-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, J7avQXXxxTgi+6S+OC18tMX1uJ6aFQeO7V+oGfh/vhGV3TIdv4y7wjJZ/uE2YO6Y h1Kg1x9s9MjVfBOBRMNkTA== 0000919805-01-500034.txt : 20020816 0000919805-01-500034.hdr.sgml : 20020816 20011204101440 ACCESSION NUMBER: 0000919805-01-500034 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20011126 ITEM INFORMATION: Other events FILED AS OF DATE: 20011204 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COASTAL BANCORP INC CENTRAL INDEX KEY: 0000919805 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTIONS, NOT FEDERALLY CHARTERED [6036] IRS NUMBER: 760428727 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-24526 FILM NUMBER: 01805548 BUSINESS ADDRESS: STREET 1: 5718 WESTHEIMER STREET 2: SUITE 600 CITY: HOUSTON STATE: TX ZIP: 77057 BUSINESS PHONE: 7134355000 MAIL ADDRESS: STREET 1: 5718 WESTHEIMER STREET 2: SUITE 600 CITY: HOUSTON STATE: TX ZIP: 77057 FORMER COMPANY: FORMER CONFORMED NAME: COASTAL BANCORP INC/TX/ DATE OF NAME CHANGE: 19940718 FORMER COMPANY: FORMER CONFORMED NAME: COASTAL BANC SAVINGS ASSOCIATION DATE OF NAME CHANGE: 19970110 8-K 1 doc1.txt SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) NOVEMBER 26, 2001 ----------------- COASTAL BANCORP, INC. --------------------- (Exact name of registrant as specified in charter) TEXAS 0-24526 76-0428727 (State or other jurisdiction (Commission File Number) (IRS Employer of incorporation) Identification No.)
5718 WESTHEIMER, SUITE 600, HOUSTON, TEXAS . . . . 77057 - -------------------------------------------------- --------------- (Address of Principal executive offices) . . . . . (Zip Code) - -------------------------------------------------- --------------- Registrant's telephone number including area code. (713) 435-5000 ---------------
(Former name or former address, if changed since last report) Not applicable -------------- ITEM 5. OTHER EVENTS - ------- ------------- On November 26, 2001, Coastal Bancorp, Inc. (the "Company") completed the settlement of the sale of approximately $845 million of its mortgage-backed securities. The transaction was undertaken to strategically restructure a portion of the Company's balance sheet to make it less vulnerable to market interest rate fluctuations. THE COMPANY DETERMINED TO UNDERTAKE THE SALE OF MORTGAGE-BACKED SECURITIES AT - -------------------------------------------------------------------------------- THIS TIME FOR THE FOLLOWING REASONS: - ---------------------------------------- - - This was an unprecedented opportunity to sell at break-even the entire mortgage-backed securities portfolio. - - The majority of the securities sold were Collaterized Mortgage Obligations ("CMO") tied to the Federal Home Loan Bank ("FHLB") 11th District Cost of Funds Index ("COFI") and contained extension risk which caused, on average, unacceptable levels of price volatility. THE MORTGAGE-BACKED SECURITIES SOLD CONSISTED OF THE FOLLOWING: - --------------------------------------------------------------------- - - A total of $845.6 million mortgage-backed securities categorized as follows: o $624.4 million COFI floaters o $131.2 million tied to the London Inter Bank Offerings Rate ("LIBOR") o $47.5 million Treasury Adjustable Rate Mortgage securities ("ARMs") o $35.2 million fixed rate CMOs o $7.3 million fixed rate pass-thru securities (where each owner gets their proportionate share of principal and interest payments). - - Approximately a $175,000 gain was booked for the quarter and year ended December 31, 2001. - - The weighted average yield of mortgage-backed securities sold was approximately 4.96%, at October 31, 2001. IN NOVEMBER 2001, THE COMPANY UTILIZED PART OF THE SALE PROCEEDS TO PURCHASE THE - -------------------------------------------------------------------------------- FOLLOWING ASSETS: - ----------------- - - A total of $513.6 million mortgage-backed securities categorized as follows: o $388.8 million COFI ARMs o $124.8 million tied to the 12-Month Treasury Average ("MTA") - - The weighted average yield of the mortgage-backed securities purchased [calculated using higher Constant Prepayment Rates ("CPR's")] is 4.53% at November 28, 2001. - - The weighted average price of the mortgage-backed securities purchased was 101.97%. - - The new portfolio has a shorter expected duration which reduces its price volatility - - The majority of the mortgage-backed securities purchased were pass-thru securities - - All mortgage-backed securities purchased and the remaining securities not sold were placed in the available-for-sale category on the balance sheet - - The Mark to Market on the available-for-sale securities will effect Generally Accepted Accounting Principles ("GAAP") capital but not Regulatory capital. THE REMAINING PROCEEDS WERE USED TO PAY DOWN THE FOLLOWING DEBT: - ------------------------------------------------------------------------- - - $286.3 million Reverse Repurchase Agreements were redeemed at a weighted average rate of 2.296% at November 19, 2001. - - $17.7 million FHLB borrowings were paid down at a weighted average rate of 2.177% at November 19, 2001. - - Previously, the balance sheet was liability sensitive but now it is asset sensitive; this puts the Company in a better position if and when interest rates rise. REDEMPTION OF THE SENIOR NOTES - ---------------------------------- The Company has notified the Trustee that it will redeem all of its 10.0% Senior Notes, ($43.9 million currently outstanding) on February 1, 2002 (the "Redemption Date"). The Redemption Price is par plus accrued interest to the Redemption Date. Following