AG真人官方

Coastal Financial Corporation Announces Second Quarter 2025 Results

EVERETT, Wash., July 29, 2025 (GLOBE NEWSWIRE) -- Coastal Financial Corporation (Nasdaq: CCB) (the 鈥淐ompany鈥�, "Coastal", "we", "our", or "us"), the holding company for Coastal Community Bank (the 鈥淏ank鈥�), 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听30, 2025, including net income of $11.0 million, or $0.71 per diluted common share, compared to $9.7 million, or $0.63 per diluted common share, for the three months ended March听31, 2025 and $11.6 million, or $0.84 per diluted common share, for the three months ended June听30, 2024.

Management Discussion of the Second Quarter Results

鈥淪econd quarter of 2025 saw a lower provision for credit losses as a result of an improvement in the performance of the CCBX portfolio and our focus on originating higher quality CCBX loans resulting in lower historical loss factors. Noninterest expenses were fairly flat compared to last quarter related to continued onboarding and implementation costs for partnerships and products within CCBX and investments in technology. We believe these investments are important to the long-term success and scalability of the Company,鈥� stated CEO Eric Sprink. 鈥淲e had another quarter of quality deposit growth of $122.3 million during the second quarter, and our CCBX program fee income, excluding nonrecurring revenue, increased 8.2% compared to the prior quarter.鈥�

Key Points for Second Quarter and Our Go-Forward Strategy

• CCBX Making Progress on Launching New Programs. As of June听30, 2025 we had two partners in testing, two in implementation/onboarding, five signed letters of intent (LOI) and we have an active pipeline of new partners along with new products with existing partners for the balance of 2025 and into 2026. Total BaaS program fee income was $6.8 million, excluding $504,000 in nonrecurring revenue, for the three months ended June听30, 2025, an increase of $512,000, or 8.2%, from the three months ended March听31, 2025. We continue to have contracts with our partners that fully indemnify us against fraud and 98.8% against credit risk as of June听30, 2025.
  
• Continued Investments in Future Growth. Total noninterest expense of $72.8 million was up $843,000, or 1.2%, as compared to $72.0 million in the quarter ended March听31, 2025, mainly driven by higher data processing and software costs partially offset by lower legal and professional expenses. With the increase in new CCBX partners and the launch of products with existing partners in 2025, we expect that expenses will be predominantly incurred at the outset, emphasizing compliance and operational risk management. This will occur before the new programs or products start to produce revenue. As a result, we believe expense growth should moderate considerably in the second half of 2025, with new programs or products starting to produce revenue to offset the initial up-front expenses.
  
• Favorable Trends On, and Off Balance Sheet. Average deposits were $3.93 billion, an increase of $221.6 million, or 6.0%, over the quarter ended March听31, 2025, driven primarily by growth in CCBX partner programs and the addition of a new deposit partner. During the second quarter of 2025, we sold $1.30 billion of loans, the majority of which were credit card receivables. We retain a portion of the fee income on sold credit card loans. As of June听30, 2025 there were 313,827 off balance sheet credit cards with fee earning potential, an increase of 76,803 compared to the quarter ended March听31, 2025 and an increase of 286,146 from June听30, 2024.
  

Second Quarter 2025 Financial Highlights

The tables below outline some of our key operating metrics.

See footnotes that follow the tables below

Key Performance Ratios

Return on average assets ("ROA") was 0.99% for the quarter ended June听30, 2025 compared to 0.93% and 1.21% for the quarters ended March听31, 2025 and June听30, 2024, respectively.听听ROA for the quarter ended June听30, 2025, increased 0.06% and decreased 0.22% compared to March听31, 2025 and June听30, 2024, respectively. Noninterest expenses were slightly higher for the quarter ended June听30, 2025 compared to the quarter ended March听31, 2025 due to continued investments in growth, technology and risk management, partially offset by a decrease in legal and professional expenses. Noninterest expenses were higher than the quarter ended June听30, 2024 due primarily to an increase in salaries and employee benefits, data processing and software licenses and legal and professional expenses, all of which are related to the growth of Company and investments in technology and risk management.

