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| Coastal Bancorp, Inc. Announces Record Annual Earnings of $17.4 Million Available to Common Stockholders and Fourth Quarter Results of 76 Cents Per Share |
| COASTAL BANCORP LOGO
Coastal Bancorp. logo. (PRNewsFoto)[DM] HOUSTON, TX USA | |||
HOUSTON, Jan. 16 /PRNewswire/ -- Coastal Bancorp, Inc. (Nasdaq: CBSA) today reported net income available to common stockholders of $17.4 million for the year ended December 31, 2000, compared to $9.4 million in 1999 (or $13.9 million for 1999 before the provision for loan losses specific to the MCA loan as discussed below). Diluted earnings per common share for the year ended December 31, 2000 were $2.87 compared to $1.42 in 1999. Diluted earnings per common share for 1999 before the provision for loan losses specific to the MCA loan were $2.08. The weighted average common shares outstanding used in the diluted earnings per common share calculations were 6,058,161 for 2000 and 6,661,308 for 1999. Overall in 2000, Coastal experienced increased net interest income (as shown in the consolidated statements of income) and net interest margin compared to 1999, along with stable noninterest expense. The increased net income in 2000 from 1999 was due to a $7.3 million increase in net interest income, a $4.8 million decrease in the provision for loan losses and a $1.4 million increase in noninterest income, offset by a $385,000 increase in noninterest expense (although it would have been a $756,000 decrease excluding the $1.1 million reversal of certain accrued liabilities in 1999) and a $4.2 million increase in the provision for Federal income taxes. The $7.3 million, or 9.5% increase in net interest income was due primarily to the increase in net interest margin to 2.87% for the year ended December 31, 2000 from 2.75% for 1999, which includes the special dividend declared by the Federal Home Loan Bank of Dallas ("FHLB") equal to 1.625% of each members' FHLB stock (the "special dividend"). The special dividend amounted to $1.1 million for Coastal and was paid in the form of FHLB stock on April 28, 2000. Net interest margin without the effect of the special dividend was 2.84% for the year ended December 31, 2000. Comparing the year ended December 31, 2000 to 1999, average net interest-earning assets increased $18.0 million, the average yield on interest-earning assets increased 0.84% (0.80% excluding the effect of the special dividend) and the average rate paid on interest-bearing liabilities increased 0.80%. The increase in average net interest-earning assets was comprised of a $137.0 million increase in interest-earning assets (primarily a $233.6 million increase in loans receivable somewhat offset by a $97.4 million decrease in mortgage-backed securities) and a $119.0 million increase in interest-bearing liabilities. The increase in the average yield was due to the increase in the overall market rates and the continuing change in the composition of Coastal's balance sheet from mortgage-backed securities to loans receivable. The increase in the average rate paid on interest-bearing liabilities was due primarily to higher wholesale funding costs and a higher cost of deposits. The decrease in the provision for loan losses from 1999 to 2000 was primarily due to the $6.8 million provision recorded in 1999 specifically for a $10.0 million participation in a warehouse loan (the "MCA loan"), which was eventually charged off as of December 31, 1999. In addition, provisions were recorded in 2000 due to Coastal moving forward on its plan to continue to eventually build the allowance for loan losses to a benchmark of approximately 100% of nonperforming loans. This plan is due to the continuing changes in the composition of Coastal's loan portfolio towards more commercial loans. Nonperforming loans are those loans on nonaccrual status as well as those loans greater than ninety (90) days delinquent and still accruing. At December 31, 2000, Coastal had nonperforming loans totaling $21.2 million. Of these nonperforming loans, $16.1 million, or 