Coastal Financial二季度因单一CCBX合作方信用费用转亏

Results Reflect Record Net Interest Income and Continued BaaS Growth, Offset by Credit Expenses Taken on Single Partner Relationship
EVERETT, Wash., July 30, 2026 (GLOBE NEWSWIRE) -- Coastal Financial Corporation (Nasdaq: CCB) (the “Company”, "Coastal", "we", "our", or "us"), the holding company for Coastal Community Bank (the “Bank”), through which it operates a community-focused bank segment ("community bank") with an industry leading banking as a service ("BaaS") segment ("CCBX"), today reported unaudited financial results for the quarter ended June 30, 2026, including net loss of $42.1 million, or $(2.76) per diluted common share, compared to net income of $12.0 million, or $0.78 per diluted common share, for the three months ended March 31, 2026 and $11.0 million, or $0.71 per diluted common share, for the three months ended June 30, 2025. The net loss is primarily attributable to a $68.8 million credit expense related to a single, isolated CCBX partner relationship.
Management Discussion of the Second Quarter Results
“Our second quarter results reflect continued performance of our core franchise, which was offset by decisive action we took on a single non-public company partner relationship. Based on our assessment, we recorded the potential impact fully and in accordance with our credit protection framework. We believe this is an isolated issue pertaining to one partner and does not reflect a change in our view of our broader partner portfolio or BaaS model. We remain focused on disciplined and sustainable growth by partnering with organizations that align with our long-term strategy, thoughtfully expanding our product offerings, and continuing to build a resilient BaaS platform designed to deliver value for all stakeholders,” stated CEO Eric Sprink.
“Despite these credit expenses, we delivered solid loan growth of 9.0%, increased BaaS program income, and continued to deepen relationships with our established partners while advancing new products that support our strategy,” added Sprink. “Our CCBX segment expanded product offerings with existing partners during the quarter while advancing new partners through onboarding toward launch and active status in alignment with our long-term strategy. We also experienced solid quarter-over-quarter growth in BaaS program income, reflecting continued momentum across our diversified revenue streams.”
“Looking ahead, we remain focused on disciplined, sustainable growth by strengthening relationships with larger, well-established partners, thoughtfully expanding our product offerings, and continuing to invest in the infrastructure, technology and risk management capabilities that support our platform. Our operating momentum, our disciplined approach to partner selection, and our strong capital and liquidity position leave us confident in our ability to execute and to create long-term value for shareholders,” concluded Sprink.
Key Points for Second Quarter
CCBX Partner and Product Expansion.
As of June 30, 2026 we had one partner in testing, one in implementation/onboarding, and three signed letters of intent (LOIs). Our active pipeline positions us for continued growth, with new partnership opportunities and product launches expected for the remainder of 2026. Total BaaS program fee income was $12.0 million for the three months ended June 30, 2026, an increase of $1.1 million, or 10.3%, from the three months ended March 31, 2026.
"Our technology modernization initiatives continue to strengthen the CCBX platform, improving operational efficiency, enhancing the partner experience and supporting long-term scalability," stated CCBX President Brian Hamilton.
Item
s Affecting Second Quarter Results.
Significant items impacting June 30, 2026 results included a $22.8 million provision for credit losses and a $46.0 million valuation adjustment to the credit enhancement asset, both related to one partner, not expected to be fully collected under its indemnification arrangement.  These items followed an individual assessment of collectability. We also recorded $4.4 million of capitalized software amortization due to shortened useful lives associated with technology modernization.
Positive On- and Off-Balance Sheet Trends Continue.
At June 30, 2026 we swept off $4.26 billion in deposits for Federal Deposit Insurance Corporation ("FDIC") insurance and liquidity purposes, and generated $1.2 million in noninterest income during the quarter ended June 30, 2026, an increase of $467,000, or 65.8%, from $710,000 for the quarter ended March 31, 2026 and an increase of $820,000, or 229.7% from $357,000 for the quarter ended June 30, 2025.
During the second quarter of 2026, we sold $4.56 billion of loans, including $3.68 billion of additional credit card receivables originated through ongoing cardholder spend and revolving activity and sold under existing forward flow arrangements, compared to $3.28 billion of sold loans in the quarter ended March 31, 2026, including $2.63 billion sold under the same forward flow arrangements. As of June 30, 2026 there were 881,659 off-balance sheet credit cards with fee earning potential, an increase of 214,636, or 32.18%, compared to the quarter ended March 31, 2026 and an increase of 567,832, or 180.94%, from June 30, 2025.
Capital and Liquidity
The Company and the Bank remained well capitalized at June 30, 2026, with a Company common equity Tier 1 ratio of 10.86%, a Tier 1 leverage ratio of 9.11%, and a total risk-based capital ratio of 13.30%, each above the levels required to be considered well capitalized. The quarter’s charges reduced capital ratios by approximately one percentage point, and the Company retained $1.01 billion of cash and cash equivalents and $1.12 billion of additional contingent borrowing capacity, with no borrowings outstanding as of June 30, 2026. The Company’s capital efficient model, including ongoing loan sales and off-balance sheet deposit and card programs, continues to support internal capital generation.
Executive Chairman Appointment
The Company also announced that Christopher D. Adams, Chairman since 2019 and a member of the Board since 2016, has been appointed Executive Chairman of Coastal Financial Corporation, effective immediately. In this expanded capacity, Mr. Adams will devote additional time to long-term strategy, leadership development, and external engagement, and partner closely with Mr. Sprink and the rest of the management team.
Second Quarter 2026 Financial Highlights
The tables below outline some of our key operating metrics.
