Exhibit 99.1
NEWS ANNOUNCEMENT
Date: April 26, 2006
Contact: Susan J. Cooke
To: News Media
Release Date: Immediate
COASTAL FINANCIAL CORPORATION
ANNOUNCES FISCAL 2006 SECOND QUARTER EARNINGS
Myrtle Beach, South Carolina, (April 26, 2006) . . . Coastal Financial
Corporation (Nasdaq/CFCP) today announced earnings for the second fiscal quarter
ended March 31, 2006.
Net income for the second quarter of fiscal 2006 increased 12.3% to $4.6 million
or $0.24 per share ($0.23 per share diluted), as compared to $4.1 million or
$0.21 per share ($0.20 per share diluted) for the same period of fiscal 2005.
Net income for the first two quarters of fiscal 2006 increased 11.1% to $9.1
million or $0.47 per share ($0.45 per share diluted), compared to $8.2 million
or $0.42 per share ($0.40 per share diluted) for the same period of fiscal 2005.
At March 31, 2006, assets totaled $1.64 billion, an increase of 13.5% from $1.45
billion at March 31, 2005. During the same period, Customer Deposits increased
10.7%, from $804.7 million to $891.1 million, and loans receivable increased
16.6%, from $864.4 million to $1.0 billion. In comparing the second quarters of
fiscal 2005 and 2006, net interest income after provision for loan losses grew
13.9% to $12.8 million. Returns on average assets and average equity were 1.14%
and 18.4%, respectively, for the six months ended March 31, 2006, as compared to
1.19% and 18.6% for the comparable period in fiscal 2005.
At March 31, 2006, non-performing assets to total assets was 0.26% as compared
with 0.53% at March 31, 2005.
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Michael C. Gerald, President and Chief Executive Officer of Coastal Financial
Corporation, said, "We are very pleased with the continued earnings momentum of
Coastal Financial Corporation for the first two quarters of fiscal 2006. This
continued level of operating performance reflects well on our Commitment to our
Customers and Communities, and to our steadfast dedication to our QUEST FOR
EXCELLENCE Business Model."
"During the second quarter of fiscal 2006, we announced a 9.8% increase in
fiscal 2006 first quarter net income, and a $.05 per share cash dividend payable
April 14, 2006 to Shareholders of record March 31, 2006. Other notable events
include the nearing of completion of our new prototype branch offices at the
intersection of Hwy 701 and Country Club Drive in Conway, South Carolina, at the
intersection of Hwy 544 and Singleton Ridge Road in Conway, South Carolina and
at Sayebrook West on Hwy 544 in Surfside Beach, South Carolina. These results
and activities are indicative of the continued growth and progress envisioned
under our QUEST FOR EXCELLENCE Business Model," 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 $1.6 billion, is a
federally chartered and FDIC insured community bank with twenty-two 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 1-843-918-7600.
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. 2511, 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 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 - 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:
o Competitive pressures among depository and other financial institutions in
the Company's market areas may increase significantly.
o 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.
o Increases in defaults by borrowers and other delinquencies could result in
increases in the Company's provision for losses on loans and related
expenses.
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o 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.
o Fluctuations in interest rates and market prices could reduce the
Company's net interest margin and asset valuations and increase expenses.
o 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.
o The Company's continued growth will depend in part on its ability to enter
new markets successfully and capitalize on other growth opportunities.
o 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.
o 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.
