stal Financial (CCB) - 2025 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION This part provides the unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition and results of operations Item 1. Condensed Consolidated Financial Statements (unaudited) This section presents the unaudited condensed consolidated financial statements for Coastal Financial Corporation, including balance sheets, income statements, comprehensive income statements, statements of changes in shareholders' equity, and cash flow statements, along with detailed notes on business operations, accounting policies, investment securities, loans, credit losses, deposits, leases, stock-based compensation, fair value measurements, earnings per share, and segment reporting for the periods ended March 31, 2025, and December 31, 2024 Condensed Consolidated Balance Sheets This section presents the Company's financial position, detailing assets, liabilities, and shareholders' equity at specific dates | ASSETS (dollars in thousands) | March 31, 2025 | December 31, 2024 | | :------------------------------ | :------------- | :---------------- | | Cash and due from banks | $43,467 | $36,533 | | Interest earning deposits | $580,835 | $415,980 | | Total assets | $4,339,282 | $4,121,208 | | LIABILITIES (dollars in thousands) | March 31, 2025 | December 31, 2024 | | :------------------------------ | :------------- | :---------------- | | Deposits | $3,791,229 | $3,585,332 | | Total liabilities | $3,889,365 | $3,682,504 | | SHAREHOLDERS' EQUITY (dollars in thousands) | March 31, 2025 | December 31, 2024 | | :------------------------------ | :------------- | :---------------- | | Total shareholders' equity | $449,917 | $438,704 | - Total assets increased by $218.1 million (5.3%) from December 31, 2024, to March 31, 2025, primarily driven by an increase in interest-earning deposits with other banks and loans receivable[14][210] - Total deposits increased by $205.9 million (5.7%) from December 31, 2024, to March 31, 2025[14][265] Condensed Consolidated Statements of Income This section outlines the Company's financial performance, reporting revenues, expenses, and net income over specific periods | Income Statement (dollars in thousands, except per share data) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------------------------------------- | :-------------------------------- | :-------------------------------- | | Total interest income | $104,907 | $91,742 | | Total interest expense | $28,845 | $29,536 | | Net interest income | $76,062 | $62,206 | | Provision for credit losses | $55,781 | $83,158 | | Total noninterest income | $63,477 | $86,176 | | Total noninterest expense | $71,989 | $56,509 | | NET INCOME | $9,730 | $6,800 | | Basic earnings per common share | $0.65 | $0.51 | | Diluted earnings per common share | $0.63 | $0.50 | - Net income increased by $2.9 million (43.1%) to $9.7 million for the three months ended March 31, 2025, compared to $6.8 million in the prior year, driven by higher interest income and lower interest expense on deposits, partially offset by increased BaaS loan expense[19][153] - Diluted EPS increased to $0.63 for the three months ended March 31, 2025, from $0.50 in the prior year[19][153] Condensed Consolidated Statements of Comprehensive Income This section details the Company's comprehensive income, including net income and other comprehensive income components | Comprehensive Income (dollars in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------------------ | :-------------------------------- | :-------------------------------- | | NET INCOME | $9,730 | $6,800 | | OTHER COMPREHENSIVE INCOME (LOSS), net of tax | $1 | $466 | | COMPREHENSIVE INCOME | $9,731 | $7,266 | - Comprehensive income increased to $9.7 million for the three months ended March 31, 2025, from $7.3 million in the prior year, with a minimal other comprehensive income contribution in 2025 compared to $466,000 in 2024[21] Condensed Consolidated Statements of Changes in Shareholders' Equity This section tracks changes in the Company's shareholders' equity, reflecting net income, stock-based compensation, and other comprehensive income | Shareholders' Equity (dollars in thousands) | Balance, December 31, 2024 | Net Income | Stock-based Compensation | Other Comprehensive Income | Balance, March 31, 2025 | | :------------------------------------------ | :------------------------- | :--------- | :----------------------- | :------------------------- | :---------------------- | | Common Stock Amount | $228,177 | — | $2,540 | — | $229,659 | | Retained Earnings | $210,529 | $9,730 | — | — | $220,259 | | Total Shareholders' Equity | $438,704 | $9,730 | $2,540 | $1 | $449,917 | - Total shareholders' equity increased by $11.2 million to $449.9 million as of March 31, 2025, from $438.7 million at December 31, 2024, primarily due to net income and stock-based compensation[22] Condensed Consolidated Statements of Cash Flows This section presents the Company's cash inflows and outflows from operating, investing, and financing activities | Cash Flows (dollars in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Net cash provided by operating activities | $71,684 | $56,764 | | Net cash used by investing activities | $(104,734) | $(127,665) | | Net cash provided by financing activities | $204,839 | $102,901 | | NET CHANGE IN CASH | $171,789 | $32,000 | | CASH, end of quarter | $624,302 | $515,128 | - Net cash provided by operating activities increased to $71.7 million for the three months ended March 31, 2025, from $56.8 million in the prior year, mainly due to higher net income and provision for credit losses[25] - Net cash provided by financing activities significantly increased to $204.8 million in Q1 2025 from $102.9 million in Q1 2024, driven by a net increase in demand, money market, and savings deposits[25] Notes to Condensed Consolidated Financial Statements (unaudited) This section presents detailed notes that provide additional information and context to the unaudited condensed consolidated financial statements Note 1 - Description of Business and Summary of Significant Accounting Policies This note describes the Company's business segments and outlines its significant accounting policies - Coastal Financial Corporation operates through three segments: Community Bank, CCBX (Banking as a Service), and Treasury & Administration. The CCBX segment had 25 relationships as of March 31, 2025[28] - On April 1, 2025, the T-Mobile deposit program went live, moving customer deposits to the Bank, which will impact second-quarter deposits[35] Note 2 - Recent accounting standards This note details the impact and