Coastal Carolina Bancshares, Inc. Reports Record 2018 Earnings
Myrtle Beach, South Carolina – (January 28, 2019) — Coastal Carolina Bancshares, Inc. (the “Company”) (OTC: CCNB), parent of Coastal Carolina National Bank (“Bank”), reported unaudited net income of $2,115,471, or $.35 cents per share for the twelve months ended December 31, 2018, compared to $323,732, or $.07 cents per share for the same period ending December 31, 2017. For the quarter ended December 31, 2018, the company reported net income of $654,029 compared to $541,040 for the prior quarter ended September 30, 2018.
2018 Financial Highlights
- Net Income available to common shareholders for 2018 increased to $2,115,471 compared to $323,732 for 2017 (JOBS Act – deferred tax adjustment recorded in December 2017)
- Total Assets grew 15.7% to $379 million at December 31, 2018, compared to $327 million at December 31, 2017
- Total Deposits grew 19.6% to $327 million at December 31, 2018, compared to $273 million at December 31, 2017
- Total Loans grew 15.7% to $288 million at December 31, 2018, compared to $249 million at December 31, 2017
- Opened our 7th branch location in the vibrant Greenville, SC market in the second quarter of 2018
“We are very proud of the bank’s performance in 2018 as it was the most profitable year in our bank’s history. Double-digit percentage growth in assets, deposits, and loans is a testament to our team’s unwavering pursuit of excellence. We are very fortunate to have such a talented group of community bankers throughout our entire organization focused on increasing shareholder value. Our credit quality remains very strong as we grew our loan portfolio 15.7% while maintaining low levels of non-performing assets as compared to many of our peers,” said Laurence S. Bolchoz, Jr., President and Chief Executive Officer of the Company and the Bank. “As we have become a bona fide statewide bank this year, we are pleased with the resulting loan portfolio diversification we are experiencing from the coastal, midlands and upstate regions of South Carolina that we serve. We are proud of our teammates and the resiliency of our neighbors in Horry County, who suffered tremendously due to Hurricane Florence and the resulting floods in the fourth quarter. We were pleased to be able to offer assistance to our customers who were impacted by this relentless storm. The core values and culture of our bank remain strong, and we are very encouraged by the potential for continued growth that we have in all markets we serve in South Carolina,” Bolchoz said.
Net interest income totaled $12.6 million for the year ended December 31, 2018, compared to $11.0 million for the previous year ended December 31, 2017. Net Interest Income to average earning assets was 4.68% and 4.55% for the twelve months ended December 31, 2018, and 2017, respectively. Net interest income to average earning assets for the fourth quarter was 4.77%, compared to 4.47% in the fourth quarter of 2017. Improvements were observed comprehensively in the yields for the loan portfolio, investment portfolio, and the cash position.
The cost of funding was 1.12% in the fourth quarter of 2018 compared to 1.18% the previous quarter. The cost of funding was 1.11% for the year ended 2018, compared to .85% for the previous year ended December 31, 2017. Significant deposit competition, entry into new markets, and a strong strategic growth plan in 2018 resulted in the bank experiencing increased funding costs during 2018.
The overall net interest margin was 3.79% for the year ended December 31, 2018, compared to 3.85% for the previous year ended December 31, 2017. The decline in margin was due to the reduction in loan mark accretion in 2018 compared to 2017. The underlying core net interest margin increased from 3.57% in 2017 to 3.59% in 2018.
Non-Interest Income, excluding gains on sale of loans, totaled $542,329 for the twelve months ended December 31, 2018, a 17% increase compared to $463,600 the previous year ended December 31, 2017. Gain on sale of loans decreased by 14.7% in 2018, from $1,043,186 in 2017 to $889,415 in 2018, the result of reduced mortgage loan volume being sold in the secondary market compared to 2017. While overall loan production levels increased in 2018, the percentage of mortgage loans sold can vary from year to year.
Non-Interest Expense totaled $10.9 million and $9.6 million for the twelve months ended December 31, 2018 and 2017, respectively, an increase of 13.5% mostly associated with expansion efforts in the Greenville, SC market. Non-interest expense in the fourth quarter of 2018 was $2.8 million, 3% less than $2.9 million during the third quarter of 2018.
Balance Sheet and Credit Quality
Total Assets grew 15.7% to $379 million at December 31, 2018, compared to $327 million at December 31, 2017. Asset growth was funded with strong deposit growth with a focus on growing checking accounts. Checking account balances totaled $72.1 million, representing 22% of the total deposit portfolio as of December 31, 2018. We continue to focus on the growth of commercial checking customers through the increase in cash management products of our Treasury Services Department in order to improve our deposit portfolio mix and our net interest margin. These balances grew $3.4 million in the fourth quarter of 2018 and grew $10.8 million for the twelve months ended December 31, 2018.
The bank continues to grow the loan portfolio effectively while focusing on maintaining our strong conservative credit culture. Non-performing Assets to Total Assets was .30% at December 31, 2018, compared to .23% at December 31, 2017. The bank continues to grow the loan portfolio effectively while focusing on maintaining our strong conservative credit culture. The Bank sold its final OREO property in the fourth quarter of 2018 to reduce OREO to zero.
The provision for loan losses totaled $425,757 for the twelve months ended December 31, 2018, and the overall loan loss reserve increased to .83% of total loans, compared to .77% at December 31, 2017.
About Coastal Carolina Bancshares, Inc. Coastal Carolina Bancshares, Inc. is the bank holding company of Coastal Carolina National Bank, a Myrtle Beach-based community bank serving Horry, Georgetown, Aiken, Richland, Lexington, Greenville (SC), and Brunswick (NC) counties. Coastal Carolina National Bank is a locally operated financial institution focused on providing personalized service and offers a full range of banking services designed to meet the specific needs of individuals and small and medium-sized businesses. Headquartered in Myrtle Beach, South Carolina, the Bank also has branches in Garden City, North Myrtle Beach, Conway, Aiken, Columbia, and Greenville, South Carolina. Through the substantial experience of our local management and Board of Directors, Coastal Carolina Bancshares, Inc. seeks to enhance value for our shareholders, build lasting customer relationships, benefit our communities and give our employees a meaningful career opportunity. Coastal Carolina Bancshares, Inc. currently trades its common stock on the OTC QX market under the symbol “CCNB.” To learn more about the Company and its subsidiary bank.
Forward-Looking Statements Except for historical information, all of the statements, expectations, and assumptions contained in this press release are forward-looking statements. Actual results might differ materially from those explicit or implicit in the forward-looking statements. Important factors that could cause actual results to differ materially include, without limitation: the effects of future economic conditions; governmental fiscal and monetary policies; legislative and regulatory changes; the risks of changes in interest rates; management of growth; fluctuations in our financial results; reliance on key personnel; our ability to compete effectively; privacy, security and other risks associated with our business. Coastal Carolina Bancshares, Inc. assumes no obligation and does not intend to update these forward-looking statements, except as required by law.