Three Months Ended
(Dollars in thousands, except share and per share data; unaudited)
June 30,
2026
March 31,
2026
December 31,
2025
September 30,
2025
June 30,
2025
Income Statement Data:
Interest and dividend income
$
118,554
$
111,681
$
107,886
$
109,027
$
107,797
Interest expense
29,187
28,324
28,521
31,126
31,060
Net interest income
89,367
83,357
79,365
77,901
76,737
Provision for credit losses
92,157
51,398
48,041
56,598
32,211
Net interest (loss) income after provision for credit losses
(2,790
)
31,959
31,324
21,303
44,526
Noninterest income
88,707
66,077
58,661
66,777
42,693
Noninterest expense
141,111
83,452
72,804
70,172
72,832
(Benefit) provision for income tax
(13,089
)
2,565
4,538
4,316
3,359
Net (loss) income
$
(42,105
)
$
12,019
$
12,643
$
13,592
$
11,028
As of and for the Three Month Period
June 30,
2026
March 31,
2026
December 31,
2025
September 30,
2025
June 30,
2025
Balance Sheet Data:
Cash and cash equivalents
$
1,008,448
$
1,495,467
$
736,970
$
642,258
$
719,759
Investment securities
45,246
46,169
48,247
43,942
45,577
Loans held for sale
107,838
124,039
71,216
42,894
60,474
Loans receivable
4,208,270
3,859,379
3,749,531
3,703,848
3,540,330
Allowance for credit losses
(213,724
)
(172,427
)
(169,530
)
(173,813
)
(164,794
)
Total assets
5,456,152
5,663,829
4,741,437
4,553,076
4,480,559
Interest bearing deposits
4,249,420
4,462,003
3,564,583
3,408,160
3,358,216
Noninterest bearing deposits
612,478
579,161
579,616
564,403
555,355
Core deposits
(1)
4,850,783
5,028,967
4,131,911
3,959,360
3,441,624
Total deposits
4,861,898
5,041,164
4,144,199
3,972,563
3,913,571
Total borrowings
48,112
48,074
48,036
47,999
47,960
Total shareholders’ equity
$
463,447
$
503,762
$
490,959
$
475,277
$
461,709
Share and Per Share Data
(2)
:
(Loss) earnings per share – basic
$
(2.76
)
$
0.79
$
0.84
$
0.90
$
0.73
(Loss) earnings per share – diluted
$
(2.76
)
$
0.78
$
0.82
$
0.88
$
0.71
Dividends per share
—
—
—
—
—
Book value per share
(3)
$
30.33
$
33.05
$
32.43
$
31.45
$
30.59
Tangible book value per share
(4)
$
30.05
$
32.76
$
32.13
$
31.45
$
30.59
Weighted avg outstanding shares
– basic
15,243,357
15,179,447
15,116,005
15,093,274
15,033,296
Weighted avg outstanding shares
– diluted
15,243,357
15,422,822
15,455,856
15,443,987
15,447,923
Shares outstanding at end of period
15,280,689
15,241,491
15,140,192
15,112,000
15,093,036
Stock options outstanding at end of period
65,835
68,585
118,881
122,206
126,654
As of and for the Three Month Period
June 30,
2026
March 31,
2026
December 31,
2025
September 30,
2025
June 30,
2025
Credit Quality Data:
Nonperforming assets
(5)
to total
assets
1.38
%
1.19
%
1.35
%
1.31
%
1.36
%
Nonperforming assets
(5)
to loans receivable and OREO
1.79
%
1.75
%
1.71
%
1.61
%
1.72
%
Nonperforming loans
(5)
to total loans receivable
1.79
%
1.75
%
1.71
%
1.61
%
1.72
%
Allowance for credit losses to nonperforming loans
284.2
%
259.3
%
264.4
%
290.8
%
270.7
%
Allowance for credit losses to total loans receivable
5.08
%
4.47
%
4.52
%
4.69
%
4.65
%
Gross charge-offs
$
58,218
$
54,523
$
55,189
$
54,534
$
53,780
Gross recoveries
$
7,583
$
4,936
$
5,114
$
5,289
$
4,467
Net charge-offs to average loans
(6)
4.90
%
5.13
%
5.31
%
5.37
%
5.54
%
Capital Ratios:
Company
Tier 1 leverage capital
9.11
%
10.09
%
10.62
%
10.54
%
10.39
%
Common equity Tier 1 risk-based capital
10.86
%
12.08
%
12.43
%
12.33
%
12.32
%
Tier 1 risk-based capital
10.94
%
12.17
%
12.52
%
12.42
%
12.41
%
Total risk-based capital
13.30
%
14.54
%
14.95
%
14.88
%
14.90
%
Bank
Tier 1 leverage capital
9.12
%
10.10
%
10.60
%
10.49
%
10.33
%
Common equity Tier 1 risk-based capital
10.97
%
12.19
%
12.50
%
12.37
%
12.36
%
Tier 1 risk-based capital
10.97
%
12.19
%
12.50
%
12.37
%
12.36
%
Total risk-based capital
12.27
%
13.48
%
13.79
%
13.66
%
13.65
%
(1)
Core deposits are defined as all deposits excluding brokered and time deposits.
(2)
Share and per share amounts are based on total actual or average common shares outstanding, as applicable.
(3)
We calculate book value per share as total shareholders’ equity at the end of the relevant period divided by the outstanding number of our common shares at the end of each period.
(4)
Tangible book value per share is a non-GAAP financial measure. We calculate tangible book value per share as total shareholders’ equity at the end of the relevant period, less goodwill and other intangible assets, divided by the outstanding number of our common shares at the end of each period. The most directly comparable GAAP financial measure is book value per share. See reconciliation of the non-GAAP measures at the end of this earnings release for the impact of intangible assets on book value.
(5)
Nonperforming assets and nonperforming loans include loans 90+ days past due and accruing interest.
(6)
Annualized calculations.
Key Performance Ratios
Return on average assets ("ROA") was (3.32)% for the quarter ended June 30, 2026 compared to 0.98% and 0.99% for the quarters ended March 31, 2026 and June 30, 2025, respectively. The decline in ROA compared to the prior quarters was primarily attributable to charges related to one partner relationship, including a valuation adjustment to the related credit enhancement asset and an increase in the provision for credit losses. ROA was also impacted by higher noninterest expense, including a loss on disposal of internally developed software and increased data processing and software license costs. See the "Provision for Credit Losses" and "Noninterest Expense" discussions below for additional information.
