Coastal Financial Corporation Announces Second Quarter 2025 Results

Core Insights - Coastal Financial Corporation reported a net income of $11.0 million for Q2 2025, an increase from $9.7 million in Q1 2025 but a decrease from $11.6 million in Q2 2024 [1] - The company experienced a quality deposit growth of $122.3 million during Q2 2025, with CCBX program fee income increasing by 8.2% compared to the previous quarter [2][18] Financial Performance - Interest and dividend income for Q2 2025 was $107.8 million, up from $104.9 million in Q1 2025 and $97.4 million in Q2 2024 [5] - Net interest income increased to $76.7 million in Q2 2025 from $76.1 million in Q1 2025 and $66.2 million in Q2 2024 [38] - Noninterest income was $42.7 million in Q2 2025, down from $63.5 million in Q1 2025 [5] - Total assets reached $4.48 billion as of June 30, 2025, compared to $4.34 billion at the end of Q1 2025 [5] Credit Quality and Loss Provisions - Provision for credit losses decreased to $32.2 million in Q2 2025 from $55.8 million in Q1 2025, reflecting improved performance in the CCBX portfolio [5][12] - Nonperforming loans to total loans receivable ratio was 1.72% as of June 30, 2025, compared to 1.60% in Q1 2025 [7] CCBX Segment Performance - CCBX loans increased by $29.5 million, or 1.8%, to $1.68 billion despite selling $1.30 billion in loans during Q2 2025 [24] - The CCBX segment had 29 relationships as of June 30, 2025, with two partners in testing and five signed letters of intent [20] - Total BaaS program fee income was $6.8 million in Q2 2025, an increase of $512,000 from Q1 2025 [6] Community Bank Performance - The community bank segment saw net loans decrease by $6.5 million, or 0.3%, to $1.86 billion in Q2 2025 [35] - Community bank deposits increased by $29.2 million, or 1.9%, to $1.55 billion during the same period [37] Management Outlook - The company anticipates additional new partner engagements in the latter half of 2025, supported by a strong CCBX pipeline [18] - Continued investments in technology and risk management infrastructure are expected to yield future efficiencies and cost reductions [18]