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| Coastal Bancorp, Inc. Announces Record Quarterly Earnings of 89 Cents Per Share |
| COASTAL BANCORP LOGO
Coastal Bancorp. logo. (PRNewsFoto)[DM] HOUSTON, TX USA | |||
HOUSTON, July 16 /PRNewswire/ -- Coastal Bancorp, Inc. (Nasdaq: CBSA) today reported net income available to common stockholders of $5.4 million for the quarter ended June 30, 2001, compared to $5.0 million for the same period in 2000, which is a $345,000, or 6.88% increase. Diluted earnings per share for the quarter ended June 30, 2001 were $0.89 compared to $0.83 for the same period last year. The weighted average common shares outstanding used in the diluted earnings per share calculations for the periods were 6,059,006 and 6,079,210, respectively. Comparing the second quarter of 2001 to the second quarter of 2000, the following were the changes in the components of net income available to common stockholders: net interest income decreased $164,000 (but if the $1.1 million special stock dividend declared by the Federal Home Loan Bank of Dallas ("FHLB") in 2000 (the "FHLB special dividend") is excluded, 2001 net interest income would have increased by $897,000), the provision for loan losses decreased $390,000, noninterest income increased $460,000 (which includes a $121,000 fair value gain on derivative instruments due to the recording of Coastal's derivatives at fair value pursuant to Statement of Financial Accounting Standards No. 133 (which was adopted effective January 1, 2001) ("Statement 133")), noninterest expense increased $180,000 and the provision for Federal income taxes increased $161,000. Net Interest Income For the three months ended June 30, 2001, net interest income increased $897,000 as compared to the same period in 2000, excluding the $1.1 million FHLB special dividend recorded in 2000. This increase was primarily due to the increase in net interest margin to 2.99% for the three months ended June 30, 2001 from 2.88% for the same period in 2000 (excluding the FHLB special dividend). This increase in net interest margin was primarily a result of the 0.54% decrease in the average rate paid on interest-bearing liabilities, due primarily to the overall decrease in wholesale funding costs, offset by a 0.44% decrease in the average yield on interest-earning assets (excluding the FHLB special dividend). In addition, net interest margin was positively impacted by a $23.6 million increase in average net interest- earning assets. Net interest margin (including the FHLB special dividend) for the three months ended June 30, 2000 was 3.02%. Comparing the quarter ended June 30, 2001 to the same period in 2000, average interest-earning assets increased $7.2 million. This increase consisted primarily of a $68.5 million increase in the average balance of loans receivable (which are higher yielding than the other interest-earning assets held by Coastal), somewhat offset by the $46.1 million decrease in the average balance of mortgage-backed securities and the $18.9 million decrease in the average balance of FHLB stock. Comparing the same periods, average interest-bearing liabilities decreased $16.4 million. This decrease was primarily comprised of a $497.6 million decrease in the average balance of advances from the FHLB, somewhat offset by a $413.7 million increase in securities sold under agreements to repurchase and a $67.6 million increase in interest-bearing deposits. Provision for Loan Losses During the second quarter of 2001, Coastal recorded a provision for loan losses of $1.2 million compared to $1.6 million during the same period in 2000. Overall during 2000 and continuing in 2001, Coastal continues to focus on increasing the size of Coastal's commercial loan portfolio. At June 30, 2001, Coastal had nonperforming loans totaling $23.0 million. Nonperforming loans are those loans on nonaccrual status as well as those loans greater than ninety (90) days delinquent and still accruing interest. Of the nonperforming loans at June 30, 2001, $19.3 million, or 84%, were first lien residential (single family) mortgage loans, $1.5 million