Coastal Financial (NASDAQ:CCB) Posts Quarterly Earnings Results, Misses Estimates By $0.07 EPS

Coastal Financial (NASDAQ:CCB) posted its earnings results on Thursday. The company reported $0.89 earnings per share for the quarter, missing the consensus estimate of $0.96 by ($0.07), Zacks reports. The business had revenue of $149.33 million for the quarter, compared to analysts’ expectations of $158.85 million. Coastal Financial had a negative return on equity of 0.80% and a negative net margin of 0.53%.

Here are the key takeaways from Coastal Financial’s conference call:

• Coastal returned to profitability in the third quarter, reporting $13.8 million of net income, or $0.89 per diluted share, versus a $42.1 million loss in the prior quarter. BaaS program fee income rose 79.6% year over year to $14.1 million, while the Common Equity Tier 1 ratio strengthened to 11.5%.
• The previously disclosed issues with one partner’s consumer loan portfolio remain unresolved. Although delinquencies and annualized net charge-offs improved, Coastal recorded $46 million of provision expense, including $3.1 million not offset by credit-enhancement income, and expects a potential $22.8 million charge-off by year-end.
• Management said its broader BaaS portfolio showed no comparable problems, with 96.7% of BaaS non-performing loans covered by partner credit enhancements. The company also reported a pipeline of two partners onboarding and three signed letters of intent, alongside higher loan sales, debit-card growth, and deposit-sweep activity.
• Coastal identified more than $20 million in potential annualized non-interest expense savings, targeted over the next four to six quarters, through vendor consolidation, reduced duplication, technology changes, and tighter spending discipline. Management expects these actions to improve operating leverage, although reinvestment could offset part of the gross savings.

Coastal Financial Trading Down 7.4%

NASDAQ:CCB opened at $43.66 on Friday. The company has a debt-to-equity ratio of 0.10, a quick ratio of 1.03 and a current ratio of 1.05. Coastal Financial has a one year low of $35.56 and a one year high of $120.05. The business’s 50-day simple moving average is $44.63 and its 200 day simple moving average is $68.95. The stock has a market cap of $667.56 million, a price-to-earnings ratio of -155.92 and a beta of 0.86.

Coastal Financial News Summary

Here are the key news stories impacting Coastal Financial this week:

• Positive Sentiment: Management is targeting more than $20 million in annualized noninterest-expense savings over the next four to six quarters, including tighter executive compensation and leadership costs. The company said the measures are intended to help restore profitability. Coastal Financial targets expense savings
• Positive Sentiment: Coastal Financial highlighted continued growth in its CCBX banking-as-a-service program, which was described as a key driver of third-quarter earnings. Cost reductions and program growth could support future earnings if credit performance stabilizes. Coastal Financial third-quarter results
• Neutral Sentiment: Coastal reported third-quarter net charge-offs and provided an investor presentation describing a strategic shift. The disclosures offer additional detail on credit trends and restructuring, but investors are likely focused on whether the changes can improve profitability. Coastal Financial net charge-offs
• Negative Sentiment: Third-quarter EPS was $0.89, below estimates of $0.96-$0.99, while revenue of $149.33 million missed the approximately $158.85 million consensus. The company also reported a negative net margin and negative return on equity, reinforcing concerns about near-term earnings quality. Coastal Financial Q3 earnings miss
• Negative Sentiment: Several law firms publicized a securities class action covering investors who purchased shares from October 28, 2024, through July 29, 2026. Allegations reportedly involve disclosures about banking-as-a-service credit-risk indemnification and a deteriorating partner portfolio; the lead-plaintiff deadline is December 1, 2026. The litigation creates additional legal, reputational and financial uncertainty. Coastal Financial class action deadline

Wall Street Analysts Forecast Growth

Several brokerages have recently weighed in on CCB. Keefe, Bruyette & Woods decreased their target price on shares of Coastal Financial from $95.00 to $53.00 and set an “outperform” rating for the company in a research note on Friday, July 31st. TD Cowen reiterated a “buy” rating on shares of Coastal Financial in a research report on Tuesday, September 29th. Weiss Ratings downgraded shares of Coastal Financial from a “hold (c)” rating to a “sell (d)” rating in a report on Tuesday, August 11th. Zacks Research lowered Coastal Financial from a “hold” rating to a “strong sell” rating in a research note on Tuesday, August 4th. Finally, Raymond James Financial downgraded Coastal Financial from a “strong-buy” rating to an “outperform” rating and set a $50.00 target price on the stock. in a research report on Friday, July 31st. Five analysts have rated the stock with a Buy rating and two have issued a Sell rating to the company. According to data from MarketBeat.com, Coastal Financial presently has an average rating of “Hold” and an average target price of $91.33.

Insider Transactions at Coastal Financial

In other Coastal Financial news, Director Steven D. Hovde acquired 10,000 shares of the company’s stock in a transaction on Thursday, August 6th. The shares were bought at an average cost of $43.83 per share, for a total transaction of $438,300.00. Following the acquisition, the director directly owned 26,500 shares of the company’s stock, valued at $1,161,495. This trade represents a 60.61% increase in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this link. Also, CEO Eric M. Sprink bought 10,000 shares of the business’s stock in a transaction on Thursday, August 6th. The stock was acquired at an average cost of $44.45 per share, for a total transaction of $444,500.00. Following the completion of the transaction, the chief executive officer owned 173,238 shares in the company, valued at $7,700,429.10. This represents a 6.13% increase in their ownership of the stock. Additional details regarding this purchase are available in the official SEC disclosure. Insiders purchased 25,290 shares of company stock valued at $1,115,894 in the last three months. 13.49% of the stock is currently owned by company insiders.

Coastal Financial Company Profile

Coastal Financial Corporation is a bank holding company headquartered in Everett, Washington. Its principal subsidiary, Coastal Community Bank, provides banking services to individuals, families, and businesses in the Pacific Northwest, with a focus on communities in the Puget Sound region.

Coastal Community Bank offers consumer and commercial deposit accounts, residential and commercial real estate lending, business loans, lines of credit, treasury management, online and mobile banking, and other traditional banking products.