Investor Relations

Press Release

Coastal Financial Corporation Announces Second Quarter 2018 Results

Company Release - 8/21/2018 2:41 PM ET

2018 Second Quarter Highlights:

  • Net income totaled $2.2 million for the second quarter of 2018, or $0.24 per diluted common share, up 22.2% from $1.8 million for the first quarter of 2018.
  • Total assets were $850.9 million at June 30, 2018, up 2.4% from $831.0 million at March 31, 2018.
  • Total loans receivable, net increased 3.3% from March 31, 2018 and 6.7% from December 31, 2017.
  • Total deposits increased 2.4% from March 31, 2018 and increased 5.9% from December 31, 2017.
  • Noninterest bearing deposits at June 30, 2018 were 34.9% of total deposits.
  • Cost of deposits were 0.40% for the second quarter of 2018, up only 0.03% from the first quarter of 2018.
  • Initial public offering of 2,577,500 shares of common stock completed, subsequent to quarter end, on July 18, 2018, for net proceeds of $33.2 million.

EVERETT, Wash., Aug. 21, 2018 (GLOBE NEWSWIRE) -- Coastal Financial Corporation (NASDAQ: CCB) (the “Company”) today reported unaudited financial results for the second quarter 2018.  Net income for the second quarter of 2018 was $2.2 million, or $0.24 per diluted common share, compared with net income of $1.8 million, or $0.20 per diluted share, for the first quarter of 2018.

On July 18, 2018, the Company closed its initial public offering of 2,577,500 shares of common stock, including the exercise of the over-allotment of 427,500 shares, for net proceeds of $33.2 million after deducting underwriting discounts, commissions, and estimated offering expenses.

Eric Sprink, President and CEO, commented, “We are pleased with our second quarter financial performance, especially our deposit and loan growth.  Historically, the second quarter has been a tougher quarter to grow deposits due to customers withdrawing funds to pay taxes.  However, for the three months ended June 30, 2018 deposit growth on an annualized basis was 9.5% and loan growth was 13.1%.  We believe that the loan and deposit growth, combined with the increase in net interest margin, positions us well for continued growth in earnings.”

In addition, our initial public offering, which was completed on July 20, 2018, was priced at $14.50 a share (which was near the top of the offering range), and net proceeds were $33.2 million after expenses.  We intend to use the net proceeds from this offering to support our growth, organically or through mergers and acquisitions, and for general corporate purposes.”

The Company had net income of $4.0 million for the six months ended June 30, 2018, or $0.44 per diluted common share, compared to $3.2 million, or $0.35 per diluted common share for the six months ended June 30, 2017.

Results of Operations

Net interest income was $8.3 million for the three months ended June 30, 2018, an increase of 6.4% from $7.8 million for the first quarter of 2018, and an increase of 15.3% from $7.2 million for the second quarter of 2017. Increases over the prior quarter and prior year were the result of growth in interest earning assets, primarily loans, and improvements in net interest margin.

Net interest income for the six months ended June 30, 2018 totaled $16.1 million, an increase of 14.2% compared to the same period last year. The $2.0 million increase in net interest income over the same period last year was primarily related to growth in loan balances. During the six months ended June 30, 2018, the average balance of total loans receivable increased by $69.2 million, compared to the same period last year. This increase was partially offset by increased deposit costs from the growth in the balance of our deposits of $40.7 million and an increase in the cost of deposit funds of 12 basis points, compared to the same period last year.

Net interest margin for the quarter ended June 30, 2018 increased 14 basis points to 4.26% from 4.12% for the first quarter of 2018 and from 4.12% for the second quarter of 2017. The increase in net interest over the comparable period in the prior year was primarily due to increases in loan volume as a percent of earning assets and higher prepayment penalties and deferred fees recognized on loans paid off, and to a lesser extent, increases in average loan yields. The average loan receivable balance for the three months ended June 30, 2018 was $689.0 million, an increase of 5.3% compared to the prior quarter of 2018 and an increase of 13.5% from the same quarter one year ago.