Yield on earning assets and yield on loans receivable decreased 0.40% and 0.22%, respectively, for the quarter ended June听30, 2025 compared to the quarter ended March听31, 2025, largely due to a decrease in CCBX loan yield. Lower rate capital call lines increased $66.2 million, or 49.6%, compared to the quarter ended March听31, 2025. These loans bear a lower rate of interest, but have less credit risk due to the way the loans are structured compared to other commercial loans. Average loans receivable as of June听30, 2025 increased $56.1 million compared to March听31, 2025 as net CCBX loans continue to grow, despite selling $1.30 billion in CCBX loans during the quarter ended June听30, 2025.

The quarter over quarter volatility in the efficiency ratio and noninterest income to average asset performance metrics was driven by a higher-quality CCBX loan-mix from a credit quality perspective, which effectively reduced the credit enhancement required within non-interest income due to lower net-charge off activity as a percent of total loans which lowered our provision expense. These items have a neutral impact to net income although impacted the quarter-to-quarter metrics due to lower reported noninterest income. Additionally, results for the three months ended June听30, 2025 also included a net $439,000 loss on equity securities due to the re-valuation of a privately held equity stake, which CCB reviews quarterly. Management doesn鈥檛 believe the write-down is indicative of longer-term concerns of the portfolio company鈥檚 health at this time.

The following table shows the Company鈥檚 key performance ratios for the periods indicated.听听

Management Outlook; CEO Eric Sprink

鈥淎s we look to the latter half of 2025 and beyond, we expect to see additional new partner engagements, given that our CCBX pipeline remains strong with high-quality opportunities. We are committed to continuing to invest in our technology and risk management infrastructure to support our growth in the BaaS sector which is expected to produce future efficiencies, automation and cost reductions as we grow. The improvement in the performance of the CCBX portfolio and lower historical loss factors within the CCBX portfolio are positive indicators that our risk reduction and credit improvement efforts are proving effective, alongside the fraud and credit indemnifications provided by our partners. Additionally, we saw an increase of $512,000, or 8.2%, from the three months ended March听31, 2025 in BaaS program income, excluding nonrecurring revenue, namely in transaction and interchange income. We anticipate this growth to continue in future periods as our partner activities expand and grow.鈥� 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.听听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.听听

CCBX Performance Update

Our CCBX segment continues to evolve, and we have 29 relationships, at varying stages, including two partners in testing, two in implementation/onboarding, and five signed LOI as of June听30, 2025.听 We continue to refine the criteria for CCBX partnerships, exploring relationships with larger and more established partners, with experienced management teams, existing customer bases and strong financial positions. We also will consider promising medium and smaller sized partners that align with our approach and terms including financial wherewithal and will continue to exit relationships where it makes sense for us to do so.

While we explore relationships with new partners we continue to expand our product offerings with existing CCBX partners. As we become more proficient in the BaaS space we aim to cultivate new relationships that align with our long-term goals. We believe that a strategy of adding new partnerships and launching new products with existing partners allows us to expand and grow our customer base with a modest increase in regulatory risk given our operational history with them. Increases in partner activity/transaction counts is positively impacting noninterest income and we expect this trend to continue as current products grow and new products are introduced. We plan to continue selling loans as part of our strategy to balance partner and lending limits, and manage the loan portfolio and credit quality. We retain a portion of the fee income for our role in processing transactions on sold credit card loans, and will continue this strategy to provide an on-going revenue source with no on balance sheet risk or capital requirement.

As we build our deposit base, we will be able to sweep deposits off and on the balance sheet as needed. This deposit sweep capability allows us to better manage liquidity and deposit programs. At June听30, 2025 we swept off $478.7 million in deposits for FDIC insurance and liquidity purposes. Robinhood has entered the production testing phase for its suite of deposit products, signaling continued momentum in our strategic partnership pipeline. Dave finalized production testing in Q2 and is poised to initiate its beta launch, expanding our footprint in digital banking solutions. The introduction of theses products are expected to diversify and grow deposits.

The following table illustrates the activity and evolution in CCBX relationships for the periods presented.

CCBX loans increased $29.5 million, or 1.8%, to $1.68 billion despite selling $1.30 billion in loans during the three months ended June听30, 2025. In accordance with the program agreement for one partner, we are responsible for losses on 5% of that portfolio. At June听30, 2025 the portion of that portfolio for which we are responsible represented $19.8 million in loans.

