Coastal Financial Corporation Reports $45.2 Million Net Income and $4.12 Billion in Assets for 2024

Coastal Financial Corporation (Coastal) reported total assets of $4.12 billion and total shareholders’ equity of $438.7 million as of December 31, 2024. Net income for the year ended December 31, 2024, was $45.2 million, or $3.26 per diluted share, a slight increase compared to $44.6 million, or $3.27 per diluted share, in 2023. This increase resulted from a $41.5 million rise in net interest income and a $104.1 million increase in noninterest income, partially offset by a $93.6 million increase in the provision for credit losses and a $51.7 million increase in noninterest expense. The company noted that the increases in noninterest income, provision expense, and noninterest expense were largely related to CCBX loan and deposit growth.

The company's 2024 financial performance included a net interest income of $273.0 million, a 17.9% increase from 2023. This increase stemmed from loan growth in both the CCBX and community bank segments. The CCBX segment, which provides banking-as-a-service (BaaS), saw average loans receivable grow to $1.43 billion, a 17.9% increase, with an average yield of 17.39%. The community bank segment experienced average loan receivable growth to $1.89 billion, a 9.6% increase, with an average yield of 6.54%. Interest expense increased to $123.7 million due to higher average interest-bearing deposits and increased interest rates.

Coastal's CCBX segment, a key driver of growth, had 24 relationships at varying stages as of December 31, 2024, including three signed letters of intent. The company's community bank maintained its position as the largest locally headquartered bank by deposit market share in Snohomish County, reaching 17.5% as of June 30, 2024. The company also highlighted its commitment to diversity, equity, and inclusion (DEI) initiatives, including board diversity and outreach to underserved communities through its CCBX partnerships. Employee headcount was 488 full-time equivalents as of December 31, 2024.

The company's 10-K filing also disclosed material weaknesses in internal control over financial reporting, resulting in a restatement of the 2023 financial statements. These weaknesses related to control, design, and implementation deficiencies concerning third-party reports, specifically those from BaaS partners. Coastal is implementing remedial measures to address these weaknesses. The company's outlook and forward-looking statements cautioned about various risks, including economic conditions, credit risk, interest rate fluctuations, competition, regulatory changes, and cybersecurity threats. The company stated that it does not intend to pay dividends in the near term.