Net interest margin for the six months ended June 30, 2018 increased 12 basis points to 4.19% from 4.07% for the comparable period last year. The increase in net interest over the comparable period in the prior year was primarily due to increases in loan volume as a percent of earning assets and higher prepayment penalties and deferred fees recognized on loans paid off in the first two quarters of 2018, and to a lesser extent, increases in average loan yields.

Loan yields for the quarter ended June 30, 2018 were 5.11%, an increase of four basis points from 5.07% for the quarter ended March 31, 2018, and a 12 basis point increase from 4.99% for the quarter ended June 30, 2017. Loan yields for the six months ended June 30, 2018 were 5.09%, an increase of 13 basis points from 4.96% for the six months ended June 30, 2017. Prepayment penalties and deferred fees recognized on loans paid off in both the current quarter and previous quarter were each 0.09% higher than the quarter ended June 30, 2017. Contractual loan yields approximated 4.92% for the three months ended June 30, 2018, 4.88% for the three months ended March 31, 2018, and 4.89% for the three months ended June 30, 2017.

The following table shows the Company’s key performance ratios for the periods indicated.

  Three months ended Six months ended
  June 30, 2018March 31, 2018June 30, 2017 June 30, 2018June 30, 2017
        
Return on average assets (1) 1.09%0.93%1.03% 1.02%0.88%
Return on average shareholders’ equity (1) 12.90%11.09%12.00% 12.07%9.81%
Yield on earnings assets (1) 4.73%4.56%4.51% 4.65%4.45%
Yield on loans receivable (1) 5.11%5.07%4.99% 5.09%4.96%
Cost of funds (1) 0.50%0.46%0.41% 0.48%0.41%
Cost of deposits (1) 0.40%0.37%0.30% 0.38%0.31%
Net interest margin (1) 4.26%4.12%4.12% 4.19%4.07%
Noninterest expense to average assets (1) 3.15%3.07%3.32% 3.12%2.98%
Efficiency ratio 66.77%68.28%66.27% 67.50%67.96%
Loans receivable to deposits 94.12%93.30%97.25% 94.12%97.25%
        
(1) annualized calculations       



Noninterest income was $1.2 million for the second quarter of 2018, an increase of $106,000 from $1.1 million for the first quarter of 2018 and an increase of $193,000 from $1.0 million for the comparable period one year ago. The increase compared to the prior quarter was primarily due to newly assessed point of sale/ATM fees and increased activity in merchant services, which resulted in an additional $84,000 of income during the quarter. The increase in noninterest income compared to the same quarter one year ago was primarily related to increases in existing deposit fees and the introduction of new deposit fees to bring those fees in line with the industry. Sublease and lease income decreased in the second quarter 2018, as compared to both first quarter 2018 and second quarter 2017, as a result of a long-term tenant electing to not renew their lease.

Noninterest income was $2.3 million for the six months ended June 30, 2018, compared to $1.9 million for the six months ended June 30, 2017. The increase is primarily related to newly assessed deposit fees, as discussed above. Loan referral fee income, which is earned when a borrower enters into an interest rate swap agreement with a third party, totaled $244,000 for the six months ended June 30, 2018, an increase of $202,000 from the same period last year.

Total noninterest expense for the current quarter increased 4.9% to $6.4 million from $6.1 million for the preceding quarter and increased 16.4% from $5.5 million from the comparable period one year ago. The increased expenses for the current quarter compared to the prior quarter and previous quarter one year ago were primarily due to increases in salary expenses. Full time equivalent employees increased 7% during the current quarter and increased 14% from the same quarter one year ago. Staffing increases are due to the continued organic growth initiatives, and includes increases in sales staff, including hiring new banking teams, and additional back office staffing to support the incremental increases in banking teams and for operation as a public company.

Total noninterest expense for the six months ended June 30, 2018 totaled $12.4 million, an increase of 14.8% compared to the same period last year. The increase is primarily attributable to increased salary expense, as discussed above and the addition of our Woodinville branch in October 2017.

