SOURCE: Coast Bancorp

August 06, 2008 17:54 ET

Coast Bancorp Second Quarter 2008 Earnings Announcement

SAN LUIS OBISPO, CA--(Marketwire - August 6, 2008) - Coast Bancorp (OTCBB: CTBP), the holding company for Coast National Bank, announced the unaudited financial results for the quarter ended June 30, 2008.

Total assets at June 30, 2008 were $203.5 million, a 10.7% increase from $183.8 million at December 31, 2007.

Net loans at June 30, 2008 were $146.3 million, an increase of $4.0 million or 2.8% from $142.3 million at December 31, 2007. The recorded investment in impaired loans as of June 30, 2008 was $11.7 million, an increase of $7.5 million or 178.6% from $4.2 million at December 31, 2007. The allowance for loan and lease losses, which covers credit losses pertaining to the loan portfolio, was $2.9 million or 2.0% of total loans at June 30, 2008. The Company also carried an additional $55,000 allowance for credit losses pertaining to its unfunded commitments in the liability section of its balance sheet. Collectively, the total allowance for all types of credit losses was $3.0 million at June 30, 2008 as compared to $1.5 million at December 31, 2007.

Deposits as of June 30, 2008 were $152.5 million, a $9.6 million, or 5.9% decrease from $162.1 million at December 31, 2007.

Total stockholders' equity decreased 3.5% to $13.6 million as of June 30, 2008 as compared to $14.1 million at December 31, 2007. The decrease was a result of the March 31, 2008 $1.5 million provision to the allowance for loan and lease losses. Despite the decrease in stockholders' equity, the Company remained "well capitalized" by regulatory standards, with a Tier 1 Leverage Capital Ratio of 9.6%, a Tier 1 Risk Based Capital Ratio of 10.9% and a Total Risk Based Capital Ratio of 13.6%.

Net interest income before the provision for loan losses for three months ended June 30, 2008 was $1.6 million, a decrease of 27.3% when compared to $2.2 million for the three months ended June 30, 2008. Net interest income before the provision for loan losses for the six months ended June 30, 2008 was $3.3 million, a decrease of 23.3% when compared to $4.3 million for the six months ended June 30, 2007. The decrease in net interest income was primarily attributable to a decreased net interest margin, partially offset by the increase in total loans. The net interest margin for the three months ended June 30, 2008 was 3.6% compared to 5.4% for the three months ended June 30, 2007. The net interest margin for the six months ended June 30, 2008 was 4.0% compared to 5.2% for the six months ended June 30, 2007.

Non-interest income for the three months ending June 30, 2008 was $172,000, an increase of 48.3%, compared to $116,000 for the three months ended June 30, 2007. Non-interest income for the six months ending June 30, 2008 was $425,000, an increase of 67.3%, compared to $254,000 for the six months ended June 30, 2007. The increased income was primarily derived from gains on the sale of SBA loans and of investments.

Non-interest expense for the three months ending June 30, 2008 was $1,650,000 a decrease of 8.6% compared to $1,806,000 for the three months ended June 30, 2007. Non-interest expense for the six months ending June 30, 2008 was $3,306,000 a decrease of 8.0% compared to $3,592,000 for the six months ended June 30, 2007. These reductions were primarily due to decreases in marketing and personnel expenses.

Net income for the three months ending June 30, 2008 was $31,000, or $0.04 per diluted share, an 89.9% decrease from $307,000, or $0.42 per diluted share, for the three months ended June 30, 2007. The net loss for the six months ending June 30, 2008 was $702,000, or ($0.97) per diluted share, a 234.2% decrease from net income of $523,000, or $0.72 per diluted share for the six months ended June 30, 2007. The decrease is primarily due to the additional provision for loan losses made at March 31, 2008.

