Coast Financial (NASDAQ:CFHI)
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BRADENTON, Fla., Jan. 27 /PRNewswire-FirstCall/ -- Coast Financial Holdings, Inc. (NASDAQ:CFHI), parent company of Coast Bank of Florida, today reported that strong loan and deposit growth contributed to a 32% increase in net interest income for the year ended December 31, 2005, compared to the prior year. For the fourth quarter of 2005, the company earned $160,000 or $0.02 per diluted share, compared to $318,000, or $0.08 per diluted share, in the fourth quarter a year ago. The company reported a net loss of $615,000, or $0.14 per diluted share in 2005, compared to earnings of $831,000, or $0.22 per diluted share in 2004.
In 2005, the company opened five new branches, including four branches in Pinellas County. The new locations include branches in Downtown St. Petersburg, Kenneth City, Seminole and Pasadena. Coast also moved its corporate offices to downtown Bradenton and added 83 new stand-alone kiosk ATM locations in Pinellas, Pasco, Polk, Manatee and Sarasota Counties.
"The expansion of our branch network in the greater Tampa Bay area is beginning to pay off, which is demonstrated by our strong loan and deposit growth in 2005," said Brian Peters, president and CEO. "The decision we made last year to enter Pinellas County was timely, giving us a good foothold in one of the most attractive demographics in Florida and providing more opportunities for growth.
"We are also moving forward with our plans to lease eight branch sites in Hillsborough, Pasco, Polk, Pinellas and Manatee counties, marking our entrance into Hillsborough, Pasco and Polk counties and increasing our presence in Pinellas and Manatee counties. These eight new locations, which we expect to open in 2006, will bring Coast's branch total to 20 offices in the greater Tampa Bay area. While these new locations will temporarily decrease short- term profitability, they should provide solid contributions to earnings in future periods," Peters added.
Income Statement Review
Revenues (net interest income before the provision for loan losses plus other operating income) for the fourth quarter increased 23% to $4.2 million, from $3.4 million in the fourth quarter of 2004. For the year ended December 31, 2005 revenues increased 20% to $15.5 million, compared to $12.9 million in 2004.
Net interest margin was 3.03% in the fourth quarter of 2005 compared to 3.06% in the previous quarter, and 3.26% in the fourth quarter of 2004. For the year, net interest margin was 3.10%, compared to 3.25% in 2004. The decline in the net interest margin was primarily a result of the higher cost of deposits associated with the branch expansion.
In the fourth quarter of 2005, net interest income before the provision for loan loss increased 32% to $3.7 million, compared to $2.8 million in the fourth quarter of 2004. For the full year, net interest income increased 32% to $13.2 million, compared to $10.0 million in 2004. Net interest income increased for both the fourth quarter and year ending December 31, 2005, as a result of increased net interest earning assets, which offset the impact of the decrease in net interest margin. Total noninterest income was $531,000 in the fourth quarter of 2005, compared to $642,000 in the fourth quarter of 2004. For the year 2005, noninterest income was $2.4 million, compared to $2.9 million in 2004. The decrease was largely due to the gain associated with the 2004 sale of the bank's credit card portfolio and merchant services portfolio.
Due to the increased staffing and occupancy expenses associated with the bank's growth, noninterest expense was $4.0 million in the fourth quarter of 2005, compared to $2.7 million in the fourth quarter a year ago. For the year 2005, noninterest expense was $14.6 million, compared to $10.2 million in 2004. "One of the primary purposes of this rapid branch expansion has been to take advantage of opportunities as they become available in attractive markets," said Peters. "Although these new locations have increased overhead expenses, we are confident they will contribute to profitability within the next few years."
Balance Sheet Review
Assets increased 43% to a record $550 million at year-end compared to $385 million a year ago. Deposits grew 38% over the past 12 months to $449 million at December 31, 2005, compared to $326 million at December 31, 2004. Book value was $11.34 per share at December 31, 2005, up from $9.30 per share a year earlier, largely as a result of the follow-up offering completed in the fourth quarter.
"Over the past 12 months, we have expanded our loan portfolio and anticipate that because of the high growth throughout the Tampa Bay area we should be able to continue at that rate this year," said Peters. Net loans increased 31%, to $391 million at December 31, 2005, from $298 million a year ago.
Commercial real estate loans now comprise 30.6% of the company's net loan portfolio at December 31, 2005, compared to 33.5% a year earlier. Residential construction loans account for 42.3% of net loans compared to 30.1% at December 31, 2004. Residential real estate loans represent 15.1% of net loans at December 31, 2005, compared to 15.8% a year earlier and installment loans now comprise just 7.4% of net loans compared to $15.8% of net loans at December 31, 2004.
