Coast Financial (NASDAQ:CFHI)
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BRADENTON, Fla., May 2 /PRNewswire-FirstCall/ -- Coast Financial Holdings, Inc. (NASDAQ:CFHI), parent company of Coast Bank of Florida today reported financial results for the quarter ended March 31, 2007. The company reported growth in loans, deposits and total assets in comparison to the fourth quarter of 2006.
For the quarter ended March 31, 2007 the company recorded a loss of $2.4 million, or $0.37 per share, as compared to a loss of $314,000 or $0.05 per share reported for the quarter ended March 31, 2006.
According to Coast Bank President & CEO, Brian F. Grimes, the increase in net loss is primarily attributable to extraordinary circumstances. "For the past several months, Coast Bank has been operating under difficult circumstances and the earnings report is reflective of the situation." Grimes continued, "As previously disclosed we have a large number of customers who have been negatively impacted by their builder filing for bankruptcy in the midst of their new home construction. This situation has generated large extraordinary expenses, negatively impacting the performance of Coast Bank."
For the quarter ended March 31, 2007 the company reported professional fees, which includes legal and consulting expenses, of $726,000 as compared to $199,000 reported for the quarter ended March 31, 2006, an increase of $527,000, or 264.8%. Also for the quarter ended March 31, 2007 the company increased the reserve for potential loan losses by $1.4 million. A significant portion of this amount is a provision for a single commercial real estate loan in the process of foreclosure. The bank took the additional provision on this loan in recognition of the depressed real estate market for such properties.
Income Statement Review
For the quarter ended March 31, 2007 net interest income before the provision for loan loss decreased 5.67% to $3.8 million, as compared to $4.0 million reported for the quarter ended March 31, 2006. Revenues (net interest income before the provision for loan losses plus other operating income) decreased 3.75% to $4.4 million in the quarter ended March 31, 2007 from the $4.6 million reported for the quarter ended March 31, 2006. A contributing factor in this decrease in revenue is the large number of residential construction-permanent loans classified as non-performing.
Net interest margin continued to compress in the first quarter of 2007. For the quarter ended March 31, 2007 net interest margin was 2.06%, as compared to the 3.13% net interest margin reported for the quarter ended March 31, 2006. "Cost of deposits reflects the market impact of rising rates and the increased premium the bank has paid for new deposits," stated Grimes.
Non-interest expenses (including the professional fees previously described) also increased in the first quarter. For the quarter ended March 31, 2007 non-interest expenses totaled $6.8 million; a 37.7% increase in comparison to the $4.9 million reported for the quarter ended March 31, 2006.
Balance Sheet Review
Deposits increased 22.8%, or $137.8 million, during the quarter to $742.4 million, from $604.6 million reported at December 31, 2006. The increase in deposits took place primarily as a part of our liquidity management program and includes $40.7 million in brokered deposits. During the first quarter, non-interest bearing demand deposits, savings, NOW and money-market deposits decreased 28.0% while time deposits rose 42.4% when compared to December 31, 2006.
Loans also increased during the past three months. As of March 31, 2007 net loans totaled $567.0 million, representing an increase of $4.4 million, or 0.8%, compared to $562.6 million at December 31, 2006.
Total assets increased during the past three months. As of March 31, 2007 assets totaled $834.1 million. This total is an increase of $114.4 million, or 15.9%, compared to $719.7 million at December 31, 2006.
Total Shareholder Equity stood at $55.0 million as of March 31, 2007, a decrease of $2.2 million compared to $57.2 million reported at December 31, 2006. The bank maintains the classification of "adequately capitalized" for regulatory purposes.
Credit Quality Review
Non-performing assets increased during the past three months. Grimes stated, "The majority of the increase of non-performing assets was a result of the migration of approximately $31.6 million in builder affected loans." As of March 31, 2007 non-performing assets totaled $38.3 million, an increase of $32.1 million compared to $6.2 million at December 31, 2006.
While a number of loans have been placed on non-accrual status, the company has made progress in addressing the issues the individual Coast Bank borrowers face with the contractor in bankruptcy and their homes unfinished. According to Grimes, "Coast Bank management is working diligently on a customer-by-customer basis to improve this situation for the borrowers as well as the bank." Grimes continued, "While many loans are on non-accrual status, Coast Bank has managed to resolve a number of these issues." Further information will be included in the Form 10-Q filing for Coast Financial Holdings, Inc., to be filed on or before May 10, 2007.
