SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                              --------------------

                                    FORM 10-QSB

(Mark One)

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

     For the quarterly period ended December 31, 2000

                                       OR

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

     For the transition period from ___________ to ______________

     Commission File Number 0-27716


                            CLASSIC BANCSHARES, INC.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)


                 Delaware                               61-1289391
-----------------------------------------         ----------------------
     (State or other jurisdiction of                 (I.R.S. Employer
      incorporation or organization)              Identification Number)

344 Seventeenth Street, Ashland, Kentucky                  41101
-----------------------------------------         ----------------------
(Address of principal executive offices)                (Zip Code)

Registrant's telephone number, including area code:  (606) 325-4789
                                                     --------------

     Check here whether the issuer (1) has filed all reports required to be
filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.                                Yes [X]  No [ ]

     As of February 5, 2001, there were 1,151,956 shares of the Registrant's
common stock issued and outstanding.

     Transitional Small Disclosure (check one):  Yes [ ]  No [X]


<PAGE>


                            CLASSIC BANCSHARES, INC.

                                     INDEX

                                                                           Page
                                                                          Number
                                                                          ------
PART I.   FINANCIAL INFORMATION

Item 1.   Financial Statements

          Consolidated Balance Sheets as of December 31,
          2000 (Unaudited) and March 31, 2000 ...........................     3

          Consolidated Statements of Income for the three and
          nine months ended December 31, 2000 and 1999 ..................     4

          Consolidated Statements of Comprehensive Income
          for the three and nine months ended December 31,
          2000 and 1999 .................................................     5

          Consolidated Statements of Stockholders' Equity for
          nine months ended December 31, 2000 (Unaudited) and
          Year Ended March 31, 2000 .....................................     6

          Consolidated Statements of Cash Flows for the nine months
          ended December 31, 2000 and 1999 ..............................   7-8

          Notes to Consolidated Financial Statements ....................  9-11


Item 2.   Management's Discussion and Analysis of Financial Condition
          and Results of Operations ..................................... 12-18


PART II.  OTHER INFORMATION .............................................    19

          Signatures ....................................................    20




                                       2

<PAGE>


                            CLASSIC BANCSHARES, INC.
                           CONSOLIDATED BALANCE SHEETS


                                                   December 31,      March 31,
                                                      2000             2000
                                                      ----             ----
                                                   (Unaudited)
ASSETS
  Cash and due from bank .....................   $   4,539,426    $   5,122,083
  Federal funds sold .........................              --          131,438
  Securities available for sale ..............      24,341,489       23,672,526
  Mortgage-backed and related securities
   available for sale ........................       2,896,009        3,229,952
  Loans receivable, net ......................     136,930,839      127,808,325
  Real estate acquired in the settlement
   of loans ..................................         210,745          255,246
  Accrued interest receivable ................       1,314,063        1,139,012
  Federal Home Loan Bank and Federal
   Reserve Bank stock ........................       1,600,200        1,462,350
  Premises and equipment, net ................       5,240,868        5,061,929
  Cost in excess of fair value of net
   assets acquired (goodwill),
   net of accumulated amortization ...........       5,617,682        5,808,774
  Other assets ...............................       1,088,023        1,562,534
                                                 -------------    -------------

TOTAL ASSETS .................................   $ 183,779,344    $ 175,254,169
                                                 =============    =============

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
  Non-interest bearing demand deposits .......   $  17,011,847    $  14,749,044
  Savings, NOW, and money market
   demand deposits ...........................      44,224,432       45,807,285
  Other time deposits ........................      79,260,569       74,340,467
                                                 -------------    -------------
              Total deposits .................     140,496,848      134,896,796
  Federal funds purchased and
   securities sold under
   agreements to repurchase ..................       2,980,077        2,687,714
  Advances from Federal Home Loan Bank .......      18,295,789       17,075,380
  Other short-term borrowings ................         581,616          573,751
  Accrued expenses and other liabilities .....         424,792          427,998
  Accrued interest payable ...................         548,608          551,465
  Accrued income taxes .......................          24,212           42,419
  Deferred income taxes ......................         351,390               --
                                                 -------------    -------------

              Total Liabilities ..............   $ 163,703,332    $ 156,255,523
                                                 -------------    -------------

Commitments and contingencies

Stockholders' Equity
  Common stock, $.01 par value,
   1,322,500 shares issued and
   1,151,956 outstanding .....................   $      13,225    $      13,225
  Additional paid-in capital .................      12,829,294       12,829,744
  Retained earnings - substantially
   restricted ................................      10,694,041       10,062,718
  Accumulated other comprehensive
   income (loss) .............................        (502,095)      (1,279,524)
  Unearned ESOP shares .......................        (736,600)        (736,600)
  Unearned RRP shares ........................         (90,196)        (174,146)
  Treasury stock, at cost ....................      (2,131,657)      (1,716,771)
                                                 -------------    -------------

              Total Stockholders'
                Equity .......................   $  20,076,012    $  18,998,646
                                                 -------------    -------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ...   $ 183,779,344    $ 175,254,169
                                                 =============    =============


                See accompanying Accountant's Review Report and
                   notes to consolidated financial statements.