were commercial real estate loans, $1.1 million were commercial financial and industrial loans with the balance in the residential construction and consumer and other categories. At June 30, 2001, the allowance for loan losses as a percentage of nonperforming loans was 63.3% compared to 68.3% at December 31, 2000. Noninterest Income, Noninterest Expense and Provision for Federal Income Taxes The increase in noninterest income was comprised of the $121,000 fair value gain on derivative instruments recorded during the quarter on Coastal's interest rate swap and cap agreements, a $115,000 increase in service charges on deposit accounts, a $110,000 increase in loan fees and a $157,000 increase in other noninterest income, offset slightly by a $43,000 decrease in servicing income due to the sale of Coastal's loan servicing portfolio in 2000. The fair value changes in the derivative instruments were primarily attributable to Coastal's interest rate swap positions, which were totally liquidated in June 2001. The increase in noninterest expense was due to the $364,000 increase in compensation, payroll taxes and other benefits, offset by smaller decreases in the other noninterest expense categories. The provision for Federal income taxes increased $161,000 primarily due to the increased income before Federal income taxes and minority interest. Comparison for the Six Months ended June 30, 2001 and 2000 Net income available to common stockholders for the first six months of 2001 was $9.9 million compared to $8.9 million for the same period in 2000. Diluted earnings per share for the six months ended June 30, 2001 were $1.64 compared to $1.42 for the same period last year. The weighted average common shares outstanding used in the diluted earnings per share calculations for the periods were 6,031,742 and 6,247,799, respectively. The increase in net income for the six months ended June 30, 2001 was comprised of the following compared to the prior six month period: a $2.0 million increase in net interest income, a $1.9 million decrease in the provision for loan losses and a slight decrease in noninterest expense, somewhat offset by a $2.2 million decrease in noninterest income and a $566,000 increase in the provision for Federal income taxes. The increase in net interest income was due primarily to the increase in net interest margin to 2.99% for the six months ended June 30, 2001 from 2.90% for the same period in 2000, which includes the FHLB special dividend as described earlier. Net interest margin, excluding the FHLB special dividend, was 2.83% for the six months ended June 30, 2000. The decrease 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, the related $244,000 decrease in loan servicing income in 2001 and the fair value loss on derivative instruments of $443,000 recorded in 2001 pursuant to Statement 133. The net fair value loss for the six months ended June 30, 2001 was primarily attributable to Coastal's interest rate swap positions, which were liquidated in June 2001. As of June 30, 2001, Coastal's interest rate cap agreements were the only derivative instruments recorded at fair value pursuant to Statement 133. In addition, there were increases of $168,000 and $446,000 in service charges on deposit accounts and other noninterest income, respectively. The decrease in noninterest expense was due to the decreases in office occupancy, data processing, the amortization of goodwill and other noninterest expense, offset by an increase of $493,000 in compensation, payroll taxes and other benefits. The Company At June 30, 2001, 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 $122.2 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 the Company's 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 For the Three Months Ended Six Months Ended June 30, June 30, 2001 2000 2001 2000 Basic earnings per share without the adoption of Statement 133 $0.92 $0.84 $1.80 $1.45 Basic earnings per share before the cumulative effect of accounting change $0.93 $0.84 $1.75 $1.45 Basic earnings per share $0.93 $0.84 $1.73 $1.45 Diluted earnings per share without the adoption