Coastal Financial Corporation Announces First Quarter 2026 Results
Rhea-AI Summary
Coastal Financial (Nasdaq: CCB) reported Q1 2026 net income of $12.0 million ($0.78 diluted), total assets of $5.66 billion (+19.5% QoQ), and total deposits of $5.04 billion (+21.6% QoQ). BaaS fee income was $10.9 million, up 22.3% quarter-over-quarter. Loans receivable were $3.86 billion and provision for credit losses was $51.4 million. Management highlighted continued CCBX partner onboarding and disciplined growth execution while noting margin and expense pressures as partnerships evolve.
Positive
- Total assets +19.5% to $5.66B at March 31, 2026
- Total deposits +21.6% to $5.04B quarter-over-quarter
- BaaS program fee income +22.3% quarter-over-quarter to $10.9M
- Net income +23.5% year-over-year to $12.0M (Q1 2026 vs Q1 2025)
- Off-balance-sheet fee-earning credit cards at 667,023, up 429,999 year-over-year
Negative
- Provision for credit losses of $51.4M in Q1 2026
- Annualized net charge-offs 5.18% for the quarter ended March 31, 2026
- Noninterest expense increased, driven by $2.6M higher legal and professional costs
- Return on average assets declined to 0.98% (down 0.11% QoQ); efficiency ratio worsened to 55.85%
News Market Reaction – CCB
In the Apr 29 session, CCB declined 12.66%, reflecting a significant negative market reaction. Argus tracked a trough of -8.7% from its starting point during tracking. Our momentum scanner triggered 36 alerts that day, indicating elevated trading interest and price volatility. Trading volume was very high at 3.0x the daily average, suggesting heavy selling pressure.
Data tracked by StockTitan Argus on the day of publication.
Key Figures
Previous Earnings Reports
| Date | Event | Sentiment | 24h Move | Catalyst |
|---|---|---|---|---|
| Jan 29 | Q4 2025 earnings | Positive | -0.1% | Reported Q4 2025 net income of $12.6M and full-year $47.0M. |
| Oct 29 | Q3 2025 earnings | Positive | +0.3% | Q3 2025 net income $13.6M with loan and deposit growth plus CCBX fees. |
| Jul 29 | Q2 2025 earnings | Positive | -4.2% | Q2 2025 earnings growth with higher CCBX fee income and deposit gains. |
| Apr 29 | Q1 2025 earnings | Positive | -0.9% | Q1 2025 results showing strong BaaS fee growth and deposit expansion. |
| Jan 28 | Q4 2024 earnings | Positive | +2.6% | Q4 2024 net income $13.4M and strong BaaS fee growth with capital raise. |
24h Move is the share-price change in the day after each event; other market factors may also have contributed.
Recent earnings releases were generally positive fundamentally, but price reactions skewed slightly negative, with several instances of post-earnings selloffs despite growth in CCBX and deposits.
Over the past five quarters, Coastal Financial has reported steady earnings with growing contributions from its CCBX BaaS segment, rising deposits, and solid capital ratios. Prior earnings on Jan 29, 2026, Oct 29, 2025, Jul 29, 2025, Apr 29, 2025, and Jan 28, 2025 highlighted recurring fee growth and balance sheet expansion. Yet, price reactions averaged about -0.45%, indicating a history of modest or negative moves even on constructive results. Today’s positive move contrasts with that mixed pattern.
Key Terms
banking as a service financial
nonperforming assets financial
allowance for credit losses financial
net charge-offs financial
tier 1 leverage capital financial
common equity tier 1 risk-based capital financial
total risk-based capital financial
efficiency ratio financial
AI-generated analysis. How Rhea-AI works. Not financial advice.
EVERETT, Wash., April 29, 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 March 31, 2026, including net income of
Management Discussion of the First Quarter Results
"During the first quarter of 2026, total assets increased
Key Points for First Quarter and Our Go-Forward Strategy
- CCBX Partner and Product Expansion. As of March 31, 2026 we had two partners in testing, three in implementation/onboarding, and two signed letters of intent (LOIs). Our active pipeline positions us for continued growth, with new partnership opportunities and product launches expected for 2026. Total BaaS program fee income was
$10.9 million for the three months ended March 31, 2026, an increase of$2.0 million , or22.3% , from the three months ended December 31, 2025. We continue to have contracts with our partners that fully indemnify us against fraud and98.8% against credit risk on CCBX loan partner balances as of March 31, 2026. - Deepening CCBX Partner Relationships. During the quarter ended March 31, 2026, we advanced multiple partner products through key development and launch stages. We managed progression across key development stages, from internal testing through limited release to full market launch, across credit, deposit and credit card programs, steadily advancing products toward successful launch and deepening strategic partner relationships.
- Positive On- and Off-Balance Sheet Trends Continue. Average deposits were
$4.38 billion , an increase of$349.9 million , or8.7% , over the quarter ended December 31, 2025, driven primarily by growth in deposits associated with CCBX partner programs. At March 31, 2026 we swept off$2.81 billion in deposits for FDIC insurance and liquidity purposes, and generated$710,000 in noninterest income during the quarter ended March 31, 2026, an increase of$170,000 , or31.5% , from$540,000 for the quarter ended December 31, 2025.
During the first quarter of 2026, we sold$3.28 billion of loans, including$2.63 billion of additional credit card receivables originated through ongoing cardholder spend and revolving activity and sold under existing forward flow arrangements, compared to$2.98 billion of sold loans in the quarter ended December 31, 2025, including$2.26 billion sold under the same forward flow arrangements. We retain a portion of the fee income on sold credit card loans. As of March 31, 2026 there were 667,023 off-balance sheet credit cards with fee earning potential, an increase of 116,046 compared to the quarter ended December 31, 2025 and an increase of 429,999 from March 31, 2025.
First 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) | March 31, 2026 | December 31, 2025 | September 30, 2025 | June 30, 2025 | March 31, 2025 | ||||||||||||||
| Income Statement Data: | |||||||||||||||||||
| Interest and dividend income | $ | 111,681 | $ | 107,886 | $ | 109,027 | $ | 107,797 | $ | 104,907 | |||||||||
| Interest expense | 28,324 | 28,521 | 31,126 | 31,060 | 28,845 | ||||||||||||||
| Net interest income | 83,357 | 79,365 | 77,901 | 76,737 | 76,062 | ||||||||||||||
| Provision for credit losses | 51,398 | 48,041 | 56,598 | 32,211 | 55,781 | ||||||||||||||
| Net interest income after provision for credit losses | 31,959 | 31,324 | 21,303 | 44,526 | 20,281 | ||||||||||||||
| Noninterest income | 66,077 | 58,661 | 66,777 | 42,693 | 63,477 | ||||||||||||||
| Noninterest expense | 83,452 | 72,804 | 70,172 | 72,832 | 71,989 | ||||||||||||||
| Provision for income tax | 2,565 | 4,538 | 4,316 | 3,359 | 2,039 | ||||||||||||||
| Net income | $ | 12,019 | $ | 12,643 | $ | 13,592 | $ | 11,028 | $ | 9,730 | |||||||||
| As of and for the Three Month Period | |||||||||||||||||||
| March 31, 2026 | December 31, 2025 | September 30, 2025 | June 30, 2025 | March 31, 2025 | |||||||||||||||
| Balance Sheet Data: | |||||||||||||||||||
| Cash and cash equivalents | $ | 1,495,467 | $ | 736,970 | $ | 642,258 | $ | 719,759 | $ | 624,302 | |||||||||
| Investment securities | 46,169 | 48,247 | 43,942 | 45,577 | 46,991 | ||||||||||||||
| Loans held for sale | 124,039 | 71,216 | 42,894 | 60,474 | 42,132 | ||||||||||||||
| Loans receivable | 3,859,379 | 3,749,531 | 3,703,848 | 3,540,330 | 3,517,359 | ||||||||||||||
| Allowance for credit losses | (172,427 | ) | (169,530 | ) | (173,813 | ) | (164,794 | ) | (183,178 | ) | |||||||||
| Total assets | 5,663,829 | 4,741,437 | 4,553,076 | 4,480,559 | 4,339,282 | ||||||||||||||
| Interest bearing deposits | 4,462,003 | 3,564,583 | 3,408,160 | 3,358,216 | 3,251,599 | ||||||||||||||
| Noninterest bearing deposits | 579,161 | 579,616 | 564,403 | 555,355 | 539,630 | ||||||||||||||
| Core deposits(1) | 5,028,967 | 4,131,911 | 3,959,360 | 3,441,624 | 3,321,772 | ||||||||||||||
| Total deposits | 5,041,164 | 4,144,199 | 3,972,563 | 3,913,571 | 3,791,229 | ||||||||||||||
| Total borrowings | 48,074 | 48,036 | 47,999 | 47,960 | 47,923 | ||||||||||||||
| Total shareholders’ equity | $ | 503,762 | $ | 490,959 | $ | 475,277 | $ | 461,709 | $ | 449,917 | |||||||||
| Share and Per Share Data(2): | |||||||||||||||||||
| Earnings per share – basic | $ | 0.79 | $ | 0.84 | $ | 0.90 | $ | 0.73 | $ | 0.65 | |||||||||
| Earnings per share – diluted | $ | 0.78 | $ | 0.82 | $ | 0.88 | $ | 0.71 | $ | 0.63 | |||||||||
| Dividends per share | — | — | — | — | — | ||||||||||||||
| Book value per share(3) | $ | 33.05 | $ | 32.43 | $ | 31.45 | $ | 30.59 | $ | 29.98 | |||||||||
| Tangible book value per share(4) | $ | 32.76 | $ | 32.13 | $ | 31.45 | $ | 30.59 | $ | 29.98 | |||||||||
| Weighted avg outstanding shares – basic | 15,179,447 | 15,116,005 | 15,093,274 | 15,033,296 | 14,962,507 | ||||||||||||||
| Weighted avg outstanding shares – diluted | 15,422,822 | 15,455,856 | 15,443,987 | 15,447,923 | 15,462,041 | ||||||||||||||
| Shares outstanding at end of period | 15,241,491 | 15,140,192 | 15,112,000 | 15,093,036 | 15,009,225 | ||||||||||||||
| Stock options outstanding at end of period | 68,585 | 118,881 | 122,206 | 126,654 | 163,932 | ||||||||||||||
See footnotes that follow the tables below
| As of and for the Three Month Period | |||||||||||||||||||
| March 31, 2026 | December 31, 2025 | September 30, 2025 | June 30, 2025 | March 31, 2025 | |||||||||||||||
| Credit Quality Data: | |||||||||||||||||||
| Nonperforming assets(5)to total assets | 1.19 | % | 1.35 | % | 1.31 | % | 1.36 | % | 1.30 | % | |||||||||
| Nonperforming assets(5)to loans receivable and OREO | 1.75 | % | 1.71 | % | 1.61 | % | 1.72 | % | 1.60 | % | |||||||||
| Nonperforming loans(5)to total loans receivable | 1.75 | % | 1.71 | % | 1.61 | % | 1.72 | % | 1.60 | % | |||||||||
| Allowance for credit losses to nonperforming loans | 253.0 | % | 264.4 | % | 290.8 | % | 270.7 | % | 325.0 | % | |||||||||
| Allowance for credit losses to total loans receivable | 4.47 | % | 4.52 | % | 4.69 | % | 4.65 | % | 5.21 | % | |||||||||
| Gross charge-offs | $ | 54,523 | $ | 55,189 | $ | 54,534 | $ | 53,780 | $ | 53,686 | |||||||||
| Gross recoveries | $ | 4,936 | $ | 5,114 | $ | 5,289 | $ | 4,467 | $ | 5,486 | |||||||||
| Net charge-offs to average loans(6) | 5.18 | % | 5.31 | % | 5.37 | % | 5.54 | % | 5.57 | % | |||||||||
| Capital Ratios: | |||||||||||||||||||
| Company | |||||||||||||||||||
| Tier 1 leverage capital | 10.09 | % | 10.62 | % | 10.54 | % | 10.39 | % | 10.67 | % | |||||||||
| Common equity Tier 1 risk-based capital | 12.08 | % | 12.43 | % | 12.33 | % | 12.32 | % | 12.13 | % | |||||||||
| Tier 1 risk-based capital | 12.17 | % | 12.52 | % | 12.42 | % | 12.41 | % | 12.22 | % | |||||||||
| Total risk-based capital | 14.54 | % | 14.95 | % | 14.88 | % | 14.90 | % | 14.73 | % | |||||||||
| Bank | |||||||||||||||||||
| Tier 1 leverage capital | 10.10 | % | 10.60 | % | 10.49 | % | 10.33 | % | 10.57 | % | |||||||||
| Common equity Tier 1 risk-based capital | 12.19 | % | 12.50 | % | 12.37 | % | 12.36 | % | 12.12 | % | |||||||||
| Tier 1 risk-based capital | 12.19 | % | 12.50 | % | 12.37 | % | 12.36 | % | 12.12 | % | |||||||||
| Total risk-based capital | 13.48 | % | 13.79 | % | 13.66 | % | 13.65 | % | 13.42 | % | |||||||||
(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
Compared to the quarter ended December 31, 2025, yield on earning assets declined
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. These items have a neutral impact on net income, but they impact the abovementioned metrics quarter over quarter due to changes in reported noninterest income.
