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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 19, 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
of incorporation) Identification 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 October 19, 1999, the Registrant issued the press release attached
hereto as Exhibit 99 announcing its earnings for the quarter ended September 30,
1999 and the declaration of a cash dividend.
Item 7. Financial Statements and Exhibits
(a) Exhibits
99 Press release dated October 19, 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: October 25, 1999 By: /s/Lisah M. Frazier
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Lisah M. Frazier, Vice President,
Treasurer and Chief Financial
Officer
FOR IMMEDIATE RELEASE
For Additional Information Contact:
David B. Barbour, President and Chief Executive Officer
Lisah M. Frazier, Senior Vice President, Treasurer and
Chief Financial Officer
(606) 325-4789
Fax (606) 324-1307
www.bank-anywhere.com
CLASSIC BANCSHARES, INC. REPORTS A 33% INCREASE IN YEAR-TO-DATE EARNINGS
PER SHARE AND SUBSTANTIAL LOAN AND DEPOSIT GROWTH AND DECLARES A
CASH DIVIDEND
Ashland, Kentucky, -- October 19, 1999 -- Classic Bancshares, Inc. (NASDAQ
- - CLAS) reported cash-based net income (which excludes amortization of goodwill)
of $323,000 for the second quarter ended September 30, 1999 compared to
cash-based net income of $241,000 for the same period in 1998. Cash-diluted
earnings per share were $.28 for the three months ended September 30, 1999
compared to $.19 for the same period in 1998. Cash-based net income for the six
months ended September 30, 1999 was $621,000 compared to $469,000 for the same
period in 1998. Cash-diluted earnings per share were $.54 for the six months
ended September 30, 1999 compared to $.38 for the same period in 1998.
Net income for the second quarter ended September 30, 1999 was $261,000, or
$.22 per diluted share compared to $210,000, or $.17 per diluted share for the
same period in 1998. Net income for the six months ended September 30, 1999 was
$513,000, or $.44 per diluted share compared to $407,000, or $.33 per diluted
share for the same period in 1998.
Classic Bancshares' assets increased $28.5 million from $142.7 million at
March 31, 1999 to $171.2 million at September 30, 1999 primarily due to
significant internal growth. The remainder of the increase was due to the
acquisition of Citizens Bank, Grayson on May 14, 1999. At the close of the
transaction, Citizens Bank, Grayson was merged with and into Classic Bank with
Classic Bank as the surviving institution. The transaction was valued at $4.5
million and was accounted for under the purchase method of accounting. On the
date of closing, Citizens had total assets of approximately $13.4 million and
total deposits of $12.0 million. In connection with the acquisition, the Company
recorded $3.1 million in goodwill.
Loans increased $26.3 million from $97.5 million at March 31, 1999 to
$123.8 million at September 30, 1999 with $17.3 million of the increase
attributable to internal growth specifically in the areas of commercial
mortgage, commercial business, and consumer loans and $9.0 million in loans
acquired in the Citizens Bank transaction. Deposits increased $22.5 million from
$117.7 million at March 31, 1999 to $140.2 million at September 30, 1999 with
$12.0 million of the increase attributable to the acquisition of Citizens Bank
while the remaining increase resulted from aggressive marketing and sales
efforts and the opening of two additional banking offices during fiscal 1999.
Asset quality improved as total non-performing assets was .6% of total
assets at September 30, 1999 compared to .7% at March 31, 1999. The Company
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recorded a provision for loan losses of $88,000 for the six month period,
recorded an allowance of $550,000 from the acquisition of Citizens and had net
charge-offs of $137,000 for the six month period resulting in an allowance for
loan losses of $1.3 million at September 30, 1999. The allowance at September
30, 1999 was equal to 168% of total non-performing loans, 124% of non-performing
assets and 1.0% of total loans receivable.
President and Chief Executive Officer, David B. Barbour stated that, "The
first half of our fiscal year ending March 31, 2000 has been a period of
incredible growth for the Company. Our franchise has increased by $28.5 million
resulting from strong internal deposit and loan growth and the acquisition of
Citizens Bank, Grayson. Loans have increased significantly, primarily in the
commercial and consumer segments, with corresponding growth in transactional
deposit accounts. The growth we experienced in this period had a positive impact
on earnings as earnings per share has increased 33% for the six months ending
September 30, 1999 compared to the same period in 1998. The positive trends
exhibited in recent periods are the result of the Company's growth strategy that
included the opening of two new banking offices, an aggressive ATM deployment
and the implementation of our fully transactional Internet banking product."
Net interest income increased $382,000 to $1.5 million for the second
quarter ended September 30, 1999 compared to $1.2 million for the second quarter
ended September 30, 1998. The net interest margin increased to 4.3% for the
quarter ended September 30, 1999 compared to 3.8% for the same period in 1998.
Net interest income increased $597,000 to $2.9 million for the six months ended
September 30, 1999 compared to $2.3 million for the same period in 1998. The net
interest margin increased to 4.4% for the six months ended September 30, 1999
compared to 3.9% for the same period in 1998. The increase was due to the
combination of the continued increase in higher yielding, non-mortgage loans,
such as commercial and consumer loans and a reduction in the cost of deposits
through the continued increase in non-certificate, transaction accounts.
Non-interest income was $214,000 for the quarter ended September 30, 1999
compared to $177,000 for the quarter ended September 30, 1998. Non-interest
income was $405,000 for the six months ended September 30, 1999 compared to
$323,000 for the six months ended September 30, 1998. Non-interest income
increased for the quarter primarily due to an increase in fees and service
charges on deposit accounts. The increase in fees and service charges on
deposits is the result of increased product offerings, an increased deposit base
and aggressive pricing strategies.
