NEWS ANNOUNCEMENT
Date: October 27, 2004
Contact: Susan Cooke
To: News Media
Release Date: Immediate
COASTAL FINANCIAL CORPORATION
ANNOUNCES EARNINGS FOR FISCAL 2004
Myrtle Beach, South Carolina, (October 27, 2004)...Coastal Financial Corporation
(Nasdaq/CFCP) today announced earnings for the year ended September 30, 2004.
Net earnings for fiscal 2004 were $14.8 million or $0.94 per share ($0.89 per
share diluted), compared to $11.2 million or $0.72 per share ($0.69 per share
diluted) for fiscal 2003. Diluted earnings per share increased 29.0% over the
prior year. Net interest income after provision for loan losses increased to
$40.5 million for fiscal 2004 from $33.6 million for the year ended September
30, 2003.
Net earnings for the fourth quarter of fiscal 2004 were $3.9 million or $0.25
per share ($0.23 per share diluted), as compared to $2.9 million or $0.18 per
share ($0.18 per share diluted) for the fourth quarter of fiscal 2003.
At September 30, 2004, non-performing assets to total assets were 0.51% as
compared with 0.77% at September 30, 2003.
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Michael C. Gerald, President and Chief Executive Officer of Coastal Financial
Corporation, said, "We are very pleased with the performance of Coastal
Financial Corporation for fiscal 2004, and particularly with our Return On
Average Shareholders' Equity of 18.77%. This level of achievement ranks us among
the top performing financial services companies in the nation and reflects well
on our exceptional Associates, the strength of the local markets in which we
operate and our focus on our QUEST FOR EXCELLENCE Business Model.
"Our operating performance for fiscal 2004 reflected healthy Community-based
growth with total deposits increasing 8.1% from $697.0 million at September 30,
2003 to $753.4 million at the end of this year and loans receivable increasing
by 13.8% to $799.0 million".
"During fiscal 2004, our stock price increased by 25.0%. Since becoming a
publicly owned company in 1990, Coastal Financial Corporation's stock has grown
at a compound annual rate of over 31%, taking our market capitalization from
$4.6 million in October 1990, to $229.7 million at the close of this fiscal
year. Put another way, an initial investment of $10,000 in October of 1990,
would have grown to approximately $457,000 without regard to the reinvestment of
cash dividends."
"Shareholders' equity increased from $73.7 million at September 30, 2003, to
$85.3 million at September 30, 2004. Book value per share was $5.37 at September
30, 2004, compared to $4.71 per share at the end of fiscal 2003. Returns on
average equity and average assets for fiscal 2004, were 18.77% and 1.18%,
respectively, as compared to 15.84% and 1.04%, respectively, for fiscal 2003."
"During the fourth quarter, we announced a 40.32% increase in third quarter
earnings, a $0.05 per share quarterly cash dividend which is payable on October
27th to Shareholders of record October 13th and a 10% stock dividend which was
paid on August 27th."
"Coastal Financial Corporation received continued national attention in the
August 2004 edition of a U.S. Banker Magazine which, for the 5th consecutive
year, ranked Coastal Financial the #1 Community Bank in the Carolinas. In this
edition, U.S. Banker Magazine featured its Ranking of the Top 100 Publicly
Traded Mid-Tier Banks. This Ranking features Banks with assets between $1 and $5
billion, ranked by 3-year average Return On Average Equity. Coastal Financial
Corporation was ranked 30th nationally in this listing."
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"Noteworthy also is the completion of construction of new branch facilities in
Shallotte, North Carolina and Loris, South Carolina, the expected completion of
our newest branch office on 17th Street in Wilmington, North Carolina by the end
of the 2004 calendar year, and the recent announcement that Coastal Federal
Bank, for the seventh consecutive year, placed 1st in voting by the readers of
the (Myrtle Beach) SUN NEWS in the Financial Institutions category of the SUN
NEWS Best Of The Beach Competition for 2004."
"We believe these results clearly indicate the progress we made during the
fourth 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 Retirement, Estate
and Tax Planners, Inc. Coastal Federal Bank, with assets over $1.3 billion, is a
federally chartered and FDIC insured community bank with eighteen offices
serving the communities of Horry and Georgetown Counties, South Carolina and
Brunswick and New Hanover Counties, North Carolina. Coastal Retirement, Estate
and Tax Planners offers professional, objective, fee-based financial planning
services. 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 1-800-918-7600, 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 1-800-1340, Ext.
2514, or Investor Relations.
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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. 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 and Related Matters
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 the 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 the historical price performance of the Company's common stock
may not be indicative of future stock price performance.