The following table details the CCBX loan portfolio:

The increase in CCBX loans in the quarter ended June听30, 2025, includes an increase of $66.2 million, or 49.6%, in capital call lines as a result of normal balance fluctuations and business activities, a decrease of $50.6 million, or 17.7%, in residential real estate loans and an increase of $17.4 million or 1.5%, in other consumer and other loans. We continue to monitor and manage the CCBX loan portfolio, and sold $1.30 billion in CCBX loans during the quarter ended June听30, 2025 compared to sales of $744.6 million in the quarter ended March听31, 2025. We continue to reposition ourselves by managing 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 0.67% for the quarter ended June听30, 2025 compared to the quarter ended March听31, 2025 as a result of an increase in lower rate capital call lines and overall mix of loans compared to the quarter ended March听31, 2025, these loans bear a lower rate of interest, but have less credit risk due to the way the loans are structured compared to other commercial loans.

The following chart shows the growth 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, and that 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 deposits increased $93.1 million, or 4.1%, in the three months ended June听30, 2025 to $2.36 billion as a result of growth and normal balance fluctuations. This excludes the $478.7 million in CCBX deposits that were transferred off balance sheet for increased Federal Deposit Insurance Corporation ("FDIC") insurance coverage and sweep purposes, compared to $406.3 million for the quarter ended March听31, 2025. Amounts in excess of FDIC insurance coverage are transferred, using a third-party facilitator/vendor sweep product, to participating financial institutions.

Community Bank Performance Update

In the quarter ended June听30, 2025, the community bank saw net loans decrease $6.5 million, or 0.3%, to $1.86 billion, as a result of normal balance fluctuations.

The following table details the Community Bank loan portfolio:

Community bank loan categories decreased $29.8 million in commercial real estate loans and $1.1 million in consumer and other loans, partially offset by an increase of $27.6 million in construction, land and land development loans and $822,000 in commercial and industrial loans, during the quarter ended June听30, 2025.

The following table details the community bank deposit portfolio:

Community bank deposits increased $29.2 million, or 1.9%, during the three months ended June听30, 2025 to $1.55 billion. The community bank segment includes noninterest bearing deposits of $494.9 million, or 31.9%, of total community bank deposits, resulting in a cost of deposits of 1.77%, which compared to 1.76% for the quarter ended March听31, 2025.

Net Interest Income and Margin Discussion

Net interest income was $76.7 million for the quarter ended June听30, 2025, an increase of $675,000, or 0.9%, from $76.1 million for the quarter ended March听31, 2025, and an increase of $10.6 million, or 16.0%, from $66.2 million for the quarter ended June听30, 2024. Net interest income compared to March听31, 2025, was higher due to an increase in average loans receivable. The increase in net interest income compared to June听30, 2024 was largely related to growth in loans receivable and a reduction in cost of funds as a result of lower interest rates.听听

Net interest margin was 7.06% for the three months ended June听30, 2025, compared to 7.48% for the three months ended March听31, 2025, due primarily to a decrease in loan yield. 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 4.07% for the three months ended June听30, 2025, compared to 4.28% for the three months ended March听31, 2025. Net interest margin was 7.12% for the three months ended June听30, 2024. The decrease in net interest margin for the three months ended June听30, 2025 compared to the three months ended June听30, 2024 was largely due to a decrease in loan yield, partially offset by lower cost of funds. The $66.2 million of growth in lower rate capital call lines and overall mix of loans contributed to the decrease in net interest margin for the three months ended June听30, 2025. Capital call lines grew 49.6% quarter-over-quarter to $199.7 million, or 11.9% of total CCBX loans versus 8.1% in the prior quarter. These loans carry a lower interest rate, but also lower credit costs.

Interest and fees on loans receivable increased $720,000, or 0.7%, to $98.9 million for the three months ended June听30, 2025, compared to $98.1 million for the three months ended March听31, 2025, as a result of loan growth. Interest and fees on loans receivable increased $8.0 million, or 8.8%, compared to $90.9 million for the three months ended June听30, 2024, due to an increase in outstanding balances. 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) decreased 0.21% for the three months ended June听30, 2025, compared to the three months ended March听31, 2025 and increased 0.07% compared the three months ended June听30, 2024.

The following tables illustrate how net interest margin and loan yield is affected by BaaS loan expense:

Average investment securities decreased $900,000 to $46.3 million compared to the three months ended March听31, 2025 and decreased $3.5 million compared to the three months ended June听30, 2024 as a result of principal paydowns.

