Coastal Banc's goal is to increase commercial business loans and noninterest-bearing deposits as a percentage of total assets and deposits, respectively. The objective is to improve the loan and deposit mix to increase Coastal Banc's net interest margin while decreasing its vulnerability to volatile market interest rate fluctuations. However, Coastal Banc will continue to strive to minimize the credit risk of its balance sheet. Historically, managing a low cost operation relative to its peers has allowed Coastal Banc to achieve a competitive return on equity while maintaining a low credit risk balance sheet. Management plans to continue this strategy by increasing the proportion of transaction deposit accounts, reducing overall cost of funds and using technology to deliver more commercial loans per overhead dollar.
Competition is fierce in the commercial lending business.
Commercial customers who have complex needs frequently choose Coastal Banc because of our immediate response time. Second, in order to take that responsiveness to the next level, Coastal Banc developed a new commercial lending delivery system which became operational during the fourth quarter of 1997. The PCC applies Internet and network computer technology to an interactive, dynamic process for taking a commercial loan from application to closing in less time and incorporating more comprehensive credit information. The PCC frees up the customer development officer to focus on new customer relationships rather than spending time and resources on gathering and organizing data. Coastal Banc has no present plans to grow outside of Texas.