COASTAL FINANCIAL CORPORATION ANNOUNCES THIRD QUARTER 2026 RESULTS
COASTAL FINANCIAL CORP (CCB) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 COASTAL FINANCIAL CORPORATION ANNOUNCES THIRD QUARTER 2026 RESULTS Coastal Financial Corporation Reports Strong Third Quarter 2026 Earnings Driven by CCBX Program Growth Everett, WA : October 29, 2026 Coastal Financial Corporation (Nasdaq: CCB) (the “Company”, "Coast
How this was made
The 30-second read
Why it matters
The earnings release provides fresh data on profitability, fee growth, and partnership pipeline, which were not previously public.
Market read
The earnings beat and BaaS growth could lift the stock and influence sentiment toward similar regional banks.
What to watch
Potential liquidity impact from the upcoming termination of the Bluevine partnership.
Coastal Financial Corporation Reports Strong Third Quarter 2026 Earnings Driven by CCBX Program Growth
Coastal returned to profitability and grew CCBX program income, while net interest margin declined, CCBX on-balance-sheet deposits fell as sweeps rose, and partner credit and indemnification collectability remain material risks.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net income, three months ended September 30, 2026GAAP | $13.8M | – | – |
| Diluted earnings per common share, three months ended September 30, 2026GAAP | $0.89 | – | – |
| Basic earnings per common share, three months ended September 30, 2026GAAP | $0.90 | – | – |
| Total interest income, three months ended September 30, 2026GAAP | $121.2M | – | – |
| Interest expense, three months ended September 30, 2026GAAP | $32.90M | – | – |
| Net interest income, three months ended September 30, 2026GAAP | $88.3M | (1.2)% | 13.4% |
| Provision for credit losses, three months ended September 30, 2026GAAP | $46.02M | – | – |
| Noninterest income, three months ended September 30, 2026GAAP | $61M | – | – |
| BaaS program income, three months ended September 30, 2026GAAP | $14.13M | – | – |
| BaaS credit enhancements, three months ended September 30, 2026GAAP | $41.77M | – | – |
| BaaS indemnification income, three months ended September 30, 2026GAAP | $45.90M | – | – |
| Total noninterest expense, three months ended September 30, 2026GAAP | $84.8M | $(56.3) million | – |
| Noninterest expense, net of BaaS loan expense, BaaS fraud expense and reimbursement of expenses, three months ended September 30, 2026non-GAAP | $42.41M | $(51.7) million | – |
| Income before provision for income taxes, three months ended September 30, 2026GAAP | $18.46M | – | – |
| Provision for income taxes, three months ended September 30, 2026GAAP | $4.68M | – | – |
| Return on average assets, three months ended September 30, 2026GAAP | 1.01% | – | – |
| Return on average equity, three months ended September 30, 2026GAAP | 11.64% | – | – |
| Net interest margin, three months ended September 30, 2026GAAP | 6.59% | – | – |
| Net interest margin, net of BaaS loan expense, three months ended September 30, 2026non-GAAP | 3.93% | – | – |
| Loan yield, three months ended September 30, 2026GAAP | 10.03% | – | – |
| Loan income, net of BaaS loan expense, divided by average loans, three months ended September 30, 2026non-GAAP | 6.86% | – | – |
| Cost of deposits, three months ended September 30, 2026GAAP | 2.61% | – | – |
| Efficiency ratio, three months ended September 30, 2026other | 56.82% | – | – |
| Total assets, September 30, 2026GAAP | $5.28B | (3.3)% | – |
| Loans receivable, September 30, 2026GAAP | $4.19B | – | – |
| Loans held for sale, September 30, 2026GAAP | $140.3M | – | – |
| Total deposits, September 30, 2026GAAP | $4.68B | – | – |
| Cash and cash equivalents, September 30, 2026GAAP | $803.6M | – | – |
| Total shareholders' equity, September 30, 2026GAAP | $478.3M | – | – |
| Book value per share, September 30, 2026GAAP | $31.28 | – | – |
| Tangible book value per share, September 30, 2026non-GAAP | $31.02 | – | – |
| Allowance for credit losses, September 30, 2026GAAP | $208.1M | – | – |
| Allowance for credit losses to total loans receivable, September 30, 2026GAAP | 4.97% | – | – |
| Net charge-offs, three months ended September 30, 2026GAAP | $49.9M | – | – |
| Net charge-offs to average loans, three months ended September 30, 2026GAAP | 4.43% | – | – |
| Nonperforming assets, September 30, 2026GAAP | $60.5M | $(14.7) million | – |
| Nonperforming assets to total assets, September 30, 2026GAAP | 1.15% | – | – |
| Company common equity Tier 1 risk-based capital, September 30, 2026other | 11.47% | – | – |
| Company Tier 1 leverage capital, September 30, 2026other | 8.81% | – | – |
| Company total risk-based capital, September 30, 2026other | 13.82% | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| CCBXBaaS program fee income increased with broader partner portfolio activity; the Company reported one partner in testing, two in implementation/onboarding, and three signed LOIs. | BaaS program income $14,127 | 17.6% | 79.6% |
| Community BankDeposits increased $63.2 million, or 4.0%, to $1.64 billion, with a cost of deposits of 1.54%. | Net interest income $23,719 | – | – |
| Treasury & AdministrationInterest earning deposits with other banks averaged $775,638 during the quarter. | Net interest income $3,977 | – | – |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Remainder of 2026 and next 4–6 quarters outlook
- NoteNew partnership opportunities and product launches expected for the remainder of 2026.