Coast National Bank opened for business on June 16, 1997. The Bank is an independent community bank with five banking offices and a loan production office. With a focus on delivering unsurpassed customer service, the Bank provides small business loans, home loans and other loans, as well as an array of business and personal banking deposit products and other services. The Bank is a wholly owned subsidiary of Coast Bancorp, a $204 million bank holding company, headquartered in San Luis Obispo, California. Coast Bancorp stock trades under the ticker symbol "CTBP.OB." For more information, visit www.coastnationalbank.com or call 805.541.0400.

Please refer to the following Consolidated Balance Sheets (unaudited) as of June 30, 2008 and December 31, 2007 and Consolidated Statements of Income (unaudited) for the three months ended June 30, 2008 and 2007 for specific information regarding the Company's financials.


                    Coast Bancorp and Subsidiary
              Consolidated Balance Sheets (Unaudited)
               June 30, 2008 and December 31, 2007


                   ASSETS                      June 30,       December 31,
                                                 2008            2007
                                             -------------   -------------
Cash and due from banks                      $   5,196,249   $   6,923,496
Federal funds sold                              29,600,000      14,350,000
                                             -------------   -------------
            TOTAL CASH AND CASH EQUIVALENTS     34,796,249      21,273,496

Interest bearing deposits with other banks       5,000,000               -
Investment securities available for sale         3,678,665       7,694,486

Loans:
  Commercial                                    60,894,502      41,498,791
  Real estate - construction                    51,235,410      41,044,155
  Real estate - other                           32,801,910      58,050,610
  Consumer                                       4,451,960       3,339,550
                                             -------------   -------------
                                TOTAL LOANS    149,383,782     143,933,106
Net deferred loan fees                            (165,525)       (162,696)
Allowance for credit losses                     (2,933,652)     (1,487,131)
                                             -------------   -------------
                                  NET LOANS    146,284,605     142,283,279
Premises and equipment                           8,557,372       8,733,401
Deferred taxes                                   1,449,253         485,000
Federal Reserve Bank stock and Federal Home
 Loan Bank stock, at cost                        1,725,300         991,350
Other Real Estate Owned                            770,000         770,000
Accrued interest and other assets                1,271,618       1,520,398
                                             -------------   -------------
                               TOTAL ASSETS  $ 203,533,062   $ 183,751,410
                                             =============   =============

        LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
  Non-interest-bearing demand                $  37,519,343   $  42,989,733
  Money market and NOW                          46,513,758      45,959,276
  Savings                                        7,117,465       6,454,025
  Time deposits of $100,000 or more             45,540,343      49,012,877
  Other time deposits                           15,771,721      17,648,933
                                             -------------   -------------
                             TOTAL DEPOSITS    152,462,630     162,064,844
  FHLB advances                                 30,000,000
  Junior subordinated debt securities            7,217,000       7,217,000
  Other liabilities                                255,586         338,924
                                             -------------   -------------
                          TOTAL LIABILITIES    189,935,216     169,620,768
                                             -------------   -------------

Commitments and contingencies                            -               -
Stockholders' equity:
  Preferred stock - 10,000,000 authorized,
   none outstanding                                      -               -
  Common stock no par value; 10,000,000 shares
   authorized; issued and outstanding:
   723,700 at June 30, 2008 and
   713,000 at December 31, 2007                  7,599,311       7,443,847
  Additional paid-in capital                       217,374         184,780
  Retained earnings                              5,760,079       6,462,202
  Accumulated other comprehensive income - net
   unrealized gains on available-for-sale
   securities, net of taxes of $14,650 at
   June 30, 2008 and $27,666 at
   December 31, 2007                                21,082          39,813
                                             -------------   -------------
                 TOTAL STOCKHOLDERS' EQUITY     13,597,846      14,130,642
                                             -------------   -------------
 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY  $ 203,533,062   $ 183,751,410
                                             =============   =============



                    Coast Bancorp and Subsidiary
            Consolidated Statements of Income (Unaudited)
       For the Three and Six Months Ended June 30, 2008 and 2007


