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| Coastal Bancorp, Inc. Announces Third Quarter Earnings of 83 Cents Per Share |
| COASTAL BANCORP LOGO
Coastal Bancorp. logo. (PRNewsFoto)[DM] HOUSTON, TX USA | |||
HOUSTON, Oct. 15 /PRNewswire/ -- Coastal Bancorp, Inc. (Nasdaq: CBSA) today reported net income available to common stockholders of $5.1 million for the quarter ended September 30, 2001, compared to $4.1 million for the same period in 2000, which is a $969,000, or 23.6% increase. Diluted earnings per share for the quarter ended September 30, 2001 were up 16.9% to $0.83 compared to $0.71 for the same period last year. The weighted average common shares outstanding used in the diluted earnings per share calculations for the periods were 6,122,079 and 5,791,472, respectively. Basic earnings per share for the quarter ended September 30, 2001 were $0.88 compared to $0.73 for the third quarter of 2000. Comparing the third quarter of 2001 to the third quarter of 2000, the following were the changes in the components of net income available to common stockholders: net interest income increased $886,000, noninterest income increased $1.1 million, noninterest expense increased $531,000 and the provision for Federal income taxes increased $498,000. Net Interest Income For the three months ended September 30, 2001, net interest income increased $886,000 when compared to the same period in 2000. This increase was primarily due to the increase in net interest margin to 2.95% for the three months ended September 30, 2001 from 2.79% for the same period in 2000. This increase in net interest margin was primarily a result of the 1.43% decrease in the average rate paid on interest-bearing liabilities, due primarily to the overall decrease in wholesale funding costs, partially offset by a 1.23% decrease in the average yield on interest-earning assets. In addition, net interest margin was positively impacted by a $31.0 million increase in average net interest-earning assets. Comparing the quarter ended September 30, 2001 to the same period in 2000, average interest-earning assets decreased $45.8 million, primarily in the lower yielding asset categories. This decrease consisted primarily of a $72.3 million decrease in the average balance of mortgage-backed securities and a $31.6 million decrease in the average balance of FHLB stock, offset somewhat by a $49.3 million increase in the average balance of loans receivable (which are higher yielding than the other interest-earning assets held by Coastal) and an $8.8 million increase in the balance of other interest-earning assets. Comparing the same periods, average interest-bearing liabilities decreased $76.8 million. This decrease was primarily comprised of a $163.4 million decrease in the average balance of advances from the FHLB, somewhat offset by a $45.8 million increase in interest-bearing deposits and a $42.0 million increase in securities sold under agreements to repurchase. Provision for Loan Losses During each of the quarters ended September 30, 2001 and 2000, Coastal recorded a provision for loan losses of $900,000. At September 30, 2001, Coastal had nonperforming loans totaling $22.7 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 September 30, 2001, $18.7 million, or 82%, were first lien residential (single family) mortgage loans, $1.3 million were commercial real estate loans, $882,000 were commercial financial and industrial loans with the balance in the residential construction, multifamily real estate, acquisition and development, consumer and other loan categories. At September 30, 2001, the allowance for loan losses as a percentage of nonperforming loans was 67.6% compared to 68.3% at December 31, 2000. Noninterest Income, Noninterest Expense and Provision for Federal Income Taxes The increase in noninterest income was primarily comprised of a $275,000 increase in service charges on deposit accounts, a $130,000 increase in loan fees and a $734,000 increase in the gain on sale of real estate owned, somewhat offset by a $20,000 decrease in other noninterest income and a $7,000 fair value loss on derivative