- NoteManagement identified up to $20.0 million in potential annualized savings in noninterest expenses and expects to gradually achieve these potential savings over the next 4–6 quarters.
- NoteValley has indicated it expects the Bluevine acquisition transaction to close in the second quarter of 2027, at which time the Bluevine relationship is expected to terminate.
Capital returns
- Dividends per share: —.
- The Company contributed $25.0 million of capital to the Bank during the quarter ended September 30, 2026.
- Common stock increased $1.0 million as a result of equity awards vested and exercised during the three months ended September 30, 2026.
What drove it
- BaaS program income rose to $14.1 million, up $2.1 million, or 17.6%, from the second quarter and $6.3 million, or 79.6%, from the third quarter of 2025.
- Off-balance-sheet credit card accounts reached 1.3 million, an increase of 452,984, or 51.38%, from June 30, 2026 and 937,831, or 236.34%, from September 30, 2025.
- The Company did not repeat the $46.0 million second-quarter credit enhancement receivable valuation adjustment related to The Partner.
- BaaS loan expense declined to $35,715 from $40,409 in the prior quarter, while net BaaS loan income increased to $43,908 from $38,171.
- Community bank deposits increased to $1.64 billion, supported by $491.3 million of noninterest-bearing deposits, or 30.0% of total community bank deposits.
- Nonperforming assets declined $14.7 million quarter over quarter, including a $14.3 million decline in CCBX nonperforming loans.
Concerns
- Bluevine is expected to terminate its relationship when Valley's acquisition of Bluevine closes, which Valley expects in the second quarter of 2027. The Bank held $452.4 million of Bluevine deposits on balance sheet and swept $1.85 billion off balance sheet to other banks at September 30, 2026.
- The Partner's $22.8 million specific allowance remained unchanged, and the valuation allowance against the credit enhancement asset was $45.6 million. Approximately $3.1 million of additional provision expense was not offset by credit enhancement income because collection was not considered probable.
- Net interest margin declined to 6.59% from 7.27% in the preceding quarter and 7.00% a year earlier, driven primarily by lower average loan yield and changes in loan mix.
- CCBX deposits reported on the balance sheet decreased $246.2 million, or 7.5%, to $3.04 billion, although management attributed the decline primarily to greater use of off-balance-sheet sweeps.
- Total noninterest expense remained above the prior-year quarter at $84.8 million versus $70.2 million, including higher legal and professional expenses, technology costs, salaries and employee benefits, BaaS loan expense, and BaaS fraud expense.
- The Company is conducting a search for a permanent Chief Financial Officer, which it stated is ongoing and in its final stages.
What to watch
- Progress against up to $20.0 million in potential annualized noninterest-expense savings over the next 4–6 quarters.
- CCBX partner activity, product launches, and the conversion of one testing relationship, two implementation/onboarding relationships, and three signed LOIs.
- Credit performance and contractual collectability associated with The Partner, including the $22.8 million specific allowance and $45.6 million valuation allowance against the credit enhancement asset.
- The timing and funding impact of the anticipated Bluevine relationship termination in the second quarter of 2027.
- Whether loan mix, CCBX loan sales, and funding costs stabilize net interest margin and net BaaS loan income.
- Trends in off-balance-sheet deposit sweeps, uninsured deposits, and CCBX on-balance-sheet deposit balances.
Balance sheet and cash flow
- Cash and cash equivalents were $803.6 million at September 30, 2026.
- Additional contingent borrowing capacity was $827.4 million, with no borrowings outstanding as of September 30, 2026.
- The Company had borrowing capacity of up to $621.4 million from the Federal Reserve Bank discount window and Federal Home Loan Bank, plus $206.0 million under credit facilities with banker's banks.
- Total deposits were $4,678,831 at September 30, 2026, compared with $4,861,898 at June 30, 2026.
- The Company swept $6.29 billion in deposits off-balance sheet for FDIC insurance and liquidity purposes at September 30, 2026.
- During the third quarter of 2026, the Company sold $5.99 billion of loans, including $4.69 billion of additional credit card receivables originated through ongoing cardholder spend and revolving activity.
