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| Coastal Bancorp, Inc. Announces First Quarter Results of $0.75 Per Share |
| COASTAL BANCORP LOGO
Coastal Bancorp logo. (PRNewsFoto)[DM TC] HOUSTON, TX USA | |||
HOUSTON, April 15 /PRNewswire-FirstCall/ -- Coastal Bancorp, Inc. (Nasdaq: CBSA) and subsidiaries ("Coastal") today reported net income available to common stockholders of $4.1 million for the quarter ended March 31, 2004, compared to $3.1 million for the same period in 2003. The $1.0 million increase in net income available to common stockholders was primarily due to the following: a $277,000 increase in net interest income, a $450,000 decrease in the provision for loans losses and a $222,000 decrease in noninterest expense, offset by a $567,000 increase in the provision for Federal income taxes. In addition, dividends on preferred stock decreased $627,000 due to the July 31, 2003 redemption of the 9.12% Series A Cumulative Preferred Stock of Coastal Bancorp, Inc. ("Bancorp"). Diluted earnings per share for the quarter ended March 31, 2004 were $0.75, compared to $0.57 for the same period in 2003. The weighted average common shares outstanding used in the diluted earnings per share calculations for the periods were 5,508,796 and 5,386,566, respectively. Basic earnings per share for the quarter ended March 31, 2004 were $0.78 compared to $0.59 for the same period in 2003. On December 2, 2003 Coastal announced that it had signed a definitive merger agreement with Hibernia Corporation (NYSE: HIB) ("Hibernia") pursuant to which Hibernia would acquire Coastal by means of a merger and pay cash in the amount of $41.50 per share for each outstanding share of Coastal common stock and $41.50 less the exercise price for each option to acquire a share of Coastal common stock. The required regulatory approvals have been granted. The merger is subject to the approval of Coastal's shareholders and will be voted on at the annual meeting to be held on April 22, 2004. If Coastal's shareholders vote in favor of the merger and all other customary conditions are met, the merger is expected to close on May 12, 2004. Net Interest Income When comparing the two periods, net interest income increased $277,000, due to a decrease of $1.3 million in interest expense, offset by a $1.0 million decrease in interest income. Net interest margin decreased 0.18% to 2.53% for the quarter ended March 31, 2004, from 2.71% for the same period in 2003. The average balance of interest-bearing liabilities increased $208.4 million from the quarter ended March 31, 2003 to the same period in 2004, while the average rate paid decreased 0.46%, to 2.07% for the quarter ended March 31, 2004, from 2.53% for the same period in 2003. The increase in liabilities is due to deposit growth, borrowings to fund purchases of mortgage loans and mortgage-backed securities and the $10.3 million in subordinated debentures issued in June of 2003. The average balance of interest-earning assets increased $209.6 million from the quarter ended March 31, 2003 to the same period in 2004, while the average yield decreased 0.58% to 4.39% from 4.97%. When comparing the first quarter of 2004 to the same period in 2003, the average yield on loans decreased to 4.90% from 5.50% and the average yield on mortgage-backed securities decreased to 2.80% from 3.14%. Provision for Loan Losses During the quarter ended March 31, 2004, Coastal recorded a provision for loan losses of $450,000 compared to $900,000 for the same period in 2003. As in the fourth quarter of 2003, the provision recorded in the first quarter of 2004 is less than previous quarters based upon the current level of unallocated reserves. At March 31, 2004, the allowance for loan losses as a percentage of total loans (excluding loans held for sale which are recorded at the lower of cost or fair value) was 1.00% compared to 0.98% at December 31, 2003. While management believes that it has adequately provided for loan losses, it will continue to monitor the loan portfolio and make adjustments to the allowance for loan losses as it considers necessary. Noninterest Income, Noninterest Expense and Provision for Federal Income Taxes Noninterest income increased slightly by $45,000 when comparing the first quarter of 2004 to the same period in 2003. This increase was comprised of the following: a $244,000 increase in the gain on sale of real estate owned, a $200,000 gain on the sale of mortgage-backed securities available for sale, a $188,000 increase in the gain on sale of repossessed assets due to the sale of one asset during the first quarter of 2004 and a $113,000 increase in other noninterest income, largely offset by a $716,000 decrease in the gain on sale of loans held for sale, due to gains of $734,000 in the quarter ended March 31, 2003, compared to $18,000 in the current period. When comparing the first quarter of 2004 to the same period a year earlier, the $222,000 decrease in noninterest expense was comprised primarily of