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| Coastal Bancorp, Inc. Announces Third Quarter Earnings of 68 Cents Per Share |
| COASTAL BANCORP LOGO
Coastal Bancorp. logo. (PRNewsFoto)[DM] HOUSTON, TX USA | |||
HOUSTON, Oct. 15 /PRNewswire-FirstCall/ -- Coastal Bancorp, Inc. (Nasdaq: CBSA) today reported net income available to common stockholders of $3.7 million for the quarter ended September 30, 2002, compared to $5.1 million for the same period in 2001, which is a $1.3 million, or 26.1% decrease. The decrease was primarily due to Coastal's smaller asset size compared to the same period in 2001 resulting in a $3.2 million decrease in net interest income, in addition to the issuance of $50.0 million of 9.0% trust preferred securities in June 2002 (as discussed below) and continuing higher than expected prepayments on Coastal's mortgage-backed securities and mortgage loan portfolios (approximately 30% on an annualized basis for mortgage-backed securities and 40% for mortgage loans receivable) due to the continuing low interest rate environment. This decrease was somewhat offset by a $1.0 million decrease in noninterest expense and a $791,000 decrease in the provision for Federal income taxes. Diluted earnings per share for the quarter ended September 30, 2002 were $0.68 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 5,474,435 and 6,122,079, respectively. Basic earnings per share for the quarter ended September 30, 2002 were $0.72 compared to $0.88 for the same period in 2001. Comparison for the Three Months ended September 30, 2002 and 2001 Net Interest Income Due to Coastal's smaller asset size, the lower interest rate environment and continuing higher than expected prepayments on Coastal's mortgage-backed securities and mortgage loan portfolios, the most significant contributor to decreased net income available to common stockholders was decreased net interest income. When comparing the quarter ended September 30, 2002 to the same period in 2001, average interest-earning assets decreased $443.9 million to $2.5 billion. The $443.9 million decrease in average interest-earning assets consisted primarily of a $476.6 million decrease in the average balance of mortgage-backed securities, somewhat offset by a $31.3 million increase in the average balance of loans receivable. The decrease in average interest- earning assets was largely due to the reduction in Coastal's asset size in late November 2001. To strategically restructure a portion of its asset base to make it less vulnerable to market interest rate and price fluctuations, Coastal sold $845 million of mortgage-backed securities and purchased $512 million of primarily pass-through securities at a premium. This transaction had the effect of shortening the duration of the mortgage-backed securities portfolio, thereby lessening the extension risk to Coastal. In addition to the reduction in Coastal's asset size due to the restructuring, during the third quarter of 2002 as a consequence of the extraordinary high levels of refinancings, Coastal experienced continuing higher than expected principal paydowns of $31.3 million (or approximately 30% on an annualized basis) on its mortgage-backed securities portfolio and $97.1 million (or approximately 40% on an annualized basis) on its single- family mortgage loan portfolio, which resulted in greater premium amortization on those assets originally purchased at a premium. Net interest margin increased to 2.97% for the three months ended September 30, 2002 from 2.95% for the three months ended September 30, 2001. This increase in net interest margin was a result of the 1.56% decrease in the average rate paid on interest-bearing liabilities, partially offset by the 1.49% decrease in the average yield on interest-earning assets, both due to the decrease in general market interest rates during 2001 and continuing into 2002. Comparing the same periods, average interest-bearing liabilities decreased $436.6 million as a result of the strategic restructuring discussed above. Noninterest Income, Noninterest Expense and Provision for Federal Income Taxes Noninterest income decreased by $423,000 for the quarter ended September 30, 2002 compared to the quarter ended September 30, 2001. This decrease was primarily due to the $843,000 decrease in the gain on the sale of real estate owned and smaller decreases of $74,000 and $83,000 in loan fees and other noninterest income. The decrease in the gain on the sale of real estate owned was due to a gain of $603,000 recorded during the quarter ended September 30, 2001 on one real estate