The following table shows the Company’s key performance ratios for the periods indicated.
| Three Months Ended | |||||||||||||||
| (unaudited) | March 31, 2026 | December 31, 2025 | September 30, 2025 | June 30, 2025 | March 31, 2025 | ||||||||||
| Return on average assets(1) | 0.98 | % | 1.09 | % | 1.19 | % | 0.99 | % | 0.93 | % | |||||
| Return on average equity(1) | 9.80 | % | 10.41 | % | 11.52 | % | 9.72 | % | 8.91 | % | |||||
| Yield on earnings assets(1) | 9.38 | % | 9.55 | % | 9.80 | % | 9.92 | % | 10.32 | % | |||||
| Yield on loans receivable(1) | 10.76 | % | 10.63 | % | 10.95 | % | 11.11 | % | 11.33 | % | |||||
| Cost of funds(1) | 2.59 | % | 2.77 | % | 3.07 | % | 3.13 | % | 3.11 | % | |||||
| Cost of deposits(1) | 2.56 | % | 2.74 | % | 3.04 | % | 3.10 | % | 3.08 | % | |||||
| Net interest margin(1) | 7.00 | % | 7.03 | % | 7.00 | % | 7.06 | % | 7.48 | % | |||||
| Noninterest expense to average assets(1) | 6.78 | % | 6.25 | % | 6.13 | % | 6.52 | % | 6.87 | % | |||||
| Noninterest income to average assets(1) | 5.37 | % | 5.04 | % | 5.83 | % | 3.82 | % | 6.06 | % | |||||
| Efficiency ratio | 55.85 | % | 52.75 | % | 48.50 | % | 60.98 | % | 51.59 | % | |||||
| Loans receivable to deposits(2) | 79.02 | % | 92.20 | % | 94.32 | % | 92.01 | % | 93.89 | % | |||||
(1) Annualized calculations shown for quarterly periods presented.
(2) Includes loans held for sale.
Management Outlook; CEO Eric Sprink
“We continued to see strength in our CCBX segment in the first quarter, driven by the performance of our existing partners, new products and the addition of new relationships. We’ve been intentional about how we grow, and that includes focusing on credit quality as portfolios mature and ensuring we’re operating in a safe and sound manner as expectations around bank–fintech partnerships continue to evolve. As the rate environment evolves, we expect some pressure on margins, but we believe our diversified business model and funding base continue to position us well. Our focus remains on consistent execution and building long-term value through disciplined growth.” said CEO Eric Sprink.
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 two partners in testing, three in implementation/onboarding, two signed LOIs and three winding down as of March 31, 2026. This includes a new CCBX correspondent bank partner relationship. We continue to refine our partnership criteria, prioritizing larger, established partners with strong management teams, customer bases, and financial profiles, while selectively pursuing emerging partners aligned with our model, and will proactively manage and exit select relationships in line with our ongoing portfolio optimization efforts, reflecting our focus on enhancing partner quality and long-term value creation.
We are also actively exploring opportunities to expand the CCBX partner base and broaden related product offerings to support continued growth. This dual approach of onboarding new partners while deepening relationships with existing ones supports growth that aligns with our long-term strategic objectives, while leveraging our established relationships to help mitigate incremental risk.
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 March 31, 2026 we swept off
The following table illustrates the activity and evolution in CCBX relationships for the periods presented.
| As of | |||
| (unaudited) | March 31, 2026 | December 31, 2025 | March 31, 2025 |
| Active | 20 | 19 | 19 |
| Friends and family / testing | 2 | 2 | 2 |
| Implementation / onboarding | 3 | 5 | 3 |
| Signed letters of intent | 2 | 1 | 1 |
| Wind down - active but preparing to exit relationship | 3 | 1 | 0 |
| Total CCBX relationships | 30 | 28 | 25 |
| Total exited relationships life to date | 9 | 9 | 8 |
CCBX loans increased
The following table details the CCBX loan portfolio:
| CCBX | As of | ||||||||||||||||||||
| March 31, 2026 | December 31, 2025 | March 31, 2025 | |||||||||||||||||||
| (dollars in thousands; unaudited) | Balance | % to Total | Balance | % to Total | Balance | % to Total | |||||||||||||||
| Commercial and industrial loans: | |||||||||||||||||||||
| Capital call lines | $ | 176,384 | 9.4 | % | $ | 210,480 | 11.6 | % | $ | 133,466 | 8.1 | % | |||||||||
| All other commercial & industrial loans | 21,792 | 1.2 | 19,166 | 1.1 | 29,702 | 1.8 | |||||||||||||||
| Real estate loans: | |||||||||||||||||||||
| Residential real estate loans | 266,037 | 14.1 | 264,059 | 14.6 | 285,355 | 17.3 | |||||||||||||||
| Consumer and other loans: | |||||||||||||||||||||
| Credit cards | 693,485 | 36.8 | 622,681 | 34.4 | 532,775 | 32.2 | |||||||||||||||
| Other consumer and other loans | 726,943 | 38.5 | 691,708 | 38.3 | 670,026 | 40.6 | |||||||||||||||
| Gross CCBX loans receivable | 1,884,641 | 100.0 | % | 1,808,094 | 100.0 | % | 1,651,324 | 100.0 | % | ||||||||||||
| Net deferred origination fees | (517 | ) | (542 | ) | (498 | ) | |||||||||||||||
| Loans receivable | $ | 1,884,124 | $ | 1,807,552 | $ | 1,650,826 | |||||||||||||||
| Loan Yield - CCBX(1)(2) | 15.01 | % | 14.89 | % | 16.88 | % | |||||||||||||||
(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 March 31, 2026, includes an increase of
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 chart shows the growth in active CCBX debit cards, which are sources of interchange income.
The following table details the CCBX deposit portfolio:
| CCBX | As of | ||||||||||||||||||||
| March 31, 2026 | December 31, 2025 | March 31, 2025 | |||||||||||||||||||
| (dollars in thousands; unaudited) | Balance | % to Total | Balance | % to Total | Balance | % to Total | |||||||||||||||
| Demand, noninterest bearing | $ | 77,890 | 2.3 | % | $ | 86,648 | 3.4 | % | $ | 58,416 | 2.6 | % | |||||||||
| Interest bearing demand and money market | 3,121,888 | 90.0 | 2,425,881 | 94.8 | 2,145,608 | 94.6 | |||||||||||||||
| Savings | 268,444 | 7.7 | 45,311 | 1.8 | 16,625 | 0.7 | |||||||||||||||
| Total core deposits | 3,468,222 | 100.0 | 2,557,840 | 100.0 | 2,220,649 | 97.9 | |||||||||||||||
| Other deposits | — | 0.0 | — | 0.0 | 46,359 | 2.1 | |||||||||||||||
| Total CCBX deposits | $ | 3,468,222 | 100.0 | % | $ | 2,557,840 | 100.0 | % | $ | 2,267,008 | 100.0 | % | |||||||||
| Cost of deposits(1) | 3.17 | % | 3.52 | % | 4.01 | % | |||||||||||||||
(1) Cost of deposits is annualized for the three months ended for each period presented.