Compared to the quarter ended March 31, 2026, yield on earning assets increased 0.27% while yield on loans receivable decreased by 0.02%. Average loans receivable as of June 30, 2026 increased $269.8 million compared to March 31, 2026 as net CCBX loans continue to grow, despite selling $4.56 billion in CCBX loans during the quarter ended June 30, 2026. Compared to the quarter ended June 30, 2025, yield on earning assets declined 0.28% and yield on loans receivable declined by 0.36%. Average loans receivable as of June 30, 2026 increased $580.6 million compared to June 30, 2025.
The quarter over quarter volatility in the efficiency ratio and noninterest income to average asset performance metrics were driven by changes in the credit enhancement on CCBX loans, which is included within noninterest income, due to changes in CCBX provision expense. Although these items have historically been largely offsetting, a portion of the second quarter 2026 provision was not expected to be fully recovered under a partner indemnification arrangement, resulting in a net adverse impact on earnings. The quarter over quarter change in ROA and return on average equity are related to the expenses previously mentioned.
The following table shows the Company’s key performance ratios for the periods indicated.
Three Months Ended
(unaudited)
June 30,
2026
March 31,
2026
December 31,
2025
September 30,
2025
June 30,
2025
Return on average assets
(1)
(3.32
)%
0.98
%
1.09
%
1.19
%
0.99
%
Return on average equity
(1)
(33.10
)%
9.80
%
10.41
%
11.52
%
9.72
%
Yield on earnings assets
(1)
9.65
%
9.38
%
9.55
%
9.80
%
9.92
%
Yield on loans receivable
(1)
10.74
%
10.76
%
10.63
%
10.95
%
11.11
%
Cost of funds
(1)
2.62
%
2.59
%
2.77
%
3.07
%
3.13
%
Cost of deposits
(1)
2.57
%
2.56
%
2.74
%
3.04
%
3.10
%
Net interest margin
(1)
7.27
%
7.00
%
7.03
%
7.00
%
7.06
%
Noninterest expense to average assets
(1)
11.13
%
6.78
%
6.25
%
6.13
%
6.52
%
Noninterest income to average assets
(1)
7.00
%
5.37
%
5.04
%
5.83
%
3.82
%
Efficiency ratio
79.24
%
55.85
%
52.75
%
48.50
%
60.98
%
Loans receivable to deposits
(2)
88.77
%
79.02
%
92.20
%
94.32
%
92.01
%
(1)
Annualized calculations shown for quarterly periods presented.
(2)
Includes loans held for sale.
Second Quarter Conference Call
The Company will host its second quarter conference call on July 30, 2026 at 8 a.m. ET (5 a.m. PT). A live webcast of the conference call, as well as a replay, will be available online on the Investor Relations section of the Company’s investor website at
https://ir.coastalbank.com/
Q2 Earnings Call Webcast Link:
Link to Earnings Call
Coastal Financial Corporation Overview
The Company has one main subsidiary, the Bank, which consists of three segments:  CCBX, the community bank and treasury & administration. The CCBX segment includes all of our BaaS activities, the community bank segment includes all community banking activities and the treasury & administration segment includes treasury management, overall administration and all other aspects of the Company.
CCBX Performance Update
Our CCBX segment continues to evolve, and we have 30 relationships, at varying stages, including one partner in testing, one in implementation/onboarding, three signed LOIs and three winding down as of June 30, 2026. We continue to focus on the composition of our partner portfolio by emphasizing relationships with well-established organizations that align with our long-term strategy, while continually evaluating our portfolio to ensure it reflects our risk and return objectives. As part of this disciplined approach, we remain focused on strengthening existing partnerships, thoughtfully expanding product offerings, and selectively adding new relationships that complement our platform and support sustainable growth.
Our strategy is centered on building long-term partnerships and leveraging the scale of our existing relationships to drive continued growth while maintaining a strong focus on prudent risk management and operational excellence.
Increased partner activity and transaction volumes are driving growth in noninterest income, a trend we expect to continue as existing products scale and new offerings are introduced. As part of our strategy to manage partner and lending limits, as well as overall portfolio composition and credit quality, we plan to continue selling loans. We also retain a portion of the fee income associated with processing transactions on sold credit card loans. This revenue stream continues to grow and is expected to provide ongoing income without adding balance sheet risk or capital requirements.
As our deposit base grows, we expect to continue moving deposits on and off the balance sheet, subject to applicable agreements, to manage liquidity, FDIC insurance coverage, and deposit program operations. This deposit sweep capability allows us to better manage liquidity and deposit programs. At June 30, 2026 we swept off $4.26 billion in deposits for FDIC insurance and liquidity purposes, and generated $1.2 million in noninterest income during the quarter ended June 30, 2026, compared to $710,000 for the quarter ended March 31, 2026. During the quarter ended June 30, 2026, eight partner programs were in various stages of expansion to include additional products, such as lines of credit, deposit programs, asset backed credit cards, credit cards, and other lending products. The expansion of these and other partner initiatives is expected to drive higher partner revenue in upcoming periods.
The following table illustrates the activity and evolution in CCBX relationships for the periods presented.
As of
(unaudited)
June 30, 2026
March 31,
2026
June 30, 2025
Active
22
20
20
Friends and family / testing
1
2
2
Implementation / onboarding
1
3
2
Signed letters of intent
3
2
5
Wind down - active but preparing to exit relationship
3
3
0
Total CCBX relationships
30
30
29
Total exited relationships life to date
10
9
8
CCBX loans increased $341.6 million, or 18.1%, to $2.23 billion despite selling $4.56 billion in loans during the three months ended June 30, 2026, $3.68 billion of which was new activity on previously sold credit card loans.