The provision for income taxes decreased 33.3% for the current quarter and the six months ended June 30, 2018, compared to the same periods last year, primarily due to the Tax Cuts and Jobs Act legislation which was signed into law on December 22, 2017. The Company began using the lower tax rate of 21.0% for the current fiscal year.

Balance Sheet

The Company’s total assets increased $45.1 million, or 5.6%, to $850.9 million at June 30, 2018 from $805.8 million at December 31, 2017 due to the Company’s organic growth initiatives.

Total loans receivable, net of allowance for loan losses, increased $43.4 million, or 6.7%, to $692.2 million at June 30, 2018 from $648.8 million at December 31, 2017.  The growth in loans receivable was due primarily to increases in commercial real estate loans of $36.6 million.

The following table summarizes the loan portfolio at the periods indicated.

    
  As of  
  June 30, 2018 December 31, 2017 June 30, 2017 
(Dollars in thousands) Balance% to
Total
 Balance% to
Total
 Balance% to
Total
 
           
Commercial and industrial loans $  89,28412.7% $  88,68813.5% $  84,79213.6% 
Real estate:          
  Construction, land and          
  land development   46,3566.6   41,6416.3   45,6267.3 
  Residential    88,42212.6   87,03113.3   69,47811.1 
  Commercial real estate   474,33067.7   437,71766.6   422,15667.7 
Consumer and other    2,6700.4   2,0580.3   1,7950.3 
  Gross loans receivable   701,062100.0%   657,135100.0%   623,847100.0% 
Net deferred origination fees   (370)    (347)    (597)  
  Loans receivable $  700,692  $  656,788  $  623,250  
           


Total deposits increased $41.2 million, or 5.9%, to $744.5 million at June 30, 2018 from $703.3 million at December 31, 2017.  The increase in deposits included increases in non-interest bearing deposit accounts of $17.1 million, or 7.1%, and total time deposits of $9.2 million, or 10.1%.

The following table shows the Company’s deposit composition for the periods indicated.

         As of
  June 30, 2018  December 31, 2017  June 30, 2017 
(Dollars in thousands) Balance% to Total  Balance% to Total  Balance% to Total 
             
Demand, non-interest bearing $  259,44934.9% $  242,35834.5% $  219,87234.3%
Now and money market   336,66645.2    326,41246.4    305,98447.8 
Savings   48,5096.5    43,8766.2    43,1526.7 
Time deposits less than $250,000   65,3938.8    60,4458.6    51,8998.1 
Time deposits $250,000 and over   34,4514.6    30,2044.3    19,9963.1 
  Total $  744,468100.0% $  703,295100.0% $  640,903100.0%


Total shareholders’ equity increased $3.8 million, or 5.8%, to $69.5 million at June 30, 2018 from $65.7 million at December 31, 2017.  The increase in shareholders’ equity was primarily due to net income earned during the year.

Capital Ratios

The Company and the Bank remain well capitalized at June 30, 2018, as summarized in the following table.

       
Capital Ratios: Coastal
Community
Bank
 Coastal
Financial
Corporation
 Financial
Institution 
Basel III
Regulatory
Guidelines
       
Tier 1 leverage capital10.18% 9.21% 5.00%
Tier 1 risk-based capital 11.30% 10.24% 8.00%
Common Equity Tier 1 risk-based capital11.30% 9.76% 6.50%
Total risk-based capital12.50% 12.82% 10.00%
       
       


Asset Quality

The allowance for loan losses was 1.22% of loans receivable at June 30, 2018, compared to 1.22% at December 31, 2017. Provision for loan losses totaled $392,000 for the current quarter, $501,000 for the preceding quarter, and there was no provision for the same quarter in the prior year. Net charge-offs totaled $370,000 for the six months ended June 30, 2018 compared to net charge-offs of $94,000 for six months ended June 30, 2017.

Non-performing assets were $2.1 million, or 0.24% of total assets, at June 30, 2018, compared to $2.1 million, or 0.26% of total assets at December 31, 2017.  There were no repossessed assets or other real estate owned at June 30, 2018.