CCBX deposits increased
Community Bank Performance Update
In the quarter ended March 31, 2026, the community bank saw net loans increase
The following table details the community bank loan portfolio:
| Community Bank | As of | ||||||||||||||||||||
| March 31, 2026 | December 31, 2025 | March 31, 2025 | |||||||||||||||||||
| (dollars in thousands; unaudited) | Balance | % to Total | Balance | % to Total | Balance | % to Total | |||||||||||||||
| Commercial and industrial loans | $ | 235,603 | 11.9 | % | $ | 224,439 | 11.5 | % | $ | 149,104 | 8.0 | % | |||||||||
| Real estate loans: | |||||||||||||||||||||
| Construction, land and land development loans | 234,911 | 11.8 | 222,075 | 11.4 | 166,551 | 8.9 | |||||||||||||||
| Residential real estate loans | 199,185 | 10.1 | 202,293 | 10.4 | 202,920 | 10.8 | |||||||||||||||
| Commercial real estate loans | 1,300,547 | 65.6 | 1,285,856 | 66.0 | 1,340,647 | 71.6 | |||||||||||||||
| Consumer and other loans: | |||||||||||||||||||||
| Other consumer and other loans | 11,587 | 0.6 | 14,072 | 0.7 | 13,326 | 0.7 | |||||||||||||||
| Gross community bank loans receivable | 1,981,833 | 100.0 | % | 1,948,735 | 100.0 | % | 1,872,548 | 100.0 | % | ||||||||||||
| Net deferred origination fees | (6,578 | ) | (6,756 | ) | (6,015 | ) | |||||||||||||||
| Loans receivable | $ | 1,975,255 | $ | 1,941,979 | $ | 1,866,533 | |||||||||||||||
| Loan Yield(1) | 6.58 | % | 6.52 | % | 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
The following table details the community bank deposit portfolio:
| Community Bank | As of | ||||||||||||||||||||
| March 31, 2026 | December 31, 2025 | March 31, 2025 | |||||||||||||||||||
| (dollars in thousands; unaudited) | Balance | % to Total | Balance | % to Total | Balance | % to Total | |||||||||||||||
| Demand, noninterest bearing | $ | 501,271 | 31.9 | % | $ | 492,968 | 31.1 | % | $ | 481,214 | 31.5 | % | |||||||||
| Interest bearing demand and money market | 1,006,623 | 64.0 | 1,024,798 | 64.6 | 560,416 | 36.8 | |||||||||||||||
| Savings | 52,851 | 3.3 | 56,305 | 3.5 | 59,493 | 3.9 | |||||||||||||||
| Total core deposits | 1,560,745 | 99.2 | 1,574,071 | 99.2 | 1,101,123 | 72.2 | |||||||||||||||
| Other deposits | 1 | 0.0 | 1 | 0.0 | 407,391 | 26.7 | |||||||||||||||
| Time deposits less than | 4,174 | 0.3 | 4,415 | 0.3 | 5,585 | 0.4 | |||||||||||||||
| Time deposits | 8,022 | 0.5 | 7,872 | 0.5 | 10,122 | 0.7 | |||||||||||||||
| Total community bank deposits | $ | 1,572,942 | 100.0 | % | $ | 1,586,359 | 100.0 | % | $ | 1,524,221 | 100.0 | % | |||||||||
| Cost of deposits(1) | 1.46 | % | 1.56 | % | 1.76 | % | |||||||||||||||
(1) Cost of deposits is annualized for the three months ended for each period presented.
Community bank deposits decreased
Net Interest Income and Margin Discussion
Net interest income was
Net interest margin was
Interest and fees on loans receivable increased
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) | March 31 2026 | December 31 2025 | March 31 2025 | |||||||||
| Net interest margin, net of BaaS loan expense: | ||||||||||||
| Net interest margin(1) | 7.00 | % | 7.03 | % | 7.48 | % | ||||||
| Earning assets | 4,830,601 | 4,482,007 | 4,124,065 | |||||||||
| Net interest income (GAAP) | 83,357 | 79,365 | 76,062 | |||||||||
| Less: BaaS loan expense | (36,940 | ) | (31,256 | ) | (32,507 | ) | ||||||
| Net interest income, net of BaaS loan expense(2) | $ | 46,417 | $ | 48,109 | $ | 43,555 | ||||||
| Net interest margin, net of BaaS loan expense(1)(2) | 3.90 | % | 4.26 | % | 4.28 | % | ||||||
| Loan income net of BaaS loan expense divided by average loans: | ||||||||||||
| Loan yield (GAAP)(1) | 10.76 | % | 10.63 | % | 11.33 | % | ||||||
| Total average loans receivable | $ | 3,878,626 | $ | 3,740,073 | $ | 3,511,724 | ||||||
| Interest and earned fee income on loans (GAAP) | 102,887 | 100,206 | 98,147 | |||||||||
| BaaS loan expense | (36,940 | ) | (31,256 | ) | (32,507 | ) | ||||||
| Net loan income(2) | $ | 65,947 | $ | 68,950 | $ | 65,640 | ||||||
| Loan income, net of BaaS loan expense, divided by average loans(1)(2) | 6.90 | % | 7.31 | % | 7.58 | % | ||||||
(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 increased
Cost of funds was
The following table summarizes the average yield on loans receivable and cost of deposits:
| For the Three Months Ended | |||||||||||||||||
| March 31, 2026 | December 31, 2025 | March 31, 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 | 6.58 | % | 1.46 | % | 6.52 | % | 1.56 | % | 6.53 | % | 1.76 | % | |||||
| CCBX(1) | 15.01 | % | 3.17 | % | 14.89 | % | 3.52 | % | 16.88 | % | 4.01 | % | |||||
| Consolidated | 10.76 | % | 2.56 | % | 10.63 | % | 2.74 | % | 11.33 | % | 3.08 | % | |||||
(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 | ||||||||||||||||||
| March 31, 2026 | December 31, 2025 | March 31, 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 | $ | 71,153 | 15.01 | % | $ | 68,846 | 14.89 | % | $ | 67,855 | 16.88 | % | ||||||
| Less: BaaS loan expense | 36,940 | 7.79 | % | 31,256 | 6.76 | % | 32,507 | 8.09 | % | |||||||||
| Net BaaS loan income(1) | $ | 34,213 | 7.22 | % | $ | 37,590 | 8.13 | % | $ | 35,348 | 8.79 | % | ||||||
| Average BaaS Loans(3) | $ | 1,922,586 | $ | 1,833,904 | $ | 1,630,088 | ||||||||||||
(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
The
Noninterest Expense Discussion
Total noninterest expense increased
The
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 partner 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 | |||||||||
| March 31, | December 31, | March 31, | |||||||
| (dollars in thousands; unaudited) | 2026 | 2025 | 2025 | ||||||
| Total noninterest expense (GAAP) | $ | 83,452 | $ | 72,804 | $ | 71,989 | |||
| Less: BaaS loan expense | 36,940 | 31,256 | 32,507 | ||||||
| Less: BaaS fraud expense | 3,059 | 1,090 | 1,993 | ||||||
| Less: Reimbursement of expenses (BaaS) | 2,392 | 1,868 | 1,026 | ||||||
| Noninterest expense, net of BaaS loan expense, BaaS fraud expense and reimbursement of expenses (BaaS)(1) | $ | 41,061 | $ | 38,590 | $ | 36,463 | |||
(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 was
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
Financial Condition Overview
Total assets increased
As of March 31, 2026, in addition to the
The Company, on a stand alone basis, had a cash balance of
Uninsured deposits were
Total shareholders’ equity as of March 31, 2026 increased
The Company and the Bank remained well capitalized at March 31, 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) | 10.10 | % | 10.09 | % | 5.00 | % | |||
| Common Equity Tier 1 Capital (to risk-weighted assets) | 12.19 | % | 12.08 | % | 6.50 | % | |||
| Tier 1 Capital (to risk-weighted assets) | 12.19 | % | 12.17 | % | 8.00 | % | |||
| Total Capital (to risk-weighted assets) | 13.48 | % | 14.54 | % | 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
The following table details the allocation of the allowance for credit loss as of the period indicated:
| As of March 31, 2026 | As of December 31, 2025 | As of March 31, 2025 | ||||||||||||||||||||||||||||||||||
| (dollars in thousands; unaudited) | Community Bank | CCBX | Total | Community Bank | CCBX | Total | Community Bank | CCBX | Total | |||||||||||||||||||||||||||
| Loans receivable | $ | 1,975,255 | $ | 1,884,124 | $ | 3,859,379 | $ | 1,941,979 | $ | 1,807,552 | $ | 3,749,531 | $ | 1,866,533 | $ | 1,650,826 | $ | 3,517,359 | ||||||||||||||||||
| Allowance for credit losses | (18,153 | ) | (154,274 | ) | (172,427 | ) | (18,231 | ) | (151,299 | ) | (169,530 | ) | (18,992 | ) | (164,186 | ) | (183,178 | ) | ||||||||||||||||||
| Allowance for credit losses to total loans receivable | 0.92 | % | 8.19 | % | 4.47 | % | 0.94 | % | 8.37 | % | 4.52 | % | 1.02 | % | 9.95 | % | 5.21 | % | ||||||||||||||||||
Net charge-offs totaled
The following table details net charge-offs for the community bank and CCBX for the period indicated:
| Three Months Ended | ||||||||||||||||||||||||||||||||||||
| March 31, 2026 | December 31, 2025 | March 31, 2025 | ||||||||||||||||||||||||||||||||||
| (dollars in thousands; unaudited) | Community Bank | CCBX | Total | Community Bank | CCBX | Total | Community Bank | CCBX | Total | |||||||||||||||||||||||||||
| Gross charge-offs | $ | 2 | $ | 54,521 | $ | 54,523 | $ | 24 | $ | 55,165 | $ | 55,189 | $ | 4 | $ | 53,682 | $ | 53,686 | ||||||||||||||||||
| Gross recoveries | (3 | ) | (4,933 | ) | (4,936 | ) | (2 | ) | (5,112 | ) | (5,114 | ) | (7 | ) | (5,479 | ) | (5,486 | ) | ||||||||||||||||||
| Net charge-offs (recoveries) | $ | (1 | ) | $ | 49,588 | $ | 49,587 | $ | 22 | $ | 50,053 | $ | 50,075 | $ | (3 | ) | $ | 48,203 | $ | 48,200 | ||||||||||||||||
| Net charge-offs to average loans(1) | 0.00 | % | 10.46 | % | 5.18 | % | 0.00 | % | 10.83 | % | 5.31 | % | 0.00 | % | 11.99 | % | 5.57 | % | ||||||||||||||||||
(1) Annualized calculations shown for periods presented.
During the quarter ended March 31, 2026, a
In accordance with accounting guidance, we estimate and record a provision for expected losses for these CCBX loans and reclassified negative deposit accounts. When the provision for CCBX credit losses and provision for unfunded commitments is recorded, a credit enhancement asset is also recorded on the balance sheet through noninterest income (BaaS credit enhancements). Expected losses are recorded in the allowance for credit losses. The credit enhancement asset is relieved when credit enhancement recoveries are received from the CCBX partner. If our partner is unable to fulfill their contracted obligations then the Bank could be exposed to additional credit losses. Management regularly evaluates and manages this counterparty risk with our CCBX partners.
