BRADENTON, Fla., Oct. 26 /PRNewswire-FirstCall/ -- Coast Financial
Holdings, Inc. (NASDAQ:CFHI), parent company of Coast Bank of
Florida today reported financial results for the quarter ended
September 30, 2007. For the quarter ended September 30, 2007 the
company recorded a loss of $14.2 million, or $2.18 per share, as
compared to a loss of $1.5 million, or $0.22 per share, reported
for the quarter ended September 30, 2006. For the nine months ended
September 30, 2007, the company has recorded a loss of $35.3
million, or $5.43 per share. According to Coast Bank Acting
President and Chief Executive Officer, Anne V. Lee, the losses
posted in the quarter are reflective of the many critical issues
facing the bank at this time. "As a result of the worsening
downturn in the investor real estate market, where Coast Bank has
significant exposure, non-performing assets continue to rise,
severely depressing earnings." Lee continued, "These increases in
non-performing assets necessitate additional increases in the
Provision for Loan Losses, further increasing the quarterly loss."
For the quarter ended September 30, 2007, Coast Bank increased the
provision for loan losses by $9.5 million. Lee continued, "These
factors, coupled with the constraints and significant expense of
operating under a regulatory Cease and Desist order; the legal and
professional fees associated with protecting the bank's interest in
properties associated with affected loans; the costs related to the
prospective future acquisition and the challenges of the current
interest rate environment create a scenario where it is
increasingly difficult for Coast Bank to realize a near-term
profit." Income Statement Review For the quarter ended September
30, 2007 net interest income before the provision for loan loss
decreased 60.46% to $1.7 million, as compared to $4.3 million
reported for the quarter ended September 30, 2006. Revenues (net
interest income before the provision for loan losses plus other
operating income) decreased 57.14% to $2.1 million in the quarter
ended September 30, 2007 from the $4.9 million reported for the
quarter ended September 30, 2006. Among the factors contributing to
the reduction in income is the continuing increase in
non-performing assets, primarily in the construction-to-permanent
real estate portfolio, including affected loans and similar loans,
where the financing by the borrowers was primarily for investment
purposes. Net interest margin compressed in the quarter. For the
quarter ended September 30, 2007 net interest margin was 0.98%, as
compared to the 2.85% net interest margin reported for the quarter
ended September 30, 2006. Non-interest expenses decreased in the
quarter. For the quarter ended September 30, 2007 non-interest
expenses totaled $6.8 million; a decrease of less than one percent
when compared to the $6.9 million reported for the quarter ended
September 30, 2006. Balance Sheet Review Deposits increased 4.6%,
or $27.7 million to $632.3 million, from $604.6 million reported at
December 31, 2006. At September 30, 2007, non-interest bearing
demand deposits, savings, NOW and money-market deposits totaled
$97.7 million, a decrease of 41.9% when compared to the $168.2
million outstanding at December 31, 2006. During the reporting
period, time deposits increased $98.2 million, or 22.5%, to $534.6
million from the $436.4 million outstanding at December 31, 2006.
