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 27% INCREASE IN ANNUAL EARNINGS PER SHARE
AND SUBSTANTIAL GROWTH FOR THE 2000 FISCAL YEAR
Ashland, Kentucky, -- May 30, 2000 -- Classic Bancshares, Inc. (NASDAQ
- CLAS) reported adjusted cash net income (which excludes amortization of
goodwill) of $346,000 for the fourth quarter ended March 31, 2000 compared to
adjusted cash net income of $276,000 for the same period in 1999. Adjusted cash
earnings per share were $.30 for the three months ended March 31, 2000 compared
to $.23 for the same period in 1999. Adjusted cash net income for the twelve
months ended March 31, 2000 was $1.3 million compared to $1.0 million for the
same period in 1999. Adjusted cash earnings per share were $1.13 for the twelve
months ended March 31, 2000 compared to $.82 for the same period in 1999.
Net income for the fourth quarter ended March 31, 2000 was $279,000, or
$.24 per diluted share compared to $246,000, or $.20 per diluted share for the
same period in 1999. Net income for the twelve months ended March 31, 2000 was
$1.1 million, or $.92 per diluted share compared to $885,000, or $.72 per
diluted share for the same period in 1999.
Classic Bancshares' assets increased $32.3 million from $142.7 million
at March 31, 1999 to $175.0 million at March 31, 2000 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 $30.3 million from $97.5 million at March 31, 1999 to
$127.8 million at March 31, 2000 with $21.3 million of the increase attributable
to internal growth primarily in the areas of commercial mortgage, commercial
business, and consumer loans and $9.0 million attributable to loans acquired in
the Citizens Bank transaction. Deposits increased $17.2 million from $117.7
million at March 31, 1999 to $134.9 million at March 31, 2000 with $12.0 million
of the increase attributable to the acquisition of Citizens Bank while the
remaining increase was attributable to aggressive marketing and sales efforts
and the opening of two additional banking offices during fiscal 1999.
Asset quality remained strong as total non-performing assets was .6% of
total assets at March 31, 2000 compared to .7% at March 31, 1999. The Company
recorded a provision for loan losses of $223,000 for the twelve month period,
recorded an allowance of $506,000 from the acquisition of Citizens and had net
charge-offs of $270,000 for the twelve month period resulting in an allowance
for loan losses of $1.3 million at March 31, 2000. The allowance at March 31,
2000 was equal to 169% of total non-performing loans, 123% of non-performing
assets and 1.0% of total loans receivable.
President and Chief Executive Officer, David B. Barbour stated that,
"We are extremely excited that our community and relationship banking strategies
yielded double digit annual increases in total revenues, loans, deposits,
earnings and earnings per share. Our increases in non-interest income and
continued improvement of our net interest margin positions the Company for the
future notwithstanding significant fluctuations in the interest rate
environment."
<PAGE>
Net interest income increased $275,000 to $1.6 million for the fourth
quarter ended March 31, 2000 compared to $1.3 million for the fourth quarter
ended March 31, 1999. The net interest margin was 4.2% for the quarter ended
March 31, 2000 and March 31, 1999. Net interest income increased $1.2 million to
$6.0 million for the twelve months ended March 31, 2000 compared to $4.8 million
for the same period in 1999. The net interest margin increased to 4.3% for the
twelve months ended March 31, 2000 compared to 4.1% for the same period in 1999.
The increase for the three and twelve month period was due to an increase in the
volume of interest-earning assets and interest-bearing liabilities coupled with
an increase in higher yielding, non-mortgage loans, such as commercial and
consumer loans, and a reduction in the cost of funds through the continued
increase in lower cost non-certificate, transaction accounts as a funding
source.
Non-interest income was $223,000 for the quarter ended March 31, 2000
compared to $182,000 for the quarter ended March 31, 1999. Non-interest income
was $895,000 for the twelve months ended March 31, 2000 compared to $675,000 for
the twelve months ended March 31, 1999. Non-interest income increased 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 March 31, 2000 was $1.4
million compared to $1.1 million for the quarter ended March 31, 1999.
