Long Island’s Gold Coast Bancorp Reports 23 Percent Deposit Growth and 13 Percent Loan Growth in
2018
Gold Coast Bancorp, Inc. (OTC:GLDT) (“Gold Coast”), the holding company of Gold Coast Bank, known as “Long Island’s Community
Bank”sm, (the”Bank”) today reported net income for the quarter ended September 30, 2018 of $391,000, or $0.10 per share
compared with net income of $816,000, or $0.21 per share for the quarter ended September 30, 2017. Return on average assets and
return on average equity was 0.29 percent and 3.64 percent, respectively, in the third quarter of 2018, compared to 0.69 percent
and 7.68 percent in the 2017 quarter. The decrease in net income was largely due to increases in interest income being offset by
interest expense on the Company’s Subordinated Debt and an increased cost of deposits, reflecting raising market rates, as well as
an increase in the provision for loan losses associated with the growth of the portfolio.
For the nine months ended September 30, 2018, Gold Coast earned $1,426,000, or $0.36 per share compared with net income of
$1,976,000, or $0.50 per share for the same period in 2017. Return on average assets and return on average equity was 0.37 percent
and 4.51 percent, respectively, for the nine months ended September 30, 2018, compared to 0.58 percent and 6.38 percent,
respectively, for the nine months ended September 30, 2017. The decrease in net income for the 2018 year to date period was the
result of the same factors discussed for the quarterly results.
Total assets at September 30, 2018 were $542 million, an increase of $72 million, or 15 percent from total assets of $470
million at December 31, 2017. Total assets increased $65 million, or 14 percent from $477 million at September 30, 2017.
Deposits at September 30, 2018 totaled $482 million, an increase of $90 million, or 23 percent from $392 million at December 31,
2017. Deposits totaled $417 million at September 30, 2017. Non-interest bearing demand deposits were 23 percent of the total
deposit portfolio at September 30, 2018, compared to 25 percent at December 31, 2017 and 24 percent at September 30, 2017,
respectively. There were no FHLB borrowings outstanding at September 30, 2018 and 2017, respectively. The Bank repaid $20 million
of FHLB borrowings in the third quarter of 2018 as a result of deposit growth. FHLB borrowings were $20 million at December 31,
2017.
Total loans outstanding at September 30, 2018 were $432 million, an increase of $51 million, or 13 percent from $381 million at
December 31, 2017 and an increase of $67 million, or 18 percent from $365 million at September 30, 2017. Loan originations and
draws were $37 million in the third quarter of 2018, an increase of $19 million, or 106 percent compared to $18 million in the
third quarter of 2017. The Bank experienced loan repayments and pay downs of $8 million in the third quarter of 2018 compared to
$17 million in the third quarter of 2017. Loan originations and draws were $87 million in the nine months ended September 30, 2018
compared to $90 million in the same period in 2017. The Bank experienced loan repayments and pay downs of $37 million in the nine
months ended September 30, 2018, compared to $65 million in the same period in 2017. The decrease in loan originations and
repayments in 2018 was largely due to the decrease in refinancing activity due to the recent increase in market interest rates.
Asset quality continues to remain strong: the Bank’s nonperforming loans were 0.02 percent of gross loans at September 30, 2018.
Allowance for loan losses was 0.97 percent of total loans at September 30, 2018.
The Bank remained well capitalized at September 30, 2018, with the following regulatory capital ratios:
- Tier 1 Leverage Capital Ratio of 10.7 percent
- Common Equity Tier 1 Risk-Based Capital and Tier 1 Risk-Based Capital Ratios of 14.2 percent
- Total Risk-Based Capital Ratio of 15.3 percent
At September 30, 2018 book value per share was $10.83, increasing from $10.69 per share at December 31, 2017.
Net interest income was $3.5 million in the third quarter of 2018 compared to $3.7 million in the third quarter of 2017. The
decrease was largely due to a decrease in the net interest margin to 2.66 percent in the third quarter of 2018 compared to 3.10
percent in the third quarter of 2017, partially offset by a 13 percent increase in average interest earning assets. The decrease in
the net interest margin is largely due to an increase in the cost of funds, primarily due to the issuance of $13.5 million of 6.50%
subordinated notes on September 29, 2017, coupled with the recent increase in market interest rates which increased the Bank’s cost
of deposits in the third quarter of 2018 compared to the same period in 2017. Net interest income grew $80,000 for the nine months
ended September 30, 2018, compared to the same nine month period in 2017, largely due to a 13 percent increase in average interest
earning assets, partially offset by a decrease in the net interest margin to 2.79 percent in the most recent nine month period
compared to 3.09 percent in the 2017 nine month period.
The provision for loan losses was $276,000 in the third quarter of 2018. There was no provision for loan losses required in the
third quarter of 2017. The provision for loan losses for the nine months ended September 30, 2018 was $356,000 compared to $114,000
for the nine months ended September 30, 2017.