a decrease in compensation, payroll taxes and benefits of $174,000 and a decrease of $201,000 in other noninterest expense, due largely to a decrease of $119,000 in expenses related to loans, repossessed assets and real estate owned. These decreases were somewhat offset by smaller increases of $72,000 in office occupancy, $46,000 in data processing and $39,000 in advertising. The provision for Federal income taxes increased $567,000 due to the increased amount of income before Federal income taxes, with the effective tax rate being approximately 35% for the quarter ended March 31, 2004 and 31% for the same period in 2003. The provision for Federal income taxes for the quarter ended March 31, 2003 included a tax benefit of $219,000 received from the dividends on the Series A Preferred Stock of Coastal Bancorp, Inc. This benefit ceased upon redemption of the Bancorp Preferred Stock on July 31, 2003. Asset Quality As shown in the "Other Financial Data" table attached, at March 31, 2004, Coastal had nonperforming loans totaling $14.9 million, which is a $5.3 million, or 26%, decrease when compared to December 31, 2003. Nonperforming loans are those loans on nonaccrual status as well as those loans greater than ninety (90) days delinquent and still accruing interest. This decrease was primarily a result of the decrease in nonperforming first lien residential (single-family) mortgage loans. At March 31, 2004, nonperforming assets (which include nonperforming loans, real estate owned and repossessed assets) were $17.4 million and the ratio of nonperforming assets to total assets was 0.64%. At December 31, 2003, nonperforming assets were $22.8 million and the ratio of nonperforming assets to total assets was 0.85%. At March 31, 2004, $7.8 million, or 52%, of nonperforming loans were first lien residential (single-family) mortgage loans, $5.5 million, or 37%, were acquisition and development loans, $604,000, or 4%, were commercial real estate loans, $947,000, or 6%, were commercial, financial and industrial loans, with the balance in other loan categories. Of the nonperforming acquisition and development loans outstanding at December 31, 2003 and March 31, 2004, two loans to the same borrower made up $5.4 million of the total at each date. These two loans have been paid off subsequent to March 31, 2004. At March 31, 2004, the allowance for loan losses as a percentage of nonperforming loans (excluding nonperforming loans held for sale which are recorded at the lower of cost or fair value) was 131.07% compared to 95.66% at December 31, 2003. Common Stock Repurchase As of March 31, 2004, a total of 2,746,110 shares of common stock were held in treasury at an average price of $19.53 per share for a total cost of $53.6 million. The Company At March 31, 2004, Coastal had total assets of approximately $2.7 billion, deposits of approximately $1.7 billion and common stockholders' equity of approximately $139.8 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 44 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). Notice under the Private Securities Litigation Reform Act of 1995 "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 statements with respect to plans, projections or future performance of Coastal, the occurrence of which involve certain risks and uncertainties. Additional information concerning factors that could cause actual results to materially differ from those in the forward-looking statements is contained in Coastal Bancorp, Inc.'s Securities and Exchange Commission filings. Investors are cautioned that any such forward looking statements are not guarantees of future performance and that actual results or developments may differ materially from those projected in the forward looking statements. Furthermore, Coastal does not intend (and is not obligated) to update publicly any forward-looking statement. COASTAL BANCORP, INC. AND SUBSIDIARIES SELECTED FINANCIAL DATA (Dollars In Thousands, except per share data) (unaudited) For the Three Months Ended March 31, 2004 2003 Basic earnings per share $0.78 $0.59 Diluted earnings per share $0.75 $0.57 Return (before minority interest) on average assets 0.61% 0.60% Return on average common equity 12.13% 9.91% Net interest margin 2.53% 2.71% Noninterest expense to average total assets 2.04% 2.28% Charge-offs of loans receivable $392 $908 Net charge-offs of loans receivable $254 $717 Ratio of net charge-offs to average loans receivable 0.01% 0.04% COASTAL BANCORP, INC. AND SUBSIDIARIES SELECTED FINANCIAL DATA (In Thousands) (unaudited) For the Three Months Ended March 31, 2004 2003 Average balance sheet information Assets: Interest-earning assets: Loans receivable $2,013,178 $1,871,027 Mortgage-backed securities 521,536 468,165 Other 67,076 53,001 Total interest-earning assets 2,601,790 2,392,193 Noninterest-earning assets 93,529 89,013 Total assets $2,695,319 $2,481,206 Liabilities and stockholders' equity: Interest-bearing deposits $1,463,421 $1,418,473 Borrowings 818,427 