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| Coastal Bancorp, Inc. Record $0.83 Quarter - Second Quarter Earnings Up 68.7% From 1999 |
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Coastal Bancorp. logo. (PRNewsFoto)[DM] HOUSTON, TX USA | |||
HOUSTON, July 17 /PRNewswire/ -- Coastal Bancorp, Inc. (Nasdaq: CBSA) today reported net income of $5.6 million for the quarter ended June 30, 2000, compared to net income for the quarter ended June 30, 1999, of $3.3 million, which is a $2.3 million, or 68.7%, increase. The increase from 1999 to 2000 was due to a $3.7 million increase in net interest income, a $111,000 increase in noninterest income, a $425,000 decrease in noninterest expense, offset by a $915,000 increase in the provision for loan losses and a $1.1 million increase in the provision for Federal income taxes. Diluted earnings per share for the quarter ended June 30, 2000 were $0.83 compared to $0.46 for the same period last year. The weighted average common shares outstanding used in the diluted earnings per share calculations for the periods were 6,079,210 and 6,535,760, respectively. The $3.7 million, or 19.8%, increase in net interest income from 1999 to 2000 was primarily due to the increase in net interest margin from 2.70% for the three months ended June 30, 1999 to 3.02% for the same period in 2000. A portion of this increase in net interest income, and therefore net interest margin, was due to a special dividend declared by the Federal Home Loan Bank of Dallas ("FHLB") equal to 1.625% of each members' FHLB stock held as of March 31, 2000 (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. Without the special dividend, net interest margin was 2.88% for the three months ended June 30, 2000. Comparing the three months ended June 30, 1999 to the same period in 2000, the average yield on interest-earning assets increased 1.03% (0.89% without the special dividend). 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. This increase was somewhat offset by a 0.77% increase in the average rate paid on interest-bearing liabilities, due primarily to higher wholesale funding costs. In addition to the above, net interest margin was positively impacted by an $18.7 million increase in average net interest-earning assets. On the asset side of the balance sheet, average interest-earning assets increased $199.6 million from the three months ended June 30, 1999 to the same period in 2000. This increase consisted of a $290.7 million increase in the average balance of loans receivable (which are higher yielding than the other interest-earning assets held by Coastal), partially offset by the $101.3 million decrease in the average balance of mortgage-backed securities. On the liability side, average interest-bearing liabilities increased $180.9 million, comprised of a $400.6 million increase in the average balance of advances from the Federal Home Loan Bank of Dallas, offset by decreases of $193.8 million, $24.8 million and $1.0 million in the average balances of securities sold under agreements to repurchase, interest-bearing deposits and senior notes payable, respectively. During the second quarter of 2000, Coastal recorded a provision for loan losses of $1.6 million compared to $675,000 during the same period in 1999. The increased provision is primarily due to continuing changes in the composition of Coastal's loan portfolio towards more commercial type loans and Coastal's plan to continue to build the allowance for loan losses to a benchmark of approximately 100% of nonperforming loans. Nonperforming loans are those loans on nonaccrual status as well as those loans greater than ninety (90) days delinquent and still accruing. At June 30, 2000, Coastal had nonperforming loans totaling $19.2 million. Of these nonperforming loans, $13.4 million, or 69.6%, were first lien residential (single family) mortgage loans, $2.2 million were commercial real estate loans, $2.2 million were commercial, financial and industrial loans, with the balance in the residential construction, multifamily mortgage and consumer and other categories. At June 30, 2000, 82% of the nonperforming first lien residential mortgage loans were purchased and 18% were originated, compared to 85% of the total first lien residential mortgage loan portfolio being purchased and 15% originated. At June 30, 2000, the allowance for loan losses as a percentage of nonperforming loans was 71.7% compared to 61.3% at December 31, 1999. From the three months ended June 30, 1999 to the same period in 2000, noninterest expense decreased by $425,000 and the provision for Federal income taxes increased $1.1 million primarily due to the increased income before Federal income taxes and minority interest. Comparing the second quarter of 2000 to the quarter ended March 31, 2000, net income increased $1.1 million, or 25.8%. An analysis of the quarterly results is as follows: Quarter Ended June 30, 2000 March 31, 2000 Income before the provision for loan losses and one-time items (net of tax effect) $5,990 $4,636 Provision for loan losses, net of tax effect (1,034) (1,560) FHLB special dividend as described above, net of tax effect 689 --- Gain on sale of mortgage servicing rights, net of tax effect --- 1,412 Net income $5,645 $4,488 Diluted earnings per share $0.83 $0.60 The increase in income before