The factors used in management’s analysis for community bank credit losses indicated that a provision recapture of
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) | March 31, 2026 | December 31, 2025 | March 31, 2025 | ||||||||
| Community bank | $ | (1,428 | ) | $ | (101 | ) | $ | 65 | |||
| CCBX | 52,563 | 45,893 | 54,319 | ||||||||
| Total provision expense | $ | 51,135 | $ | 45,792 | $ | 54,384 | |||||
Included in provision expense was a
At March 31, 2026, our nonperforming assets were
Nonperforming assets increased
For the quarter ended March 31, 2026, there were
The following table details the Company’s nonperforming assets for the periods indicated.
| Consolidated | As of | ||||||||||
| (dollars in thousands; unaudited) | March 31, 2026 | December 31, 2025 | March 31, 2025 | ||||||||
| Nonaccrual loans: | |||||||||||
| Commercial and industrial loans | $ | 251 | $ | 2,278 | $ | 381 | |||||
| Real estate loans: | |||||||||||
| Construction, land and land development | — | — | — | ||||||||
| Residential real estate | 314 | 38 | — | ||||||||
| Commercial real estate | 4,344 | 4,344 | — | ||||||||
| Consumer and other loans: | |||||||||||
| Credit cards | 24,497 | 21,433 | 13,602 | ||||||||
| Other consumer and other loans | 3,015 | 2,875 | 6,376 | ||||||||
| Total nonaccrual loans | 32,421 | 30,968 | 20,359 | ||||||||
| Accruing loans past due 90 days or more: | |||||||||||
| Commercial & industrial loans | 604 | 654 | 782 | ||||||||
| Real estate loans: | |||||||||||
| Residential real estate loans | 2,241 | 1,961 | 2,407 | ||||||||
| Consumer and other loans: | |||||||||||
| Credit cards | 24,149 | 22,536 | 27,187 | ||||||||
| Other consumer and other loans | 8,205 | 7,993 | 5,632 | ||||||||
| Total accruing loans past due 90 days or more | 35,199 | 33,144 | 36,008 | ||||||||
| Total nonperforming loans | 67,620 | 64,112 | 56,367 | ||||||||
| Real estate owned | — | — | — | ||||||||
| Repossessed assets | — | — | — | ||||||||
| Total nonperforming assets | $ | 67,620 | $ | 64,112 | $ | 56,367 | |||||
| Total nonaccrual loans to loans receivable | 0.84 | % | 0.83 | % | 0.58 | % | |||||
| Total nonperforming loans to loans receivable | 1.75 | % | 1.71 | % | 1.60 | % | |||||
| Total nonperforming assets to total assets | 1.19 | % | 1.35 | % | 1.30 | % | |||||
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) | March 31, 2026 | December 31, 2025 | March 31, 2025 | ||||||||
| Nonaccrual loans: | |||||||||||
| Commercial and industrial loans: | |||||||||||
| All other commercial & industrial loans | $ | 81 | $ | 127 | $ | 192 | |||||
| Consumer and other loans: | |||||||||||
| Credit cards | 24,497 | 21,433 | 13,602 | ||||||||
| Other consumer and other loans | 3,015 | 2,875 | 6,376 | ||||||||
| Total nonaccrual loans | 27,593 | 24,435 | 20,170 | ||||||||
| Accruing loans past due 90 days or more: | |||||||||||
| Commercial & industrial loans | 604 | 654 | 782 | ||||||||
| Real estate loans: | |||||||||||
| Residential real estate loans | 2,241 | 1,961 | 2,407 | ||||||||
| Consumer and other loans: | |||||||||||
| Credit cards | 24,149 | 22,536 | 27,187 | ||||||||
| Other consumer and other loans | 8,205 | 7,993 | 5,632 | ||||||||
| Total accruing loans past due 90 days or more | 35,199 | 33,144 | 36,008 | ||||||||
| Total nonperforming loans | 62,792 | 57,579 | 56,178 | ||||||||
| Other real estate owned | — | — | — | ||||||||
| Repossessed assets | — | — | — | ||||||||
| Total nonperforming assets | $ | 62,792 | $ | 57,579 | $ | 56,178 | |||||
| Total CCBX nonperforming assets to total consolidated assets | 1.11 | % | 1.21 | % | 1.29 | % | |||||
| Community Bank | As of | ||||||||||
| (dollars in thousands; unaudited) | March 31, 2026 | December 31, 2025 | March 31, 2025 | ||||||||
| Nonaccrual loans: | |||||||||||
| Commercial and industrial loans | $ | 170 | $ | 2,151 | $ | 189 | |||||
| Real estate: | |||||||||||
| Residential real estate | 314 | 38 | — | ||||||||
| Commercial real estate | 4,344 | 4,344 | — | ||||||||
| Total nonaccrual loans | 4,828 | 6,533 | 189 | ||||||||
| Accruing loans past due 90 days or more: | |||||||||||
| Total accruing loans past due 90 days or more | — | — | — | ||||||||
| Total nonperforming loans | 4,828 | 6,533 | 189 | ||||||||
| Other real estate owned | — | — | — | ||||||||
| Repossessed assets | — | — | — | ||||||||
| Total nonperforming assets | $ | 4,828 | $ | 6,533 | $ | 189 | |||||
| Total community bank nonperforming assets to total consolidated assets | 0.09 | % | 0.14 | % | — | % | |||||
About Coastal Financial
Coastal Financial Corporation (Nasdaq: CCB) (the “Company”), is an Everett, Washington based bank holding company whose wholly owned subsidiaries are Coastal Community Bank (“Bank”) and Arlington Olympic LLC. The
CCB-ER
Contact
Eric Sprink, Chief Executive Officer, esprink@coastalbank.com
Brandon J. Soto, Executive Vice President & Chief Financial Officer, bsoto@coastalbank.com
Forward-Looking Statements
This earnings release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. Any statements about our management’s expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through the use of words or phrases such as “anticipate,” “believes,” “can,” “could,” “may,” “predicts,” “potential,” “should,” “will,” “estimate,” “plans,” “projects,” “continuing,” “ongoing,” “expects,” “intends” and similar words or phrases. Any or all of the forward-looking statements in this earnings release may turn out to be inaccurate. The inclusion of or reference to forward-looking information in this earnings release should not be regarded as a representation by us or any other person that the future plans, estimates or expectations contemplated by us will be achieved. We have based these forward looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. Our actual results could differ materially from those anticipated in such forward-looking statements as a result of risks, uncertainties and assumptions that are difficult to predict. Factors that could cause actual results to differ materially from those in the forward-looking statements include, without limitation, the risk that the conflicts in the Middle East and/or changes in U.S. trade policies, including the imposition of tariffs and retaliatory tariffs, may adversely impact our business, financial condition, and results of operations and those other risks and uncertainties discussed under “Risk Factors” in our Annual Report on Form 10-K for the most recent period filed and in any of our subsequent filings with the Securities and Exchange Commission.
If one or more events related to these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may differ materially from what we anticipate. You are cautioned not to place undue reliance on forward-looking statements. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update or revise any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events, except as required by law.
| COASTAL FINANCIAL CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Dollars in thousands; unaudited) | |||||||||||||||||||
| ASSETS | |||||||||||||||||||
| March 31, 2026 | December 31, 2025 | September 30, 2025 | June 30, 2025 | March 31, 2025 | |||||||||||||||
| Cash and due from banks | $ | 52,695 | $ | 34,241 | $ | 34,928 | $ | 29,546 | $ | 43,467 | |||||||||
| Interest earning deposits with other banks | 1,442,772 | 702,729 | 607,330 | 690,213 | 580,835 | ||||||||||||||
| Investment securities, available-for-sale, at fair value | 28 | 29 | 31 | 33 | 34 | ||||||||||||||
| Investment securities, held-to-maturity, at amortized cost | 46,141 | 48,218 | 43,911 | 45,544 | 46,957 | ||||||||||||||
| Other investments | 14,023 | 12,837 | 12,778 | 12,521 | 12,589 | ||||||||||||||
| Loans held for sale | 124,039 | 71,216 | 42,894 | 60,474 | 42,132 | ||||||||||||||
| Loans receivable | 3,859,379 | 3,749,531 | 3,703,848 | 3,540,330 | 3,517,359 | ||||||||||||||
| Allowance for credit losses | (172,427 | ) | (169,530 | ) | (173,813 | ) | (164,794 | ) | (183,178 | ) | |||||||||
| Total loans receivable, net | 3,686,952 | 3,580,001 | 3,530,035 | 3,375,536 | 3,334,181 | ||||||||||||||
| CCBX credit enhancement asset | 180,587 | 177,657 | 177,741 | 167,779 | 183,377 | ||||||||||||||
| CCBX receivable | 24,926 | 23,047 | 16,260 | 13,009 | 12,685 | ||||||||||||||
| Premises and equipment, net | 29,710 | 29,325 | 29,114 | 29,052 | 28,639 | ||||||||||||||
| Lease right-of-use assets | 4,641 | 4,821 | 4,788 | 4,891 | 5,117 | ||||||||||||||
| Accrued interest receivable | 20,139 | 18,613 | 20,493 | 20,849 | 21,109 | ||||||||||||||
| Bank-owned life insurance, net | 14,044 | 13,910 | 13,777 | 13,648 | 13,501 | ||||||||||||||
| Deferred tax asset, net | — | — | — | 3,829 | 3,912 | ||||||||||||||
| Intangible assets, net | 4,434 | 4,536 | — | — | — | ||||||||||||||
| Other assets | 18,698 | 20,257 | 18,996 | 13,635 | 10,747 | ||||||||||||||
| Total assets | $ | 5,663,829 | $ | 4,741,437 | $ | 4,553,076 | $ | 4,480,559 | $ | 4,339,282 | |||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||||||||||
| LIABILITIES | |||||||||||||||||||