For Further Information Contact:
Tramm Hudson
941/752-5900
COAST FINANCIAL HOLDINGS, INC. AND SUBSIDIARY
Condensed Consolidated Statements of Earnings (Unaudited)
($ in thousands, except per share amounts)
Three Months Ended
March 31,
2007 2006
Interest income:
Loans $10,015 $7,044
Securities 1,221 925
Other interest-earning assets 644 292
Total interest income 11,880 8,261
Interest expense:
Deposits 7,627 4,059
Borrowings 458 179
Total interest expense 8,085 4,238
Net interest income 3,795 4,023
Provision for loan losses 1,426 133
Net interest income after provision
for loan losses 2,369 3,890
Noninterest income:
Service charges on deposit accounts 142 124
Gain on sale of loans held for sale 466 409
Other service charges and fees 12 18
Other - 13
Total noninterest income 620 564
Noninterest expenses:
Employee compensation and benefits 2,962 2,461
Occupancy and equipment 1,316 932
Data processing 290 244
Professional fees 726 199
Telephone, postage and supplies 384 312
Advertising 363 436
Other 761 357
Total noninterest expenses 6,802 4,941
Loss before income tax benefit (3,813) (487)
Income tax benefit (1,409) (173)
Net loss $(2,404) $(314)
Loss per share, basic $(0.37) $(0.05)
Loss per share, diluted $(0.37) $(0.05)
Weighted-average number of common shares
outstanding, basic 6,509,057 6,506,659
Weighted-average number of common shares
outstanding, diluted 6,509,057 6,506,659
COAST FINANCIAL HOLDINGS, INC. AND SUBSIDIARY
Condensed Consolidated Balance Sheets
($ in thousands, except per share amounts)
March 31, December 31, March 31,
Assets 2007 2006 2006
(Unaudited) (Unaudited)
Cash and due from banks $14,346 $13,952 $13,821
Federal funds sold and
securities purchased under
agreements to resell 1,394 385 17,140
Cash and cash equivalents 15,740 14,337 30,961
Securities available for sale 201,646 92,013 89,390
Loans, net of allowance for
loan losses of $26,818,
$25,710 and $3,271 566,972 562,574 427,257
Federal Home Loan Bank stock,
at cost 2,219 3,035 1,620
Premises and equipment, net 27,130 27,598 24,056
Accrued interest receivable 4,192 4,119 2,668
Deferred income taxes 13,753 12,465 2,753
Other assets 2,402 3,528 3,030
Total assets $834,054 $719,669 $581,735
Liabilities and
Stockholders' Equity
Liabilities:
Noninterest-bearing demand
deposits $ 30,457 $34,345 $35,643
Savings, NOW and
money-market deposits 90,565 133,819 90,479
Time deposits 621,339 436,408 351,929
Total deposits 742,361 604,572 478,051
Federal Home Loan Bank
advances 20,000 41,000 10,000
Federal funds purchased - - -
Repurchase agreement - - -
Other borrowings 13,404 14,108 18,002
Other liabilities 3,276 2,813 2,456
Total liabilities 779,041 662,493 508,509
Stockholders' equity:
Preferred stock, $0.01 par
value; 5,000,000 shares
authorized, no shares
issued and outstanding - - -
Common stock, $5 par value;
20,000,000 shares
authorized, 6,509,057,
6,509,057, and 6,509,057
shares issued and
outstanding in 2007
and 2006 32,545 32,545 32,545
Additional paid-in capital 46,031 45,992 45,524
Accumulated deficit (23,523) (21,119) (4,153)
Accumulated other
comprehensive loss (40) (242) (690)
Total stockholders' equity 55,013 57,176 73,226
Total liabilities and
stockholders' equity $834,054 $719,669 $581,735
ADDITIONAL FINANCIAL INFORMATION
(in thousands)
LOANS: Mar 31, 2007 Dec 31, 2006 Mar 31, 2006
(unaudited) (unaudited)
Commercial $13,945 $13,585 $16,485
Commercial real estate 134,416 138,912 126,210
Installment 55,859 52,894 33,060
Residential real estate 209,748 145,268 66,520
Residential construction 177,344 235,197 186,410
591,312 585,856 428,685
Add (deduct):
Deferred loan costs, net 2,478 2,428 1,843
Allowance for loan losses (26,818) (25,710) (3,271)
Loans, net $ 566,972 $ 562,574 $ 427,257
NON - PERFORMING ASSETS : Mar 31, 2007 Dec 31, 2006 Mar 31, 2006
(unaudited) (unaudited)
Loans on Non - Accrual
Status $38,139 $6,043 $ 922
Delinquent Loans on
Accrual Status - - - - - -
Total Non - Performing
Loans 38,139 6,043 922
Real Estate Owned (REO)/
Repossessed assets 167 167 171
Total Non - Performing
Assets $38,306 $6,210 $1,093
Total Non - Performing
Assets/ Total Assets 4.59 % 0.86 % 0.19 %
Three Months Ended
Mar 31, 2007 Mar 31, 2006
CHANGE IN THE (unaudited) (unaudited)
ALLOWANCE FOR LOAN LOSSES :
Balance at beginning of period $25,710 $3,146
Provision for loan losses 1,426 133
Recoveries 21 11
Charge offs (339) (19)
Net charge offs (318) (8)
Balance at end of period $26,818 $3,271
Net Charge-offs/Average
Loans Outstanding 0.22 % 0.01 %
Allowance for Loan Losses/Total
Loans Outstanding 4.54 % 0.76 %
Allowance for Loan Losses/Non-
