CCB

Interested in Coastal Financial Corporation? Here are five stocks we like better. Coastal Financial reported a $42.1 million second-quarter GAAP net loss, primarily due to $68.8 million in pre-tax adjustments tied to a defined BaaS partner and its consumer loan portfolio, including a $46 million valuation adjustment and $22.8 million credit-loss provision. Management said the issue appears isolated to one partner and found no evidence of impropriety, while the company pursues contractual remedies and evaluates recovery options. The affected portfolio contains about $500 million in consumer loans, with resolution potentially taking from one or two quarters to 12–18 months. Despite the charge, core operations grew: net interest income rose 7.2% sequentially to a record $89.4 million, loans increased 9% to approximately $4.21 billion, and BaaS program income climbed 10.3%. Coastal remained well-capitalized, but announced leadership changes including CFO Brandon Soto’s departure and the return of Joel Edwards as interim CFO. Coastal Financial (NASDAQ:CCB) reported a second-quarter GAAP net loss of $42.1 million, or $2.76 per diluted share, driven largely by $68.8 million of pre-tax accounting adjustments tied to a defined Banking-as-a-Service, or BaaS, partner and its consumer loan portfolio. Chief Executive Officer Eric Sprink said the company recorded a $46 million valuation adjustment to a credit enhancement asset and a $22.8 million provision for credit losses related to the partner’s indemnification agreement. Coastal also recorded $4.4 million of accelerated amortization on capitalized software after shortening the useful lives of technology assets being replaced through modernization efforts. → Why SK hynix Could Be the Best AI Chip Stock to Buy Now Sprink said the affected portfolio comprises about $500 million of underlying consumer loans, including a mix of term consumer debt. The partner remains contractually responsible for losses covered by its indemnification agreement, he said, though Coastal’s accounting treatment reflected its updated assessment of expected collectibility at June 30. Management said it changed its assessment of the unnamed, non-public partner during the quarter after considering portfolio performance, collections, recovery expectations and the partner’s financial condition. The company has engaged independent third-party advisers to assess loan-level data, and Sprink said that review found no evidence of impropriety by the partner or its customers. → 3 Value ETFs to Consider as Growth Stocks Lag Behind The company is pursuing its contractual rights and is managing the portfolio through servicing, collections, recoveries, contractual remediation efforts and an evaluation of strategic alternatives. Sprink said the potential timeline for resolution could range from one to two quarters to 12 to 18 months, depending on how the situation evolves. During the question-and-answer session, Sprink said the partner remains in business and has not defaulted to Coastal. He said the company’s reserve reflects the current assessment of risk and collectibility rather than a waiver of the partner’s obligations. → 5 AI Stocks Are Pulling Back—Which Growth Catalysts Still Look Strongest? Coastal said the defined portfolio’s reserve addresses the gap between cash collateral held and expected recoveries under the indemnification agreement. While many CCBX partners maintain cash reserve arrangements, Sprink said not every partner is required to do so, including programs involving consumer-level cash-secured lending and certain relationships where Coastal has determined a corporate cash collateral account is unnecessary. Coastal said it reviewed the rest of its CCBX portfolio using the same monitoring standards and did not identify a comparable issue. The remaining core CCBX portfolio totaled approximately $1.7 billion at quarter-end, with improvements in net charge-offs and both early- and late-stage delinquency metrics, according to management. Sprink said all reviewed partners were current on contractual cash collateral funding obligations. He characterized the matter as related to one of more than 25 partnerships and said it should not be extrapolated to the company’s broader BaaS model or underwriting discipline. The company said it will continue to monitor the identified portfolio in real time. Sprink noted that provisioning expense could increase as loans grow, with counterparty-related benefits also increasing for the remaining programs, while the affected portfolio will receive ongoing, separate monitoring. Excluding the partner-related credit expense and software charge, management highlighted continued growth in net interest income, loans and BaaS-related fees. Net interest income rose $6 million, or 7.2% from the first quarter, to a record $89.4 million. Net interest margin increased to 7.27%, while net interest margin after BaaS loan expense rose to 3.98% from 3.90% in the prior quarter. Total loans increased $348.9 million, or 9%, to approximately $4.21 billion. BaaS program income increased $1.1 million, or 10.3%, from the first quarter. The company sold approximately $4.56 billion of CCBX loans during the quarter, including ongoing balances generated from previously sold credit card accounts. Its off-balance-sheet credit card program reached approximately 881,000 fee-earning accounts, up 32% from the first quarter. Coastal swept approximately $4.26 billion of deposits off balance sheet and generated about $1.2 million of sweep income during the quarter. Total deposits ended the quarter at approximately $4.86 billion. Chief Financial Officer Brandon Soto said the sequential decline primarily reflected greater use of off-balance-sheet deposit sweep arrangements rather than a comparable decline in underlying partner deposit activity. Community Bank credit quality remained strong, with annualized net charge-offs equal to approximately 0.01% of average loans, according to Soto. Executive Chairman Chris Adams said Coastal remained well-capitalized and liquid following the quarter’s adjustments. At June 30, the company reported a Common Equity Tier 1 ratio of 10.86%, a Tier 1 leverage ratio of 9.11%, and a total risk-based capital ratio of 13.30%. The accounting adjustments reduced capital ratios by approximately 1 percentage point. Coastal held approximately $1.01 billion in cash and more than $1.1 billion of additional contingent borrowing capacity, with no short-term borrowings outstanding. Adams, who was appointed executive chairman effective immediately after serving on Coastal’s board since 2016 and as chair since 2019, said his expanded role will emphasize long-term strategy, external engagement, leadership development, operating leverage and profitability. The company is reviewing vendor spending, contractor usage, discretionary costs, organizational duplication, technology priorities, and partner- and product-level profitability. Sprink will remain CEO and retain responsibility for daily operations, financial performance, risk management and execution. Coastal also announced that Soto will leave to become CEO of another financial institution that is neither a current partner nor competitor. Former CFO Joel Edwards will return as interim CFO while the company searches for a permanent successor. Finally, Sprink said Coastal is no longer actively pursuing an acquisition of assets and deposits from Evolve Bank & Trust. Coastal Financial Corporation is a bank holding company whose principal subsidiary, Coastal Community Bank, provides a full range of community banking services to clients along North Carolina's central and eastern coastline. The company focuses on delivering personalized relationship banking to individuals, small businesses, and local professionals in seaside and inland communities. Through Coastal Community Bank, Coastal Financial offers deposit products including checking, savings, money market accounts and certificates of deposit. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Coastal Financial Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

This article first appeared on GuruFocus. Release Date: July 30, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Record net interest income of $89.4 million, up 16.4% year-over-year, with a stable and slightly improving net interest margin of 7.27%. CCBX segment momentum continued with BAS program fee income of $12 million, up 10% from the first quarter. Off-balance sheet credit card program grew to 881,000 fee-earning accounts, a 32% increase from the first quarter. Community Bank credit quality remained strong with annualized net charge-offs at just 0.01% of average loans. Company remains well-capitalized with a CET1 ratio of 10.86%, $1.01 billion in cash, and over $1.1 billion in contingent borrowing capacity with no short-term borrowings. Reported a GAAP net loss of $42.1 million, driven by $68.8 million in pretax accounting adjustments related to a defined CCBX portfolio partner. The $68.8 million charge includes a $46 million valuation adjustment to a credit enhancement asset and a $22.8 million provision for credit losses on a partner's indemnification agreement. Core operating expenses rose double-digits sequentially and 22% year-over-year, indicating a need for better cost control. The company recorded a $4.4 million accelerated software amortization charge due to shortened useful lives from technology modernization. The troubled partner portfolio of approximately $500 million in underlying loans presents ongoing uncertainty, with resolution potentially taking 1-2 quarters to 12-18 months. Here are the key highlights from the Coastal Financial Corp (NASDAQ:CCB) Q2 2026 earnings call, focusing on the most critical Q&A exchanges. Warning! GuruFocus has detected 2 Warning Sign with SCRYY. Is CCB fairly valued? Test your thesis with our free DCF calculator. Q: Can you provide more comfort on why this $68.8 million charge related to a specific partner is a one-off situation and not a read-through to the broader CCBX portfolio? What is unique about this partner? A: (Eric Spring, CEO) Our assessment changed for this one partner based on a combination of factors we monitor continuously: portfolio performance, collection results, recovery experience, and the partner's own financial condition. For this specific relationship, that combination of signals moved such that we concluded we needed to recognize the exposure. We reviewed the rest of the CCBX book against the same standards and did not see a comparable pattern. This is not a read-through to consumer credit trends broadly or the rest of the partners. Q: Is the partner company still operating, and why can they not fulfill their credit enhancement obligation? Do you have a claim on their assets beyond the loans? A: (Eric Spring, CEO) The partner remains contractually responsible for losses covered by the indemnification, and recording this valuation does not change or waive those responsibilities. The borrower has not defaulted with us. The reserve reflects our updated assessment of risk and expected collectability based on real-time, June 30 information. The partner is still in business, and we are very hopeful the resolution will be positive over time. Q: Core operating expenses were up double-digits sequentially and 22% year-over-year. What are you doing to contain expense growth and improve profitability in the back half of the year? A: (Chris Adams, Executive Chairman) Operating leverage and profitability are a huge focus for the board, which is why I am stepping into this role. We have great people and have spent a lot on technology. We are now focused on getting the efficiency out of what we have already built. Management has begun a review of vendor spending, contractor usage, discretionary expenses, and organizational duplication to reduce lower-value spending. Q: Does the new focus on profitability and operating leverage change your approach to partner growth? Should we expect you to be more selective in adding new partners? A: (Eric Spring, CEO) The board is absolutely committed to the banking-as-a-service business. We are at a unique inflection point with digital adoption, and we are expertly positioned. This event reinforces the importance of continuous monitoring and picking the right partners, but we absolutely believe this platform has long-term potential. We will be deliberate in how we onboard and scale partnerships. Q: What is the expected timeline for resolving the situation with the problem partner? Should we think in terms of quarters or years? A: (Eric Spring, CEO) The board is reviewing all alternatives and remediations, and the partner is exploring their options. They are well-established and exploring opportunities. There could be a wide gap between remediation and potential outcomes, ranging anywhere from one to two quarters to 12 to 18 months, based on how the relationship evolves. Q: Has this event changed the appetite of buyers to purchase your loans? Have you seen changes in pricing or due diligence? A: (Eric Spring, CEO) We were very successful in the first quarter with loan sales, and the market continues to be vibrant. The capital markets are still open. We have seen some tightening on pricing for risk-based spread premiums across the board, but nothing that is deterring the framework and the markets from working. Q: You shortened the useful life of certain capitalized software assets, resulting in accelerated amortization. What new capabilities are replacing these legacy systems, and what tangible benefits should we expect? A: (Eric Spring, CEO) The hidden message is that we now have newer, better technologies supplanting the old ones. While it is unfortunate it shows up as a charge, it is exciting. The new technology will give us efficiencies across multiple fronts, including compliance, oversight, risk management, and partner data management. Q: Your provision was in the $50 million range in recent quarters. Should we expect a step-up in provision as you do more enhanced reviews going forward? A: (Eric Spring, CEO) As loans continue to grow, I would anticipate provisioning expense to go up, with the counterparty benefit for the remaining programs going up alongside it. For the specific problem partner, we will continuously monitor the $500 million loan pool, and provisioning will be real-time. For the remaining programs, provisioning will continue as it has in the past. Q: The press release mentions that "many" CCBX partners pledge a cash reserve. Why "many" and not "all"? Was there a cash reserve for this specific program? A: (Eric Spring, CEO) We have programs that are not required to have cash pledge reserves. For example, some programs are purely cash-secured lending at the consumer level, so a corporate cash collateral account is not required. Other programs have been deemed low-risk. The specific reserve for this partner is geared towards the gap between the cash collateral account and the expectations under the indemnification agreement. Q: The BAS net interest margin moved up nicely this quarter. Was any of that upside driven by the additional yield you recognize on the problem portfolio? A: (Eric Spring, CEO) No, there was no NIM benefit based on the reserves we took in Q2. The stable to improving NIM is driven by product mix. To my knowledge, there have been no repricings that would adversely affect the portfolio in Q2's NIM. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Results Reflect Record Net Interest Income and Continued BaaS Growth, Offset by Credit Expenses Taken on Single Partner Relationship EVERETT, Wash., July 30, 2026 (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 segment ("community bank") with an industry leading banking as a service ("BaaS") segment ("CCBX"), today reported unaudited financial results for the quarter ended June 30, 2026, including net loss of $42.1 million, or $(2.76) per diluted common share, compared to net income of $12.0 million, or $0.78 per diluted common share, for the three months ended March 31, 2026 and $11.0 million, or $0.71 per diluted common share, for the three months ended June 30, 2025. The net loss is primarily attributable to a $68.8 million credit expense related to a single, isolated CCBX partner relationship. Management Discussion of the Second Quarter Results “Our second quarter results reflect continued performance of our core franchise, which was offset by decisive action we took on a single non-public company partner relationship. Based on our assessment, we recorded the potential impact fully and in accordance with our credit protection framework. We believe this is an isolated issue pertaining to one partner and does not reflect a change in our view of our broader partner portfolio or BaaS model. We remain focused on disciplined and sustainable growth by partnering with organizations that align with our long-term strategy, thoughtfully expanding our product offerings, and continuing to build a resilient BaaS platform designed to deliver value for all stakeholders,” stated CEO Eric Sprink. “Despite these credit expenses, we delivered solid loan growth of 9.0%, increased BaaS program income, and continued to deepen relationships with our established partners while advancing new products that support our strategy,” added Sprink. “Our CCBX segment expanded product offerings with existing partners during the quarter while advancing new partners through onboarding toward launch and active status in alignment with our long-term strategy. We also experienced solid quarter-over-quarter growth in BaaS program income, reflecting continued momentum across our diversified revenue streams.” “Looking ahead, we remain focused on disciplined, sustainable growth by strengthening relationships with larger, well-established partners, thoughtfully expanding our product offerings, and continuing to invest in the infrastructure, technology and risk management capabilities that support our platform. Our operating momentum, our disciplined approach to partner selection, and our strong capital and liquidity position leave us confident in our ability to execute and to create long-term value for shareholders,” concluded Sprink. Key Points for Second Quarter CCBX Partner and Product Expansion. As of June 30, 2026 we had one partner in testing, one in implementation/onboarding, and three signed letters of intent (LOIs). Our active pipeline positions us for continued growth, with new partnership opportunities and product launches expected for the remainder of 2026. Total BaaS program fee income was $12.0 million for the three months ended June 30, 2026, an increase of $1.1 million, or 10.3%, from the three months ended March 31, 2026."Our technology modernization initiatives continue to strengthen the CCBX platform, improving operational efficiency, enhancing the partner experience and supporting long-term scalability," stated CCBX President Brian Hamilton. Items Affecting Second Quarter Results. Significant items impacting June 30, 2026 results included a $22.8 million provision for credit losses and a $46.0 million valuation adjustment to the credit enhancement asset, both related to one partner, not expected to be fully collected under its indemnification arrangement.  These items followed an individual assessment of collectability. We also recorded $4.4 million of capitalized software amortization due to shortened useful lives associated with technology modernization. Positive On- and Off-Balance Sheet Trends Continue. At June 30, 2026 we swept off $4.26 billion in deposits for Federal Deposit Insurance Corporation ("FDIC") insurance and liquidity purposes, and generated $1.2 million in noninterest income during the quarter ended June 30, 2026, an increase of $467,000, or 65.8%, from $710,000 for the quarter ended March 31, 2026 and an increase of $820,000, or 229.7% from $357,000 for the quarter ended June 30, 2025.  During the second quarter of 2026, we sold $4.56 billion of loans, including $3.68 billion of additional credit card receivables originated through ongoing cardholder spend and revolving activity and sold under existing forward flow arrangements, compared to $3.28 billion of sold loans in the quarter ended March 31, 2026, including $2.63 billion sold under the same forward flow arrangements. As of June 30, 2026 there were 881,659 off-balance sheet credit cards with fee earning potential, an increase of 214,636, or 32.18%, compared to the quarter ended March 31, 2026 and an increase of 567,832, or 180.94%, from June 30, 2025. Capital and Liquidity The Company and the Bank remained well capitalized at June 30, 2026, with a Company common equity Tier 1 ratio of 10.86%, a Tier 1 leverage ratio of 9.11%, and a total risk-based capital ratio of 13.30%, each above the levels required to be considered well capitalized. The quarter’s charges reduced capital ratios by approximately one percentage point, and the Company retained $1.01 billion of cash and cash equivalents and $1.12 billion of additional contingent borrowing capacity, with no borrowings outstanding as of June 30, 2026. The Company’s capital efficient model, including ongoing loan sales and off-balance sheet deposit and card programs, continues to support internal capital generation. Executive Chairman Appointment The Company also announced that Christopher D. Adams, Chairman since 2019 and a member of the Board since 2016, has been appointed Executive Chairman of Coastal Financial Corporation, effective immediately. In this expanded capacity, Mr. Adams will devote additional time to long-term strategy, leadership development, and external engagement, and partner closely with Mr. Sprink and the rest of the management team. Second Quarter 2026 Financial Highlights The tables below outline some of our key operating metrics. (1)     Core deposits are defined as all deposits excluding brokered and time deposits. (2)     Share and per share amounts are based on total actual or average common shares outstanding, as applicable. (3)     We calculate book value per share as total shareholders’ equity at the end of the relevant period divided by the outstanding number of our common shares at the end of each period.(4)     Tangible book value per share is a non-GAAP financial measure. We calculate tangible book value per share as total shareholders’ equity at the end of the relevant period, less goodwill and other intangible assets, divided by the outstanding number of our common shares at the end of each period. The most directly comparable GAAP financial measure is book value per share. See reconciliation of the non-GAAP measures at the end of this earnings release for the impact of intangible assets on book value.(5)     Nonperforming assets and nonperforming loans include loans 90+ days past due and accruing interest. (6)     Annualized calculations. Key Performance Ratios Return on average assets ("ROA") was (3.32)% for the quarter ended June 30, 2026 compared to 0.98% and 0.99% for the quarters ended March 31, 2026 and June 30, 2025, respectively. The decline in ROA compared to the prior quarters was primarily attributable to charges related to one partner relationship, including a valuation adjustment to the related credit enhancement asset and an increase in the provision for credit losses. ROA was also impacted by higher noninterest expense, including a loss on disposal of internally developed software and increased data processing and software license costs. See the "Provision for Credit Losses" and "Noninterest Expense" discussions below for additional information. Compared to the quarter ended March 31, 2026, yield on earning assets increased 0.27% while yield on loans receivable decreased by 0.02%. Average loans receivable as of June 30, 2026 increased $269.8 million compared to March 31, 2026 as net CCBX loans continue to grow, despite selling $4.56 billion in CCBX loans during the quarter ended June 30, 2026. Compared to the quarter ended June 30, 2025, yield on earning assets declined 0.28% and yield on loans receivable declined by 0.36%. Average loans receivable as of June 30, 2026 increased $580.6 million compared to June 30, 2025. The quarter over quarter volatility in the efficiency ratio and noninterest income to average asset performance metrics were driven by changes in the credit enhancement on CCBX loans, which is included within noninterest income, due to changes in CCBX provision expense. Although these items have historically been largely offsetting, a portion of the second quarter 2026 provision was not expected to be fully recovered under a partner indemnification arrangement, resulting in a net adverse impact on earnings. The quarter over quarter change in ROA and return on average equity are related to the expenses previously mentioned. The following table shows the Company’s key performance ratios for the periods indicated. (1)     Annualized calculations shown for quarterly periods presented.(2)     Includes loans held for sale. Second Quarter Conference Call The Company will host its second quarter conference call on July 30, 2026 at 8 a.m. ET (5 a.m. PT). A live webcast of the conference call, as well as a replay, will be available online on the Investor Relations section of the Company’s investor website at https://ir.coastalbank.com/ Q2 Earnings Call Webcast Link: Link to Earnings Call Coastal Financial Corporation Overview The Company has one main subsidiary, the Bank, which consists of three segments:  CCBX, the community bank and treasury & administration. The CCBX segment includes all of our BaaS activities, the community bank segment includes all community banking activities and the treasury & administration segment includes treasury management, overall administration and all other aspects of the Company. CCBX Performance Update Our CCBX segment continues to evolve, and we have 30 relationships, at varying stages, including one partner in testing, one in implementation/onboarding, three signed LOIs and three winding down as of June 30, 2026. We continue to focus on the composition of our partner portfolio by emphasizing relationships with well-established organizations that align with our long-term strategy, while continually evaluating our portfolio to ensure it reflects our risk and return objectives. As part of this disciplined approach, we remain focused on strengthening existing partnerships, thoughtfully expanding product offerings, and selectively adding new relationships that complement our platform and support sustainable growth. Our strategy is centered on building long-term partnerships and leveraging the scale of our existing relationships to drive continued growth while maintaining a strong focus on prudent risk management and operational excellence. Increased partner activity and transaction volumes are driving growth in noninterest income, a trend we expect to continue as existing products scale and new offerings are introduced. As part of our strategy to manage partner and lending limits, as well as overall portfolio composition and credit quality, we plan to continue selling loans. We also retain a portion of the fee income associated with processing transactions on sold credit card loans. This revenue stream continues to grow and is expected to provide ongoing income without adding balance sheet risk or capital requirements. As our deposit base grows, we expect to continue moving deposits on and off the balance sheet, subject to applicable agreements, to manage liquidity, FDIC insurance coverage, and deposit program operations. This deposit sweep capability allows us to better manage liquidity and deposit programs. At June 30, 2026 we swept off $4.26 billion in deposits for FDIC insurance and liquidity purposes, and generated $1.2 million in noninterest income during the quarter ended June 30, 2026, compared to $710,000 for the quarter ended March 31, 2026. During the quarter ended June 30, 2026, eight partner programs were in various stages of expansion to include additional products, such as lines of credit, deposit programs, asset backed credit cards, credit cards, and other lending products. The expansion of these and other partner initiatives is expected to drive higher partner revenue in upcoming periods. The following table illustrates the activity and evolution in CCBX relationships for the periods presented. CCBX loans increased $341.6 million, or 18.1%, to $2.23 billion despite selling $4.56 billion in loans during the three months ended June 30, 2026, $3.68 billion of which was new activity on previously sold credit card loans. The following table details the CCBX loan portfolio: (1)    CCBX yield does not include the impact of BaaS loan expense. BaaS loan expense represents the amount paid or payable to partners for credit enhancements and originating & servicing CCBX loans. See reconciliation of the non-GAAP measures at the end of this earnings release for the impact of BaaS loan expense on CCBX loan yield.(2)     Loan yield is annualized for the three months ended for each period presented and includes loans held for sale and nonaccrual loans. The increase in CCBX loans in the quarter ended June 30, 2026, includes an increase of $251.5 million, or 17.7%, in consumer and other loans, an increase of $58.8 million, or 22.1%, in residential real estate and an increase of $28.5 million, or 16.1%, in capital call lines as a result of normal balance fluctuations and business activities. We sold $4.56 billion in CCBX loans during the quarter ended June 30, 2026 compared to sales of $3.28 billion in the quarter ended March 31, 2026. We continue to manage CCBX credit and concentration levels in an effort to optimize our loan portfolio earnings and generate off-balance sheet fee income. CCBX loan yield decreased 0.45% for the quarter ended June 30, 2026 compared to the quarter ended March 31, 2026 due to a change in overall mix of loans compared to the quarter ended March 31, 2026. The following charts show the growth and quarter over quarter changes in credit card accounts that generate fee income. This includes accounts with balances, which are included in our loan totals, and accounts that have been sold and have no corresponding balance in our loan totals, both of which generate fee income. The following table details the CCBX deposit portfolio: (1)     Cost of deposits is annualized for the three months ended for each period presented. CCBX deposits reported on the balance sheet decreased $180.5 million, or 5.2%, in the three months ended June 30, 2026 to $3.29 billion. The decline was primarily attributable to increased use of off-balance sheet sweep arrangements and does not reflect a decline in underlying partner deposit activity. Deposits swept off-balance sheet for increased FDIC insurance coverage and liquidity purposes increased to $4.26 billion at June 30, 2026, compared to $2.81 billion for the quarter ended March 31, 2026, demonstrating continued growth in partner balances despite lower reported on-balance-sheet balances. Using third-party facilitator/vendor sweep products, amounts in excess of FDIC insurance coverage are swept off-balance sheet to participating financial institutions. Community Bank Performance Update In the quarter ended June 30, 2026, the community bank saw net loans increase $7.3 million, or 0.4%, to $1.98 billion, as a result of loan originations and normal balance fluctuations. The following table details the community bank loan portfolio: (1)     Loan yield is annualized for the three months ended for each period presented and includes loans held for sale and nonaccrual loans. The increase in community bank loans consisted of an increase of $19.3 million in commercial real estate loans, an increase of $1.6 million in commercial and industrial loans and an increase of $345,000 in residential real estate loans, partially offset by a decrease of $13.3 million in construction, land and land development loans, and $827,000 in consumer and other loans during the quarter ended June 30, 2026. The following table details the community bank deposit portfolio: (1)     Cost of deposits is annualized for the three months ended for each period presented. Community bank deposits increased $1.2 million, or 0.1%, during the three months ended June 30, 2026 to $1.57 billion as a result of normal growth and balance fluctuations. The community bank segment includes noninterest bearing deposits of $502.8 million, or 31.9%, of total community bank deposits, resulting in a cost of deposits of 1.46%, which is unchanged from the quarter ended March 31, 2026. Net Interest Income and Margin Discussion Net interest income was $89.4 million for the quarter ended June 30, 2026, an increase of $6.0 million, or 7.2%, from $83.4 million for the quarter ended March 31, 2026, and an increase of $12.6 million, or 16.4%, from $76.7 million for the quarter ended June 30, 2025. Net interest income compared to March 31, 2026 and June 30, 2025 was higher due to interest on loans due to an increase in average loans receivable partially offset by a decrease in interest on interest earning deposits with other banks due to lower average balances. Net interest margin was 7.27% for the three months ended June 30, 2026, compared to 7.00% for the three months ended March 31, 2026 and 7.06% for the three months ended June 30, 2025. The increase in net interest margin for the three months ended June 30, 2026 compared to the three months ended March 31, 2026 was primarily driven by a higher proportion of interest-earning assets invested in loans rather than interest-bearing deposits with other banks. Net interest margin, net of BaaS loan expense, (a reconciliation of the non-GAAP measures are set forth in the Non-GAAP Financial Measures section of this earnings release) was 3.98% for the three months ended June 30, 2026, compared to 3.90% for the three months ended March 31, 2026 and 4.07% for the three months ended June 30, 2025. The quarter-over-quarter increase in net interest margin, net of BaaS loan expense, was also primarily driven by a higher proportion of interest-earning assets invested in loans rather than interest-bearing deposits with other banks. Interest and fees on loans receivable increased $8.2 million, or 8.0%, to $111.1 million for the three months ended June 30, 2026, compared to $102.9 million for the three months ended March 31, 2026, as a result of an increase in loans receivable. Interest and fees on loans receivable increased $12.2 million, or 12.4%, compared to $98.9 million for the three months ended June 30, 2025, due to loan growth, partially offset by a decrease in loan yield. The following table illustrates how net interest margin and loan yield is affected by BaaS loan expense: (1)  Annualized calculations shown for periods presented.