                                       3

<PAGE>


                            CLASSIC BANCSHARES, INC.
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                  THREE MONTHS ENDED            NINE MONTHS ENDED
                                                                     DECEMBER 31,                  DECEMBER 31,
                                                          ----------------------------    ----------------------------
                                                              2000              1999           2000            1999
                                                              ----              ----           ----            ----
INTEREST INCOME
<S>                                                       <C>             <C>             <C>             <C>
  Loans ...............................................   $  3,054,509    $  2,632,286    $  8,876,827    $  7,400,089
  Investment securities ...............................        394,682         396,781       1,189,647       1,190,231
  Mortgage-backed securities ..........................         52,968          55,385         169,742         168,427
  Other interest earning assets .......................          3,977           9,033          12,414          28,269
                                                          ------------    ------------    ------------    ------------
              Total Interest Income ...................      3,506,136       3,093,485      10,248,630       8,787,016
                                                          ------------    ------------    ------------    ------------
INTEREST EXPENSE
  Interest on deposits ................................      1,550,334       1,358,481       4,364,716       3,925,534
  Interest on FHLB Advances ...........................        311,765         117,790         932,576         204,272
  Interest on other borrowed funds ....................         53,847          60,087         170,171         157,745
                                                          ------------    ------------    ------------    ------------
              Total Interest Expense ..................      1,915,946       1,536,358       5,467,463       4,287,551
                                                          ------------    ------------    ------------    ------------
              Net Interest Income .....................      1,590,190       1,557,127       4,781,167       4,499,465
Provision for loss on loans ...........................         79,750          72,500         203,250         160,000
                                                          ------------    ------------    ------------    ------------
              Net interest income after
               provision for loss on
               loans ..................................      1,510,440       1,484,627       4,577,917       4,339,465
                                                          ------------    ------------    ------------    ------------
NON-INTEREST INCOME
  Service charges and other fees ......................        253,233         199,903         690,487         518,586
  Gain (loss) on sale of securities
    available for sale ................................             --              --              --          (2,500)
  Gain on disposal of assets ..........................             --          24,284              --          27,988
  Other income ........................................         45,774          41,691         119,371         127,321
                                                          ------------    ------------    ------------    ------------
              Total Non-Interest Income ...............        299,007         265,878         809,858         671,395
                                                          ------------    ------------    ------------    ------------
NON-INTEREST EXPENSES
  Employee compensation and benefits ..................        621,615         629,264       1,928,966       1,841,663
  Occupancy and equipment expense .....................        225,534         198,878         636,567         563,543
  Federal deposit insurance premiums ..................          6,693          12,089          20,699          32,113
  Loss (gain) on foreclosed real estate ...............         (1,424)          1,623           4,164           3,606
  Other general and administrative
     expenses .........................................        457,863         489,751       1,418,973       1,386,432
                                                          ------------    ------------    ------------    ------------
              Total Non-Interest Expense ..............      1,310,281       1,331,605       4,009,369       3,827,357
                                                          ------------    ------------    ------------    ------------
INCOME BEFORE INCOME TAXES ............................        499,166         418,900       1,378,406       1,183,503
              Income tax expense ......................        114,540          77,241         288,976         221,287
                                                          ------------    ------------    ------------    ------------
INCOME BEFORE GOODWILL AMORTIZATION ...................        384,626         341,659       1,089,430         962,216
                                                          ------------    ------------    ------------    ------------
  Goodwill amortization ...............................        (63,810)        (63,279)       (191,092)       (171,080)
                                                          ------------    ------------    ------------    ------------
NET INCOME ............................................   $    320,816    $    278,380    $    898,338    $    791,136
                                                          ============    ============    ============    ============
Basic earnings per share before goodwill amortization .   $       0.36    $       0.30    $       1.01    $       0.85
Goodwill amortization .................................          (0.06)          (0.06)          (0.18)          (0.15)
                                                          ------------    ------------    ------------    ------------
Basic earnings per share after goodwill amortization ..   $       0.30    $       0.25    $       0.83    $       0.70
                                                          ============    ============    ============    ============
Diluted earnings per share before goodwill amortization   $       0.36    $       0.29    $       1.01    $       0.83
Goodwill amortization .................................          (0.06)          (0.06)          (0.18)          (0.15)
                                                          ------------    ------------    ------------    ------------
Diluted earnings per share after goodwill amortization    $       0.30    $       0.24    $       0.83    $       0.68
                                                          ============    ============    ============    ============
</TABLE>


                See accompanying Accountant's Review Report and
                   notes to consolidated financial statements.


                                       4

<PAGE>


                            CLASSIC BANCSHARES, INC.
                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                              THREE MONTHS ENDED            NINE MONTHS ENDED
                                                                  DECEMBER 31,                 DECEMBER 31,
                                                         --------------------------    ---------------------------
                                                             2000            1999          2000            1999
                                                             ----            ----          ----            ----
<S>                                                      <C>            <C>            <C>            <C>
Net Income ...........................................   $   320,816    $   278,380    $   898,338    $   791,136
                                                         -----------    -----------    -----------    -----------
     Other comprehensive income, net of tax:
       Unrealized holding gains (losses) on securities
       during the period, net of tax .................       401,903       (244,200)       777,429     (1,262,621)
     Reclassification adjustments for realized gains
       (losses) included in earnings .................            --          1,650             --          1,650
                                                         -----------    -----------    -----------    -----------
  Other comprehensive income .........................       401,903       (242,550)       777,429     (1,260,971)
                                                         -----------    -----------    -----------    -----------
Comprehensive Income (Loss) ..........................   $   722,719    $    35,830    $ 1,675,767    $  (469,835)
                                                         ===========    ===========    ===========    ===========
Accumulated Other Comprehensive Income ...............   $  (502,095)   $(1,176,994)   $  (502,095)   $(1,176,994)
                                                         ===========    ===========    ===========    ===========
</TABLE>




                See accompanying Accountant's Review Report and
                   notes to consolidated financial statements.


