SOURCE: Coast Bancorp

July 10, 2008 20:27 ET

Coast Bancorp Restates First Quarter Earnings

SAN LUIS OBISPO, CA--(Marketwire - July 10, 2008) - Coast Bancorp (OTCBB: CTBP), the holding company for Coast National Bank, today announced the restatement of its First Quarter 2008 Earnings. The restatement results from the request of the Office of the Comptroller of the Currency that Coast National Bank:

--  Reclassify three relationships as "non-performing" which increased non-
    performing loans to $9.27 million from the previously reported $4.3
    million; and
--  Add $1.5 million to its Allowance for Loan Losses.
    

Approximately 96% of the company's $147 million loan portfolio is unaffected by the reclassification. However, as a consequence of these actions, Coast National Bank’s previously reported net income of $214,000 for the first quarter of 2008 has been restated to reflect an after tax loss of $681,000. Coast Bancorp’s previously reported net income of $161,000 for the first quarter of 2008 has been restated to reflect an after tax loss of $733,000.

According to President and CEO Jack Wauchope, "Although the Bank could have challenged the OCC's request, the Bank's management and board thought it would be better to take the requested actions, amend the Company's financial results for the first quarter of 2008, and move forward and get back to the business of serving our customers. Local financial institutions have been impacted as a result of the national fallout from the sub-prime mortgage debacle. While Coast National Bank did not directly participate in the sub-prime mortgage industry, the bank like most other local financial institutions has been affected. As a result of the current economic conditions, the federal regulatory agencies are taking a close look at the condition of all banking institutions."

"It is important to note," Mr. Wauchope added, "that even after taking these actions, the Bank is still financially sound and our regulatory capital ratios exceed those required to be classified as 'well capitalized.' Our tier one leverage ratio after the changes will be 10.23% which is more than double the 5% ratio required to meet the regulatory definition of well capitalized. Coast National Bank remains fully committed to serving our community, and looks forward to the upcoming year as an opportunity to serve both new and existing customers, while simultaneously building value for our shareholders."

This news release contains forward-looking statements with respect to the financial condition, results of operation and business of Coast Bancorp and its subsidiaries. These include, but are not limited to, statements that relate to or are dependent on estimates or assumptions relating to, among others, credit quality and future earnings. 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; and(4) legislation or regulatory requirements or changes adversely affect the business in which the combined organization will be engaged.

Contact Information

  • Contact:
    Davina A. Palazzo
    Phone: (805)547-6125
    Email: Email Contact