Just a little more than two years after being placed under a consent order by state and federal banking regulators for its preponderance of non-performing loans, The Coastal Bank announced Monday the FDIC and the Georgia Department of Banking and Finance have removed the mandate in place since May 2011.
“Long before the formal order was issued, we committed the necessary resources to improve the bank’s condition as quickly as possible,” said Jim A. LaHaise, president and CEO of The Coastal Bank.
“Throughout the two-year tenure of the order, we maintained capital levels, which were well in excess of the agreed upon minimums. This capital position allows us to continue to lend money to support customer needs in the communities we serve.
“A lot of hard work — from our board, management team and staff — went into working our way through this,” he said.
LaHaise said there were several reasons for the bank’s quick turnaround.
“The first was an improvement in the local economy,” he said.
“Also, most of our issues were in residential construction and our acquisition and development portfolios,” he said. “And that part of the market has come back sooner than anyone expected.
“We’ve been able to sell finished houses and lots that had been on the books since the housing bust.”
The bank was also paying attention to its “problem loans,” looking for solutions long before the consent order was issued, LaHaise said.
“One thing we did was to split the bank into two divisions — the core bank and a special assets group that focused primarily on the issue of our underperforming loans.
“That allowed us to transform our core balance sheet and created an earnings stream,” he said, adding that the bank’s board of directors stepped up to the increased responsibilities with rock-solid support.
Improvement of the bank’s financial condition over the past two years has been driven primarily by the reduction of those problem loans. The bank has also made significant improvements in earnings performance, returning to profitability in 2012.
This trend has continued into 2013, with the bank reporting net income of $1.09 million through six months ended June 30, 2013, compared to $922,000 for the year ended December 31, 2012.
LaHaise said he is particularly proud of the fact the bank was able to come back to profitability with no outside infusion of capital.
“We earned our way out,” he said. “That’s good for our shareholders, good for the bank and good for our customers.”
ABOUT THE COASTAL BANK
Locally owned and operated, The Coastal Bank provides a full range of financial services, specializing in small business, consumer banking and real estate lending.
Headquartered on Johnson Square in Savannah, the bank has served the greater Savannah area since 1954. The Coastal Bank has an operations center in Pooler and branches in Hinesville, Pooler, Rincon and throughout Savannah.
For more information, call 912-201-4934 or go to www.thecoastalbank.com.