NEWS ANNOUNCEMENT
Date: July 31, 2003
Contact: Susan J. Cooke
To: News Media
Release Date: Immediate
COASTAL FINANCIAL CORPORATION
ANNOUNCES FISCAL 2003
THIRD QUARTER EARNINGS
Myrtle Beach, South Carolina, (July 31, 2003) . . . Coastal Financial
Corporation (Nasdaq/CFCP) today announced earnings for the third quarter and
nine months ended June 30, 2003.
Net earnings for the third quarter of fiscal 2003 increased 7.2% to $2.8 million
or $0.24 per share ($0.23 per share diluted), as compared to $2.6 million or
$0.22 per share ($0.22 per share diluted) for the same period of fiscal 2002.
Net earnings for the first three quarters of fiscal 2003 increased 10.2% to $8.3
million or $0.71 per share ($0.68 per share diluted), compared to $7.5 million
or $0.64 per share ($0.63 per share diluted) for the same period of fiscal 2002.
During the nine months ended June 30, 2003, the Company repurchased
approximately 28,000 shares, at an average price of $11.04 per share.
At June 30, 2003, assets totaled $1.1 billion, an increase of 31.3%, or $270
million, from $861.3 million at June 30, 2002. Deposits increased 15.8% to
$712.9 million at June 30, 2003, as compared to $615.8 million at June 30, 2002
and Shareholders' equity grew by 16.5% during the same period.
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Returns on average assets and average equity were 1.01% and 15.57%,
respectively, for the three months ended June 30, 2003, compared to 1.25% and
17.23%, respectively, for the prior year period.
At June 30, 2003, non-performing assets to total assets were 0.67% as compared
with 0.67% at June 30, 2002.
Michael C. Gerald, President and Chief Executive Officer of Coastal Financial
Corporation, said: "Our financial performance during this quarter, and
year-to-date, reflects well on our region's continuing economic strength and on
Coastal Financial's ability to effectively execute its strategic plans. Our
success in building a stronger Business Banking and Investment Services presence
in the communities we serve, coupled with our experience and expertise in
residential lending, the physical expansion of our banking locations and our
steadfast dedication to our QUEST FOR EXCELLENCE Operating Philosophy have also
been key factors in our exceptional financial performance through the first nine
months of fiscal 2003."
"We remain solidly focused on our Mission of Exceeding The Expectations of our
Customer through offering the residents and businesses of our local communities
a full line of Business Banking, Personal Banking, Residential Mortgage Lending
and Investment Services in ways that add value for our Shareholders."
"During the third quarter, we announced an 11.6% increase in fiscal 2003 second
quarter net earnings, a 10% stock dividend, an expansion of our repurchase
program to acquire up to an additional 250,000 shares and a 20% increase in the
quarterly cash dividend from $.05 to $.06 per share."
"Other notable events and accomplishments during this quarter include the
creation of a Retirement, Estate and Tax Planning subsidiary to provide for the
delivery of financial planning services to the residents and small businesses of
the Communities we serve and the conversion of our Information Technology
platform to a new, state-of-the-art system which will better support our
strategic plans. These activities are indicative of the continued growth and
progress envisioned under our Vision 2005 Plan and clearly indicate the progress
we made during the third quarter toward our Basic Corporate Objective of
Maximizing The Value Of Our Shareholders' Investment and our Long-Term Goal of
Being The Best Financial Services Company In Our Marketplace," concluded Mr.
Gerald.
Coastal Financial Corporation, headquartered in Myrtle Beach, South Carolina,
offers a broad range of commercial, consumer and mortgage financial services
through two subsidiaries, Coastal Federal Bank and Coastal Investor Services,
Inc. Coastal Federal Bank, with assets over $1.1 Billion, is a federally
chartered and FDIC insured community
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bank with eighteen offices serving the communities of Horry and Georgetown
Counties, South Carolina and Brunswick and New Hanover Counties, North Carolina.
Coastal Investor Services engages in the sale of alternative financial products.
Additional information about Coastal Federal is available on its web site at
www.coastalfederal.com.
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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, Herzog, Heine, Geduld, Inc. at 1-800-523-4936,
Knight Securities at 212-336-8690, Spear, Leeds & Kellogg at 1-800-526-3160 or
Trident Securities at 1-800-222-2618.
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 and at a discount to market price. 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.
2511, 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 to consolidate accounts
should contact the Transfer Agent at 1-800-866-1340, Ext. 2511, or Investor
Relations.
Investor Relations
Analysts, investors and others seeking financial information should contact:
Susan J. Cooke - Vice President and Secretary
Coastal Financial Corporation
2619 Oak Street
Myrtle Beach, South Carolina 29577
(843) 205-2676
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Forward Looking Statements
This news release may contain certain "forward-looking statements" within the
meaning of Section 27A of the Securities Exchange Act of 1934, as amended, that
represent Coastal Financial Corporation's (the "Company") expectations or
beliefs concerning future events. Such forward-looking statements are about
matters that are inherently subject to risks and uncertainties. Factors that
could influence the matters discussed in certain forward-looking statements
include the timing and amount of revenues that may be recognized by the Company,
continuation of current revenue and expense trends (including trends affecting
charge-offs), absence of unforeseen changes in the Company's markets, legal and
regulatory changes, and general changes in the economy (particularly in the
markets served by the Company). Because of the risks and uncertainties inherent
in forward looking statements, readers are cautioned not to place undue reliance
on them, whether included in this news release or made elsewhere from time to
time by the Company or on its behalf. The Company disclaims any obligation to
update such forward-looking statements. In addition, statements in this news
release regarding historical stock price performance are not indicative of or
guarantees of future price performance.