| Deposits | $ | 5,041,164 | $ | 4,144,199 | $ | 3,972,563 | $ | 3,913,571 | $ | 3,791,229 | |||||||||
| Subordinated debt, net | 44,480 | 44,443 | 44,406 | 44,368 | 44,331 | ||||||||||||||
| Junior subordinated debentures, net | 3,594 | 3,593 | 3,593 | 3,592 | 3,592 | ||||||||||||||
| Deferred compensation | 251 | 267 | 281 | 295 | 310 | ||||||||||||||
| Accrued interest payable | 2,665 | 1,435 | 1,106 | 954 | 1,107 | ||||||||||||||
| Lease liabilities | 4,799 | 4,984 | 4,956 | 5,063 | 5,293 | ||||||||||||||
| CCBX payable | 28,410 | 27,492 | 31,221 | 32,939 | 29,391 | ||||||||||||||
| Deferred tax liability, net | 1,656 | 853 | 799 | — | — | ||||||||||||||
| Other liabilities | 33,048 | 23,212 | 18,874 | 18,068 | 14,112 | ||||||||||||||
| Total liabilities | 5,160,067 | 4,250,478 | 4,077,799 | 4,018,850 | 3,889,365 | ||||||||||||||
| SHAREHOLDERS’ EQUITY | |||||||||||||||||||
| Common Stock | 234,222 | 233,438 | 230,399 | 230,423 | 229,659 | ||||||||||||||
| Retained earnings | 269,541 | 257,522 | 244,879 | 231,287 | 220,259 | ||||||||||||||
| Accumulated other comprehensive loss, net of tax | (1 | ) | (1 | ) | (1 | ) | (1 | ) | (1 | ) | |||||||||
| Total shareholders’ equity | 503,762 | 490,959 | 475,277 | 461,709 | 449,917 | ||||||||||||||
| Total liabilities and shareholders’ equity | $ | 5,663,829 | $ | 4,741,437 | $ | 4,553,076 | $ | 4,480,559 | $ | 4,339,282 | |||||||||
| COASTAL FINANCIAL CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Dollars in thousands, except per share amounts; unaudited) | |||||||||||||||
| Three Months Ended | |||||||||||||||
| March 31, 2026 | December 31, 2025 | September 30, 2025 | June 30, 2025 | March 31, 2025 | |||||||||||
| INTEREST AND DIVIDEND INCOME | |||||||||||||||
| Interest and fees on loans | $ | 102,887 | $ | 100,206 | $ | 100,367 | $ | 98,867 | $ | 98,147 | |||||
| Interest on interest earning deposits with other banks | 8,128 | 6,810 | 8,007 | 8,085 | 6,070 | ||||||||||
| Interest on investment securities | 622 | 635 | 616 | 626 | 650 | ||||||||||
| Dividends on other investments | 44 | 235 | 37 | 219 | 40 | ||||||||||
| Total interest income | 111,681 | 107,886 | 109,027 | 107,797 | 104,907 | ||||||||||
| INTEREST EXPENSE | |||||||||||||||
| Interest on deposits | 27,670 | 27,863 | 30,466 | 30,400 | 28,185 | ||||||||||
| Interest on borrowed funds | 654 | 658 | 660 | 660 | 660 | ||||||||||
| Total interest expense | 28,324 | 28,521 | 31,126 | 31,060 | 28,845 | ||||||||||
| Net interest income | 83,357 | 79,365 | 77,901 | 76,737 | 76,062 | ||||||||||
| PROVISION FOR CREDIT LOSSES | 51,398 | 48,041 | 56,598 | 32,211 | 55,781 | ||||||||||
| Net interest income after provision for credit losses | 31,959 | 31,324 | 21,303 | 44,526 | 20,281 | ||||||||||
| NONINTEREST INCOME | |||||||||||||||
| Service charges and fees | 850 | 882 | 903 | 913 | 860 | ||||||||||
| Unrealized gain (loss) on equity securities, net | 126 | — | 9 | (439 | ) | 16 | |||||||||
| Other income | 410 | 459 | 461 | 496 | 682 | ||||||||||
| Noninterest income, excluding BaaS program income and BaaS indemnification income | 1,386 | 1,341 | 1,373 | 970 | 1,558 | ||||||||||
| Servicing and other BaaS fees | 2,623 | 2,113 | 1,575 | 1,896 | 1,419 | ||||||||||
| Transaction and interchange fees | 5,873 | 4,924 | 4,878 | 5,109 | 3,833 | ||||||||||
| Reimbursement of expenses | 2,392 | 1,868 | 1,412 | 646 | 1,026 | ||||||||||
| BaaS program income | 10,888 | 8,905 | 7,865 | 7,651 | 6,278 | ||||||||||
| BaaS credit enhancements | 50,744 | 47,325 | 55,412 | 31,268 | 53,648 | ||||||||||
| BaaS fraud enhancements | 3,059 | 1,090 | 2,127 | 2,804 | 1,993 | ||||||||||
| BaaS indemnification income | 53,803 | 48,415 | 57,539 | 34,072 | 55,641 | ||||||||||
| Total noninterest income | 66,077 | 58,661 | 66,777 | 42,693 | 63,477 | ||||||||||
| NONINTEREST EXPENSE | |||||||||||||||
| Salaries and employee benefits | 23,122 | 22,745 | 20,146 | 21,401 | 21,532 | ||||||||||
| Occupancy | 859 | 1,091 | 952 | 915 | 1,034 | ||||||||||
| Data processing and software licenses | 7,643 | 6,978 | 6,114 | 5,541 | 4,232 | ||||||||||
| Legal and professional expenses | 7,002 | 4,447 | 3,957 | 5,962 | 6,488 | ||||||||||
| Point of sale expense | 445 | 105 | 69 | 69 | 107 | ||||||||||
| Excise taxes | 1,169 | 756 | 696 | 681 | 722 | ||||||||||
| Federal Deposit Insurance Corporation ("FDIC") assessments | 573 | 817 | 815 | 790 | 755 | ||||||||||
| Director and staff expenses | 668 | 870 | 544 | 612 | 631 | ||||||||||
| Marketing | 38 | 259 | 272 | 50 | 50 | ||||||||||
| Other expense | 1,934 | 2,390 | 1,640 | 1,524 | 1,938 | ||||||||||
| Noninterest expense, excluding BaaS loan and BaaS fraud expense | 43,453 | 40,458 | 35,205 | 37,545 | 37,489 | ||||||||||
| BaaS loan expense | 36,940 | 31,256 | 32,840 | 32,483 | 32,507 | ||||||||||
| BaaS fraud expense | 3,059 | 1,090 | 2,127 | 2,804 | 1,993 | ||||||||||
| BaaS loan and fraud expense | 39,999 | 32,346 | 34,967 | 35,287 | 34,500 | ||||||||||
| Total noninterest expense | 83,452 | 72,804 | 70,172 | 72,832 | 71,989 | ||||||||||
| Income before provision for income taxes | 14,584 | 17,181 | 17,908 | 14,387 | 11,769 | ||||||||||
| PROVISION FOR INCOME TAXES | 2,565 | 4,538 | 4,316 | 3,359 | 2,039 | ||||||||||
| NET INCOME | $ | 12,019 | $ | 12,643 | $ | 13,592 | $ | 11,028 | $ | 9,730 | |||||
| Basic earnings per common share | $ | 0.79 | $ | 0.84 | $ | 0.90 | $ | 0.73 | $ | 0.65 | |||||
| Diluted earnings per common share | $ | 0.78 | $ | 0.82 | $ | 0.88 | $ | 0.71 | $ | 0.63 | |||||
| Weighted average number of common shares outstanding: | |||||||||||||||
| Basic | 15,179,447 | 15,116,005 | 15,093,274 | 15,033,296 | 14,962,507 | ||||||||||
| Diluted | 15,422,822 | 15,455,856 | 15,443,987 | 15,447,923 | 15,462,041 | ||||||||||
| COASTAL FINANCIAL CORPORATION AVERAGE BALANCES, YIELDS, AND RATES – QUARTERLY (Dollars in thousands; unaudited) | |||||||||||||||||||||||||||||
| For the Three Months Ended | |||||||||||||||||||||||||||||
| March 31, 2026 | December 31, 2025 | March 31, 2025 | |||||||||||||||||||||||||||
| Average Balance | Interest & Dividends | Yield / Cost(1) | Average Balance | Interest & Dividends | Yield / Cost(1) | Average Balance | Interest & Dividends | Yield / Cost(1) | |||||||||||||||||||||
| Assets | |||||||||||||||||||||||||||||
| Interest earning assets: | |||||||||||||||||||||||||||||
| Interest earning deposits with other banks | $ | 891,511 | $ | 8,128 | 3.70 | % | $ | 682,663 | $ | 6,810 | 3.96 | % | $ | 553,393 | $ | 6,070 | 4.45 | % | |||||||||||
| Investment securities, available-for-sale(2) | 30 | 1 | 13.52 | 31 | — | — | 37 | 1 | 10.96 | ||||||||||||||||||||
| Investment securities, held-to-maturity(2) | 47,420 | 621 | 5.31 | 46,431 | 635 | 5.43 | 47,154 | 649 | 5.58 | ||||||||||||||||||||
| Other investments | 13,014 | 44 | 1.37 | 12,809 | 235 | 7.28 | 11,757 | 40 | 1.38 | ||||||||||||||||||||
| Loans receivable(3) | 3,878,626 | 102,887 | 10.76 | 3,740,073 | 100,206 | 10.63 | 3,511,724 | 98,147 | 11.33 | ||||||||||||||||||||
| Total interest earning assets | 4,830,601 | 111,681 | 9.38 | 4,482,007 | 107,886 | 9.55 | 4,124,065 | 104,907 | 10.32 | ||||||||||||||||||||
| Noninterest earning assets: | |||||||||||||||||||||||||||||
| Allowance for credit losses | (166,987 | ) | (168,725 | ) | (170,542 | ) | |||||||||||||||||||||||
| Other noninterest earning assets | 324,660 | 305,068 | 296,993 | ||||||||||||||||||||||||||
| Total assets | $ | 4,988,274 | $ | 4,618,350 | $ | 4,250,516 | |||||||||||||||||||||||
| Liabilities and Shareholders’ Equity | |||||||||||||||||||||||||||||
| Interest bearing liabilities: | |||||||||||||||||||||||||||||
| Interest bearing deposits | $ | 3,798,235 | $ | 27,670 | 2.95 | % | $ | 3,443,247 | $ | 27,863 | 3.21 | % | $ | 3,166,384 | $ | 28,185 | 3.61 | % | |||||||||||
| FHLB advances and other borrowings | — | — | — | — | — | — | — | 1 | — | ||||||||||||||||||||
| Subordinated debt | 44,457 | 599 | 5.46 | 44,420 | 599 | 5.35 | 44,309 | 598 | 5.47 | ||||||||||||||||||||
| Junior subordinated debentures | 3,593 | 55 | 6.21 | 3,593 | 59 | 6.51 | 3,592 | 61 | 6.89 | ||||||||||||||||||||
| Total interest bearing liabilities | 3,846,285 | 28,324 | 2.99 | 3,491,260 | 28,521 | 3.24 | 3,214,285 | 28,845 | 3.64 | ||||||||||||||||||||
| Noninterest bearing deposits | 585,211 | 590,340 | 543,784 | ||||||||||||||||||||||||||
| Other liabilities | 59,333 | 55,075 | 49,624 | ||||||||||||||||||||||||||
| Total shareholders' equity | 497,445 | 481,675 | 442,823 | ||||||||||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 4,988,274 | $ | 4,618,350 | $ | 4,250,516 | |||||||||||||||||||||||
| Net interest income | $ | 83,357 | $ | 79,365 | $ | 76,062 | |||||||||||||||||||||||
| Interest rate spread | 6.39 | % | 6.31 | % | 6.68 | % | |||||||||||||||||||||||
| Net interest margin(4) | 7.00 | % | 7.03 | % | 7.48 | % | |||||||||||||||||||||||
(1) Yields and costs are annualized.
(2) For presentation in this table, average balances and the corresponding average rates for investment securities are based upon historical cost, adjusted for amortization of premiums and accretion of discounts.
(3) Includes loans held for sale and nonaccrual loans.
