Coastal Financial Corporation (CCB) Q3 2024 earnings summary

Executive summary

• Net income for Q3 2024 was $13.5 million ($0.97 per diluted share), up 16% sequentially and 31% year-over-year, driven by strong CCBX and community bank performance and higher interest income.

• Total assets reached $4.07 billion, up 2.6% from Q2 2024 and 8.3% from December 31, 2023, fueled by loan growth, especially in CCBX.

• Deposits increased to $3.63 billion, with CCBX deposits up 13% year-to-date and community bank deposits up 1.7%.

• CCBX partnerships expanded to 22, focusing on larger, established partners and new product launches.

• The company remains well-capitalized, compliant with regulatory requirements, and has reorganized leadership to support future growth.

Financial highlights

• Revenue was $152.3M, up 11.8% sequentially; net interest income rose to $72.2M, up 16% year-over-year; noninterest income for Q3 2024 was $80.1M, up 131.6% year-over-year.

• Total loans receivable grew 13% year-to-date to $3.42B, with CCBX loans up 27.2% and community bank loans up 3.7%.

• Tangible book value per share rose 4.1% sequentially and 14.6% year-over-year to $24.51.

• Allowance for credit losses rose to $170.3M (4.98% of loans), reflecting higher expected losses in CCBX loans.

• Efficiency ratio improved to 43.10% in Q3 2024.

Outlook and guidance

• Management expects continued CCBX loan sales to optimize portfolio, manage credit risk, and support capital levels.

• Focus remains on expanding with established CCBX partners, launching new products, and investing in technology and automation to control expense growth.

• Net interest margin is expected to expand slightly as rate-sensitive deposits reprice faster than CCBX loans.

• Transaction and interchange fees projected to increase as partner activity grows and recurring fees replace minimums.