville, Kentucky with one branch office
located in Johnson County.
