$CCB

COASTAL FINANCIAL CORP

CIK:0001437958|SEC Filings

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2026	Jun. 30, 2025	Jun. 30, 2026	Jun. 30, 2025
INTEREST AND DIVIDEND INCOME
Interest and fees on loans	$ 111,097	$ 98,867	$ 213,984	$ 197,014
Interest on interest earning deposits with other banks	6,607	8,085	14,735	14,155
Interest on investment securities	612	626	1,234	1,276
Dividends on other investments	238	219	282	259
Total interest income	118,554	107,797	230,235	212,704
INTEREST EXPENSE
Interest on deposits	28,043	30,400	55,713	58,585
Interest on borrowed funds	1,144	660	1,798	1,320
Total interest expense	29,187	31,060	57,511	59,905
Net interest income	89,367	76,737	172,724	152,799
PROVISION FOR CREDIT LOSSES	92,157	32,211	143,555	87,992
Net interest income (expense) after provision for credit losses	(2,790)	44,526	29,169	64,807
NONINTEREST INCOME
Service charges and fees	1,016	913	1,866	1,773
Unrealized gain (loss) on equity securities, net	(25)	(439)	101	(423)
Other income	667	496	1,077	1,178
Noninterest income, excluding BaaS program income and BaaS indemnification income	1,658	970	3,044	2,528
Total noninterest income	88,707	42,693	154,784	106,170
NONINTEREST EXPENSE
Salaries and employee benefits	23,615	21,450	46,779	42,967
Occupancy	890	915	1,749	1,949
Data processing and software licenses	14,348	5,541	21,991	10,423
Legal and professional expenses	6,197	5,962	13,199	11,850
Point of sale expense	464	69	909	176
Excise taxes	988	681	2,157	1,403
Federal Deposit Insurance Corporation ("FDIC") assessments	829	790	1,402	1,545
Director and staff expenses	718	612	1,386	1,243
Marketing	6	50	44	100
Credit enhancement receivable valuation adjustment	46,009	0	46,009	0
Other expense	2,326	1,475	4,218	3,378
Noninterest expense, excluding BaaS loan and BaaS fraud expense	96,390	37,545	139,843	75,034
BaaS loan and fraud expense	44,721	35,287	84,720	69,787
Total noninterest expense	141,111	72,832	224,563	144,821
(Loss) income before provision for income taxes	(55,194)	14,387	(40,610)	26,156
(BENEFIT) PROVISION FOR INCOME TAXES	(13,089)	3,359	(10,524)	5,398
NET (LOSS) INCOME	$ (42,105)	$ 11,028	$ (30,086)	$ 20,758
Basic earnings per common share (in usd per share)	$ (2.76)	$ 0.73	$ (1.98)	$ 1.38
Diluted earnings per common share (in usd per share)	$ (2.76)	$ 0.71	$ (1.98)	$ 1.36
Weighted average number of common shares outstanding:
Basic (in shares)	15,243,357	15,033,296	15,211,579	14,998,097
Diluted (in shares)	15,243,357	15,447,923	15,211,579	15,248,776
BaaS program income
NONINTEREST INCOME
Noninterest income	$ 12,012	$ 7,651	$ 22,900	$ 13,929
BaaS indemnification income
NONINTEREST INCOME
Noninterest income	75,037	34,072	128,840	89,713
Servicing and other BaaS fees \| BaaS program income
NONINTEREST INCOME
Noninterest income	2,917	1,896	5,540	3,315
Transaction and interchange fees \| BaaS program income
NONINTEREST INCOME
Noninterest income	6,836	5,109	12,709	8,942
Reimbursement of expenses \| BaaS program income
NONINTEREST INCOME
Noninterest income	2,259	646	4,651	1,672
BaaS credit enhancements \| BaaS indemnification income
NONINTEREST INCOME
Noninterest income	70,725	31,268	121,469	84,916
BaaS fraud enhancements \| BaaS indemnification income
NONINTEREST INCOME
Noninterest income	4,312	2,804	7,371	4,797
BaaS loan expense
NONINTEREST EXPENSE
BaaS loan and fraud expense	40,409	32,483	77,349	64,990
BaaS fraud expense
NONINTEREST EXPENSE
BaaS loan and fraud expense	$ 4,312	$ 2,804	$ 7,371	$ 4,797

