SOURCE: Coast Bancorp

Coast Bancorp

August 08, 2014 16:03 ET

Coast Bancorp and Coast National Bank Announce Second Quarter Earnings Results

SAN LUIS OBISPO, CA--(Marketwired - Aug 8, 2014) - Coast National Bank, a wholly owned subsidiary of Coast Bancorp (OTCBB: CTBP) today reported Net Profit of $150,000 for the 2nd quarter 2014, compared to a loss of $185,000 for the second quarter of 2013. 

For the six months ended June 30, 2014, the bank reflected a net loss of $16,000, compared to a net profit of $180,000 for the same period in 2013. In the first quarter of 2013, a large gain on sale of the guaranteed portion of an SBA loan was the major contributor to the significant profit in 1st half of 2013. In comparison, the gain on sale income was normalized in 2014.

Coast National Bank Highlights:

Total assets at June 30, 2014 were $122.8 million, or 4.6% higher compared to $117.4 million at June 30, 2013. Total deposits at June 30, 2014 increased to $110.9 million or 1.0% compared to $109.7 million at June 30, 2013. Loan growth has been strong with net loans increasing 23.0% to $72.6 million at June 30, 2014 compared to $59.0 million at June 30, 2013.

The allowance for loan losses at June 30, 2014 was 2.6% of gross loans and is considered adequate in light of the bank's low level of non-performing loans of $317 thousand at June 30, 2014.

Deposits at June 30, 2014 increased to $110.8 million or 1% over June 30, 2013. Core deposits represent 94.5% of total deposits and demand deposits represent 42.2% of total deposits. The bank continues to benefit from a strong core customer base together with low cost of deposits averaging 0.19% year-to-date, down from 0.25% for the same period in 2013.

As a result of $3.5 million of additional capital provided by Coast Bancorp in June 2014, the bank's Tier I leverage ratio improved to 9.7% at June 30, 2014 compared to 6.4% at June 30, 2013. Its total risk-based capital ratio was 16.6% at June 30, 2014 compared to 13.2% for the same date in 2013. The bank is "Well Capitalized". The Consent Order with the OCC was terminated in April 2014.

Coast Bancorp Highlights:

Coast Bancorp reported a consolidated net loss of $110,000 or $0.08 per basic and diluted share for the six months ended June 30, 2014 compared to a net profit of $75,000 or $0.09 per basic and diluted share for the same period in 2013. Total consolidated assets were $123.1 million at June 30, 2014 compared to $117.7 million at June 30, 2013. Total consolidated liabilities of $119.7 million include deposits held in the bank, junior subordinated debt of $7.2 million due in 2027, and a senior note for $2.0 million due in 2016, as well as other liabilities of $233 thousand. The accrued and deferred interest on the junior subordinated debt from 2009, of $2.2 million was paid in June. Pursuant to its right under the indenture agreement, the Company has elected to defer interest for a second deferral period of up to five years. 

Total stockholder's equity increased to $3.4 million at June 30, 2014 from a deficit of $1.5 million at June 30, 2013. The Company completed a private placement offering in June whereby 4,800,000 shares of common stock were sold for $1.00 per share, less the cost of the private placement. Net proceeds from the offering and the senior note were used to satisfy the accrued and unpaid interest on the junior subordinated debt securities, and invest $3.5 million in the bank. A portion of the remaining proceeds will be held to pay the interest on the senior note, which is payable annually at the rate of 10% for the first year and 12% for the second and final year.

Established in 1997, Coast National Bank is a locally owned community bank serving consumers and businesses through four local offices serving San Luis Obispo County. With a focus on delivering quality customer service, Coast National Bank provides small business loans and an array of business and personal banking deposit products and other services. For further information, visit www.coastnationalbank.com or call 805.541.0400.

Coast National Bank is an equal housing lender and member FDIC.

This release contains forward-looking statements that reflect management's current views of future events and operations. These forward-looking statements are based on information currently available to the Company as of the date of this release. It is important to note that these forward-looking statements are not guarantees of future performance and involve risks and uncertainties, including, but not limited to, the ability of the Company to implement its strategies.