Non-performing loans to loans receivable ratio was 0.30% at June 30, 2018, compared to 0.32% at December 31, 2017.  Classified loans were $8.6 million at June 30, 2018, an increase of $700,000, as compared to $7.9 million at December 31, 2017.

The following table details the Company’s non-performing assets for the periods indicated.

  As of 
  June 30, December 31, June 30, 
(Dollars in thousands) 2018 2017 2017
       
Non-accrual loans:      
Commercial and industrial loans $  703 $  372 $  284
Real estate:      
  Construction, land and land development   -   -   -
  Residential    75   88   151
  Commercial real estate   -   345   579
  Commercial real estate - troubled debt restructure   1,290   1,315   1,340
Consumer and other loans   -   -   -
  Total non-accrual loans    2,068   2,120   2,354
  Total accruing loans past due 90 days or more   -   -   -
  Total non-performing loans    2,068   2,120   2,354
       
Other real estate owned    -   -   -
Repossessed assets   -   -   -
       
Total non-performing assets $  2,068 $  2,120 $  2,354
       
Troubled debt restructurings, accruing   -   -   3,999
       
Total non-performing loans to loans receivable 0.30% 0.32% 0.38%
       
Total non-performing assets to total assets 0.24% 0.26% 0.32%
       


About Coastal Financial

Coastal Financial Corporation is an Everett-based Washington State bank holding company with Coastal Community Bank (the “Bank”), a full-service commercial bank, as its sole wholly-owned banking subsidiary.  The Bank operates through its 13 branches in Snohomish, Island, and King Counties, the Internet and its mobile banking application.  More information about the Bank can be found on its website at www.coastalbank.com and its investor relations page.

Contact

Eric Sprink, President & Chief Executive Officer, (425) 357-3659
Joel Edwards, Executive Vice President & Chief Financial Officer, (425) 357-3687

Forward-Looking Statements

This earnings release contains forward-looking statements. These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. Any statements about our management’s expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through the use of words or phrases such as “anticipate,” “believes,” “can,” “could,” “may,” “predicts,” “potential,” “should,” “will,” “estimate,” “plans,” “projects,” “continuing,” “ongoing,” “expects,” “intends” and similar words or phrases. Any or all of the forward-looking statements in this earnings release may turn out to be inaccurate. The inclusion of forward-looking information in this earnings release should not be regarded as a representation by us or any other person that the future plans, estimates or expectations contemplated by us will be achieved. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. Our actual results could differ materially from those anticipated in such forward-looking statements.

Accordingly, we caution you that any such forward-looking statements are not a guarantee of future performance and that actual results may prove to be materially different from the results expressed or implied by the forward-looking statements due to a number of factors. Such factors include, without limitation, those listed from time to time in reports that the Company files with the Securities and Exchange Commission.  These forward-looking statements are made as of the date of this communication, and the Company does not intend, and assumes no obligation, to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events or circumstances, except as required by law.


 
COASTAL FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in thousands; unaudited)
 
ASSETS
   June 30, March 31, December 31,
   2018 2018 2017
Cash and due from banks $  14,217 $  13,589 $  13,787
Interest-bearing deposits with other banks   77,232   80,980   75,964
Investment securities, available for sale, at fair value   36,013   36,015   36,927
Investment securities, held to maturity, at amortized cost   1,304   1,323   1,409
Other investments   3,766   3,766   3,680
Loans receivable   700,692   678,515   656,788
Allowance for loan losses   (8,540)   (8,423)   (8,017)
Total loans receivable, net   692,152   670,092   648,771
Premises and equipment, net   12,963   13,000   13,121
Accrued interest receivable   2,290   1,968   2,274
Bank-owned life insurance, net   6,592   6,546   6,500
Deferred tax asset, net   2,253   2,277   2,092
Other assets   2,140   1,406   1,228
 Total assets $  850,922 $  830,962 $  805,753
        
LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES      
Deposits $  744,468 $  727,268 $  703,295
Federal Home Loan Bank (FHLB) advances   20,000   20,000   20,000
Subordinated debt   9,957   9,954   9,950
Junior subordinated debentures   3,580   3,580   3,579
Deferred compensation   1,127   1,151   1,175
Accrued interest payable   241   229   228
Other liabilities   2,059   1,853   1,815
 Total liabilities   781,432   764,035   740,042
        
SHAREHOLDERS’ EQUITY      
Common stock   52,946   52,592   52,521
Retained earnings   18,364   16,163   14,134
Accumulated other comprehensive loss, net of tax   (1,820)   (1,828)   (944)
 Total shareholders’ equity   69,490   66,927   65,711
 Total liabilities and shareholders’ equity $  850,922 $  830,962 $  805,753
        


COASTAL FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share amounts; unaudited)
    
 Three months ended 
 June 30, 2018March 31, 2018June 30, 2017 
INTEREST AND DIVIDEND INCOME    
Interest and fees on loans$  8,778$  8,189$  7,557 
Interest on interest-bearing deposits with other banks  236  255  149 
Interest on investment securities  155  152  132 
Dividends on other investments  62  11  63 
Total interest and dividend income  9,231  8,607  7,901 
INTEREST EXPENSE    
Interest on deposits  712  646  492 
Interest on borrowed funds  216  183  185 
Total interest expense  928  829  677 
Net interest income  8,303  7,778  7,224 
PROVISION FOR LOAN LOSSES  392  501  - 
Net interest income after provision for loan losses  7,911  7,277  7,224 
NONINTEREST INCOME    
Deposit service charges and fees  771  687  651 
Loan referral fees  114  130  42 
Mortgage broker fees  69  37  74 
Sublease and lease income  4  57  55 
Gain on sale of loans  78  64  58 
Other  177  132  140 
Total noninterest income  1,213  1,107  1,020 
NONINTEREST EXPENSE    
Salaries and employee benefits  3,910  3,735  3,174 
Occupancy  804  823  740 
Data processing  492  479  447 
Director and staff expenses  136  144  137 
Excise taxes  134  124  112 
Marketing  86  57  83 
Legal and professional fees  130  80  104 
Federal Deposit Insurance Corporation (FDIC) assessments  79  85  78 
Business development  72  88  60 
Other  511  452  528 
Total noninterest expense  6,354  6,067  5,463 
Income before provision for income taxes  2,770  2,317  2,781 
PROVISION FOR INCOME TAXES  569  474  905 
NET INCOME$  2,201$  1,843$  1,876 
     
Basic and diluted earnings per share$  0.24$  0.20$  0.20 
Weighted average number of common shares outstanding:    
Basic  9,263,302  9,242,839  9,233,738 
Diluted  9,282,816  9,248,428  9,236,815 
     


  
COASTAL FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share amounts; unaudited)
 
 Six months ended
 June 30, 2018June 30, 2017
INTEREST AND DIVIDEND INCOME  
Interest and fees on loans$  16,967$  14,833
 Interest on interest-bearing deposits with other banks   491  287
 Interest on investment securities   307  250
 Dividends on other investments   73  74
Total interest and dividend income  17,838  15,444
 INTEREST EXPENSE   
 Interest on deposits   1,358  986
 Interest on borrowed funds   399  359
 Total interest expense   1,757  1,345
 Net interest income   16,081  14,099
 PROVISION FOR LOAN LOSSES   893  439
 Net interest income after provision for loan losses   15,188  13,660
 NONINTEREST INCOME   
 Deposit service charges and fees   1,458  1,199
 Loan referral fees   244  42
 Mortgage broker fees   106  115
 Sublease and lease income   61  111
Gain on sale of loans  142  84
 Other   309  300
 Total noninterest income   2,320  1,851
 NONINTEREST EXPENSE   
 Salaries and employee benefits   7,645  6,456
 Occupancy   1,627  1,469
 Data processing   971  848
 Director and staff expenses   280  278
 Excise taxes   258  225
 Marketing   143  150
 Legal and professional fees   210  194
 Federal Deposit Insurance Corporation (FDIC) assessments   164  181
 Business development   160  127
 Other   963  911
 Total noninterest expense   12,421  10,839
 Income before provision for income taxes   5,087  4,672
PROVISION FOR INCOME TAXES  1,043  1,483
NET INCOME$  4,044$  3,189
   
