Coastal Financial Corporation Announces Third Quarter 2025 Results

Core Insights - Coastal Financial Corporation reported a net income of $13.6 million for Q3 2025, an increase from $11.0 million in Q2 2025 and $13.5 million in Q3 2024, translating to earnings per diluted share of $0.88 [1][4] - The company experienced a 4.6% increase in loans receivable, amounting to $163.5 million, and a 1.5% growth in deposits totaling $59.0 million during the same quarter [2][4] Financial Performance - Interest and dividend income reached $109.0 million, up from $107.8 million in Q2 2025 and $105.2 million in Q3 2024 [5] - Net interest income was $77.9 million, reflecting a 1.5% increase from $76.7 million in Q2 2025 and a 7.8% increase from $72.3 million in Q3 2024 [38] - Noninterest income totaled $66.8 million, compared to $42.7 million in Q2 2025 and $78.8 million in Q3 2024 [5] Loan and Deposit Growth - Average deposits were $3.97 billion, an increase of $40.7 million or 1.0% from Q2 2025, primarily driven by CCBX partner programs [6] - The community bank segment saw net loans increase by $39.6 million, or 2.1%, to $1.90 billion [34] CCBX Segment Performance - The CCBX segment reported a total of 29 relationships, with 2 partners in testing, 4 in implementation, and 2 signed letters of intent as of September 30, 2025 [20][24] - CCBX loans increased by $123.9 million, or 7.4%, to $1.80 billion despite selling $1.62 billion in loans during the quarter [24][27] Cost Management and Efficiency - Total noninterest expense decreased by $2.7 million, or 3.7%, to $70.2 million compared to Q2 2025, mainly due to lower legal and professional expenses [6] - The efficiency ratio improved to 48.50% from 60.98% in Q2 2025, indicating better operational efficiency [17] Credit Quality - Nonperforming assets to total assets ratio improved to 1.31% from 1.36% in Q2 2025, while the allowance for credit losses to nonperforming loans ratio was 290.8% [8][12] - The company reported gross charge-offs of $54.5 million for the quarter, slightly up from $53.8 million in Q2 2025 [8] Management Outlook - The company anticipates further growth in the BaaS space with new partner engagements and continued investment in technology and risk management infrastructure [18] - Credit quality remains a central focus, with a strategy to manage the balance sheet effectively in response to interest rate changes [18]