At December 31, 2005, non-performing assets totaled $1.3 million, or 0.24% of total assets, compared to $1.5 million, or 0.38% of total assets a year earlier. The allowance for loan losses was $3.1 million, or 0.80% of total loans outstanding, at December 31, 2005, compared to $2.9 million, or 0.96% of total loans outstanding, a year earlier.
About the Company
As of December 31, 2005, Coast Financial Holdings, Inc. had $550 million in total assets and through its banking subsidiary, Coast Bank of Florida (http://www.coastfl.com/ ), operates 12 full-service banking locations in Manatee and Pinellas 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, Palmetto, Longboat Key, Seminole, Kenneth City and St. Petersburg.
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-KSB for the fiscal year ended December 31, 2004 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.
(tables follow)
COAST FINANCIAL HOLDINGS, INC. AND SUBSIDIARY
Condensed Consolidated Statements of Earnings (Unaudited)
($ in thousands, except per share amounts)
Three Months Ended Twelve Months Ended
December 31, December 31,
2005 2004 2005 2004
Interest income:
Loans $6,387 $4,555 $22,717 $16,142
Securities 729 354 2,281 1,145
Other interest-earning
assets 349 10 429 50
Total interest income 7,465 4,919 25,427 17,337
Interest expense:
Deposits 3,567 2,018 11,462 7,017
Borrowings 195 97 813 365
Total interest expense 3,762 2,115 12,275 7,382
Net interest income 3,703 2,804 13,152 9,955
Provision for loan losses (69) 176 1,815 1,315
Net interest income after
provision for loan losses 3,772 2,628 11,337 8,640
Noninterest income:
Service charges on deposit
accounts 134 114 498 434
Gain on sale of loans held
for sale 388 255 1,806 1,462
Gain on sale of credit card
portfolio -- 173 -- 173
Gain on sale of securities
available for sale -- -- -- 4
Gain on sale of mortgage
loan servicing rights -- -- -- 118
Gain on sale of merchant
services -- -- -- 212
Net loan servicing fees (costs) -- -- 1 (159)
Asset management fees (costs) -- (2) -- 69
Other service charges and
fees 9 50 48 547
Other -- 52 -- 85
Total noninterest income 531 642 2,353 2,945
Noninterest expenses:
Employee compensation and
benefits 2,047 1,527 7,308 5,477
Occupancy and equipment 701 374 2,269 1,412
Data processing 269 225 932 922
Professional fees 119 67 689 486
Telephone, postage and
supplies 286 172 1,068 676
Advertising 337 102 1,205 348
Other 282 273 1,176 905
Total noninterest expenses 4,041 2,740 14,647 10,226
Earnings (loss) before
income taxes (benefit) 262 530 (957) 1,359
Income tax provision (benefit) 102 212 (342) 528
Net earnings (loss) $160 $318 $(615) $831
Earnings (loss) per share
basic $0.02 0.08 $(0.14) 0.22
Earnings (loss) per share
diluted $0.02 0.08 $(0.14) 0.22
Weighted-average number of
common shares outstanding,
basic 6,503,600 3,756,050 4,354,994 3,749,343
Weighted-average number of
common shares outstanding,
diluted 6,552,148 3,814,676 4,354,994 3,783,661
COAST FINANCIAL HOLDINGS, INC. AND SUBSIDIARY
Consolidated Balance Sheets (unaudited)
($ in thousands, except per share amounts)
December 31,
Assets 2005 2004
(unaudited)
Cash and due from banks $25,203 7,122
Federal funds sold and securities
purchased under agreements to resell 22,810 --
Cash and cash equivalents 48,013 7,122
Securities available for sale 79,029 55,490
Loans, net of allowance for loan
losses of $3,146 and $2,901 390,867 297,725
Federal Home Loan Bank stock, at
cost 1,289 573
Premises and equipment, net 24,780 18,358
Accrued interest receivable 2,218 1,478
Deferred income taxes 2,471 1,846
Loan servicing rights -- --
Other assets 1,627 2,031
Total assets $550,294 384,623
Liabilities and Stockholders'
Equity
Liabilities:
Noninterest-bearing demand
deposits 33,302 25,485
Savings, NOW and money-market
deposits 84,635 99,394
Time deposits 331,520 201,410
Total deposits 449,457 326,289
Federal Home Loan Bank advances 10,000 1,000