Total loans decreased for the reporting period. As of September 30,
2007 net loans totaled $530.1 million, representing a decrease of
$32.5 million, or 5.8%, compared to $562.6 million at December 31,
2006. Total assets also decreased. As of September 30, 2007 assets
totaled $664.5 million. This total is a decrease of $55.2 million,
or 7.7%, compared to $719.7 million at December 31, 2006. Total
Shareholder Equity stood at $22.3 million as of September 30, 2007,
a decrease of $34.9 million compared to $57.2 million reported at
December 31, 2006. Credit Quality Review Non-performing assets
increased during the past three months. Lee stated, "The bank
continues to experience increases in non-performing assets related
to the affected loans resulting from the CCI bankruptcy, as well as
other construction-to-permanent loans initiated by individuals for
investment purposes." As of September 30, 2007 non-performing
assets totaled $77.8 million, an increase of $76.8 million compared
to $1.0 million reported at December 31, 2006. Impact of
Non-Performing Assets on Proposed Purchase Price Under the terms of
the agreement with First Banks, CFHI shareholders can receive up to
$3.40 in cash for their shares upon closing of the transaction. The
per-share price may be adjusted if, on the Determination Date each
of the following conditions exist: -- the Company's allowance for
loan and lease losses plus its tangible equity is less than 75% of
the Company's non-performing loans and leases plus other real
estate owned (the Deficiency), and -- The Deficiency is greater
than $1 million. If each of the above conditions exists, then the
aggregate cash consideration to be paid by First Banks will be
reduced to the nearest $500,000 increment, rounded upward or
downward, to the full amount of the Deficiency and the price per
common share will be reduced accordingly. If the deficiency exceeds
$10 million, then CFHI or First Banks, respectively, will have the
right to terminate the merger agreement. Based on this formula and
depending on the amount of the deficiency, the price paid per share
could be reduced to $1.86 prior to triggering such termination
rights. As of September 30, 2007, the deficiency was approximately
$1,286,000 which would result in a payment of approximately $3.17
per share. In view of the current and anticipated performance of
CFHI, it is likely that the deficiency will continue to increase in
size and the amount paid per share will be further reduced. COAST
FINANCIAL HOLDINGS, INC. AND SUBSIDIARY Condensed Consolidated
Statements of Earnings (Unaudited) ($ in thousands, except per
share amounts) Three Months Ended Nine Months Ended September 30,
September 30, 2007 2006 2007 2006 Interest income: Loans $8,578
$9,367 $27,713 $4,510 Securities 972 1,010 3,591 2,954 Other
interest- earning assets 469 169 1,843 558 Total interest income
10,019 10,546 33,147 28,022 Interest expense: Deposits 8,229 5,991
24,584 14,865 Borrowings 99 213 826 600 Total interest expense
8,328 6,204 25,410 15,465 Net interest income 1,691 4,342 7,737
12,557 Provision for loan losses 9,514 275 11,680 582 Net interest
income after provision for loan losses (7,823) 4,067 (3,943) 11,975
Noninterest income: Service charges on deposit accounts 136 126 424
365 Gain on sale of loans held for sale 293 426 1,125 1,269 Other
service charges and fees 18 9 53 42 Other - - - 13 Total
noninterest income 447 561 1,602 1,689 Noninterest expenses:
Employee compensation and benefits 2,473 3,616 8,231 8,777
Occupancy and equipment 1,319 1,268 3,937 3,320 Data processing 270
281 846 763 Professional fees 884 233 2,580 667 Telephone, postage
and supplies 280 368 982 1,058 Advertising 159 522 712 1,463 FDIC
and State assessments 730 44 1,677 122 Other 702 587 1,708 1,328
Total noninterest expenses 6,817 6,919 20,673 17,498 Loss before
income tax expense (benefit) (14,193) (2,291) (23,014) (3,834)
Income tax expense (benefit) - (835) 12,320 (1,361) Net loss
$(14,193) $(1,456) $(35,334) $(2,473) Loss per share, basic $(2.18)
(0.22) $(5.43) (0.38) Loss per share, diluted $(2.18) (0.22)
$(5.43) (0.38) Weighted-average number of common shares