                                       5


<PAGE>

<TABLE>
<CAPTION>
                                                                                             NET UNREALIZED
                                                       ADDITIONAL                            GAIN (LOSS) ON
                                        COMMON           PAID-IN            RETAINED          AVAILABLE FOR        UNEARNED
                                         STOCK           CAPITAL            EARNINGS         SALE SECURITIES      ESOP SHARES
                                         -----           -------            --------         ---------------      -----------
<S>                                <C>               <C>                <C>                <C>                <C>
Balances at April 1, 1999 ......    $     13,225      $ 12,806,544       $  9,362,668       $     83,977       $   (785,150)
  Net income for the year
   ended March 31, 2000 ........              --                --          1,069,682                 --                 --
  Dividend paid ($.32 per
   share) ......................              --                --           (369,632)                --                 --
  ESOP shares earned ...........              --            14,468                 --                 --             48,550
  RRP shares earned ............              --                --                 --                 --                 --
  RRPshares granted ............              --               365                 --                 --                 --
  RRPshares forfeited ..........              --              (264)                --                 --                 --
  Tax benefit from RRP .........              --             8,631                 --                 --                 --
  Purchased 66,106 treasury
   shares ......................              --                --                 --                 --                 --
  Change in unrealized gain ....              --                --                 --                 --                 --
   (loss) on available for
   sale securities, net of
   applicable deferred
   income taxes of $702,410 ....              --                --                 --         (1,363,501)                --
                                    ------------      ------------       ------------       ------------       ------------
Balances at March 31, 2000 .....          13,225        12,829,744         10,062,718         (1,279,524)          (736,600)
  Net income for the nine
   months ended
   December 31, 2000 ...........              --                --            898,338                 --                 --
  Dividend paid ................              --                --           (267,015)                --                 --
  RRP shares earned ............              --                --                 --                 --                 --
  RRP shares awarded ...........              --              (450)                --                 --                 --
  Purchased 40,300 treasury
   shares ......................              --                --                 --                 --                 --
  Change in unrealized gain
   (loss) on available for
   sale securities, net of
   applicable deferred
   income taxes of $400,494 ....              --                --                 --            777,429                 --
                                    ------------      ------------       ------------       ------------       ------------
Balances at December 31, 2000 ..    $     13,225      $ 12,829,294       $ 10,694,041       $   (502,095)      $   (736,600)
                                    ============      ============       ============       ============       ============
</TABLE>

                                  UNEARNED          TREASURY
                                 RRP SHARES          STOCK         TOTAL
                                 ----------          -----         -----
Balances at April 1, 1999 ...   $   (294,332)   $   (897,952)   $ 20,288,980
  Net income for the year
   ended March 31, 2000 .....             --              --       1,069,682
  Dividend paid ($.32 per
   share) ...................             --              --        (369,632)
  ESOP shares earned ........             --              --          63,018
  RRP shares earned .........        116,255              --         116,255
  RRPshares granted .........         (2,725)          2,360              --
  RRPshares forfeited .......          6,656          (6,392)             --
  Tax benefit from RRP ......             --              --           8,631
  Purchased 66,106 treasury
   shares ...................             --        (814,787)       (814,787)
  Change in unrealized gain .             --              --              --
   (loss) on available for
   sale securities, net of
   applicable deferred
   income taxes of $702,410 .             --              --      (1,363,501)
                                ------------    ------------    ------------
Balances at March 31, 2000 ..       (174,146)     (1,716,771)     18,998,646
  Net income for the nine
   months ended
   December 31, 2000 ........             --              --         898,338
  Dividend paid .............             --              --        (267,015)
  RRP shares earned .........         87,024              --          87,024
  RRP shares awarded ........         (3,074)          3,524              --
  Purchased 40,300 treasury
   shares ...................             --        (418,410)       (418,410)
  Change in unrealized gain
   (loss) on available for
   sale securities, net of
   applicable deferred
   income taxes of $400,494 .             --              --         777,429
                                ------------    ------------    ------------
Balances at December 31, 2000   $    (90,196)   $ (2,131,657)   $ 20,076,012
                                ============    ============    ============

                See accompanying Accountant's Review Report and
                   notes to consolidated financial statements.

                                       6

<PAGE>

                            CLASSIC BANCSHARES, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                               NINE MONTHS ENDED
                                                                  DECEMBER 31,
                                                           -------------------------
                                                              2000           1999
                                                           ----------    -----------
<S>                                                        <C>           <C>
OPERATING ACTIVITIES
  Net Income ...........................................   $  577,523    $   791,136
  Adjustments to reconcile net income to net cash
    provided by operating activities:
      Depreciation and amortization ....................           --        391,451
      Provision for loss on loans ......................           --        160,000
      Loss on sale of securities available for sale ....           --          2,500
      Gain on disposal of equipment ....................           --        (27,988)
      Loss on sale of foreclosed real estate ...........           --             45
      Federal Home Loan Bank stock dividends ...........           --        (58,200)
      Deferred income tax (benefit) expense ............           --         51,263
      Amortization and accretion of invesment
        securities premiums and discounts, net .........           --         65,325
      RRP shares earned ................................           --         85,809
      Amortization of goodwill .........................           --        171,080
  Decrease (increase) in:
      Accrued interest receivable ......................           --       (223,508)
      Other assets .....................................           --       (112,506)
  Increase (decrease) in:
      Accrued interest payable .........................           --        208,202
      Accrued income taxes .............................           --        (34,489)
      Accounts payable and accrued expenses ............           --         97,054
                                                           ----------    -----------
        Net cash provided by operating activities ......      577,523      1,567,174
                                                           ----------    -----------
INVESTING ACTIVITIES
  Securities:
      Proceeds from sale, maturities or calls ..........           --        527,500
      Purchased ........................................           --             --
  Mortgage-backed securities:
      Proceeds from sale ...............................           --             --
      Purchased ........................................           --             --
      Principal payments ...............................           --        960,264
  Redemption of Federal Reserve Bank Stock .............           --         45,000
  Purchase of Federal Home Loan Bank Stock .............           --             --
  Loan originations and principal payments, net ........           --    (20,119,303)
  Proceeds from sale of equipment ......................           --        241,700
  Proceeds from sale of foreclosed real estate .........           --         51,903
  Purchases of software ................................           --        (23,467)
  Purchases of premises and equipment ..................           --       (385,931)
  Cash invested in purchase of Bank subsidiary in
    excess of cash and cash equivalents acquired .......           --     (1,497,572)
                                                           ----------    -----------
        Net cash used by investing activities ..........           --    (20,199,906)
                                                           ----------    -----------
</TABLE>


                See accompanying Accountant's Review Report and
                   notes to consolidated financial statements.