Non-interest income was $84,000 in the third quarter of 2018 compared to $152,000 in the third quarter of 2017. Non-interest
income was $301,000 for the nine months ended September 30, 2018, compared to $392,000 for the nine months ended September 30,
2017. Non-interest expense increased $181,000, or 7 percent in the third quarter of 2018 compared to the third quarter of 2017,
largely due to the addition of staff to support the bank’s expanded lending activities in the NYC metropolitan area. Non-interest
expense for the nine months ended September 30, 2018 increased $792,000, or 10 percent also due to expansion of staff.
John C. Tsunis, Chairman and CEO stated, “Gold Coast has been digesting the planned expansion of our infrastructure as we
recruit and engage quality and experienced bankers that have been attracted to our community/private banking model. We have
deployed experienced credit trained personnel at our Brooklyn and Mineola branches to bring decision making relationship bankers
closer to our markets, adding value and strengthening our customer relationships. The recent turmoil community banks have
encountered as market interest rates rise and competition remains strong is an opportunity for Gold Coast to expand its market
share. We believe the Gold Coast experience will bear dividends as our lending and underwriting process fast tracks our robust loan
pipeline from application to the closing table, while accelerating interest income to our bottom line. Notwithstanding the
intensity of competition for loans and deposits, we continue to believe in participating in the communities we serve, investing our
local deposits into the local communities, which we believe will translate into incremental deposits and additional income to our
bottom line in the fourth quarter of 2018. “
About Gold Coast Bancorp, Inc.
Gold Coast Bancorp, Inc. is the holding company for Gold Coast Bank. Headquartered in Islandia with additional branches
located in Huntington, Setauket, Farmingdale, Mineola, Southampton and Brooklyn, Gold Coast Bank is a New York State chartered bank
whose popularity and 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). Gold Coast Bank prides itself on
providing businesses and individuals with quality lending and banking services. Fulfilling a unique niche within our metropolitan
New York trade area, 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 Bancorp, Inc. and Gold Coast Bank, please visit
www.gcbny.com. Our press releases, and other material information published by the Company and the Bank, may be found on our
website under the tab “Investor Relations”.
Forward-Looking Statements
This news release contains certain forward-looking statements which are based on certain assumptions and describe future plans,
strategies and expectations of the Company. These forward-looking statements are generally identified by use of the words
"believe," "expect," "intend," "anticipate," "estimate," "project," or similar expressions. The Company's ability to predict
results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse
effect on the operations of the Company and its subsidiaries include, but are not limited to, changes in interest rates, general
economic conditions, legislative/regulatory changes, monetary and fiscal policies of the U.S. Government, including policies of the
U.S. Treasury and the Federal Reserve Board, the quality or composition of the loan or investment portfolios, demand for loan
products, deposit flows, competition, demand for financial services in the Company's market area and accounting principles and
guidelines. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should
not be placed on such statements. The Company does not undertake, and specifically disclaims any obligation, to publicly release
the result of any revisions which may be made to any forward-looking statements to reflect events or circumstances after the date
of such statements or to reflect the occurrence of anticipated or unanticipated events.
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Consolidated Balance Sheets |
(dollars in thousands, except per share data) |
|
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(unaudited) |
|
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|
(unaudited) |
|
|
September 30, |
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December 31, |
|
September 30, |
|
|
2018 |
|
2017 |
|
2017 |
ASSETS |
|
|
|
|
|
|
Total cash and cash equivalents |
|
$ |
41,568 |
|
|
$ |
21,343 |
|
|
$ |
54,244 |
|
Securities available for sale, at fair value |
|
|
58,191 |
|
|
|
56,960 |
|
|
|
47,893 |
|
Securities held to maturity |