outstanding, basic 6,509,057 6,509,057 6,509,057 6,508,373
Weighted-average number of common shares outstanding, diluted
6,509,057 6,509,057 6,509,057 6,508,373 COAST FINANCIAL HOLDINGS,
INC. AND SUBSIDIARY Condensed Consolidated Balance Sheets
(unaudited) ($ in thousands, except per share amounts) September
30, December 31, Assets 2007 2006 (Unaudited) Cash and due from
banks 9,833 13,952 Federal funds sold and securities purchased
under agreements to resell 16,356 385 Cash and cash equivalents
26,189 14,337 Securities available for sale 72,727 92,013 Loans,
net of allowance for loan losses of $34,798 and $25,710 530,077
562,574 Federal Home Loan Bank stock, at cost 1,319 3,035 Premises
and equipment, net 26,093 27,598 Accrued interest receivable 4,094
4,119 Deferred income taxes - 12,465 Other real estate owned 1,762
167 Other assets 2,191 3,361 Total assets $664,452 719,669
Liabilities and Stockholders' Equity Liabilities:
Noninterest-bearing demand deposits $20,071 34,345 Savings, NOW and
money-market deposits 77,652 133,819 Time deposits 534,580 436,408
Total deposits 632,303 604,572 Federal Home Loan Bank advances -
41,000 Federal funds purchased - - Repurchase agreement - - Other
borrowings 6,777 14,108 Other liabilities 3,121 2,813 Total
liabilities 642,201 662,493 Stockholders' equity: Preferred stock,
$0.01 par value; 5,000,000 shares authorized, no shares issued and
outstanding - - Common stock, $5 par value; 20,000,000 shares
authorized, 6,509,057 and 6,509,057 shares issued and outstanding
in 2007 and 2006 32,545 32,545 Additional paid-in capital 46,061
45,992 Accumulated deficit (56,453) (21,119) Accumulated other
comprehensive loss 98 (242) Total stockholders' equity 22,251
57,176 Total liabilities and stockholders' equity $664,452 719,669
ADDITIONAL FINANCIAL INFORMATION (in thousands) LOANS: Sep 30, 2007
Jun 30, 2007 Sep 30, 2006 (unaudited) (unaudited) (unaudited)
Commercial $9,825 $12,684 13,970 Commercial real estate 121,310
125,197 136,952 Installment 56,367 56,110 45,852 Residential real
estate 220,140 205,402 99,580 Residential construction 155,168
179,500 236,738 562,810 578,893 533,092 Add (deduct): Deferred loan
costs, net 2,065 2,262 2,047 Allowance for loan losses (34,798)
(26,666) (3,748) Loans, net $530,077 $554,489 531,391
NON-PERFORMING ASSETS: Sep 30, 2007 Jun 30, 2007 Sep 30, 2006
(unaudited) (unaudited) (unaudited) Loans on Non - Accrual Status
$76,018 $63,671 814 Delinquent Loans on Accrual Status -- -- --
Total Non - Performing Loans 76,018 63,671 814 Real Estate Owned
(REO)/ Repossessed assets 1,762 1,159 171 Total Non-Performing
Assets $77,780 $64,830 985 Total Non-Performing Assets/ Total
Assets 11.71% 8.74% 0.15% Three Months Ended Nine Months Ended Sep
30, Sep 30, Sep 30, Sep 30, 2007 2006 2007 2006 CHANGE IN THE
(unaudited) (unaudited) (unaudited) (unaudited) ALLOWANCE FOR LOAN
LOSSES: Balance at beginning of period $26,666 $3,446 $25,710
$3,146 Provision for loan losses 9,514 275 11,680 582 Recoveries 3
39 25 64 Charge offs (1,385) (11) (2,617) (43) Net charge offs
(1,382) 28 (2,592) 21 Balance at end of period $34,798 $3,749
$34,798 $3,749 Net Charge-offs/Average Loans Outstanding 0.96%
(0.02)% 0.59% (0.01)% Allowance for Loan Losses/ Total Loans
Outstanding 6.16% 0.70% 6.16% 0.70% Allowance for Loan Losses/
Non-Performing Loans 45.78% 460.44% 45.78% 460.44% ADDITIONAL
FINANCIAL INFORMATION (in thousands) (Rates/Ratios Annualized)
Three Months Ended Nine Months Ended Sep 30, Sep 30, Sep 30, Sep
30, 2007 2006 2007 2006 (unaudited) (unaudited) (unaudited)
(unaudited) OPERATING PERFORMANCE: Average loans $570,631 $505,606
$586,463 $456,034 Average investment securities 76,149 85,914
95,654 87,221 Average other interest- earning assets 35,967 12,885
46,713 15,709 Average non-interest- earning assets 18,283 46,859
28,692 44,492 Total Average Assets $701,030 $651,264 $757,522
$603,456 Average interest bearing deposits $631,753 $519,221
$653,705 $469,149 Average borrowings 9,365 25,180 25,204 26,079
Average non-interest bearing liabilities 26,721 35,367 31,250
35,728 Total Average Liabilities 667,839 579,768 710,159 530,956
Total average equity 33,191 71496 47,363 72,500 Total Average