             
COAST NATIONAL BANK            
CONDENSED BALANCE SHEETS            
(In thousands)            
  June 30,            
  2014     2013            
ASSETS Unaudited     Unaudited            
Cash and due from banks $ 3,373     $ 3,859                
Interest-bearing deposits at FRB and other banks   27,191       45,021                
Federal funds sold   100       100                
Investment securities   9,908       -                
Federal Reserve and Federal Home Loan Bank stock, at cost   617       659                
Loans, net   72,614       59,029                
Premises and equipment, net   6,105       6,237                
Other real estate owned, net   1,734       1,456                
Accrued interest receivable and other assets   1,171       1,076                
  Total assets $ 122,813     $ 117,437                
                             
LIABILITIES AND STOCKHOLDERS' EQUITY                            
Non-interest bearing demand $ 46,799     $ 41,802                
Money market and NOW   35,751       37,921                
Savings   8,129       7,848                
Time   20,119       22,162                
  Total deposits   110,798       109,733                
Accrued interest payable and other liabilities   201       279                
  Total liabilities   110,999       110,012                
Common stock - no par value, 5,646,881 shares outstanding at June 30, 2014 and 846,881 shares outstanding at June 30, 2013.   3,162       3,162                
Additional paid-in capital   13,335       9,835                
Retained earnings   (4,766 )     (5,572 )              
Unrealized gains on AFS securities, net   83       -                
  Total stockholders' equity   11,814       7,425                
  Total liabilities and stockholders' equity $ 122,813     $ 117,437                
                             
                             
                             
COAST NATIONAL BANK
CONDENSED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
                     
  Three Months Ended     Six Months Ended
  June 30,     June 30,
  2014     2013     2014     2013
  Unaudited     Unaudited     Unaudited     Unaudited
Total interest income $ 1,113     $ 1,039     $ 2,106     $ 2,204
Total interest expense   52       64       108       132
  Net interest income   1,061       975       1,998       2,072
Provision for loan losses   -       -       -       -
  Net interest income after provision for loan losses   1,061       975       1,998       2,072
                             
Noninterest income   334       199       456       962
Noninterest expense   1,243       1,357       2,468       2,852
  Income before income taxes   152       (183 )     (14 )     182
Income taxes   2       2       2       2
  Net profit (loss) $ 150     $ (185 )   $ (16 )   $ 180
                             
Basic and diluted profit (loss) per share $ 0.04     $ (0.22 )   $ (0.01 )   $ 0.21
                             
Average basic and diluted shares outstanding   3,727       847       1,324       847
                             
                             
                             
COAST BANCORP            
CONDENSED BALANCE SHEETS            
(In thousands)            
  June 30,            
  2014     2013            
ASSETS Unaudited     Unaudited            
Cash and cash equivalents $ 20,761     $ 38,301                
Federal funds sold   100       100                
Time deposits at other banks   9,803       9,267                
Investment securities   9,908       -                
Federal Reserve and Federal Home Loan Bank stock, at cost   617       659                
Loans, net   72,614       60,340                
Premises and equipment, net   6,105       6,237                
Other real estate owned, net   1,734       1,456                
Accrued interest receivable and other assets   1,414       1,355                
  Total assets $ 123,056     $ 117,715                
                             
LIABILITIES AND STOCKHOLDERS' EQUITY                            
Non-interest bearing demand $ 46,217     $ 41,833                
Money market and NOW   35,751       37,905                
Savings   8,129       7,848                
Time   20,120       22,162                
  Total deposits   110,217       109,748                
Senior notes payable   2,000       -                
Junior subordinated debt securities   7,217       7,217                
Accrued interest payable and other liabilities   233       2,285                
  Total liabilities   119,667       119,250                
Common stock - no par value, 5,646,881 shares outstanding at June 30, 2014 and 846,881 shares outstanding at June 30, 2013.   12,494       8,277                
Additional paid-in capital   293       293                
Accumulated deficit   (9,481 )     (10,105 )              
Unrealized gains on AFS securities, net   83       -                
  Total stockholders' equity   3,389       (1,535 )              
  Total liabilities and stockholders' equity $ 123,056     $ 117,715                
                             
                             
                             
COAST BANCORP  
CONDENSED STATEMENTS OF OPERATIONS  
(In thousands, except per share amounts)  
                     
  Six Months Ended     Three Months Ended  
  June 30,     June 30,  
  2014     2013     2014   2013  
  Unaudited     Unaudited     Unaudited   Unaudited  
Total interest income $ 2,108     $ 2,206     $ 1,113   $ 1,041  
Total interest expense   199       213       101     104  
  Net interest income   1,909       1,993       1,012     937  
Provision for loan losses   -       -       -     -  
  Net interest income after provision for loan losses   1,909       1,993       1,012     937  
                             
Noninterest income   456       961       334     198  
Noninterest expense   2,473       2,877       1,248     1,381  
  Income before income taxes   (108 )     77       98     (246 )
Income taxes   2       2       2     2  
  Net profit (loss) $ (110 )   $ 75     $ 96   $ (248 )
                             
Basic and diluted profit (loss) per share $ (0.08 )   $ 0.09     $ 0.05   $ (0.29 )
                             
Average basic and diluted shares outstanding   1,324       847       1,796     847