Cost of funds was 3.13% for the quarter ended June听30, 2025, an increase of 2 basis points from the quarter ended March听31, 2025 and a decrease of 47 basis points from the quarter ended June听30, 2024. Cost of deposits for the quarter ended June听30, 2025 was 3.10%, compared to 3.08% for the quarter ended March听31, 2025, and 3.58% for the quarter ended June听30, 2024. The decreased cost of funds and deposits compared to June听30, 2024 were largely due to the reductions in the Fed funds rate in 2024.

The following table summarizes the average yield on loans receivable and cost of deposits:

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:

Noninterest Income Discussion

Noninterest income was $42.7 million for the three months ended June听30, 2025, a decrease of $20.8 million from $63.5 million for the three months ended March听31, 2025, and a decrease of $26.4 million from $69.1 million for the three months ended June听30, 2024.听听The decrease in noninterest income for the quarter ended June听30, 2025 as compared to the quarter ended March听31, 2025 was primarily due to a decrease of $20.6 million in total BaaS income.听听The $20.6 million decrease in total BaaS income included a $22.4 million decrease in BaaS credit enhancements related to the decrease in provision for credit losses due to an improvement in the performance of the CCBX portfolio and our focus on originating higher quality CCBX loans resulting in lower historical loss factors, which had a favorable impact on the provision for credit losses, partially offset by an increase of $1.0 million in BaaS program income, which includes $504,000 in nonrecurring revenue, and a $811,000 increase in BaaS fraud enhancements. Results for the three months ended June听30, 2025 also included a net $439,000 loss on equity securities due to the re-valuation of a privately held equity stake, which we review quarterly. Management doesn鈥檛 believe the write-down is indicative of longer-term concerns of the portfolio company鈥檚 health at this time. The $1.0 million increase in BaaS program income is largely due to an increase in transaction and interchange fees and includes $504,000 in nonrecurring revenue (see 鈥淎ppendix B鈥� for more information on the accounting for BaaS allowance for credit losses and credit and fraud enhancements).

The $26.4 million decrease in noninterest income over the quarter ended June听30, 2024 was primarily due to a $28.5 million decrease in BaaS credit and fraud enhancements due to improvement in the performance of the CCBX loan portfolio, partially offset by an increase of $2.0 million in BaaS program income, which includes $504,000 in nonrecurring revenue.

Noninterest Expense Discussion

Total noninterest expense increased $843,000 to $72.8 million for the three months ended June听30, 2025, compared to $72.0 million for the three months ended March听31, 2025, and increased $14.9 million from $58.0 million for the three months ended June听30, 2024. The $843,000 increase in noninterest expense for the quarter ended June听30, 2025, as compared to the quarter ended March听31, 2025, was primarily due to a $659,000 increase in data processing and software licenses, an $811,000 increase in BaaS fraud expense and a $74,000 increase in legal and professional fees, partially offset by a $414,000 decrease in other expenses, $119,000 decrease in occupancy expense, $81,000 decrease in salaries and employee benefits and a $24,000 decrease in BaaS loan expense. The increase in data processing and software licenses were part of our continued investments in growth, technology and risk management. BaaS loan expense represents the amount paid or payable to partners for credit enhancements, fraud enhancements, and originating & servicing CCBX loans. BaaS fraud expense represents non-credit fraud losses on partner鈥檚 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.

The increase in noninterest expenses for the quarter ended June听30, 2025 compared to the quarter ended June听30, 2024 was largely due to a $4.4 million increase in salary and employee benefits, a $1.6 million increase in data processing and software licenses due to enhancements and investments in technology, and a $2.7 million increase in legal and professional expenses, all of which are related to the growth of Company and investments in technology and risk management. Also contributing to the the increase was a $3.5 million increase in BaaS loan expense and a $1.0 million increase in BaaS fraud 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 partner in noninterest income. The following table reflects the portion of noninterest expenses that are reimbursed by partners to assist in the understanding of how the increases in noninterest expense are related to expenses incurred and reimbursed by CCBX partners:

Provision for Income Taxes

The provision for income taxes was $3.4 million for the three months ended June听30, 2025, $2.0 million for the three months ended March听31, 2025 and $3.4 million for the second quarter of 2024.听 The income tax provision as a percentage was higher for the three months ended June听30, 2025 compared to the quarter ended March听31, 2025 as a result of the higher net income and increase in state income tax rates, partially offset by the deductibility of certain equity awards, and was somewhat flat in dollar amount compared to the quarter ended June听30, 2024, but higher in tax rate.

