SOURCE: Coast Bancorp

Coast Bancorp

October 20, 2015 19:54 ET

Coast Bancorp Reports Third Quarter Results

SAN LUIS OBISPO, CA--(Marketwired - Oct 20, 2015) - Coast Bancorp ("Coast Bancorp" or the "Company") (OTCBB: CTBP), a bank holding company and the parent of Coast National Bank (the "Bank"), reported third quarter net income on a consolidated basis available to common shareholders of $6,646,000 or $1.17 per dilutive common share compared to a loss of ($36,000) or ($0.01) for the same period in 2014. Three significant events occurred during the third quarter of 2015. First, both Coast Bancorp and Coast National Bank reversed deferred tax asset valuation allowances during the third quarter resulting in a combined tax benefit of $4.4 million. Also, the Bank sold two buildings, an OREO property and an administrative office building for a combined gain on sale of $1.5 million. Lastly, a reverse provision for loan losses of $500,000 brings the Allowance for Loan Losses in line with peers. Net interest income before provision for loan losses increased to $1.2 million in the three months ended September 30, 2015 compared to $1.0 million in the third quarter of 2014. Excluding the real estate sale gain of $1.5 million, other noninterest income was $15,000 lower in the third quarter of 2015 compared to the third quarter of 2014. Noninterest expense was $39,000 lower in the third quarter of 2015 compared to the same period in 2014 as a result of lower salaries and benefits and regulatory assessments.

Net income for the nine month period ended September 30, 2015 totaled $6.7 million or $1.18 per dilutive common share compared to a net loss of ($146,000), or ($0.05) per dilutive common share for the nine months ended September 30, 2014. Net interest income before provision for loan losses increased $596,000 for the nine months ended September 30, 2015 compared to the same period in 2014 due to growth of the loan portfolio and investments. Noninterest income, excluding the gain on sale of the real estate of $1.5 million, declined $56,000 primarily due to lower gain on sales of SBA loans. Noninterest expense increased $117,000 in the nine months ended September 30, 2015 compared to the same period in 2014 mainly as a result of higher salary and benefit costs and technology expenses for the nine month period.

Total consolidated assets were $146.4 million at September 30, 2015 compared to $129.4 million at September 30, 2014 for an increase of 13.2%. Net loans grew 25.9% to $90.2 million and investments increased 41.7% to $22.0 million during this period. Total consolidated liabilities of $136.1 million include deposits of $126.1 million, an increase of 8.1% from $116.6 million at September 30, 2014, junior subordinated debt of $7.2 million due in 2027, senior notes for $2.5 million due in 2018, and other liabilities of $369,000. Stockholders' equity increased to $7.1 million or 214.6% at September 30, 2015 compared to September 30, 2014.

September 30, 2015 Highlights of Coast National Bank, a wholly owned subsidiary of Coast Bancorp:

  • Net income of $5.7 million for the third quarter of 2015, compared to net income of $76,000 for the second quarter of 2014. 
  • Net income of $5.9 million for the first nine months of 2015, compared to net income of $59,000 for the same period in 2014. 
  • Bank assets at September 30, 2015 were $144.9 million, or 12.2% higher compared to $129.2 million at September 30, 2014.
  • Total deposits increased to $126.5 million or 8.0% at September 30, 2015 from $117.1 million at September 30, 2014. 
  • Net Loans increased 25.9% to $90.2 million at September 30, 2015 from $71.6 million at September 30, 2014.
  • Investment securities increased 41.8% to $22.0 million from $15.5 million at September 30, 2014.
  • Deposits at September 30, 2015 of $126.5 million reflect core deposits of 96.7% and noninterest-bearing demand deposits of 43.8% of total deposits, up from 94.5% and 43.5% at September 30, 2014, respectively.
  • The Allowance for Loan and Lease Loss as a percentage of loans at September 30, 2015 was 1.5% compared to 2.9% at September 30, 2014. Due to two $500,000 reverse provisions, one at December 31, 2014 and a second at September 30, 2015, the level of coverage is now comparable to peers and reflects the ongoing satisfactory credit quality. Non Performing Assets continued to improve to 0.3% of Net Loans plus OREO at September 30, 2015 compared to 3.6% at September 30, 2014.
  • The Tier I leverage capital ratio increased to 13.4% at both September 30, 2015 compared to 9.32% at September 30, 2014.
  • Total risk-based capital was 14.7% at September 30, 2015 compared to 15.9% for the same date in 2014. At September 30, 2015, the Bank maintained regulatory capital ratios at levels that would be generally considered "well capitalized" for regulatory purposes.