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COASTAL FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited - Dollars in Thousands Except Per Share Data)
Three Months Ended Nine Months Ended
June 30, June 30, Percentage June 30, June 30, Percentage
2003 2002 Change 2003 2002 Change
---- ---- ------ ---- ---- ------
Interest Income $14,790 $13,498 9.57% $44,273 $39,853 11.09%
Interest Expense 5,779 5,278 9.49% 17,211 16,093 6.95%
------- ------ ------- -------
Net Interest Income 9,011 8,220 9.62% 27,062 23,760 13.90%
Provision for Loan Losses 750 350 114.29% 2,055 855 140.35%
------- ------ ------- -------
Net Interest Income After
Provision for Loan Losses 8,261 7,870 4.97% 25,007 22,905 9.18%
Other Income * 2,945 1,876 56.98% 8,328 5,752 44.78%
General & Administrative
Expenses ** 6,851 5,640 21.47% 20,398 16,792 21.47%
------- ------ ------- -------
Earnings Before Taxes 4,355 4,106 6.06% 12,937 11,865 9.03%
Income Taxes 1,575 1,513 4.10% 4,652 4,345 7.07%
------- ------ ------- -------
Net Income $ 2,780 $ 2,593 7.21% $ 8,285 $ 7,520 10.17%
======= ======= ======= =======
Earnings per Share ***
Basic $ 0.24 $ 0.22 9.09% $ 0.71 $ 0.64 10.94%
======= ======= ======= =======
Diluted $ 0.23 $ 0.22 4.55% $ 0.68 $ 0.63 7.94%
======= ======= ======= =======
Average Common Shares Outstanding
Basic (in thousands)*** 11,707 11,582 1.08% 11,673 11,688 -0.13%
Average Common Shares Outstanding
Diluted (in thousands)*** 12,169 11,945 1.88% 12,188 11,989 1.66%
Net Interest Margin 3.64% 4.25% -14.35% 3.76% 4.30% -12.56%
Return on Average Assets 1.01% 1.25% -19.20% 1.06% 1.26% -15.87%
Return on Average Equity 15.57% 17.23% -9.63% 15.84% 17.05% -7.10%
* Gains on sales of securities of $146,000 and $662,000 are included in other
income for the quarter and nine months ended June 30, 2003, respectively. For
the quarter and nine months ended June 30, 2002, gains were $70,000 and
$141,000, respectively.
** Prepayment penalties on FHLB advances of $750,000 and $2.4 million are
included in general and administrative expenses for the quarter and nine months
ended June 30, 2003, respectively. For the quarter and nine months ended June
30, 2002, prepayment penalties were $107,000 and $782,000, respectively.
*** All share and per share data have been retroactively restated to reflect the
10% stock dividend declared on May 27, 2003, paid June 24, 2003 to shareholders
of record as of June 10, 2003.
COASTAL FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited - Dollars in Thousands Except Per Share Data)
(CONTINUED)
Percentage
At At At Change from
June 30, Sept 30, June 30, September 30,
2003 2002 2002 2002
.......... .......... .......... .............
Total Assets $1,131,252 $ 950,796 $ 861,287 18.98%
Loans Receivable, Net $ 671,148 $ 555,545 $ 537,968 20.81%
Deposits $ 712,922 $ 637,081 $ 615,812 11.90%
Shareholders' Equity $ 72,209 $ 66,386 $ 61,985 8.77%
Non-Performing Assets
To Total Assets** 0.67% 0.48% 0.67% 39.58%
Allowance for Loan Losses as a
Percentage of Total Loans 1.40% 1.42% 1.42% -1.41%
Tangible Book Value
Per Share $ 6.16 $ 5.70 $ 5.35 8.07%
At or for the
Three Months Ended
June 30, September 30, Percentage
2003 2002 Change
.................. ............. ............
Credit Quality:
Non-Performing Loans $ 5,879 $ 3,514 67.30%
Non-Performing Loans as a % of Loans 0.88% 0.63% 39.68%
Allowance for Loan Losses as a % of
Non-Performing Loans 160.38% 224.33% -28.51%
Non-Performing Assets ** $ 7,614 $ 4,560 66.97%
Non-Performing Assets as a % of Loans
and Foreclosed Property 1.13% 0.82% 37.80%
Net Loan Charge-Offs
as a % of Average Loans (Annualized) 0.13% 0.08% 62.50%
Stock Performance
At Quarter End:
Market Price Per Share of Common Stock $ 12.88 $ 12.31 4.63%
Indicated Annual Dividend $ 0.24 $ 0.20 10.00%
Dividend Yield 1.86% 1.62% 5.56%
Price/Book Ratio 209% 216% -3.24%
Market Capitalization $150,965 $143,358 5.31%
** Non-performing assets consist of nonaccrual loans, accruing loans 90 days or
more past due and real estate owned.