(4) Net interest margin represents net interest income divided by the average total interest earning assets.
| COASTAL FINANCIAL CORPORATION SELECTED AVERAGE BALANCES, YIELDS, AND RATES – BY SEGMENT - QUARTERLY (Dollars in thousands; unaudited) | ||||||||||||||||||||||||||
| For the Three Months Ended | ||||||||||||||||||||||||||
| March 31, 2026 | December 31, 2025 | March 31, 2025 | ||||||||||||||||||||||||
| (dollars in thousands, unaudited) | Average Balance | Interest & Dividends | Yield / Cost(1) | Average Balance | Interest & Dividends | Yield / Cost(1) | Average Balance | Interest & Dividends | Yield / Cost(1) | |||||||||||||||||
| Community Bank | ||||||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||
| Interest earning assets: | ||||||||||||||||||||||||||
| Loans receivable(2) | $ | 1,956,040 | $ | 31,734 | 6.58 | % | $ | 1,905,430 | $ | 31,337 | 6.52 | % | $ | 1,881,636 | $ | 30,292 | 6.53 | % | ||||||||
| Total interest earning assets | 1,956,040 | 31,734 | 6.58 | 1,905,430 | 31,337 | 6.52 | 1,881,636 | 30,292 | 6.53 | |||||||||||||||||
| Liabilities | ||||||||||||||||||||||||||
| Interest bearing liabilities: | ||||||||||||||||||||||||||
| Interest bearing deposits | 1,057,293 | 5,571 | 2.14 | % | 1,091,322 | 6,282 | 2.28 | % | 1,045,971 | 6,604 | 2.56 | % | ||||||||||||||
| Intrabank liability | 403,880 | 3,625 | 3.64 | 306,684 | 3,059 | 3.96 | 356,337 | 3,909 | 4.45 | |||||||||||||||||
| Total interest bearing liabilities | 1,461,173 | 9,196 | 2.55 | 1,398,006 | 9,341 | 2.65 | 1,402,308 | 10,513 | 3.04 | |||||||||||||||||
| Noninterest bearing deposits | 494,867 | 507,424 | 479,329 | |||||||||||||||||||||||
| Net interest income | $ | 22,538 | $ | 21,996 | $ | 19,779 | ||||||||||||||||||||
| Net interest margin(3) | 4.67 | % | 4.58 | % | 4.26 | % | ||||||||||||||||||||
| CCBX | ||||||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||
| Interest earning assets: | ||||||||||||||||||||||||||
| Loans receivable(2)(4) | $ | 1,922,586 | $ | 71,153 | 15.01 | % | $ | 1,833,904 | $ | 68,846 | 14.89 | % | $ | 1,630,088 | $ | 67,855 | 16.88 | % | ||||||||
| Intrabank asset | 908,700 | 8,156 | 3.64 | 600,937 | 5,995 | 3.96 | 554,781 | 6,085 | 4.45 | |||||||||||||||||
| Total interest earning assets | 2,831,286 | 79,309 | 11.36 | 2,434,841 | 74,841 | 12.19 | 2,184,869 | 73,940 | 13.72 | |||||||||||||||||
| Liabilities | ||||||||||||||||||||||||||
| Interest bearing liabilities: | ||||||||||||||||||||||||||
| Interest bearing deposits | 2,740,942 | 22,099 | 3.27 | % | 2,351,925 | 21,581 | 3.64 | % | 2,120,413 | 21,581 | 4.13 | % | ||||||||||||||
| Total interest bearing liabilities | 2,740,942 | 22,099 | 3.27 | 2,351,925 | 21,581 | 3.64 | 2,120,413 | 21,581 | 4.13 | |||||||||||||||||
| Noninterest bearing deposits | 90,344 | 82,916 | 64,455 | |||||||||||||||||||||||
| Net interest income | $ | 57,210 | $ | 53,260 | $ | 52,359 | ||||||||||||||||||||
| Net interest margin(3) | 8.19 | % | 8.68 | % | 9.72 | % | ||||||||||||||||||||
| Net interest margin, net of BaaS loan expense(5) | 2.90 | % | 3.59 | % | 3.68 | % | ||||||||||||||||||||
| For the Three Months Ended | ||||||||||||||||||||||||||
| March 31, 2026 | December 31, 2025 | March 31, 2025 | ||||||||||||||||||||||||
| (dollars in thousands, unaudited) | Average Balance | Interest & Dividends | Yield / Cost(1) | Average Balance | Interest & Dividends | Yield / Cost(1) | Average Balance | Interest & Dividends | Yield / Cost(1) | |||||||||||||||||
| Treasury & Administration | ||||||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||
| Interest earning assets: | ||||||||||||||||||||||||||
| Loans receivable(2) | $ | — | $ | — | — | % | $ | 739 | $ | 23 | — | % | $ | — | $ | — | — | % | ||||||||
| Interest earning deposits with other banks | 891,511 | 8,128 | 3.70 | 682,663 | 6,810 | 3.96 | 553,393 | 6,070 | 4.45 | |||||||||||||||||
| Investment securities, available-for-sale(6) | 30 | 1 | 3.37 | 31 | — | — | 37 | 1 | 10.96 | |||||||||||||||||
| Investment securities, held-to-maturity(6) | 47,420 | 621 | 5.31 | 46,431 | 635 | 5.43 | 47,154 | 649 | 5.58 | |||||||||||||||||
| Other investments | 13,014 | 44 | 1.37 | 12,809 | 235 | 7.28 | 11,757 | 40 | 1.38 | |||||||||||||||||
| Total interest earning assets | 951,975 | 8,794 | 3.75 | % | 742,673 | — | 7,703 | 4.11 | % | 612,341 | 6,760 | 4.48 | % | |||||||||||||
| Liabilities | ||||||||||||||||||||||||||
| Interest bearing liabilities: | ||||||||||||||||||||||||||
| FHLB advances and borrowings | $ | — | — | — | % | $ | — | — | — | % | $ | — | 1 | — | % | |||||||||||
| Subordinated debt | 44,457 | 599 | 5.46 | 44,420 | 599 | 5.35 | 44,309 | 598 | 5.47 | |||||||||||||||||
| Junior subordinated debentures | 3,593 | 55 | 6.21 | 3,593 | 59 | 6.51 | 3,592 | 61 | 6.89 | |||||||||||||||||
| Intrabank liability, net(7) | 504,820 | 4,531 | 3.64 | 294,253 | 2,936 | 3.96 | 198,444 | 2,176 | 4.45 | |||||||||||||||||
| Total interest bearing liabilities | 552,870 | 5,185 | 3.80 | 342,266 | 3,594 | 4.17 | 246,345 | 2,836 | 4.67 | |||||||||||||||||
| Net interest income | $ | 3,609 | $ | 4,109 | $ | 3,924 | ||||||||||||||||||||
| Net interest margin(3) | 1.54 | % | 2.20 | % | 2.60 | % | ||||||||||||||||||||
(1) Yields and costs are annualized.
(2) Includes loans held for sale and nonaccrual loans.
(3) Net interest margin represents net interest income divided by the average total interest earning assets.
(4) 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, fraud 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.
(5) Net interest margin, net of BaaS loan expense, includes the impact of BaaS loan expense. BaaS loan expense represents the amount paid or payable to partners for credit enhancements, fraud enhancements, originating & servicing CCBX loans. See reconciliation of the non-GAAP measures at the end of this earnings release.
(6) For presentation in this table, average balances and the corresponding average rates for investment securities are based upon historical cost, adjusted for amortization of premiums and accretion of discounts.
(7) Intrabank assets and liabilities are consolidated for period calculations and presented as intrabank asset, net or intrabank liability, net in the table above.
Non-GAAP Financial Measures
The Company uses certain non-GAAP financial measures to provide meaningful supplemental information regarding the Company’s operational performance and to enhance investors’ overall understanding of financial performance.
However, these non-GAAP financial measures are supplemental and are not a substitute for an analysis based on GAAP measures. As other companies may use different calculations for these adjusted measures, this presentation may not be comparable to other similarly titled adjusted measures reported by other companies.
The following non-GAAP measures are presented to illustrate the impact of BaaS loan expense on net loan income and yield on loans and CCBX loans and the impact of BaaS loan expense on net interest income and net interest margin.
Loan income, net of BaaS loan expense, divided by average loans, is a non-GAAP measure that includes the impact of BaaS loan expense on loan income and the yield on loans. The most directly comparable GAAP measure is yield on loans.
Net BaaS loan income divided by average CCBX loans is a non-GAAP measure that includes the impact of BaaS loan expense on net BaaS loan income and the yield on CCBX loans. The most directly comparable GAAP measure is yield on CCBX loans.
Net interest income, net of BaaS loan expense, is a non-GAAP measure that includes the impact of BaaS loan expense on net interest income. The most directly comparable GAAP measure is net interest income.
CCBX net interest margin, net of BaaS loan expense, is a non-GAAP measure that includes the impact of BaaS loan expense on net interest rate margin. The most directly comparable GAAP measure is CCBX net interest margin.
Reconciliations of the GAAP and non-GAAP measures are presented below.
| CCBX | As of and for the Three Months Ended | |||||||||||
| (dollars in thousands; unaudited) | March 31 2026 | December 31 2025 | March 31 2025 | |||||||||
| Net BaaS loan income divided by average CCBX loans: | ||||||||||||
| CCBX loan yield (GAAP)(1) | 15.01 | % | 14.89 | % | 16.88 | % | ||||||
| Total average CCBX loans receivable | $ | 1,922,586 | $ | 1,833,904 | $ | 1,630,088 | ||||||
| Interest and earned fee income on CCBX loans (GAAP) | 71,153 | 68,846 | 67,855 | |||||||||
| BaaS loan expense | (36,940 | ) | (31,256 | ) | (32,507 | ) | ||||||
| Net BaaS loan income | $ | 34,213 | $ | 37,590 | $ | 35,348 | ||||||
| Net BaaS loan income divided by average CCBX loans(1) | 7.22 | % | 8.13 | % | 8.79 | % | ||||||
| CCBX net interest margin, net of BaaS loan expense: | ||||||||||||
| CCBX net interest margin(1) | 8.19 | % | 8.68 | % | 9.72 | % | ||||||
| CCBX earning assets | 2,831,286 | 2,434,841 | 2,184,869 | |||||||||
| Net interest income (GAAP) | 57,210 | 53,260 | 52,359 | |||||||||
| Less: BaaS loan expense | (36,940 | ) | (31,256 | ) | (32,507 | ) | ||||||
| Net interest income, net of BaaS loan expense | $ | 20,270 | $ | 22,004 | $ | 19,852 | ||||||
| CCBX net interest margin, net of BaaS loan expense(1) | 2.90 | % | 3.59 | % | 3.68 | % | ||||||
| Consolidated | As of and for the Three Months Ended | |||||||||||
| (dollars in thousands; unaudited) | March 31 2026 | December 31 2025 | March 31 2025 | |||||||||
| Net interest margin, net of BaaS loan expense: | ||||||||||||
| Net interest margin(1) | 7.00 | % | 7.03 | % | 7.48 | % | ||||||
| Earning assets | 4,830,601 | 4,482,007 | 4,124,065 | |||||||||
| Net interest income (GAAP) | 83,357 | 79,365 | 76,062 | |||||||||
| Less: BaaS loan expense | (36,940 | ) | (31,256 | ) | (32,507 | ) | ||||||
| Net interest income, net of BaaS loan expense | $ | 46,417 | $ | 48,109 | $ | 43,555 | ||||||
| Net interest margin, net of BaaS loan expense(1) | 3.90 | % | 4.26 | % | 4.28 | % | ||||||
| Loan income net of BaaS loan expense divided by average loans: | ||||||||||||
| Loan yield (GAAP)(1) | 10.76 | % | 10.63 | % | 11.33 | % | ||||||
| Total average loans receivable | $ | 3,878,626 | $ | 3,740,073 | $ | 3,511,724 | ||||||
| Interest and earned fee income on loans (GAAP) | 102,887 | 100,206 | 98,147 | |||||||||
| BaaS loan expense | (36,940 | ) | (31,256 | ) | (32,507 | ) | ||||||
| Net loan income | $ | 65,947 | $ | 68,950 | $ | 65,640 | ||||||
| Loan income, net of BaaS loan expense, divided by average loans(1) | 6.90 | % | 7.31 | % | 7.58 | % | ||||||
(1) Annualized calculations for periods presented.