(2)  A reconciliation of the non-GAAP measures are set forth at the end of this earnings release. Average investment securities decreased $1.6 million to $45.8 million compared to the three months ended March 31, 2026 as a result of maturities and principal paydowns, and decreased $482,000 compared to the three months ended June 30, 2025. Cost of funds was 2.62% for the quarter ended June 30, 2026, an increase of three basis points from the quarter ended March 31, 2026 and a decrease of 51 basis points from the quarter ended June 30, 2025. Cost of deposits for the quarter ended June 30, 2026 was 2.57%, compared to 2.56% for the quarter ended March 31, 2026, and 3.10% for the quarter ended June 30, 2025. The decreased cost of funds and deposits compared to June 30, 2025 was largely due to the reductions in the Fed funds rate in 2025. The following table summarizes the average yield on loans receivable and cost of deposits: (1)     CCBX yield on loans does not include the impact of BaaS loan expense. BaaS loan expense represents the amount paid or payable to partners for credit and fraud enhancements and originating & servicing CCBX loans. To determine Net BaaS loan income earned from CCBX loan relationships, the Company takes BaaS loan interest income and deducts BaaS loan expense to arrive at Net BaaS loan income, which can be compared to interest income on the Company’s community bank loans. See reconciliation of the non-GAAP measures at the end of this earnings release for the impact of BaaS loan expense on CCBX loan yield.(2)     Annualized calculations for periods presented. The following table illustrates how BaaS loan interest income is affected by BaaS loan expense resulting in net BaaS loan income and the associated yield: (1)  A reconciliation of the non-GAAP measures are set forth at the end of this earnings release.(2)  Annualized calculations shown for the periods presented.(3)  Includes loans held for sale. Noninterest Income Discussion Noninterest income was $88.7 million for the three months ended June 30, 2026, an increase of $22.6 million from $66.1 million for the three months ended March 31, 2026, and an increase of $46.0 million from $42.7 million for the three months ended June 30, 2025. The increase in noninterest income for the quarter ended June 30, 2026 as compared to the quarter ended March 31, 2026 was primarily due to a $20.0 million increase in BaaS credit enhancements related to the increase in provision for credit losses based upon an analysis of the CCBX loan portfolio, a $1.3 million increase in BaaS fraud enhancements, and an increase of $1.1 million in BaaS program income (see “Appendix B” for more information on the accounting for BaaS allowance for credit losses and credit and fraud enhancements). The $46.0 million increase in noninterest income over the quarter ended June 30, 2025 was primarily due to a $41.0 million increase in BaaS credit and fraud enhancements due primarily to loan growth in the CCBX loan portfolio and an increase of $4.4 million in BaaS program income. Noninterest Expense Discussion Total noninterest expense increased $57.7 million to $141.1 million for the three months ended June 30, 2026, compared to $83.5 million for the three months ended March 31, 2026, and increased $68.3 million from $72.8 million for the three months ended June 30, 2025. The $57.7 million increase in noninterest expense for the quarter ended June 30, 2026, as compared to the quarter ended March 31, 2026, was primarily due to a $46.0 million credit enhancement receivable valuation adjustment related to the assessment of collectability for one CCBX partner, a $6.7 million increase in data processing and software licenses and a $451,000 increase in salaries and employee benefits, partially offset by an $805,000 decrease in legal and professional fees. Also contributing to the variance is a $3.5 million increase in BaaS loan expense, and a $1.3 million increase in BaaS fraud expense. BaaS loan expense represents the amount paid or payable to partners for credit enhancements and originating & servicing CCBX loans. BaaS fraud expense represents non-credit fraud losses on partner’s customer loan and deposit accounts. A portion of this expense is realized during the quarter in which the loss occurs, and a portion is estimated based on historical or other information from our partners.  Data processing and software license costs increased due to continued investments in growth, technology and risk management and included a $4.4 million impact from revising the estimated useful life of certain software assets to reflect their abandonment as they are replaced with the technology modernization initiatives. The $68.3 million increase in noninterest expenses for the quarter ended June 30, 2026 compared to the quarter ended June 30, 2025 was largely due to a $46.0 million credit enhancement receivable valuation adjustment, $8.8 million increase in data processing and software licenses due to enhancements and investments in technology and a $2.2 million increase in salaries and employee benefits. Also contributing to the variance is a $7.9 million increase in BaaS loan expense and a $1.5 million increase in BaaS fraud expense. Certain operating expenses associated with CCBX programs are reimbursed by our CCBX partners. In accordance with GAAP we recognize all expenses in noninterest expense and the reimbursement of expenses from our CCBX partners in noninterest income. The following table reflects the portion of noninterest expenses that are reimbursed by partners to assist in understanding how the increases in noninterest expense are related to expenses incurred and reimbursed by CCBX partners: (1) A reconciliation of the non-GAAP measures are set forth at the end of this earnings release. Provision for Income Taxes The provision for income taxes reflected a benefit of  $13.1 million for the three months ended June 30, 2026, compared to tax expense of $2.6 million for the three months ended March 31, 2026 and $3.4 million for the three months ended June 30, 2025. The tax benefit recognized during the three months ended June 30, 2026 was primarily attributable to the pre-tax loss incurred during the period, while differences between periods also reflect changes in the taxability of certain equity awards. As CCBX activities and employee presence expand into additional states, the Company becomes subject to additional state tax jurisdictions, which has increased the overall tax rate used in calculating the provision for income taxes. The Company uses a federal statutory tax rate of 21.0% as a basis for calculating provision for federal income taxes and 5.14% for calculating the provision for state income taxes. Financial Condition Overview Total assets decreased $207.7 million, or 3.7%, to $5.46 billion at June 30, 2026 compared to $5.66 billion at March 31, 2026. The decrease is primarily comprised of a $482.4 million decrease in interest earning deposits with other banks and a $16.2 million decrease in loans held for sale, partially offset by a $348.9 million increase in loans receivable. As of June 30, 2026, in addition to the $1.01 billion in cash on hand, the Company had borrowing capacity of up to a total of $865.6 million from the Federal Reserve Bank discount window and Federal Home Loan Bank, plus an additional $250.0 million available under credit facilities with banker's banks. There were no borrowings outstanding on these lines as of June 30, 2026. The Company, on a stand alone basis, had a cash balance of $40.2 million as of June 30, 2026, a portion of which is retained for general operating purposes, including debt repayment, and for funding $917,000 in commitments to bank technology investment funds, with the remaining cash available to be contributed to the Bank as capital. Uninsured deposits were estimated at $1.35 billion as of June 30, 2026, compared to $1.77 billion as of March 31, 2026.  While uninsured deposits decreased from the prior quarter, they are expected to remain above historical levels due to the composition and timing of certain partner deposit balances, including the periodic use of sweep arrangements. Total shareholders’ equity as of June 30, 2026 decreased $40.3 million since March 31, 2026. The decrease in shareholders’ equity was primarily comprised of $42.1 million in net losses partially offset by an increase of $1.8 million in common stock outstanding as a result of equity awards vested and exercised during the three months ended June 30, 2026. The Company and the Bank remained well capitalized at June 30, 2026, as summarized in the following table. (1)    Presents the minimum capital ratios for an insured depository institution, such as the Bank, to be considered well capitalized under the Prompt Corrective Action framework. The minimum requirements for the Company to be considered well capitalized under Regulation Y include to maintain, on a consolidated basis, a total risk-based capital ratio of 10.0 percent or greater and a tier 1 risk-based capital ratio of 6.0 percent or greater. Asset Quality The allowance for credit losses was $213.7 million and 5.08% of loans receivable at June 30, 2026 compared to $172.4 million and 4.47% at March 31, 2026 and $164.8 million and 4.65% at June 30, 2025. The allowance for credit loss allocated to the CCBX portfolio was $198.0 million and 8.90% of CCBX loans receivable at June 30, 2026, with $15.7 million of allowance for credit loss allocated to the community bank, or 0.79% of total community bank loans receivable. The following table details the allocation of the allowance for credit loss as of the period indicated: Net charge-offs totaled $50.6 million for the quarter ended June 30, 2026, compared to $49.6 million for the quarter ended March 31, 2026 and $49.3 million for the quarter ended June 30, 2025. Net charge-offs as a percent of average loans decreased to 4.90% for the quarter ended June 30, 2026 compared to 5.18% for the quarter ended March 31, 2026, and 5.54% for the quarter ended June 30, 2025. Under one partner program, the Company retains ownership of approximately 5% of a $350.8 million loan portfolio and retains the provision for credit losses for that portfolio. At June 30, 2026, our retained exposure totaled $23.4 million in loans. Net charge-offs for this $23.4 million in loans were $1.0 million for the three months ended June 30, 2026, $1.0 million for the three months ended March 31, 2026 and $1.3 million for the three months ended June 30, 2025. The following table details net charge-offs for the community bank and CCBX for the period indicated: (1)  Annualized calculations shown for periods presented. During the quarter ended June 30, 2026, a $94.3 million provision for credit losses was recorded for CCBX partner loans, compared to $52.6 million for the quarter ended March 31, 2026. The increase in the provision for credit losses compared to the prior quarter was primarily driven by loan growth, changes in the composition of the loan portfolio and the establishment of a $22.8 million specific provision related to one partner relationship for credit losses not expected to be fully recovered under the partner's indemnification arrangement following an individual assessment of collectability, bringing the CCBX allowance for credit losses to $198.0 million at June 30, 2026 compared to $154.3 million at March 31, 2026. In general, CCBX loans have a higher level of expected losses than our community bank loans, which is reflected in the factors for the allowance for credit losses. In accordance with accounting guidance, we estimate and record a provision for expected losses for these CCBX loans and reclassified negative deposit accounts, with expected losses reflected in the allowance for credit losses. When provision expense is recognized for CCBX credit losses and unfunded commitments that are subject to partner indemnification, we also record a credit enhancement asset through noninterest income (BaaS credit enhancements) representing amounts contractually due under the applicable partner agreements. We evaluate the collectability of the credit enhancement asset each reporting period and record a valuation adjustment when collection of all or a portion of the asset is no longer considered probable. The credit enhancement asset is reduced as indemnification payments are received from CCBX partners. Management regularly evaluates and manages counterparty risk associated with its CCBX partners, as the Bank could incur additional credit losses to the extent a partner is unable to fulfill its contractual obligations. The factors used in management’s analysis for community bank credit losses indicated that a provision recapture of $2.2 million was needed for the quarter ended June 30, 2026 compared to a provision recapture of $1.4 million and $47,000 for the quarters ended March 31, 2026 and June 30, 2025, respectively. The provision recapture in the current period was due to a decrease in weighted average life of the construction, land and land development  portfolio and an improvement in the overall mix of the portfolio. The following table details the provision expense/(recapture) for the community bank and CCBX for the period indicated: Included in provision expense was a $213,000 provision for unfunded commitments, recorded primarily due to higher loss rates on certain CCBX loans. At June 30, 2026, our nonperforming assets were $75.2 million, or 1.38%, of total assets, compared to $67.6 million, or 1.19%, of total assets, at March 31, 2026, and $60.9 million, or 1.36%, of total assets, at June 30, 2025. These ratios are impacted by nonperforming CCBX loans that are covered by CCBX partner credit enhancements. As of June 30, 2026, $67.0 million of the $69.0 million in nonperforming CCBX loans were covered by CCBX partner credit enhancements described above. Additionally, certain CCBX partners employ collection practices that place specific loans on nonaccrual status to enhance collectability. As of June 30, 2026, $24.6 million of these loans are less than 90 days past due. Nonperforming assets increased $7.5 million during the quarter ended June 30, 2026, compared to the quarter ended March 31, 2026. Community bank nonperforming loans increased $1.4 million from March 31, 2026 to $6.2 million as of June 30, 2026. CCBX nonperforming loans increased $6.2 million to $69.0 million from March 31, 2026. The increase in CCBX nonperforming loans is due to an increase of $2.9 million in nonaccrual loans from March 31, 2026 to $30.5 million, combined with a $3.3 million increase in CCBX loans that are past due 90 days or more and still accruing interest. As a result of the type of loans (primarily consumer loans) originated through our CCBX partners, we would typically anticipate that balances 90 days past due or more and still accruing will generally increase as those loan portfolios grow. Consumer loans originated through CCBX lending partners may continue to accrue interest beyond 90 days past due. Installment (closed-end) loans generally continue to accrue until 120 past due while revolving (open-end) loans generally continue to accrue until 180 days past due. There were no repossessed assets or other real estate owned at June 30, 2026. Our nonperforming loans to loans receivable ratio was 1.79% at June 30, 2026, compared to 1.75% at March 31, 2026 and 1.72% at June 30, 2025. The following table details the Company’s nonperforming assets for the periods indicated. The following tables detail the CCBX and community bank nonperforming assets, which are included in the total nonperforming assets table above. Negative deposit account balances are reclassified as loans for financial reporting purposes and are included in the Company's allowance for credit losses under its CECL methodology. Because these balances do not accrue interest, they are not included in nonaccrual loans. Management monitors the aging, collectability and expected credit losses associated with these balances as part of its ongoing credit risk management process. At June 30, 2026, reclassified negative deposit accounts outstanding for more than 90 days totaled $22.8 million. About Coastal Financial Coastal Financial Corporation (Nasdaq: CCB) (the “Company”), is an Everett, Washington based bank holding company whose wholly owned subsidiaries are Coastal Community Bank (“Bank”) and Arlington Olympic LLC.  