of Statement 133 $0.87 $0.83 $1.71 $1.42 Diluted earnings per share before the cumulative effect of accounting change $0.89 $0.83 $1.66 $1.42 Diluted earnings per share $0.89 $0.83 $1.64 $1.42 Diluted cash earnings per share (A) $0.97 $0.92 $1.81 $1.60 Return (before minority interest) on average assets (B) 0.86% 0.82% 0.81% 0.75% Return on average common equity (B) 18.09% 19.33% 17.23% 16.96% Net interest margin (B) 2.99% 3.02% 2.99% 2.90% Noninterest expense to average total assets (B) 1.89% 1.87% 1.91% 1.93% Charge-offs of loans receivable $955 $729 $2,215 $1,012 Net charge-offs of loans receivable $831 $701 $2,056 $701 Ratio of net charge-offs to average loans receivable 0.04% 0.04% 0.10% 0.04% (A) Cash earnings is calculated by adding back goodwill amortization (net of the tax effect). (B) Annualized ratio. COASTAL BANCORP, INC. AND SUBSIDIARIES SELECTED FINANCIAL DATA (Dollars In Thousands, except per share data) (unaudited) For the Three Months Ended For the Six Months Ended June 30, June 30, 2001 2000 2001 2000 Average balance sheet information Assets: Interest-earning assets: Loans receivable $1,982,134 $1,913,625 $1,964,621 $1,865,615 Mortgage-backed securities 961,884 1,007,946 970,390 1,011,785 Other 56,139 71,371 60,928 67,723 Total interest-earning assets 3,000,157 2,992,942 2,995,939 2,945,123 Noninterest-earning assets 96,836 99,222 97,786 105,067 Total assets $3,096,993 $3,092,164 $3,093,725 $3,050,190 Liabilities and stockholders' equity: Interest-bearing deposits $1,541,577 $1,473,948 $1,536,425 $1,474,834 Borrowings 1,156,672 1,240,637 1,166,770 1,198,249 Senior notes payable 46,900 46,900 46,900 46,900 Total interest-bearing liabilities 2,745,149 2,761,485 2,750,095 2,719,983 Noninterest-bearing liabilities 176,717 170,279 171,353 168,958 Preferred stock of Coastal Banc ssb 28,750 28,750 28,750 28,750 Preferred stockholders' equity 27,500 27,500 27,500 27,500 Common stockholders' equity 118,877 104,150 116,027 104,999 Total liabilities and stockholders' equity $3,096,993 $3,092,164 $3,093,725 $3,050,190 COASTAL BANCORP, INC. AND SUBSIDIARIES OTHER FINANCIAL DATA (Dollars In Thousands, except per share data) (unaudited) June 30, December 31, 2001 2000 Nonaccrual loans receivable: First lien residential $19,089 $16,062 Residential construction 737 390 Commercial real estate 1,282 1,134 Commercial, financial and industrial 482 1,152 Consumer and other 160 496 21,750 19,234 Loans greater than 90 days delinquent and still accruing: First lien residential 254 475 Commercial real estate 242 736 Commercial, financial and industrial 660 634 Consumer and other 96 153 1,252 1,998 Total nonperforming loans 23,002 21,232 Real estate owned and repossessed assets 4,766 4,095 Total nonperforming assets $27,768 $25,327 Allowance for loan losses $14,551 $14,507 Ratio of nonperforming loans to loans receivable 1.16% 1.12% Ratio of nonperforming assets to total assets 0.90% 0.82% Ratio of allowance for loan losses to nonperforming loans receivable 63.26% 68.32% Ratio of allowance for loan losses to loans receivable 0.73% 0.77% Book value per common share $20.48 $18.89 Tangible book value per common share $16.87 $15.08 Regulatory capital ratios: Tier 1 (Core) 6.38% 6.22% Tier 1 risk-based 10.30% 9.94% Total risk-based 11.06% 10.72% COASTAL BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (In Thousands, except share data) June 30, December 31, ASSETS 2001 2000 (unaudited) Cash and cash equivalents $37,485 $69,730 Federal funds sold 6,570 869 Loans receivable 1,990,914 1,896,228 Mortgage-backed securities held-to-maturity 851,649 885,565 Mortgage-backed securities available-for-sale, at market value 90,868 94,673 U.S. Treasury securities held-to-maturity 1,399 1,497 Accrued interest receivable 17,404 18,772 Property and equipment 27,057 28,086 Stock in the Federal Home Loan Bank of Dallas (FHLB) 34,898 58,005 Goodwill 23,215 24,611 Prepaid expenses and other assets 13,554 13,575 $3,095,013 $3,091,611 LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Deposits $1,691,496 $1,674,981 Advances from the FHLB 666,158 1,150,305 Securities sold under agreements