|
|
8,390 |
|
|
|
8,437 |
|
|
|
7,456 |
|
Loans |
|
|
431,954 |
|
|
|
381,452 |
|
|
|
365,031 |
|
Allowance for loan losses |
|
|
(4,201 |
) |
|
|
(3,919 |
) |
|
|
(3,783 |
) |
Loans, net |
|
|
427,753 |
|
|
|
377,533 |
|
|
|
361,248 |
|
Premises and equipment, net |
|
|
1,548 |
|
|
|
1,778 |
|
|
|
1,892 |
|
Other assets |
|
|
4,375 |
|
|
|
4,384 |
|
|
|
4,093 |
|
Total assets |
|
$ |
541,825 |
|
|
$ |
470,435 |
|
|
$ |
476,826 |
|
|
|
|
|
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|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
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|
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|
Non-interest bearing |
|
$ |
109,293 |
|
|
$ |
99,153 |
|
|
$ |
100,564 |
|
Interest bearing |
|
|
372,528 |
|
|
|
293,120 |
|
|
|
316,531 |
|
Total deposits |
|
|
481,821 |
|
|
|
392,273 |
|
|
|
417,095 |
|
Borrowings |
|
|
- |
|
|
|
20,000 |
|
|
|
- |
|
Subordinated debt, net |
|
|
13,314 |
|
|
|
13,299 |
|
|
|
13,298 |
|
Other liabilities |
|
|
4,101 |
|
|
|
2,815 |
|
|
|
3,866 |
|
Total Liabilities |
|
|
499,236 |
|
|
|
428,387 |
|
|
|
434,259 |
|
Total Shareholders' Equity |
|
|
42,589 |
|
|
|
42,048 |
|
|
|
42,567 |
|
Total Liabilities and Shareholders' Equity |
|
$ |
541,825 |
|
|
$ |
470,435 |
|
|
$ |
476,826 |
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|
|
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Selected Financial Data (unaudited) |
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|
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Allowance for loan losses to total loans |
|
|
0.97 |
% |
|
|
1.03 |
% |
|
|
1.04 |
% |
Non-performing loans to total loans |
|
|
0.02 |
% |
|
|
0.13 |
% |
|
|
0.41 |
% |
Book value per share |
|
$ |
10.83 |
|
|
$ |
10.69 |
|
|
$ |
10.83 |
|
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|
|
|
|
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Capital Ratios (unaudited) (1) |
|
|
|
|
|
|
Tier 1 leverage ratio |
|
|
10.74 |
% |
|
|
11.39 |
% |
|
|
11.68 |
% |
Common equity Tier 1 risk-based capital ratio |
|
|
14.22 |
% |
|
|
15.31 |
% |
|
|
15.83 |
% |
Tier 1 risk-based capital ratio |
|
|
14.22 |
% |
|
|
15.31 |
% |
|
|
15.83 |
% |
Total risk-based capital ratio |
|
|
15.27 |
% |
|
|
16.40 |
% |
|
|
16.92 |
% |
|
|
|
|
|
|
|
(1) Regulatory capital ratios presented on bank-only basis |
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Consolidated Statements of Income (unaudited) |
(dollars in thousands, except share and per share data) |
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For the three months ended |
|
For the nine months ended |
|
|
September 30, |
|
September 30, |
|
September 30, |
|
September 30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Interest income |
|
$ |
5,193 |
|
|
$ |
4,357 |
|
|
$ |
14,821 |
|
|
$ |
12,361 |
|
Interest expense |
|
|
1,688 |
|
|
|
676 |
|
|
|
4,253 |
|
|
|
1,873 |
|
Net interest income |
|
|
3,505 |
|
|
|
3,681 |
|
|
|
10,568 |
|
|
|
10,488 |
|
Provision for loan losses |
|
|
276 |
|
|
|
- |
|
|
|
356 |
|
|
|
114 |
|
Net interest income after provision for loan losses |
|
|
3,229 |
|
|
|
3,681 |
|
|
|
10,212 |
|
|
|
10,374 |
|
Non interest income |
|
|
84 |
|
|
|
152 |
|
|
|
301 |
|
|
|
392 |
|
Non interest expense |
|
|
2,799 |
|
|
|
2,618 |
|
|
|
8,638 |
|
|
|
7,846 |
|
Income before income taxes |
|
|
514 |
|
|
|
1,215 |
|
|
|
1,875 |
|
|
|
2,920 |
|
Income tax expense |
|
|
123 |
|
|
|
399 |
|
|
|
449 |
|
|
|
944 |
|
Net income |
|
$ |
391 |
|
|
$ |
816 |
|
|
$ |
1,426 |
|
|
$ |
1,976 |
|
|
|
|
|
|
|
|
|
|
Basic earnings per share |
|
$ |
0.10 |
|
|
$ |
0.21 |
|
|
$ |
0.36 |
|
|
$ |
0.50 |
|
Diluted earnings per share |
|
$ |
0.10 |
|
|
$ |
0.21 |
|
|
$ |
0.36 |
|
|
$ |
0.50 |
|
Weighted average common and equivalent shares outstanding
|
|
|
3,931,634 |
|
|
|
3,931,634 |
|
|
|
3,931,634 |
|
|
|
3,931,634 |
|
|
|
|
|
|
|
|
|
|
Selected Financial Data (unaudited) |
|
|
|
|
|
|
|
|
Return on average assets |
|
|
0.29 |
% |
|
|
0.69 |
% |
|
|
0.37 |
% |
|
|
0.58 |
% |
Return on average equity |
|
|
3.64 |
% |
|
|
7.68 |
% |
|
|
4.51 |
% |
|
|
6.38 |
% |
Net interest margin |
|
|
2.66 |
% |
|
|
3.10 |
% |
|
|
2.79 |
% |
|
|
3.09 |
% |
Efficiency ratio |
|
|
77.99 |
% |
|
|
68.30 |
% |
|
|
79.47 |
% |
|
|
72.11 |
% |
|
|
|
|
|
|
|
|
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![](http://cts.businesswire.com/ct/CT?id=bwnews&sty=20181022005765r1&sid=mstr3&distro=nx&lang=en)
Gold Coast Bancorp, Inc.
Catherine Califano, EVP / CFO
631-233-8640
ccalifano@gcbny.com
View source version on businesswire.com: https://www.businesswire.com/news/home/20181022005765/en/