Basic and diluted earnings per share$  0.44$  0.35
Weighted average number of common shares outstanding:  
Basic  9,253,095  9,232,444
Diluted  9,265,647  9,235,521
   


COASTAL FINANCIAL CORPORATION
AVERAGE BALANCES, YIELDS, AND RATES – QUARTERLY
(Dollars in thousands; unaudited)
 
 For the Three Months Ended
 June 30, 2018 March 31, 2018 June 30, 2017
 AverageInterest &Yield / AverageInterest &Yield / AverageInterest &Yield /
 BalanceDividendsCost (4) BalanceDividendsCost (4) BalanceDividendsCost (4)
Assets           
Interest earning assets:           
Interest-bearing deposits$  50,750$  2361.87% $  68,160$  2551.52% $  56,240$  1491.06%
Investment securities (1)  39,642  1551.57   39,717  1521.55   36,288  1321.46
Other Investments  3,200  627.77   2,912  111.53   2,975  638.49
Loans receivable (2)  688,975  8,7785.11   654,570  8,1895.07   607,197  7,5574.99
Total interest earning assets$  782,567$  9,2314.73 $  765,359$  8,6074.56 $  702,700$  7,9014.51
Noninterest earning assets:           
Allowance for loan losses  (8,522)     (8,121)     (7,861)  
Other noninterest earning assets  36,277     36,077     38,094  
Total assets$  810,322   $  793,315   $  732,933  
            
Liabilities and Shareholders’ Equity           
Interest bearing liabilities:           
Interest-bearing deposits$  464,133$  7120.62% $  464,219$  6460.56% $  422,166$  4920.47%
Subordinated debt  9,955  1475.92   9,952  1445.87   9,941  1485.97
Junior subordinated debentures  3,580  394.37   3,579  353.97   3,578  303.36
FHLB advances and other borrowings  5,972  302.01   793  42.05   2,544  71.10
Total interest-bearing liabilities$  483,640$  9280.77 $  478,543$  8290.70 $  438,229$  6770.62
Non-interest bearing deposits   255,615     245,273     229,084  
Other liabilities  2,610     2,845     2,889  
Total shareholders' equity  68,457     66,654     62,731  
Total liabilities and            
  shareholders' equity$  810,322   $  793,315   $  732,933  
Net interest income $  8,303   $  7,778   $  7,224 
Interest rate spread  3.96%   3.86%   3.89%
Net interest margin (3)  4.26%   4.12%   4.12%
            
(1) For presentation in this table, average balances and the corresponding average rates for investment securities are based upon historical cost, adjusted for amortization of premiums and accretion of discounts.
(2) Includes nonaccrual loans
(3) Net interest margin represents net interest income divided by the average total interest-earning assets 
(4) Yields and rates are annualized 
            


        
COASTAL FINANCIAL CORPORATION
AVERAGE BALANCES, YIELDS, AND RATES – YEAR-TO-DATE
(Dollars in thousands; unaudited)
     
        
 For the Six Months Ended
 June 30, 2018 June 30, 2017
 AverageInterest &Yield / AverageInterest &Yield /
 BalanceDividendsCost (4) BalanceDividendsCost(4)
Assets       
Interest earning assets:       
Interest-bearing deposits$  59,407$  4911.67% $  57,466  $  2871.01%
Investment securities (1)  39,679  3071.56   36,336  2501.39
Other Investments  3,057  734.82   2,790  745.35
Loans receivable (2)  671,867  16,9675.09   602,619  14,8334.96
Total interest earning assets$  774,010$  17,8384.65 $  699,211  $  15,4444.45
Noninterest earning assets:       
Allowance for loan losses  (8,323)     (7,771)  
Other noninterest earning assets  36,178     41,361  
Total assets$  801,865   $  732,801  
        