The Company is subject to various state taxes that are assessed as CCBX activities and employees expand into other states, which has increased the overall tax rate used in calculating the provision for income taxes in the current and future periods. 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. The state rate increased in the quarter ended June 30, 2025 primarily as a result of a change in California's tax laws.

Financial Condition Overview

Total assets increased $141.3 million, or 3.3%, to $4.48 billion at June听30, 2025 compared to $4.34 billion at March听31, 2025.听听The increase is primarily comprised of a $95.5 million increase in cash and interest bearing deposits with other banks, a $23.0 million increase in loans receivable, and an $18.3 million increase in loans held for sale. Total loans receivable increased to $3.54 billion at June听30, 2025, from $3.52 billion at March听31, 2025.

As of June听30, 2025, in addition to the $719.8 million in cash on hand the Company had the capacity to borrow up to a total of $642.7 million from the Federal Reserve Bank discount window and Federal Home Loan Bank, plus an additional $50.0 million from a correspondent bank. There were no borrowings outstanding on these lines as of June听30, 2025.

The Company, on a stand alone basis, had a cash balance of $43.9 million as of June听30, 2025, a portion of which is retained for general operating purposes, including debt repayment, for funding $1.6 million in commitments to bank technology investment funds, with the remaining cash available to be contributed to the Bank as capital.听听

Uninsured deposits were $579.9 million as of June听30, 2025, compared to $558.8 million as of March听31, 2025.

Total shareholders鈥� equity as of June听30, 2025 increased $11.8 million since March听31, 2025.听听The increase in shareholders鈥� equity was primarily comprised of $11.0 million in net earnings combined with an increase of $764,000 in common stock outstanding as a result of equity awards exercised or vested during the three months ended June听30, 2025.

The Company and the Bank remained well capitalized at June听30, 2025, as summarized in the following table.

Asset Quality

The allowance for credit losses was $164.8 million and 4.65% of loans receivable at June听30, 2025 compared to $183.2 million and 5.21% at March听31, 2025 and $148.9 million and 4.48% at June听30, 2024. The allowance for credit loss allocated to the CCBX portfolio was $145.9 million and 8.68% of CCBX loans receivable at June听30, 2025, with $18.9 million of allowance for credit loss allocated to the community bank or 1.02% of total community bank loans receivable.

The following table details the allocation of the allowance for credit loss as of the period indicated:

Net charge-offs totaled $49.3 million for the quarter ended June听30, 2025, compared to $48.2 million for the quarter ended March听31, 2025 and $53.0 million for the quarter ended June听30, 2024. Net charge-offs as a percent of average loans decreased to 5.54% for the quarter ended June听30, 2025 compared to 5.57% for the quarter ended March听31, 2025. CCBX partner agreements provide for a credit enhancement that covers the net-charge-offs on CCBX loans and negative deposit accounts by indemnifying or reimbursing incurred losses, except in accordance with the program agreement for one partner where the Company was responsible for credit losses on approximately 5% of a $296.3 million loan portfolio. At June听30, 2025, our portion of this portfolio represented $19.8 million in loans. Net charge-offs for this $19.8 million in loans were $1.3 million for the three months ended June听30, 2025, $1.1 million for the three months ended March听31, 2025 and $1.3 million for the three months ended June听30, 2024.

The following table details net charge-offs for the community bank and CCBX for the period indicated:

During the quarter ended June听30, 2025, a $31.0 million provision for credit losses was recorded for CCBX partner loans, compared to the $54.3 million provision for credit losses was recorded for CCBX partner loans for the quarter ended March听31, 2025. The provision was based on management's analysis, bringing the CCBX allowance for credit losses to $145.9 million at June听30, 2025 compared to $164.2 million at March听31, 2025. The decrease in the allowance is due to an improvement in the performance of the CCBX portfolio and our focus on originating higher quality CCBX loans resulting in lower historical loss factors. As we continue to originate higher quality loans, these become a greater proportion of the CCBX portfolio, resulting in an improvement in expected losses and a reduced allowance. 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. Agreements with our CCBX partners provide for a credit enhancement which protects the Bank by indemnifying or reimbursing incurred losses.

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鈥檚 analysis for community bank credit losses indicated that a provision recapture of $47,000 was needed for the quarter ended June听30, 2025 compared to a provision of $65,000 and a provision recapture of $341,000 for the quarters ended March听31, 2025 and June听30, 2024, respectively. The provision recapture in the current period was due to the lower outstanding balance in the community bank loan portfolio.