instruments. The increase in the gain on sale of real estate owned was primarily due to the $603,000 (or 6.4 cents per diluted share, after tax) gain on the sale of one real estate owned property during the quarter ended September 30, 2001. The increase in noninterest expense was due to the $459,000 increase in compensation, payroll taxes and other benefits, a $234,000 increase in other noninterest expense and a $32,000 increase in data processing expense, partially offset by a $133,000 decrease in office occupancy and a $61,000 decrease in the amortization of goodwill. The provision for Federal income taxes increased $498,000 primarily due to the increased income before Federal income taxes and minority interest. Comparison for the Nine Months ended September 30, 2001 and 2000 Net income available to common stockholders for the first nine months of 2001 was $15.0 million compared to $13.0 million for the same period in 2000. Diluted earnings per share for the nine months ended September 30, 2001 were $2.47 compared to $2.12 for the same period last year. The weighted average common shares outstanding used in the diluted earnings per share calculations for the periods were 6,069,170 and 6,110,021, respectively. The increase in net income for the nine months ended September 30, 2001 was comprised of the following compared to the same period in 2000: a $2.9 million increase in net interest income, a $1.9 million decrease in the provision for loan losses, somewhat offset by a $1.1 million decrease in noninterest income, a $499,000 increase in noninterest expense and a $1.1 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 to 2.97% for the nine months ended September 30, 2001 from 2.86% for the same period in 2000, which included a FHLB special dividend of $1.1 million in 2000. Net interest margin, excluding the FHLB special dividend, was 2.81% for the nine months ended September 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 $450,000 recorded in 2001 pursuant to the adoption of Statement of Financial Accounting Standards No. 133 during the year. The net fair value loss for the nine months ended September 30, 2001 was primarily attributable to Coastal's interest rate swap positions, which were liquidated in June 2001. As of September 30, 2001, Coastal's interest rate cap agreements were the only derivative instruments recorded at fair value. In addition, there were increases of $443,000, $131,000, $693,000 and $467,000 in service charges on deposit accounts, loan fees, gain on sale of real estate owned and other noninterest income, respectively, comparing the two nine month periods. The large increase in other noninterest income was primarily due to $300,000 in insurance proceeds received in 2001 for reimbursement of certain deposit account losses incurred in prior years. The increase in noninterest expense was due to a $952,000 increase in compensation, payroll taxes and other benefits, partially offset by a decrease of $296,000 in office occupancy and a $178,000 decrease in the amortization of goodwill. The Company At September 30, 2001, Coastal had total assets of approximately $3.0 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 $127.3 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 statements with respect to plans, projections or future performance of the Company, 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. COASTAL BANCORP, INC. AND SUBSIDIARIES SELECTED FINANCIAL DATA (Dollars In Thousands, except per share data) (unaudited) For the For the Three Months Ended Nine Months Ended September 30, September 30, 2001 2000 2001 2000 Basic earnings per share without the adoption of Statement 133 $0.88 $0.73 $2.67 $2.17 Basic earnings per share before the cumulative effect of accounting change for the adoption of Statement 133 $0.88 $0.73 $2.62 $2.17 Basic earnings per share $0.88 $0.73 $2.60 $2.17 Diluted earnings per share without the adoption of Statement 133 $0.83 $0.71 $2.53 $2.12 Diluted earnings per share before the cumulative effect of accounting change for the adoption of Statement 133 $0.83 $0.71 $2.49 $2.12 Diluted earnings per share $0.83 $0.71 $2.47 $2.12 Diluted cash earnings per share (A) $0.91 $0.84 $2.72 $2.50 Return (before minority interest) on average assets (B) 0.84% 0.70% 0.82% 0.73% Return on average common equity (B) 16.18% 15.80% 16.87% 16.54% Net interest margin (B) 2.95% 2.79% 2.97% 2.86% Noninterest expense to average total assets (B) 1.96% 1.86% 1.93% 1.90% Charge-offs of loans receivable $749 $533 $2,964 $1,545 Net charge-offs of loans receivable $97 $472 $2,153 $1,173 Ratio of net charge-offs to average loans receivable 0.01% 0.02% 0.11% 0.06% (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) (unaudited) For the Three Months Ended For the Nine Months Ended September 30, September 30, 2001 2000 2001 2000 Average balance sheet information Assets: Interest-earning assets: Loans receivable $1,942,099 $1,892,757 $1,957,048 $1,874,732 Mortgage-backed securities 926,060 998,364 955,451 1,007,279 Other 47,496 70,337 56,403 68,594 Total interest-earning assets 2,915,655 2,961,458 2,968,902 2,950,605 Noninterest-earning assets 97,656 98,637 97,741 102,910 Total assets $3,013,311 $3,060,095 $3,066,643 $3,053,515 Liabilities and stockholders' equity: Interest-bearing deposits $1,533,397 $1,487,647 $1,535,405 $1,479,136 Borrowings 1,072,829 1,194,260 1,135,112 1,196,910 Senior notes payable 45,791 46,900 46,526 46,900 Total interest-bearing liabilities 2,652,017 2,728,807 2,717,043 2,722,946 Noninterest-bearing liabilities 180,652 172,035 174,595 169,736 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 124,392 103,003 118,755 104,583 Total liabilities and stockholders' equity $3,013,311 $3,060,095 $3,066,643 $3,053,515 COASTAL BANCORP, INC. AND SUBSIDIARIES OTHER FINANCIAL DATA (Dollars In Thousands, except per share data) (unaudited) September 30, December 31, 2001 2000 Nonaccrual loans receivable: First lien residential $18,333 $16,062 Residential construction 454 390 Commercial real estate 1,280 1,134 Acquisition and development 448 --- Commercial, financial and industrial 604 1,152 Consumer and other 441 496 21,560 19,234 Loans greater than 90 days delinquent and still accruing: First lien residential 349 475 Multifamily real estate 452 --- Commercial real estate 6 736 Acquisition and development 60 --- Commercial, financial and industrial 278 634 Consumer and other --- 153 1,145 1,998 Total nonperforming loans 22,705 21,232 Real estate owned and repossessed assets 5,013 4,095 Total nonperforming assets $27,718 $25,327 Allowance for loan losses $15,354 $14,507 Ratio of nonperforming loans to loans receivable 1.19% 1.12% Ratio of nonperforming assets to total assets 0.93% 0.82% Ratio of allowance for loan losses to nonperforming loans receivable 67.62% 68.32% Ratio of allowance for loan losses to loans receivable 0.80% 0.77% Book value per common share $21.13 $18.89 Tangible book value per common share $17.63 $15.08 Regulatory capital ratios: Tier 1 (Core) 6.72% 6.22% Tier 1 risk-based 10.89% 9.94% Total risk-based 11.73% 10.72% COASTAL BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (In Thousands, except share data) September 30, December 31, ASSETS 2001 2000 (unaudited) Cash and cash equivalents $35,206 $69,730 Federal funds sold 4,980 869 Loans receivable 1,913,605 1,896,228 Mortgage-backed securities held-to-maturity 811,748 885,565 Mortgage-backed securities available-for-sale, at market value 87,886 94,673 U.S. Treasury securities held-to-maturity 1,400 1,497 Accrued interest receivable 15,418 18,772 Property and equipment 26,832 28,086 Stock in the Federal Home Loan Bank of Dallas (FHLB) 35,218 58,005 Goodwill 22,513 24,611 Prepaid expenses and other assets 15,399 13,575 $2,970,205 $3,091,611 LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Deposits $1,677,675 $1,674,981 Advances from the FHLB 608,662 1,150,305 Securities sold under agreements to repurchase 422,562 --- Senior notes payable 43,900 46,900 Advances from borrowers for taxes and insurance 13,637 5,050 Other liabilities and accrued expenses 20,247 47,154 Total liabilities 2,786,683 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; 7,829,390 shares issued and 5,829,390 shares outstanding at September 