Liabilities and Shareholders’ Equity       
Interest bearing liabilities:       
Interest-bearing deposits$  464,176$  1,3580.59% $  423,501  $  9860.47%
Subordinated debt  9,954  2915.90   9,940  2915.90
Junior subordinated debentures  3,580  744.17   3,578  583.27
FHLB advances and other borrowings  3,397  342.02   1,611  101.25
Total interest-bearing liabilities$  481,107$  1,7570.74 $  438,630  $  1,3450.62
Non-interest bearing deposits   250,473     225,769  
Other liabilities  2,724     2,820  
Total shareholders' equity  67,561     65,582  
Total liabilities and        
  shareholders' equity$  801,865   $  732,801  
Net interest income $  16,081     $  14,099 
Interest rate spread  3.91%   3.84%
Net interest margin (3)  4.19%   4.07%
        
(1) For presentation in this table, average balances and the corresponding average rates for investment securities are based upon historical cost, adjusted for amortization of premiums and accretion of discounts.  
(2) Includes nonaccrual loans  
(3) Net interest margin represents net interest income divided by the average total interest-earning assets  
(4) Yields and rates are annualized       


      
COASTAL FINANCIAL CORPORATION
QUARTERLY STATISTICS
(Dollars in thousands, except per share amounts; unaudited) 
     
      
 Three Months Ended
 June 30, March 31, December 31, September 30, June 30, 
 20182018201720172017
Income Statement Data:     
Interest and dividend income$  9,231$  8,607$  8,452$  8,217$  7,901
Interest expense  928  829  798  732  677
Provision for loan losses  392  501  366  65  -
Net interest income after      
provision for loan losses  7,911  7,277  7,288  7,420  7,224
Noninterest income  1,213  1,107  1,053  1,250  1,020
Noninterest expense  6,354  6,067  5,785  5,809  5,463
Provision for income tax  569  474  2,213  957  905
Net income  2,201  1,843  343  1,904  1,876
Adjusted net income (1)  2,201  1,843  1,638  1,904  1,876
      
 As of Period End or for the three month period
 June 30, March 31, December 31, September 30, June 30, 
 20182018201720172017
Balance Sheet Data:     
Cash and cash-equivalents$  91,449$  94,569$  89,751$  86,531$  58,198
Investment securities  37,317  37,338  38,336  40,201  35,280
Loans receivable  700,692  678,515  656,788  630,442  623,250
Allowance for loan losses  (8,540)  (8,423)  (8,017)  (7,947)  (7,889)
Total assets  850,922  830,962  805,753  778,609  738,049
Interest-bearing deposits  485,019  473,268  460,937  438,592  421,031
Noninterest-bearing deposits  259,449  254,000  242,358  242,607  219,872
Total deposits  744,468  727,268  703,295  681,199  640,903
Total borrowings  33,537  33,534  33,529  28,526  30,521
Total shareholders’ equity  69,490  66,927  65,711  65,558  63,600
      
Share and Per Share Data (2)(3):     
Earnings per share – basic$  0.24$  0.20$  0.04$  0.21$  0.20
Earnings per share – diluted$  0.24$  0.20$  0.04$  0.21$  0.20
Adjusted earnings per share - diluted (4)  $  0.18  
Dividends per share  -  -  -  -  -
Book value per share (5)$  7.47$  7.23$  7.10$  7.09$  6.88
Tangible book value per share (6)$  7.47$  7.23$  7.10$  7.09$  6.88
Weighted avg outstanding shares – basic   9,263,302  9,242,766  9,237,660  9,235,344  9,233,738
Weighted avg outstanding shares – diluted   9,282,816  9,248,365  9,240,737  9,238,421  9,236,815
Shares outstanding at end of period  9,298,553  9,253,303  9,248,901  9,249,006  9,245,546
      