The following non-GAAP measure is presented to illustrate the impact of BaaS loan expense, BaaS fraud expense and reimbursement of expenses (BaaS) on noninterest expense. Certain noninterest expenses 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. This non-GAAP measure is intended to help investors distinguish between noninterest expenses borne by the Company and those incurred for, and reimbursed by, CCBX partners.The most comparable GAAP measure is noninterest expense.
| As of and for the Three Months Ended | |||||||||
| (dollars in thousands, unaudited) | March 31, 2026 | December 31, 2025 | March 31, 2025 | ||||||
| Noninterest expense, net of BaaS loan expense, BaaS fraud expense and reimbursement of expenses (BaaS) | |||||||||
| Noninterest expense (GAAP) | $ | 83,452 | $ | 72,804 | $ | 71,989 | |||
| Less: BaaS loan expense | 36,940 | 31,256 | 32,507 | ||||||
| Less: BaaS fraud expense | 3,059 | 1,090 | 1,993 | ||||||
| Less: Reimbursement of expenses | 2,392 | 1,868 | 1,026 | ||||||
| Noninterest expense, net of BaaS loan expense, BaaS fraud expense and reimbursement of expenses | $ | 41,061 | $ | 38,590 | $ | 36,463 | |||
The following non-GAAP measure is presented to illustrate the impact of intangible assets on book value per share. 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.
| As of | |||||||||||||||
| (dollars in thousands, except per share information, unaudited) | March 31, 2026 | December 31, 2025 | September 30, 2025 | June 30, 2025 | March 31, 2025 | ||||||||||
| Tangible book value per share | |||||||||||||||
| Book value (GAAP) | $ | 33.05 | $ | 32.43 | $ | 31.45 | $ | 30.59 | $ | 29.98 | |||||
| Total shareholders' equity | 503,762 | 490,959 | 475,277 | 461,709 | 449,917 | ||||||||||
| Less: Intangible assets | 4,434 | 4,536 | — | — | — | ||||||||||
| Tangible book value | $ | 499,328 | $ | 486,423 | $ | 475,277 | $ | 461,709 | $ | 449,917 | |||||
| Common shares outstanding | 15,241,491 | 15,140,192 | 15,112,000 | 15,093,036 | 15,009,225 | ||||||||||
| Tangible book value per share | $ | 32.76 | $ | 32.13 | $ | 31.45 | $ | 30.59 | $ | 29.98 | |||||
APPENDIX A
As of March 31, 2026
Industry Concentration
We have a diversified loan portfolio, representing a wide variety of industries. Our major categories of loans are commercial real estate, consumer and other loans, residential real estate, commercial and industrial, and construction, land and land development loans. Together they represent
Commercial real estate loans represent the largest segment of our loans, comprising
The following table summarizes our loan commitments by industry for our commercial real estate portfolio as of March 31, 2026:
| (dollars in thousands; unaudited) | Outstanding Balance | Available Loan Commitments | Total Outstanding Balance & Available Commitments | % of Total Loans (Outstanding Balance & Available Commitments) | Average Loan Balance | Number of Loans | |||||||||||
| Apartments | $ | 357,711 | $ | 13,442 | $ | 371,153 | 5.7 | % | $ | 3,726 | 96 | ||||||
| Hotel/Motel | 178,339 | 862 | 179,201 | 2.8 | 7,134 | 25 | |||||||||||
| Convenience Store | 143,092 | 3,345 | 146,437 | 2.3 | 2,236 | 64 | |||||||||||
| Warehouse | 100,075 | 250 | 100,325 | 1.5 | 1,853 | 54 | |||||||||||
| Retail | 97,447 | 427 | 97,874 | 1.5 | 1,071 | 91 | |||||||||||
| Mixed use | 95,791 | 6,498 | 102,289 | 1.6 | 1,076 | 89 | |||||||||||
| Office | 84,678 | 4,216 | 88,894 | 1.4 | 1,045 | 81 | |||||||||||
| Mini Storage | 79,326 | 303 | 79,629 | 1.2 | 4,407 | 18 | |||||||||||
| Strip Mall | 42,779 | — | 42,779 | 0.7 | 6,111 | 7 | |||||||||||
| Manufacturing | 32,139 | 1,195 | 33,334 | 0.5 | 1,286 | 25 | |||||||||||
| Groups < | 89,170 | 4,880 | 94,050 | 1.5 | 1,173 | 76 | |||||||||||
| Total | $ | 1,300,547 | $ | 35,418 | $ | 1,335,965 | 20.7 | % | $ | 2,078 | 626 | ||||||
Consumer loans comprise
The following table summarizes our loan commitments by industry for our consumer and other loan portfolio as of March 31, 2026:
| (dollars in thousands; unaudited) | Outstanding Balance | Available Loan Commitments(1) | Total Outstanding Balance & Available Commitments(1) | % of Total Loans (Outstanding Balance & Available Commitments) | Average Loan Balance | Number of Loans | |||||||||||
| CCBX consumer loans | |||||||||||||||||
| Credit cards | $ | 693,485 | $ | 1,008,183 | $ | 1,701,668 | 26.4 | % | $ | 1.5 | 456,317 | ||||||
| Installment loans | 669,544 | 35,963 | 705,507 | 10.9 | 0.7 | 1,026,896 | |||||||||||
| Lines of credit | 29,956 | 26,968 | 56,924 | 0.9 | 0.1 | 303,549 | |||||||||||
| Other loans | 27,443 | — | 27,443 | 0.4 | 0.1 | 297,989 | |||||||||||
| Community bank consumer loans | |||||||||||||||||
| Installment loans | 1,088 | 5 | 1,093 | 0.0 | 43.5 | 25 | |||||||||||
| Lines of credit | 163 | 387 | 550 | 0.0 | 5.3 | 31 | |||||||||||
| Other loans | 10,336 | 3,000 | 13,336 | 0.2 | 28.2 | 366 | |||||||||||
| Total | $ | 1,432,015 | $ | 1,074,506 | $ | 2,506,521 | 38.8 | % | $ | 0.7 | 2,085,173 | ||||||
(1) Total exposure on CCBX loans is subject to CCBX partner/portfolio maximum limits.
Residential real estate loans comprise
The following table summarizes our loan commitments by industry for our residential real estate loan portfolio as of March 31, 2026:
| (dollars in thousands; unaudited) | Outstanding Balance | Available Loan Commitments(1) | Total Outstanding Balance & Available Commitments(1) | % of Total Loans (Outstanding Balance & Available Commitments) | Average Loan Balance | Number of Loans | |||||||||||
| CCBX residential real estate loans | |||||||||||||||||
| Home equity lines of credit | $ | 266,037 | $ | 661,716 | $ | 927,753 | 14.4 | % | $ | 23 | 11,336 | ||||||
| Community bank residential real estate loans | |||||||||||||||||
| Closed end, secured by first liens | 156,550 | 546 | 157,096 | 2.4 | 293 | 293 | |||||||||||
| Home equity lines of credit | 32,962 | 49,812 | 82,774 | 1.3 | 257 | 257 | |||||||||||
| Closed end, second liens | 9,673 | 1,605 | 11,278 | 0.2 | 28 | 28 | |||||||||||
| Total | $ | 465,222 | $ | 713,679 | $ | 1,178,901 | 18.3 | % | $ | 39 | 11,914 | ||||||
(1) Total exposure on CCBX loans is subject to CCBX partner/portfolio maximum limits.
Commercial and industrial loans comprise
The following table summarizes our loan commitment by industry for our commercial and industrial loan portfolio as of March 31, 2026:
| (dollars in thousands; unaudited) | Outstanding Balance | Available Loan Commitments(1) | Total Outstanding Balance & Available Commitments(1) | % of Total Loans (Outstanding Balance & Available Commitments) | Average Loan Balance | Number of Loans | |||||||||||
| CCBX C&I loans | |||||||||||||||||
| Capital call lines | $ | 176,384 | $ | 573,832 | $ | 750,216 | 11.6 | % | $ | 1,446 | 122 | ||||||
| Retail and other loans | 21,792 | 34,620 | 56,412 | 0.9 | 9 | 2,332 | |||||||||||
| Community bank C&I loans | |||||||||||||||||
| Financial institutions | 102,025 | — | 102,025 | 1.6 | 4,251 | 24 | |||||||||||
| Construction/Contractor services | 32,716 | 30,889 | 63,605 | 1.0 | 186 | 176 | |||||||||||
| Medical / Dental / Other care | 5,387 | 282 | 5,669 | 0.1 | 449 | 12 | |||||||||||
| Transportation | 4,302 | 31 | 4,333 | 0.1 | 615 | 7 | |||||||||||
| Manufacturing | 4,144 | 4,007 | 8,151 | 0.1 | 115 | 36 | |||||||||||
| Groups < | 87,029 | 29,605 | 116,634 | 1.8 | 418 | 208 | |||||||||||
| Total | $ | 433,779 | $ | 673,266 | $ | 1,107,045 | 17.2 | % | $ | 149 | 2,917 | ||||||
(1) Total exposure on CCBX loans is subject to CCBX partner/portfolio maximum limits.
