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New York's Gold Coast Bank Reports Earnings for First Quarter of 2013 & Commencement of Stock Offering

ISLANDIA, N.Y., April 22, 2013 (GLOBE NEWSWIRE) -- Gold Coast Bank, known as Long Island's Community Banksm, announced today continued profitable results for the first quarter of 2013, marking its eleventh consecutive quarter of profitability since opening in March 2008.

Gold Coast Bank's profitable first quarter results for 2013 mark a number of noteworthy gains achieved by the bank, which include:

  • Net Income was $102,000 for the quarter ended March 31, 2013 as compared to $306,000 for the quarter ended March 31, 2012. Core earnings (excluding the impact of tax expense and benefits) for the first quarter of 2013 were $169,000 compared to $215,000 for the first quarter of 2012. The decrease was primarily due to expenses associated with opening two additional branches in 2012. The bank recorded tax expense of $67,000 in the first quarter of 2013 compared to tax benefits of $91,000 in the first quarter of 2012.
  • Total Assets of $230 million at March 31, 2013, an increase of $70 million, or 44% from $160 million at March 31, 2012 and an increase of $28 million, or 14% from $202 million at December 31, 2012.
  • Total loans outstanding of $130 million, an increase of $38 million, or 40% from $92 million at March 31, 2012 and an increase of $4 million, or 3% from $127 million at December 31, 2012. Loan originations and draws were $13 million in both the first quarter of 2013 and 2012.
  • Total deposits of $210 million, an increase of $69 million, or 49% from $141 million at March 31, 2012 and an increase of $28 million, or 16% from $181 million at December 31, 2012. Although total deposits increased, non- interest bearing demand deposits declined to 33% of deposits at March 31, 2013 compared to 49% at March 31, 2012 and 42% at December 31, 2012. The change in our deposit portfolio is due to recent changes effected by the Dodd-Frank Act which permit the payment of interest on commercial checking accounts, which was previously prohibited.
  • Continued Strong Asset Quality: Allowance for loan losses was 1.14% of total loans at March 31, 2013. The bank had no nonperforming loans at March 31, 2013.
  • Remaining "Well Capitalized" at March 31, 2013:
    - Tier 1 Leverage Capital of 8.4%.
    - Tier 1 Risk-Based Capital of 12.6%
    - Total Risk-Based Capital of 13.6%
  • Increasing book value per share to $9.22, as of March 31, 2013, an increase of 9% as compared to March 31, 2012.

The Bank commenced an offering of up to 1,500,000 shares of its common stock at a price of $10.00 per share on March 15, 2013. Its existing shareholders will have a priority right to subscribe for shares of common stock in the offering until April 30, 2013. The Bank expects the offering to close on May 31, 2013. The Bank intends to use the proceeds to increase lending and provide additional capital to support continued growth, including the establishment of additional banking offices. In addition, a larger capital base will permit the Bank to make larger loans and to better penetrate its market area.

"We continue to be encouraged by our bank's growth, profitability and stellar asset quality. In order to insure that we have sufficient capital to continue to grow, we are undertaking an offering of up to 1,500,000 shares of common stock," stated Joseph G. Perri, President and Chief Executive Officer. "We intend to use the proceeds to increase our lending capacity to our current customers and target markets and to expand our branch footprint. The additional capital will ensure we meet all regulatory capital requirements as well as increase our legal lending limit. "

Net Earnings and Returns

Net income for the quarter ended March 31, 2013 was $102,000, or $0.05 per share, compared to $306,000, or $0.14 per share, for the same period in 2012. Core earnings (excluding the impact of tax expense and benefits) for the first quarter of 2013 was $169,000 compared to $215,000 in the first quarter of 2012. The decrease was largely due to increased expenses related to branch expansion in 2012. Returns on average assets and equity for the first quarter of 2013 were 0.18% and 2.06%, respectively.

Net interest income grew $257,000, or 18% in the first quarter of 2013 compared to the first quarter of 2012, largely due to a 44% increase in average interest earning assets of $68 million, offsetting a decline in the net interest margin from 3.51% to 3.10%. The decline in the net interest margin reflected the impact of higher deposit balances and increased loan demand, offset by decreases in the yield on money market and investment securities due to the historically low interest rate environment. The decrease in our yield on interest earning assets was mitigated by our cost of funds, which remained stable between the periods and is below industry averages. It was not necessary for the Bank to record a provision for loan losses in either of the first quarter of 2013 and 2012 due to our asset quality. Service charges and fee income totaled $98,000 in the first quarter of 2013 compared to $32,000 in the same quarter of 2012. There were no net gains on sales of securities in either the 2013 or 2012 first quarters. Non-interest expenses for the first quarter of 2013 increased $369,000, or 30% compared to the same period in 2012 largely due to expenses associated with our two new branches. The Bank recorded tax expense of $67,000 in the first quarter of 2013 compared to a tax benefit of $91,000 in the first quarter of 2012, a $158,000 increase. The tax benefits recorded in 2012 related to the reversal of the valuation allowance on the bank's deferred tax asset since the bank is generating sufficient taxable income. The bank incurred tax expense in the first quarter of 2013 since there was no remaining valuation allowance as of December 31, 2012. Because of this, the bank expects to recognize tax expense in all future periods.

Balance Sheet and Asset Quality

Total assets increased $28 million to $230.1 million at March 31, 2013 from $202.3 million at December 31, 2012, largely due to an increase in deposits of $28 million as a result of organic growth in the bank's five branches. The increase in deposits was primarily in interest bearing demand accounts and will be used to fund future loan demand. Investment securities increased $6.5 million, or 15% to $51.1 million and cash and cash equivalents increased $17.9 million to $46.2 million, pending allocation into newly originated loans. At March 31, 2013, the bank had no non-performing loans and its allowance for loan losses was 1.14% of total loans.

About Gold Coast Bank

Headquartered in Islandia with additional individual branches located in Huntington, Setauket, Farmingdale and Mineola, Gold Coast Bank is a New York State chartered bank whose popularity and sterling reputation stems from the strong, long-term relationships it has cultivated among its large and diverse customer base. The Bank's deposits are insured by the Federal Deposit Insurance Corporation (FDIC). The Bank is one of Long Island's financially strongest de novo banks, and Gold Coast Bank prides itself on providing businesses and individuals with quality lending and banking services. Fulfilling a unique niche within the Long Island commercial banking sector, Gold Coast Bank delivers specialty lending capabilities in a variety of areas that include real estate, equipment finance, and lines of credit for privately owned businesses. For more information about Gold Coast Bank, please visit www.gcbny.com.

CONTACT: BANK CONTACT: Catherine Califano, SVP-CFO 631-233-8640 ccalifano@gcbny.com

Source:Gold Coast Bank