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EVERETT, Wash., Jan. 28, 2025 (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 with an industry leading banking as a service ("BaaS") segment, today reported unaudited financial results for the quarter ended December 31, 2024, including net income of $13.4 million, or $0.94 per diluted common share, compared to $13.5 million, or $0.97 per diluted common share, for the three months ended September 30, 2024 and $45.2 million, or $3.26 per diluted common share, for the year ended December 31, 2024, compared to $44.6 million, or $3.27 per diluted common share for the year ended December 31, 2023.
Management Discussion of the Quarter and Full-year Results
"2024 was highlighted by the completion of our $98.0 million capital raise during the fourth quarter, which we will utilize to support growth of the Bank including in our CCBX segment,” said CEO Eric Sprink. "We saw high quality net loan growth of $67.7 million despite selling $845.5 million in loans during the fourth quarter, and our CCBX program fee income continued to increase which was up 56.9% for full-year 2024 relative to the prior year. We continue to invest heavily in CCBX to support future growth, and we are pleased to have three letters of intent ("LOI") signed going into 2025 with an active pipeline.”
Key Points for Fourth Quarter and Our Go-Forward Strategy
- Completed Capital Raise Allows CCBX Growth to Continue. During the fourth quarter of 2024, we completed a $98.0 million common equity raise, which was priced at $71.00/share. Proceeds will be used for general corporate purposes and to support growth of the Bank including in our CCBX segment. As of December 31, 2024 we had three signed LOIs and continue to have an active pipeline for 2025. The growth in common-equity tier 1 and total risk-based capital to 12.04% and 14.67%, respectively, includes the benefit of the capital raise.
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- Strong Annual Growth in CCBX Program Fees. Total BaaS program fee income was $25.6 million for the year ended December 31, 2024, an increase of $9.3 million, or 56.9%, from the year ended December 31, 2023, and is representative of growth in partner transaction activity and expanded product offerings within our CCBX operating segment. Trends in CCBX noninterest income were also positive during the quarter, with total program fees of $8.2 million for the three months ended December 31, 2024, an increase of $1.8 million, or 27.6%, from the three months ended September 30, 2024.
- Investments for Growth Continues. Total non-interest expense of $64.2 million was down $1.4 million, or 2.1%, as compared to $65.6 million in the third quarter of 2024, mainly driven by lower BaaS loan expense, partially offset by higher salaries and employee benefits, point of sale expense, and legal and professional expenses. As we increase the number of new CCBX partners and programs launching in 2025, we expect that expenses will tend to be front-loaded with a focus on compliance and operational risk before any new program reaches significant revenues.
- Off Balance Sheet Activity Update. During the fourth quarter of 2024, we sold $845.5 million of loans, the majority of which were credit card receivables, and swept $273.2 million of deposits off balance-sheet. We are able to retain a portion of the fee income on these sold credit card loans. As of December 31, 2024 there were 182,449 credit cards with fee earning potential, an increase of 101,023 compared to the quarter ended September 30, 2024 and an increase of 172,400 from December 31, 2023.
- Continued Monitoring of CCBX Risk. We remain fully indemnified against fraud and 98.7% indemnified against credit risk with our CCBX partners as of year-end of 2024.
Fourth Quarter 2024 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) | December 31, 2024 | September 30,
2024 | June 30, 2024 | March 31,
2024 | December 31,
2023 | ||||||||||||||
| Income Statement Data: | |||||||||||||||||||
| Interest and dividend income | $ | 96,587 | $ | 105,079 | $ | 97,487 | $ | 90,472 | $ | 88,243 | |||||||||
| Interest expense | 30,071 | 32,892 | 31,250 | 29,536 | 28,586 | ||||||||||||||
| Net interest income | 66,516 | 72,187 | 66,237 | 60,936 | 59,657 | ||||||||||||||
| Provision for credit losses | 61,867 | 70,257 | 62,325 | 83,158 | 60,789 | ||||||||||||||
| Net interest (expense)/ income after provision for credit losses | 4,649 | 1,930 | 3,912 | (22,222 | ) | (1,132 | ) | ||||||||||||
| Noninterest income | 76,756 | 80,068 | 69,918 | 86,955 | 64,694 | ||||||||||||||
| Noninterest expense | 64,206 | 65,616 | 58,809 | 56,018 | 51,703 | ||||||||||||||
| Provision for income tax | 3,832 | 2,926 | 3,425 | 1,915 | 2,847 | ||||||||||||||
| Net income | 13,367 | 13,456 | 11,596 | 6,800 | 9,012 | ||||||||||||||
| As of and for the Three Month Period | |||||||||||||||||||
| December 31, 2024 | September 30, 2024 | June 30,
2024 | March 31, 2024 | December 31, 2023 | |||||||||||||||
| Balance Sheet Data: | |||||||||||||||||||
| Cash and cash equivalents | $ | 452,513 | $ | 484,026 | $ | 487,245 | $ | 515,128 | $ | 483,128 | |||||||||
| Investment securities | 47,321 | 48,620 | 49,213 | 50,090 | 150,364 | ||||||||||||||
| Loans held for sale | 20,600 | 7,565 | - | 797 | - | ||||||||||||||
| Loans receivable | 3,486,565 | 3,418,832 | 3,326,460 | 3,199,554 | 3,026,092 | ||||||||||||||
| Allowance for credit losses | (176,994 | ) | (170,263 | ) | (147,914 | ) | (139,258 | ) | (116,958 | ) | |||||||||
| Total assets | 4,121,208 | 4,065,821 | 3,961,546 | 3,865,258 | 3,753,366 | ||||||||||||||
| Interest bearing deposits | 3,057,808 | 3,047,861 | 2,949,643 | 2,888,867 | 2,735,161 | ||||||||||||||
| Noninterest bearing deposits | 527,524 | 579,427 | 593,789 | 574,112 | 625,202 | ||||||||||||||
| Core deposits (1) | 3,123,434 | 3,190,869 | 3,528,339 | 3,447,864 | 3,342,004 | ||||||||||||||
| Total deposits | 3,585,332 | 3,627,288 | 3,543,432 | 3,462,979 | 3,360,363 | ||||||||||||||
| Total borrowings | 47,884 | 47,847 | 47,810 | 47,771 | 47,734 | ||||||||||||||
| Total shareholders' equity | 438,704 | 331,930 | 316,693 | 303,709 | 294,978 | ||||||||||||||
| Share and Per Share Data (2): | |||||||||||||||||||
| Earnings per share - basic | $ | 0.97 | $ | 1.00 | $ | 0.86 | $ | 0.51 | $ | 0.68 | |||||||||
| Earnings per share - diluted | $ | 0.94 | $ | 0.97 | $ | 0.84 | $ | 0.50 | $ | 0.66 | |||||||||
| Dividends per share | - | - | - | - | - | ||||||||||||||
| Book value per share (3) | $ | 29.37 | $ | 24.51 | $ | 23.54 | $ | 22.65 | $ | 22.17 | |||||||||
| Tangible book value per share (4) | $ | 29.37 | $ | 24.51 | $ | 23.54 | $ | 22.65 | $ | 22.17 | |||||||||
| Weighted avg outstanding shares - basic | 13,828,605 | 13,447,066 | 13,412,667 | 13,340,997 | 13,286,828 | ||||||||||||||
| Weighted avg outstanding shares - diluted |
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