Loan Portfolio Increases 45%, Deposits Grow 38% and Revenues
Increase 24% BRADENTON, Fla., Nov. 1 /PRNewswire-FirstCall/ --
Coast Financial Holdings, Inc. (NASDAQ:CFHI), parent company of
Coast Bank of Florida, today reported significant loan and deposit
growth for the third quarter of 2006, with loans growing 45%,
deposits increasing 38% and net interest income rising 30% compared
to the third quarter a year ago. Coast has generated strong growth
in assets of 40% in the past year as it aggressively invested in
expanding its franchise in the growing greater Tampa Bay market.
For the third quarter of 2006, the company reported a loss of $1.5
million, or $0.22 per share, as compared to earnings of $106,000,
or $0.03 per share, in the third quarter a year ago. For the first
nine months of 2006, the company reported a loss of $2.5 million,
or $0.38 per share, as compared to a loss of $775,000, or $0.21 per
share, in the first nine months of 2005. "In the third quarter we
continued the implementation of our 2006 business plan with the
goal to increase our share of the growing Florida market through
continued branch expansion. Earlier this quarter we opened the
Walsingham branch in the town of Largo and last week we opened a
branch in Pinellas Park. We have opened eight branches in the
greater Tampa Bay area in 2006, in addition to the five opened in
2005, now bringing our branch franchise to 20 locations," said
Brian Grimes, President and CEO. "We previously announced plans to
open two additional branches in late 2006, but based on our new
tempered growth strategy in response to the changing local real
estate and interest rate markets, we do not expect to open these
branches prior to the first quarter of 2008." 2006 Year-To-Date
Highlights (compared to 2005 Year-To-Date) - Loan portfolio
increased 45% - Deposits increased 38% - Revenues increased 26% -
Net interest income increased 30% - Total assets increased 40% -
Non-performing assets improved to 0.15% of total assets - Coast
incurred an after-tax expense of $476,000 related to costs
associated with terminating relationship with former CEO Income
Statement Review Third quarter net interest income before the
provision for loan loss increased 30% to $4.3 million compared to
$3.3 million in the same quarter a year ago. Year-to-date, net
interest income before the provision for loan losses increased 33%
to $12.6 million compared to $9.4 million in the like period a year
ago. Revenues (net interest income before the provision for loan
losses plus other operating income) increased 24% to $4.9 million
in the third quarter as compared to $4.0 million in the third
quarter of 2005. Year- to-date, revenues increased 26% to $14.2
million as compared to $11.3 million in the same period a year ago.
Net interest margin was 2.85% in the third quarter of 2006 as
compared to 3.06% in the second quarter of 2006 and in the third
quarter of 2005. "Our net interest margin came under pressure
during the quarter as deposit costs continue to increase faster
than loan yields," said Grimes. "We anticipate deposit costs will
continue to rise during the remainder of the year and that our net
interest margin will continue to tighten." For the first nine
months of 2006, net interest margin was 3.00%, as compared to 3.12%
in the first nine months of 2005. Because Coast has added eight new
branches this year, compensation and occupancy expenses nearly
doubled to $4.9 million for the third quarter, as compared to $2.5
million in the same quarter a year ago. In addition, Coast incurred
a one-time pre-tax charge of $761,000 in severance related expenses
in the third quarter, related to the terminated relationship with
the former CEO. Total noninterest expenses increased 83% to $6.9
million in the quarter, as compared to $3.8 million in the third
quarter a year ago. For the first nine months of 2006, noninterest
expenses were $17.5 million, as compared to $10.6 million in the
first nine months of 2005. "Our eight new branches are already
attracting new customers and a growth in deposits. Although our new
branches are pressuring expenses, primarily due to the increase in
staffing and occupancy expenses, we expect that over time they will
add to our profitability by providing us low cost deposits to fund
loan growth," said Grimes. Balance Sheet Review "During the
quarter, loan volumes increased as our new branches expand our
market opportunities," said Anne Lee, Chief Operating Officer. "For
the most recently completed quarter ending September 30, loans were
up $52.2 million, or 43% annualized, as a result of these efforts.
We anticipate continued high growth throughout the greater Tampa
Bay area, which should continue to fuel significant loan growth for
the remainder of the year." Net loans increased 45%, to $531
million at September 30, 2006, as compared to $366 million a year
earlier. "Over the past 12 months, the major components of our loan
portfolio have shown significant growth," continued Lee. "We have
increased residential construction loans 64%, commercial real
estate loans 9% and residential real estate loans 90% from a year
ago. These components now make up 89% of the loan portfolio."
Deposits increased 38% over the past 12 months to $568 million at
September 30, 2006, compared to $413 million a year earlier.