o 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
2006 2005 Change 2006 2005 Change
---- ---- ------ ---- ---- ------
Interest Income $24,138 $18,912 27.63% $47,176 $36,858 27.99%
Interest Expense 10,970 7,016 56.36% 20,732 13,446 54.19%
------- ------- ------- -------
Net Interest Income 13,168 11,896 10.69% 26,444 23,412 12.95%
Provision for Loan Losses 330 625 -47.20% 730 975 -25.13%
------- ------- ------- -------
Net Interest Income After
Provision for Loan Losses 12,838 11,271 13.90% 25,714 22,437 14.61%
Other Income* 4,201 3,336 25.93% 7,790 6,102 27.66%
General & Administrative
Expenses 9,926 8,319 19.32% 19,606 16,100 21.78%
------- ------- ------- -------
Earnings Before Taxes 7,113 6,288 13.12% 13,898 12,439 11.73%
Income Taxes 2,469 2,153 14.68% 4,810 4,260 12.91%
------- ------- ------- -------
Net Income $ 4,644 $ 4,135 12.31% $ 9,088 $ 8,179 11.11%
======= ======= ======= =======
Earnings Per Common Share
Basic $ 0.24 $ 0.21 14.29% $ 0.47 $ 0.42 11.90%
======= ======= ======= =======
Diluted $ 0.23 $ 0.20 15.00% $ 0.45 $ 0.40 12.50%
======= ======= ======= =======
Average Common Shares Outstanding
Basic (in thousands) 19,547 19,362 0.96% 19,488 19,278 1.09%
Average Common Shares Outstanding
Diluted (in thousands) 20,440 20,524 -0.41% 20,380 20,367 0.06%
Net Interest Margin 3.57% 3.68% -2.99% 3.64% 3.67% -0.82%
Return on Average Assets 1.15% 1.17% -1.71% 1.14% 1.19% -4.20%
Return on Average Equity 18.63% 18.48% 0.81% 18.38% 18.57% -1.02%
* Gains (losses) on sales of securities of $30,000 and ($16,000) are included in
other income for the quarter and six months ended March 31, 2006, respectively.
For the quarter and six months ended March 31, 2005, gains on sales of
securities were $248,000 and $406,000, respectively.
COASTAL FINANCIAL CORPORATION
CONSOLIDATED FINANCIAL HIGHLIGHTS
(Unaudited - Dollars in Thousands Except Per Share Data)
(CONTINUED)
Percentage
At At At Change from
March 31, Sept 30, March 31, September 30,
2006 2005 2005 2005
---------- ---------- ---------- ----------
Total Assets (1) $1,643,991 $1,543,459 $1,448,158 6.51%
Loans Receivable, Net $1,008,168 $ 942,381 $ 864,407 6.98%
Customer Deposits (1) (2) $ 891,136 $ 901,013 $ 804,656 -1.10%
Shareholders' Equity $ 100,209 $ 97,221 $ 89,534 3.07%
Non-Performing Assets
to Total Assets (3) 0.26% 0.22% 0.53% 18.18%
Allowance for Loan Losses as a
Percentage of Total Net Loans 1.21% 1.25% 1.36% -3.20%
Tangible Book Value
Per Share $ 5.12 $ 5.00 $ 4.61 2.40%
At or for the At or for the
Three Months Ended Three Months Ended
March 31, Sept. 30, Percentage
2006 2005 Change
------------------ ------------------ ----------
Credit Quality:
Non-Performing Loans $3,137 $2,641 18.78%
Non-Performing Loans as a % of Loans 0.31% 0.28% 10.71%
Allowance for Loan Losses as a % of
Non-Performing Loans 389.12% 444.83% -12.52%
Non-Performing Assets (3) $4,258 $3,459 23.10%
Non-Performing Assets as a % of Loans
and Foreclosed Property 0.42% 0.37% 13.51%
Net Loan Charge-Offs
as a % of Average Loans (Annualized) 0.05% 0.12% -58.33%
Stock Performance
At quarter end:
Market Price Per Share of Common Stock $13.76 $13.65 0.81%
Indicated Annual Dividend $0.20 $0.18 11.11%
Dividend Yield 1.45% 1.32% 9.85%
Price/Book Ratio 269.00% 273.00% -1.47%
Market Capitalization $269,464 $265,689 1.42%
(1) Total Assets and Customer Deposits in prior periods have been reclassified
to conform to the March 31, 2006 presentation.
(2) Customer Deposits exclude brokered deposits. Brokered deposits were
$189,304, $169,905 and $85,625 at March 31, 2006, September 30, 2005 and March
31, 2005, respectively.
(3) Non-performing assets consist of non-accrual loans 90 days or more past due
and real estate owned.