Federal Funds Purchased -- 3,790
Repo Agreements 14,367 15,867
Other liabilities 2,707 2,729
Total liabilities 476,531 349,675
Commitments and contingencies
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,
6,503,600 and 3,756,050
shares issued and
outstanding in 2005 and
2004 32,518 18,780
Additional paid-in capital 45,591 19,448
Accumulated deficit (3,839) (3,224)
Accumulated other comprehensive
loss (507) (56)
Total stockholders'
equity 73,763 34,948
Total liabilities and
stockholders' equity $550,294 384,623
ADDITIONAL FINANCIAL INFORMATION
(in thousands)
LOANS: Dec 31, 2005 Dec 31, 2004
(unaudited)
Commercial $17,831 $32,020
Commercial real
estate 119,814 99,955
Installment 29,048 29,640
Residential real
estate 59,366 47,157
Residential
construction 166,020 89,716
392,079 298,488
Add (deduct):
Deferred loan
costs, net 1,934 2,138
Allowance for
loan losses (3,146) (2,901)
Loans, net $390,867 $297,725
NON-PERFORMING ASSETS: Dec 31, 2005 Dec 31, 2004
(unaudited)
Loans on Non-Accrual
Status $1,319 $1,444
Delinquent Loans on
Accrual Status -- --
Total Non-Performing
Loans 1,319 1,444
Real Estate Owned (REO)/
Repossessed assets 13 33
Total Non-Performing
Assets $1,332 $1,477
Total Non-Performing
Assets/Total Assets 0.24% 0.38%
Three Months Ended Twelve Months Ended
Dec 31, 2005 Dec 31, 2004 Dec 31, 2005 Dec 31, 2005
CHANGE IN THE (unaudited) (unaudited) (unaudited)
ALLOWANCE FOR LOAN LOSSES:
Balance at beginning
of period $3,183 $2,839 $2,901 $3,163
Provision for loan losses (69) 176 1,815 1,315
Recoveries 88 295 203 331
Charge-offs (56) (409) (1,773) (1,908)
Net charge-offs 32 (114) (1,570) (1,577)
Balance at end of period $3,146 $2,901 $3,146 $2,901
Net Charge-offs/Average
Loans Outstanding -0.03% 0.15% 0.45% 0.60%
Allowance for Loan
Losses/Total
Loans Outstanding 0.80% 0.97% 0.80% 0.97%
Allowance for Loan Losses/
Non-Performing Loans 239% 201% 239% 201%
ADDITIONAL FINANCIAL INFORMATION
(in thousands)
(Rates/Ratios Annualized)
Three Months Ended Twelve Months Ended
Dec 31, Dec 31, Dec 31, Dec 31,
2005 2004 2005 2004
(unaudited) (unaudited (unaudited)
OPERATING PERFORMANCE:
Average loans $377,914 $293,154 $350,397 $260,739
Average investment securities 72,364 49,629 63,205 40,644
Average other interest-earning
assets 34,629 1,718 11,104 4,668
Average noninterest-earning
assets 40,873 26,371 35,726 24,002
Total Average Assets $525,780 $370,872 $460,432 $330,053
Average interest-bearing
deposits $393,692 $287,364 $350,857 $248,179
Average borrowings 28,629 21,724 32,170 21,746
Average noninterest-bearing
liabilities 35,401 27,185 34,483 26,096
Total Average Liabilities 457,722 336,273 417,510 296,021
Total average equity 68,058 34,599 42,922 34,032
Total Average Liabilities And
Equity $525,780 $370,872 $460,432 $330,053
Interest rate yield on loans 6.71% 6.18% 6.48% 6.19%
Interest rate yield investment
securities 4.00% 2.84% 3.61% 2.82%
Interest rate yield on other
interest-earning assets 4.00% 2.32% 3.86% 1.07%
Interest Rate Yield On Interest-
Earning Assets 6.11% 5.68% 5.99% 5.66%
Interest rate expense on deposits 3.59% 2.79% 3.27% 2.83%
Interest rate expense on
borrowings 2.70% 1.78% 2.53% 1.68%
Interest Rate Expense On
Interest-Bearing Liabilities 3.53% 2.72% 3.20% 2.73%
Interest rate spread 2.58% 2.96% 2.79% 2.93%
Net interest margin 3.03% 3.26% 3.10% 3.25%
Other operating income/Average
assets 0.40% 0.69% 0.51% 0.89%
Other operating expense/Average
assets 3.05% 2.94% 3.18% 3.10%
Efficiency ratio (noninterest
expense/revenue) 95.44% 79.49% 94.46% 79.27%
Return on average assets 0.12% 0.34 -1.43% 2.44%
Average equity/Average assets 12.94% 9.33% 9.32% 10.31%
Contacts:
Brian P. Peters, President and CEO Brian F. Grimes, EVP and CFO
877-COASTFL 877-COASTFL
DATASOURCE: Coast Financial Holdings, Inc.
CONTACT: Brian P. Peters, President and CEO, , or
Brian F. Grimes, EVP and CFO, , both of Coast Financial
Holdings, +1-877-COASTFL
Web site: http://www.coastbankflorida.com/