Savings, NOW and money-market deposits increased 14% and time
deposits rose 49% compared to a year ago, while noninterest-bearing
demand deposits remained flat. "As interest rates have increased,
we have seen customers demand certificates of deposit accounts,"
noted Lee. Total assets increased to a record $676 million at
September 30, 2006, or 40% as compared to $483 million a year
earlier. Book value per share improved to $10.99 at September 30,
2006, from 9.03 a year earlier, largely as a result of the public
offering completed in the fourth quarter of 2005. Credit Quality
Non-performing assets also improved 32% to $985,000, or 0.15% of
total assets, at September 30, 2006, as compared to $1.4 million or
0.30% of total assets a year ago. The provision for loan losses for
the third quarter was $275,000, as compared to $2,000 in the third
quarter of 2005. The allowance for loan losses totaled $3.7
million, or 0.70% of total loans outstanding at quarter-end
compared to $3.2 million, or 0.86% of total loans outstanding, at
the end of the third quarter of 2005. "We are maintaining our
strong credit posture and are being very diligent regarding new
loan applications -- across the board," Grimes concluded. About the
Company 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, 2005, in the Company's form 10-Q for the
quarter ended September 30, 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 F. Grimes, President
and CEO 877-COASTF (tables follow) COAST FINANCIAL HOLDINGS, INC.
AND SUBSIDIARY Condensed Consolidated Statements of Earnings
(Unaudited) ($ in thousands, except per share amounts) Three Months
Ended Nine Months Ended September 30, September 30, 2006 2005 2006
2005 Interest income: Loans $9,367 $6,013 $24,510 $16,330
Securities 1,010 578 2,954 1,552 Other interest-earning assets 169
65 558 80 Total interest income 10,546 6,656 28,022 17,962 Interest
expense: Deposits 5,991 3,110 14,865 7,895 Borrowings 213 207 600
618 Total interest expense 6,204 3,317 15,465 8,513 Net interest
income 4,342 3,339 12,557 9,449 Provision for loan losses 275 2 582
1,884 Net interest income after provision for loan losses 4,067
3,337 11,975 7,565 Noninterest income: Service charges on deposit
accounts 126 117 365 364 Gain on sale of loans held for sale 426
491 1,269 1,418 Other service charges and fees 9 17 42 35 Other -
(8) 13 4 Total noninterest income 561 617 1,689 1,821 Noninterest
expenses: Employee compensation and benefits 3,616 1,915 8,777
5,261 Occupancy and equipment 1,268 614 3,320 1,567 Data processing
281 231 763 662 Professional fees 233 126 667 570 Telephone,
postage and supplies 368 287 1,058 782 Advertising 522 356 1,463
867 Other 631 247 1,450 896 Total noninterest expenses 6,919 3,776
17,498 10,605 (Loss) earnings before income tax (benefit) provision
(2,291) 178 (3,834) (1,219) Income tax (benefit) provision (835) 72
(1,361) (444) Net (loss) earnings $(1,456) $106 $(2,473) $(775)
(Loss) earnings per share, basic $(0.22) 0.03 $(0.38) (0.21) (Loss)
earnings per share, diluted $(0.22) 0.03 $(0.38) (0.21)
Weighted-average number of common shares outstanding, basic
6,509,057 3,757,650 6,508,373 3,757,632 Weighted-average number of
common shares outstanding, diluted 6,509,057 3,820,422 6,508,373
3,757,632 COAST FINANCIAL HOLDINGS, INC. AND SUBSIDIARY Condensed
Consolidated Balance Sheets (unaudited) ($ in thousands, except per
share amounts) Assets September 30, December 31, September 30, 2006
2005 2005 (Unaudited) (Unaudited) Cash and due from banks 13,619
25,203 12,213 Federal funds sold and securities purchased under
agreements to resell 4,596 22,810 6,006 Cash and cash equivalents
18,215 48,013 18,219 Securities available for sale 87,727 79,029
67,520 Loans, net of allowance for loan losses of $3,748, $3,146,
and $3,183 531,391 390,867 366,125 Federal Home Loan Bank stock, at
cost 2,000 1,289 1,289 Premises and equipment, net 27,184 24,780
24,412 Accrued interest receivable 3,453 2,218 1,892 Deferred
income taxes 3,821 2,471 2,468 Other assets 2,415 1,627 1,472 Total
assets $676,206 $550,294 $483,397 Liabilities and Stockholders'
Equity Liabilities: Noninterest-bearing demand deposits $32,710
$33,302 $32,592 Savings, NOW and money-market deposits 103,150
