CFCP Coastal Finl Corp Del (MM)

Coastal Financial Corporation (NASDAQ:CFCP) today announced earnings for the second fiscal quarter ended March 31, 2007. Net income for the second quarter of fiscal 2007 decreased 4.7% to $4.4 million or $0.20 per share ($0.19 per share diluted), as compared to $4.6 million or $0.22 per share ($0.21 per share diluted) for the same period of fiscal 2006. Net income for the first two quarters of fiscal 2007 increased 2.4% to $9.3 million or $0.42 per share ($0.41 per share diluted), compared to $9.1 million or $0.42 per share ($0.41 per share diluted) for the same period of fiscal 2006. At March 31, 2007, assets totaled $1.68 billion, an increase of 2.1% from $1.64 billion at March 31, 2006. During the same period, Customer Deposits decreased 0.8%, from $891.1 million to $883.9 million, and net loans receivable increased 7.7%, from $1.0 billion to $1.1 billion. In comparing the second quarters of fiscal 2006 and 2007, net interest income after provision for loan losses grew 7.5% to $13.8 million. Returns on average assets and average equity were 1.12% and 15.59%, respectively, for the six months ended March 31, 2007, as compared to 1.14% and 18.38% for the comparable period in fiscal 2006. At March 31, 2007, non-performing assets to total assets was 0.20% as compared with 0.26% at March 31, 2006. Michael C. Gerald, President and Chief Executive Officer of Coastal Financial Corporation, noted that, during the second quarter of fiscal 2007, the corporation announced a 9.9% increase in fiscal 2007 first quarter net income, and a $.05 per share cash dividend payable April 20, 2007 to Shareholders of record April 6, 2007. Coastal Financial Corporation, headquartered in Myrtle Beach, South Carolina, offers a broad range of commercial, consumer and mortgage financial services through its subsidiary, Coastal Federal Bank. Coastal Federal Bank, with assets of $1.7 billion, is a federally chartered and FDIC insured community bank with twenty-four offices serving the Communities of Horry and Georgetown Counties, South Carolina and Brunswick and New Hanover Counties, North Carolina. Additional information about Coastal Federal is available on its web site at www.coastalfederal.com. Stock Trading Information The common stock of Coastal Financial Corporation is traded on the Nasdaq Stock Market under the symbol "CFCP." For information, contact Raymond James Financial Services at 1-843-918-7600. Dividend Reinvestment and Direct Stock Purchase Plan Coastal Financial Corporation offers Shareholders a Dividend Reinvestment and Direct Stock Purchase Plan which provides existing and new shareholders a convenient means for making purchases of Coastal Financial shares free of fees and brokerage commissions. Additional cash contributions, up to $1,000 per quarter, can be made to purchase additional shares. For more information, contact the Transfer Agent at 1-800-866-1340, Ext. 2514, or Investor Relations. Shareholder Services Shareholders desiring to enroll in the Coastal Financial Corporation Dividend Reinvestment Plan, change the name, address, or ownership of their stock certificates, report lost or stolen certificates, or consolidate accounts should contact the Transfer Agent at 1-800-866-1340, Ext. 2514, or Investor Relations. Investor Relations Analysts, investors and others seeking financial information should contact: Susan J. Cooke - Senior Vice President and Secretary Coastal Financial Corporation 2619 Oak Street Myrtle Beach, South Carolina 29577 (843) 205-2676� Forward Looking Statements This report may contain certain �forward-looking statements� within the meaning of Section 27A of the Securities Exchange Act of 1934, as amended, that represent the Company�s expectations or beliefs concerning future events. All forward-looking statements are based on assumptions and involve risks and uncertainties, many of which are beyond the Company�s control and which may cause its actual results, performance or achievements to differ materially from the results, performance or achievements contemplated by the forward-looking statements. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words such as �believe,� �expect,� �anticipate,� �intend,� �plan,� �estimate� or words of similar meaning, or future or conditional verbs such as �will,� �would,� �should,� �could� or �may.� Forward-looking statements speak only as of the date they are made. Such risks and uncertainties include, among other things: � Competitive pressures among depository and other financial institutions in the Company�s market areas may increase significantly. � Adverse changes in the economy or business conditions, either nationally or in the Company�s market areas, could increase credit-related losses and expenses and/or limit growth. � Increases in defaults by borrowers and other delinquencies could result in increases in the Company�s provision for losses on loans and related expenses. � The Company�s inability to manage growth effectively, including the successful expansion of the Company�s Customer support, administrative infrastructure and internal management systems, could adversely affect the Company�s results of operations and prospects. � Fluctuations in interest rates and market prices could reduce the Company�s net interest margin and asset valuations and increase expenses. � The consequences of continued bank acquisitions and mergers in the Company�s market areas, resulting in fewer but much larger and financially stronger competitors, could increase competition for financial services to the Company�s