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, 2019 of $640,000, or $0.16 per share compared with net income of $531,000, or $0.14 per share for the quarter ended March 31, 2018. Return on average assets and return on average equity was 0.46 percent and 5.86 percent, respectively, in the first quarter of 2019, compared to 0.43 percent and 5.14 percent in the 2018 first quarter.

Total assets increased $6 million to $563 million at March 31, 2019 from $556 million at December 31, 2018, and $54 million, or 11 percent from $509 million at March 31, 2018. The increase occurred while the bank repaid $10 million of FHLB borrowings during the quarter.

Deposits at March 31, 2019 totaled $486 million, an increase of $8 million from $478 million at December 31, 2018. Total deposits increased $62 million, or 15 percent from $424 million at March 31, 2018. Non-interest bearing demand deposits were 20 percent and 21 percent, respectively, of the total deposit portfolio at March 31, 2019 and December 31, 2018, compared to 25 percent of the total deposit portfolio at March 31, 2018. FHLB borrowings were $10 million at March 31, 2019 compared to $20 million at December 31, 2018 and $25 million at March 31, 2018, respectively.

Total loans outstanding at March 31, 2019 were $463 million, an increase of $17 million, or 4 percent from $446 million at December 31, 2018 and an increase of $72 million, or 18 percent from $391 million at March 31, 2018. Loan originations and draws were $25 million and $31 million, respectively, in the first quarter of 2019 and the first quarter of 2018. The bank experienced loan repayments and pay downs of $9 million in the first quarter of 2019 compared to $21 million in the first quarter of 2018.

Asset quality continues to remain strong: The Bank had no nonperforming loans at March 31, 2019 compared to non-performing loans of 0.02 percent of gross loans at March 31, 2018. The allowance for loan losses was 0.96 percent of total loans at March 31, 2019.

The Bank remained well capitalized at March 31, 2019, with the following regulatory capital ratios:

- Tier 1 Leverage Capital Ratio of 10.4 percent.

- Common Equity Tier 1 Risk-Based Capital and Tier 1 Risk-Based Capital Ratios of 13.7 percent

- Total Risk-Based Capital Ratio of 14.7 percent

At March 31, 2019 book value per share was $11.44 per share, increasing from $11.16 per share at December 31, 2018 and $10.70 per share at March 31, 2018.

Net interest income remained flat at $3.6 million in the first quarters of both 2019 and 2018, largely due to a decrease in the net interest margin to 2.61 percent in the first quarter of 2019 compared to 2.88 percent in the first quarter of 2018, which offset a 12 percent increase in interest earning assets. The decrease in the Bank’s net interest margin is largely due to a 62 basis point increase in the Bank’s cost of funds, as a result of the increase in market interest rates. This increase was partially offset by an increase of 31 basis points in the yield on interest earning assets between the periods. The provision for loan losses was $138,000 in the first quarter of 2019 compared to $80,000 in the first quarter of 2018.

Non-interest income was $96,000 in the first quarter of 2019 compared to $107,000 in the first quarter of 2018. Non-interest expense decreased $217,000, or 7 percent in the first quarter of 2019 compared to the first quarter of 2018, largely due to a decrease of $230,000 in the Bank’s compensation expenses.

John C. Tsunis, Chairman and CEO stated, “We are pleased to report continued strength in our asset quality with no non-performing loans as of March 31, 2019. Book value continued to rise to $11.44 per share, a 9% increase year over year. Despite the margin compression, earnings increased to $0.16 per share for the first quarter of 2019 from $0.14 per share for the first quarter of 2018, largely due to greater operating efficiencies.

Despite reducing costs, we are introducing new programs that provide services which were only available at money center banks. New technology and initiatives, such as Relationship Rewards, a reward program we are introducing in 2019 for our consumer and small business clients: Notifi Events and Alert Services, allowing our customers to better manage alerts and Secure Now, enhanced security for online banking are offered by our lending officers and relationship managers at our branches, complementing the excellent personal service that Gold Coast Bank, “Long Island’s Community Bank” is known for.