Non-interest expense was $5.4 million for the twelve months ended March 31, 2000
compared to $4.3 million for the same period in 1999. 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 $19.0 million at March 31, 2000 compared to
$20.3 million at March 31, 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 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.
<PAGE>
SELECTED FINANCIAL DATA
The following table sets forth selected financial data of Classic
Bancshares, Inc. as of March 31, 2000 and March 31, 1999 and for the three and
twelve months ended March 31, 2000 and 1999.
<TABLE>
March 31 March 31
2000 1999
---- ----
Selected Financial Condition Data: (In Thousands)
----------------------------------
<S> <C> <C>
Total Assets $175,254 $142,739
Cash and other interest bearing deposits
with other financial institutions 5,254 4,486
Loans receivable, net 127,808 97,527
Investment Securities:
Available for Sale 25,135 26,526
Mortgage-backed securities:
Available for Sale 3,230 4,479
Goodwill 5,809 2,779
Deposits 134,897 117,732
Federal funds purchased and securities sold under
Agreement to repurchase 2,688 2,187
FHLB advances 17,075 388
Stockholders' Equity, subject to certain restrictions 18,999 20,289
</TABLE>
<TABLE>
Three Months Ended Twelve Months Ended
March 31, March 31,
-------- --------
2000 1999 2000 1999
---- ---- ---- ----
Selected Operations Data:
------------------------ (In Thousands)
<S> <C> <C> <C> <C>
Total interest income $3,154 $2,489 $11,941 $9,822
Total interest expense 1,604 1,214 5,892 4,979
----------- --------- --------- ----------
Net interest income 1,550 1,275 6,049 4,843
Provision for loan losses 63 35 223 100
------------ --------- ---------- ----------
Net interest income after provision 1,487 1,240 5,826 4,743
for losses on loans ------------ --------- ---------- ----------
Fees and service charges 184 119 703 487
(Loss) gain on sale of securities --- --- (3) 4
Other non-interest income 39 63 195 184
------------ --------- --------- ----------
Total non-interest income 223 182 895 675
Total non-interest expense 1,360 1,140 5,359 4,295
------------ --------- --------- ----------
Income before income taxes 350 282 1,362 1,123
Income tax expense (benefit) 71 36 292 238
------------ --------- --------- ----------
Net Income $279 $246 $1,070 $885
============ ========= ========= ==========
Amortization of goodwill 67 30 238 123
------------ --------- --------- ----------
Adjusted cash net income $346 $276 $1,308 $1,008
============ ========= ========= ==========
Basic earnings per share $0.25 $0.21 $0.95 $0.75
Adjusted cash basic earnings per share* $0.31 $0.24 $1.16 $0.85
Fully diluted earnings per share $0.24 $0.20 $0.92 $0.72
Adjusted cash fully diluted earnings per share* $0.30 $0.23 $1.13 $0.82
* Adjusted to exclude amortization of goodwill
</TABLE>
<PAGE>
<TABLE>
At or for the At or for the
Three Months Ended Twelve Months Ended
March 31, March 31,
-------- --------
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Other Data:
-----------
Return on average assets (ratio of annualized
net income to total average assets) .6% .7% .6% .6%
Return on average equity (ratio of annualized
net income to total average equity) 5.9 4.8 5.5 4.3
Net interest margin **(FTE) 4.2 4.2 4.3 4.1
Non-performing assets to total assets 0.6 0.7 0.6 0.7
Allowance for loan losses to non-performing loans 168.9 212.1 168.9 212.1
Allowance for loan losses to loans receivable, net 1.0 0.9 1.0 0.9
Equity to total assets at end of period 10.8 14.2 10.8 14.2
Adjusted non-interest expenses/Total revenues *** 68.8 71.1 69.4 71.2
Book value per share $15.94 $16.08 $15.94 $16.08
Tangible book value per share $11.07 $13.87 $11.07 $13.87
Total shares outstanding 1,191,956 1,258,406 1,191,956 1,258,406
Number of full service offices 6 5 6 5
Number of ATM locations 14 12 14 12
</TABLE>
____________________
** Net interest income (FTE) annualized divided by average earning assets
*** Adjusted non-interest expense excludes amortization of goodwill
Total revenues = Net interest income (FTE)+ non-interest income.