The $5.46 billion Bank provides service through 14 full-service branches in Snohomish, Island and King Counties, one loan production office in King County, the Internet and its mobile banking application. The Bank provides banking as a service to digital financial service providers, companies and brands that want to provide financial services to their customers through the Bank's CCBX segment. To learn more about the Company visit www.coastalbank.com. CCB-ER Contact Eric Sprink, Chief Executive Officer, [email protected] J. Soto, Executive Vice President & Chief Financial Officer, [email protected] Forward-Looking StatementsThis earnings release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. Any statements about our management’s expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through the use of words or phrases such as “anticipate,” “believes,” “can,” “could,” “may,” “predicts,” “potential,” “should,” “will,” “estimate,” “plans,” “projects,” “continuing,” “ongoing,” “expects,” “intends” and similar words or phrases. Any or all of the forward-looking statements in this earnings release may turn out to be inaccurate. The inclusion of or reference to forward-looking information in this earnings release should not be regarded as a representation by us or any other person that the future plans, estimates or expectations contemplated by us will be achieved. We have based these forward looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. Our actual results could differ materially from those anticipated in such forward-looking statements as a result of risks, uncertainties and assumptions that are difficult to predict. Factors that could cause actual results to differ materially from those in the forward-looking statements include, without limitation, our ability to effectively evaluate and manage counterparty risk associated with CCBX partners and the risk that the conflicts in the Middle East and/or changes in U.S. trade policies, including the imposition of tariffs and retaliatory tariffs, may adversely impact our business, financial condition, and results of operations and those other risks and uncertainties discussed under “Risk Factors” in our Annual Report on Form 10-K for the most recent period filed and in any of our subsequent filings with the Securities and Exchange Commission. If one or more events related to these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may differ materially from what we anticipate. You are cautioned not to place undue reliance on forward-looking statements. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update or revise any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events, except as required by law. COASTAL FINANCIAL CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION(Dollars in thousands; unaudited) COASTAL FINANCIAL CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF INCOME(Dollars in thousands, except per share amounts; unaudited) COASTAL FINANCIAL CORPORATIONAVERAGE BALANCES, YIELDS, AND RATES – QUARTERLY(Dollars in thousands; unaudited) (1)     Yields and costs are annualized.(2)     For presentation in this table, average balances and the corresponding average rates for investment securities are based upon historical cost, adjusted for amortization of premiums and accretion of discounts.(3)     Includes loans held for sale and nonaccrual loans.(4)     Net interest margin represents net interest income divided by the average total interest earning assets. COASTAL FINANCIAL CORPORATIONSELECTED AVERAGE BALANCES, YIELDS, AND RATES – BY SEGMENT - QUARTERLY(Dollars in thousands; unaudited) (1)        Yields and costs are annualized.(2)        Includes loans held for sale and nonaccrual loans.(3)        Net interest margin represents net interest income divided by the average total interest earning assets. (4)        CCBX yield does not include the impact of BaaS loan expense. BaaS loan expense represents the amount paid or payable to partners for credit enhancements, fraud enhancements and originating & servicing CCBX loans. See reconciliation of the non-GAAP measures at the end of this earnings release for the impact of BaaS loan expense on CCBX loan yield.(5)        Net interest margin, net of BaaS loan expense, includes the impact of BaaS loan expense. BaaS loan expense represents the amount paid or payable to partners for credit enhancements, fraud enhancements, originating & servicing CCBX loans. See reconciliation of the non-GAAP measures at the end of this earnings release.(6)        For presentation in this table, average balances and the corresponding average rates for investment securities are based upon historical cost, adjusted for amortization of premiums and accretion of discounts. (7)        Intrabank assets and liabilities are consolidated for period calculations and presented as intrabank asset, net or intrabank liability, net in the table above. Non-GAAP Financial Measures The Company uses certain non-GAAP financial measures to provide meaningful supplemental information regarding the Company’s operational performance and to enhance investors’ overall understanding of financial performance. However, these non-GAAP financial measures are supplemental and are not a substitute for an analysis based on GAAP measures. As other companies may use different calculations for these adjusted measures, this presentation may not be comparable to other similarly titled adjusted measures reported by other companies. The following non-GAAP measures are presented to illustrate the impact of BaaS loan expense on net loan income and yield on loans and CCBX loans and the impact of BaaS loan expense on net interest income and net interest margin. Loan income, net of BaaS loan expense, divided by average loans, is a non-GAAP measure that includes the impact of BaaS loan expense on loan income and the yield on loans. The most directly comparable GAAP measure is yield on loans. Net BaaS loan income divided by average CCBX loans is a non-GAAP measure that includes the impact of BaaS loan expense on net BaaS loan income and the yield on CCBX loans. The most directly comparable GAAP measure is yield on CCBX loans. Net interest income, net of BaaS loan expense, is a non-GAAP measure that includes the impact of BaaS loan expense on net interest income. The most directly comparable GAAP measure is net interest income. CCBX net interest margin, net of BaaS loan expense, is a non-GAAP measure that includes the impact of BaaS loan expense on net interest rate margin. The most directly comparable GAAP measure is CCBX net interest margin. Reconciliations of the GAAP and non-GAAP measures are presented below. (1) Annualized calculations for periods presented. The following non-GAAP measure is presented to illustrate the impact of BaaS loan expense, BaaS fraud expense and reimbursement of expenses (BaaS) on noninterest expense. Certain noninterest expenses are reimbursed by our CCBX partners. In accordance with GAAP we recognize all expenses in noninterest expense and the reimbursement of expenses from our CCBX partners in noninterest income. This non-GAAP measure is intended to help investors distinguish between noninterest expenses borne by the Company and those incurred for, and reimbursed by, CCBX partners.The most comparable GAAP measure is noninterest expense. The following non-GAAP measure is presented to illustrate the impact of intangible assets on book value per share. We calculate tangible book value per share as total shareholders’ equity at the end of the relevant period, less goodwill and other intangible assets, divided by the outstanding number of our common shares at the end of each period. The most directly comparable GAAP financial measure is book value per share. APPENDIX AAs of June 30, 2026 Industry Concentration We have a diversified loan portfolio, representing a wide variety of industries. Our major categories of loans are commercial real estate, consumer and other loans, residential real estate, commercial and industrial, and construction, land and land development loans. Together they represent $4.22 billion in outstanding loan balances. When combined with $2.82 billion in unused commitments, the total of these categories is $7.03 billion. Commercial real estate loans represent the largest segment of our loans, comprising 31.3% of our total balance of outstanding loans as of June 30, 2026. Unused commitments to extend credit represents an additional $38.6 million, and the combined total in commercial real estate loans represents $1.36 billion, or 19.3% of our total outstanding loans and loan commitments. The following table summarizes our loan commitments by industry for our commercial real estate portfolio as of June 30, 2026: Consumer loans comprise 39.9% of our total balance of outstanding loans as of June 30, 2026. Unused commitments to extend credit represents an additional $1.20 billion, and the combined total in consumer and other loans represents $2.89 billion, or 41.0% of our total outstanding loans and loan commitments. The $1.20 billion in commitments is subject to CCBX partner/portfolio maximum limits. As illustrated in the table below, our CCBX partners bring in a large number of mostly smaller dollar loans, resulting in an average consumer loan balance of just $500. CCBX consumer loans are underwritten to CCBX credit standards, and underwriting of these loans is regularly tested, including quarterly testing for partners with the largest exposures. The following table summarizes our loan commitments by industry for our consumer and other loan portfolio as of June 30, 2026: (1)     Total exposure on CCBX loans is subject to CCBX partner/portfolio maximum limits. Residential real estate loans comprise 12.4% of our total balance of outstanding loans as of June 30, 2026. Unused commitments to extend credit represents an additional $785.7 million, which is subject to partner/portfolio maximum limits, and the combined total in residential real estate loans represents $1.31 billion, or 18.6% of our total outstanding loans and loan commitments. The following table summarizes our loan commitments by industry for our residential real estate loan portfolio as of June 30, 2026: (1)     Total exposure on CCBX loans is subject to CCBX partner/portfolio maximum limits. Commercial and industrial loans comprise 11.1% of our total balance of outstanding loans as of June 30, 2026. Unused commitments to extend credit represents an additional $713.8 million, and the combined total in commercial and industrial loans represents $1.18 billion, or 16.8% of our total outstanding loans and loan commitments. Included in commercial and industrial loans is $204.8 million in outstanding capital call lines, with an additional $591.0 million in available loan commitments, which is limited to a $350.0 million portfolio maximum. Capital call lines are provided to venture capital firms through one of our CCBX BaaS clients. These loans are secured by the capital call rights and are individually underwritten to the Bank’s credit standards, and the underwriting is reviewed by the Bank on every capital call line. The following table summarizes our loan commitment by industry for our commercial and industrial loan portfolio as of June 30, 2026: (1) Total exposure on CCBX loans is subject to CCBX partner/portfolio maximum limits. Construction, land and land development loans comprise 5.3% of our total balance of outstanding loans as of June 30, 2026. Unused commitments to extend credit represent an additional $75.3 million, and the combined total in construction, land and land development loans represents $296.8 million, or 4.2% of our total outstanding loans and loan commitments. The following table details our loan commitment for our construction, land and land development portfolio as of June 30, 2026: Exposure and risk in our construction, land and land development portfolio increased compared to recent periods as indicated in the following table: Commitments to extend credit for on-balance sheet loans total $2.82 billion at June 30, 2026, however we do not anticipate our customers using the $2.82 billion that is showing as available due to CCBX partner and portfolio limits. As of June 30, 2026, commitments associated with sold credit card receivables subject to receivable sale agreements totaled $6.15 billion. While we retain the customer account relationship, receivables generated under these programs are periodically sold to BaaS partners pursuant to the applicable receivable sale agreements and remain subject to the Company's established partner and portfolio limits. The following table presents commitments associated with outstanding commitments to extend credit for on-balance sheet loans, CCBX sold credit card receivable commitments, standby and commercial letters of credit and equity investment commitments as of June 30, 2026: (1)     Total exposure on CCBX loans is subject to CCBX partner/portfolio maximum limits. We have portfolio limits with each of our partners to manage loan concentration risk, liquidity risk and counterparty partner risk. For example, as of June 30, 2026, capital call lines outstanding balance totaled $204.8 million, and while commitments totaled $591.0 million the commitments are cancelable, and are also limited to a maximum of $350.0 million by agreement with the partner. These limits allow us to manage portfolio concentrations with partners and by loan type. See the table below for CCBX portfolio maximums and related available commitments for on-balance sheet loans: (1)  Remaining commitment available, net of outstanding balance.