COASTAL FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited - Dollars in Thousands Except Per Share Data)
Three Months Ended Twelve Months Ended
Sept 30, Sept 30, Percentage Sept 30, Sept 30, Percentage
2004 2003 Change 2004 2003 Change
---- ---- ------ ---- ---- ------
Interest Income $17,453 $14,941 16.81% $65,805 $59,214 11.13%
Interest Expense 6,059 5,787 4.70% 23,524 22,998 2.29%
------- ------- ------- -------
Net Interest Income 11,394 9,154 24.47% 42,281 36,216 16.75%
Provision for Loan Losses 500 600 -16.67% 1,750 2,655 -34.09%
------- ------- ------- -------
Net Interest Income After
Provision for Loan Losses 10,894 8,554 27.36% 40,531 33,561 20.77%
Other Income* 2,298 2,580 -10.93% 9,171 10,908 -15.92%
General & Administrative
Expenses ** 7,156 6,758 5.89% 27,269 27,156 0.42%
------- ------- ------- -------
Earnings Before Taxes 6,036 4,376 37.93% 22,433 17,313 29.57%
Income Taxes 2,125 1,490 42.62% 7,627 6,141 24.20%
------- ------- ------- -------
Net Income $ 3,911 $2,886 35.52% $14,806 $11,172 32.53%
======= ====== ======= =======
Earnings Per Common Share
Basic $0.25 $0.18 38.89% $0.94 $0.72 30.56%
======= ====== ======= =======
Diluted $0.23 $0.18 27.78% $0.89 $0.69 28.99%
======= ====== ======= =======
Average Common Shares Outstanding
Basic (in thousands) 15,876 15,615 1.67% 15,752 15,552 1.29%
Average Common Shares Outstanding
Diluted (in thousands) 16,703 16,428 1.67% 16,625 16,264 2.22%
Net Interest Margin 3.81% 3.33% 14.41% 3.64% 3.65% -0.27%
Return on Average Assets 1.21% 1.00% 21.00% 1.18% 1.04% 13.46%
Return on Average Equity 19.14% 15.82% 20.99% 18.77% 15.84% 18.50%
* Gain (loss) on sales of securities of ($389,000) and ($1.1 million) are
included in other income for the quarter and year ended September 30, 2004,
respectively. For the quarter and year ended September 30, 2003, gains (losses)
were ($193,000) and $469,000, respectively.
** Prepayment penalties on FHLB advances of $0.00 and $77,000 are included in
general and administrative expenses for the quarter and year ended September,
30, 2004, respectively. For the quarter and year ended September 30, 2003,
prepayment penalties were $396,000 and $2.8 million, respectively.
COASTAL FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited - Dollars in Thousands Except Per Share Data)
(CONTINUED)
Percentage
At At At Change from
Sept 30, June 30, Sept 30, September 30,
2004 2004 2003 2003
........... .......... ........... .............
Total Assets $1,309,543 $1,279,877 $1,181,209 10.86%
Loans Receivable, Net $ 798,976 $ 784,083 $ 701,833 13.84%
Deposits $ 753,379 $ 763,990 $ 697,012 8.09%
Shareholders' Equity $ 85,348 $ 78,122 $ 73,707 15.79%
Non-Performing Assets
to Total Assets ** 0.51% 0.46% 0.77% -33.77%
Allowance for Loan Losses as a
Percentage of Total Loans 1.39% 1.38% 1.40% -0.71%
Tangible Book Value
Per Share $ 5.37 $ 4.93 $ 4.71 14.01%
** Non-performing assets consist of nonaccrual loans, accruing loans 90 days or
more past due and real estate owned.
At or for the At or for the
Three Months Ended Three Months Ended
Sept 30, Sept 30, Percentage
2004 2003 Change
.................. .................. ..........
Credit Quality:
Non-Performing Loans $ 5,856 $ 7,449 -21.39%
Non-Performing Loans as a % of Loans 0.73% 1.06% -31.13%
Allowance for Loan Losses as a % of
Non-Performing Loans 189.16% 131.99% 43.31%
Non-Performing Assets ** $ 6,641 $ 9,077 -26.84%
Non-Performing Assets as a % of Loans
and Foreclosed Property 0.83% 1.29% -35.66%
Net Loan Charge-Offs
as a % of Average Loans (Annualized) 0.13% 0.11% 18.18%
Stock Performance
At quarter end:
Market Price Per Share of Common Stock $ 14.45 $ 11.56 25.00%
Indicated Annual Dividend $ 0.20 $ 0.18 11.11%
Dividend Yield 1.38% 1.56% -11.54%
Price/Book Ratio 269.00% 245.00% 9.80%
Market Capitalization $ 229,713 $ 180,765 27.08%