30, 2001; 7,677,622 shares issued and 5,677,622 shares outstanding at December 31, 2000 78 77 Additional paid-in capital 35,276 33,312 Retained earnings 123,818 110,794 Accumulated other comprehensive loss - unrealized loss on securities available-for-sale (555) (1,867) Treasury stock, at cost (2,000,000 shares in 2001 and 2000) (31,345) (31,345) Total stockholders' equity 154,772 138,471 $2,970,205 $3,091,611 COASTAL BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In Thousands, except per share data) Three Months Ended September 30, 2001 2000 (Unaudited) Interest income: Loans receivable $37,749 $43,199 Mortgage-backed securities 12,659 16,398 FHLB stock, federal funds sold and other interest-earning assets 442 1,158 50,850 60,755 Interest expense: Deposits 17,108 19,022 Advances from the FHLB 6,750 12,894 Other borrowed money 4,338 7,044 Senior notes payable 1,145 1,172 29,341 40,132 Net interest income 21,509 20,623 Provision for loan losses 900 900 Net interest income after provision for loan losses 20,609 19,723 Noninterest income: Service charges on deposit accounts 2,035 1,760 Loan fees 340 210 Gain (loss) on derivative instruments (7) --- Gain on sale of real estate owned, net 810 76 Other 299 319 3,477 2,365 Noninterest expense: Compensation, payroll taxes and other benefits 7,719 7,260 Office occupancy 2,689 2,822 Data processing 844 812 Amortization of goodwill 701 762 Other 2,951 2,717 14,904 14,373 Income before provision for Federal income taxes and minority interest 9,182 7,715 Provision for Federal income taxes 2,836 2,338 Income before minority interest 6,346 5,377 Minority interest - preferred stock dividends of Coastal Banc ssb 647 647 Net income $5,699 $4,730 Net income available to common stockholders $5,072 $4,103 Basic earnings per share $0.88 $0.73 Diluted earnings per share $0.83 $0.71 Effective Federal income tax rate 30.89% 30.30% COASTAL BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In Thousands, except per share data) Nine Months Ended September 30, 2001 2000 (Unaudited) Interest income: Loans receivable $121,828 $124,319 Mortgage-backed securities 43,646 47,642 FHLB stock, federal funds sold and other interest-earning assets 1,964 4,306 167,438 176,267 Interest expense: Deposits 56,090 53,005 Advances from the FHLB 32,710 49,383 Other borrowed money 8,916 7,045 Senior notes payable 3,490 3,517 101,206 112,950 Net interest income 66,232 63,317 Provision for loan losses 3,000 4,890 Net interest income after provision for loan losses 63,232 58,427 Noninterest income: Service charges on deposit accounts 5,656 5,213 Loan fees 940 809 Loan servicing income, net --- 244 Gain (loss) on derivative instruments (450) --- Gain on sale of real estate owned, net 841 148 Other 1,296 829 Gain on sale of mortgage servicing rights --- 2,172 8,283 9,415 Noninterest expense: Compensation, payroll taxes and other benefits 22,925 21,973 Office occupancy 8,206 8,502 Data processing 2,531 2,512 Amortization of goodwill 2,098 2,276 Other 8,399 8,397 44,159 43,660 Income before provision for Federal income taxes, minority interest and cumulative effect of accounting change 27,356 24,182 Provision for Federal income taxes 8,442 7,378 Income before minority interest and cumulative effect of accounting change 18,914 16,804 Minority interest - preferred stock dividends of Coastal Banc ssb 1,941 1,941 Income before cumulative effect of accounting change 16,973 14,863 Cumulative effect of change in accounting for derivative instruments, net of tax (104) --- Net income $16,869 $14,863 Net income available to common stockholders $14,988 $12,982 Basic earnings per share before cumulative effect of accounting change $2.62 $2.17 Basic earnings per share $2.60 $2.17 Diluted earnings per share before cumulative effect of accounting change $2.49 $2.12 Diluted earnings per share $2.47 $2.12 Effective Federal income tax rate 30.86% 30.51%SOURCE Coastal Bancorp, Inc.
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CONTACT:
Manuel J. Mehos, CEO, or Catherine N. Wylie,
CFO, cwylie@coastalbanc.com , both of Coastal Bancorp, Inc.,
+1-713-435-5327, or fax, +1-713-435-5106