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 BANCORP  
CONDENSED CONSOLIDATED BALANCE SHEETS  
(In thousands)  
    September 30,  
    2015     2014  
ASSETS   Unaudited     Unaudited  
Cash and cash equivalents   $ 16,047     $ 22,142  
Federal funds sold     -       100  
Time deposits at other banks     7,105       10,045  
Investment securities     22,002       15,522  
Loans, net     90,216       71,640  
Premises and equipment, net     4,424       5,320  
Federal Reserve and Federal Home Loan Bank stock, at cost     894       726  
Other real estate owned, net     -       2,481  
Deferred tax asset     4,388       -  
Accrued interest receivable and other assets     1,357       1,422  
  Total assets   $ 146,433     $ 129,398  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY          
Non-interest bearing demand   $ 54,977     $ 50,383  
Money market and NOW     45,928       37,476  
Savings     9,815       9,074  
Time     15,338       19,669  
  Total deposits     126,058       116,602  
Senior notes payable     2,448       2,000  
Junior subordinated debt securities     7,217       7,217  
Accrued interest payable and other liabilities     369       292  
  Total liabilities     136,092       126,111  
Common stock - no par value, 5,646,881 shares outstanding at September 30, 2015 and 2014.     12,494       12,494  
Additional paid-in capital     316       293  
Accumulated deficit     (2,481 )     (9,517 )
Other comprehensive income (loss), net of taxes     12       17  
  Total stockholders' equity     10,341       3,287  
  Total liabilities and stockholders' equity   $ 146,433     $ 129,398  
                 
                 
                 
COAST BANCORP  
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS  
(In thousands, except per share amounts)  
                         
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2015     2014     2015     2014  
    Unaudited     Unaudited     Unaudited     Unaudited  
Total interest income   $ 1,364     $ 1,142     $ 3,901     $ 3,250  
Total interest expense     126       132       386       331  
  Net interest income     1,238       1,010       3,515       2,919  
Provision for loan losses     (500 )     -       (500 )     -  
  Net interest income after provision for loan losses     1,738       1,010       4,015       2,919  
                                 
Noninterest income     1,787       260       2,202       716  
Noninterest expense     1,267       1,306       3,896       3,779  
  Income before income taxes     2,258       (36 )     2,321       (144 )
Income taxes     (4,388 )     -       (4,386 )     2  
  Net income (loss)   $ 6,646     $ (36 )   $ 6,707     $ (146 )
                                 
Basic net income (loss) per share   $ 1.18     $ (0.01 )   $ 1.19     $ (0.05 )
Diluted net income (loss) per share   $ 1.17     $ (0.01 )   $ 1.18     $ (0.05 )
                                 
Average basic shares outstanding     5,647       5,647       5,647       2,781  
Average diluted shares outstanding     5,692       5,647       5,670       2,781  
                                 
                                 
                                 
 
COAST NATIONAL BANK  
CONDENSED BALANCE SHEETS  
(In thousands)  
    September 30,  
    2015   2014  
ASSETS   Unaudited   Unaudited  
Cash and due from banks   $ 1,151   $ 2,598  
Interest-bearing deposits at FRB and other banks     22,000     29,589  
Federal funds sold     -     100  
Investment securities     22,003     15,522  
Loans, net     90,216     71,640  
Premises and equipment, net     4,424     5,320  
Federal Reserve and Federal Home Loan Bank stock, at cost     894     726  
Other real estate owned, net     -     2,481  
Deferred tax assets     3,329     -  
Accrued interest receivable and other assets     884     1,178  
  Total assets   $ 144,901   $ 129,154  
               
LIABILITIES AND STOCKHOLDERS' EQUITY        
Non-interest bearing demand   $ 55,386   $ 50,931  
Money market and NOW     45,928     37,476  
Savings     9,815     9,073  
Time     15,338     19,669  
  Total deposits     126,467     117,149  
Accrued interest payable and other liabilities     201     181  
  Total liabilities     126,668     117,330  
               
Common stock     3,162     3,162  
Additional paid-in capital     13,358     13,335  
Retained earnings     1,701     (4,690 )
Other comprehensive income (loss), net of taxes     12     17  
  Total stockholders' equity     18,233     11,824  
  Total liabilities and stockholders' equity   $ 144,901   $ 129,154  
                 
                 
               
                     
COAST NATIONAL BANK
CONDENSED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
                     
    Three Months Ended   Nine Months Ended
    September 30,   September 30,
    2015     2014   2015     2014
    Unaudited     Unaudited   Unaudited     Unaudited
Total interest income   $ 1,363     $ 1,141   $ 3,898     $ 3,246
Total interest expense     48       50     144       157
  Net interest income     1,315       1,091     3,754       3,089
Provision for loan losses     (500 )     -     (500 )     -
  Net interest income after provision for loan losses     1,815       1,091     4,254       3,089
                             
Noninterest income     1,787       260     2,202       716
Noninterest expense     1,251       1,275     3,845       3,744
  Income before income taxes     2,351       76     2,611       61
Income taxes     (3,328 )     -     (3,327 )     2
  Net income (loss)   $ 5,679     $ 76   $ 5,938     $ 59