(2)  These home equity lines of credit are secured by residential real estate and are accessed by using a credit card, but are classified as 1-4 family residential properties per regulatory guidelines. APPENDIX BAs of June 30, 2026 CCBX – BaaS Reporting Information During the quarter ended June 30, 2026, $70.7 million was recorded in BaaS credit enhancements related to the provision for credit losses - loans and reserve for unfunded commitments for CCBX partner loans and negative deposit accounts. Agreements with our CCBX partners provide a credit enhancement under which the partner indemnifies or reimburses the Bank for covered credit losses on loans, unfunded commitments and negative deposit accounts. In accordance with U.S. GAAP, we estimate expected credit losses on these exposures and record the related provision for credit losses and reserve for unfunded commitments. Concurrently, a credit enhancement asset is recognized through noninterest income (BaaS credit enhancements) representing the expected reimbursement from the partner. The collectability of the credit enhancement asset is evaluated each reporting period and a valuation adjustment is recorded when collection of all or a portion of the asset is no longer considered probable. The credit enhancement asset is relieved as credit enhancement payments and recoveries are received from the CCBX partner or taken from the partner's cash reserve account. Management regularly evaluates and manages counterparty risk associated with its CCBX partners, as the Bank could incur additional credit losses to the extent a partner is unable to fulfill its contractual obligations. Agreements with our CCBX partners also provide protection to the Bank from fraud by indemnifying or reimbursing covered fraud losses. BaaS fraud includes non-credit fraud losses on loans and deposits originated through partners. Generally fraud losses related to loans are comprised primarily of first payment defaults. Fraud losses are recorded when incurred as losses in noninterest expense, and the enhancement received from the CCBX partner is recorded in noninterest income, resulting in a net impact of zero to the income statement. Many CCBX partners also pledge a cash reserve account at the Bank, which the Bank can collect from when losses occur that is then replenished by the partner on a regular interval. Although agreements with our CCBX partners provide for credit enhancements that provide protection to the Bank from credit and fraud losses if our partner is unable to fulfill their contractual obligation and if the cash flows on the loans were not sufficient to fund the reimbursement of loan losses, then the Bank would be exposed to additional loan and deposit losses as a result of this counterparty risk. If a CCBX partner does not replenish their cash reserve account, the Bank may consider an alternative plan for funding the cash reserve. This may involve the possibility of adjusting the funding amounts or timelines to better align with the partner's specific situation. If a mutually agreeable funding plan is not agreed to, the Bank could declare the agreement in default, take over servicing and cease paying the partner for servicing the loan and providing credit enhancements. In the event of a partner default, the Bank would evaluate any remaining credit enhancement asset associated with that partner to determine whether a write-off is appropriate. If a write-off occurs, the Bank would stop payments to the CCBX partner and retain the full yield and any fee income on the loan portfolio going forward, decreasing our BaaS loan expense. The Bank records contractual interest earned from the borrowers on CCBX partner loans in interest income, adjusted for origination costs, which are paid or payable to the CCBX partners. BaaS loan expense represents the amount paid or payable to partners for credit and fraud enhancements and originating & servicing CCBX loans. To determine net revenue (Net BaaS loan income) earned from CCBX loan relationships, the Bank takes BaaS loan interest income and deducts BaaS loan expense to arrive at Net BaaS loan income (a reconciliation of the non-GAAP measures are set forth in the preceding section of this earnings release) which can be compared to interest income on the Company’s community bank loans. The following table illustrates how CCBX partner loan income and expenses are recorded in the financial statements: (1)  Annualized calculation for quarterly periods shown.(2)  A reconciliation of the non-GAAP measures are set forth in the preceding section of this earnings release. An increase in average loans receivable resulted in increased interest income and net BaaS loan income on CCBX loans during the quarter ended June 30, 2026 compared to the quarter ended March 31, 2026. Our strategy is to optimize the CCBX loan portfolio and strengthen our balance sheet through originating higher quality new loans with enhanced credit standards. These higher quality loans tend to have lower stated rates and expected losses than some of our CCBX loans historically. We continue to manage CCBX credit and concentration levels in an effort to optimize our loan portfolio and also generate off-balance sheet fee income. Growth in CCBX loans has resulted in an increase in interest income for the quarter ended June 30, 2026 compared to the quarter ended June 30, 2025, as well as an increase in net BaaS loan income. The following tables are a summary of the interest components, direct fees and expenses of BaaS for the periods indicated and are not inclusive of all income and expense related to BaaS. Servicing and other BaaS fees increased $294,000, and transaction and interchange fees increased $963,000 in the quarter ended June 30, 2026 compared to the quarter ended March 31, 2026. We expect servicing and other BaaS fees to be higher when bringing on new partners and then to decrease when transaction and interchange fees increase as partner activity grows and these recurring fees exceed contracted minimum fees. Increases in BaaS reimbursement of fees offset increases in noninterest expense from BaaS expenses covered by CCBX partners. Graphs accompanying this announcement are available at: https://www.globenewswire.com/NewsRoom/AttachmentNg/7a4770de-cdc4-4caf-854d-8ecc8b5847a9 https://www.globenewswire.com/NewsRoom/AttachmentNg/8037cf48-be34-46ea-994f-246cc24f58ae

First Northwest Bancorp (FNWB) came out with quarterly earnings of $0.03 per share, beating the Zacks Consensus Estimate of $0.01 per share. This compares to earnings of $0.42 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +200.00%. A quarter ago, it was expected that this company would post earnings of $0.03 per share when it actually produced break-even earnings, delivering a surprise of -100%. Over the last four quarters, the company has surpassed consensus EPS estimates just once. First Northwest Bancorp, which belongs to the Zacks Banks - West industry, posted revenues of $16.18 million for the quarter ended June 2026, missing the Zacks Consensus Estimate by 5.39%. This compares to year-ago revenues of $16.36 million. The company has topped consensus revenue estimates just once over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. First Northwest Bancorp shares have added about 25.7% since the beginning of the year versus the S&P 500's gain of 8.5%. While First Northwest Bancorp has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for First Northwest Bancorp was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.07 on $17.5 million in revenues for the coming quarter and $0.20 on $68.7 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Banks - West is currently in the top 29% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, Coastal Financial Corporation (CCB), has yet to report results for the quarter ended June 2026. The results are expected to be released on July 30. This company is expected to post quarterly earnings of $0.95 per share in its upcoming report, which represents a year-over-year change of +33.8%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Coastal Financial Corporation's revenues are expected to be $162.7 million, up 36.2% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report First Northwest Bancorp (FNWB) : Free Stock Analysis Report Coastal Financial Corporation (CCB) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Columbia Banking (COLB) came out with quarterly earnings of $0.76 per share, beating the Zacks Consensus Estimate of $0.73 per share. This compares to earnings of $0.76 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +4.11%. A quarter ago, it was expected that this bank holding company would post earnings of $0.68 per share when it actually produced earnings of $0.72, delivering a surprise of +5.88%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Columbia Banking, which belongs to the Zacks Banks - West industry, posted revenues of $677 million for the quarter ended June 2026, missing the Zacks Consensus Estimate by 1.66%. This compares to year-ago revenues of $510.91 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Columbia Banking shares have added about 16.7% since the beginning of the year versus the S&P 500's gain of 9.6%. While Columbia Banking has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Columbia Banking was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.78 on $701.22 million in revenues for the coming quarter and $3.05 on $2.78 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Banks - West is currently in the top 20% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, Coastal Financial Corporation (CCB), is yet to report results for the quarter ended June 2026. This company is expected to post quarterly earnings of $0.95 per share in its upcoming report, which represents a year-over-year change of +33.8%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Coastal Financial Corporation's revenues are expected to be $162.7 million, up 36.2% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Columbia Banking System, Inc. (COLB) : Free Stock Analysis Report Coastal Financial Corporation (CCB) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Five Star Bancorp (FSBC) came out with quarterly earnings of $0.91 per share, beating the Zacks Consensus Estimate of $0.87 per share. This compares to earnings of $0.68 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +4.60%. A quarter ago, it was expected that this company would post earnings of $0.8 per share when it actually produced earnings of $0.87, delivering a surprise of +8.75%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Five Star Bancorp, which belongs to the Zacks Banks - West industry, posted revenues of $47.96 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 1.49%. This compares to year-ago revenues of $38.33 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Five Star Bancorp shares have added about 37.9% since the beginning of the year versus the S&P 500's gain of 9.7%. While Five Star Bancorp has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Five Star Bancorp was favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.89 on $49 million in revenues for the coming quarter and $3.58 on $192 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Banks - West is currently in the top 19% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, Coastal Financial Corporation (CCB), is yet to report results for the quarter ended June 2026. This company is expected to post quarterly earnings of $0.95 per share in its upcoming report, which represents a year-over-year change of +33.8%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Coastal Financial Corporation's revenues are expected to be $162.7 million, up 36.2% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Five Star Bancorp (FSBC) : Free Stock Analysis Report Coastal Financial Corporation (CCB) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Wrapping up Q1 earnings, we look at the numbers and key takeaways for the regional banks stocks, including Coastal Financial (NASDAQ:CCB) and its peers. Regional banks, financial institutions operating within specific geographic areas, serve as intermediaries between local depositors and borrowers. They benefit from rising interest rates that improve net interest margins (the difference between loan yields and deposit costs), digital transformation reducing operational expenses, and local economic growth driving loan demand. However, these banks face headwinds from fintech competition, deposit outflows to higher-yielding alternatives, credit deterioration (increasing loan defaults) during economic slowdowns, and regulatory compliance costs. Recent concerns about regional bank stability following high-profile failures and significant commercial real estate exposure present additional challenges. The 91 regional banks stocks we track reported a slower Q1. As a group, revenues were in line with analysts’ consensus estimates. In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results. Pioneering the intersection of traditional banking and financial technology in the Pacific Northwest, Coastal Financial (NASDAQ:CCB) operates as a bank holding company that provides traditional banking services and Banking-as-a-Service (BaaS) solutions to consumers and businesses. Coastal Financial reported revenues of $121.3 million, up 9.1% year on year. This print fell short of analysts’ expectations by 9.9%. Overall, it was a softer quarter for the company with a significant miss of analysts’ revenue and EPS estimates. "During the first quarter of 2026, total assets increased $922.4 million, or 19.5%, to $5.66 billion at March 31, 2026 compared to $4.74 billion at December 31, 2025, deposits grew by $897.0 million, or 21.6% and loans receivable increased by $109.8 million, representing a 2.9% rise, marking another period of solid growth. Our CCBX segment continued to expand product offerings with existing partners during the quarter, while advancing new partners through onboarding toward launch and active status in alignment with our long-term strategy. We expect growth to continue as current programs scale, new products are introduced, and we leverage our experience in the BaaS space to support disciplined, sustainable expansion,” stated CEO Eric Sprink. Unsurprisingly, the stock is down 18.5% since reporting and currently trades at $70.63. Is now the time to buy Coastal Financial? Access our full analysis of the earnings results here, it’s free. With roots dating back to 1913 and a name derived from "United Missouri Bank," UMB Financial (NASDAQ:UMBF) is a financial holding company that provides banking, asset management, and fund services to commercial, institutional, and individual customers. UMB Financial reported revenues of $744.8 million, up 29.3% year on year, outperforming analysts’ expectations by 5.4%. The business had an exceptional quarter with a beat of analysts’ EPS and net interest income estimates. UMB Financial pulled off the biggest analyst estimate beat among its peers. The market seems content with the results as the stock is up 3.1% since reporting. It currently trades at $129.19. Is now the time to buy UMB Financial? Access our full analysis of the earnings results here, it’s free. Born from the ashes of a failed Florida thrift during the 2009 financial crisis, BankUnited (NYSE:BKU) is a regional bank that provides commercial lending, deposit services, and treasury solutions to businesses and consumers primarily in Florida and the New York metropolitan area. BankUnited reported revenues of $273.8 million, up 6.1% year on year, falling short of analysts’ expectations by 5.1%. It was a disappointing quarter as it posted a significant miss of analysts’ revenue and net interest income estimates. The stock is flat since the results and currently trades at $46.68. Read our full analysis of BankUnited’s results here. Operating through five distinct regional banking divisions across the western United States, Western Alliance Bancorporation (NYSE:WAL) provides commercial banking, treasury management, mortgage services, and specialized financial solutions through its banking divisions and subsidiaries. Western Alliance Bancorporation reported revenues of $977.3 million, up 25.8% year on year. This result surpassed analysts’ expectations by 2.7%. Zooming out, it was a slower quarter as it produced a significant miss of analysts’ EPS estimates and tangible book value per share in line with analysts’ estimates. The stock is up 2.8% since reporting and currently trades at $80.03. Read our full, actionable report on Western Alliance Bancorporation here, it’s free. With roots dating back to 1898 and a significant expansion through its 2023 acquisition of Silicon Valley Bank, First Citizens BancShares (NASDAQGS:FCNC.A) is a bank holding company that provides financial services to individuals and businesses through its First-Citizens Bank & Trust Company subsidiary. First Citizens BancShares reported revenues of $2.14 billion, flat year on year. This print missed analysts’ expectations by 1.3%. Overall, it was a slower quarter as it also recorded a miss of analysts’ net interest income and revenue estimates. The stock is down 2.4% since reporting and currently trades at $1,998. Read our full, actionable report on First Citizens BancShares here, it’s free. Late in 2025 into early 2026, there was hand-wringing around artificial intelligence. For software companies, the fear was that AI would erode pricing power and compress margins as new tools made it easier to replicate what once required expensive enterprise platforms. Crypto investors had their own version of the same anxiety: if AI agents could trade, allocate capital, and manage wallets autonomously, what exactly was the long-term value of today’s crypto infrastructure? These concerns triggered a noticeable rotation away from these sectors and into safer havens. But markets rarely dwell on one narrative for long. Spring 2026 came, and the focus shifted abruptly from technological disruption to geopolitical risk. The US’ conflict with Iran became the dominant driver of market psychology, and when geopolitics takes center stage, the script changes quickly. Investors stop debating growth rates and start worrying about oil supply, inflation, and global stability. Want to invest in winners with rock-solid fundamentals? Check out our Top 6 Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate. StockStory’s analyst team — all seasoned professional investors — uses quantitative analysis and automation to deliver market-beating insights faster and with higher quality.