665,265 Subordinated debentures 61,856 51,546 Total interest-bearing liabilities 2,343,704 2,135,284 Noninterest-bearing deposits 202,736 179,763 Other noninterest-bearing liabilities 12,912 13,457 Preferred stockholders' equity --- 27,500 Common stockholders' equity 135,967 125,202 Total liabilities and stockholders' equity $2,695,319 $2,481,206 COASTAL BANCORP, INC. AND SUBSIDIARIES OTHER FINANCIAL DATA (Dollars in Thousands, except per share data) (unaudited) March 31, December 31, 2004 2003 Nonaccrual loans receivable: First lien residential $7,737 $10,312 Residential construction 103 --- Commercial real estate 517 714 Acquisition and development 5,467 5,497 Commercial, financial and industrial 900 1,111 Consumer and other 51 68 14,775 17,702 Loans greater than 90 days delinquent and still accruing: First lien residential 33 --- Residential construction --- 136 Acquisition and development --- 454 Commercial real estate 87 188 Commercial, financial and industrial 47 1,789 167 2,567 Total nonperforming loans 14,942 20,269 Real estate owned and repossessed assets 2,452 2,524 Total nonperforming assets $17,394 $22,793 Allowance for loan losses $19,585 $19,389 Ratio of nonperforming loans to total loans receivable and loans receivable held for sale 0.75% 1.02% Ratio of nonperforming assets to total assets 0.64% 0.85% Ratio of allowance for loan losses to nonperforming loans receivable (excluding nonperforming loans held for sale) 131.07% 95.66% Ratio of allowance for loan losses to loans receivable (excluding loans receivable held for sale) 1.00% 0.98% Book value per common share $25.66 $24.78 Tangible book value per common share $21.62 $20.71 Regulatory capital ratios of Coastal Banc ssb: Tier 1 (Core) 6.35% 6.26% Tier 1 risk-based 9.28% 9.23% Total risk-based 10.36% 10.31% COASTAL BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (In Thousands, except share data) ASSETS March 31, December 31, 2004 2003 (unaudited) Cash and cash equivalents $35,389 $40,814 Federal funds sold 24,732 10,440 Loans receivable held for sale 35,341 8,078 Loans receivable 1,967,328 1,981,924 Mortgage-backed securities available- for-sale, at fair value 501,543 504,402 Other securities available-for-sale, at fair value 4,855 6,787 Accrued interest receivable 8,762 9,198 Property and equipment 33,174 32,563 Stock in the Federal Home Loan Bank of Dallas (FHLB) 45,641 45,471 Goodwill 21,429 21,429 Prepaid expenses and other assets 20,165 21,884 $2,698,359 $2,682,990 LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Deposits $1,680,116 $1,676,131 Advances from the FHLB 801,512 799,875 Subordinated debentures 61,856 61,856 Advances from borrowers for taxes and insurance 4,023 2,482 Other liabilities and accrued expenses 11,066 8,954 Total liabilities 2,558,573 2,549,298 Commitments and contingencies Stockholders' equity Common stock, $0.01 par value; authorized shares 30,000,000; 8,043,802 shares issued and 5,297,692 shares outstanding at March 31, 2004; 7,981,434 shares issued and 5,235,324 shares outstanding at December 31, 2003 80 80 Additional paid-in capital 38,187 37,179 Retained earnings 154,485 151,167 Accumulated other comprehensive income (loss) - unrealized gain (loss) on securities available-for-sale 664 (1,104) Treasury stock, at cost (2,746,110 shares in 2004 and 2003) (53,630) (53,630) Total stockholders' equity 139,786 133,692 $2,698,359 $2,682,990 COASTAL BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In Thousands, except per share data) Three Months Ended March 31, 2004 2003 (unaudited) Interest income: Loans receivable $24,670 $25,612 Mortgage-backed securities 3,646 3,667 FHLB stock, federal funds sold and other interest-earning assets 269 325 28,585 29,604 Interest expense: Deposits 6,806 8,048 Advances from the FHLB 4,061 4,225 Subordinated debentures 1,270 1,160 12,137 13,433 Net interest income 16,448 16,171 Provision for loan losses 450 900 Net interest income after provision for loan losses 15,998 15,271 Noninterest income: Service charges on deposit accounts 2,893 2,902 Loan fees 244 219 Gain on sale of loans receivable held for sale 18 734 Gain on sale of mortgage-backed securities available-for-sale 200 --- Gain (loss) on sale of real estate owned 114 (130) Gain (loss) on sale of repossessed assets 180 (8) Other 389 276 4,038 3,993 Noninterest expense: Compensation, payroll taxes and other benefits 7,834 8,008 Office occupancy 2,389 2,317 Data processing 479 433 Advertising 314 275 Postage and delivery 375 379 Other 2,307 2,508 13,698 13,920 Income before provision for Federal income taxes 6,338 5,344 Provision for Federal income taxes 2,226 1,659 Net income $4,112 $3,685 Net income available to common stockholders $4,112 $3,058 Basic earnings per share $0.78 $0.59 Diluted earnings per share $0.75 $0.57SOURCE Coastal Bancorp, Inc.
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CONTACT:
Manuel J. Mehos, CEO, or Catherine N. Wylie,
CFO, both of Coastal Bancorp, Inc., +1-713-435-5327, or fax,
+1-713-435-5106