detriment. � The Company�s continued growth will depend in part on its ability to enter new markets successfully and capitalize on other growth opportunities. � Changes in legislative or regulatory requirements, or actions by the Securities and Exchange Commission (�SEC�), the Financial Accounting Standards Board (�FASB�), or the Public Company Accounting Oversight Board, applicable to the Company and its subsidiaries could increase costs, limit certain operations and adversely affect results of operations. � Changes in tax requirements, including tax rate changes, new tax laws and revised tax law interpretations may increase the Company�s tax expense or adversely affect its Customers� businesses. � Company initiatives now in place or introduced in the future, not producing results consistent with historic growth rates or results which justify their costs. In light of these risks, uncertainties and assumptions, you should not place undue reliance on any forward-looking statements in this report. Except as may be required by applicable law or regulation, the Company undertakes no obligation to publicly update or otherwise revise any forward-looking statements, whether as a result of new information, future events or otherwise. COASTAL FINANCIAL CORPORATION� CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited - Dollars in Thousands Except Per Share Data) � Three Months Ended Six Months Ended March 31, March 31, Percentage March. 31, March 31, Percentage 2007� 2006� Change 2007� 2006� Change � Interest Income $ 27,266� $ 24,138� 12.96% $ 54,664� $ 47,176� 15.87% Interest Expense 13,461� 10,970� 22.71% 26,995� 20,732� 30.21% � Net Interest Income 13,805� 13,168� 4.84% 27,669� 26,444� 4.63% � Provision for Loan Losses 0� 330� -100.00% 225� 730� -69.18% Net Interest Income After Provision for Loan Losses 13,805� 12,838� 7.53% 27,444� 25,714� 6.73% � Other Income (1) 4,965� 4,201� 18.19% 9,996� 7,790� 28.32% � General & Administrative Expenses (2) 12,065� 9,926� 21.55% 23,314� 19,606� 18.91% � Earnings Before Taxes 6,705� 7,113� -5.74% 14,126� 13,898� 1.64% � Income Taxes 2,280� 2,469� -7.65% 4,819� 4,810� 0.19% � � Net Income $ 4,425� $ 4,644� -4.72% $ 9,307� $ 9,088� 2.41% � Earnings Per Common Share (3) (4) � Basic $ 0.20� $ 0.22� -9.09% $ 0.42� $ 0.42� n/a� Diluted $ 0.19� $ 0.21� -9.52% $ 0.41� $ 0.41� n/a� � Average Common Shares Outstanding (3) (4) Basic (in thousands) 22,228� 21,502� 3.38% 22,180� 21,437� 3.47% � Diluted (in thousands) 22,871� 22,184� 3.10% 22,838� 22,132� 3.19% � Net Interest Margin 3.54% 3.57% -0.84% 3.54% 3.64% -2.75% � Return on Average Assets 1.06% 1.15% -7.83% 1.12% 1.14% -1.75% � Return on Average Equity 14.43% 18.63% -22.54% 15.59% 18.38% -15.18% � (1) Gains on sales of securities of zero and $25 are included in other income for the quarter and six months ended March 31, 2007, respectively. For the quarter and six months ended March 31, 2006, gains (losses) on sales of securities were $30 and ($16), respectively. � (2) Expenses related to the proposed merger with BB&T Corporation, primarily consisting of professional fees, totaled approximately $718 and $1.1 million for the quarter and six months ended March 31, 2007, respectively.��In addition, the quarter and six-month periods ended March 31, 2007, include a charitable contribution pledge of $1.0 million. � (3) Earnings per share and average common shares outstanding for the quarter and six months ended March 31, 2006 have been computed to conform to the alternative transition method as provided under FSP FAS 123R-3 �Transition Election Related to Accounting for the Tax Effects of Share-Based Payment Awards,� adopted by the Company effective October 1, 2006. � (4) All share and per share data have been retroactively restated for all common stock dividends. COASTAL FINANCIAL CORPORATION� CONSOLIDATED FINANCIAL HIGHLIGHTS (Unaudited - Dollars in Thousands Except Per Share Data) (CONTINUED) � Percentage Change from Sept. 30, AtMarch 31, AtSept 30, AtMarch 31, 2007� 2006� 2006� 2006� � � Total Assets $ 1,677,734� $ 1,659,475� $ 1,643,991� 1.10% � Loans Receivable, Net $ 1,086,259� $ 1,090,084� $ 1,008,168� -0.35% � Customer Deposits (1) $ 883,921� $ 909,788� $ 891,136� -2.84% � Shareholders' Equity $ 129,318� $ 112,824� $ 100,209� 14.62% � Non-Performing Assets to Total Assets (2) 0.20% 0.21% 0.26% -4.76% � Allowance for Loan Losses as a Percentage of Total Net Loans 1.17% 1.17% 1.21% n/a� � Tangible Book Value Per Share $ 5.70� $ 5.20� $ 4.65� 9.62% At or for the Three Months Ended March 31, 2007 At or for the Three Months Ended Sept. 30, 2006 � Percentage Change � Credit Quality: Non-Performing Loans $ 2,758� $ 2,990� -7.76% Non-Performing Loans as a % of Loans 0.25% 0.27% -7.41% Allowance for Loan Losses as a % of Non-Performing Loans 461.86% 425.67% 8.50% Non-Performing Assets (2) $ 3,390� $ 3,561� -4.80% Non-Performing Assets as a % of Loans and Foreclosed Property 0.31% 0.33% -6.06% Net Loan Charge-Offs as a % of Average Loans (Annualized) 0.01% 0.02% -50.00% � Stock Performance at quarter end: Market Price Per Share of Common Stock $ 15.63� $ 12.60� 24.05% Indicated Annual Dividend $ 0.20� $ 0.20� n/a� Dividend Yield 1.28% 1.59% -19.50% Price/Book Ratio 274.00% 242.00% 13.22% Market Capitalization $ 354,879� $ 273,250� 29.87% � (1) Customer Deposits exclude brokered deposits.��Brokered deposits were $159,662, $153,317 and $189,304 at March 31, 2007, September 30, 2006 and March 31, 2006, respectively. � (2) Non-performing assets consist of non-accrual loans 90 days or more past due and real estate owned.