Loan Portfolio Increases 32%, Deposits Grow 38% and Revenues Rise
29% BRADENTON, Fla., April 25 /PRNewswire-FirstCall/ -- Coast
Financial Holdings, Inc. (NASDAQ:CFHI), parent company of Coast
Bank of Florida, today reported that its branch network expansion
generated solid loan and deposit growth for the first quarter of
2006. In the first quarter, loans grew 32%, deposits increased 38%
and net interest income increased 35% compared to the first quarter
a year ago. "We are focused on achieving the objectives outlined in
our business plan. Naturally, with a business plan that includes
significant branch expansion in an effort to gain market share, we
expect to incur net losses until these new locations reach
breakeven," said Brian Peters, president and CEO. "We believe our
branch expansion is prudent and will yield significant improvement
in shareholder value over the longer term." For the first quarter
of 2006, the company reported a loss of $314,000 or $0.05 per
diluted share, compared to earnings of $77,000, or $0.02 per
diluted share, in the first quarter of 2005. "We have been very
busy the first few months of 2006 with the grand opening of three
new branches in the greater Tampa Bay area," added Peters. "We
recently opened the Dunedin and Northwood branches, both in
Pinellas County, and we made our entrance into Hillsborough County
with the Oakfield branch, located in Brandon. Already we are
encouraged by the customer activity these locations have
experienced. We also have plans to open nine additional branches
this year, with six scheduled to open within the next 60 days.
While the investments we are making in new branches, ATM locations
and experienced banking professionals will reduce profitability
this year, we are confident these efforts will produce significant
shareholder value over the long term." Income Statement Review
Revenues (net interest income before the provision for loan losses
plus other operating income) grew 29% to $4.6 million in the first
quarter compared to $3.5 million in the first quarter of 2005. For
the first quarter of 2006, net interest income before the provision
for loan loss increased 35% to $4.0 million compared to $3.0
million in the same quarter a year ago. Total noninterest income
for the first quarter was $564,000 compared to $576,000 in same
quarter last year. Net interest margin was 3.13% in the first
quarter of 2006 compared to 3.23% in the first quarter of 2005. The
decline in the net interest margin was primarily a result of the
higher cost of deposits associated with the branch expansion.
Noninterest expenses were $4.9 million in the first quarter of
2006, compared to $3.1 million in the first quarter a year ago,
primarily due to the increase in staffing and occupancy expenses
from the new branches. The ratio of other operating expense
(expense ratio) to average assets was 3.55% in the first quarter of
2006 compared to 3.08% in the first quarter last year. "We have
made significant progress on six additional branch offices, which
we expect to open in the next few months. In addition, we have
plans to open three other branch offices later this year, and will
continue to explore further branch expansion opportunities in the
greater Tampa Bay area," said Peters. "While we expect to see
higher expenses in future periods as a result of our expansion,
over time these new branches should further improve our
profitability by providing us low cost deposits to fund our loan
growth." Balance Sheet Review Assets increased 37% to a record $582
million at March 31, 2006, compared to $424 million a year earlier.
Book value per share improved to $11.25 at March 31, 2006, from
$9.27 a year earlier, largely as a result of the follow- up
offering completed in the fourth quarter of 2005. Net loans
increased 32%, to $427 million at March 31, 2006, compared to $323
million a year earlier. "Over the past 12 months, the major
components of our loan portfolio have showed significant growth,"
said Peters. "We have increased residential construction loans 7%
and commercial real estate loans 14% from a year ago. These
components now make up 73% of the loan portfolio. In addition, we
continue to let our installment loans drop off as they now
represent just 8% of the loan portfolio compared to 9% a year ago."
Deposits grew 38% over the past 12 months to $478 million at March
31, 2006, compared to $346 million a year earlier.