                                       7

<PAGE>

                            CLASSIC BANCSHARES, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                               NINE MONTHS ENDED
                                                                  DECEMBER 31,
                                                           -------------------------
                                                              2000           1999
                                                           ----------    -----------
<S>                                                        <C>           <C>
FINANCING ACTIVITIES
  Net increase in deposits .............................   $5,600,051    $ 4,831,446
  Net proceeds from FHLB borrowings ....................    1,220,409     15,547,179
  Increase in federal funds purchased and securities
    sold under agreements to repurchase ................      292,363        548,707
  Net increase in short-term borrowings ................        7,865        589,287
  Purchase of treasury stock ...........................     (917,888)      (375,413)
  Dividends paid .......................................     (267,015)      (275,738)
                                                           ----------    -----------
        Net cash (used) provided by financing activities    5,935,785     20,865,468
                                                           ----------    -----------

Increase (decrease) in cash and cash equivalents .......      639,792      2,232,736
Cash and cash equivalent at beginning of period ........    5,253,521      4,486,156
                                                           ----------    -----------

Cash and cash equivalents at end of period .............   $5,893,313    $ 6,718,892
                                                           ==========    ===========

Additional cash flows and supplementary information
  Cash paid during the period for:
    Interest on deposits and borrowings ................   $1,736,484    $   979,532
    Income Taxes .......................................   $  312,376    $   208,592
  Assets acquired in settlement of loans ...............   $   71,000    $    65,000
  Net unrealized loss on securities available for sale .   $ (502,095)   $(1,260,971)
  Liabilities assumed and cash paid in acquisition of
    Citizens Bank ......................................   $       --    $16,852,774
  Fair value of assets received ........................   $       --    $13,707,355
  Amount assigned to goodwill ..........................   $       --    $ 3,145,419
</TABLE>


                See accompanying Accountant's Review Report and
                   notes to consolidated financial statements.

                                       8

<PAGE>


                            CLASSIC BANCSHARES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) Principles of Consolidation

         The financial statements for 2000 are presented for Classic Bancshares,
Inc. (the "Company") and its  wholly-owned  subsidiaries,  Classic Bank, and The
First National Bank of Paintsville ("First National").  The consolidated balance
sheets for  December  31,  2000 and March 31, 2000 is for the  Company,  Classic
Bank, and First National. The acquisition of Citizens Bank, Grayson ("Citizens")
was  completed  on May 14, 1999 at which time  Citizens was merged with and into
Classic Bank with Classic Bank as the surviving institution. The acquisition was
accounted  for  under  the  purchase  method  of  accounting.  The  consolidated
statements of income  include the  operations  of the Company,  Classic Bank and
First  National for the three and nine months ended  December 31, 2000 and 1999.
The  earnings of Citizens  Bank are  included in the  consolidated  statement of
income for the nine months ending December 31, 1999 from the date of closing.

(2) Basis of Presentation

         The accompanying  Consolidated  Financial Statements have been prepared
in  accordance  with  generally  accepted  accounting   principles  for  interim
financial  information  and with the  instructions to Form 10-QSB and Regulation
S-B. Accordingly, they do not include all the information and footnotes required
by generally accepted accounting principles for complete financial statements.

         In the opinion of management,  the  Consolidated  Financial  Statements
contain  all  adjustments  (consisting  only of  normal  recurring  adjustments)
necessary to present fairly the financial condition of Classic Bancshares,  Inc.
as of December 31, 2000, and the results of operations  for all interim  periods
presented. Operating results for the nine months ended December 31, 2000 are not
necessarily  indicative  of the results that may be expected for the fiscal year
ended March 31, 2001.

         Certain  financial   information  and  footnote   disclosures  normally
included in annual  financial  statements  prepared in conformity with generally
accepted  accounting  principles  have been  omitted  pursuant  to the rules and
regulations  of the Securities and Exchange  Commission.  The unaudited  interim
consolidated financial statements presented herein should be read in conjunction
with the annual consolidated  financial  statements of the Company as of and for
the fiscal year ended March 31, 2000.

(3) Earnings per Share

         Effective December 31, 1997, the Company began presenting  earnings per
share pursuant to the provisions of SFAS No. 128, "Earnings Per Share."

         Basic earnings per share are calculated  based on the weighted  average
number of common shares outstanding during the respective periods.

         Diluted earnings per share is computed taking into consideration common
shares  outstanding and dilutive  potential common shares to be issued under the
Company's stock option plan and recognition and retention plan.

         The weighted  average  number of shares used in the basic  earnings per
share computations was 1,069,980 and 1,130,601 for the three-month periods ended
December 31, 2000 and 1999,

                                       9

<PAGE>


respectively  and  1,077,207  and  1,128,573  for the  nine-month  periods ended
December 31, 2000 and 1999, respectively.  The weighted average number of shares
used in the diluted earnings per share  computations was 1,073,968 and 1,160,911
for the three-month  periods ended December 31, 2000 and 1999,  respectively and
1,081,195 and 1,158,883 for the  nine-month  periods ended December 31, 2000 and
1999, respectively.

         Options to  purchase  168,000  and 17,026  shares of common  stock were
outstanding at December 31, 2000 and 1999,  respectively,  but were not included
in the  computation  of diluted  earnings  per share due to their  anti-dilutive
effect.

(4) Employee Stock Ownership Plan (ESOP)

         In  conjunction  with the Bank's  conversion on December 28, 1995,  the
Company  established  an  Employee  Stock  Ownership  Plan (ESOP)  which  covers
substantially all employees.  The ESOP borrowed $1,058,000 from the Company, and
purchased  105,800  common  shares,  equal to 8% of the  total  number of shares
issued  in  the  conversion.  The  Company's  subsidiary  banks  make  scheduled
discretionary  contributions to the ESOP sufficient to service the debt.  Shares
are allocated to participants'  accounts under the shares allocated method.  The
cost of shares committed to be released and unallocated  shares is reported as a
reduction of stockholders' equity. Compensation expense is recorded based on the
average  fair market  value of the ESOP shares when  committed  to be  released.
Furthermore,  ESOP shares that have not been  committed  to be released  are not
considered  outstanding.  The expense under the ESOP was $12,551 and $17,536 for
the three months ended December 31, 2000 and 1999,  respectively and $52,821 and
$37,405 for the nine months ended December 31, 2000 and 1999,  respectively.  As
of December 31, 2000,  the Company  considered  73,660  shares as unearned  ESOP
shares with a fair value of $819,468.