The following table details the CCBX loan portfolio:
CCBX
As of
June 30, 2026
March 31, 2026
June 30, 2025
(dollars in thousands; unaudited)
Balance
% to Total
Balance
% to Total
Balance
% to Total
Commercial and industrial loans:
Capital call lines
$
204,835
9.2
%
$
176,384
9.4
%
$
199,675
11.9
%
All other commercial & industrial loans
24,638
1.1
21,792
1.2
26,142
1.6
Real estate loans:
Residential real estate loans
324,873
14.6
266,037
14.1
234,786
14.0
Consumer and other loans:
Credit cards
753,171
33.8
693,485
36.8
533,925
31.8
Other consumer and other loans
918,779
41.3
726,943
38.5
686,321
40.7
Gross CCBX loans receivable
2,226,296
100.0
%
1,884,641
100.0
%
1,680,849
100.0
%
Net deferred origination fees
(544
)
(517
)
(569
)
Loans receivable
$
2,225,752
$
1,884,124
$
1,680,280
Loan Yield - CCBX
(1)(2)
14.56
%
15.01
%
16.22
%
(1)
CCBX yield does not include the impact of BaaS loan expense. BaaS loan expense represents the amount paid or payable to partners for credit enhancements and originating & servicing CCBX loans. See reconciliation of the non-GAAP measures at the end of this earnings release for the impact of BaaS loan expense on CCBX loan yield.
(2)
Loan yield is annualized for the three months ended for each period presented and includes loans held for sale and nonaccrual loans.
The increase in CCBX loans in the quarter ended June 30, 2026, includes an increase of $251.5 million, or 17.7%, in consumer and other loans, an increase of $58.8 million, or 22.1%, in residential real estate and an increase of $28.5 million, or 16.1%, in capital call lines as a result of normal balance fluctuations and business activities. We sold $4.56 billion in CCBX loans during the quarter ended June 30, 2026 compared to sales of $3.28 billion in the quarter ended March 31, 2026. We continue to manage CCBX credit and concentration levels in an effort to optimize our loan portfolio earnings and generate off-balance sheet fee income. CCBX loan yield decreased 0.45% for the quarter ended June 30, 2026 compared to the quarter ended March 31, 2026 due to a change in overall mix of loans compared to the quarter ended March 31, 2026.
The following charts show the growth and quarter over quarter changes in credit card accounts that generate fee income. This includes accounts with balances, which are included in our loan totals, and accounts that have been sold and have no corresponding balance in our loan totals, both of which generate fee income.
The following table details the CCBX deposit portfolio:
CCBX
As of
June 30, 2026
March 31, 2026
June 30, 2025
(dollars in thousands; unaudited)
Balance
% to Total
Balance
% to Total
Balance
% to Total
Demand, noninterest bearing
$
109,634
3.3
%
$
77,890
2.2
%
$
60,448
2.6
%
Interest bearing demand and money market
2,723,084
82.8
3,121,888
90.0
2,231,159
94.5
Savings
455,014
13.9
268,444
7.7
51,523
2.2
Total core deposits
3,287,732
100.0
3,468,222
100.0
2,343,130
99.3
Other deposits
—
0.0
—
0.0
17,013
0.7
Total CCBX deposits
$
3,287,732
100.0
%
$
3,468,222
100.0
%
$
2,360,143
100.0
%
Cost of deposits
(1)
3.19
%
3.17
%
3.96
%
(1)
Cost of deposits is annualized for the three months ended for each period presented.
CCBX deposits reported on the balance sheet decreased $180.5 million, or 5.2%, in the three months ended June 30, 2026 to $3.29 billion. The decline was primarily attributable to increased use of off-balance sheet sweep arrangements and does not reflect a decline in underlying partner deposit activity. Deposits swept off-balance sheet for increased FDIC insurance coverage and liquidity purposes increased to $4.26 billion at June 30, 2026, compared to $2.81 billion for the quarter ended March 31, 2026, demonstrating continued growth in partner balances despite lower reported on-balance-sheet balances. Using third-party facilitator/vendor sweep products, amounts in excess of FDIC insurance coverage are swept off-balance sheet to participating financial institutions.
Community Bank Performance Update
In the quarter ended June 30, 2026, the community bank saw net loans increase $7.3 million, or 0.4%, to $1.98 billion, as a result of loan originations and normal balance fluctuations.
The following table details the community bank loan portfolio:
Community Bank
As of
June 30, 2026
March 31, 2026
June 30, 2025
(dollars in thousands; unaudited)
Balance
% to Total
Balance
% to Total
Balance
% to Total
Commercial and industrial loans
$
237,176
11.9
%
$
235,603
11.9
%
$
149,926
8.0
%
Real estate loans:
Construction, land and land development loans
221,562
11.2
234,911
11.8
194,150
10.4
Residential real estate loans
199,530
10.0
199,185
10.1
198,844
10.7
Commercial real estate loans
1,319,798
66.4
1,300,547
65.6
1,310,882
70.2
Consumer and other loans:
Other consumer and other loans
10,760
0.5
11,587
0.6
12,230
0.7
Gross community bank loans receivable
1,988,826
100.0
%
1,981,833
100.0
%
1,866,032
100.0
%
Net deferred origination fees
(6,308
)
(6,578
)
(5,944
)
Loans receivable
$
1,982,518
$
1,975,255
$
1,860,088
Loan Yield
(1)
6.57
%
6.58
%
6.53
%
(1)
Loan yield is annualized for the three months ended for each period presented and includes loans held for sale and nonaccrual loans.
The increase in community bank loans consisted of an increase of $19.3 million in commercial real estate loans, an increase of $1.6 million in commercial and industrial loans and an increase of $345,000 in residential real estate loans, partially offset by a decrease of $13.3 million in construction, land and land development loans, and $827,000 in consumer and other loans during the quarter ended June 30, 2026.
The following table details the community bank deposit portfolio:
Community Bank
As of
June 30, 2026
March 31, 2026
June 30, 2025
(dollars in thousands; unaudited)
Balance
% to Total
Balance
% to Total
Balance
% to Total
Demand, noninterest bearing
$
502,844
31.9
%
$
501,271
31.9
%
$
494,907
31.9
%
Interest bearing demand and money market
1,005,748
63.9
1,006,623
64.0
545,655
35.1
Savings
54,459
3.5
52,851
3.4
57,933
3.7
Total core deposits
1,563,051
99.3
1,560,745
99.2
1,098,495
70.7
Other deposits
1
0.0
1
0.0
440,975
28.4
Time deposits less than $250,000
7,283
0.5
8,121
0.5
5,299
0.3
Time deposits $250,000 and over
3,831
0.2
4,075
0.3
8,659
0.6
Total community bank deposits
$
1,574,166
100.0
%
$
1,572,942
100.0
%
$
1,553,428
100.0
%
Cost of deposits
(1)
1.46
%
1.46
%
1.77
%
(1)
Cost of deposits is annualized for the three months ended for each period presented.