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2026	Jun. 30, 2025
CASH FLOWS FROM OPERATING ACTIVITIES
NET (LOSS) INCOME	$ (30,086)	$ 20,758
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
PROVISION FOR CREDIT LOSSES	143,555	87,992
Depreciation and amortization	8,080	3,221
Origination of loans held for sale	(437)	0
Proceeds from sales of loans held for sale	118	0
Loss on disposition of fixed assets	11	0
Decrease in operating lease right-of-use assets	542	430
Decrease in operating lease liabilities	(552)	(437)
Net amortization on investment securities	27	13
Unrealized holding (gain) loss on equity investment, net	(101)	423
Stock-based compensation	3,903	4,534
Increase in bank-owned life insurance value	(271)	(255)
Deferred tax expense	(17,049)	(228)
Net change in CCBX receivable	(5,087)	1,129
Net change in CCBX credit enhancement asset	(22,698)	14,111
Credit enhancement valuation adjustment	46,009	0
Net change in CCBX payable	5,487	3,768
Net change in other assets and liabilities	21,377	2,261
Total adjustments	182,914	116,962
Net cash provided by operating activities	152,828	137,720
CASH FLOWS FROM INVESTING ACTIVITIES
Net increase in FRB and FHLB securities	(542)	0
Change in equity investments, net	(697)	(2,144)
Principal paydowns of investment securities available-for-sale	2	3
Principal paydowns of investment securities held-to-maturity	2,972	1,729
Purchase of intangible assets	(125)	0
Purchase of bank owned life insurance	(18)	(18)
Proceeds from sales of loans held for sale	7,840,403	2,044,298
Purchase of loans and loan participations	(40,278)	0
Increase in loans receivable, net	(8,395,389)	(2,235,451)
Purchases of premises and equipment, net	(4,048)	(4,842)
Net cash used by investing activities	(597,720)	(196,425)
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in demand deposits, money market, and savings	718,872	331,828
Net decrease in time deposits	(1,173)	(3,589)
Proceeds from exercise of stock options, net of shares withheld to cover	(30)	21
Net cash for shares held to cover on restricted stock vesting	(1,299)	(2,381)
Proceeds from public offering, expense true-up	0	72
Net cash provided by financing activities	716,370	325,951
NET CHANGE IN CASH, DUE FROM BANKS AND RESTRICTED CASH	271,478	267,246
CASH, DUE FROM BANKS AND RESTRICTED CASH, beginning of year	736,970	452,513
CASH, DUE FROM BANKS AND RESTRICTED CASH, end of quarter	1,008,448	719,759
SUPPLEMENTAL SCHEDULE OF OPERATING AND INVESTING ACTIVITIES
Interest paid	56,768	59,913
Income taxes paid	6,442	6,583
SUPPLEMENTAL SCHEDULE OF NONCASH TRANSACTIONS
Lease liabilities arising from obtaining right-of-use assets	90	102
Transfer from loans to loans held for sale	$ 7,876,707	$ 2,084,172

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands	Jun. 30, 2026	Dec. 31, 2025
ASSETS
Cash and due from banks	$ 48,088	$ 34,241
Interest earning deposits with other banks	960,360	702,729
Investment securities, available-for-sale, at fair value	27	29
Investment securities, held-to-maturity, at amortized cost	45,219	48,218
Other investments	14,177	12,837
Loans held for sale	107,838	71,216
Loans receivable	4,208,270	3,749,531
Allowance for credit losses	(213,724)	(169,530)
Total loans receivable, net	3,994,546	3,580,001
CCBX credit enhancement asset, net	154,346	177,657
CCBX receivable	28,134	23,047
Premises and equipment, net	25,736	29,325
Lease right-of-use assets	4,368	4,821
Accrued interest receivable	20,937	18,613
Bank-owned life insurance, net	14,199	13,910
Deferred tax asset, net	16,196	0
Intangible assets, net	4,207	4,536
Other assets	17,774	20,257
Total assets	5,456,152	4,741,437
LIABILITIES
Deposits	4,861,898	4,144,199
Principal amount $45,000 (less unamortized debt issuance costs of $482 and $557) at June 30, 2026 and December 31, 2025, respectively	44,518	44,443
Principal amount $3,609 (less unamortized debt issuance costs of $15 and $16 at June 30, 2026 and December 31, 2025, respectively)	3,594	3,593
Deferred compensation	236	267
Accrued interest payable	2,178	1,435
Lease liabilities	4,522	4,984
CCBX payable	32,980	27,492
Deferred tax liability, net	0	853
Other liabilities	42,779	23,212
Total liabilities	4,992,705	4,250,478
SHAREHOLDERS’ EQUITY
Authorized: 25,000,000 shares at June 30, 2026 and December 31, 2025; issued and outstanding: zero shares at June 30, 2026 and December 31, 2025	0	0
Authorized: 300,000,000 shares at June 30, 2026 and December 31, 2025; 15,280,689 shares at June 30, 2026 issued and outstanding and 15,140,192 shares at December 31, 2025 issued and outstanding	236,012	233,438
Retained earnings	227,436	257,522
Accumulated other comprehensive loss, net of tax	(1)	(1)
Total shareholders’ equity	463,447	490,959
Total liabilities and shareholders’ equity	$ 5,456,152	$ 4,741,437