                       For the Three Months Ended  For the Six Months Ended

                                June 30,                 June 30,
                        ------------------------- ------------------------
                            2008        2007         2008         2007
                        ------------ -----------  -----------  -----------
Interest income:
    Interest and fees
     on loans           $  2,300,450 $ 3,288,538  $ 4,947,963  $ 6,379,205
    Interest on
     investment
     securities               47,864     108,575      147,607      195,275
    Interest on federal
     funds sold               70,794     228,259      151,926      445,481
    Other interest
     income                   19,482      15,928       36,874       42,182
                        ------------ -----------  -----------  -----------
  TOTAL INTEREST INCOME    2,438,590   3,641,300    5,284,370    7,062,143

Interest expense:
    Interest on money
     market and NOW
     accounts                164,409     411,781      414,859      829,612
    Interest on savings
     deposits                 21,806      36,677       50,268       72,567
    Interest on time
     deposits                548,937     834,788    1,235,113    1,629,482
    Interest on FHLB
     advances                 41,246           -       41,246            -
    Interest on junior
     subordinated debt
     securities              115,255     121,479      230,511      241,856
                        ------------ -----------  -----------  -----------
 TOTAL INTEREST EXPENSE      891,653   1,404,725    1,971,997    2,773,517

    Net interest income    1,546,937   2,236,575    3,312,373    4,288,626
    Provision for loan
     losses                        -           -    1,605,000       25,000
                        ------------ -----------  -----------  -----------
    NET INTEREST INCOME
        AFTER PROVISION
      FOR CREDIT LOSSES    1,546,937   2,236,575    1,707,373    4,263,626

Non-interest income:
    Service charges on
     deposit accounts
     and other                95,720      94,399      193,669      179,484
    Gain on sale of
     investments                   -           -       72,104            -
    Gain on sale of
     loans and
     servicing fees           68,165       5,277      141,328       41,710
    Mortgage packaging
     fees                      8,120      22,070       17,828       37,530
    Loss on sale of
     premises and
     equipment                     -      (5,665)           -       (4,970)
                        ------------ -----------  -----------  -----------

     TOTAL NON-INTEREST
                 INCOME      172,005     116,081      424,929      253,754

Non-interest expense:
    Salaries and
     benefits                882,575     937,643    1,788,929    1,912,384
    Net occupancy
     expense (net of
     rental income)          141,259     121,007      285,798      250,003
    Equipment expense         59,271      80,714      120,829      156,420
    Other expense            566,533     666,421    1,110,565    1,273,193
                        ------------ -----------  -----------  -----------

     TOTAL NON-INTEREST
                EXPENSE    1,649,638   1,805,785    3,306,121    3,592,000

    INCOME BEFORE TAXES       69,304     546,871   (1,173,819)     925,380
    Income taxes              38,210     239,900     (471,696)     402,300
                        ------------ -----------  -----------  -----------
             NET INCOME $     31,094 $   306,971  $  (702,123) $   523,080
                        ============ ===========  ===========  ===========

Per share data
    Earnings per share
     - Basic            $       0.04 $      0.45  $     (0.98) $      0.76
                        ============ ===========  ===========  ===========
    Earnings per share
     - Diluted          $       0.04 $      0.42  $     (0.97) $      0.72
                        ============ ===========  ===========  ===========

Coast Bancorp and Subsidiary

This news release contains forward-looking statements with respect to the financial condition, results of operation and business of Coast Bancorp and its subsidiaries. All financial results are unaudited and therefore subject to change. These include, but are not limited to, statements that relate to or are dependent on estimates or assumptions relating to the prospects of loan growth, credit quality and certain operating efficiencies resulting from the operations Coast National Bank. These forward-looking statements involve certain risks and uncertainties. Factors that may cause actual results to differ materially from those contemplated by such forward- looking statements include, among others, the following possibilities: (1) competitive pressure among financial services companies increases significantly; (2) changes in the interest rate environment on interest margins; (3) general economic conditions, internationally, nationally or in the State of California are less favorable than expected; (4) legislation or regulatory requirements or changes adversely affect the business in which the combined organization will be engaged.

Contact Information

  • Contact:
    Coast National Bank
    805.541.0400