Liabilities And Equity $701,030 $651,264 $757,522 $603,456 Interest
rate yield on loans 5.96% 7.35% 6.32% 7.19% Interest rate yield on
investment securities 5.06% 4.66% 5.02% 4.53% Interest rate yield
on other interest-earning assets 5.17% 5.20% 5.28% 4.75% Interest
Rate Yield On Interest Earning Assets 5.82% 6.92% 6.08% 6.70%
Interest rate expense on deposits 5.17% 4.58% 5.03% 4.24% Interest
rate expense on borrowings 4.20% 3.35% 4.37% 3.08% Interest Rate
Expense On Interest Bearing Liabilities 5.15% 4.52% 5.00% 4.18%
Interest rate spread 0.67% 2.40% 1.08% 2.52% Net interest margin
0.98% 2.85% 1.42% 3.00% Other operating income/ Average assets
0.25% 0.34% 0.28% 0.37% Other operating expense/ Average assets
3.86% 4.21% 3.65% 3.88% Efficiency ratio (non-interest expense/
revenue) 318.85% 141.12% 221.36% 122.83% Return on average assets
(8.03)% (0.89)% (6.24)% (0.55)% Return on average equity (169.65)%
(8.08)% (99.74)% (4.56)% Average equity/Average assets 4.73% 10.98%
6.25% 12.01% About Coast Financial Holdings: Coast Financial
Holdings, Inc. through its banking subsidiary, Coast Bank of
Florida (http://www.coastfl.com/), operates 20 full-service banking
locations in Manatee, Pinellas, Hillsborough and Pasco counties,
Florida. Coast Bank of Florida is a commercial bank that provides
full-service banking operations to its customers from its
headquarters location and from branch offices in Bradenton,
Longboat Key, Seminole, Dunedin, Clearwater, Kenneth City, Brandon,
St. Petersburg, Lutz, Largo and Pinellas Park. This press release
and other statements to be made by the Company contain certain
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act, including but not limited to
statements relating to projections and estimates of earnings,
revenues, cost-savings, expenses, or other financial items;
statements of management's plans, strategies, and objectives for
future operations, and management's expectations as to future
performance and operations and the time by which objectives will be
achieved; statements concerning proposed new products and services;
and statements regarding future economic, industry, or market
conditions or performance. Forward-looking statements are typically
identified by words or phrases such as "believe," "expect,"
"anticipate," "project," and conditional verbs such as "may,"
"could," and "would," and other similar expressions or verbs. Such
forward-looking statements reflect management's current
expectations, beliefs, estimates, and projections regarding the
Company, its industry and future events, and are based upon certain
assumptions made by management. These forward-looking statements
are not guarantees of future performance and necessarily are
subject to risks, uncertainties, and other factors (many of which
are outside the control of the Company) that could cause actual
results to differ materially from those anticipated. These risks,
uncertainties, and other factors include, among others: changes in
general economic or business conditions, either nationally or in
the State of Florida, changes in the interest rate environment, the
Company's ability to successfully open and operate new branches and
collect on delinquent loans, changes in the regulatory environment,
and other risks described in the Company's Form 10-K for the fiscal
year ended December 31, 2006, and as described from time to time by
the Company in other reports filed by it with the Securities and
Exchange Commission. Any forward-looking statement speaks only to
the date on which the statement is made, and the Company disclaims
any obligation to update any forward-looking statement, whether as
a result of new information, future events or otherwise. If the
Company does update any forward-looking statements, no inference
should be drawn that the Company will make additional updates with
respect to that statement or any other forward-looking statements.
Further information may be obtained by contacting Tramm Hudson at
941/993-5902. DATASOURCE: Coast Financial Holdings, Inc. CONTACT:
Tramm Hudson of Coast Financial Holdings, Inc., +1-941-993-5902 Web
site: http://www.coastfl.com/
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