EVERETT, Wash., April 29, 2026 (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 segment ("community bank") with an industry leading banking as a service ("BaaS") segment ("CCBX"), today reported unaudited financial results for the quarter ended March 31, 2026, including net income of $12.0 million, or $0.78 per diluted common share, compared to $12.6 million, or $0.82 per diluted common share, for the three months ended December 31, 2025 and $9.7 million, or $0.63 per diluted common share, for the three months ended March 31, 2025. Management Discussion of the First Quarter Results "During the first quarter of 2026, total assets increased $922.4 million, or 19.5%, to $5.66 billion at March 31, 2026 compared to $4.74 billion at December 31, 2025, deposits grew by $897.0 million, or 21.6% and loans receivable increased by $109.8 million, representing a 2.9% rise, marking another period of solid growth. Our CCBX segment continued to expand product offerings with existing partners during the quarter, while advancing new partners through onboarding toward launch and active status in alignment with our long-term strategy. We expect growth to continue as current programs scale, new products are introduced, and we leverage our experience in the BaaS space to support disciplined, sustainable expansion,” stated CEO Eric Sprink. Key Points for First Quarter and Our Go-Forward Strategy CCBX Partner and Product Expansion. As of March 31, 2026 we had two partners in testing, three in implementation/onboarding, and two signed letters of intent (LOIs). Our active pipeline positions us for continued growth, with new partnership opportunities and product launches expected for 2026. Total BaaS program fee income was $10.9 million for the three months ended March 31, 2026, an increase of $2.0 million, or 22.3%, from the three months ended December 31, 2025. We continue to have contracts with our partners that fully indemnify us against fraud and 98.8% against credit risk on CCBX loan partner balances as of March 31, 2026. Deepening CCBX Partner Relationships. During the quarter ended March 31, 2026, we advanced multiple partner products through key development and launch stages. We managed progression across key development stages, from internal testing through limited release to full market launch, across credit, deposit and credit card programs, steadily advancing products toward successful launch and deepening strategic partner relationships. Positive On- and Off-Balance Sheet Trends Continue. Average deposits were $4.38 billion, an increase of $349.9 million, or 8.7%, over the quarter ended December 31, 2025, driven primarily by growth in deposits associated with CCBX partner programs. At March 31, 2026 we swept off $2.81 billion in deposits for FDIC insurance and liquidity purposes, and generated $710,000 in noninterest income during the quarter ended March 31, 2026, an increase of $170,000, or 31.5%, from $540,000 for the quarter ended December 31, 2025. During the first quarter of 2026, we sold $3.28 billion of loans, including $2.63 billion of additional credit card receivables originated through ongoing cardholder spend and revolving activity and sold under existing forward flow arrangements, compared to $2.98 billion of sold loans in the quarter ended December 31, 2025, including $2.26 billion sold under the same forward flow arrangements. We retain a portion of the fee income on sold credit card loans. As of March 31, 2026 there were 667,023 off-balance sheet credit cards with fee earning potential, an increase of 116,046 compared to the quarter ended December 31, 2025 and an increase of 429,999 from March 31, 2025. First Quarter 2026 Financial Highlights The tables below outline some of our key operating metrics. See footnotes that follow the tables below (1) Core deposits are defined as all deposits excluding brokered and time deposits. (2) Share and per share amounts are based on total actual or average common shares outstanding, as applicable. (3) We calculate book value per share as total shareholders’ equity at the end of the relevant period divided by the outstanding number of our common shares at the end of each period. (4) Tangible book value per share is a non-GAAP financial measure. We calculate tangible book value per share as total shareholders’ equity at the end of the relevant period, less goodwill and other intangible assets, divided by the outstanding number of our common shares at the end of each period. The most directly comparable GAAP financial measure is book value per share. See reconciliation of the non-GAAP measures at the end of this earnings release for the impact of intangible assets on book value. (5) Nonperforming assets and nonperforming loans include loans 90+ days past due and accruing interest. (6) Annualized calculations. Key Performance Ratios Return on average assets ("ROA") was 0.98% for the quarter ended March 31, 2026 compared to 1.09% and 0.93% for the quarters ended December 31, 2025 and March 31, 2025, respectively. ROA for the quarter ended March 31, 2026 decreased 0.11%, compared to December 31, 2025 primarily due to an increase in noninterest expense and increased 0.05% compared to March 31, 2025. Noninterest expenses were higher for the quarter ended March 31, 2026 compared to the quarter ended December 31, 2025 driven primarily by a $2.6 million increase in legal and professional expenses and higher BaaS loan expense. The quarter over quarter variance in BaaS loan expense is driven in part by higher yields on certain partner loans, the income of which is passed through to partners, resulting in an increase in loan yield that partially offsets the higher BaaS loan expense, and also by, to a lesser extent, the timing of loan sales. Additionally, recent changes to partner agreements and pricing have contributed to higher BaaS loan expense and a corresponding decrease in loan yield, net of BaaS loan expense, on a quarter-over-quarter basis. Overall, these actions align with a strategic focus on enhanced partner economics and more sustainable, risk-adjusted returns over time. Noninterest expenses were higher than the quarter ended March 31, 2025 due primarily to an increase in data processing and software licenses, salaries and employee benefits, and legal and professional expenses, all of which are related to the growth of the Company and investments in technology and risk management. These increases were partially mitigated by continued discipline in staffing levels over the last year, with full-time equivalent employees decreasing to 496 compared to 517 for the quarter ended March 31, 2025. Compared to the quarter ended December 31, 2025, yield on earning assets declined 0.17% while yield on loans receivable increased by 0.13%. Average loans receivable as of March 31, 2026 increased $138.6 million compared to December 31, 2025 as net CCBX loans continue to grow, despite selling $3.28 billion in CCBX loans during the quarter ended March 31, 2026. Compared to the quarter ended March 31, 2025, yield on earning assets declined 0.94% and yield on loans receivable declined by 0.57%. Average loans receivable as of March 31, 2026 increased $366.9 million compared to March 31, 2025. The quarter over quarter volatility in the efficiency ratio and noninterest income to average asset performance metrics were driven by changes in the credit enhancement on CCBX loans, which is included within noninterest income, due to changes in CCBX provision expense. These items have a neutral impact on net income, but they impact the abovementioned metrics quarter over quarter due to changes in reported noninterest income. The following table shows the Company’s key performance ratios for the periods indicated. (1) Annualized calculations shown for quarterly periods presented. (2) Includes loans held for sale. Management Outlook; CEO Eric Sprink “We continued to see strength in our CCBX segment in the first quarter, driven by the performance of our existing partners, new products and the addition of new relationships. We’ve been intentional about how we grow, and that includes focusing on credit quality as portfolios mature and ensuring we’re operating in a safe and sound manner as expectations around bank–fintech partnerships continue to evolve. As the rate environment evolves, we expect some pressure on margins, but we believe our diversified business model and funding base continue to position us well. Our focus remains on consistent execution and building long-term value through disciplined growth.” said CEO Eric Sprink. Coastal Financial Corporation Overview The Company has one main subsidiary, the Bank, which consists of three segments: CCBX, the community bank and treasury & administration. The CCBX segment includes all of our BaaS activities, the community bank segment includes all community banking activities and the treasury & administration segment includes treasury management, overall administration and all other aspects of the Company. CCBX Performance Update Our CCBX segment continues to evolve, and we have 30 relationships, at varying stages, including two partners in testing, three in implementation/onboarding, two signed LOIs and three winding down as of March 31, 2026. This includes a new CCBX correspondent bank partner relationship. We continue to refine our partnership criteria, prioritizing larger, established partners with strong management teams, customer bases, and financial profiles, while selectively pursuing emerging partners aligned with our model, and will proactively manage and exit select relationships in line with our ongoing portfolio optimization efforts, reflecting our focus on enhancing partner quality and long-term value creation. We are also actively exploring opportunities to expand the CCBX partner base and broaden related product offerings to support continued growth. This dual approach of onboarding new partners while deepening relationships with existing ones supports growth that aligns with our long-term strategic objectives, while leveraging our established relationships to help mitigate incremental risk. Increased partner activity and transaction volumes are driving growth in noninterest income, a trend we expect to continue as existing products scale and new offerings are introduced. As part of our strategy to manage partner and lending limits, as well as overall portfolio composition and credit quality, we plan to continue selling loans. We also retain a portion of the fee income associated with processing transactions on sold credit card loans. This revenue stream continues to grow and is expected to provide ongoing income without adding balance sheet risk or capital requirements. As our deposit base grows, we expect to continue moving deposits on and off the balance sheet, subject to applicable agreements, to manage liquidity, FDIC insurance coverage, and deposit program operations. This deposit sweep capability allows us to better manage liquidity and deposit programs. At March 31, 2026 we swept off $2.81 billion in deposits for FDIC insurance and liquidity purposes, and generated $710,000 in noninterest income during the quarter ended March 31, 2026, compared to $540,000 for the quarter ended December 31, 2025. During the quarter ended March 31, 2026, eight partner programs were in various stages of expansion to include additional products, such as lines of credit, deposit programs, credit cards, and other lending products. The expansion of these and other partner initiatives is expected to drive higher partner revenue in upcoming periods. The following table illustrates the activity and evolution in CCBX relationships for the periods presented. CCBX loans increased $76.6 million, or 4.2%, to $1.88 billion despite selling $3.28 billion in loans during the three months ended March 31, 2026, $2.63 billion of which was new activity on previously sold credit card loans. The following table details the CCBX loan portfolio: (1) CCBX yield does not include the impact of BaaS loan expense. BaaS loan expense represents the amount paid or payable to partners for credit enhancements and originating & servicing CCBX loans. See reconciliation of the non-GAAP measures at the end of this earnings release for the impact of BaaS loan expense on CCBX loan yield. (2) Loan yield is annualized for the three months ended for each period presented and includes loans held for sale and nonaccrual loans. The increase in CCBX loans in the quarter ended March 31, 2026, includes an increase of $106.0 million, or 8.1%, in consumer and other loans and an increase of $2.0 million, or 0.7%, in residential real estate loans partially offset by a decrease of $34.1 million, or 16.2%, in capital call lines as a result of normal balance fluctuations and business activities. We sold $3.28 billion in CCBX loans during the quarter ended March 31, 2026 compared to sales of $2.98 billion in the quarter ended December 31, 2025. We continue to manage CCBX credit and concentration levels in an effort to optimize our loan portfolio earnings and generate off-balance sheet fee income. CCBX loan yield increased 0.12% for the quarter ended March 31, 2026 compared to the quarter ended December 31, 2025 due to a change in overall mix of loans compared to the quarter ended December 31, 2025. The following charts show the growth and quarter over quarter changes in credit card accounts that generate fee income. This includes accounts with balances, which are included in our loan totals, and accounts that have been sold and have no corresponding balance in our loan totals, both of which generate fee income. The following chart shows the growth in active CCBX debit cards, which are sources of interchange income. The following table details the CCBX deposit portfolio: (1) Cost of deposits is annualized for the three months ended for each period presented. CCBX deposits increased $910.4 million, or 35.6%, in the three months ended March 31, 2026 to $3.47 billion, driven largely by new CCBX partner relationships. Management expects the newly added deposits to moderate during the second quarter of 2026 and then normalize. The increase excludes the $2.81 billion in CCBX deposits that were swept off-balance sheet for increased Federal Deposit Insurance Corporation ("FDIC") insurance coverage and liquidity purposes, compared to $843.6 million for the quarter ended December 31, 2025. Using a third-party facilitator/vendor sweep product, amounts in excess of FDIC insurance coverage are swept off-balance sheet to participating financial institutions. Community Bank Performance Update In the quarter ended March 31, 2026, the community bank saw net loans increase $33.3 million, or 1.7%, to $1.98 billion, as a result of loan growth and normal balance fluctuations. The following table details the community bank loan portfolio: (1) Loan yield is annualized for the three months ended for each period presented and includes loans held for sale and nonaccrual loans. The increase in community bank loans consisted of an increase of $14.7 million in commercial real estate loans, an increase of $12.8 million in construction, land and land development loans, and an increase of $11.2 million in commercial and industrial loans, partially offset by a decrease of $3.1 million in residential real estate loans and $2.5 million in consumer and other loans during the quarter ended March 31, 2026. The following table details the community bank deposit portfolio: (1) Cost of deposits is annualized for the three months ended for each period presented. Community bank deposits decreased $13.4 million, or 0.8%, during the three months ended March 31, 2026 to $1.57 billion as a result of normal balance fluctuations. The community bank segment includes noninterest bearing deposits of $501.3 million, or 31.9%, of total community bank deposits, resulting in a cost of deposits of 1.46%, compared to 1.56% for the quarter ended December 31, 2025 as a result of lower interest rates. Net Interest Income and Margin Discussion Net interest income was $83.4 million for the quarter ended March 31, 2026, an increase of $4.0 million, or 5.0%, from $79.4 million for the quarter ended December 31, 2025, and an increase of $7.3 million, or 9.6%, from $76.1 million for the quarter ended March 31, 2025. Net interest income compared to December 31, 2025 and March 31, 2025 was higher due to an increase in interest on loans and interest earning deposits with other banks primarily due to an increase in average loans receivable and average interest earning deposits with other banks as well as a reduced cost of funds due to lower interest rates. Net interest margin was 7.00% for the three months ended March 31, 2026, compared to 7.03% for the three months ended December 31, 2025. Net interest margin was 7.48% for the three months ended March 31, 2025. The modest decrease in net interest margin for the three months ended March 31, 2026 compared to the three months ended December 31, 2025 was primarily due to lower yields on interest earning deposits with other banks, partially offset by lower cost of funds and higher loan yields. Net interest margin, net of BaaS loan expense, (a reconciliation of the non-GAAP measures are set forth in the Non-GAAP Financial Measures section of this earnings release) was 3.90% for the three months ended March 31, 2026, compared to 4.26% for the three months ended December 31, 2025, and 4.28% for the three months ended March 31, 2025. The quarter-over-quarter decline in net interest margin, net of BaaS loan expense, was primarily driven by an increase in BaaS loan expense. This increase reflects higher yields on certain partner loans, the income of which is passed through to partners, as well as, to a lesser extent, the timing of loan sales. While these higher yields contributed to overall loan yield and partially offset the impact of the higher BaaS