Community bank deposits increased $1.2 million, or 0.1%, during the three months ended June 30, 2026 to $1.57 billion as a result of normal growth and balance fluctuations. The community bank segment includes noninterest bearing deposits of $502.8 million, or 31.9%, of total community bank deposits, resulting in a cost of deposits of 1.46%, which is unchanged from the quarter ended March 31, 2026.
Net Interest Income and Margin Discussion
Net interest income was $89.4 million for the quarter ended June 30, 2026, an increase of $6.0 million, or 7.2%, from $83.4 million for the quarter ended March 31, 2026, and an increase of $12.6 million, or 16.4%, from $76.7 million for the quarter ended June 30, 2025. Net interest income compared to March 31, 2026 and June 30, 2025 was higher due to interest on loans due to an increase in average loans receivable partially offset by a decrease in interest on interest earning deposits with other banks due to lower average balances.
Net interest margin was 7.27% for the three months ended June 30, 2026, compared to 7.00% for the three months ended March 31, 2026 and 7.06% for the three months ended June 30, 2025. The increase in net interest margin for the three months ended June 30, 2026 compared to the three months ended March 31, 2026 was primarily driven by a higher proportion of interest-earning assets invested in loans rather than interest-bearing deposits with other banks. Net interest margin, net of BaaS loan expense, (
a reconciliation of the non-GAAP measures are set forth in the Non-GAAP Financial Measures section of this earnings release)
was 3.98% for the three months ended June 30, 2026, compared to 3.90% for the three months ended March 31, 2026 and 4.07% for the three months ended June 30, 2025. The quarter-over-quarter increase in net interest margin, net of BaaS loan expense, was also primarily driven by a higher proportion of interest-earning assets invested in loans rather than interest-bearing deposits with other banks.
Interest and fees on loans receivable increased $8.2 million, or 8.0%, to $111.1 million for the three months ended June 30, 2026, compared to $102.9 million for the three months ended March 31, 2026, as a result of an increase in loans receivable. Interest and fees on loans receivable increased $12.2 million, or 12.4%, compared to $98.9 million for the three months ended June 30, 2025, due to loan growth, partially offset by a decrease in loan yield.
The following table illustrates how net interest margin and loan yield is affected by BaaS loan expense:
Consolidated
As of and for the Three Months Ended
(dollars in thousands; unaudited)
June 30
2026
March 31
2026
June 30
2025
Net interest margin, net of BaaS loan expense:
Net interest margin
(1)
7.27
%
7.00
%
7.06
%
Earning assets
4,928,350
4,830,601
4,356,591
Net interest income (GAAP)
89,367
83,357
76,737
Less:  BaaS loan expense
(40,409
)
(36,940
)
(32,483
)
Net interest income, net of BaaS loan expense
(2)
$
48,958
$
46,417
$
44,254
Net interest margin, net of BaaS loan expense
(1)(2)
3.98
%
3.90
%
4.07
%
Loan income net of BaaS loan expense divided by average loans:
Loan yield (GAAP)
(1)
10.74
%
10.76
%
11.11
%
Total average loans receivable
$
4,148,380
$
3,878,626
$
3,567,823
Interest and earned fee income on loans (GAAP)
111,097
102,887
98,867
BaaS loan expense
(40,409
)
(36,940
)
(32,483
)
Net loan income
(2)
$
70,688
$
65,947
$
66,384
Loan income, net of BaaS loan expense, divided by average loans
(1)(2)
6.83
%
6.90
%
7.46
%
(1)
Annualized calculations shown for periods presented.
(2)
A reconciliation of the non-GAAP measures are set forth at the end of this earnings release.
Average investment securities decreased $1.6 million to $45.8 million compared to the three months ended March 31, 2026 as a result of maturities and principal paydowns, and decreased $482,000 compared to the three months ended June 30, 2025.
Cost of funds was 2.62% for the quarter ended June 30, 2026, an increase of three basis points from the quarter ended March 31, 2026 and a decrease of 51 basis points from the quarter ended June 30, 2025. Cost of deposits for the quarter ended June 30, 2026 was 2.57%, compared to 2.56% for the quarter ended March 31, 2026, and 3.10% for the quarter ended June 30, 2025. The decreased cost of funds and deposits compared to June 30, 2025 was largely due to the reductions in the Fed funds rate in 2025.
The following table summarizes the average yield on loans receivable and cost of deposits:
For the Three Months Ended
June 30, 2026
March 31, 2026
June 30, 2025
Yield on
Loans
(2)
Cost of
Deposits
(2)
Yield on
Loans
(2)
Cost of
Deposits
(2)
Yield on
Loans
(2)
Cost of
Deposits
(2)
Community Bank
6.57%
1.46%
6.58%
1.46%
6.53%
1.77%
CCBX
(1)
14.56%
3.19%
15.01%
3.17%
16.22%
3.96%
Consolidated
10.74%
2.57%
10.76%
2.56%
11.11%
3.10%
(1)
CCBX yield on loans does not include the impact of BaaS loan expense. BaaS loan expense represents the amount paid or payable to partners for credit and fraud enhancements and originating & servicing CCBX loans. To determine Net BaaS loan income earned from CCBX loan relationships, the Company takes BaaS loan interest income and deducts BaaS loan expense to arrive at Net BaaS loan income, which can be compared to interest income on the Company’s community bank loans. See reconciliation of the non-GAAP measures at the end of this earnings release for the impact of BaaS loan expense on CCBX loan yield.
(2)
Annualized calculations for periods presented.