owned property. These decreases were somewhat offset by the $564,000 increase in service charges on deposit accounts, which was due to Coastal's continued focus on increasing transaction-type accounts and the related fee income, including Coastal's new Free Checking and Bounce Protection features on retail checking accounts introduced during August 2002. Noninterest expense was down $1.0 million primarily due to decreases of $281,000, $431,000, $701,000 and $83,000 in office occupancy, data processing, the amortization of goodwill and other noninterest expense, respectively, partially offset by a $249,000 increase in compensation, payroll taxes and other benefits, a $189,000 increase in advertising expense and a $34,000 increase in postage and delivery expense. The decrease in office occupancy was primarily due to certain assets becoming fully depreciated during 2001 and 2002. The decrease in data processing expense was due to the conversion of the Rio Grande Valley Region branches to Coastal's primary deposit and loan data processing system during the third quarter of 2001 and the item processing functions brought in-house during the third quarter of 2001. The decrease in the amortization of goodwill was due to the implementation of FASB Statements 141, 142 and 147 effective January 1, 2002 (see discussion below). The increase in compensation, payroll taxes and other benefits was due to normal merit increases for existing staff, in addition to the staff increases for the item processing functions brought in-house during the third quarter of 2001 and additional personnel needed to continue Coastal's focus on commercial banking products and lending, including Coastal Banc Capital Corp. staff. The increase in advertising and postage and delivery expenses were primarily due to Coastal's continued focus on commercial banking products and lending. The provision for Federal income taxes decreased $791,000 primarily due to the decreased income before Federal income taxes and minority interest, with the effective tax rate being approximately 31% for both periods. Asset Quality As shown in the "Other Financial Data" table attached, at September 30, 2002, Coastal's nonperforming loans decreased, when compared to December 31, 2001, by $8.5 million or 34%, to $16.2 million. Nonperforming loans are those loans on nonaccrual status as well as those loans greater than ninety (90) days delinquent and still accruing interest. The decrease in nonperforming loans is mainly due to Coastal's decision to liquidate a portion of its under-performing single-family mortgage loans during the first quarter of 2002. On March 22, 2002, Coastal sold $10.8 million of these under-performing loans to a third party investor. Prior to the sale, Coastal wrote these loans down to fair value and recorded a charge-off to the allowance for loan losses of $761,000. In addition, as of March 31, 2002, Coastal wrote down to fair value and reclassified $9.1 million of other under-performing single-family mortgage loans to the held for sale category. The loans that were reclassified to the held for sale category were written down to fair value as of March 31, 2002 through a charge-off to the allowance for loan losses of $691,000. During the second quarter of 2002, a total of $3.1 million of these loans held for sale were sold. As of September 30, 2002, Coastal had $3.2 million loans held for sale remaining (net of second and third quarter activity including sales, payoffs, foreclosures and monthly principal payments received). The ratio of nonperforming assets to total assets was 0.78% at September 30, 2002 and 1.13% as of December 31, 2001. At September 30, 2002, $11.4 million, or 71%, of nonperforming loans were first lien residential (single-family) mortgage loans (of which $1.3 million were classified as held for sale), $2.5 million were commercial real estate loans, $1.2 million were commercial, financial and industrial loans, with the balance in other loan categories. At September 30, 2002, the allowance for loan losses as a percentage of nonperforming loans (excluding nonperforming loans held for sale which are recorded at fair value) was 107.4% compared to 62.3% at December 31, 2001. Pending Branch Sale On September 24, 2002, Coastal announced the execution of a definitive agreement to sell five of its branches in Central Texas (located in Llano, Burnet, Mason, Kingsland and Marble Falls, Texas) to First State Bank Central Texas. The sale includes deposit accounts of approximately $80 million, which are being sold at a 6.25% premium. The transaction is subject