Long Island's Gold Coast Bancorp Reports 32% Earnings Growth and 5% Loan Growth in 2019

Gold Coast Bancorp, Inc. 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 June 30, 2019 of $722,000, or $0.18 per share compared with net income of $504,000, or $0.13 per share for the quarter ended June 30, 2018. Return on average assets and return on average equity was 0.51 percent and 6.36 percent, respectively, in the second quarter of 2019, compared to 0.40 percent and 4.76 percent in the 2018 second quarter. The increase in net income was primarily due to a decrease in non- interest expenses.

For the six months ended June 30, 2019, Gold Coast earned $1,362,000, or $0.34 per share compared with net income of $1,035,000, or $0.26 per share for the same period in 2018. Return on average assets and return on average equity was 0.48 percent and 6.12 percent, respectively, for the six months ended June 30, 2019, compared to 0.42 percent and 4.69 percent, respectively, for the six months ended June 30, 2018. The increase in net income was primarily due to a decrease in salaries and employee benefits.

Total assets at June 30, 2019 were $572 million, an increase of $16 million, or 3 percent from total assets of $556 million at December 31, 2018. Total assets increased $74 million, or 15 percent from $498 million at June 30, 2018.

Deposits at June 30, 2019 totaled $487 million, an increase of $9 million, or 2 percent from $478 million at December 31, 2018. Deposits totaled $420 million at June 30, 2018. Non-interest bearing demand deposits were 20 percent of the total deposit portfolio at June 30, 2019, compared to 21 percent at December 31, 2018 and 23 percent at June 30, 2018, respectively. FHLB borrowings were $20 million at each of June 30, 2019, December 31, 2018, and June 30, 2018.

Total loans outstanding at June 30, 2019 were $467 million, an increase of $21 million, or 5 percent from $446 million at December 31, 2018 and an increase of $65 million, or 16 percent from $402 million at June 30, 2018. Loan originations and draws were $19 million in both the second quarter of 2019 and 2018, respectively. The Bank experienced loan repayments and pay downs of $15 million in the second quarter of 2019 compared to $8 million in the second quarter of 2018. Loan originations and draws were $45 million in the six months ended June 30, 2019 compared to $50 million in the six months ended June 30, 2018. The Bank experienced loan repayments and pay downs of $24 million in the six months ended June 30, 2019 compared to $29 million in the same period in 2018.

Asset quality continues to remain strong: The Bank had no non-performing loans at June 30, 2019. The Allowance for loan losses was 0.98 percent of total loans at June 30, 2019.

The Bank remained well capitalized at June 30, 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 13.9 percent
- Total Risk-Based Capital Ratio of 14.9 percent

At June 30, 2019 book value per share was $11.74, increasing from $11.16 per share at December 31, 2018 and $10.80 per share at June 30, 2018.

Net interest income was $3.5 million in both the second quarter of 2019 and 2018, respectively, largely due to a 13 percent increase in average interest earning assets, offset by a decrease in the net interest margin to 2.54 percent in the second quarter of 2019 compared to 2.78 percent in the second quarter of 2018. Net interest income grew $85,000, or 1 percent for the six months ended June 30, 2019, compared to the same six month period in 2018, largely due to a 13 percent increase in average interest earning assets, partially offset by a decrease in the net interest margin to 2.57 percent in the most recent six month period compared to 2.86 percent in the 2018 six month period. 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 increase in market interest rates.

The provision for loan losses was $87,000 in the second quarter of 2019. There was no provision for loan losses required in the second quarter of 2018. The provision for loan losses for the six months ended June 30, 2019 was $225,000 compared to $80,000 for the six months ended June 30, 2018.

Non-interest income was $127,000 in the second quarter of 2019 compared to $110,000 in the second quarter of 2018. Non-interest income was $223,000 for the six months ended June 30, 2019 compared to $217,000 for the six months ended June 30, 2018. Non-interest expense decreased $258,000, or 9 percent in the second quarter of 2019 compared to the second quarter of 2018, largely due to a reduction in compensation and benefits due to reduced head count. Non-interest expense for the six months ended June 30, 2019 decreased $475,000, or 8 percent also due to the reduction of staff.

On July 24, 2019, Gold Coast announced that it signed a definitive merger agreement with Investors Bancorp, Inc. ("Investors") ISBC under which Investors will acquire Gold Coast. Consideration will be paid to Gold Coast stockholders in a combination of stock and cash valued at $63.6 million, inclusive of outstanding dilutive securities and based on Investors' closing price of $11.20 on July 23, 2019. The completion of the transaction is subject to Gold Coast's stockholder approval and regulatory approvals. Subject to approvals, the transaction is expected to close in the early part of the first quarter of 2020.

John C. Tsunis, Chairman and CEO stated, "I am pleased to report continued strength in our asset quality with no non-performing loans as of June 30, 2019. Book value continued to rise to $11.74 per share, a 9% increase year over year. Despite the margin compression, earnings increased to $0.18 per share for the second quarter of 2019 from $0.13 per share for the second quarter of 2018, largely due to greater operating efficiencies."

"I am excited by the prospects of uniting Gold Coast with Investors. This transaction will provide our customers with an enhanced value proposition through an expanded product and services offering. Additionally, Investors' community banking approach and customer focus is highly consistent with the model that has made us successful since our inception. We have been a community bank that is intimately involved with our customers and we want to continue that. Investors is very supportive of that process. "

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

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