76%, were first lien residential (single family) mortgage loans, $1.2 million were commercial, financial and industrial loans, $1.1 million were commercial real estate loans, with the balance in the residential construction and consumer and other categories. Of the nonperforming first lien residential mortgage loans at December 31, 2000, 86% were purchased and 14% were originated by Coastal. At December 31, 2000, the allowance for loan losses as a percentage of nonperforming loans was 68.3% compared to 61.3% at December 31, 1999. The increase in noninterest income was primarily due to the $2.2 million gain recorded on the sale of Coastal's mortgage servicing rights during the first quarter of 2000. Management decided to take the opportunity to sell Coastal's entire servicing rights portfolio (which had an average remaining loan life of approximately seven years) based on the current market conditions for loan servicing rights and the expected declining income benefits of that servicing portfolio on an ongoing basis. The sale covered the rights to service approximately $389.1 million of mortgage loans for third party investors, primarily the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation and was substantially completed during the second quarter. In addition to this gain recorded, other changes in noninterest income were as follows: a $675,000 increase in service charges on deposit accounts, offset by a $577,000 decrease in loan fees, a $436,000 decrease in loan servicing income and a $406,000 decrease in other noninterest income. The increase in service charges on deposit accounts is due to Coastal's continued focus on increasing transaction type deposit accounts. The decreases in loan fees and loan servicing income are primarily the result of the servicing sale, in addition to a $245,000 reduction in loan fees due to the overall decreased activity in the warehouse loan portfolio. The decrease in other noninterest income was primarily due to the decreased net gain on the sale of real estate owned of $595,000, offset by a $122,000 increase in fees related to insurance and investment product sales and a $100,000 increase in the gain on the sale of loans held for sale. The increase in noninterest expense was primarily because of the reversal of certain accrued liabilities totaling $1.1 million during the first quarter of 1999 and a $416,000 increase in compensation, payroll taxes and other benefits, offset by a decrease of $545,000 in insurance premiums expense (primarily deposit insurance premiums), in addition to smaller changes in other expense categories. The $4.2 million increase in the provision for Federal income taxes was primarily due to the increased income before Federal income taxes and minority interest. Net income available to common stockholders for the quarter ended December 31, 2000 was $4.4 million compared to $535,000 for the same period in 1999 (or $4.1 million for 1999 before the provision for loan losses specific to the MCA loan). Diluted earnings per common share for the quarter ended December 31, 2000 were $0.76 compared to $0.08 for the same period in 1999. Diluted earnings per common share for the fourth quarter of 1999 before the provision for loan losses specific to the MCA loan were $0.63. The weighted average common shares outstanding used in the diluted earnings per share calculations for the periods were 5,864,139 and 6,516,189, respectively. Comparing the fourth quarter of 2000 to the same period in 1999, net interest income increased $813,000, the provision for loan losses decreased $5.3 million, noninterest income decreased $564,000, noninterest expense decreased $441,000 and the provision for Federal income taxes increased $2.1 million. The $813,000, or 4.0%, increase in net interest income in 2000 compared to 1999 was primarily due to the increase in net interest margin to 2.91% for the quarter ended December 31, 2000 from 2.89% in 1999. Comparing the quarter ended December 31, 2000 to the quarter ended December 31, 1999, average net interest-earning assets increased by $13.3 million, the average yield on interest-earning assets increased 0.87% and the average rate paid on interest-bearing liabilities increased 0.92%. The increase in average net interest-earning assets was comprised of a $90.4 million increase in average interest-earning assets (primarily a $156.9 million increase in loans receivable somewhat offset by a $41.0 million decrease in mortgage-backed securities) and a $77.1 million increase in average interest-bearing liabilities. During the fourth quarter of 2000, Coastal recorded a provision for loan losses of $900,000 compared to $6.2 million during the same period in 1999. The decreased provision was primarily due to the additional provision of $5.5 million recorded in the fourth quarter of 1999 specifically for the MCA loan as discussed previously. For the quarter ended December 31, 2000 compared to the same period in 1999, noninterest income decreased $564,000. This decrease was primarily comprised of the following: a $167,000 decrease in loan fees, a $210,000 decrease in loan servicing income and a $185,000 decrease in other noninterest income. The decrease in loan fees and loan servicing income are primarily the result of the servicing sale, in addition to a $55,000 reduction in loan fees due to the overall decreased activity in the warehouse loan portfolio. The decrease in other noninterest income was primarily due to the decreased net gain on the sale of real estate owned of $254,000, offset somewhat by an $85,000 increase in the gain on the sale of loans held for sale. In addition, noninterest expense decreased by $441,000, primarily due to decreases in various expense categories, and the provision for Federal income taxes increased $2.1 million primarily due to the increased income before Federal income taxes and minority interest. On August 27, 1998, December 21, 1998, February 25, 1999, April 27, 2000 and July 27, 2000, the Board of Directors authorized five separate repurchase plans each for up to 500,000 shares of the outstanding shares of common stock through an open-market repurchase program and privately negotiated repurchases, if any. As of December 31, 2000, 2,000,000 shares had been repurchased at an average repurchase price of $15.67 per share for a total cost of $31.3 million, with no shares from the July 27, 2000 authorization having been repurchased to date. Book value per common share at December 31, 2000 was $18.89. At December 31, 2000, Coastal had total assets of approximately $3.1 billion, deposits of approximately $1.7 billion, preferred stock (Series A) of Coastal Banc ssb of approximately $28.8 million, Series A Cumulative Preferred Stock of $27.5 million and common stockholders' equity of approximately $111.0 million. Coastal Bancorp, Inc. owns, through its wholly-owned subsidiary, Coastal Banc Holding Company, Inc., 100 percent of the voting stock of Coastal Banc ssb, a Texas-chartered FDIC insured, state savings bank headquartered in Houston. Coastal Banc ssb operates 50 branch offices in metropolitan Houston, Austin, Corpus Christi, the Rio Grande Valley and small cities in the southeast quadrant of Texas. You can visit our website at http://www.coastalbanc.com (which is not part of this release). "Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: The statements contained in this release which are not historical facts contain forward looking information with respect to plans, projections or future performance of the Company, the occurrence of which involve certain risks and uncertainties detailed in the Company's filings with the Securities and Exchange Commission. COASTAL BANCORP, INC. AND SUBSIDIARIES SELECTED FINANCIAL DATA (Dollars In Thousands, except per share data) (unaudited) For the Three For the Year Months Ended Ended December 31, December 31, 2000 1999 2000 1999 Diluted earnings per share (A) $0.76 $0.08 $2.87 $1.42 Diluted cash earnings per share (A) (B) $0.88 $0.20 $3.37 $1.88 Return (before minority interest) on average assets (A) 0.75% 0.24% 0.74% 0.47% Return on average common stockholders' equity (A) 16.32% 