         On September 14, 1998, the Board of Directors of the Company  adopted a
resolution to refinance the ESOP loan by extending its term to twenty-five years
effective for the plan year beginning April 1, 1998.

(5) Stock Option and Incentive Plan and Recognition and Retention Plan

         On July 29, 1996, the shareholders of the Company ratified the adoption
of the Company's  1996 Stock Option and Incentive Plan and the  Recognition  and
Retention Plan ("RRP"). Pursuant to the Stock Option Plan, 132,250 shares of the
Company's  common  stock are  reserved  for  issuance,  of which the Company has
granted  options  on 106,774  shares at  $10.8125  per share,  options on 19,300
shares at $13.375  per  share,  options  on 4,500  shares at $13.875  per share,
options on 1,026 shares at $13.75 per share and options on 200 shares at $13.625
per share.  Pursuant to the Recognition and Retention Plan, 52,900 shares of the
Company's  common  stock are  reserved  for  issuance,  of which the Company has
granted  awards on 52,656  shares.  At the end of the quarter,  450 stock option
shares and 244 RRP shares remain ungranted. Ungranted RRP shares are included in
treasury stock at cost.

         On July 27, 1998, the shareholders of the Company ratified the adoption
of the Company's  1998 Premium Price Stock Option Plan.  Pursuant to the Premium
Price Stock Option Plan, 50,000 shares of the Company's common stock is reserved
for issuance of which the Company has granted options on 5,000 shares at $16.295
per share,  options on 6,300 shares at $14.988 per share,  and options on 24,900
shares at $11.275 per share.

                                       10

<PAGE>


(6) Cash Dividend

         On January 15,  2001,  the Board  declared a cash  dividend of $.08 per
share  payable on  February  12, 2001 to  shareholders  of record on January 29,
2001.

(7) Charter Conversion

         Effective June 30, 2000,  Classic Bank converted from a federal savings
bank to a  Kentucky-chartered  commercial bank. During the first quarter of this
fiscal year,  the Company also filed with the Federal  Reserve Bank of Cleveland
for its  election  as a  financial  holding  company.  The  election  was deemed
effective by the Federal Reserve on June 2, 2000.

(8) Consolidation of Bank Charters

        On January 29, 2001,  the Company  announced its intent to merge Classic
Bank and  First  National  effective  March  16,  2001,  subject  to  regulatory
approval.  The resulting  institution will be a Kentucky charted commercial bank
known as Classic Bank. The merger will result in a one-time restructuring charge
of  approximately  $150,000  and  will be  taken in the  fourth  quarter  of the
Company's fiscal year ending March 31, 2001.

(9) New Branch Office

        The  Company  has  begun  construction  of a new  branch  office  in the
Paintsville  market.  The  estimated  cost of the new office is  estimated to be
approximately  $700,000.  As  of  December  31,  2000,  the  Company  had  spent
approximately  $300,000 on the new facility.  The new office is expected to open
on March 19, 2001.



                                       11


<PAGE>


                                 PART I - ITEM 2

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

Financial Condition

         The Company's total assets increased $8.5 million, or 4.8%, from $175.3
million at March 31, 2000 to $183.8  million at December 31, 2000.  The increase
was due primarily to an increase in loans of $9.1 million.

         Net loans  receivable  increased  $9.1 million  from $127.8  million at
March 31, 2000 to $136.9  million at December 31, 2000.  The increase  reflected
originations  of $28.1 million in commercial  business  loans,  $11.8 million in
consumer loans,  $12.2 million in one-to-four  family  mortgage loans,  and $3.0
million in  commercial  real estate loans offset by  repayments  since March 31,
2000.

         Investment  securities  increased  approximately  $600,000  from  $23.7
million  at March 31,  2000 to $24.3  million at  December  31,  2000  primarily
because  of an  increase  in the  market  value  of  these  available  for  sale
securities  and a  security  purchase  partially  offset by  matured  and called
securities.  Mortgage-backed  securities decreased  approximately  $300,000 from
$3.2  million  at March 31,  2000 to $2.9  million at  December  31,  2000.  The
decrease was primarily the result of principal repayments during the period.

         Net deposits  increased  $5.6 million from $134.9  million at March 31,
2000 to $140.5  million at December  31,  2000.  The increase in deposits is the
direct  result of marketing  and sales efforts to grow deposits in order to fund
loan demand.  Non-interest  bearing demand  deposits  increased $2.3 million and
other time deposits  consisting  primarily of certificates of deposit  increased
approximately $4.9 million offset by a decrease in savings, NOW and money market
demand deposits of approximately $1.6 million.

         Federal Home Loan Bank advances  increased  from $17.1 million at March
31, 2000 to $18.3  million at December  31, 2000.  The advances are  short-term,
variable rate advances with an average term of 90 days.

         Total stockholders' equity was $19.0 million at March 31, 2000 compared
to $20.1  million at December 31,  2000.  The increase was due to an increase in
the market value of available for sale  securities  and net income  recorded for
the period partially offset by the purchase of treasury stock and cash dividends
paid.

Forward-Looking Statements

         When used in this Form 10-QSB and in future filings by the Company with
the  Securities  and Exchange  Commission  (the "SEC"),  in the Company's  press
releases or other public or shareholder  communications,  and in oral statements
made with the approval of an authorized  executive officer, the words or phrases
"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 conditions

                                       12

<PAGE>


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  any  such
forward-looking  statements,  which speak only as of the date made.  The Company
wishes  to advise  readers  that the  factors  listed  above  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.