loan expense, recent changes to partner agreements and pricing contributed to both higher BaaS loan expense and a corresponding decrease in loan yield, net of BaaS loan expense. These actions align with our strategic focus on enhanced partner economics and more sustainable, risk-adjusted returns over time. Interest and fees on loans receivable increased $2.7 million, or 2.7%, to $102.9 million for the three months ended March 31, 2026, compared to $100.2 million for the three months ended December 31, 2025, as a result of an increase in loans receivable. Interest and fees on loans receivable increased $4.7 million, or 4.8%, compared to $98.1 million for the three months ended March 31, 2025, due to loan growth. The following table illustrates how net interest margin and loan yield is affected by BaaS loan expense: (1) Annualized calculations shown for periods presented. (2) A reconciliation of the non-GAAP measures are set forth at the end of this earnings release. Average investment securities increased $988,000 to $47.5 million compared to the three months ended December 31, 2025 as a result of held-to-maturity mortgage backed securities purchased for CRA purposes, and increased $259,000 compared to the three months ended March 31, 2025 as a result of securities purchased for CRA purposes, net of principal paydowns. Cost of funds was 2.59% for the quarter ended March 31, 2026, a decrease of 18 basis points from the quarter ended December 31, 2025 and a decrease of 52 basis points from the quarter ended March 31, 2025. Cost of deposits for the quarter ended March 31, 2026 was 2.56%, compared to 2.74% for the quarter ended December 31, 2025, and 3.08% for the quarter ended March 31, 2025. The decreased cost of funds and deposits compared to December 31, 2025 and March 31, 2025 were largely due to the reductions in the Fed funds rate in 2025. The following table summarizes the average yield on loans receivable and cost of deposits: (1) CCBX yield on loans does not include the impact of BaaS loan expense. BaaS loan expense represents the amount paid or payable to partners for credit and fraud enhancements and originating & servicing CCBX loans. To determine Net BaaS loan income earned from CCBX loan relationships, the Company takes BaaS loan interest income and deducts BaaS loan expense to arrive at Net BaaS loan income, which can be compared to interest income on the Company’s community bank loans. See reconciliation of the non-GAAP measures at the end of this earnings release for the impact of BaaS loan expense on CCBX loan yield. (2) Annualized calculations for periods presented. The following table illustrates how BaaS loan interest income is affected by BaaS loan expense resulting in net BaaS loan income and the associated yield: (1) A reconciliation of the non-GAAP measures are set forth at the end of this earnings release. (2) Annualized calculations shown for the periods presented. (3) Includes loans held for sale. Noninterest Income Discussion Noninterest income was $66.1 million for the three months ended March 31, 2026, an increase of $7.4 million from $58.7 million for the three months ended December 31, 2025, and an increase of $2.6 million from $63.5 million for the three months ended March 31, 2025. The increase in noninterest income for the quarter ended March 31, 2026 as compared to the quarter ended December 31, 2025 was primarily due to a $3.4 million increase in BaaS credit enhancements related to the increase in provision for credit losses based upon an analysis of the CCBX loan portfolio and a $2.0 million increase in BaaS fraud enhancements, and an increase of $2.0 million in BaaS program income (see “Appendix B” for more information on the accounting for BaaS allowance for credit losses and credit and fraud enhancements). The $2.6 million increase in noninterest income over the quarter ended March 31, 2025 was primarily due to an increase of $4.6 million in BaaS program income partially offset by a $1.8 million decrease in BaaS credit and fraud enhancements due to mix of loans and improvement in the performance of the CCBX loan portfolio. Noninterest Expense Discussion Total noninterest expense increased $10.6 million to $83.5 million for the three months ended March 31, 2026, compared to $72.8 million for the three months ended December 31, 2025, and increased $11.5 million from $72.0 million for the three months ended March 31, 2025. The $10.6 million increase in noninterest expense for the quarter ended March 31, 2026, as compared to the quarter ended December 31, 2025, was primarily due to a $2.6 million increase in legal and professional fees, a $665,000 increase in data processing and software licenses, and a $377,000 increase in salaries and employee benefits, partially offset by a $456,000 decrease in other expenses. Also contributing to the variance is a $5.7 million increase in BaaS loan expense, and a $2.0 million increase in BaaS fraud expense. BaaS loan expense represents the amount paid or payable to partners for credit enhancements and originating & servicing CCBX loans. BaaS fraud expense represents non-credit fraud losses on partner’s customer loan and deposit accounts. A portion of this expense is realized during the quarter in which the loss occurs, and a portion is estimated based on historical or other information from our partners. The $2.6 million increase in legal and professional fees was primarily driven by a CCBX partner's professional fees resulting from our asset acquisition in the prior quarter. Data processing and software license costs increased due to continued investments in growth, technology, and risk management. The $11.5 million increase in noninterest expenses for the quarter ended March 31, 2026 compared to the quarter ended March 31, 2025 was largely due to a $3.4 million increase in data processing and software licenses due to enhancements and investments in technology and a $1.6 million increase in salary and employee benefits. Also contributing to the variance is a $4.4 million increase in BaaS loan expense, and a $1.1 million increase in BaaS fraud expense. Certain operating expenses associated with CCBX programs are reimbursed by our CCBX partners. In accordance with GAAP we recognize all expenses in noninterest expense and the reimbursement of expenses from our CCBX partner in noninterest income. The following table reflects the portion of noninterest expenses that are reimbursed by partners to assist in understanding how the increases in noninterest expense are related to expenses incurred and reimbursed by CCBX partners: (1) A reconciliation of the non-GAAP measures are set forth at the end of this earnings release. Provision for Income Taxes The provision for income taxes was $2.6 million for the three months ended March 31, 2026, $4.5 million for the three months ended December 31, 2025 and $2.0 million for the first quarter of 2025. The income tax provision was lower for the three months ended March 31, 2026 compared to the quarter ended December 31, 2025 and higher when compared to the quarter ended March 31, 2025 as a result of differences in net income and the taxability of certain equity awards during each period. As CCBX activities and employee presence expand into additional states, the Company becomes subject to additional state tax jurisdictions, which has increased the overall tax rate used in calculating the provision for income taxes. The Company uses a federal statutory tax rate of 21.0% as a basis for calculating provision for federal income taxes and 5.14% for calculating the provision for state income taxes. The state rate increased in the quarter ended June 30, 2025 primarily as a result of a change in California's tax laws. Financial Condition Overview Total assets increased $922.4 million, or 19.5%, to $5.66 billion at March 31, 2026 compared to $4.74 billion at December 31, 2025. The increase is primarily comprised of a $740.0 million increase in interest earning deposits with other banks, a $109.8 million increase in loans receivable, and a $52.8 million increase in loans held for sale. As of March 31, 2026, in addition to the $1.50 billion in cash on hand, the Company had the capacity to borrow up to a total of $636.6 million from the Federal Reserve Bank discount window and Federal Home Loan Bank, plus an additional $50.0 million from a correspondent bank. There were no borrowings outstanding on these lines as of March 31, 2026. The Company, on a stand alone basis, had a cash balance of $40.2 million as of March 31, 2026, a portion of which is retained for general operating purposes, including debt repayment, for funding $1.0 million in commitments to bank technology investment funds, with the remaining cash available to be contributed to the Bank as capital. Uninsured deposits were $1.77 billion as of March 31, 2026, compared to $641.3 million as of December 31, 2025. Uninsured deposits are elevated due to the timing of new partner deposits participating in sweep and reciprocal deposit networks, but are expected to normalize during the second quarter. Total shareholders’ equity as of March 31, 2026 increased $12.8 million since December 31, 2025. The increase in shareholders’ equity was primarily comprised of $12.0 million in net earnings combined with an increase of $784,000 in common stock outstanding as a result of equity awards vested and exercised during the three months ended March 31, 2026. The Company and the Bank remained well capitalized at March 31, 2026, as summarized in the following table. (1) Presents the minimum capital ratios for an insured depository institution, such as the Bank, to be considered well capitalized under the Prompt Corrective Action framework. The minimum requirements for the Company to be considered well capitalized under Regulation Y include to maintain, on a consolidated basis, a total risk-based capital ratio of 10.0 percent or greater and a tier 1 risk-based capital ratio of 6.0 percent or greater. Asset Quality The allowance for credit losses was $172.4 million and 4.47% of loans receivable at March 31, 2026 compared to $169.5 million and 4.52% at December 31, 2025 and $183.2 million and 5.21% at March 31, 2025. The allowance for credit loss allocated to the CCBX portfolio was $154.3 million and 8.19% of CCBX loans receivable at March 31, 2026, with $18.2 million of allowance for credit loss allocated to the community bank, or 0.92% of total community bank loans receivable. The following table details the allocation of the allowance for credit loss as of the period indicated: Net charge-offs totaled $49.6 million for the quarter ended March 31, 2026, compared to $50.1 million for the quarter ended December 31, 2025 and $48.2 million for the quarter ended March 31, 2025. Net charge-offs as a percent of average loans decreased to 5.18% for the quarter ended March 31, 2026 compared to 5.31% for the quarter ended December 31, 2025, and 5.57% for the quarter ended March 31, 2025. CCBX partner agreements provide for a credit enhancement that covers the net charge-offs on CCBX loans and negative deposit accounts by indemnifying or reimbursing incurred losses, except in accordance with the program agreement for one partner where the Company was responsible for credit losses on approximately 5% of a $324.0 million loan portfolio. At March 31, 2026, our portion of this portfolio represented $22.0 million in loans. Net charge-offs for this $22.0 million in loans were $1.0 million for the three months ended March 31, 2026, $1.2 million for the three months ended December 31, 2025 and $1.1 million for the three months ended March 31, 2025. The following table details net charge-offs for the community bank and CCBX for the period indicated: (1) Annualized calculations shown for periods presented. During the quarter ended March 31, 2026, a $52.6 million provision for credit losses was recorded for CCBX partner loans, compared to $45.9 million for the quarter ended December 31, 2025. The increase in the provision was largely due to an increase in loans receivable and a change in the mix of loans, bringing the CCBX allowance for credit losses to $154.3 million at March 31, 2026 compared to $151.3 million at December 31, 2025. In general, CCBX loans have a higher level of expected losses than our community bank loans, which is reflected in the factors for the allowance for credit losses. Agreements with our CCBX partners provide for a credit enhancement, which protects the Bank by indemnifying or reimbursing incurred losses. In accordance with accounting guidance, we estimate and record a provision for expected losses for these CCBX loans and reclassified negative deposit accounts. When the provision for CCBX credit losses and provision for unfunded commitments is recorded, a credit enhancement asset is also recorded on the balance sheet through noninterest income (BaaS credit enhancements). Expected losses are recorded in the allowance for credit losses. The credit enhancement asset is relieved when credit enhancement recoveries are received from the CCBX partner. If our partner is unable to fulfill their contracted obligations then the Bank could be exposed to additional credit losses. Management regularly evaluates and manages this counterparty risk with our CCBX partners. The factors used in management’s analysis for community bank credit losses indicated that a provision recapture of $1.4 million was needed for the quarter ended March 31, 2026 compared to a provision recapture of $101,000 and a provision of $65,000 for the quarters ended December 31, 2025 and March 31, 2025, respectively. The provision recapture in the current period was due to an improvement in the overall economic outlook, partially offset by a marginal increase in the overall portfolio historical loss rates. The following table details the provision expense/(recapture) for the community bank and CCBX for the period indicated: Included in provision expense was a $252,000 provision for unfunded commitments, recorded primarily due to an increase in available commitments for CCBX loans, partially offset by a decline in the remaining weighted-average life of the unfunded construction and land portfolio. At March 31, 2026, our nonperforming assets were $67.6 million, or 1.19%, of total assets, compared to $64.1 million, or 1.35%, of total assets, at December 31, 2025, and $56.4 million, or 1.30%, of total assets, at March 31, 2025. These ratios are impacted by nonperforming CCBX loans that are covered by CCBX partner credit enhancements. As of March 31, 2026, $60.9 million of the $62.8 million in nonperforming CCBX loans were covered by CCBX partner credit enhancements described above. Additionally, certain CCBX partners employ collection practices that place specific loans on nonaccrual status to enhance collectability. As of March 31, 2026, $22.3 million of these loans are less than 90 days past due. Nonperforming assets increased $3.5 million during the quarter ended March 31, 2026, compared to the quarter ended December 31, 2025. Community bank nonperforming loans decreased $1.7 million from December 31, 2025 to $4.8 million as of March 31, 2026 with the payoff of a nonaccrual loan. CCBX nonperforming loans increased $5.2 million to $62.8 million from December 31, 2025. The increase in CCBX nonperforming loans is due to an increase of $3.2 million in nonaccrual loans from December 31, 2025 to $27.6 million, combined with a $2.1 million increase in CCBX loans that are past due 90 days or more and still accruing interest. As a result of the type of loans (primarily consumer loans) originated through our CCBX partners, we would typically anticipate that balances 90 days past due or more and still accruing will generally increase as those loan portfolios grow. Consumer loans originated through CCBX lending partners may continue to accrue interest beyond 90 days past due. Installment (closed-end) loans generally continue to accrue until 120 past due while revolving (open-end) loans generally continue to accrue until 180 days past due. There were no repossessed assets or other real estate owned at March 31, 2026. Our nonperforming loans to loans receivable ratio was 1.75% at March 31, 2026, compared to 1.71% at December 31, 2025 and 1.60% at March 31, 2025. For the quarter ended March 31, 2026, there were $1,000 in community bank net charge-offs and $49.6 million in CCBX net charge-offs. These CCBX loans have a higher level of expected losses than our community bank loans, which is reflected in the factors used in the allowance for credit losses. The following table details the Company’s nonperforming assets for the periods indicated. The following tables detail the CCBX and community bank nonperforming assets, which are included in the total nonperforming assets table above. About Coastal Financial Coastal Financial Corporation (Nasdaq: CCB) (the “Company”), is an Everett, Washington based bank holding company whose wholly owned subsidiaries are Coastal Community Bank (“Bank”) and Arlington Olympic LLC. The $5.66 billion Bank provides service through 14 full-service branches in Snohomish, Island and King Counties, one loan production office in King County, the Internet and its mobile banking application. The Bank provides banking as a service to digital financial service providers, companies and brands that want to provide financial services to their customers through the Bank's CCBX segment. To learn more about the Company visit www.coastalbank.com. CCB-ER Contact Eric Sprink, Chief Executive Officer, [email protected] Brandon J. Soto, Executive Vice President & Chief Financial Officer, [email protected] Forward-Looking Statements This earnings release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. Any statements about our management’s expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through the use of words or phrases such as “anticipate,” “believes,” “can,” “could,” “may,” “predicts,” “potential,” “should,” “will,” “estimate,” “plans,” “projects,” “continuing,” “ongoing,” “expects,” “intends” and similar words or phrases. Any or all of the forward-looking statements in this earnings release may turn out to be inaccurate. The inclusion of or reference to forward-looking information in this earnings release should not be regarded as a representation by us or any other person that the future plans, estimates or expectations contemplated by us will be achieved. We have based these forward looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. Our actual results could differ materially from those anticipated in such forward-looking statements as a result of risks, uncertainties and assumptions that are difficult to predict. Factors that could cause actual results to differ materially from those in the forward-looking statements include, without limitation, the risk that the conflicts in the Middle East and/or changes in U.S. trade policies, including the imposition of tariffs and retaliatory tariffs, may adversely impact our business, financial condition, and results of operations and those other risks and uncertainties discussed under “Risk Factors” in our Annual Report on Form 10-K for the most recent period filed and in any of our subsequent filings with the Securities and Exchange Commission. If one or more events related to these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may differ materially from what we anticipate. You are cautioned not to place undue reliance on forward-looking statements. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update or revise any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events, except as required by law. (1) Yields and costs are annualized. (2) For presentation in this table, average balances and the corresponding average rates for investment securities are based upon historical cost, adjusted for amortization of premiums and accretion of discounts. (3) Includes loans held for sale and nonaccrual loans. (4) Net interest margin represents net interest income divided by the average total interest earning assets. (1) Yields and costs are annualized. (2) Includes loans held for sale and nonaccrual loans. (3) Net interest margin represents net interest income divided by the average total interest earning assets. (4) CCBX yield does not include the impact of BaaS loan expense. BaaS loan expense represents the amount paid or payable to partners for credit enhancements, fraud enhancements and originating & servicing CCBX loans. See reconciliation of the non-GAAP measures at the end of this earnings release for the impact of BaaS loan expense on CCBX loan yield. (5) Net interest margin, net of BaaS loan expense, includes the impact of BaaS loan expense. BaaS loan expense represents the amount paid or payable to partners for credit enhancements, fraud enhancements, originating & servicing CCBX loans. See reconciliation of the non-GAAP measures at the end of this earnings release. (6) For presentation in this table, average balances and the corresponding average rates for investment securities are based upon historical cost, adjusted for amortization of premiums and accretion of discounts. (7) Intrabank assets and liabilities are consolidated for period calculations and presented as intrabank asset, net or intrabank liability, net in the table above. Non-GAAP Financial Measures The Company uses certain non-GAAP financial measures to provide meaningful supplemental information regarding the Company’s operational performance and to enhance investors’ overall understanding of financial performance. However, these non-GAAP financial measures are supplemental and are not a substitute for an analysis based on GAAP measures. As other companies may use different calculations for these adjusted measures, this presentation may not be comparable to other similarly titled adjusted measures reported by other companies. The following non-GAAP measures are presented to illustrate the impact of BaaS loan expense on net loan income and yield on loans and CCBX loans and the impact of BaaS loan expense on net interest income and net interest margin. Loan income, net of BaaS loan expense, divided by average loans, is a non-GAAP measure that includes the impact of BaaS loan expense on loan income and the yield on loans. The most directly comparable GAAP measure is yield on loans. Net BaaS loan income divided by average CCBX loans is a non-GAAP measure that includes the impact of BaaS loan expense on net BaaS loan income and the yield on CCBX loans. The most directly comparable GAAP measure is yield on CCBX loans. Net interest income, net of BaaS loan expense, is a non-GAAP measure that includes the impact of BaaS loan expense on net interest income. The most directly comparable GAAP measure is net interest income. CCBX net interest margin, net of BaaS loan expense, is a non-GAAP measure that includes the impact of BaaS loan expense on net interest rate margin. The most directly comparable GAAP measure is CCBX net interest margin. Reconciliations of the GAAP and non-GAAP measures are presented below. (1) Annualized calculations for periods presented. The following non-GAAP measure is presented to illustrate the impact of BaaS loan expense, BaaS fraud expense and reimbursement of expenses (BaaS) on noninterest expense. Certain noninterest expenses are reimbursed by our CCBX partners. In accordance with GAAP we recognize all expenses in noninterest expense and the reimbursement of expenses from our CCBX partners in noninterest income. This non-GAAP measure is intended to help investors distinguish between noninterest expenses borne by the Company and those incurred for, and reimbursed by, CCBX partners.The most comparable GAAP measure is noninterest expense. The following non-GAAP measure is presented to illustrate the impact of intangible assets on book value per share. We calculate tangible book value per share as total shareholders’ equity at the end of the relevant period, less goodwill and other intangible assets, divided by the outstanding number of our common shares at the end of each period. The most directly comparable GAAP financial measure is book value per share. APPENDIX A As of March 31, 2026 Industry Concentration We have a diversified loan portfolio, representing a wide variety of industries. Our major categories of loans are commercial real estate, consumer and other loans, residential real estate, commercial and industrial, and construction, land and land development loans. Together they represent $3.87 billion in outstanding loan balances. When combined with $2.59 billion in unused commitments the total of these categories is $6.45 billion. Commercial real estate loans represent the largest segment of our loans, comprising 33.6% of our total balance of outstanding loans as of March 31, 2026. Unused commitments to extend credit represents an additional $35.4 million, and the combined total in commercial real estate loans represents $1.34 billion, or 20.7% of our total outstanding loans and loan commitments. The following table summarizes our loan commitments by industry for our commercial real estate portfolio as of March 31, 2026: Consumer loans comprise 37.0% of our total balance of outstanding loans as of March 31, 2026. Unused commitments to extend credit represents an additional $1.07 billion, and the combined total in consumer and other loans represents $2.51 billion, or 38.8% of our total outstanding loans and loan commitments. The $1.07 billion in commitments is subject to CCBX partner/portfolio maximum limits. As illustrated in the table below, our CCBX partners bring in a large number of mostly smaller dollar loans, resulting in an average consumer loan balance of just $700. CCBX consumer loans are underwritten to CCBX credit standards, and underwriting of these loans is regularly tested, including quarterly testing for partners with the largest exposures. The following table summarizes our loan commitments by industry for our consumer and other loan portfolio as of March 31, 2026: (1) Total exposure on CCBX loans is subject to CCBX partner/portfolio maximum limits. Residential real estate loans comprise 12.0% of our total balance of outstanding loans as of March 31, 2026. Unused commitments to extend credit represents an additional $713.7 million, which is subject to partner/portfolio maximum limits, and the combined total in residential real estate loans represents $1.18 billion, or 18.3% of our total outstanding loans and loan commitments. The following table summarizes our loan commitments by industry for our residential real estate loan portfolio as of March 31, 2026: (1) Total exposure on CCBX loans is subject to CCBX partner/portfolio maximum limits. Commercial and industrial loans comprise 11.3% of our total balance of outstanding loans as of March 31, 2026. Unused commitments to extend credit represents an additional $673.3 million, and the combined total in commercial and industrial loans represents $1.11 billion, or 17.2% of our total outstanding loans and loan commitments. Included in commercial and industrial loans is $176.4 million in outstanding capital call lines, with an additional $573.8 million in available loan commitments which is limited to a $350.0 million portfolio maximum. Capital call lines are provided to venture capital firms through one of our CCBX BaaS clients. These loans are secured by the capital call rights and are individually underwritten to the Bank’s credit standards, and the underwriting is reviewed by the Bank on every capital call line. The following table summarizes our loan commitment by industry for our commercial and industrial loan portfolio as of March 31, 2026: (1) Total exposure on CCBX loans is subject to CCBX partner/portfolio maximum limits. Construction, land and land development loans comprise 6.1% of our total balance of outstanding loans as of March 31, 2026. Unused commitments to extend credit represent an additional $90.0 million, and the combined total in construction, land and land development loans represents $324.9 million, or 5.0% of our total outstanding loans and loan commitments. The following table details our loan commitment for our construction, land and land development portfolio as of March 31, 2026: Exposure and risk in our construction, land and land development portfolio increased compared to recent periods as indicated in the following table: Commitments to extend credit total $2.59 billion at March 31, 2026, however we do not anticipate our customers using the $2.59 billion that is showing as available due to CCBX partner and portfolio limits. The following table presents outstanding commitments to extend credit as of March 31, 2026: (1) Total exposure on CCBX loans is subject to CCBX partner/portfolio maximum limits. We have individual CCBX partner portfolio limits with each of our partners to manage loan concentration risk, liquidity risk and counterparty partner risk. For example, as of March 31, 2026, capital call lines outstanding balance totaled $176.4 million and, while commitments to underlying customers totaled $573.8 million, the commitments are limited to a maximum of $350.0 million by agreement with the partner. If a CCBX partner goes over their individual limit, it would be a breach of their contract and the Bank may impose penalties and would have the choice to fund or not fund the loan. See the table below for CCBX portfolio maximums and related available commitments: (1) Remaining commitment available, net of outstanding balance. (2) These home equity lines of credit are secured by residential real estate and are accessed by using a credit card, but are classified as 1-4 family residential properties per regulatory guidelines. APPENDIX B As of March 31, 2026 CCBX – BaaS Reporting Information During the quarter ended March 31, 2026, $50.7 million was recorded in BaaS credit enhancements related to the provision for credit losses - loans and reserve for unfunded commitments for CCBX partner loans and negative deposit accounts. Agreements with our CCBX partners provide for a credit enhancement provided by the partner which protects the Bank by indemnifying or reimbursing incurred losses. In accordance with accounting guidance, we estimate and record a provision for expected losses for these CCBX loans, unfunded commitments, negative deposit accounts and accrued interest receivable on CCBX partner loans. When the provision for credit losses - loans and provision for unfunded commitments is recorded, a credit enhancement asset is also recorded on the balance sheet through noninterest income (BaaS credit enhancements) in recognition of the CCBX partner legal commitment to indemnify or reimburse losses. The credit enhancement asset is relieved as credit enhancement payments and recoveries are received from the CCBX partner or taken from the partner's cash reserve account. Agreements with our CCBX partners also provide protection to the Bank from fraud by indemnifying or reimbursing incurred fraud losses. BaaS fraud includes non-credit fraud losses on loans and deposits originated through partners. Generally fraud losses related to loans are comprised primarily of first payment defaults. Fraud losses are recorded when incurred as losses in noninterest expense, and the enhancement received from the CCBX partner is recorded in noninterest income, resulting in a net impact of zero to the income statement. Many CCBX partners also pledge a cash reserve account at the Bank, which the Bank can collect from when losses occur that is then replenished by the partner on a regular interval. Although agreements with our CCBX partners provide for credit enhancements that provide protection to the Bank from credit and fraud losses if our partner is unable to fulfill their contractual obligation and if the cash flows on the loans were not sufficient to fund the reimbursement of loan losses, then the Bank would be exposed to additional loan and deposit losses as a result of this counterparty risk. If a CCBX partner does not replenish their cash reserve account, the Bank may consider an alternative plan for funding the cash reserve. This may involve the possibility of adjusting the funding amounts or timelines to better align with the partner's specific situation. If a mutually agreeable funding plan is not agreed to, the Bank could declare the agreement in default, take over servicing and cease paying the partner for servicing the loan and providing credit enhancements. In the event of a partner default, the Bank would evaluate any remaining credit enhancement asset associated with that partner to determine whether a write-off is appropriate. If a write-off occurs, the Bank would stop payments to the CCBX partner and retain the full yield and any fee income on the loan portfolio going forward, decreasing our BaaS loan expense. The Bank records contractual interest earned from the borrowers on CCBX partner loans in interest income, adjusted for origination costs, which are paid or payable to the CCBX partners. BaaS loan expense represents the amount paid or payable to partners for credit and fraud enhancements and originating & servicing CCBX loans. To determine net revenue (Net BaaS loan income) earned from CCBX loan relationships, the Bank takes BaaS loan interest income and deducts BaaS loan expense to arrive at Net BaaS loan income (a reconciliation of the non-GAAP measures are set forth in the preceding section of this earnings release) which can be compared to interest income on the Company’s community bank loans. The following table illustrates how CCBX partner loan income and expenses are recorded in the financial statements: (1) Annualized calculation for quarterly periods shown. (2) A reconciliation of the non-GAAP measures are set forth in the preceding section of this earnings release. An increase in average loans receivable resulted in increased interest income on CCBX loans during the quarter ended March 31, 2026 compared to the quarter ended December 31, 2025, however net BaaS loan income decreased as a result of higher BaaS loan expense, compared to the previous quarter. This is a result of recent changes to partner agreements and pricing changes that resulted in lower loan yields, net of BaaS loan expense. These actions reflect a strategic shift toward enhanced partner economics and more sustainable, risk-adjusted returns over time. Our strategy is to optimize the CCBX loan portfolio and strengthen our balance sheet through originating higher quality new loans with enhanced credit standards. These higher quality loans tend to have lower stated rates and expected losses than some of our CCBX loans historically. We continue to manage CCBX credit and concentration levels in an effort to optimize our loan portfolio and also generate off-balance sheet fee income. Growth in CCBX loans has resulted in an increase in interest income for the quarter ended March 31, 2026 compared to the quarter ended March 31, 2025, and a slight increase in net BaaS loan income. The following tables are a summary of the interest components, direct fees and expenses of BaaS for the periods indicated and are not inclusive of all income and expense related to BaaS. Servicing and other BaaS fees increased $510,000, and transaction and interchange fees increased $949,000 in the quarter ended March 31, 2026 compared to the quarter ended December 31, 2025. We expect servicing and other BaaS fees to be higher when bringing on new partners and then to decrease when transaction and interchange fees increase as partner activity grows and these recurring fees exceed contracted minimum fees. Increases in BaaS reimbursement of fees offset increases in noninterest expense from BaaS expenses covered by CCBX partners. 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