1.99% 16.51% 8.83% Net interest margin 2.91% 2.89% 2.87% 2.75% Noninterest expense to average total assets 1.91% 2.02% 1.91% 1.98% Charge-offs of loans receivable (C) $629 $10,258 $2,174 $11,830 Net charge-offs of loans receivable (C) $603 $10,080 $1,776 $11,440 Ratio of net charge-offs to average loans receivable 0.03% 0.58% 0.09% 0.69% Average balance sheet information Assets: Interest-earning assets: Loans receivable $1,900,158 $1,743,228 $1,881,124 $1,647,535 Mortgage-backed securities 986,498 1,027,546 1,002,055 1,099,420 Other 37,371 62,840 60,747 59,995 Total interest-earning assets 2,924,027 2,833,614 2,943,926 2,806,950 Noninterest-earning assets 93,827 113,718 100,626 113,406 Total assets $3,017,854 $2,947,332 $3,044,552 $2,920,356 Liabilities and stockholders' equity: Interest-bearing deposits $1,520,284 $1,467,296 $1,489,479 $1,490,851 Borrowings 1,115,046 1,090,914 1,176,332 1,055,183 Senior notes payable 46,900 46,900 46,900 47,658 Total interest-bearing liabilities 2,682,230 2,605,110 2,712,711 2,593,692 Noninterest-bearing liabilities 171,606 179,112 170,083 173,990 Preferred Stock of Coastal Banc ssb 28,750 28,750 28,750 28,750 Preferred stockholders' equity 27,500 27,500 27,500 16,923 Common stockholders' equity 107,768 106,860 105,508 107,001 Total liabilities and stockholders' equity $3,017,854 $2,947,332 $3,044,552 $2,920,356 (A) The 1999 ratio includes the effect of the provision for loan losses specific to the MCA loan of $3.6 million (net of tax) for the quarter ended December 31, 1999 and $4.4 million (net of tax) for the year ended December 31, 1999. (B) Cash earnings is calculated by adding back goodwill amortization to net income available to common stockholders. (C) The 1999 amount includes the $8.9 million charge-off of the MCA loan in the fourth quarter of 1999. COASTAL BANCORP, INC. AND SUBSIDIARIES OTHER FINANCIAL DATA (Dollars In Thousands, except share data) (unaudited) December 31, December 31, 2000 1999 Nonaccrual loans receivable: First lien residential $ 16,062 $ 13,344 Residential construction 390 184 Commercial real estate 1,134 104 Commercial, financial and industrial 1,152 694 Consumer and other 496 340 19,234 14,666 Loans greater than 90 days delinquent and still accruing: First lien residential 475 1,137 Commercial real estate 736 690 Commercial, financial and industrial 634 531 Consumer and other 153 94 1,998 2,452 Total nonperforming loans 21,232 17,118 Real estate owned and repossessed assets 4,095 4,531 Total nonperforming assets $ 25,327 $ 21,649 Allowance for loan losses $ 14,507 $ 10,493 Ratio of nonperforming loans to loans receivable 1.12% 0.99% Ratio of nonperforming assets to total assets 0.82% 0.73% Ratio of allowance for loan losses to nonperforming loans receivable 68.32% 61.30% Ratio of allowance for loan losses to loans receivable 0.77% 0.60% Book value per common share $18.89 $16.42 Tangible book value per common share $15.08 $12.53 Regulatory capital ratios: Tier 1 (Core) 6.22% 5.76% Tier 1 risk-based 9.94% 9.68% Total risk-based 10.72% 10.29% COASTAL BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (In Thousands, except share data) ASSETS December 31, December 31, 2000 1999 (unaudited) Cash and cash equivalents $69,730 $48,098 Federal funds sold 869 --- Loans receivable 1,896,228 1,735,081 Mortgage-backed securities held-to-maturity 885,565 917,212 Mortgage-backed securities available-for-sale, at market value 94,673 99,665 U.S. Treasury securities held-to-maturity 1,497 299 Accrued interest receivable 18,772 16,150 Property and equipment 28,086 30,708 Stock in the Federal Home Loan Bank of Dallas (FHLB) 58,005 56,753 Goodwill 24,611 27,636 Mortgage servicing rights --- 3,035 Prepaid expenses and other assets 13,575 13,315 $3,091,611 $2,947,952 LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Deposits $1,674,981 $1,624,289 Advances from the FHLB 1,150,305 1,096,931 Senior notes payable 46,900 46,900 Advances from borrowers for taxes and insurance 5,050 3,852 Other liabilities and accrued expenses 47,154 13,774 Total liabilities 2,924,390 