Executing on these relationships in the business and not for profit community, through our educational outreach programs with local elementary schools, teaching students about fiscal responsibility and the wonders of compound interest rates, as well as our Gold Coast Bank Service Appreciation Program acknowledging our police, firefighters and other uniformed services who support and make our communities a safe and great place to live, has epitomized our community banking commitment of “We are your neighbor and we have your back”!

This is what makes Gold Coast Bank different from the nondescript, money center banks that don’t even know your name! We continue to penetrate our existing markets, complementing our Golden real estate loan portfolio by growing our deposit base via owner operated real estate customers and operating businesses in our community, generating deposits as well as non-interest income. As a result of these efforts, in a most competitive banking environment, Gold Coast Bank continues its growth, increasing assets by 11 percent over the past year, and deposits by 15 percent.

We thank you for your support!”

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.

Gold Coast Bancorp, Inc.
Consolidated Balance Sheets
(dollars in thousands, except per share data)
		(unaudited)								(unaudited)
		March 31,				December 31,				March 31,
		2019				2018				2018
ASSETS
Total cash and cash equivalents		$	24,118			$	38,377			$	51,295
Securities available for sale, at fair value			62,116				61,171				55,303
Securities held to maturity			8,608				8,624				8,421
Loans			462,647				446,116				391,363
Allowance for loan losses			(4,455	)			(4,293	)			(3,956	)
Loans, net			458,192				441,823				387,407
Premises and equipment, net			5,083				1,494				1,674
Other assets			4,518				4,976				4,713
Total Assets		$	562,635			$	556,465			$	508,813
LIABILITIES AND SHAREHOLDERS' EQUITY
Non-interest bearing deposits		$	97,633			$	99,284			$	104,450
Interest bearing deposits			388,303				378,261				319,848
Total deposits			485,936				477,545				424,298
Borrowings			10,000				20,000				25,000
Subordinated debt, net			13,325				13,319				13,304
Other liabilities			8,370				1,713				4,127
Total Liabilities			517,631				512,577				466,729
Total Shareholders' Equity			45,004				43,888				42,084
Total Liabilities and Shareholders' Equity		$	562,635			$	556,465			$	508,813
Selected Financial Data (unaudited)
Allowance for loan losses to total loans			0.96	%			0.96	%			1.01	%
Non-performing loans to total loans			0.00	%			0.00	%			0.02	%
Book value per share		$	11.44			$	11.16			$	10.70
Capital Ratios (unaudited) (1)
Tier 1 leverage ratio			10.40	%			10.58	%			11.07	%
Common equity Tier 1 risk-based capital ratio			13.67	%			14.05	%			15.34	%
Tier 1 risk-based capital ratio			13.67	%			14.05	%			15.34	%
Total risk-based capital ratio			14.71	%			15.09	%			16.43	%
(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,
		2019				2018				2018
Interest income		$	5,728			$	5,579			$	4,797
Interest expense			2,145				1,880				1,204
Net interest income			3,583				3,699				3,593
Provision for loan losses			138				88				80
Net interest income after provision for loan losses			3,445				3,611				3,513
Non interest income			96				128				107
Non interest expense			2,704				2,781				2,921
Income before income taxes			837				958				699
Income tax expense			197				226				168
Net income		$	640			$	732			$	531
Basic earnings per share		$	0.16			$	0.19			$	0.14
Diluted earnings per share		$	0.16			$	0.19			$	0.14
Weighted average common and equivalent
shares outstanding			3,932,494				3,931,634				3,931,634
Selected Financial Data (unaudited)
Return on average assets			0.46	%			0.52	%			0.43	%
Return on average equity			5.86	%			6.51	%			5.14	%
Net interest margin			2.61	%			2.72	%			2.88	%
Efficiency ratio			73.50	%			72.67	%			78.95	%

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