Coastal Financial Corporation (CCB) Q2 2025 earnings summary

Executive summary

• Net income for Q2 2025 was $11.0 million ($0.71 per diluted share), down from $11.6 million in Q2 2024 but up from $9.7 million in Q1 2025, mainly due to higher noninterest expenses.

• Total assets reached $4.48 billion, loans receivable $3.54 billion, deposits $3.91 billion, and shareholders' equity $461.7 million as of June 30, 2025.

• CCBX segment expanded to 29 partners, with strong deposit growth and ongoing focus on optimizing the portfolio and selling loans to manage growth and credit quality.

• Deposits increased 3.2% sequentially to $3.91 billion, with liquidity supported by $719.8 million in cash and $642.7 million in borrowing capacity.

• CCBX BaaS program fee income (excluding nonrecurring revenue) rose 8.2% sequentially, reflecting increased partner activity.

Financial highlights

• Net interest income for Q2 2025 was $76.7 million, up 16% year-over-year, driven by loan growth, especially in CCBX.

• Provision for credit losses decreased to $32.2 million from $62.3 million year-over-year, reflecting improved CCBX loan performance.

• Noninterest income fell 38.2% to $42.7 million, mainly due to lower BaaS indemnification/credit enhancement income.

• Noninterest expense rose 25.7% to $72.8 million, with increases in salaries, BaaS loan and fraud expense, legal, and technology costs.

• Allowance for credit losses was $164.8 million (4.65% of loans), with CCBX at 8.68% and community bank at 1.02%.

Outlook and guidance

• Continued focus on optimizing CCBX portfolio, selling loans to manage risk and capital, and expanding partnerships with established fintechs.

• Expectation of ongoing growth in transaction and interchange fees as partner activity increases.

• Anticipated increases in technology and compliance costs due to regulatory focus on BaaS and third-party risk management.

• Expense growth is expected to moderate as new programs generate revenue to offset initial costs.

• Deposit sweep capabilities and new digital banking partnerships (e.g., Robinhood, Dave) expected to diversify and grow deposits.