RESULTS OF OPERATIONS - COMPARISON  OF OPERATING  RESULTS FOR THE THREE AND NINE
MONTHS ENDED DECEMBER 31, 2000 AND 1999

         General.  The Company's results of operations depend primarily upon the
level of net  interest  income,  which is the  difference  between the  interest
income earned on its interest-earning assets such as loans and investments,  and
the costs of the Company's interest-bearing liabilities,  primarily deposits and
borrowings.  Results  of  operations  are also  dependent  upon the level of the
Company's  non-interest  income,  including fee income and service charges,  and
affected by the level of its  non-interest  expenses,  including its general and
administrative  expenses.  Net  interest  income  depends  upon  the  volume  of
interest-earning assets and interest-bearing  liabilities and the interest rates
earned or paid on them, respectively.

         The Company  reported  net income of $321,000  during the three  months
ended  December  31, 2000  compared  to net income of $278,000  during the three
months ended  December 31, 1999.  The increase in income of $43,000  between the
two periods was  primarily  the result of an increase in net interest  income of
$33,000,  an  increase  in  non-interest  income of $33,000  and a  decrease  in
non-interest  expenses of $21,000  partially  offset by an increase in provision
for loss on loans of $7,000, and an increase in income taxes of $37,000.

         The Company  reported  net income of $898,000 for the nine months ended
December  31, 2000  compared to net income of $791,000 for the nine months ended
December  31, 1999.  The increase in income of $107,000  between the two periods
was primarily the result of an increase in net interest  income of $282,000,  an
increase in non-interest  income of $138,000  partially offset by an increase in
provision for loss on loans of $43,000, an increase in non-interest  expenses of
$182,000,  an increase in goodwill  amortization of $20,000,  and an increase in
income taxes of $68,000.

         Interest  Income.  Total interest  income  increased  $413,000 and $1.5
million for the three and nine months ended December 31, 2000 as compared to the
three and nine months ended December 31, 1999.  The increase in interest  income
for the three-month  period  resulted  partially from an increase in the average
balance of  interest-earning  assets of $9.5 million from $157.0 million for the
three  months  ended  December  31, 1999 to $166.5  million for the three months
ended  December 31, 2000.  The  increase in interest  income for the  nine-month
period   resulted   primarily  from  an  increase  in  the  average  balance  of
interest-earning assets of $15.6 million from $148.9 million for the nine months
ended December  31,1999 to $164.5 million for the nine months


                                       13

<PAGE>


ended December 31, 2000. The increase in the average balance of interest-earning
assets was due  primarily to the increase in the average  balance of loans.  The
increase in the average balance of loans was due to aggressive sales efforts and
continued loan demand within the Company's market area.

         Interest income increased also due to an increase in the average yield.
The average yield on interest-earning assets was 8.6% and 8.5% for the three and
nine months  ended  December  31,  2000  compared to 8.1% for the three and nine
months  ended  December  31,  1999.  The  increase  in the  yield was due to the
continued  diversification  of the loan portfolio in higher yielding  commercial
and consumer  loans as well as increases  during the period in general  interest
rates. Tax equivalent adjustments were made to the yield.

         Interest Expense.  Interest expense increased $380,000 and $1.2 million
for the three and nine months  ended  December  31, 2000 as compared to the same
period in 1999.  Interest expense  increased for the periods partially due to an
increase in the average  balance of  interest-bearing  liabilities.  The average
balance of  interest-bearing  liabilities  increased  $7.0  million  from $138.7
million for the three months ended  December 31, 1999 to $145.7  million for the
three months ended  December 31, 2000. The average  balance of  interest-bearing
liabilities  increased  $11.7  million  from $132.4  million for the nine months
ended December 31, 1999 to $144.1 million for the nine months ended December 31,
2000. The increase in these balances is the result of an increase in the average
balance  of  primarily  FHLB and  other  borrowings  and,  to a  lesser  extent,
deposits.  In the past  twelve  months,  the  Company  has funded loan growth by
taking advantage of attractive borrowing rates and utilizing FHLB borrowings.

         Interest expense  increased also due to an increase in the average rate
paid. The average rate paid on  interest-bearing  liabilities  was 5.3% and 5.1%
for the three and nine months ended  December 31, 2000 compared to 4.4% and 4.3%
for the three and nine months  ended  December  31,  1999.  The  increase in the
average rate paid on  interest-bearing  liabilities for the three and nine-month
period is due to a significant increase in market interest rates.

         Provision  for Loan Losses.  The  Company's  provision  for loan losses
totaled  $80,000 and $203,000  for the three and nine months ended  December 31,
2000  compared  to $73,000  and  $160,000  for the three and nine  months  ended
December  31,  1999  based  on  management's  overall  assessment  of  the  loan
portfolio.  The  increase  for the  three  and nine  month  period  was based on
management's  evaluation of the Company's  current  portfolio  including factors
such as an increase in charge-offs and non-performing  loans and the increase in
non-residential  loans.  Management continually monitors the Company's allowance
for loan losses and makes adjustments as economic conditions,  portfolio quality
and portfolio  diversity  dictate.  Although the Company maintains its allowance
for loan losses at a level which the Board  considers  to be adequate to provide
for  potential  losses,  there can be no assurance  that future  losses will not
exceed estimated amounts or that additional  provisions for loan losses will not
be required for future periods.

         Non-interest  Income.   Non-interest  income  increased   approximately
$33,000 for the three months ended December 31, 2000 compared to the same period
in 1999. The increase for the  three-month  period is primarily the result of an
increase  in service  charges  and other  fees on  deposits  of  $53,000  and an
increase  in other  income of $4,000  partially  offset by a decrease in gain on
disposal  of assets of  $24,000.  Non-interest  income  increased  approximately
$138,000 for the nine months ended December 31, 2000 compared to the same period
in 1999.  The increase for the  nine-month  period is primarily the result of an
increase in service charges and other fees on


                                       14

<PAGE>


deposits  of  $172,000  partially  offset by a decrease  in gain on  disposal of
assets of $28,000 and other income of $6,000.  The  increase in service  charges
and other fees on deposits  for the three and nine month period is the result of
increased  product  offerings,  an increased  core deposit base,  aggressive fee
pricing  strategies  and a stringent  policy with regard to the waiving of fees.
The Company adheres to a waive factor of less than 1% of total fees and charges.