The following table illustrates how BaaS loan interest income is affected by BaaS loan expense resulting in net BaaS loan income and the associated yield:
For the Three Months Ended
June 30, 2026
March 31, 2026
June 30, 2025
(dollars in thousands, unaudited)
Income / Expense
Income / expense divided by average CCBX loans
(2)
Income / Expense
Income / expense divided by average CCBX loans
(2)
Income / Expense
Income / expense divided by average CCBX loans
(2)
BaaS loan interest income
$
78,580
14.56
%
$
71,153
15.01
%
$
68,264
16.22
%
Less: BaaS loan expense
40,409
7.49
%
36,940
7.79
%
32,483
7.72
%
Net BaaS loan income
(1)
$
38,171
7.07
%
$
34,213
7.22
%
$
35,781
8.50
%
Average BaaS Loans
(3)
$
2,164,634
$
1,922,586
$
1,688,492
(1)
A reconciliation of the non-GAAP measures are set forth at the end of this earnings release.
(2)
Annualized calculations shown for the periods presented.
(3)
Includes loans held for sale.
Noninterest Income Discussion
Noninterest income was $88.7 million for the three months ended June 30, 2026, an increase of $22.6 million from $66.1 million for the three months ended March 31, 2026, and an increase of $46.0 million from $42.7 million for the three months ended June 30, 2025. The increase in noninterest income for the quarter ended June 30, 2026 as compared to the quarter ended March 31, 2026 was primarily due to a $20.0 million increase in BaaS credit enhancements related to the increase in provision for credit losses based upon an analysis of the CCBX loan portfolio, a $1.3 million increase in BaaS fraud enhancements, and an increase of $1.1 million in BaaS program income (see “Appendix B” for more information on the accounting for BaaS allowance for credit losses and credit and fraud enhancements).
The $46.0 million increase in noninterest income over the quarter ended June 30, 2025 was primarily due to a $41.0 million increase in BaaS credit and fraud enhancements due primarily to loan growth in the CCBX loan portfolio and an increase of $4.4 million in BaaS program income.
Noninterest Expense Discussion
Total noninterest expense increased $57.7 million to $141.1 million for the three months ended June 30, 2026, compared to $83.5 million for the three months ended March 31, 2026, and increased $68.3 million from $72.8 million for the three months ended June 30, 2025. The $57.7 million increase in noninterest expense for the quarter ended June 30, 2026, as compared to the quarter ended March 31, 2026, was primarily due to a $46.0 million credit enhancement receivable valuation adjustment related to the assessment of collectability for one CCBX partner, a $6.7 million increase in data processing and software licenses and a $451,000 increase in salaries and employee benefits, partially offset by an $805,000 decrease in legal and professional fees. Also contributing to the variance is a $3.5 million increase in BaaS loan expense, and a $1.3 million increase in BaaS fraud expense. BaaS loan expense represents the amount paid or payable to partners for credit enhancements and originating & servicing CCBX loans. BaaS fraud expense represents non-credit fraud losses on partner’s customer loan and deposit accounts. A portion of this expense is realized during the quarter in which the loss occurs, and a portion is estimated based on historical or other information from our partners.  Data processing and software license costs increased due to continued investments in growth, technology and risk management and included a $4.4 million impact from revising the estimated useful life of certain software assets to reflect their abandonment as they are replaced with the technology modernization initiatives.
The $68.3 million increase in noninterest expenses for the quarter ended June 30, 2026 compared to the quarter ended June 30, 2025 was largely due to a $46.0 million credit enhancement receivable valuation adjustment, $8.8 million increase in data processing and software licenses due to enhancements and investments in technology and a $2.2 million increase in salaries and employee benefits. Also contributing to the variance is a $7.9 million increase in BaaS loan expense and a $1.5 million increase in BaaS fraud expense.
Certain operating expenses associated with CCBX programs are reimbursed by our CCBX partners. In accordance with GAAP we recognize all expenses in noninterest expense and the reimbursement of expenses from our CCBX partners in noninterest income. The following table reflects the portion of noninterest expenses that are reimbursed by partners to assist in understanding how the increases in noninterest expense are related to expenses incurred and reimbursed by CCBX partners:
Three Months Ended
June 30,
March 31,
June 30,
(dollars in thousands; unaudited)
2026
2026
2025
Total noninterest expense (GAAP)
$
141,111
$
83,452
$
72,832
Less:  BaaS loan expense
40,409
36,940
32,483
Less:  BaaS fraud expense
4,312
3,059
2,804
Less:  Reimbursement of expenses (BaaS)
2,259
2,392
646
Noninterest expense, net of BaaS loan expense, BaaS fraud expense and reimbursement of expenses (BaaS)
(1)
$
94,131
$
41,061
$
36,899
(1)
A reconciliation of the non-GAAP measures are set forth at the end of this earnings release.
Provision for Income Taxes
The provision for income taxes reflected a benefit of  $13.1 million for the three months ended June 30, 2026, compared to tax expense of $2.6 million for the three months ended March 31, 2026 and $3.4 million for the three months ended June 30, 2025. The tax benefit recognized during the three months ended June 30, 2026 was primarily attributable to the pre-tax loss incurred during the period, while differences between periods also reflect changes in the taxability of certain equity awards.
As CCBX activities and employee presence expand into additional states, the Company becomes subject to additional state tax jurisdictions, which has increased the overall tax rate used in calculating the provision for income taxes. The Company uses a federal statutory tax rate of 21.0% as a basis for calculating provision for federal income taxes and 5.14% for calculating the provision for state income taxes.
Financial Condition Overview
Total assets decreased $207.7 million, or 3.7%, to $5.46 billion at June 30, 2026 compared to $5.66 billion at March 31, 2026. The decrease is primarily comprised of a $482.4 million decrease in interest earning deposits with other banks and a $16.2 million decrease in loans held for sale, partially offset by a $348.9 million increase in loans receivable.
As of June 30, 2026, in addition to the $1.01 billion in cash on hand, the Company had borrowing capacity of up to a total of $865.6 million from the Federal Reserve Bank discount window and Federal Home Loan Bank, plus an additional $250.0 million available under credit facilities with banker's banks. There were no borrowings outstanding on these lines as of June 30, 2026.
The Company, on a stand alone basis, had a cash balance of $40.2 million as of June 30, 2026, a portion of which is retained for general operating purposes, including debt repayment, and for funding $917,000 in commitments to bank technology investment funds, with the remaining cash available to be contributed to the Bank as capital.