- Uninsured deposits were estimated at $899.6 million at September 30, 2026, compared to $1.35 billion at June 30, 2026.
Analysis
Coastal returned to profitability in the third quarter after the second-quarter loss associated with The Partner. Net income was $13.8 million, compared with a net loss of $(42.1) million in the preceding quarter and net income of $13.6 million a year earlier. The quarter benefited from the absence of the prior quarter's $46.0 million credit enhancement receivable valuation adjustment, which helped reduce noninterest expense to $84.8 million from $141.1 million. Return on average assets recovered to 1.01% from (3.32)% in the second quarter, but remained below 1.19% in the prior-year quarter.
CCBX activity was the central growth driver. BaaS program income reached $14.1 million, up $2.1 million, or 17.6%, sequentially and $6.3 million, or 79.6%, year over year. Off-balance-sheet credit card accounts rose to 1.3 million, while the Company sold $5.99 billion of loans during the quarter. CCBX reported deposits declined to $3.04 billion as the Company increased off-balance-sheet sweeps to $6.29 billion. Management described this as a liquidity and FDIC-insurance management outcome rather than a decline in underlying partner deposit activity.
Core spread performance weakened. Net interest income was $88.3 million, down $1.1 million, or 1.2%, sequentially, though up $10.4 million, or 13.4%, year over year. Net interest margin fell to 6.59% from 7.27% in the second quarter and 7.00% in the prior-year period. The non-GAAP margin net of BaaS loan expense was 3.93%, compared with 3.98% and 4.05%, respectively. Loan yield fell to 10.03%, while the cost of deposits increased to 2.61% from 2.57% sequentially. Community bank deposits increased $63.2 million, or 4.0%, and carried a 1.54% cost of deposits.
Credit metrics improved sequentially but remain a key focus. Nonperforming assets fell $14.7 million to $60.5 million and net charge-offs to average loans declined to 4.43% from 4.90%. The allowance for credit losses declined to $208.1 million from $213.7 million, while the allowance remained 4.97% of loans receivable. The $22.8 million specific allowance related to The Partner was unchanged, and the valuation allowance against the credit enhancement asset was reduced modestly to $45.6 million. Management also stated that $3.1 million of additional provision expense was not offset by credit enhancement income because collection was not considered probable.
Capital and liquidity were substantial, with $803.6 million of cash and cash equivalents, $827.4 million of additional contingent borrowing capacity, and no borrowings outstanding as of September 30, 2026. The Company common equity Tier 1 ratio was 11.47%, the Tier 1 leverage ratio was 8.81%, and the total risk-based capital ratio was 13.82%. Management identified up to $20.0 million in potential annualized noninterest-expense savings over the next 4–6 quarters. The principal forward issue is the expected Bluevine relationship termination following the anticipated second-quarter 2027 close of Valley's acquisition of Bluevine, against $452.4 million of Bluevine deposits held on balance sheet and $1.85 billion swept off balance sheet.
Management, verbatim
The third quarter better reflects the underlying earnings power of Coastal’s business, following a challenging second quarter for our shareholders.
Eric Sprink, Chief Executive Officer
Beyond this relationship, we returned to profitability with net income of $13.8 million and diluted earnings per share of $0.89, and our ROA was 1.01%.
Eric Sprink, Chief Executive Officer
We ended the quarter well capitalized, with strong cash reserves and a strong pipeline.
Eric Sprink, Chief Executive Officer
Not in the filing
stated, not guessed- Total revenue is not reported because Coastal is a bank and the release reports interest income, net interest income, and noninterest income rather than a total revenue line.
- Gross margin is not reported.
- GAAP and non-GAAP operating income are not reported.
- Operating cash flow is not reported.
- Free cash flow is not reported.
- Share repurchases are not reported.
- A formal quantitative earnings guidance range for revenue, net interest income, EPS, margins, expenses, or tax rate is not reported.
- Prior-release outlook was not provided, so comparison with prior guidance is unavailable.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
Coastal Financial Corp is a Nasdaq‑listed holding company for a community bank and a BaaS platform.
Ticker impact
Coastal Financial Corp reported Q3 2026 earnings with net income of $13.8M, a swing to profitability from a prior loss.
likely upward pressure as the market prices in the profitability turnaround
The company posted a profit and significant fee income growth, reversing a loss, which typically drives buying interest.
Market effects
BaaS and community banking segments may see renewed investor interest.
Northwest US regional banks could benefit from demonstrated profitability.
Limited to U.S. regional banking sector.
Counterpoint
If the profit is viewed as a one‑off due to accounting adjustments, the rally could be short‑lived.
Key entities
- companyCoastal Financial Corp
Nasdaq‑listed bank holding company reporting Q3 2026 results.
- partnerBluevine, Inc.
Partner whose deposits will be transferred after acquisition by Valley National Bancorp.