         Non-interest  Expense.  Non-interest expenses decreased $21,000 for the
three  months  ended  December  31,  2000  compared  to the same period in 1999.
Non-interest  expenses decreased for the three-month period due to a decrease in
employee  compensation  and benefits of $8,000,  a decrease in FDIC  premiums of
$5,000,  a decrease on expenses  related to foreclosed real estate of $3,000,  a
decrease  in  stationary,  printing  and  supplies of  $14,000,  a reduction  in
professional fees of $5,000 and a reduction in other general and  administrative
expenses of $15,000 offset by an increase in occupancy and equipment  expense of
$27,000.  Employee  compensation  and benefits  decreased  primarily  due to the
reduction of ESOP  expense for the  quarter.  Occupancy  and  equipment  expense
increased  due  to  an  increase  in  maintenance   costs  related  to  existing
facilities;  an increase in maintenance costs related to equipment;  an increase
in lease  expense  due to the  leasing of  additional  space and a land lease to
construct a new facility in the Paintsville area and an increase in depreciation
expense due to an improved technological infrastructure.

         Non-interest  expense  increased  approximately  $182,000  for the nine
months ended December 31, 2000 compared to the same period in 1999. Non-interest
expenses  increased for the nine month period due to an increase in compensation
and  benefits of $87,000,  an increase in  occupancy  and  equipment  expense of
$73,000,  an  increase in ATM expense of $8,000,  an increase in  marketing  and
advertising expense of $20,000,  and an increase in professional fees of $23,000
partially  offset by a decrease in  printing,  stationary  & supplies  and other
general  and  administrative  expenses  of $29,000.  Employee  compensation  and
benefits increased as a result of an increase in the net number of employees due
to the hiring of additional  employees in order to facilitate  the growth of the
Company.  Compensation  and benefit  expenses  also  increased due to the rising
costs of  medical  insurance  premiums.  Effective  April 1, 2000,  the  Company
implemented  a Section  125  Cafeteria  Plan in order to try to  control  rising
medical insurance  premiums in future years. These increases in compensation and
benefits were offset by a decrease in ESOP expense for the nine-month period due
to the decrease in the average market price of the Company's stock.

         Occupancy and equipment  expense  increased for the period due to costs
related to repairs and  maintenance  of the existing  facilities  and equipment,
increased  lease  expense  and  increased   depreciation   due  to  an  improved
technological  infrastructure.  ATM expense  increased due to an increase in the
usage of the various ATM locations. Marketing, advertising and promotion expense
increased  due  to  aggressive   marketing   efforts  and  increased   marketing
promotions.  Professional  fees  increased due to the engagement of a major bank
consulting  firm to assist in the  strategic  planning  process for the Company.
Professional  fees also  increased  due to the  outsourcing  of the loan  review
function for the Company.

         Goodwill  amortization  increased  $20,000  for the nine  months  ended
December 31, 2000 due to amortization being recorded on the Citizens acquisition
for only part of the nine months ended  December 31, 1999 compared to the entire
nine months ended December 31, 2000.

         Income Tax Expense.  Income tax expense  increased  $37,000 and $68,000
for the three and nine  months  ended  December  31,  2000  primarily  due to an
increase in income before income taxes for each period.


                                       15

<PAGE>


         Non-Performing  Assets and Allowance for Loan Losses. The allowance for
loan losses is calculated  based upon an evaluation  and assessment of pertinent
factors  underlying the types and qualities of the Company's  loans.  Management
considers such factors as the payment  status of a loan, the borrower's  ability
to repay  the loan,  the  estimated  fair  value of the  underlying  collateral,
anticipated economic conditions that may affect the borrower's repayment ability
and the  Company's  historical  charge-offs.  The  Company's  allowance for loan
losses as of December 31, 2000 was $1.4 million or 1.0% of the total loans.  The
March 31, 2000 allowance for loan loss was $1.3 million, or 1.0% of total loans.
The Company  recorded a provision for loan losses of $203,000 for the nine-month
period,  and had net  charge-offs  of $134,000 for the  nine-month  period.  The
allowance  for loan  losses at  December  31,  2000 was  allocated  as  follows:
$163,000 to one-to-four  family real estate loans,  $496,000 to commercial  real
estate and commercial  business  loans,  $146,000 to consumer loans and $548,000
remained unallocated.

         The ratio of non-performing  assets to total assets is one indicator of
other exposure to credit risk.  Non-performing  assets of the Company consist of
non-accruing  loans,  accruing loans  delinquent 90 days or more, and foreclosed
assets,  which have been acquired as a result of foreclosure or  deed-in-lieu of
foreclosure.  For  all  periods  presented  the  Company  had no  troubled  debt
restructurings.  The  following  table sets  forth the amount of  non-performing
assets at the periods indicated.


                                                       December 31,    March 31,
                                                          2000           2000
                                                          ----           ----
                                                         (Dollars in Thousands)
Non-Accruing Loans .............................         $  604          $  620
Accruing Loans Delinquent
 90 Days or More ...............................            336             153
Foreclosed Assets ..............................            236             296
                                                         ------          ------
Total Non-Performing Assets ....................         $1,176          $1,069
Total Non-Performing Assets
 as a Percentage of Total Assets ...............             .6%             .6%


         Total  non-performing  assets increased $107,000 from March 31, 2000 to
December 31, 2000.  Management  continually pursues collection of these loans in
order to decrease the level of non-performing assets.