Uninsured deposits were estimated at $1.35 billion as of June 30, 2026, compared to $1.77 billion as of March 31, 2026.  While uninsured deposits decreased from the prior quarter, they are expected to remain above historical levels due to the composition and timing of certain partner deposit balances, including the periodic use of sweep arrangements.
Total shareholders’ equity as of June 30, 2026 decreased $40.3 million since March 31, 2026. The decrease in shareholders’ equity was primarily comprised of $42.1 million in net losses partially offset by an increase of $1.8 million in common stock outstanding as a result of equity awards vested and exercised during the three months ended June 30, 2026.
The Company and the Bank remained well capitalized at June 30, 2026, as summarized in the following table.
(unaudited)
Coastal Community Bank
Coastal Financial Corporation
Minimum Well Capitalized Ratios under Prompt Corrective Action
(1)
Tier 1 Leverage Capital (to average assets)
9.12
%
9.11
%
5.00
%
Common Equity Tier 1 Capital (to risk-weighted assets)
10.97
%
10.86
%
6.50
%
Tier 1 Capital (to risk-weighted assets)
10.97
%
10.94
%
8.00
%
Total Capital (to risk-weighted assets)
12.27
%
13.30
%
10.00
%
(1)
Presents the minimum capital ratios for an insured depository institution, such as the Bank, to be considered well capitalized under the Prompt Corrective Action framework. The minimum requirements for the Company to be considered well capitalized under Regulation Y include to maintain, on a consolidated basis, a total risk-based capital ratio of 10.0 percent or greater and a tier 1 risk-based capital ratio of 6.0 percent or greater.
Asset Quality
The allowance for credit losses was $213.7 million and 5.08% of loans receivable at June 30, 2026 compared to $172.4 million and 4.47% at March 31, 2026 and $164.8 million and 4.65% at June 30, 2025. The allowance for credit loss allocated to the CCBX portfolio was $198.0 million and 8.90% of CCBX loans receivable at June 30, 2026, with $15.7 million of allowance for credit loss allocated to the community bank, or 0.79% of total community bank loans receivable.
The following table details the allocation of the allowance for credit loss as of the period indicated:
As of June 30, 2026
As of March 31, 2026
As of June 30, 2025
(dollars in thousands; unaudited)
Community Bank
CCBX
Total
Community Bank
CCBX
Total
Community Bank
CCBX
Total
Loans receivable
$
1,982,518
$
2,225,752
$
4,208,270
$
1,975,255
$
1,884,124
$
3,859,379
$
1,860,088
$
1,680,280
$
3,540,368
Allowance for credit losses
(15,723
)
(198,001
)
(213,724
)
(18,153
)
(154,274
)
(172,427
)
(18,936
)
(145,858
)
(164,794
)
Allowance for credit losses to total loans receivable
0.79
%
8.90
%
5.08
%
0.92
%
8.19
%
4.47
%
1.02
%
8.68
%
4.65
%
Net charge-offs totaled $50.6 million for the quarter ended June 30, 2026, compared to $49.6 million for the quarter ended March 31, 2026 and $49.3 million for the quarter ended June 30, 2025. Net charge-offs as a percent of average loans decreased to 4.90% for the quarter ended June 30, 2026 compared to 5.18% for the quarter ended March 31, 2026, and 5.54% for the quarter ended June 30, 2025. Under one partner program, the Company retains ownership of approximately 5% of a $350.8 million loan portfolio and retains the provision for credit losses for that portfolio. At June 30, 2026, our retained exposure totaled $23.4 million in loans. Net charge-offs for this $23.4 million in loans were $1.0 million for the three months ended June 30, 2026, $1.0 million for the three months ended March 31, 2026 and $1.3 million for the three months ended June 30, 2025.
The following table details net charge-offs for the community bank and CCBX for the period indicated:
Three Months Ended
June 30, 2026
March 31, 2026
June 30, 2025
(dollars in thousands; unaudited)
Community Bank
CCBX
Total
Community Bank
CCBX
Total
Community Bank
CCBX
Total
Gross charge-offs
$
56
$
58,162
$
58,218
$
2
$
54,521
$
54,523
$
11
$
53,769
$
53,780
Gross recoveries
(2
)
(7,581
)
(7,583
)
(3
)
(4,933
)
(4,936
)
(2
)
(4,465
)
(4,467
)
Net charge-offs (recoveries)
$
54
$
50,581
$
50,635
$
(1
)
$
49,588
$
49,587
$
9
$
49,304
$
49,313
Net charge-offs to average loans
(1)
0.01
%
9.37
%
4.90
%
0.00
%
10.46
%
5.18
%
0.00
%
11.71
%
5.54
%
(1)
Annualized calculations shown for periods presented.
During the quarter ended June 30, 2026, a $94.3 million provision for credit losses was recorded for CCBX partner loans, compared to $52.6 million for the quarter ended March 31, 2026. The increase in the provision for credit losses compared to the prior quarter was primarily driven by loan growth, changes in the composition of the loan portfolio and the establishment of a $22.8 million specific provision related to one partner relationship for credit losses not expected to be fully recovered under the partner's indemnification arrangement following an individual assessment of collectability, bringing the CCBX allowance for credit losses to $198.0 million at June 30, 2026 compared to $154.3 million at March 31, 2026. In general, CCBX loans have a higher level of expected losses than our community bank loans, which is reflected in the factors for the allowance for credit losses.
In accordance with accounting guidance, we estimate and record a provision for expected losses for these CCBX loans and reclassified negative deposit accounts, with expected losses reflected in the allowance for credit losses. When provision expense is recognized for CCBX credit losses and unfunded commitments that are subject to partner indemnification, we also record a credit enhancement asset through noninterest income (BaaS credit enhancements) representing amounts contractually due under the applicable partner agreements. We evaluate the collectability of the credit enhancement asset each reporting period and record a valuation adjustment when collection of all or a portion of the asset is no longer considered probable. The credit enhancement asset is reduced as indemnification payments are received from CCBX partners. Management regularly evaluates and manages counterparty risk associated with its CCBX partners, as the Bank could incur additional credit losses to the extent a partner is unable to fulfill its contractual obligations.