to regulatory approvals and is expected to close during the fourth quarter of 2002. Redemption of Senior Notes On February 1, 2002, Coastal redeemed all of its 10.0 % Senior Notes ($43.9 million) outstanding, at par plus accrued interest. Issuance of Trust Preferred Securities and Redemption of Coastal Banc ssb's Noncumlative Preferred Stock On June 18, 2002, Coastal, through Coastal Capital Trust I (a consolidated trust subsidiary) (the "Trust"), issued 2,000,000 in trust preferred securities ("Trust Preferred Securities") with a liquidation preference of $25 per security. The Trust Preferred Securities represent undivided beneficial interests in the Trust, which was established and is guaranteed by Coastal Bancorp, Inc. The Trust is the lender on the junior subordinated debentures to Coastal whose interest payments fund the dividends on the Trust Preferred Securities. The debentures have the same payment terms as the Trust Preferred Securities. Dividends on the securities are payable quarterly at the annual rate of 9.0%. The proceeds from the issuance of the Trust Preferred Securities were used to repurchase 500,000 shares of common stock for $15.0 million from a director of the Company in June and $28.8 million was used on July 15, 2002 to redeem Coastal Banc ssb's 9.0% Series A Noncumulative Preferred Stock (CBSAO) through a capital contribution to Coastal Banc ssb. Common Stock Repurchase During the quarter ended September 30, 2002, Coastal repurchased 161,775 shares of common stock at an average repurchase price of $29.22 per share. During the nine months ended September 30, 2002, Coastal purchased a total of 709,575 shares of common stock at an average repurchase price of $29.82 per share. As of September 30, 2002, a total of 2,706,847 shares were held in treasury at an average price of $19.38 per share for a total cost of $52.5 million. Implementation of FASB Statements 141, 142 and 147 In July 2001, Statement of Financial Accounting Standards No. 141, "Business Combinations" ("Statement 141") and Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets" ("Statement 142") were issued. Statement 141 required, effective January 1, 2002, that Coastal evaluate its existing intangible assets and goodwill and make any necessary reclassifications in order to conform with the new criteria in Statement 141 for recognition apart from goodwill. Statement 141 also required that Coastal reclassify amounts originally recorded as goodwill pursuant to Statement of Financial Accounting Standards No. 72, "Accounting for Certain Acquisitions of Banking or Thrift Institutions" ("Statement 72") to other intangible assets, as those amounts, under Statement 142, were not subject to the non-amortization provisions. As of January 1, 2002, Coastal had unamortized goodwill that was subject to the non-amortization provisions of Statements 141 and 142 of $5.5 million. As of that same date, Coastal reclassified $16.3 million to other intangible assets and continued to amortize these amounts in 2002. On October 1, 2002, Statement of Accounting Standards No. 147, "Acquisitions of Certain Financial Institutions" ("Statement 147") was issued. Statement 147 amended Statement 72, to exclude from its scope, the acquisitions of financial institutions (other than transactions between two or more mutual enterprises) and provide certain transition provisions for existing intangible assets. Under Statement 147 transition provisions, if the transaction that gave rise to an unidentifiable other intangible asset was considered a business combination, the carrying amount of that asset amount would now be reclassified to goodwill and be subject to the non-amortization provisions as of the effective date of the implementation of Statement 142, which in Coastal's case was January 1, 2002. Based on the implementation of Statement 147, Coastal has reclassified as of January 1, 2002, the $16.3 million mentioned above to goodwill and removed the amortization expense recorded in 2002, through restatement of its 2002 financial statements as required by Statement 147. Coastal implemented these statements effective January 1, 2002 and has tested for impairment in accordance with the provisions of Statement 142 and did not recognize any transitional impairment losses as the cumulative effect of a change in accounting principle during the period. As restated (due to the implementation of Statement 147), diluted earnings per share for the quarter ended June 30, 2002 were $0.72 (as compared to $0.66 previously reported) and for the quarter ended March 31, 2002 were $0.57 (as