84,635 90,253 Time deposits 432,125 331,520 290,175 Total deposits
567,985 449,457 413,020 Federal Home Loan Bank advances 20,000
10,000 10,000 Other borrowings 13,166 14,367 23,439 Other
liabilities 3,537 2,707 3,025 Total liabilities 604,688 476,531
449,484 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
September 30, 2006, December 31, 2005 and September 30, 2005 32,545
32,518 18,788 Additional paid-in capital 45,767 45,591 19,456
Accumulated deficit (6,312) (3,839) (3,999) Accumulated other
comprehensive loss (482) (507) (332) Total stockholders' equity
71,518 73,763 33,913 Total liabilities and stockholders' equity
$676,206 $550,294 $483,397 ADDITIONAL FINANCIAL INFORMATION (in
thousands) LOANS: Sep 30, 2006 Jun 30, 2006 Sep 30, 2005
(unaudited) (unaudited) (unaudited) Commercial $13,969 $13,645
$17,946 Commercial real estate 136,952 131,688 125,450 Installment
45,852 39,800 27,492 Residential real estate 99,580 74,404 50,151
Residential construction 236,739 221,326 146,350 533,092 480,864
367,389 Add (deduct): Deferred loan costs, net 2,047 1,756 1,918
Allowance for loan losses (3,748) (3,446) (3,183) Loans, net
$531,391 $479,174 $366,124 NON - PERFORMING ASSETS : Sep 30, 2006
Jun 30, 2006 Sep 30, 2005 (unaudited) Loans on Non - Accrual Status
$814 $1,088 $1,334 Delinquent Loans on Accrual Status - - - Total
Non - Performing Loans 814 1,088 1,334 Real Estate Owned (REO) /
Repossessed assets 171 173 112 Total Non - Performing Assets $985
$1,261 $1,446 Total Non - Performing Assets / Total Assets 0.15%
0.23% 0.30% Three Months Ended Nine Months Ended Sep 30, Sep 30,
Sep 30, Sep 30, 2006 2005 2006 2005 (unaudited) (unaudited) CHANGE
IN THE ALLOWANCE FOR LOAN LOSSES : Balance at beginning of period
$3,446 $3,187 $3,146 $2,901 Provision for loan losses 275 2 582
1,884 Recoveries 39 21 64 116 Charge offs (11) (24) (43) (1,717)
Net charge offs 28 (3) 21 (1,601) Balance at end of period $3,749
$3,186 $3,749 $3,184 Net Charge-offs / Average Loans Outstanding
-0.02% - -0.01% 0.63% Allowance for Loan Losses / Total Loans
Outstanding 0.70% 0.86% 0.70% 0.86% Allowance for Loan Losses / Non
- Performing Loans 461.00% 239.00% 461.00% 239.00% ADDITIONAL
FINANCIAL INFORMATION (in thousands) (Rates / Ratios Annualized)
Three Months Ended Nine Months Ended Sep 30, Sep 30, Sep 30, Sep
30, 2006 2005 2006 2005 (unaudited) (unaudited) OPERATING
PERFORMANCE : Average loans $505,606 $362,073 $456,034 $341,124
Average investment securities 85,914 63,605 87,221 60,119 Average
other interest-earning assets 12,885 7,041 15,709 3,176 Average non
- interest - earning assets 46,859 37,576 44,492 33,991 Total
Average Assets $651,264 $470,295 $603,456 $438,410 Average interest
bearing deposits $519,221 $370,444 $469,149 $336,422 Average
borrowings 25,180 30,974 26,079 33,364 Average non - interest
bearing liabilities 35,367 35,004 35,728 34,173 Total Average
Liabilities 579,768 436,422 530,956 403,959 Total average equity
71,496 33,873 72,500 34,451 Total Average Liabilities And Equity
$651,264 $470,295 $603,456 $438,410 Interest rate yield on loans
7.35% 6.59% 7.19% 6.40% Interest rate yield on investment
securities 4.66% 3.61% 4.53% 3.45% Interest rate yield on other
interest-earning assets 5.20% 3.66% 4.75% 3.37% Interest Rate Yield
On Interest Earning Assets 6.92% 6.10% 6.70% 5.94% Interest rate
expense on deposits 4.58% 3.33% 4.24% 3.14% Interest rate expense
on borrowings 3.35% 2.65% 3.07% 2.48% Interest Rate Expense On
Interest Bearing Liabilities 4.52% 3.28% 4.18% 3.08% Interest rate
spread 2.40% 2.82% 2.52% 2.86% Net interest margin 2.85 3.06 3.00%
3.12% Other operating income / Average assets 0.34% 0.52% 0.37%
0.56% Other operating expense / Average assets 4.21% 3.19% 3.88%
3.23% Efficiency ratio (non-interest expense / revenue) 141.12%
95.45% 122.83% 94.10% Return on average assets -0.89% 0.09% -0.55%
-0.24% Return on average equity -8.08% 1.24% -4.56% -3.01% Average
equity / Average assets 10.98% 7.20% 12.01% 7.86% DATASOURCE: Coast
Financial Holdings, Inc. CONTACT: Brian F. Grimes, President and
CEO of Coast Financial Holdings, Inc., +1-877-COASTFL, or Web site:
http://www.coastfl.com/
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