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Sep 30, 2023
Coastal Financial Q3 2023 Earnings Report
Coastal Financial's Q3 2023 earnings were announced, revealing a net income of $10.3 million and strategic balance sheet adjustments.
Key Takeaways
Coastal Financial Corporation reported a net income of $10.3 million for Q3 2023, with total assets increasing to $3.68 billion. The company strategically decreased total loans by $40.5 million through loan sales, while deposits increased by $127.1 million. Focus remained on optimizing the CCBX loan portfolio and strengthening the balance sheet.
Net income reached $10.3 million, or $0.75 per diluted common share.
Total assets grew to $3.68 billion, a 4.1% increase for the quarter.
Total loans decreased by $40.5 million due to strategic loan sales.
Deposits increased by $127.1 million, reflecting a 4.0% growth.
Revenue by Segment
Forward Guidance
Coastal Financial anticipates lower earnings in the short term due to optimizing the CCBX loan portfolio with enhanced credit standards, expecting the process to take 2 to 3 quarters. The company plans to focus on increasing efficiency and using technology to reduce future expense growth, while maintaining its community bank mentality.
Positive Outlook
- Focusing on larger partners and optimizing the CCBX loan portfolio to grow and advance presence in the BaaS space.
- Being more intentional in selecting products and partnerships that best serve customers and shareholders.
- Attracting a more established partner set due to expertise and strength.
- Optimizing the CCBX loan portfolio by selling higher yielding loans that have a greater potential for credit deterioration.
- Focusing on strengthening the portfolio with new loans that will provide for long term stability and profitability.
Challenges Ahead
- Expect lower earnings in the short term with lower loan yields and compressed margins.
- Net interest margin will tighten as higher quality loans yield less than higher risk loans.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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