Non-interest expense for the quarter ended September 30, 1999 was $1.4
million compared to $1.0 million for the quarter ended September 30, 1998.
Non-interest expense was $2.6 million for the six months ended September 30,
1999 compared to $2.1 million for the same period in 1998. Non-interest expenses
increased for the period due primarily to the increased costs related to an
additional banking office as a result of the acquisition of Citizens Bank and an
increase in goodwill amortization from the acquisition of Citizens Bank.
Non-interest expenses also increased due to an increase in employee salaries and
benefits due to an increase in the net number of employees and an increase in
other general and administrative expenses in order to facilitate the growth of
the Company.
Stockholders' equity was $19.3 million at September 30, 1999 compared to
$20.3 million at March 31, 1999.
Classic Bancshares, Inc. also announced that the Company will pay a
quarterly cash dividend of $.08 per share. The dividend will be payable on
November 8, 1999 to shareholders of record on October 25, 1999.
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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 three branch offices
located in Boyd, Greenup and Carter 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
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.
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 SEPTEMBER 30, 1999 AND MARCH 31, 1999 AND FOR THE THREE
AND SIX MONTHS ENDED SEPTEMBER 30, 1999 AND 1998.
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<CAPTION>
SEPT. 30, MARCH 31,
1999 1999
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(IN THOUSANDS)
SELECTED FINANCIAL
CONDITION DATA:
TOTAL ASSETS $171,189 $142,739
CASH AND OTHER INTEREST BEARING
DEPOSITS WITH OTHER FINANCIAL
INSTITUTIONS 4,307 4,486
LOANS RECEIVABLE, NET 123,842 97,527
INVESTMENT SECURITIES
AVAILABLE FOR SALE 25,727 26,526
MORTGAGE-BACKED SECURITIES:
AVAILABLE FOR SALE 3,694 4,479
GOODWILL 5,817 2,779
DEPOSITS 140,154 117,732
FEDERAL FUNDS PURCHASED AND SECURITIES
SOLD UNDER
AGREEMENT TO REPURCHASE 4,299 2,817
FHLB ADVANCES 5,294 388
STOCKHOLDERS' EQUITY, SUBJECT TO CERTAIN
RESTRICTIONS 19,284 20,289
</TABLE>
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<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1999 1998 1999 1998
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<S> <C> <C> <C> <C>
(IN THOUSANDS)
SELECTED OPERATIONS DATA:
TOTAL INTEREST INCOME $ 2,995 $ 2,434 $ 5,694 $ 4,849
TOTAL INTEREST EXPENSE 1,455 1,276 2,751 2,503
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NET INTEREST INCOME 1,540 1,158 2,943 2,346
PROVISION FOR LOAN LOSSES 53 15 88 40
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NET INTEREST INCOME AFTER
PROVISION FOR LOSSES ON
LOANS 1,487 1,143 2,855 2,306
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FEES AND SERVICE CHARGES 170 105 319 213
(LOSS) GAIN ON SALE OF
SECURITIES (3) 3 (3) 4
OTHER NONINTEREST INCOME 47 69 89 106
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TOTAL NONINTEREST
INCOME 214 177 405 323
TOTAL NONINTEREST
EXPENSE 1,364 1,029 2,603 2,076
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INCOME BEFORE INCOME TAXES 337 291 657 553
INCOME TAX EXPENSE (BENEFIT) 76 81 144 146
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NET INCOME $ 261 $ 210 $ 513 $ 407
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AMORTIZATION OF GOODWILL 62 31 108 62
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CASH-BASED NET INCOME $ 323 $ 241 $ 621 $ 469
======== ========= ======== ========
BASIC EARNINGS PER SHARE $0.23 $0.18 $0.45 $0.35
CASH-BASED BASIC EARNINGS PER SHARE $0.29 $0.20 $0.55 $0.40
FULLY DILUTED EARNINGS PER SHARE $0.22 $0.17 $0.44 $0.33
CASH-BASED FULLY DILUTED EARNINGS $0.28 $0.19 $0.54 $0.38
PER SHARE
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<TABLE>
<CAPTION>
AT OR FOR THE AT OR FOR THE
THREE MONTHS ENDED SIX MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1999 1998 1999 1998
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<S> <C> <C> <C> <C>
OTHER DATA:
RETURN ON AVERAGE ASSETS
(RATIO OF NET INCOME TO
TOTAL AVERAGE ASSETS)* .6% .6% .6% .6%
RETURN ON AVERAGE EQUITY (RATIO OF
NET INCOME TO TOTAL
AVERAGE ASSETS)* 5.4 4.1 5.2 4.0
NET INTEREST MARGIN** (FTE) 4.3 3.8 4.4 3.9
NON-PERFORMING ASSETS TO TOTAL
ASSETS 0.6 0.6 0.6 0.6
ALLOWANCE FOR LOAN LOSSES
TO NON-PERFORMING LOANS 168.2 161.7 168.2 161.7
EQUITY TO TOTAL ASSETS AT END OF
PERIOD 11.3 14.4 11.3 14.4
EFFICIENCY RATIO*** 77.8 78.0 77.8 79.0
CASH-BASED EFFICIENCY RATIO 74.2 74.8 74.5 75.5
BOOK VALUE PER SHARE $15.65 $15.94 $15.65 $15.94
TANGIBLE BOOK VALUE PER SHARE $10.93 $13.76 $10.93 $13.76
NUMBER OF FULL SERVICE OFFICES 6 5 6 5
NUMBER OF ATM LOCATIONS 14 7 14 7
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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.
