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

Total Assets Increase 16% Year-Over-Year as Book Value Increases

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| Source: Gold Coast Bank

ISLANDIA, N.Y., July 24, 2014 (GLOBE NEWSWIRE) -- Gold Coast Bank, known as Long Island's Community Banksm, today announced continued profitable results for its second quarter ended June 30, 2014, marking its sixteenth consecutive quarter of profitability since opening March 2008.

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

  • Income before income taxes for the second quarter of 2014, excluding non-recurring items, was $247,000 compared to $213,000 for the second quarter of 2013, a 16 percent 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. Net Income was $5,000 for the quarter ended June 30, 2014 compared to $155,000 for the quarter ended June 30, 2013.  Non-recurring items in the 2014 second quarter included one –time charge of $278,000 for severance payments and $39,000 net gains on sales of securities, compared to non-recurring items totaling $46,000 from net gains on sales of securities in the second quarter of 2013.  
     
  • Income before income taxes for the six months ended June 30, 2014, excluding the previously mentioned non-recurring items, was $491,000 as compared to $382,000 in the same period in 2013, a 29 percent increase. Net income was $147,000 for the six months ended June 30, 2014 compared to $257,000 for the six months ended June 30, 2013.
     
  • Total Assets of $261 million at June 30, 2014, an increase of $37 million, or 16 percent from $224 million at June 30, 2013 and an increase of $16 million, or 7 percent from $244 million at December 31, 2013.
     
  • Total loans outstanding of $193 million, an increase of $57 million, or 41 percent from $137 million at June 30, 2013 and an increase of $29 million, or 17 percent from $165 million at December 31, 2013. Loan originations and draws were $28 million in the second quarter of 2014, a 67 percent increase from $16 million in the same period in 2013. Loan originations and draws were $41 million for the six months ended June 30, 2014, a 40 percent increase from $29 million for the same six month period in 2013.
     
  • Total deposits of $207 million, an increase of $7 million, or 3 percent from $200 million at June 30, 2013 and a decrease of $4 million, or 2 percent from $211 million at December 31, 2013. Non-interest bearing demand deposits declined to 22 percent of deposits at June 30, 2014 compared to 35 percent at June 30, 2013 and 31 percent at December 31, 2013. The Bank supplemented its deposit growth with borrowings from the FHLBNY which totaled $25 million at June 30, 2014 compared to $5 million at December 31, 2013. The bank had no borrowings at June 30, 2013.
     
  • Continued Strong Asset Quality: Allowance for loan losses was 1.03 percent of total loans at June 30, 2014. Nonperforming loans totaled 0.22 percent at June 30, 2014.
     
  • Remaining "Well Capitalized" at June 30, 2014:   
    • Tier 1 Leverage Capital of 11.0 percent.
    • Tier 1 Risk-Based Capital of 13.9 percent
    • Total Risk-Based Capital of 14.9 percent
       
  • Increasing book value per share to $9.48 as of June 30, 2014, compared to $9.13 at June 30, 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 June 30, 2014.

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.

Gold Coast Bank Chairman and CEO, John C. Tsunis stated, "Gold Coast Bank has never been more proud of its success than in our most recent quarter. Our pride stems not only from our record operating profitability but also from our increasing presence in the Long Island business community. Our loan portfolio expanded dramatically in the most recent quarter, and we continue to forge connections with Long Island companies, both small, mid-sized and large. We continue to explore opening a sixth branch, targeting Nassau County's North Shore and Manhattan, where there is density of population and expanding business.  The Board and management's commitment to Gold Coast Bank and the thriving business community we serve broadens with each quarter, and we could not be happier or more pleased to participate in its growth."

Net Earnings and Returns

Net income for the quarter ended June 30, 2014 was $5,000, compared to $155,000, or $0.07 per share, for the same period in 2013. Non-recurring items in the 2014 quarter included a one-time charge of $278,000 for severance payments and $39,000 net gains on the sales of securities, compared to non-recurring items totaling $46,000 from net gains on sales of securities in the 2013 quarter.  Income before income taxes for the second quarter of 2014, excluding non-recurring items, was $247,000 compared to $213,000 in the second 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 second quarter of 2014 (including the effect of non-recurring items) were 0.01 percent and 0.07 percent compared to 0.27 percent and 2.94 percent, respectively, for the same period in 2013.

Net interest income grew $305,000, or 18 percent in the second quarter of 2014 compared to the second quarter of 2013, largely due to a 12 percent increase in average interest earning assets of $26 million, coupled with an increase in the net interest margin from 3.07 percent to 3.23 percent. 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 $134,000 in the second quarter of 2014 due to growth in the loan portfolio compared to $59,000 in the second quarter of 2013.  Service charges and fee income totaled $58,000 in the second quarter of 2014 compared to $139,000 in the same quarter of 2013.  Net gains on the sales of securities totaled $39,000 in the second quarter of 2014 compared to $46,000 in the prior year quarter. Non-interest expenses (excluding non-recurring severance payments totaling $278,000) increased $112,000, or 7 percent for the second quarter of 2014 compared to the same period in 2013 largely due to increases in staff to support the bank's growth.

Net income for the six months ended June 30, 2014 was $147,000, or $0.05 per share as compared to $257,000, or $0.12 per share for the six months ended June 30, 2013. Income before income taxes for the six month period of 2014, excluding non-recurring items, was $491,000 as compared to $382,000 in the same period in 2013. Return on average assets and equity for the six months ended June 30, 2014 (including the effect of non-recurring items) were 0.12 percent and 1.07 percent compared to 0.23 percent and 2.53 percent, respectively, for the same period in 2013.

Net interest income grew $513,000, or 15 percent in the six months ended June 30, 2014 compared to the same period in 2013, largely due to an 11 percent increase in average interest earning assets of $25 million, coupled with an increase in the net interest margin from 3.08 percent to 3.17 percent. The bank recorded a provision for loan losses of $169,000 for the six month period in 2014 compared to $58,000 in the same period in 2013. Net gains on the sales of securities totaled $39,000 in the first six months of 2014 compared to $46,000 in the first six months of 2013. Non-interest expenses (excluding non-recurring severance payments totaling $278,000 recorded in the second quarter of 2014) increased $193,000, or 6 percent in the six months ended June 30, 2014, compared to the prior year period.

Balance Sheet and Asset Quality

Total assets increased $16 million to $261 million at June 30, 2014 from $244 million at December 31, 2013, largely due to an increase in FHLBNY borrowings of $20 million to fund loans.  Cash and cash equivalents decreased $14 million during the six month period and investment securities increased modestly to $50 million, as excess cash was redeployed to higher yielding loans. At June 30, 2014, the bank's non-performing loans totaled 0.22 percent of total loans and its allowance for loan losses was 1.03 percent 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