The following table details the provision expense/(recapture) for the community bank and CCBX for the period indicated:

A provision for unfunded commitments of $1.5 million was recorded for the quarter ended June听30, 2025 as a result of a change in the loan mix of available balance. A provision for accrued interest receivable of $182,000 was recorded for the quarter ended June听30, 2025 on CCBX loans.

At June听30, 2025, our nonperforming assets were $60.9 million, or 1.36%, of total assets, compared to $56.4 million, or 1.30%, of total assets, at March听31, 2025, and $53.2 million, or 1.34%, of total assets, at June听30, 2024. These ratios are impacted by nonperforming CCBX loans that are covered by CCBX partner credit enhancements. As of June听30, 2025, $55.3 million of the $57.0 million in nonperforming CCBX loans were covered by CCBX partner credit enhancements described above. Additionally, some CCBX partners have a collection practice that places certain loans on nonaccrual status to improve collectability. $20.1 million of these loans are less than 90 days past due as of June听30, 2025.

Nonperforming assets increased $4.5 million during the quarter ended June听30, 2025, compared to the quarter ended March听31, 2025. Community bank nonperforming loans increased $3.7 million from March听31, 2025 to $3.8 million as of June听30, 2025, and CCBX nonperforming loans increased $847,000 to $57.0 million from March听31, 2025. The increase in CCBX nonperforming loans is due to an increase of $4.2 million in nonaccrual loans from March听31, 2025 to $24.4 million, partially offset by a $3.4 million decrease in CCBX loans that are past due 90 days or more and still accruing interest. As of June听30, 2025, $20.1 million in loans are under 90 days past due as a result of CCBX partners placing them on nonaccrual status to improve collectability. 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, therefore we believe the decrease in these past due CCBX loans is a positive performance indicator for the CCBX portfolio. Installment/closed-end and revolving/open-end consumer loans originated through CCBX lending partners will continue to accrue interest until 120 and 180 days past due, respectively and are reported as substandard, 90 days or more days past due and still accruing. There were no repossessed assets or other real estate owned at June听30, 2025. Our nonperforming loans to loans receivable ratio was 1.72% at June听30, 2025, compared to 1.60% at March听31, 2025, and 1.60% at June听30, 2024.

For the quarter ended June听30, 2025, there were $9,000 in community bank net charge-offs and $49.3 million in net charge-offs were recorded on CCBX loans. These 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.

The following table details the Company鈥檚 nonperforming assets for the periods indicated.

The following tables detail the CCBX and community bank nonperforming assets which are included in the total nonperforming assets table above.

About Coastal Financial

Coastal Financial Corporation (Nasdaq: CCB) (the 鈥淐ompany鈥�), is an Everett, Washington based bank holding company whose wholly owned subsidiaries are Coastal Community Bank (鈥淏ank鈥�) and Arlington Olympic LLC.听听The $4.48 billion Bank provides service through 14 branches in Snohomish, Island, and King Counties, the Internet and its mobile banking application.听听The Bank provides banking as a service to digital financial service providers, companies and brands that want to provide financial services to their customers through the Bank's CCBX segment.听听To learn more about the Company visit www.coastalbank.com.

CCB-ER

Contact

Eric Sprink, Chief Executive Officer, (425) 357-3659
Joel Edwards, Executive Vice President & Chief Financial Officer, (425) 357-3687

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鈥檚 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 鈥渁nticipate,鈥� 鈥渂elieves,鈥� 鈥渃an,鈥� 鈥渃ould,鈥� 鈥渕ay,鈥� 鈥減redicts,鈥� 鈥減otential,鈥� 鈥渟hould,鈥� 鈥渨ill,鈥� 鈥渆stimate,鈥� 鈥減lans,鈥� 鈥減rojects,鈥� 鈥渃ontinuing,鈥� 鈥渙ngoing,鈥� 鈥渆xpects,鈥� 鈥渋ntends鈥� 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 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 鈥淩isk Factors鈥� 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)

COASTAL FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share amounts; unaudited)

COASTAL FINANCIAL CORPORATION
AVERAGE BALANCES, YIELDS, AND RATES 鈥� QUARTERLY
(Dollars in thousands; unaudited)

COASTAL FINANCIAL CORPORATION
SELECTED AVERAGE BALANCES, YIELDS, AND RATES 鈥� BY SEGMENT - QUARTERLY
(Dollars in thousands; unaudited)