compared to $0.51 previously reported). Comparison for the Nine Months ended September 30, 2002 and 2001 Net income available to common stockholders for the first nine months of 2002 was $11.5 million compared to $15.0 million for the same period in 2001. Diluted earnings per share for the nine months ended September 30, 2002 were $1.97 compared to $2.47 for the same period last year. The weighted average common shares outstanding used in the diluted earnings per share calculations for the periods were 5,858,701 and 6,069,170, respectively. Basic earnings per share for the nine months ended September 30, 2002 were $2.06 compared to $2.60 for the same period in 2001. As in the comparison for the quarters ended September 30, 2002 and 2001, the primary contributor to the decrease in net income available to common stockholders was Coastal's smaller asset size, resulting in decreased net interest income. Net interest income decreased $9.4 million from the nine months ended September 30, 2001 to the same period in 2002, as a result of Coastal's smaller asset size as compared to the same period in 2001, lower market interest rates and record high prepayments on Coastal's mortgage-backed securities and mortgage loan portfolios, as discussed previously. This decrease in net interest income was somewhat offset by a $300,000 decrease in the provision for loan losses, an increase of $234,000 in noninterest income, a $2.7 million decrease in noninterest expense and a $2.2 million decrease in the provision for Federal income taxes. The increase in noninterest income was primarily due to the $1.1 million increase in service charges on deposit accounts and a $450,000 fair value loss on derivative instruments recorded in 2001 (compared to an $18,000 fair value loss recorded during the first nine months of 2002). These increases were partially offset by a $52,000 decrease in loan fees, a $634,000 decrease in the gain on the sale of real estate owned and a $588,000 decrease in other noninterest income (primarily due to $300,000 in insurance proceeds received in 2001 for reimbursement of certain deposit losses in prior years). The decrease in noninterest expense was primarily due to the $2.1 million decrease in the amortization of goodwill as discussed previously. In addition, Coastal experienced decreases of $577,000, $1.3 million and $121,000 in office occupancy, data processing and the other noninterest expense, respectively. These decreases were partially offset by an increase of $896,000 in compensation, payroll taxes and other benefits, a $324,000 increase in advertising expense and a $128,000 increase in postage and delivery expense. The Company At September 30, 2002, Coastal had total assets of approximately $2.6 billion, deposits of approximately $1.6 billion, Series A Cumulative Preferred Stock of $27.5 million and common stockholders' equity of approximately $120.1 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 49 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 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. 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 For the Nine Months Ended September 30, September 30, 2002 2001 2002 2001 Basic earnings per share before the cumulative effect of accounting change $0.72 $0.88 $2.06 $2.62 Basic earnings per share - reported $0.72 $0.88 $2.06 $2.60 Basic earnings per share - as adjusted (A) $0.72 $0.96 $2.06 $2.87 Diluted earnings per share before the cumulative effect of accounting change $0.68 $0.83 $1.97 $2.49 Diluted earnings per share - reported $0.68 $0.83 $1.97 $2.47 Diluted earnings per share - as adjusted (A) $0.68 $0.91 $1.97 $2.72 Return (before minority interest) on average assets 0.71% 0.84% 0.79% 0.82% Return on average common equity 12.64% 16.18% 12.18% 16.87% Net interest margin 2.97% 2.95% 3.10% 2.97% Noninterest expense to average total assets 2.15% 1.96% 2.19% 1.93% Charge-offs of loans receivable (B) $511 $749 $2,785 $2,964 Net charge-offs of loans receivable $129 $97 $2,081 $2,153 Ratio of net charge-offs to average loans receivable 0.00% 0.01% 0.11% 0.11% (A) Pursuant to the transition provisions of Statement 142, presented are as adjusted earnings per share numbers to exclude amortization expense (net of any tax effect) recognized in those periods prior to the implementation related to goodwill that is no longer being amortized. (B) During the first quarter of 2002, Coastal charged-off $1.5 million due to the write-down of certain under-performing single family mortgage loans that were either sold or reclassified to the held for sale category as