New York’s Gold Coast Bank Reports Earnings for 2012;
Plans to Commence Stock Offering
(Islandia, NY) February 19, 2013 – Gold Coast Bank, known as Long Island’s Community Banksm, announced today continued profitable results for 2012, marking its tenth consecutive quarter of profitability since opening in March 2008.
Gold Coast Bank’s profitable fourth quarter and annual results for 2012 reinforce noteworthy gains achieved by the bank, including:
Net Income was $920,000 for the quarter ended December 31, 2012 compared to $436,000 for the quarter ended December 31, 2011. Tax benefits recognized in the fourth quarter of 2012 totaled $845,000 compared to $339,000 in the fourth quarter of 2011. Core earnings (excluding securities gains in 2011 and the impact of tax benefits) for the fourth quarter of 2012 were $75,000 compared to $96,000 for the fourth quarter of 2011. The decrease was primarily due to expenses associated with the opening of the bank’s newest branch in Mineola in October 2012, which marked the bank’s fifth location and its first in Nassau County.
Net income was $1,796,000 for the year ended December 31, 2012 as compared to $1,168,000 for the year ended December 31, 2011, which included $819,000 of securities gains. Core earnings (excluding securities gains and the impact of tax benefits) for 2012 were $621,000 compared to $10,000 for 2011. Tax benefits recognized in 2012 totaled $1,175,000 compared to $339,000 in 2011.
Total Assets reached $202 million at December 31, 2012, an increase of $40 million, or 25%, from $162 million at December 31, 2011.
Total loans outstanding reached $126 million, an increase of $42 million, or 50%, from $84 million at year end 2011. Loan originations and draws for 2012 were $75 million, an increase of $39 million, or 113%, compared to $35 million in 2011.
Total deposits reached $181 million, an increase of $38 million, or 26%, from $143 million at December 31, 2011.
Continued Strong Asset Quality: Allowance for loan losses was 1.17% of total loans at December 31, 2012. The bank had no nonperforming loans at December 31, 2012.
Well Capitalized at December 31, 2012:
– Tier 1 Leverage Capital of 9.3%.
– Tier 1 Risk-Based Capital of 13.3%
– Total Risk-Based Capital of 14.3%
Increasing book value per share of $9.22, as of December 31, 2012, an increase of 12.0% as compared to the prior year-end.
“We continue to be encouraged by our bank’s growth and profitability. We grew by two additional branches in 2012, Farmingdale and Mineola, which is our first in Nassau County,” stated Joseph G. Perri, President and Chief Executive Officer. “We are extremely pleased that in January 2013, we received approval to increase our authorized capital stock from 2,411,420 shares to 4,350,000 shares. That will allow us to raise additional capital to ensure we meet all regulatory capital requirements as well as increase our legal lending limit. We intend to commence a common stock offering soon.”
Net Earnings and Returns
Net income for the quarter ended December 31, 2012 was $920,000, or $0.43 per share, compared to $436,000, or $0.20 per share, for the same period in 2011, reflecting a 111% increase in net income and a 115% increase in earnings per share. In 2012, net income was $1.8 million, or $0.83 per share, compared to $1.2 million, or $0.54 per share. Returns on average assets and equity for 2012 were 0.46% and 4.46%, respectively.
Net interest income grew $1.2 million, or 25% in 2012, largely due to a 31% increase in average interest earning assets of $42 million, offsetting a decline in the net interest margin from 3.67% to 3.49%. The decline in the net interest margin reflected the positive 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. This trend continued into the fourth quarter of 2012 where net interest income grew $359,000, or 28% compared to the same period in 2011.
For 2012, the provision for loan losses was $206,000, an increase of $97,000 over 2011 as a result of the increase in the loan portfolio. The fourth quarter of 2012 included a provision for loan losses of $16,000 compared to no provision in the same period in 2011.
Service charges and fee income totaled $204,000 in 2012 compared to $213,000 in 2011. There was no gain on sale of securities in 2012 compared to $819,000 in 2011.
Non-interest expenses for 2012 increased in both the fourth quarter and year due to expenses associated with new branches, technology and staff.
Tax benefits recognized in 2012 totaled $1.2 million compared to $339,000 in 2011. In the fourth quarter of 2012, tax benefits were $845,000 compared to $339,000 in the same period in 2011. The tax benefits recorded in 2012 and 2011 were driven by $1.4 million and $673,000 of reversals of the valuation allowance maintained on the bank’s net deferred tax assets. At December 31, 2012, there was no remaining valuation allowance and the bank expects to incur tax expense as opposed to a net tax benefit on a going-forward basis.
Balance Sheet and Asset Quality
Total assets increased $40 million to $202.3 million at December 31, 2012, largely due to an increase in deposits of $38 million as a result of organic growth in the bank’s five branches. Non- interest bearing deposits grew $9.2 million, or 14%, to $76 million and comprised 42% of deposits at December 31, 2012. The increase in deposits was primarily deployed to grow the loan portfolio by $42 million in 2012. Investment securities remained stable at $45 million and cash and cash equivalent decreased $2.6 million to $28.4 million. At December 31, 2012, the bank had no non-performing loans and its allowance for loan losses was 1.17% of total loans.
Challenges and Opportunities
“Even though entrepreneurs on Long Island are faced with many unknown fiscal challenges from the federal government, the team we have in place – our board of directors, our president, our loan officers, and our sales personnel – is here to help them navigate the potentially rocky waters,” said John Tsunis, Chairman of Gold Coast Bank. “Because most of us are business owners ourselves, we are extremely adept at finding ways to help our customers. What is most gratifying about our secondary offering is that we will be able to lend more money to those in our community who are working diligently to grow their businesses.”
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 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 including real estate, equipment finance, and lines of credit for privately owned businesses. For more information about Gold Coast Bank, please visit www.gcbny.com.