         Other Assets of Concern. Other than the non-performing assets set forth
in the table above, as of December 31, 2000, there were no loans with respect to
which known  information  about the possible credit problems of the borrowers or
the  cash  flows of the  security  properties  have  caused  management  to have
concerns  as to the  ability  of the  borrowers  to  comply  with  present  loan
repayment  terms and which may result in the future  inclusion  of such items in
the non-performing asset categories.

         Liquidity and Capital  Resources.  The Company's most liquid assets are
cash and cash  equivalents.  The  levels of these  assets are  dependent  on the
Company's operating,  financing, and investing activities.  At December 31, 2000
and March 31,  2000,  cash and cash  equivalents  totaled  $4.5 million and $5.3
million,  respectively. The Company's primary sources of funds include principal
and interest payments on loans (both scheduled and  prepayments),  maturities of
investment  securities and principal payments from  mortgage-backed  securities,
deposits and Federal Home Loan Bank of Cincinnati advances. While scheduled loan
repayments  and proceeds  from  maturing  investment  securities  and  principal
payments on mortgage-backed securities are

                                       16

<PAGE>


relatively  predictable,  deposit flows and early repayments are more influenced
by interest rates, general economic conditions and competition.  Certificates of
deposit as of December 31, 2000 maturing within one year total $63.8 million.

         Liquidity  management is both a short- and long-term  responsibility of
management.  The Company  adjusts its  investments  in liquid  assets based upon
management's  assessment  of  expected  loan  demand,   projected  purchases  of
investment  and  mortgage-backed  securities,  expected  deposit  flows,  yields
available on  interest-bearing  deposits,  and liquidity of its  asset/liability
management  program.  Excess liquidity is generally invested in interest-bearing
overnight  deposits  and  other  short-term  liquid  asset  funds.  If funds are
required beyond the funds generated internally,  the subsidiaries of the Company
have the  ability to borrow  funds from the FHLB.  At  December  31,  2000,  the
Company had $18.3 million in borrowings outstanding with the FHLB.

         At  December  31,  2000,  the Company had  outstanding  commitments  to
originate  loans of $10.9  million.  The Company  anticipates  that it will have
sufficient funds available to meet its current  commitments  principally through
the use of current  liquid  assets and through its  borrowing  capacity with the
FHLB.

         Classic Bank is subject to the regulatory  capital  requirements of the
Federal  Deposit  Insurance   Corporation  (the  "FDIC").  The  following  table
summarizes,  as of December 31, 2000,  the capital  requirements  applicable  to
Classic Bank and its actual  capital  ratios.  As of December 31, 2000,  Classic
Bank exceeded all current regulatory capital standards.

<TABLE>
<CAPTION>
                                         Regulatory                        Actual Capital
                                     Capital Requirement                      (CB Only)
                                    -----------------------             -----------------------
                                    Amount          Percent             Amount          Percent
                                    ------          -------             ------          -------
                                                       (Dollars in Thousands)
<S>                              <C>               <C>                <C>              <C>
Total Capital
  (to Risk Weighted Assets)         $5,582             8.0%             $8,516           12.2%
Tier 1 Capital
  (to Adjusted Total Assets)         4,040             4.0               7,713            7.6
</TABLE>


         First National is subject to the regulatory capital requirements of the
Office of the  Comptroller  of the Currency  (the "OCC").  The  following  table
summarizes,  as of December 31, 2000,  the capital  requirements  applicable  to
First National and its actual  capital  ratios.  As of December 31, 2000,  First
National exceeded all current regulatory capital standards.

<TABLE>
<CAPTION>

                                          Regulatory                     Actual Capital
                                      Capital Requirement                    (FN Only)
                                    ------------------------            ---------------------
                                    Amount           Percent            Amount        Percent
                                    ------           -------            ------        -------
                                                      (Dollars in Thousands)
<S>                              <C>                <C>               <C>             <C>
Total Capital
  (to Risk Weighted Assets)         $4,316             8.0%             $6,390          11.8%
Tier 1 Capital
  (to Adjusted Total Assets)         3,020             4.0               5,838           7.7
</TABLE>


Impact of Inflation and Changing Prices

         The consolidated financial statements and related data presented herein
have been prepared in accordance with generally accepted  accounting  principles
which require the measurement of

                                       17

<PAGE>


financial  position and operating results in terms of historical dollars without
considering  changes in the relative  purchasing power of money over time due to
inflation.  The primary  impact of inflation on the operations of the Company is
reflected  in  increased  operating  costs.  Unlike most  industrial  companies,
virtually  all of the assets and  liabilities  of a  financial  institution  are
monetary  in  nature.  As a  result,  interest  rates,  generally,  have  a more
significant impact on a financial institution's performance than does inflation.
Interest  rates do not  necessarily  move in the same  direction  or to the same
extent as the prices of goods and services



                                       18

<PAGE>


                           PART II. OTHER INFORMATION


Item 1. Legal Proceedings

         None.

Item 2. Changes in Securities

         None.

Item 3. Defaults Upon Senior Securities

         None.

Item 4. Submission of Matters to a Vote of Security Holders

         None.

Item 5. Other Information

         None.

Item 6. Exhibits and Reports on Form 8-K

          a.   Exhibits

               Exhibit 28 Accountant's Review Report

          b.   Reports on Form 8-K

               The  Registrant filed the  following current  reports on Form 8-K
               during the three months ended December 31, 2000:

               Press release dated October  27,  2000  announcing  earnings  for
               the  quarter  ended  September  30,  2000  and  declaring  a cash
               dividend.



                                       19

<PAGE>


                                   SIGNATURES


         Pursuant to the requirement 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.
                                   REGISTRANT





Date: February 14, 2001             /s/ David B. Barbour
      ------------------------      --------------------------------------------
                                    David B. Barbour, President, Chief Executive
                                    Officer and Director (Duly Authorized
                                    Officer)





Date: February 14, 2001             /s/ Lisah M. Frazier
      ------------------------      --------------------------------------------
                                    Lisah M. Frazier, Senior Vice President,
                                    Treasurer and Chief Financial Officer
                                    (Principal Financial Officer)



                                       20