Coast Bancorp (CA) (fka CTBP)

[56Chevy]

Coast National Bank Selling Morro Bay Branch Office and Related Deposits to Heritage Oaks Bank

Coast National Bank Retains Three Locations While Preparing for Future Growth

Date : 10/01/2012 @ 12:22PM
Source : MarketWire
Stock : Coast Bancorp (QB) (CTBP)
Quote : $1.35 0.0 (0.00%) @ 9:30AM

SAN LUIS OBISPO, CA--(Marketwire - Oct 1, 2012) - San Luis Obispo-based Coast National Bank, the wholly owned subsidiary of Coast Bancorp ( OTCQB : CTBP ), today announced that it entered into a definitive agreement for the sale of Coast National Bank's Morro Bay branch location to Heritage Oaks Bank. The transaction includes the sale of approximately $30 million in deposit accounts at the Morro Bay branch together with the fixed assets and real estate. Heritage Oaks Bank will pay market value for the building and the physical assets, and a blended deposit premium of 2.2% for the deposits which includes approximately 35.5% non-interest bearing demand deposits. No loans will be transferred in connection with the sale of the branch.

Anita Robinson, President and CEO of Coast National Bank, said that Coast conducted a process to ensure it was receiving the best price possible for this branch sale. Heritage Oaks Bank's bid was the best one of several received by Coast. Robinson, who became President and CEO of Coast in late January of this year, said that after careful consideration the Board made a decision that selling the Morro Bay branch and focusing operations on Coast's three remaining locations was in the best interest of the Bank and its shareholders. Ms. Robinson stated, "This sale helps strengthen the Bank financially by both increasing Coast's capital ratios and further reducing the Bank's operating expenses, which in turn will help increase its profitability."

Robinson said timing and opportunity created an ideal circumstance for Heritage Oaks Bank to acquire the Morro Bay location. "Coast National Bank has been focused on its rebound from the economic problems of the last few years. This transaction will make a great contribution to the positive progress underway."

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http://finance.yahoo.com/news/coast-national-bank-selling-morro-162226762.html

*I have No investment interest at this time...but the bank is certainly worth watching.

A quick review of the bank from 30,000 feet tells me Coast Bancorp fits the same under capitalized situation many small banks do but the new CEO Anita Robinson appears to be taking the right corrective steps. This bank did not participate in the 08/09 TARP program which is a plus going forward.

Before the sale of the Morro Bay branch office the bank had $142 Million in Assets and only $7 Million in Captial.

In March of 2011 the bank was put under (and remains under) a Consent Order agreement with the regulators. The Bank has agreed, among other matters, to: (1) Achieve and maintain a Tier 1 capital ratio of 9% of adjusted total assets and a total risk based capital ratio of 12%; (2) Maintain an adequate Allowance for Loan and Lease Losses; (3) Ensure implementation and adherence to a written commercial real estate concentration program; (4) Revise the comprehensive liquidity risk management program. (5) Prepare and implement three year strategic and capital plans; (6) Ensure effective management; (7) Adopt and implement policies to improve the Bank's loan policy management and reduce the level of credit risk in its loan portfolio; and (8) Cure credit, collateral and appraisal exceptions.

[....]

http://www.reuters.com/article/2011/03/21/idUS223051+21-Mar-2011+MW20110321

Here is a quick visual graph:

http://banktracker.investigativereportingworkshop.org/banks/california/san-luis-obispo/coast-national-bank/

The sale of The Morro bay branch happened after this latest workshop graph.