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Sep 30, 2024
Coastal Financial Q3 2024 Earnings Report
Reported net income of $13.5 million and strong momentum across community bank and CCBX segments.
Key Takeaways
Coastal Financial Corporation reported a strong third quarter in 2024, marked by a net income of $13.5 million, or $0.97 per diluted common share. The company experienced high quality net loan growth of $92.4 million, driven by both the community bank and CCBX segments, despite selling $423.7 million in loans. Strategic initiatives to increase fee income and investments in scalable infrastructure contributed to the positive results.
Balance sheet is well-positioned for lower rates with $1.95 billion of CCBX deposits contractually repricing lower immediately upon any reduction in the Federal Funds Rate.
Expanding relationships with CCBX partners by launching new products with existing partners to reach a wide customer base.
Sold $423.7 million loans to balance credit risk, manage partner and lending limits, protect capital levels and move credit card balances to an off balance sheet fee generating model.
Continued regulatory and compliance infrastructure investments position the company well for the next phase of growth.
Forward Guidance
Coastal Financial Corporation is focused on building its technology and risk management infrastructure to support the next phase of growth within CCBX. Strategic decisions are expected to enhance credit quality, generate passive fee income, strengthen talent, and grow relationships with established and prospective CCBX partners, positioning Coastal to be more profitable in 2025.
Positive Outlook
- Building out technology and risk management infrastructure to support CCBX growth.
- Enhancing credit quality through strategic balance sheet management.
- Generating passive fee income from sold credit card balances.
- Strengthening talent through reorganization and strategic appointments.
- Growing relationships with established and prospective CCBX partners.
Challenges Ahead
- Balance sheet re-mix earlier in the year resulted in a short-term reduction to income.
- Continued investment in regulatory and compliance infrastructure increases expenses.
- Potential exposure to additional credit losses if CCBX partners are unable to fulfill their contracted obligations.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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