of March 31, 2002. COASTAL BANCORP, INC. AND SUBSIDIARIES SELECTED FINANCIAL DATA (In Thousands) (unaudited) For the Three Months Ended For the Nine Months Ended September 30, September 30, 2002 2001 2002 2001 Average balance sheet information Assets: Interest-earning assets: Loans receivable $1,973,354 $1,942,099 $1,913,072 $1,957,048 Mortgage-backed securities 449,477 926,060 467,344 955,451 Other 48,895 47,496 61,922 56,403 Total interest- earning assets 2,471,726 2,915,655 2,442,338 2,968,902 Noninterest-earning assets 87,334 97,656 89,438 97,741 Total assets $2,559,060 $3,013,311 $2,531,776 $3,066,643 Liabilities and stockholders' equity: Interest-bearing deposits $1,482,524 $1,533,397 $1,480,049 $1,535,405 Borrowings 682,936 1,072,829 667,484 1,135,112 Company obligated mandatorily redeemable 9.0% trust preferred securities of Coastal Capital Trust I 50,000 --- 19,231 --- Senior notes payable --- 45,791 4,982 46,526 Total interest- bearing liabilities 2,215,460 2,652,017 2,171,746 2,717,043 Noninterest-bearing liabilities 194,145 180,652 185,400 174,595 Preferred stock of Coastal Banc ssb 4,375 28,750 20,536 28,750 Preferred stockholders' equity 27,500 27,500 27,500 27,500 Common stockholders' equity 117,580 124,392 126,594 118,755 Total liabilities and stockholders' equity $2,559,060 $3,013,311 $2,531,776 $3,066,643 COASTAL BANCORP, INC. AND SUBSIDIARIES OTHER FINANCIAL DATA (Dollars In Thousands, except per share data) (unaudited) September 30, December 31, 2002 2001 Nonaccrual loans receivable: First lien residential $10,141 $21,744 First lien residential - loans held for sale 1,306 --- Residential construction 189 218 Multifamily real estate --- 82 Commercial real estate 2,479 1,174 Acquisition and development --- 6 Commercial, financial and industrial 1,212 499 Consumer and other 145 141 15,472 23,864 Loans greater than 90 days delinquent and still accruing: First lien residential --- 62 Residential construction 83 755 Acquisition and development 54 --- Commercial real estate 30 --- Commercial, financial and industrial 568 31 Consumer and other --- 1 735 849 Total nonperforming loans 16,207 24,713 Real estate owned and repossessed assets 4,008 4,607 Total nonperforming assets $20,215 $29,320 Allowance for loan losses $16,004 $15,385 Ratio of nonperforming loans to total loans receivable and loans receivable held for sale 0.82% 1.33% Ratio of nonperforming assets to total assets 0.78% 1.13% Ratio of allowance for loan losses to nonperforming loans receivable (excluding nonperforming loans held for sale) 107.40% 62.26% Ratio of allowance for loan losses to loans receivable (excluding loans receivable held for sale) 0.81% 0.83% Book value per common share $22.39 $21.54 Tangible book value per common share $18.60 $18.15 Regulatory capital ratios of Coastal Banc ssb: Tier 1 (Core) 6.82% 7.27% Tier 1 risk-based 9.80% 11.90% Total risk-based 10.70% 12.79% COASTAL BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (In Thousands, except share data) ASSETS September 30, December 31, 2002 2001 (unaudited) Cash and cash equivalents $40,822 $41,537 Federal funds sold 750 16,710 Loans receivable 1,966,119 1,863,601 Loans receivable held for sale 3,163 --- Mortgage-backed securities available-for-sale, at market value 468,407 514,068 Other securities available-for-sale, at market value 1,758 42,827 Accrued interest receivable 11,344 13,243 Property and equipment 27,501 27,461 Stock in the Federal Home Loan Bank of Dallas (FHLB) 40,937 40,032 Goodwill 21,811 21,811 Prepaid expenses and other assets 16,665 16,601 $2,599,277 $2,597,891 LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Deposits $1,643,681 $1,660,386 Advances from the FHLB 732,783 690,877 Company obligated mandatorily redeemable 9.0% trust preferred securities of Coastal Capital Trust I 50,000 --- Senior notes payable --- 43,875 Advances from borrowers for taxes and insurance 10,368 4,259 Other liabilities and accrued expenses 14,860 12,310 Total liabilities 2,451,692 2,411,707 9.0% noncumulative preferred stock of Coastal Banc ssb(Series A) --- 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; 7,852,650 shares issued and 5,145,803 shares outstanding at September 30, 2002; 7,835,178 shares issued and 5,835,178 shares outstanding at December 31, 2001 79 78 Additional paid-in capital 35,507 35,366 Retained earnings 136,924 127,425 Accumulated other comprehensive loss - unrealized gain (loss) on securities available-for-sale 36 (1,590) Treasury stock, at cost (2,706,847 shares in 2002 and 2,000,000 shares in 2001) (52,461) (31,345) Total stockholders' equity 