Long Island’s Gold Coast Bancorp Reports Higher Quarterly Net Income, Deposits and Loan Growth

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 March 31, 2018 of $ 531,000, or $0.14 per share compared with net income of $515,000, or $0.13 per share for the quarter ended March 31, 2017. Return on average assets and return on average equity was 0.43 percent and 5.14 percent, respectively, in the first quarter of 2018, compared to 0.48 percent and 5.15 percent in the 2017 first quarter.

Total assets at March 31, 2018 were $509 million, an increase of $39 million, or 8 percent from total assets of $470 million at December 31, 2017. Total assets increased $66 million, or 15 percent from $443 million at March 31, 2017.

Deposits at March 31, 2018 totaled $424 million, an increase of $32 million, or 8 percent from $392 million at December 31, 2017. Total deposits increased $36 million, or 9 percent from $388 million at March 31, 2017. Non-interest bearing demand deposits were 25 percent of the total deposit portfolio at both March 31, 2018 and December 31, 2017, compared to 28 percent of the total deposit portfolio at March 31, 2017. FHLB borrowings were $25 million at March 31, 2018 compared to $20 million at December 31, 2017 and $10 million at March 31, 2017, respectively.

Total loans outstanding at March 31, 2018 were $391 million, an increase of $10 million, or 3 percent from $381 million at December 31, 2017 and an increase of $47 million, or 14 percent from $344 million at March 31, 2017. Loan originations and draws were $31 million in both the first quarter of 2018 and the first quarter of 2017. The bank experienced loan repayments and pay downs of $21 million in the first quarter of 2018 compared to $28 million in the first quarter of 2017.

Asset quality continues to remain strong: The Bank’s nonperforming loans were 0.02 percent of gross loans at March 31, 2018. Allowance for loan losses was 1.01 percent of total loans at March 31, 2018.

The Bank remained well capitalized at March 31, 2018, with the following regulatory capital ratios:

- Tier 1 Leverage Capital Ratio of 11.1 percent.

- Common Equity Tier 1 Risk-Based Capital and Tier 1 Risk-Based Capital Ratios of 15.3 percent.

- Total Risk-Based Capital Ratio of 16.4 percent.

At March 31, 2018 book value per share was $10.70 per share, increasing from $10.69 per share at December 31, 2017 and $10.43 per share at March 31, 2017.

Net interest income grew $258,000, or 8 percent in the first quarter of 2018 compared to the first quarter of 2017, largely due to a 13 percent increase in average interest earning assets, partially offset by a decrease in the net interest margin to 2.88 percent in the first quarter of 2018 compared to 3.12 percent in the first quarter of 2017. The decrease in the Bank’s net interest margin is largely due to an increase in the Bank’s cost of funds, primarily due to the issuance of $13.5 million of 6.50% subordinated notes on September 29, 2017. The provision for loan losses was $80,000 in the three months ended March 31, 2018. There was no provision required in the 2017 first quarter.

Non-interest income was $107,000 in the first quarter of 2018 compared to $99,000 in the first quarter of 2017. Non-interest expense increased $305,000, or 12 percent in the first quarter of 2018 compared to the first quarter of 2017 , largely due to the opening of the Bank’s newest branch in Brooklyn in April 2017 and the addition of staff to support the bank’s expanded lending activities in the NYC metropolitan area.

John C. Tsunis, Chairman and CEO stated, “The successful issuance of our subordinated debt last year has allowed us to expand our balance sheet these past six months, and grow our loan portfolio as interest rates rise. Notwithstanding the challenging interest rate environment for new loans, as well as higher costs for deposits, we believe that with prudent management and continuing investment in our technology and personal infrastructure, our balance sheet and net income will continue to grow in a prudent and balanced fashion. The Bank’s deposits, the lifeblood of our industry, have accelerated as our customer base, in our trade area, has become aware of our bank’s certificate of deposit program, allowing for longer term, stable deposits to fund our growing loan portfolio. We are fiercely determined to execute on our community banking strategy, supporting our neighbors, local community businesses, and not-for-profit corporations that make our communities special. We are grateful for their support and we in turn reinvest their deposits LOCALLY and not outside of our trade area or country.”

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.”

Consolidated Balance Sheets (unaudited)
(dollars in thousands, except per share data)
				March 31,				December 31,				March 31,
				2018				2017				2017
ASSETS
Total cash and cash equivalents				$	51,295			$	21,343			$	40,303
Securities available for sale, at fair value					55,303				56,960				48,877
Securities held to maturity					8,421				8,437				6,677
Loans					391,363				381,452				344,288
Allowance for loan losses					(3,956	)			(3,919	)			(3,558	)
Loans, net					387,407				377,533				340,730
Premises and equipment, net					1,674				1,778				2,002
Other assets					4,713				4,384				4,267
Total assets				$	508,813			$	470,435			$	442,856
LIABILITIES AND SHAREHOLDERS' EQUITY
Non-interest bearing				$	104,450			$	99,153			$	109,852
Interest bearing					319,848				293,120				277,874
Total deposits					424,298				392,273				387,726
Borrowings					25,000				20,000				10,000
Subordinated debt, net					13,304				13,299				-
Other liabilities					4,127				2,815				4,132
Total Liabilities					466,729				428,387				401,858
Total Shareholders' Equity					42,084				42,048				40,998
Total Liabilities and Shareholders' Equity				$	508,813			$	470,435			$	442,856
Selected Financial Data (unaudited)
Allowance for loan losses to total loans					1.01	%			1.03	%			1.03	%
Non-performing loans to total loans					0.02	%			0.13	%			0.09	%
Book value per share				$	10.70			$	10.69			$	10.43
Capital Ratios (unaudited) (1)
Tier 1 leverage ratio					11.07	%			11.39	%			9.51	%
Common equity Tier 1 risk-based capital ratio					15.34	%			15.31	%			12.43	%
Tier 1 risk-based capital ratio					15.34	%			15.31	%			12.43	%
Total risk-based capital ratio					16.43	%			16.40	%			13.50	%
(1) Regulatory capital ratios presented on bank-only basis
Consolidated Statements of Income (unaudited)
(dollars in thousands, except share and per share data)
				For the three months ended
				March 31,				December 31,				March 31,
				2018				2017 (1)				2017
Interest income				$	4,797			$	4,444			$	3,905
Interest expense					1,204				935				570
Net interest income					3,593				3,509				3,335
Provision for loan losses					80				119				-
Net interest income after provision for loan losses					3,513				3,390				3,335
Non interest income					107				149				99
Non interest expense					2,921				2,916				2,616
Income before income taxes					699				623				818
Income tax expense					168				889				303
Net income (loss)				$	531			$	(266	)		$	515
Basic earnings (loss) per share				$	0.14			$	(0.07	)		$	0.13
Diluted earnings (loss) per share				$	0.14			$	(0.07	)		$	0.13
Weighted average common and equivalent
shares outstanding					3,931,634				3,931,634				3,931,634
Selected Financial Data (unaudited)
Return on average assets					0.43	%			-0.22	%			0.48	%
Return on average equity					5.14	%			-2.47	%			5.15	%
Net interest margin					2.88	%			2.93	%			3.12	%
Efficiency ratio					78.95	%			79.72	%			76.18	%
(1) Profitability negative in 4Q2017 due to tax -related DTA adjustment

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