Construction, land and land development loans comprise
The following table details our loan commitment for our construction, land and land development portfolio as of March 31, 2026:
| (dollars in thousands; unaudited) | Outstanding Balance | Available Loan Commitments | Total Outstanding Balance & Available Commitments | % of Total Loans (Outstanding Balance & Available Commitments) | Average Loan Balance | Number of Loans | |||||||||||
| Commercial construction | $ | 138,232 | $ | 35,954 | $ | 174,186 | 2.7 | % | $ | 9,215 | 15 | ||||||
| Residential construction | 34,241 | 42,322 | 76,563 | 1.2 | 1,105 | 31 | |||||||||||
| Land development | 22,950 | 11,316 | 34,266 | 0.5 | 2,295 | 10 | |||||||||||
| Undeveloped land loans | 20,633 | — | 20,633 | 0.3 | 1,376 | 15 | |||||||||||
| Developed land loans | 18,855 | 420 | 19,275 | 0.3 | 1,178 | 16 | |||||||||||
| Total | $ | 234,911 | $ | 90,012 | $ | 324,923 | 5.0 | % | $ | 2,700 | 87 | ||||||
Exposure and risk in our construction, land and land development portfolio increased compared to recent periods as indicated in the following table:
| Outstanding Balance as of | |||||||||||||||
| (dollars in thousands; unaudited) | March 31, 2026 | December 31, 2025 | September 30, 2025 | June 30, 2025 | March 31, 2025 | ||||||||||
| Commercial construction | $ | 138,232 | $ | 124,894 | $ | 124,240 | $ | 104,078 | $ | 96,716 | |||||
| Residential construction | 34,241 | 37,395 | 35,929 | 39,831 | 39,375 | ||||||||||
| Undeveloped land loans | 20,633 | 20,704 | 20,584 | 20,067 | 16,684 | ||||||||||
| Developed land loans | 18,855 | 20,559 | 22,756 | 22,875 | 7,788 | ||||||||||
| Land development | 22,950 | 18,523 | 14,552 | 7,299 | 5,988 | ||||||||||
| Total | $ | 234,911 | $ | 222,075 | $ | 218,061 | $ | 194,150 | $ | 166,551 | |||||
Commitments to extend credit total
The following table presents outstanding commitments to extend credit as of March 31, 2026:
| Consolidated | |||
| (dollars in thousands; unaudited) | As of March 31, 2026 (1) | ||
| Commitments to extend credit: | |||
| Credit cards | $ | 1,008,183 | |
| Residential real estate loans | 713,679 | ||
| Commercial and industrial loans – capital call lines | 573,832 | ||
| Commercial and industrial loans | 99,434 | ||
| Consumer and other loans | 66,323 | ||
| Construction – commercial real estate loans | 47,691 | ||
| Construction – residential real estate loans | 42,321 | ||
| Commercial real estate loans | 35,418 | ||
| Total commitments to extend credit | $ | 2,586,881 | |
(1) Total exposure on CCBX loans is subject to CCBX partner/portfolio maximum limits.
We have individual CCBX partner portfolio limits with each of our partners to manage loan concentration risk, liquidity risk and counterparty partner risk. For example, as of March 31, 2026, capital call lines outstanding balance totaled
See the table below for CCBX portfolio maximums and related available commitments:
| CCBX | |||||||||||||||
| (dollars in thousands; unaudited) | Balance | Percent of CCBX Loans Receivable | Available Commitments(1) | Maximum Portfolio Size | Cash Reserve/Pledge Account Amount | ||||||||||
| Commercial and industrial loans: | |||||||||||||||
| Capital call lines | $ | 176,384 | 9.4 | % | $ | 573,832 | $ | 350,000 | $ | — | |||||
| All other commercial & industrial loans | 21,792 | 1.2 | 34,620 | 512,975 | 1,066 | ||||||||||
| Real estate loans: | |||||||||||||||
| Home equity lines of credit(2) | 266,037 | 14.1 | 661,716 | 450,000 | 32,108 | ||||||||||
| Consumer and other loans: | |||||||||||||||
| Credit cards - cash secured | 398 | 16 | — | ||||||||||||
| Credit cards - unsecured | 693,087 | 1,008,167 | 49,605 | ||||||||||||
| Credit cards - total | 693,485 | 36.8 | 1,008,183 | 1,125,000 | 49,605 | ||||||||||
| Installment loans - cash secured | 174,036 | 35,963 | — | ||||||||||||
| Installment loans - unsecured | 495,508 | — | (11,175 | ) | |||||||||||
| Installment loans - total | 669,544 | 35.5 | 35,963 | 1,962,891 | (11,175 | ) | |||||||||
| Other consumer and other loans | 57,399 | 3.0 | 26,968 | 459,134 | 835 | ||||||||||
| Gross CCBX loans receivable | 1,884,641 | 100.0 | % | $ | 2,341,282 | $ | 4,860,000 | $ | 72,439 | ||||||
| Net deferred origination fees | (517 | ) | |||||||||||||
| Loans receivable | $ | 1,884,124 | |||||||||||||
(1) Remaining commitment available, net of outstanding balance.
(2) These home equity lines of credit are secured by residential real estate and are accessed by using a credit card, but are classified as 1-4 family residential properties per regulatory guidelines.
APPENDIX B
As of March 31, 2026
CCBX – BaaS Reporting Information
During the quarter ended March 31, 2026,
Many CCBX partners also pledge a cash reserve account at the Bank, which the Bank can collect from when losses occur that is then replenished by the partner on a regular interval. Although agreements with our CCBX partners provide for credit enhancements that provide protection to the Bank from credit and fraud losses if our partner is unable to fulfill their contractual obligation and if the cash flows on the loans were not sufficient to fund the reimbursement of loan losses, then the Bank would be exposed to additional loan and deposit losses as a result of this counterparty risk. If a CCBX partner does not replenish their cash reserve account, the Bank may consider an alternative plan for funding the cash reserve. This may involve the possibility of adjusting the funding amounts or timelines to better align with the partner's specific situation. If a mutually agreeable funding plan is not agreed to, the Bank could declare the agreement in default, take over servicing and cease paying the partner for servicing the loan and providing credit enhancements. In the event of a partner default, the Bank would evaluate any remaining credit enhancement asset associated with that partner to determine whether a write-off is appropriate. If a write-off occurs, the Bank would stop payments to the CCBX partner and retain the full yield and any fee income on the loan portfolio going forward, decreasing our BaaS loan expense.
The Bank records contractual interest earned from the borrowers on CCBX partner loans in interest income, adjusted for origination costs, which are paid or payable to the CCBX partners. BaaS loan expense represents the amount paid or payable to partners for credit and fraud enhancements and originating & servicing CCBX loans. To determine net revenue (Net BaaS loan income) earned from CCBX loan relationships, the Bank takes BaaS loan interest income and deducts BaaS loan expense to arrive at Net BaaS loan income (a reconciliation of the non-GAAP measures are set forth in the preceding section of this earnings release) which can be compared to interest income on the Company’s community bank loans.
The following table illustrates how CCBX partner loan income and expenses are recorded in the financial statements:
| Loan income and related loan expense | Three Months Ended | |||||||||||
| (dollars in thousands; unaudited) | March 31, 2026 | December 31, 2025 | March 31, 2025 | |||||||||
| Yield on loans(1) | 15.01 | % | 14.89 | % | 16.88 | % | ||||||
| BaaS loan interest income | $ | 71,153 | $ | 68,846 | $ | 67,855 | ||||||
| Less: BaaS loan expense | 36,940 | 31,256 | 32,507 | |||||||||
| Net BaaS loan income(2) | $ | 34,213 | $ | 37,590 | $ | 35,348 | ||||||
| Net BaaS loan income divided by average BaaS loans(1)(2) | 7.22 | % | 8.13 | % | 8.79 | % | ||||||
(1) Annualized calculation for quarterly periods shown.
(2) A reconciliation of the non-GAAP measures are set forth in the preceding section of this earnings release.
An increase in average loans receivable resulted in increased interest income on CCBX loans during the quarter ended March 31, 2026 compared to the quarter ended December 31, 2025, however net BaaS loan income decreased as a result of higher BaaS loan expense, compared to the previous quarter. This is a result of recent changes to partner agreements and pricing changes that resulted in lower loan yields, net of BaaS loan expense. These actions reflect a strategic shift toward enhanced partner economics and more sustainable, risk-adjusted returns over time. Our strategy is to optimize the CCBX loan portfolio and strengthen our balance sheet through originating higher quality new loans with enhanced credit standards. These higher quality loans tend to have lower stated rates and expected losses than some of our CCBX loans historically. We continue to manage CCBX credit and concentration levels in an effort to optimize our loan portfolio and also generate off-balance sheet fee income. Growth in CCBX loans has resulted in an increase in interest income for the quarter ended March 31, 2026 compared to the quarter ended March 31, 2025, and a slight increase in net BaaS loan income.
The following tables are a summary of the interest components, direct fees and expenses of BaaS for the periods indicated and are not inclusive of all income and expense related to BaaS.
| Interest income | Three Months Ended | ||||||||
| (dollars in thousands; unaudited) | March 31, 2026 | December 31, 2025 | March 31, 2025 | ||||||
| BaaS loan interest income | $ | 71,153 | $ | 68,846 | $ | 67,855 | |||
| Total BaaS loan interest income | $ | 71,153 | $ | 68,846 | $ | 67,855 | |||
| Interest expense | Three Months Ended | ||||||||
| (dollars in thousands; unaudited) | March 31, 2026 | December 31, 2025 | March 31, 2025 | ||||||
| BaaS interest expense | $ | 22,099 | $ | 21,581 | $ | 21,581 | |||
| Total BaaS interest expense | $ | 22,099 | $ | 21,581 | $ | 21,581 | |||
| BaaS income | Three Months Ended | ||||||||
| (dollars in thousands; unaudited) | March 31, 2026 | December 31, 2025 | March 31, 2025 | ||||||
| BaaS program income: | |||||||||
| Servicing and other BaaS fees | $ | 2,623 | $ | 2,113 | $ | 1,419 | |||
| Transaction and interchange fees | 5,873 | 4,924 | 3,833 | ||||||
| Reimbursement of expenses | 2,392 | 1,868 | 1,026 | ||||||
| Total BaaS program income | 10,888 | 8,905 | 6,278 | ||||||
| BaaS indemnification income: | |||||||||
| BaaS credit enhancements | 50,744 | 47,325 | 53,648 | ||||||
| BaaS fraud enhancements | 3,059 | 1,090 | 1,993 | ||||||
| BaaS indemnification income | 53,803 | 48,415 | 55,641 | ||||||
| Total noninterest BaaS income | $ | 64,691 | $ | 57,320 | $ | 61,919 | |||
Servicing and other BaaS fees increased
| BaaS loan and fraud expense: | Three Months Ended | ||||||||
| (dollars in thousands; unaudited) | March 31, 2026 | December 31, 2025 | March 31, 2025 | ||||||
| BaaS loan expense | $ | 36,940 | $ | 31,256 | $ | 32,507 | |||
| BaaS fraud expense | 3,059 | 1,090 | 1,993 | ||||||
| Total BaaS loan and fraud expense | $ | 39,999 | $ | 32,346 | $ | 34,500 | |||
Photos accompanying this announcement are available at https://www.globenewswire.com/NewsRoom/AttachmentNg/7ec8185f-b892-430b-91b3-ebc8fefd208c
https://www.globenewswire.com/NewsRoom/AttachmentNg/d33a96dd-d34e-47a5-8f96-57b6b00480c6
https://www.globenewswire.com/NewsRoom/AttachmentNg/cdf3699e-6064-4d8e-b9e9-01b5984203da