the redemption, management believes that the Bank will continue to be categorized as "well capitalized" as defined by the Federal Deposit Insurance Corporation. EARNINGS PER SHARE ESTIMATE - ------------------------------ As a result of the above-described transactions, the Company estimates that its earnings per share will be: - - Diluted EPS for the fourth quarter 2001 could range from $0.68 - $0.75 - - Diluted EPS for the year 2001 could range from $3.15 - $3.25 2002 ESTIMATE - -------------- Diluted EPS for year 2002 could range from $2.75 - $2.90 using the following assumptions: - - Asset size of the Company ranging from $2.5 to $2.7 billion - - Loans receivable equal to approximately 75% of total assets - - Mortgage-backed securities equal to approximately 20% of total assets - - Deposits of approximately $1.7 billion - - Net interest margin of 3.09% for year 2002 NOTICE UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 - -------------------------------------------------------------------------- This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, (i) statements about our estimates of future financial results, including future operating results, the effects of future interest rate movements on our financial results; and the effects of the economic environment on the credit quality of our loan portfolios, (ii) statements about our plans, objectives, expectations and intentions and other statements that are not historical facts; and (iii) other statements identified by words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," or words of similar meaning. These forward-looking statements are based on current beliefs and expectations of our management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control which are set forth in detail in Exhibit 99 attached hereto. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: - - Adverse governmental or regulatory policies may be enacted; - - The interest rate environment may change, causing margins to compress and adversely affecting net interest income; - - The risks associated with adverse changes to credit quality; - - Competition from other financial services companies in our markets; and - - The current economic slowdown may continue longer than anticipated, causing an adverse effect on credit quality and loan originations. Additional factors that could cause actual results to differ materially from those expressed in the forward-looking statements are discussed in our reports filed with the Securities and Exchange Commission. All subsequent written and oral forward-looking statements concerning other matters attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements above. We do not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statements are made. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. - ------- ------------------------------------------------------------- (a) Financial Statements --------------------- No financial statements are required. (b) Pro-Forma Financial Information --------------------------------- No pro forma financial information is required. (c) Exhibits -------- - -No. Description --- ----------- 99 Forward-Looking Statements SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. COASTAL BANCORP, INC. /s/ Catherine N. Wylie Date: December 4, 2001 ------------------------- by: Catherine N. Wylie Sr. Executive Vice President/ Chief Financial Officer COASTAL BANCORP, INC. EXHIBIT 99 FORWARD-LOOKING STATEMENTS FORWARD-LOOKING STATEMENTS -------------------------- The statements contained in this Current Report on Form 8-K which are not historical facts contain forward looking information with respect to plans, projections or future performance of Coastal Bancorp, Inc. ("Coastal"), the occurrence of which involve certain risks and uncertainties detailed in Coastal's filings with the Securities and Exchange Commission ("SEC"). Such discussion contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Reform Act"), and is subject to the safe harbor created by that Reform Act. The words "estimate," "project," "anticipate," "expect," "intend," "believe," "plans," and similar expressions are intended to identify forward-looking statements. Because such forward-looking statements involve risks and uncertainties, there are important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Factors, all of which are difficult to predict and many of which are beyond the control of Coastal, that could cause actual results to differ materially include, but are not limited to: risks related to Coastal's acquisition strategy, including risks of adversely changing results of operations and factors affecting Coastal's ability to consummate further acquisitions; risks involved in Coastal's ability to quickly and efficiently integrate the operations of acquired entities with those of Coastal; changes in general economic and business conditions; changes in market rates of interest; changes in the laws and regulations applicable to Coastal; the risks associated with the Bank's non-traditional lending (loans other than single-family residential mortgage loans such as multifamily, real estate acquisition and development, commercial real estate, commercial business and warehouse loans); and changes in business strategies and other factors as discussed in Coastal's Annual Report on Form 10-K for the year ended December 31, 2000, as filed with the SEC on March 27, 2001 and Quarterly Report on Form 10-Q for the period ended September 30, 2001 as filed with the SEC on November 14, 2001. -----END PRIVACY-ENHANCED MESSAGE-----