2,785,746 9.0% noncumulative preferred stock of Coastal Banc ssb (Series A) 28,750 28,750 Commitments and contingencies Stockholders' equity Preferred stock, no par value; authorized shares 5,000,000; 9.12% Cumulative, Series A, 1,100,000 shares issued and outstanding 27,500 27,500 Common stock, $0.01 par value; authorized shares 30,000,000; 7,677,622 shares issued and 5,677,622 shares outstanding at December 31, 2000; 7,616,227 shares issued and 6,332,548 shares outstanding at December 31, 1999 77 76 Additional paid-in capital 33,312 32,683 Retained earnings 110,794 95,508 Accumulated other comprehensive loss - unrealized loss on securities available-for-sale (1,867) (1,848) Treasury stock, at cost (2,000,000 and 1,283,679 shares in 2000 and 1999) (31,345) (20,463) Total stockholders' equity 138,471 133,456 $3,091,611 $2,947,952 COASTAL BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In Thousands, except per share data) Three Months Ended December 31, 2000 1999 (Unaudited) Interest income: Loans receivable $44,010 $37,270 Mortgage-backed securities 16,604 15,030 FHLB stock, Federal funds sold and other interest-earning assets 616 896 61,230 53,196 Interest expense: Deposits 20,211 16,064 Other borrowed money 9,626 132 Senior notes payable 1,173 1,173 Advances from the FHLB 8,945 15,365 39,955 32,734 Net interest income 21,275 20,462 Provision for loan losses 900 6,209 Net interest income after provision for loan losses 20,375 14,253 Noninterest income: Service charges on deposit accounts 1,751 1,753 Loan fees 215 382 Loan servicing income, net --- 210 Other 419 604 2,385 2,949 Noninterest expense: Compensation, payroll taxes and other benefits 7,214 7,089 Office occupancy 2,954 2,927 Data processing 813 866 Amortization of goodwill 749 769 Insurance premiums 152 237 Real estate owned 104 106 Other 2,549 2,982 14,535 14,976 Income before provision for Federal income taxes and minority interest 8,225 2,226 Provision for Federal income taxes 2,517 417 Income before minority interest 5,708 1,809 Minority interest - preferred stock dividends of Coastal Banc ssb 647 647 Net income $5,061 $1,162 Net income available to common stockholders $4,434 $535 Basic earnings per share $0.78 $0.08 Diluted earnings per share $0.76 $0.08 COASTAL BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In Thousands, except per share data) Year Ended December 31, 2000 1999 (Unaudited) Interest income: Loans receivable $168,329 $136,036 Mortgage-backed securities 64,246 63,663 FHLB stock, Federal funds sold and other interest-earning assets 4,922 3,244 237,497 202,943 Interest expense: Deposits 73,216 64,701 Other borrowed money 16,671 5,614 Senior notes payable 4,690 4,773 Advances from the FHLB 58,328 50,569 152,905 125,657 Net interest income 84,592 77,286 Provision for loan losses 5,790 10,575 Net interest income after provision for loan losses 78,802 66,711 Noninterest income: Service charges on deposit accounts 6,965 6,290 Loan fees 1,023 1,600 Loan servicing income, net 244 680 Other 1,396 1,802 Gain on sale of mortgage servicing rights 2,172 --- 11,800 10,372 Noninterest expense: Compensation, payroll taxes and other benefits 29,187 28,771 Office occupancy 11,456 11,422 Data processing 3,325 3,416 Amortization of goodwill 3,025 3,051 Insurance premiums 599 1,144 Real estate owned 451 439 Other 10,152 9,567 58,195 57,810 Income before provision for Federal income taxes and minority interest 32,407 19,273 Provision for Federal income taxes 9,895 5,659 Income before minority interest 22,512 13,614 Minority interest - preferred stock dividends of Coastal Banc ssb 2,588 2,588 Net income $19,924 $11,026 Net income available to common stockholders $17,416 $9,442 Basic earnings per share $2.94 $1.45 Diluted earnings per share $2.87 $1.42SOURCE Coastal Bancorp, Inc.
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http://www.newscom.com/cgi-bin/prnh/19990826/CBSALOGO
PRN Photo Desk, 888-776-6555 or 201-369-3467
CONTACT:
Manuel J. Mehos, CEO, or Catherine N. Wylie,
CFO, both of Coastal Bancorp, Inc., 713-435-5327, or fax,
713-435-5106