147,585 157,434 $2,599,277 $2,597,891 COASTAL BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In Thousands, except per share data) Three Months Ended September 30, 2002 2001 (Unaudited) Interest income: Loans receivable $29,649 $37,749 Mortgage-backed securities 4,034 12,659 FHLB stock, federal funds sold and other interest-earning assets 348 442 34,031 50,850 Interest expense: Deposits 9,616 17,108 Advances from the FHLB 4,944 6,750 Other borrowed money --- 4,338 Senior notes payable --- 1,145 Company obligated mandatorily redeemable trust preferred securities 1,112 --- 15,672 29,341 Net interest income 18,359 21,509 Provision for loan losses 900 900 Net interest income after provision for loan losses 17,459 20,609 Noninterest income: Service charges on deposit accounts 2,599 2,035 Loan fees 266 340 Gain (loss) on derivative instruments 6 (7) Gain (loss) on sale of real estate (33) 810 Other 216 299 3,054 3,477 Noninterest expense: Compensation, payroll taxes and other benefits 7,968 7,719 Office occupancy 2,408 2,689 Data processing 413 844 Amortization of goodwill --- 701 Advertising 546 357 Postage and delivery 411 377 Other 2,134 2,217 13,880 14,904 Income before provision for Federal income taxes and minority interest 6,633 9,182 Provision for Federal income taxes 2,045 2,836 Income before minority interest 4,588 6,346 Minority interest - preferred stock dividends of Coastal Banc ssb 213 647 Net income - reported $4,375 $5,699 Net income - as adjusted (A) $4,375 $6,210 Net income available to common stockholders - reported $3,748 $5,072 Net income available to common stockholders - as adjusted (A) $3,748 $5,583 Basic earnings per share - reported $0.72 $0.88 Basic earnings per share - as adjusted (A) $0.72 $0.96 Diluted earnings per share - reported $0.68 $0.83 Diluted earnings per share - as adjusted (A) $0.68 $0.91 (A) As adjusted excludes the amortization expense (net of any tax effect) recognized in the period prior to the implementation related to the goodwill that is no longer being amortized. COASTAL BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In Thousands, except per share data) Nine Months Ended September 30, 2002 2001 (Unaudited) Interest income: Loans receivable $90,357 $121,828 Mortgage-backed securities 13,060 43,646 FHLB stock, federal funds sold and other interest-earning assets 1,203 1,964 104,620 167,438 Interest expense: Deposits 30,859 56,090 Advances from the FHLB 15,303 32,710 Other borrowed money --- 8,916 Senior notes payable 378 3,490 Company obligated mandatorily redeemable trust preferred securities 1,275 --- 47,815 101,206 Net interest income 56,805 66,232 Provision for loan losses 2,700 3,000 Net interest income after provision for loan losses 54,105 63,232 Noninterest income: Service charges on deposit accounts 6,732 5,656 Loan fees 888 940 Gain (loss) on derivative instruments (18) (450) Gain (loss) on sale of real estate owned 207 841 Other 708 1,296 8,517 8,283 Noninterest expense: Compensation, payroll taxes and other benefits 23,821 22,925 Office occupancy 7,629 8,206 Data processing 1,235 2,531 Amortization of goodwill --- 2,098 Advertising 1,396 1,072 Postage and delivery 1,206 1,078 Other 6,128 6,249 41,415 44,159 Income before provision for Federal income taxes, minority interest and cumulative effect of accounting change 21,207 27,356 Provision for Federal income taxes 6,289 8,442 Income before minority interest and cumulative effect of accounting change 14,918 18,914 Minority interest - preferred stock dividends of Coastal Banc ssb 1,507 1,941 Income before cumulative effect of accounting change 13,411 16,973 Cumulative effect of change in accounting for derivative instruments, net of tax --- (104) Net income - reported $13,411 $16,869 Net income - as adjusted (A) $13,411 $18,395 Net income available to common stockholders - reported $11,530 $14,988 Net income available to common stockholders - as adjusted (A) $11,530 $16,514 Basis earnings per share before cumulative effect of accounting change $2.06 $2.62 Basic earnings per share - reported $2.06 $2.60 Basic earnings per share - as adjusted (A) $2.06 $2.87 Diluted earnings per share before cumulative effect of accounting change $1.97 $2.49 Diluted earnings per share - reported $1.97 $2.47 Diluted earnings per share - as adjusted (A) $1.97 $2.72 (A) As adjusted excludes the amortization expense (net of any tax effect) recognized in the period prior to the implementation related to the goodwill that is no longer being amortized.SOURCE Coastal Bancorp, Inc.
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