Noninterest-bearing demand deposits increased 12% at quarter-end
compared to a year earlier and time deposits rose 59% compared to a
year ago. Asset quality continues to improve, with non-performing
assets declining to $1.1 million, or 0.19% of total assets at March
31, 2006, compared to $1.4 million or 0.34% of total assets a year
earlier. The provision for loan losses for the first quarter was
$133,000, compared to $360,000 in the first quarter of 2005. The
allowance for loan losses was $3.3 million, or 0.76% of total loans
outstanding at quarter-end compared to $3.0 million, or 0.77% of
total loans outstanding, at the end of the first quarter of 2005.
About the Company Coast Financial Holdings, Inc. through its
banking subsidiary, Coast Bank of Florida ( http://www.coastfl.com/
), operates 15 full-service banking locations in Manatee, Pinellas
and Hillsborough 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, Dunedin,
Clearwater, Kenneth City, St. Petersburg and Brandon. 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, 2005, in the Company's form 10-Q for the
quarter ended March 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.
Contacts: Brian P. Peters, President and CEO Brian F. Grimes, EVP
and CFO 877-COASTFL 877-COASTFL (tables follow) COAST FINANCIAL
HOLDINGS, INC. AND SUBSIDIARY Condensed Consolidated Statements of
Operations (Unaudited) ($ in thousands, except per share amounts)
Three Months Ended March 31, 2006 2005 Interest income: Loans
$7,044 $4,841 Securities 925 452 Other interest-earning assets 292
7 Total interest income 8,261 5,300 Interest expense: Deposits
4,059 2,155 Borrowings 179 174 Total interest expense 4,238 2,329
Net interest income 4,023 2,971 Provision for loan losses 133 360
Net interest income after provision for loan losses 3,890 2,611
Noninterest income: Service charges on deposit accounts 124 122
Gain on sale of loans held for sale 409 441 Other service charges
and fees 18 13 Other 13 -- Total noninterest income 564 576
Noninterest expenses: Employee compensation and benefits 2,461
1,600 Occupancy and equipment 932 407 Data processing 244 211
Professional fees 199 97 Telephone, postage and supplies 312 234
Advertising 436 157 Other 357 349 Total noninterest expenses 4,941
3,055 Earnings (loss) before income taxes (benefit) (487) 132
Income tax provision (benefit) (173) 55 Net (loss) earnings $(314)
$77 (Loss) earnings per share, basic $(0.05) $0.02 (Loss) earnings
per share, diluted $(0.05) $0.02 Weighted-average number of common
shares outstanding, basic 6,506,659 3,757,597 Weighted-average
number of common shares outstanding, diluted 6,506,659 3,824,974
COAST FINANCIAL HOLDINGS, INC. AND SUBSIDIARY Condensed
Consolidated Balance Sheets (unaudited) ($ in thousands, except per
share amounts) March 31, December 31, March 31, Assets 2006 2005
2005 (Unaudited) (Unaudited) Cash and due from banks $13,821
$25,203 $9,580 Federal funds sold and securities purchased under
agreements to resell 17,140 22,810 6,908 Cash and cash equivalents
30,961 48,013 16,488 Securities available for sale 89,390 79,029
56,683 Loans, net of allowance for loan losses of $3,271, $3,146
and $3,040 427,257 390,867 323,416 Federal Home Loan Bank stock, at
cost 1,620 1,289 1,315 Premises and equipment, net 24,056 24,780
20,420 Accrued interest receivable 2,668 2,218 1,616 Deferred
income taxes 2,753 2,471 1,909 Other assets 3,030 1,627 1,852 Total
assets $581,735 $550,294 $423,699 Liabilities and Stockholders'
Equity Liabilities: Noninterest-bearing demand deposits $35,643
$33,302 $31,802 Savings, NOW and money-market deposits 90,479
84,635 92,992 Time deposits 351,929 331,520 221,468 Total deposits