The factors used in management’s analysis for community bank credit losses indicated that a provision recapture of $2.2 million was needed for the quarter ended June 30, 2026 compared to a provision recapture of $1.4 million and $47,000 for the quarters ended March 31, 2026 and June 30, 2025, respectively. The provision recapture in the current period was due to a decrease in weighted average life of the construction, land and land development  portfolio and an improvement in the overall mix of the portfolio.
The following table details the provision expense/(recapture) for the community bank and CCBX for the period indicated:
Three Months Ended
(dollars in thousands; unaudited)
June 30,
2026
March 31,
2026
June 30,
2025
Community bank
$
(2,164
)
$
(1,428
)
$
(47
)
CCBX
94,309
52,563
30,976
Total provision expense
$
92,145
$
51,135
$
30,929
Included in provision expense was a $213,000 provision for unfunded commitments, recorded primarily due to higher loss rates on certain CCBX loans.
At June 30, 2026, our nonperforming assets were $75.2 million, or 1.38%, of total assets, compared to $67.6 million, or 1.19%, of total assets, at March 31, 2026, and $60.9 million, or 1.36%, of total assets, at June 30, 2025. These ratios are impacted by nonperforming CCBX loans that are covered by CCBX partner credit enhancements. As of June 30, 2026, $67.0 million of the $69.0 million in nonperforming CCBX loans were covered by CCBX partner credit enhancements described above. Additionally, certain CCBX partners employ collection practices that place specific loans on nonaccrual status to enhance collectability. As of June 30, 2026, $24.6 million of these loans are less than 90 days past due.
Nonperforming assets increased $7.5 million during the quarter ended June 30, 2026, compared to the quarter ended March 31, 2026. Community bank nonperforming loans increased $1.4 million from March 31, 2026 to $6.2 million as of June 30, 2026. CCBX nonperforming loans increased $6.2 million to $69.0 million from March 31, 2026. The increase in CCBX nonperforming loans is due to an increase of $2.9 million in nonaccrual loans from March 31, 2026 to $30.5 million, combined with a $3.3 million increase in CCBX loans that are past due 90 days or more and still accruing interest. As a result of the type of loans (primarily consumer loans) originated through our CCBX partners, we would typically anticipate that balances 90 days past due or more and still accruing will generally increase as those loan portfolios grow. Consumer loans originated through CCBX lending partners may continue to accrue interest beyond 90 days past due. Installment (closed-end) loans generally continue to accrue until 120 past due while revolving (open-end) loans generally continue to accrue until 180 days past due. There were no repossessed assets or other real estate owned at June 30, 2026. Our nonperforming loans to loans receivable ratio was 1.79% at June 30, 2026, compared to 1.75% at March 31, 2026 and 1.72% at June 30, 2025.
The following table details the Company’s nonperforming assets for the periods indicated.
Consolidated
As of
(dollars in thousands; unaudited)
June 30,
2026
March 31,
2026
June 30,
2025
Nonaccrual loans:
Commercial and industrial loans
$
243
$
251
$
2,333
Real estate loans:
Construction, land and land development
—
—
1,697
Residential real estate
1,705
314
—
Commercial real estate
4,344
4,344
—
Consumer and other loans:
Credit cards
26,670
24,497
20,140
Other consumer and other loans
3,729
3,015
4,063
Total nonaccrual loans
36,691
32,421
28,233
Accruing loans past due 90 days or more:
Commercial & industrial loans
504
604
926
Real estate loans:
Residential real estate loans
1,446
2,241
1,817
Consumer and other loans:
Credit cards
27,077
24,149
23,116
Other consumer and other loans
9,472
8,205
6,775
Total accruing loans past due 90 days or more
38,499
35,199
32,634
Total nonperforming loans
75,190
67,620
60,867
Real estate owned
—
—
—
Repossessed assets
—
—
—
Total nonperforming assets
$
75,190
$
67,620
$
60,867
Total nonaccrual loans to loans receivable
0.87
%
0.84
%
0.80
%
Total nonperforming loans to loans receivable
1.79
%
1.75
%
1.72
%
Total nonperforming assets to total assets
1.38
%
1.19
%
1.36
%
The following tables detail the CCBX and community bank nonperforming assets, which are included in the total nonperforming assets table above.
CCBX
As of
(dollars in thousands; unaudited)
June 30,
2026
March 31,
2026
June 30,
2025
Nonaccrual loans:
Commercial and industrial loans:
All other commercial & industrial loans
$
68
$
81
$
188
Consumer and other loans:
Credit cards
26,670
24,497
20,140
Other consumer and other loans
3,729
3,015
4,063
Total nonaccrual loans
30,467
27,593
24,391
Accruing loans past due 90 days or more:
Commercial & industrial loans
504
604
926
Real estate loans:
Residential real estate loans
1,446
2,241
1,817
Consumer and other loans:
Credit cards
27,077
24,149
23,116
Other consumer and other loans
9,472
8,205
6,775
Total accruing loans past due 90 days or more
38,499
35,199
32,634
Total nonperforming loans
68,966
62,792
57,025
Other real estate owned
—
—
—
Repossessed assets
—
—
—
Total nonperforming assets
$
68,966
$
62,792
$
57,025
Total CCBX nonperforming assets to total consolidated assets
1.26
%
1.11
%
1.27
%
Community Bank
As of
(dollars in thousands; unaudited)
June 30,
2026
March 31,
2026
June 30,
2025
Nonaccrual loans:
Commercial and industrial loans
$
175
$
170
$
2,145
Real estate:
Construction, land and land development
—
—
1,697
Residential real estate
1,705
314
—
Commercial real estate
4,344
4,344
—
Total nonaccrual loans
6,224
4,828
3,842
Accruing loans past due 90 days or more:
Total accruing loans past due 90 days or more
—
—
—
Total nonperforming loans
6,224
4,828
3,842
Other real estate owned
—
—
—
Repossessed assets
—
—
—
Total nonperforming assets
$
6,224
$
4,828
$
3,842
Total community bank nonperforming assets to total consolidated assets
0.11
%
0.09
%
0.09
%
Negative deposit account balances are reclassified as loans for financial reporting purposes and are included in the Company's allowance for credit losses under its CECL methodolo