Coastal Financial Corporation (CCB) Q4 2024 earnings summary

Executive summary

• Q4 2024 net income was $13.4 million ($0.94/diluted share), up 48.3% year-over-year, with a $98.0 million equity raise at $71.00/share to support growth, especially in CCBX.

• Sold $845.5 million in loans (mainly credit card receivables) and transferred $273.2 million in deposits off balance sheet, retaining fee income.

• CCBX BaaS program fee income grew 56.9% year-over-year to $25.6 million, with 182,449 credit cards with fee earning potential, up from 81,426 last quarter.

• Three new CCBX letters of intent signed, with 24 total CCBX relationships at year-end and an active pipeline.

Financial highlights

• Q4 2024 revenue was $143.3 million; net interest income was $66.5 million, up 11.5% year-over-year.

• Noninterest income for Q4 2024 was $76.8 million, up $12.1 million year-over-year, driven by BaaS and credit enhancement income.

• Noninterest expense decreased 2.1% sequentially to $64.2 million; core expense grew 6.0% year-over-year.

• Total assets grew to $4.12 billion at year-end, up $55.4 million from Q3 2024.

• Loans receivable increased $67.7 million sequentially to $3.49 billion; allowance for credit losses rose to $177.0 million (5.08% of loans).

Outlook and guidance

• Strategy for 2025 focuses on selective CCBX partner expansion, technology and risk management investment, and growing noninterest income.

• Expect net interest margin to expand slightly as deposits reprice faster than CCBX loans; continued focus on higher quality CCBX loans.

• Additional CCBX loan sales expected to optimize portfolio and manage credit quality.

• Expenses for new CCBX programs expected to be front-loaded, with compliance and operational risk focus before revenue ramps.