478,051 449,457 346,262 Federal Home Loan Bank advances 10,000
10,000 16,100 Repurchase agreement -- -- 5,220 Other borrowings
18,002 14,367 18,264 Other liabilities 2,455 2,707 3,005 Total
liabilities 508,508 476,531 388,851 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, 6,503,600 and 3,757,650
shares issued and outstanding in 2006, 2005 and March 31, 2005
32,545 32,518 18,788 Additional paid-in capital 45,523 45,591
19,456 Accumulated deficit (4,152) (3,839) (3,147) Accumulated
other comprehensive income (loss) (689) (507) (249) Total
stockholders' equity 73,227 73,763 34,848 Total liabilities and
stockholders' equity $581,735 $550,294 $423,699 ADDITIONAL
FINANCIAL INFORMATION (in thousands) LOANS: Mar 31, 2006 Dec 31,
2005 Mar 31, 2005 (unaudited) (unaudited) Commercial $16,485
$17,831 $24,794 Commercial real estate 126,210 119,814 111,032
Installment 33,059 29,048 28,887 Residential real estate 64,159
59,366 49,947 Residential construction 188,770 166,020 109,773
428,684 392,079 324,433 Add (deduct): Deferred loan costs, net
1,844 1,934 2,023 Allowance for loan losses (3,271) (3,146) (3,040)
Loans, net $427,257 $390,867 $323,416 NON - PERFORMING ASSETS : Mar
31, 2006 Dec 31, 2005 Mar 31, 2005 (unaudited) Loans on Non -
Accrual Status $922 $1,378 $1,378 Past due 90 days or more, still
accrueing -- -- -- Total Non - Performing Loans 922 1,378 1,378
Real Estate Owned (REO) / Repossessed assets 171 13 42 Total Non -
Performing Assets $1,093 $1,391 $1,420 Total Non - Performing
Assets / Total Assets 0.19% 0.25% 0.34% Three Months Ended Mar 31,
2006 Mar 31, 2005 CHANGE IN THE (unaudited) (unaudited) ALLOWANCE
FOR LOAN LOSSES: Balance at beginning of period $3,146 $2,901
Provision for loan losses 133 360 Recoveries 11 80 Charge offs (19)
(301) Net charge offs (8) (221) Balance at end of period $3,271
$3,040 Net Charge-offs / Average Loans Outstanding 0.01% 0.29%
Allowance for Loan Losses / Total Loans Outstanding 0.76% 0.77%
Allowance for Loan Losses / Non - Performing Loans 355.00% 221.00%
ADDITIONAL FINANCIAL INFORMATION (in thousands) Three Months Ended
(Rates / Ratios Annualized) Mar 31, 2006 Mar 31, 2005 (unaudited)
(unaudited) OPERATING PERFORMANCE : Average loans $409,417 $314,226
Average investment securities 85,824 57,178 Average other interest
- earning assets 26,605 1,183 Average non - interest - earning
assets 42,748 29,510 Total Average Assets $564,594 $402,097 Average
interest bearing deposits $428,018 $303,209 Average borrowings
26,084 32,190 Average non - interest bearing liabilities 37,100
31,776 Total Average Liabilities 491,202 367,175 Total average
equity 73,392 34,922 Total Average Liabilities And Equity $564,594
$402,097 Interest rate yield on loans 6.98% 6.25% Interest rate
yield on investment securities 4.37% 3.21% Interest rate yield on
other interest - earning assets 4.46% 2.40% Interest Rate Yield On
Interest Earning Assets 6.42% 5.77% Interest rate expense on
deposits 3.85% 2.88% Interest rate expense on borrowings 2.78%
2.19% Interest Rate Expense On Interest Bearing Liabilities 3.78%
2.82% Interest rate spread 2.64% 2.95% Net interest margin 3.13%
3.23% Other operating income / Average assets 0.41% 0.58% Other
operating expense / Average assets 3.55% 3.08% Efficiency ratio
(non-interest expense / revenue) 107.72% 86.13% Return on average
assets -0.23% 0.08% Return on average equity -1.73% 0.88% Average
equity / Average assets 13.00% 8.69% DATASOURCE: Coast Financial
Holdings, Inc. CONTACT: Brian P. Peters, President and CEO, , or
Brian F. Grimes, EVP and CFO, , both of Coast Financial Holdings,
Inc., +1-877-COASTFL Web site: http://www.coastfl.com/
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