Performing Loans 70.00 % 355.00 %
ADDITIONAL FINANCIAL INFORMATION
(in thousands)
(Rates / Ratios Annualized)
Three Months Ended
Mar 31, 2007 Mar 31, 2006
(unaudited) (unaudited)
OPERATING PERFORMANCE :
Average loans $596,355 $409,417
Average investment securities 99,554 85,824
Average other interest-earning assets 49,796 26,605
Average non - interest - earning
assets 35,266 42,748
Total Average Assets $780,971 $564,594
Average interest bearing deposits $646,546 $428,018
Average borrowings 42,194 26,084
Average non - interest bearing
liabilities 35,947 37,100
Total Average Liabilities 724,687 491,202
Total average equity 56,284 73,392
Total Average Liabilities And Equity $780,971 $564,594
Interest rate yield on loans 6.81 % 6.98 %
Interest rate yield on investment securities 4.97 % 4.37 %
Interest rate yield on other
interest-earning assets 5.25 % 4.46 %
Interest Rate Yield On Interest
Earning Assets 6.46 % 6.42 %
Interest rate expense on deposits 4.78 % 3.85 %
Interest rate expense on borrowings 4.40 % 2.78 %
Interest Rate Expense On Interest Bearing
Liabilities 4.76 % 3.78 %
Interest rate spread 1.70 % 2.64 %
Net interest margin 2.06 % 3.13 %
Other operating income / Average assets 0.32 % 0.41 %
Other operating expense / Average assets 3.53 % 3.55 %
Efficiency ratio (non-interest expense/
revenue) 154.07 % 107.72 %
Return on average assets (1.25) % (0.23)%
Return on average equity (17.32) % (1.73)%
Average equity/
Average assets 7.21 % 13.00 %
About the Coast Financial Holdings:
Coast Financial Holdings, Inc. through its banking subsidiary, Coast Bank of Florida (http://www.coastfl.com/), operates 20 full-service banking locations in Manatee, Pinellas, Hillsborough and Pasco counties, Florida. Coast Bank of Florida is a commercial bank that provides full-service banking operations to its customers from its headquarters location and from branch offices in Bradenton, Longboat Key, Seminole, Dunedin, Clearwater, Kenneth City, Brandon, St. Petersburg, Lutz, Largo and Pinellas Park.
This press release and other statements to be made by the Company contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act, including but not limited to statements relating to projections and estimates of earnings, revenues, cost-savings, expenses, or other financial items; statements of management's plans, strategies, and objectives for future operations, and management's expectations as to future performance and operations and the time by which objectives will be achieved; statements concerning proposed new products and services; and statements regarding future economic, industry, or market conditions or performance. Forward-looking statements are typically identified by words or phrases such as "believe," "expect," "anticipate," "project," and conditional verbs such as "may," "could," and "would," and other similar expressions or verbs. Such forward-looking statements reflect management's current expectations, beliefs, estimates, and projections regarding the Company, its industry and future events, and are based upon certain assumptions made by management. These forward-looking statements are not guarantees of future performance and necessarily are subject to risks, uncertainties, and other factors (many of which are outside the control of the Company) that could cause actual results to differ materially from those anticipated. These risks, uncertainties, and other factors include, among others: changes in general economic or business conditions, either nationally or in the State of Florida, changes in the interest rate environment, the Company's ability to successfully open and operate new branches and collect on delinquent loans, changes in the regulatory environment, and other risks described in the Company's Form 10-K for the fiscal year ended December 31, 2006, and as described from time to time by the Company in other reports filed by it with the Securities and Exchange Commission. Any forward-looking statement speaks only to the date on which the statement is made, and the Company disclaims any obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise. If the Company does update any forward-looking statements, no inference should be drawn that the Company will make additional updates with respect to that statement or any other forward-looking statements.
Further information may be obtained by contacting Tramm Hudson at 941/752- 5900.
DATASOURCE: Coast Financial Holdings, Inc.
CONTACT: Tramm Hudson for Coast Financial Holdings, Inc.,
+1-941-752-5900
Web site: http://www.coastfl.com/