the provision for loan losses and one-time items (net of tax effect) is primarily due to increased net interest income and a decrease in noninterest expense. Net interest income (excluding the FHLB special dividend) increased primarily due to a $96.0 million increase in the average balance of loans receivable and an increase in the related average yield of 0.44% from the first to the second quarter of 2000. The $501,000 decrease in noninterest expense is the result of ongoing expense reduction efforts by management. Net income for the first six months of 2000 was $10.1 million compared to $6.1 million for the same period in 1999. Diluted earnings per share for the six months ended June 30, 2000 were $1.42 compared to $0.85 for the same period last year. The weighted average common shares outstanding used in the diluted earnings per share calculations for the periods were 6,247,799 and 6,803,662, respectively. The increase in net income for the six months ended June 30, 2000 was comprised of the following: a $5.4 million increase in net interest income, a $2.2 million increase in noninterest income, offset by a $984,000 increase in the provision for loan losses, a $989,000 increase in noninterest expense and a $1.6 million increase in the provision for Federal income taxes. The increase in net interest income was due primarily to the increase in net interest margin from 2.67% for the six months ended June 30, 1999 to 2.90% for the same period in 2000, which includes the FHLB special dividend as described earlier. The increase in noninterest income was due to the $2.2 million gain recorded on the sale of Coastal's mortgage servicing rights during the first quarter of 2000. Due to the declining servicing portfolio (with an average loan life of approximately seven years), management decided to take the opportunity to sell Coastal's entire servicing rights portfolio based on the current market conditions for loan servicing rights and the expected declining income benefits of that servicing portfolio on an ongoing basis. Pursuant to a purchase and sale agreement, Coastal sold its 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. 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 $308,000 increase in compensation, payroll taxes and other benefits, offset by a decrease of $317,000 in insurance premiums expense, in addition to small changes in other expense categories. On August 27, 1998, December 21, 1998, February 25, 1999 and April 27, 2000, the Board of Directors authorized four 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 June 30, 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. At June 30, 2000, Coastal had total assets of approximately $3.1 billion, deposits of approximately $1.6 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 $101.2 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 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 Months For the Six Months Ended Ended June 30, June 30, 2000 1999 2000 1999 Diluted earnings per share $0.83 $0.46 $1.42 $0.85 Diluted cash earnings per share (A) $0.95 $0.58 $1.66 $1.07 Return (before minority interest) on average assets 0.82% 0.55% 0.75% 0.51% Return on average common equity 19.33% 11.58% 16.96% 10.82% Net interest margin 3.02% 2.70% 2.90% 2.67% Noninterest expense to average total assets 1.87% 2.05% 1.93% 1.96% Charge-offs of loans receivable $729 $554 $1,012 $1,107 Net charge-offs of loans receivable $701 $448 $701 $980 Ratio of net charge-offs to average loans receivable 0.04% 0.03% 0.04% 0.06% Average balance sheet information Assets: Interest-earning assets: Loans receivable $1,913,625 $1,622,973 $1,865,615 $1,572,552 Mortgage-backed securities 1,007,946 1,109,292 1,011,785 1,157,587 Other 71,371 61,037 67,723 59,796 Total interest-earning assets 2,992,942 2,793,302 2,945,123 2,789,935 Noninterest-earning assets 99,222 109,397 105,067 115,020 Total assets $3,092,164 $2,902,699 $3,050,190 $2,904,955 Liabilities and stockholders' equity: Interest-bearing deposits $1,473,948 $1,498,713 $1,474,834 $1,513,330 Borrowings 1,240,637 1,033,932 1,198,249 1,031,095 Senior Notes payable 46,900 47,900 46,900 48,250 Total interest-bearing liabilities 2,761,485 2,580,545 2,719,983 2,592,675 Noninterest-bearing liabilities 170,279 174,245 168,958 167,827 Preferred Stock of Coastal Banc ssb 28,750 28,750 28,750 28,750 Preferred stockholders' equity 27,500 14,643 27,500 7,857 Common stockholders' equity 104,150 104,516 104,999 107,846 Total liabilities and stockholders' equity $3,092,164 $2,902,699 $3,050,190 $2,904,955 (A) Cash earnings is calculated by adding back goodwill amortization to net income available to common stockholders. COASTAL BANCORP, INC. AND SUBSIDIARIES OTHER FINANCIAL DATA (Dollars In Thousands, except share data) (unaudited) June 30, December 31, 2000 1999 Nonaccrual loans receivable: First lien residential $13,312 $13,344 Multifamily mortgage 297 --- Residential construction --- 184 Commercial real estate 915 104 Commercial, financial and industrial 1,226 694 Consumer and other 484 340 16,234 14,666 Loans greater than 90 days delinquent and still accruing: First lien residential 69 1,137 Multifamily mortgage 257 --- Residential construction 194 --- Commercial real estate 1,325 690 Commercial, financial and industrial 956 531 Consumer and other 186 94 2,987 2,452 