Credit Quality Ratios:     
Nonperforming assets to total assets0.24%0.20%0.26%0.32%0.32%
Nonperforming assets to loans receivable      
and OREO0.30%0.25%0.32%0.40%0.38%
Nonperforming loans to total loans receivable0.30%0.25%0.32%0.40%0.38%
Allowance for loan losses to nonperforming loans412.96%495.76%378.16%316.49%335.13%
Allowance for loan losses to total loans receivable1.22%1.24%1.22%1.26%1.27%
Net charge-offs (recoveries) to average loans (7)0.16%0.06%0.18%0.01%-0.06%
      
Capital Ratios:     
Tier 1 leverage capital 9.21%9.07%8.95%9.31%9.22%
Tier 1 risk-based capital 10.24%10.25%10.50%10.75%10.43%
Common equity Tier 1 risk-based capital 9.76%9.75%9.98%10.21%9.89%
Total risk-based capital12.82%12.90%13.24%13.54%13.21%
      
      
      
(1) Adjusted net income is a non-GAAP financial measure that excludes the impact of the revaluation of our deferred tax assets as a result of the reduction in the corporate income tax rate under the Tax Cuts and Jobs Act. The most directly comparable GAAP measure is net income. See our reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures under the caption “Non-GAAP Financial Measures.”
(2) Share and per share amounts are based on total common shares outstanding, which includes common stock and nonvoting common stock.
(3) Share and per share information has been adjusted to give effect to a one-for-five reverse stock split of our common shares completed effective May 4, 2018.
(4) Adjusted earnings per share is a non-GAAP financial measure that excludes the impact of the revaluation of our deferred tax assets as a result of the reduction in the corporate income tax rate under the Tax Cuts and Jobs Act. The most directly comparable GAAP measure is earnings per share. See our reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures under the caption “Non-GAAP Financial Measures.”
(5) We calculate book value per share as total shareholders’ equity at the end of the relevant period divided by the outstanding number of our common shares, which includes common stock and nonvoting common stock, at the end of each period.
(6) Tangible book value per share is a non-GAAP financial measure. We calculate tangible book value per share as total shareholders’ equity at the end of the relevant period, less goodwill and other intangible assets, divided by the outstanding number of our common shares, which includes common stock and nonvoting common stock, at the end of each period. The most directly comparable GAAP financial measure is book value per share. We had no goodwill or other intangible assets as of any of the dates indicated. As a result, tangible book value per share is the same as book value per share as of each of the dates indicated.
(7) Annualized calculations     


Non-GAAP Financial Measures

This earnings release contains certain non-GAAP (“Generally Accepted Accounting Principles”) financial measures in addition to results presented in accordance with GAAP. These measures include the following:

“Adjusted net income” is a non-GAAP measure defined as net income increased by the additional income tax expense that resulted from the revaluation of deferred tax assets as a result of the reduction in the corporate income tax rate under the recently enacted Tax Cuts and Jobs Act. The most directly comparable GAAP measure is net income.

“Adjusted earnings per share” is a non-GAAP measure defined as net income, plus additional income tax expense, divided by weighted average outstanding shares (diluted). The most directly comparable GAAP measure is earnings per share.

The Company also presented comparable earnings information using GAAP financial measures. Reconciliations of the GAAP and non-GAAP measures are presented below.  

   
(Dollars in thousands, except share and per share data) As of and for three
Months ended
December 31, 2017
Adjusted net income:  
Net income $  343
Plus: additional income tax expense   1,295
Adjusted net income $  1,638
Adjusted earnings per share – diluted:  
Net income $  343
Plus: additional income tax expense   1,295
Adjusted net income $  1,638
Weighted average common shares outstanding– diluted (1)   9,240,737
Adjusted earnings per share – diluted (1) $  0.18
   
    
(1) Share and per share information has been adjusted to give effect to a one-for-five reverse stock split of our common shares completed effective May 4, 2018. 
   

 

 

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Source: Coastal Financial Corporation