to repurchase 483,180 --- Senior notes payable 46,900 46,900 Advances from borrowers for taxes and insurance 10,105 5,050 Other liabilities and accrued expenses 18,718 47,154 Total liabilities 2,916,557 2,924,390 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; 7,760,199 shares issued and 5,760,199 shares outstanding at June 30, 2001; 7,677,622 shares issued and 5,677,622 shares outstanding at December 31, 2000 78 77 Additional paid-in capital 34,352 33,312 Retained earnings 119,445 110,794 Accumulated other comprehensive loss - unrealized loss on securities available-for-sale (324) (1,867) Treasury stock, at cost (2,000,000 shares in 2001 and 2000) (31,345) (31,345) Total stockholders' equity 149,706 138,471 $3,095,013 $3,091,611 COASTAL BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In Thousands, except per share data) Three Months Ended June 30, 2001 2000 (Unaudited) Interest income: Loans receivable $41,078 $42,614 Mortgage-backed securities 14,729 15,811 FHLB stock, federal funds sold and other interest-earning assets 616 2,173 56,423 60,598 Interest expense: Deposits 19,061 17,450 Advances from the FHLB 9,197 19,394 Other borrowed money 4,575 --- Senior notes payable 1,172 1,172 34,005 38,016 Net interest income 22,418 22,582 Provision for loan losses 1,200 1,590 Net interest income after provision for loan losses 21,218 20,992 Noninterest income: Service charges on deposit accounts 1,860 1,745 Loan fees 360 250 Loan servicing income, net --- 43 Gain (loss) on derivative instruments 121 --- Other 643 486 2,984 2,524 Noninterest expense: Compensation, payroll taxes and other benefits 7,608 7,244 Office occupancy 2,841 2,874 Data processing 833 841 Amortization of goodwill 695 761 Other 2,596 2,673 14,573 14,393 Income before provision for Federal income taxes and minority interest 9,629 9,123 Provision for Federal income taxes 2,992 2,831 Income before minority interest 6,637 6,292 Minority interest - preferred stock dividends of Coastal Banc ssb 647 647 Net income $5,990 $5,645 Net income available to common stockholders $5,363 $5,018 Basic earnings per share $0.93 $0.84 Diluted earnings per share $0.89 $0.83 COASTAL BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In Thousands, except per share data) Six Months Ended June 30, 2001 2000 (Unaudited) Interest income: Loans receivable $84,079 $81,120 Mortgage-backed securities 30,987 31,244 FHLB stock, federal funds sold and other interest-earning assets 1,522 3,148 116,588 115,512 Interest expense: Deposits 38,982 33,983 Advances from the FHLB 25,960 36,489 Other borrowed money 4,578 1 Senior notes payable 2,345 2,345 71,865 72,818 Net interest income 44,723 42,694 Provision for loan losses 2,100 3,990 Net interest income after provision for loan losses 42,623 38,704 Noninterest income: Service charges on deposit accounts 3,621 3,453 Loan fees 600 599 Loan servicing income, net --- 244 Gain (loss) on derivative instruments (443) --- Other 1,028 582 Gain on sale of mortgage servicing rights --- 2,172 4,806 7,050 Noninterest expense: Compensation, payroll taxes and other benefits 15,206 14,713 Office occupancy 5,517 5,680 Data processing 1,687 1,700 Amortization of goodwill 1,397 1,514 Other 5,448 5,680 29,255 29,287 Income before provision for Federal income taxes, minority interest and cumulative effect of accounting change 18,174 16,467 Provision for Federal income taxes 5,606 5,040 Income before minority interest and cumulative effect of accounting change 12,568 11,427 Minority interest - preferred stock dividends of Coastal Banc ssb 1,294 1,294 Income before cumulative effect of accounting change 11,274 10,133 Cumulative effect of change in accounting for derivative instruments, net of tax (104) --- Net income $11,170 $10,133 Net income available to common stockholders $9,916 $8,879 Basis earnings per share before cumulative effect of accounting change $1.75 $1.45 Basic earnings per share $1.73 $1.45 Diluted earnings per share before cumulative effect of accounting change $1.66 $1.42 Diluted earnings per share $1.64 $1.42SOURCE 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