Total nonperforming loans 19,221 17,118 Real estate owned and repossessed assets 3,684 4,531 Total nonperforming assets $22,905 $21,649 Allowance for loan losses $13,782 $10,493 Ratio of nonperforming loans to loans receivable 1.02% 0.99% Ratio of nonperforming assets to total assets 0.75% 0.73% Ratio of allowance for loan losses to nonperforming loans receivable 71.70% 61.30% Ratio of allowance for loan losses to loans receivable 0.73% 0.60% Book value per common share $17.43 $16.42 Tangible book value per common share $13.40 $12.53 Regulatory capital ratios: Tier 1 (Core) 5.78% 5.76% Tier 1 risk-based 9.89% 9.68% Total risk-based 10.66% 10.29% COASTAL BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (In Thousands, except share data) ASSETS June 30, December 31, 2000 1999 (unaudited) Cash and cash equivalents $37,742 $48,098 Federal funds sold 1,900 --- Loans receivable 1,881,644 1,735,081 Mortgage-backed securities held-to-maturity 904,641 917,212 Mortgage-backed securities available-for-sale, at market value 94,230 99,665 U.S. Treasury securities held-to-maturity 994 299 Accrued interest receivable 17,965 16,150 Property and equipment 28,742 30,708 Stock in the Federal Home Loan Bank of Dallas (FHLB) 67,367 56,753 Goodwill 26,122 27,636 Mortgage servicing rights --- 3,035 Prepaid expenses and other assets 11,938 13,315 $3,073,285 $2,947,952 LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Deposits $1,616,251 $1,624,289 Advances from the FHLB 1,224,948 1,096,931 Senior notes payable 46,900 46,900 Advances from borrowers for taxes and insurance 10,609 3,852 Other liabilities and accrued expenses 17,149 13,774 Total liabilities 2,915,857 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; 7,643,453 and 7,616,227 shares issued in 2000 and 1999 76 76 Additional paid-in capital 32,912 32,683 Retained earnings 103,389 95,508 Accumulated other comprehensive loss -- unrealized loss on securities available-for-sale (3,854) (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 128,678 133,456 $3,073,285 $2,947,952 COASTAL BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In Thousands, except per share data) Three Months Ended June 30, March 31, June 30, 2000 2000 1999 (Unaudited) Interest income: Loans receivable $42,614 $38,506 $32,824 Mortgage-backed securities 15,811 15,433 15,739 FHLB stock, federal funds sold and other interest-earning assets 2,173 975 788 60,598 54,914 49,351 Interest expense: Deposits 17,450 16,533 16,068 Other borrowed money --- 1 2,573 Senior notes payable 1,172 1,173 1,197 Advances from the FHLB 19,394 17,095 10,666 38,016 34,802 30,504 Net interest income 22,582 20,112 18,847 Provision for loan losses 1,590 2,400 675 Net interest income after provision for loan losses 20,992 17,712 18,172 Noninterest income: Loan fees and service charges on deposit accounts 1,995 2,057 1,910 Loan servicing income, net 43 201 152 Other 486 96 351 Gain on sale of mortgage servicing rights --- 2,172 --- 2,524 4,526 2,413 Noninterest expense: Compensation, payroll taxes and other benefits 7,244 7,469 7,290 Office occupancy 2,874 2,806 2,837 Data processing 841 859 863 Amortization of goodwill 761 753 761 Insurance premiums 149 149 312 Real estate owned 82 127 123 Other 2,442 2,731 2,632 14,393 14,894 14,818 Income before provision for Federal income taxes and minority interest 9,123 7,344 5,767 Provision for Federal income taxes 2,831 2,209 1,773 Income before minority interest 6,292 5,135 3,994 Minority interest - preferred stock dividends of Coastal Banc ssb 647 647 647 Net income $5,645 $4,488 $3,347 Net income available to common stockholders $5,018 $3,861 $3,017 Basic earnings per share $0.84 $0.61 $0.47 Diluted earnings per share $0.83 $0.60 $0.46 COASTAL BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In Thousands, except per share data) Six Months Ended June 30, 2000 1999 (Unaudited) Interest income: Loans receivable $81,120 $63,828 Mortgage-backed securities 31,244 33,489 FHLB stock, federal funds sold and other interest-earning assets 3,148 1,560 115,512 98,877 Interest expense: Deposits 33,983 32,878 Other borrowed money 1 4,091 Senior notes payable 2,345 2,414 Advances from the FHLB 36,489 22,231 72,818 61,614 Net interest income 42,694 37,263 Provision for loan losses 3,990 3,006 Net interest income after provision for loan losses 38,704 34,257 Noninterest income: Loan fees and service charges 4,052 3,724 Loan servicing income, net 244 286 Other 582 843 Gain on sale of mortgage servicing rights 2,172 --- 7,050 4,853 Noninterest expense: Compensation, payroll taxes and other benefits 14,713 14,405 Office occupancy 5,680 5,639 Data processing 1,700 1,762 Amortization of goodwill 1,514 1,514 Insurance premiums 298 615 Real estate owned 209 277 Other 5,173 4,086 29,287 28,298 Income before provision for Federal income taxes and minority interest 16,467 10,812 Provision for Federal income taxes 5,040 3,399 Income before minority interest 11,427 7,413 Minority interest - preferred stock dividends of Coastal Banc ssb 1,294 1,294 Net income $10,133 $6,119 Net income available to common stockholders $8,879 $5,789 Basic earnings per share $1.45 $0.87 Diluted earnings per share $1.42 $0.85SOURCE Coastal Bancorp, Inc.
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NewsCom:
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
