New York's Gold Coast Bank Reports First Quarter 2014 Results

39% Net Income Increase Due to Increase in Net Interest Income

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| Source: Gold Coast Bank

ISLANDIA, N.Y., April 22, 2014 (GLOBE NEWSWIRE) -- Gold Coast Bank, known as Long Island's Community Banksm, announced today continued profitable results for the first quarter of 2014, marking its fifteenth consecutive quarter of profitability since opening in March 2008.

Gold Coast Bank's profitable first quarter results for 2014 mark a number of noteworthy gains achieved by the bank, which include:

  • Net Income was $142,000 for the quarter ended March 31, 2014 as compared to $102,000 for the quarter ended March 31, 2013, a 39% increase. Income before income taxes for the first quarter of 2014 was $244,000 compared to $169,000 for the first quarter of 2013, a 44% increase. The increase was primarily due to an increase in net interest income, as investments in lower yielding short term investments were redeployed to higher yielding loans.
  • Total Assets of $252 million at March 31, 2014, an increase of $22 million, or 10% from $230 million at March 31, 2013 and an increase of $8 million, or 3% from $244 million at December 31, 2013.
  • Total loans outstanding of $172 million, an increase of $42 million, or 32% from $130 million at March 31, 2013 and an increase of $7 million, or 4% from $165 million at December 31, 2013. Loan originations and draws were $13 million in both the first quarter of 2014 and 2013.
  • Total deposits of $214 million, an increase of $4 million, or 2% from $210 million at March 31, 2013 and an increase of $3 million, or 1% from $211 million at December 31, 2013. Non-interest bearing demand deposits declined to 24% of deposits at March 31, 2014 compared to 33% at March 31, 2013 and 31% at December 31, 2013. 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. Competition from other institutions due to this provision has led to the decline in non-interest bearing deposits. The Bank supplemented its deposit growth with borrowings from the FHLBNY which totaled $10 million at March 31, 2014 compared to $5 million at December 31, 2013. The bank had no borrowings at March 31, 2013.
  • Continued Strong Asset Quality: Allowance for loan losses was 1.08% of total loans at March 31, 2014. Nonperforming loans totaled 0.25% at March 31, 2014.
  • Remaining "Well Capitalized" at March 31, 2014:
    • Tier 1 Leverage Capital of 11.3%.
    • Tier 1 Risk-Based Capital of 14.9%
    • Total Risk-Based Capital of 15.9%
  • Increasing book value per share to $9.38, as of March 31, 2014, compared to $9.22 at March 31, 2013 and $9.25 at December 31, 2013.

The Bank commenced an offering of up to 1.5 million shares of its common stock at a price of $10.00 per share on March 15, 2013. The bank completed the offering in January 2014 after issuing a total of 820,250 shares of its common stock and raising over $8 million in new capital. Total shares outstanding totaled 2,973,304 at March 31, 2013.

The bank is using the new capital to increase lending and provide additional capital to support continued growth. In addition, the larger capital base permits the bank to make larger loans and to better penetrate our market area.

"The increase in our Q1 earnings, as well as our overall growth, highlights the success of our focus on increasing interest and non-interest income," said Gold Coast bank President and CEO Joseph G. Perri. "We have successfully begun using our new capital to increase our lending capacity to our current customers. In addition, our efforts to enhance our commercial and consumer Gold Coast Bank customer experience has resulted in increased customer activity across all lines of business. "

"We continue to employ new technology to augment the exceptional personal service that is our hallmark," Perri added. "Commercial and consumer customers have responded favorably to these enhanced services – usually only provided by much larger banks – including our expanded remote tellers, online banking, mobile banking, instant-issue debit cards and e-statements."

Net Earnings and Returns

Net income for the quarter ended March 31, 2014 was $142,000, or $0.05 per share, compared to $102,000, or $0.05 per share, for the same period in 2013. Income before income taxes for the first quarter of 2014 was $244,000 compared to $169,000 in the first quarter of 2013. The increase was largely due to an increase in net interest income, as investments in lower yielding short term investments were redeployed to loans. Returns on average assets and equity for the first quarter of 2014 were 0.24% and 2.08% compared to 0.18% and 2.06%, respectively, for the same period in 2013.

Net interest income grew $211,000, or 13% in the first quarter of 2014 compared to the first quarter of 2013, largely due to a 10% increase in average interest earning assets of $23 million, coupled with an increase in the net interest margin from 3.09% to 3.15%. The increase in the net interest margin reflected the redeployment of cash from lower yielding money market and investment securities to higher yielding loans. The bank recorded a provision for loan losses of $35,000 in the first quarter of 2014 due to growth in the loan portfolio. The bank did not record a provision for loan losses in the first quarter of 2013. Service charges and fee income totaled $78,000 in the first quarter of 2014 compared to $98,000 in the same quarter of 2013. There were no net gains on sales of securities in either the 2014 or 2013 first quarters. Non-interest expenses for the first quarter of 2014 increased $81,000, or 5% compared to the same period in 2013 largely due to increases in staff to support the bank's growth.

Balance Sheet and Asset Quality

Total assets increased $8 million to $252 million at March 31, 2014 from $244 million at December 31, 2013, largely due to an increase in deposits of $3 million and an increase in FHLB borrowings of $5 million. Cash and cash equivalents and investment securities remained stable at $29 million and $48 million, respectively, as excess cash was redeployed to higher yielding loans. At March 31, 2014, the bank's non-performing loans totaled 0.25% of total loans and its allowance for loan losses was 1.08% 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 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 was recently ranked one of the 359 Safest Banks in America according to a list compiled by Investing Answers. 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.

BANK CONTACT:
Catherine Califano, SVP-CFO
631-233-8640